Surface Transportation News #178

Surface Transportation Innovations Newsletter

Surface Transportation News #178

Toll-financed Interstates, provocative infrastructure proposals and autonomous vehicles.

In this issue:

Outlook Improving for Toll-Financed Interstate Replacement

I continue to be amazed at how many Americans erroneously believe that (1) the federal government owns the Interstates, and (2) that since they are “already paid for,” using tolls for them would be “double taxation.” Actually, the states own all the Interstates and are fully responsible for maintaining, improving, and replacing them as they wear out. And, since most are nearing the end of their 50-year design life, somebody is going to have to pay to rebuild them, and also to replace major bottleneck interchanges in urban areas and to add lanes where needed. There is no federal program in sight to come to the states’ rescue on this.

At least six states are now seriously contemplating the use of toll financing to rebuild and modernize their aging Interstate highways, and one of them (Rhode Island) is already under way on a modest program to use truck-toll revenue to replace more than 150 structurally deficient bridges. So I was glad to take part in a panel on this subject last month at the Floridians for Better Transportation summer meeting.

My fellow panelists were from toll industry consultants CDM Smith and HNTB. The former has done most of the recent tolling studies in Connecticut, while the latter has done major studies for Wisconsin and Indiana, both states with significant legislative support for toll-financed Interstate modernization. CDM Smith’s Ed Regan pointed out that whereas the federal share of the cost of constructing the Interstates was 90 percent, today federal aid for Interstate projects is less than 45 percent, and states overall are spending $25 billion a year on Interstate maintenance, expansion, and reconstruction. Yet the cost of reconstructing and selective widening of the entire system is in the $1-2 trillion range.

Looking at ways to proceed despite the 1956 federal ban on tolls on the federally funded Interstates, Regan dubbed the three-state federal pilot program (ISRRPP) a failure, since it creates negative incentives for any state that participates—especially the loss of existing federal Interstate funds, and the limitation to only one project per state (creating a “why us?” problem in the affected corridor area). He pointed out two alternatives that states are seriously considering: tolling all lanes under the federal Value Pricing Program and using the bridge-replacement provision of Section 129 of the US code that allows replacement of non-tolled Interstate bridges with tolled bridges. Connecticut and Oregon appear to be leaning toward the former, while the latter is the apparent choice of Indiana, following FHWA’s approval of that method in Rhode Island.

Brad Guilmino of HNTB and I both emphasized the importance of how this subject is presented to legislators and the traveling public. The emphasis in just about every news article on this subject is on how much revenue tolling could bring in. That feeds fears that Interstate tolling is simply a revenue grab, rather than a means to the end of creating a second-generation Interstate system for the 21st century. In my presentation, I stressed customer benefits of a much better Interstate system with enough lanes and less congestion, real service plazas like those on toll roads, and dedicated lanes for heavy trucks, where truck traffic warrants this.

I also explained Value-Added Tolling policies, that would guarantee that new tolls be used only for the capital and operating/maintenance costs of the replacement Interstates, that tolling a corridor would begin only after the reconstruction was completed (value for money), and that toll customers would get rebates on their state fuel taxes for the miles driven on toll-financed replacement corridors. I also noted that the national board of AAA, the largest highway customer organization, has endorsed these policies.

I was also glad to learn that FHWA has been getting up to speed on Interstate tolling. It commissioned CDM Smith to produce a National Interstate Tolling Analysis Tool, which enables sketch-level assessment of the cost of implementing electronic toll collection on any specific Interstate corridor, potential toll revenue, operating costs, etc. Modeled in the system are all one- and two-digit Interstates (e.g. I-5, I-35) but not the three-digit urban Interstates (I-405). Data sources tapped include FHWA’s very detailed Freight Analysis Framework so that costs and benefits to commercial trucking can also be analyzed.

One question that came up in the Q&A concerned the impact on state DOTs of providing rebates of fuel taxes to those who drive on the rebuilt, tolled Interstates. Ed Regan had pointed out that states today, on average, spend 30 percent of their transportation budgets on Interstates. If those Interstates were fully funded by tolls instead, that would free up the current 30 percent for the rest of their transportation needs, and only a fraction of that would be needed for the fuel-tax rebates. One reason for this is that since most state fuel taxes generate 2-2.5 cents/mile from passenger cars, Interstate tolls would likely generate 4-5 cents/mile, so the math is pretty obvious.

