Surface Transportation News #191, September 2019
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Surface Transportation Innovations Newsletter

Surface Transportation News #191, September 2019

The Annual Highway Report has new winners and losers, electric vehicles and shrinking fuel tax revenues, and more.

In this issue:

 Congestion is Greater than Ever, Per 2019 Urban Mobility Report

Last month saw the release of a long-awaited new editions of Reason Foundation’s Annual Highway Report and the Texas A&M Transportation Institute’s Urban Mobility Report. Reason’s Baruch Feigenbaum, the lead author of the Annual Highway Report, breaks down its findings in detail below. So I’ll start with the Urban Mobility Report, which uses an improved methodology and more-detailed data from transportation data firm INRIX and finds that traffic congestion has reached new levels in America’s urban areas.

Among the headline numbers is that the total annual direct cost (lost time and excess fuel) of traffic congestion in the most recent year (2017) was $166 billion. That is an increase of 39.5 percent from 10 years ago. (Due to the revised methodology, figures for previous years have been recalculated to be consistent with the 2017 numbers.) Total delay in 2017 was 8.8 billion hours, with 3.3 billion gallons of fuel wasted.

There are several different ways to measure congestion, and how metro areas rank depends on which measure one chooses. If you use the intensity of congestion faced by a motorist, the top 10 most-congested metro areas are as follows:

Rank Metro Area Cost/commuter/year
1 Los Angeles $2,440
2 San Francisco $2,390
3 Washington, DC $1,840
4 New York $1,780
5 San Jose $1,500
6 Boston $1,440
7 Seattle $1,410
8 Atlanta $1,510
9 Houston $1,380
10 Chicago $1,310

On the other hand, if you want to know how metro areas rank on the total amount of congestion, using the sum of wasted time and fuel for all motorists and truckers yields a somewhat different ranking:

Rank Metro Area Annual Direct Cost
1 Los Angeles $17.78 billion
2 New York $15.04 billion
3 Chicago $  6.53 billion
4 Miami $  4.90 billion
5 San Francisco $  4.73 billion
6 Washington, DC $  4.58 billion
7 Houston $  4.55 billion
8 Atlanta $  4.34 billion
9 Dallas/Ft Worth $  4.12 billion
10 Philadelphia $  3.62 billion

Thus, the cost to the metro area economy is by far the greatest in Los Angeles and New York, compared with the other eight metro areas, even though they have similarly intense levels of congestion, but affecting smaller numbers of people and miles.

Incidentally, economists point out that the direct costs (time and fuel) seriously understate the economic impact of traffic congestion. Urban transportation researchers such as Alain Bertaud and Shlomo Angel of New York University have shown that congestion reduces the economic productivity of an urban area, which depends on very large numbers of positive-gain transactions taking place—e.g., employers finding the very best candidate for job openings. Very long home/work travel times reduce the extent to which such transactions occur. One much-cited study estimates that a 10 percent increase in the effective size of the labor market (the time-based radius of travel that most commuters will accept) increases the urban region’s economic productivity by 1.3 percent. Based on such urban agglomeration benefits, a former chief economist of the U.S. DOT estimated that the full economic cost of congestion is about double the direct cost that is measured in studies like this one.

One of the most annoying things about urban traffic congestion is the unreliability of freeway travel times. This is measured by what the report calls a planning time index—basically the amount of time you must allow for a peak-period trip to be sure of getting to your destination on time, 19 work days out of 20. A travel time index of 1