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Two Flawed, But Provocative, Infrastructure Funding Proposals

Last month saw the release of two proposals that would dramatically reform the federal surface transportation program. One is a Discussion Draft, released by Rep. Bill Shuster (R, PA), Chairman of the House Transportation & Infrastructure Committee, who will retire from Congress at the end of this year. The other is a devolution proposal from three Republican Senators: Mike Lee (R, UT), Ted Cruz (R, TX), and Marco Rubio (R, FL). Both would make major changes, and both have their good points. But there are also serious flaws.

The headline portion of Shuster’s proposal is a very large increase in federal gasoline and diesel taxes, aimed at “restoring solvency” to the Highway Trust Fund. They would add $284 billion in revenues over the next 10 years, nearly doubling the amount of fuel tax revenue. The plan also calls for a federal commission to recommend a replacement for those fuel taxes, to be put in place at the end of those 10 years—presumably some form of mileage-based user fee, for which the plan would also create a national pilot program to test a federal MBUF.

The problem with this set of proposals is that doubling the revenue from existing federal fuel taxes (which would be indexed going forward) would remove the urgency or even the desire among members of Congress to replace fuel taxes with MBUFs. So we would end up locking in place the status quo of a federal program that tries to be all things to all people—instead of re-focusing it on functions that are truly federal in nature, while incentivizing state and local governments to resume their historic responsibilities for their own highways, transit systems, sidewalks, bike paths, etc.

There are some worthwhile near-term ideas in Shuster’s discussion draft. For one thing, it calls for all modes that receive funding from the Highway Trust Fund to pay something into it. Buses would pay the full diesel tax rate, as would diesel locomotives hauling passengers. Electric car purchasers would pay a new battery tax (10 percent of the vehicle’s purchase price). And bicyclists would pay a tax on tires, as truckers already do.

The piece I like best is the introduction of incentives for “asset recycling,” as pioneered by Australia’s federal government several years ago. The program would set aside $3 billion for incentive grants to state and local governments that lease existing revenue-producing transportation assets (airports, toll roads, seaports) under long-term P3 agreements. A city that leased its airport for $1 billion and agreed to use the proceeds to invest in other infrastructure would get a grant for 15 percent of that billion–$150 million, also to be used for other infrastructure investment.

Whereas Chairman Shuster’s proposal would largely shore up the federal program’s status quo, the three Senators’ proposal is aimed at devolving most of what the program now does to state and local governments. Over a 10-year period, it would reduce the federal gasoline and diesel taxes by 80 percent, with the remaining revenues devoted to a handful of federal responsibilities. That would eliminate INFRA grants, the Mass Transit Account, the CMAQ program, and the Transportation Alternatives (bicycle and pedestrian) program, among others. Alas, it would also kill the very valuable TIFIA program, which helps generate $48 in investment for each $1 in federal money.

While this proposal would return most transportation responsibilities to state and local governments, its retention of the Interstate highway system as a federal responsibility is naïve, at least on its face. As noted in the previous article, the Interstates are wearing out and need replacement over the next several decades, at a cost of somewhere between one and two trillion dollars. A federal program with only $14 billion in revenues by 2028 could not begin to cope with such a massive undertaking. While there is a rationale for retaining some sort of federal oversight of a second-generation Interstate system, (to ensure standardization, for example), responsibility for its funding logically belongs with the states that own and manage these vital highways.

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Fully Autonomous Vehicles Recede Into the Future

In my column in the July/August Public Works Financing, I criticize a 2017 report from a group called RethinkX, which claimed that fully autonomous vehicles would be on the market in 2020 and within a decade would provide 95 percent of all US passenger miles of travel. Those miles would all be traveled in shared vehicles (Mobility as a Service) and the 2030 vehicles would all be powered by electricity. And they would provide mobility at such low cost that hardly anyone would want to own a vehicle anymore.

That kind of hype has begun to influence transportation planners, who now think their near-term plans should include AV-friendly narrow lanes on roadways and the conversion of obsolete parking structures into alternative uses. Those planners should be paying more attention to what is actually going on in the AV community. Wired’s July 13th report on the 7th annual AV conference (co-sponsored by the Transportation Research Board) carried the headline, “Home from the Honeymoon, the Self-Driving Car Industry Faces Reality.” Reporter Jeff Swensen wrote that this year’s presenters were far more restrained than last year. “In an industry built on eliminating human error, insiders have started to admit that building a flawless vehicle will be almost impossible.”

My Reason colleague Baruch Feigenbaum attended this and previous annual AV conferences, and shares this view, telling me that “companies are adopting a much more cautious timetable relating to AVs. . . . Level 5 vehicles are looking increasingly untenable before at least 2035 and maybe 2050 or later.” Forbes reported (July 20th) that Waymo CEO John Krafcik told attendees at the National Governors Association meeting that “the time period will be longer than you think” for fully automated (Level 5) vehicles that can operate safely on any kind of road in any kind of weather.

The reason for these revised expectations among AV developers depends on another abbreviation: AI (artificial intelligence). Russell Brandom explored the problem in a well-researched piece on The Verge, “Self-Driving Cars Are Headed Toward an AI Roadblock” (July 3rd). The problem seems to be that developing an AI system that is better than human drivers is a much more difficult problem than many in the AV community realized. One version of AI, called “generalization,” involves algorithms that teach the system to identify objects by generalizing from thousands or millions of examples. This was supposed to be the key to developing viable “chat box” AIs, but deep learning could not accomplish this via generalization, Brandom reports. Others are now attempting to use a different deep learning approach called “interpolation”—but this is running up against the reality that “nearly every car accident involves some sort of unforeseen circumstance, and without the power to generalize, self-driving cars will have to confront each of these scenarios as if for the first time.”

Some AV developers are even starting to say that since AI cannot fully solve the problem, the solution is to “train bystanders to anticipate self-driving behavior” and keep themselves out of the path of AVs. Brandom reports this as the view of Drive.AI founder Andrew Ng—a view I find frightening and irresponsible.

Brandom quotes NYU researcher Gary Marcus as being doubtful that a big data approach will lead to the answer. Those companies, he says, “are leaning on big data because that’s the crutch that they have, but there’s no proof that [it] ever gets you to the level of precision that we need.”

All that said, I do think Level 4 AVs—with full driver controls but able to operate in full-auto mode only on certain kinds of roads under certain weather conditions—will likely on the market by the early 2020s. But Level 4 is not what all the visions of the future are about. Level 5—full autonomy anywhere, any-weather, no driver ever—is still far off, since it is a very difficult problem to solve. Transportation planners should prepare accordingly.

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Texas Tolling Far From Dead

Despite a 2017 legislative prohibition on Texas DOT putting any tax money into toll road or express toll lane (ETL) projects, such projects continue to make headway in the Lone Star state. Some of this is due to projects authorized before the anti-toll legislation. Others are being launched by toll agencies and regional mobility authorities (RMAs) that abstain from using any TxDOT money. And in several other cases (so far), state officials have been willing to interpret the law to permit certain strongly supported projects to proceed.

Here is a sampling of toll projects approved or under way as of summer 2018:

  • The Hidalgo County RMA will develop the Hidalgo County Loop as a toll road, and construction is proceeding on the portion called the 365 Toll Road.
  • Harris County Toll Road Authority (Houston) is developing a reversible ETL for the rebuilt US 290 and will extend the Katy ETLs to Fort Bend County.
  • The Montgomery County Toll Road Authority is selling toll revenue bonds to extend the SH 249 toll road into that county.
  • The Central Texas RMA has received state permission for the SH 130/US 290 flyover project, with TxDOT contributing $41 million in toll revenue from its toll roads in the Austin metro area.
  • Construction begins this fall on the final segments (52 miles) of the tolled Grand Parkway (SH 99) outer beltway in Houston.
  • In Dallas/Ft. Worth, construction is nearly completed on the $847 million Midtown Express, which includes ETLs in both directions.
  • In Austin, the new SH 360 toll road opened in May, and the $743 million US 183 toll road project is now 50 percent completed.

Compromises were reached in recent month enabling two important projects, strongly desired by the public and local officials, to go forward. The largest of these is the $1.8 billion LBJ East project in Dallas. The agreement with the state will allow the reconstruction and widening of the LBJ, but instead of ending up with two ETLs each way, there will only be a reconstructed version of the existing one ETL each way (though the overall widening may permit a second ETL each way if the anti-toll legislation is repealed or modified by a future legislature). And the much-needed widening of a very congested stretch of the SH 130 toll road in Austin was approved in late April, on condition that only toll dollars will be used.

Other projects with strong local support are still seeking a way forward. Austin’s CTRMA wants to extend its SH 183A toll road six miles northward and is moving forward with the environmental review in hopes of getting TxDOT approval to connect to the state system. In Cameron County, the local RMA is trying to figure out how to finance a $500 million project for a new causeway to South Padre Island, planned as a toll road. And negotiations are under way in Fort Worth to get the OK for segment 3C of the North Tarrant Express, which will add six miles of I-35W to this successful P3 project, hopefully as an extension of the existing P3 concession agreement.

Finally, the Austin business community is working hard to build support for the planned $8 billion project to expand congested I-35 through downtown, which is planned largely as express toll lanes. Attorney General Ken Paxton has offered a legal opinion that TxDOT should be able to account separately for tax money and toll money, which could offer a way around the apparent ban on tolled projects involving TxDOT. Based in part on Paxton’s opinion, State Sen. Kirk Watson has called on Gov. Abbott to allow such projects to proceed. “It is my hope that he’ll green-light Central Texas projects, such as the US 183 express lanes and completion of the I-35 Capitol Express,” Watson told the Austin American Statesman in May.

Fundamentally, what is going on in Texas is a state law enacted by opponents of tolling, ETLs, and P3 concessions that is preventing the implementation of projects with strong local support, not merely in Austin, Dallas/Ft. Worth, and Houston but also in smaller jurisdictions such as Cameron, Hidalgo, and Montgomery Counties. It’s bizarre to see self-styled populist legislators thwarting the will of commuters, businesses, and officials who are trying hard to cope with Texas’s unrelenting growth, using proven tools.

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The New York Times Drops the Ball on Automated Vehicles
By Baruch Feigenbaum

At times the popular media coverage of transportation makes me cringe.  Many news outlets lack a dedicated transportation reporter, and the person whose job it is to cover the story often has little background and even less interest in transportation policy. Automated vehicles, in particular, seem to bring out some of the oddest, most uneducated assertions of all areas in transportation.

Exhibit A is Emily Badger’s New York Times piece, “Pave Over the Subway? Cities Face Tough Bets on Driverless Cars” (July 20, 2018). The article confuses facts and makes bizarre assumptions but its biggest weakness is leading those with limited knowledge to think her piece represents mainstream AV thinking. Princeton AV expert Alain Kornhauser described the piece as “not even … half-baked.”

Several times Badger takes the viewpoint of a small minority and presents it as mainstream. Beth Osborne of Transportation for America argues that city council members, state legislation, and decision-making have been unduly influenced by people who “have imbued autonomous vehicles with the possibility to solve every problem that was ever created in transportation since the beginning of time.”

AVs by themselves don’t solve problems; good policy solves problems. And if most people thought that AVs by themselves could fix all of our transportation issues, that would be a problem. But most people don’t. In fact, polls show that more Americans fear AVs than welcome them. Sixty-four percent of millennials don’t think automated vehicles are safe. Some futurists may have an unrealistic view of AVs, but the public as a whole does not.

Badger repeats this problem with transit—twice. First, she uses the opinion of one person to argue that cities will have to pave over obsolete heavy-rail lines such as the New York Subway. That person, Brad Templeton, is a pioneer AV thinker who comes up with many creative ideas, but he is an expert in technology and software, not mass transit. Ten out of 10 transit experts will tell you the New York City subway will never be paved over. Heavy rail, where it works, transports huge numbers of people. In very dense central cities rail simply cannot be replaced with bus, and I say this as a member of a Transportation Research Board bus transit committee.

Badger then uses Templeton’s idea to suggest that opponents of light rail projects in Detroit, Indianapolis, and Nashville are falling for the “AV will fix everything” argument.  Detroit, Indianapolis, and Nashville are nothing like New York City. New York has the super-high-density to make heavy rail work, a large number of jobs and residents near the central business district, and geographic boundaries (rivers) that make car travel challenging. The other cities have very low densities, very few jobs or residents in the central business districts, and no geographic boundaries. As a result, the three struggle to make even quality bus service work. In fact, the transit experts in those three metro areas did not recommend light rail; they recommended bus. Yet, Nashville’s political leadership chose to ignore the recommendation and place a light rail measure on the ballot that polling indicated would fail—as it did.

The lack of understanding that not every U.S. city has the spatial structure of New York or Washington, DC, is pervasive throughout the article. For example, Las Vegas is lauded for planning a light rail line, because there will not be space in downtown for everybody to drive their own AV. Yet no one is suggesting most folks will drive their own AVs. Early predictions are for a large increase in ride-sharing, as automation significantly reduces its cost. But even if many people buy their own AVs, Las Vegas could build a BRT line for less than one-third the cost of a rail line. Las Vegas already has a successful BRT line starting in downtown and running along the Vegas strip. Similar to Nashville, Las Vegas does not have the density to support light rail.

Badger makes one good point about the inflexibility and lack of creativity of many transit agencies. Twenty years ago, city manager Frank Martz of the Orlando suburb Altamonte Springs suggested using computers or kiosks to let people order smaller vehicles with optimized routes. But the leadership of the local transit agency, Lynx, was focused on buses, unions and drivers. The agency simply could not conceptualize on-demand transit. Finally, 20 years later, the city completed a two-year pilot program where it offered discounts on Uber rides. If transit agencies lack creativity and have made mistakes in the past, doesn’t it make sense to consider the uncertainties of automated vehicles when deciding on a transit technology?

This isn’t the first time The New York Times has published a poor transportation article. Earlier this year the newspaper argued that the Nashville rail plan (that the city’s own transit experts argued was bad policy) lost at the polls not because it was bad policy but because Americans for Prosperity bankrolled a campaign of transit-haters. The newspaper mentioned Randal O’Toole’s Nashville speech that compared rail transit to a diamond-encrusted watch. But it did not mention my Nashville presentation on why a bus-based system was a better alternative or other presentations from transit experts on automated vehicles and personal mobility.

The Times should re-assess its goals in transportation policy. If its goal is to run balanced, intelligent articles that are well-respected by professionals, it should follow the lead of the Washington Post (and many other newspapers) and hire one or more dedicated transportation reporters to write balanced feature articles on transportation policy. If the newspaper’s goal is to produce flashy headlines with little substantive news, it should stay on its current track (irony intended). But the New York Times’ leadership should not be surprised when transportation professionals continue to dismiss its work as drivel.

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Upcoming Transportation Events

Note: We don’t have the time or space to list all transportation events that might be of interest to readers of this newsletter. Listed here are events at which a Reason Foundation transportation researcher is speaking or moderating.

ALEC Annual Meeting, August 8-10, 2018, New Orleans, LA, Hilton New Orleans Riverside (Adrian Moore speaking). Details at: https://www.alec.org/meeting/45th-alec-annual-meeting-new-orleans-la.

Rethinking America’s Highways, Sept. 12, 2018, Cambridge, MA, Harvard Kennedy School (Robert Poole speaking). Details at: https://ash.harvard.edu/event/book-talk-rethinking-america percentE2 percent80 percent99s-highways

ITS Summit 5C Event, Oct. 7-10, 2018, Jacksonville, FL, Hyatt Regency Jacksonville (Baruch Feigenbaum speaking). Details at: http://www.its5Csummit.com.

IBTTA Annual Meeting, Oct. 14-16, 2018, Baltimore, MD, Baltimore Marriott Waterfront (Robert Poole speaking). Details at: https://www.ibtta.org/events/86th-annual-meeting-exhibition.

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News Notes

Bay Area Toll Hike Challenged as Tax. The Howard Jarvis Taxpayers Association has challenged the voter-approved toll increase on San Francisco Bay Area toll bridges, approved by 55 percent of voters several months ago. Because two-thirds of the planned transportation projects are for transit, bicycle, or pedestrian projects, the group contends, the increase is actually a tax which requires a two-thirds (rather than majority) voter approval. The case hinges in part on a revised definition of what constitutes a tax (versus a fee) approved by voters in Proposition 26 in 2010.

E-ZPass Usable in Orlando. The Central Florida Expressway Authority has announced an agreement with the 16-state E-ZPass system under which visitors from those states will be able to use their E-ZPass transponders on all the Orlando-area toll roads operated by CFEA, effective September 1st. E-ZPass is still not compatible with other Florida toll roads that use the statewide SunPass system. CFEA is also working with E-ZPass so that CFEA customers using the agency’s new multistate E-Pass Xtra will be able to use that transponder in all 16 E-ZPass states.

The Case Against the Jones Act. The nearly hundred-year-old Jones Act that requires all waterway and oceanic shipping between U.S. ports to be carried out in U.S.-built, U.S.-owned and U.S.-crewed ships is “a burden America can no longer bear.” That is the conclusion of a detailed policy study by three analysts at the Cato Institute, released on June 28, 2018. Besides increasing shipping costs on America’s inland waterways and for residents of Guam, Hawaii, and Puerto Rico, the Act has failed in its purpose of fostering a strong U.S. merchant marine on which the Defense Department can rely in times of war or national emergency.

California’s SR 125 Toll Road Gets A-minus Bond Rating. The once-bankrupt South Bay Expressway has received another vote of confidence from the bond rating community. Fitch Ratings last month affirmed its A-minus rating and a positive outlook for the $194.1 million in toll revenue bonds currently outstanding. Eight years ago, following a bankruptcy filing by the original toll concession company that developed the toll road, the San Diego Association of Governments purchased it and refinanced it, based on its lower acquisition price. Fitch said that if the toll road’s revenue strength continues, it might receive a boost to a full A rating.

I-70 P3 Reconstruction Begins in Denver. Construction has begun on the four-year $1.2 billion project to reconstruct and widen 10 miles of I-70 between downtown Denver and its international airport. Under a 30-year P3 concession, Kiewit-Meridiam Partners will design, build, finance, operate and maintain the rebuilt facility. A key element of the project is to replace an aging 54-year-old viaduct between I-25 and Chambers Road with a depressed section that will be covered over with a park, re-uniting neighborhoods that were divided when I-70 was built. In addition, the project will add express toll lanes in both directions.

Europe’s Railways Prepare for Open Entry. Under the European Union’s “fourth railway package,” in 2019, all state railway operators must open their tracks to rival operators—both public and private. The initial market opening applies to routes currently showing operating profits–defined in Europe as including operating subsidies as revenues. And by 2026, private operators will be able to bid on routes which, despite subsidies, are considered unprofitable. The Economist reports (June 30, 2018) that in countries that have already opened rail markets, operating costs have been reduced, leading to reductions in fares.

India Continues Asset Recycling of Toll Roads. The National Highway Authority of India (NHAI) announced last month that it will auction off seven more toll roads (totaling 566 km) this summer. Bids are expected from infrastructure investment funds and large public-sector pension funds. The first round of toll road auctions (in February) offered nine toll roads totaling 700 km, and the winner was Macquarie, bidding $1.4 billion. Separately, the government announced plans for a $15 billion expressway between New Delhi and Mumbai, a portion of whose costs may be met by recycling proceeds from the auctions of existing toll roads.

Asset Recycling Under Way in Indonesia. State-owned toll road operator PT Waskita Toll Road in July announced plans to sell two more toll roads, following its successful sale of three others in April. The company plans to use the proceeds as part of its bid to construct and operate two new toll roads that are included in the government’s plan to seek bids for six toll roads totaling 327 km in length. Bids for these toll projects will be based on proposals that require the least support from the government, according to Herry Trisaputra Zuna, chief of the Toll Road Regulatory Board.

Tunnel Boring Machine Will Create New Hampton Roads Tunnel. On August 2nd, Virginia DOT announced that its engineers have decided that the planned expansion of the Hampton Roads Bridge-Tunnel will make use of a bored tunnel beneath the seabed, rather than an immersed tube (as is the case for all existing roadway tunnels in the region). The new tunnel will carry eastbound traffic, while the existing tunnel will become westbound-only. The new configuration will include an express toll lane in each direction. Two finalist firms will submit proposals for the $3 billion-plus project, with the selection expected by early 2019. This project will actually be the second use of a tunnel boring machine in Virginia; that method is in use for the Parallel Thimble Shoal Tunnel under construction at the Chesapeake Bay Bridge-Tunnel.

New Travel Plazas in Service on the Indiana Toll Road. The concession company that operates the Indiana Toll Road (I-80/I-90) announced in mid-July that all eight travel plazas on the 156-mile highway have now been re-opened to customers, after two years of reconstruction and upgrading. Toll Road officials and local leaders marked the occasion with an event at the Rolling Prairie Plaza on July 18th. Unlike tolled Interstates, all other Interstates are banned from offering any commercial services except vending machines at “rest areas” along those highways. This is due to a provision in the 1956 law authorizing federal funding for the creation of the non-tolled majority of the Interstate highway system.

Tolled Bridges in Louisville Very Popular. Riverlink, the toll system operator for the three toll bridges linking Louisville, KY with southern Indiana, reports that the bridges continue to set new records for traffic and revenue. Average weekday crossings were 103,000 in June, and there were 8.4 million crossings in the April-June quarter. In the first half of 2018, $51 million in toll revenue was received from customers in the two states, with an estimated $4 million still to be received from users from other E-ZPass states. As of June 30th, there were nearly 177,000 prepaid toll accounts and more than 408,000 transponders requested. A toll-by-plate option with online payment will be implemented later this year.

Solar Panels on Freeways Being Tested in China. The New York Times reported (June 11th) that China is experimenting with plastic-covered solar panels on a stretch of highway. The panels are produced by Shandong Pavenergy, a start-up company. Despite the article’s optimistic tone, there are reasons for skepticism. One is the amount of energy that can be captured, for two reasons: the protective surface will reduce the incoming solar energy compared with a panel lacking such a surface. And on congested roads, large numbers of vehicles will prevent light from falling on the panels a large fraction of the time. Moreover, the durability and lifetime of the panels, compared to conventional paving, remains a serious question mark.

New Book Documents Politics of Tappan Zee Replacement. Politics Across the Hudson: The Tappan Zee Megaproject is a new book by journalist Philip Mark Plotch. According to a review in the Journal of the American Planning Association by UC Berkeley’s Karen Trapenberg Frick, the book amounts to “a guide to what not to do in megaproject development.” And Frick is well-placed to assess the book, having researched and written the definitive account of the politics of the rebuilt San Francisco-Oakland Bay Bridge, published in 2016.

E.U. Study Critiques European High-Speed Rail Projects. The European Court of Auditors in June released a report that finds chronic cost overruns, delays, and poor performance of Europe’s expanding set of high-speed rail lines. The report finds that the average cost of these projects is $47 million per mile, and that “cost overruns . . . and delays were the norm instead of the exception.” The study reviewed 10 completed or under-construction projects in six European Union countries. And of the six currently in operation, trains were running at speeds averaging only 45 percent of each line’s design capacity. You can find an overview and link to the report here.

Argentina Launches $8 Billion Highway P3 Program. Last month the Argentine transport ministry signed the first two of six P3 contracts for 2,600 km of new highways to be built and operated under15-year concessions. The projects will be financed as availability-payment concessions, which accounts for their relatively short terms. Each corridor will include some tolled corridors but also non-tolled upgrades of existing two-lane roads.

Chile Continues Toll Concessions. With strong traffic and revenue on the urban P3 toll concessions in capital city Santiago, Chile’s Public Works ministry is under way on a 30-year $525 million toll concession for Ruta 5 (the Panamerican Highway) between Los Vilos and La Serena, northwest of Santiago. Long-distance toll roads are also doing well in Chile, with strong traffic and revenue growth on highways such as Ruta 68 (Santiago to Valparaiso) and Ruta del Maipo (another stretch of the Panamerican Highway), reports Public Works Financing.

Critique of Boring Company’s Chicago Airport Tunnel. Andrew Hawkins posted a thoughtful critique of the winning proposal for an express link between downtown Chicago and O’Hare International Airport. His piece (on The Verge, June 15th) questions the $1 billion cost estimate as likely too low and also questions whether the project could conceivably make money (as seems to be Elon Musk’s assumption). Hawkins quotes an infrastructure professor at Carnegie Mellon as saying Musk and the City have agreed to a D-BOM concession, under which the City would do the financing and take traffic and revenue risk, which if true would be a big mistake. To read Hawkins’ piece, just google its title: “The Boring Company’s Chicago Project Seems Awfully Cheap for Something So Big.”

Good Overview on the Case for Mileage-Based User Fees. Connor Kitchings and Baruch Feigenbaum posted a commentary explaining why this country must phase out per-gallon fuel taxes and replace them with per-mile charges, commonly known as mileage-based user fees (MBUFs). It also gives an overview of some of the useful pilot projects completed in recent years or currently under way.

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Quotable Quotes

[T]he dream of a fully autonomous car may be further than we realize. There’s a growing concern among AI experts that it may be years, if not decades, before self-driving systems can reliably avoid accidents. As self-trained systems grapple with the chaos of the real world, experts like NYU’s Gary Marcus are bracing for a painful recalibration in expectations, a correction sometimes called ‘AI winter.’ That delay could have disastrous consequences for companies banking on self-driving technology, putting full autonomy out of reach for an entire generation.”
—Russell Brandom, “Self-Driving Cars Are Headed Toward an AI Roadblock,” The Verge, July 5, 2018

“The Jones Act has wreaked havoc on the U.S. economy. After nearly a century of enduring its burdens, it is time to repeal the law. Of course, repeal will not be easy because after 100 years, incumbent interests, regulators, and politicians get used to the privileges of a system that benefits a concentrated few. In addition to untangling these political alliances, repeal efforts will have to contend with pushback from agencies and committees with oversight authority that have institutional interest in protecting their jurisdictional turf. No fewer than 16 congressional committees and 6 federal agencies have some form of oversight authority.”
—Colin Grabow, Inu Manak, and Daniel Ikenson, “The Jones Act: A Burden America Can No Longer Bear,” Policy Analysis No. 845, Cato Institute, June 28, 2018

“In a more technologically sophisticated environment, local governments should focus on a private-enterprise model for financing transportation through user fees, which ultimately direct responsibility for paying for new projects—whether toll roads, airports, or bridges—to those who will use the facilities, rather than forcing everyone to pay through general taxes. Around the world, portfolio managers are directing vast sums into such investments because they know that users can pay for these investments through innovations like electronic toll collection. Up to now, Europe and other developed areas have welcomed that money far more than the United States.”
—Steven Malanga, “States of Siege,” City Journal, Winter 2018

“Given the resistance that user-charge proposals frequently generate, whether reasonable or not, it is not surprising that politicians generally prefer to avoid imposing charges. And even if they do so, the user-charge system they end up putting in place is often so hobbled and complex—with cross-subsidies here, special concessions there, and a complex financing structure that shifts costs outside the circle of direct beneficiaries (e.g., to the future)—that it is never quite clear who is paying how much for what. Local politicians—who must literally live with their constituents, employees, and suppliers—may be especially tempted to charge too little and in the wrong way. It is much easier to ask for transfers from higher-level governments than to deal with outraged neighbors.”
—Richard M. Bird and Enid Slack, “Who Should Pay for Infrastructure?” Regulation, Spring 2018

“Perhaps even more significant for talent acquisition may be regional shifts, measured by the latest U.S Census Bureau population estimates (2016). Virtually all the major metropolitan areas with the strongest population growth since 2011 are cities with smaller or, in some cases, even negligible urban cores—places like Austin, Orlando, Raleigh, Houston, San Antonio, Dallas-Ft. Worth, Nashville, Phoenix, Denver, and Charlotte. For example, less than five percent of the population in these metro areas is in the urban core. In comparison, more than 50 percent of the population of New York lives in the urban core, while in Boston, San Francisco, Philadelphia, and Chicago the number exceeds 25 percent.”
—Stephen Lockwood, email to the author, May 5, 2018 (used with permission)

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Robert Poole is director of transportation policy and Searle Freedom Trust Transportation Fellow at Reason Foundation.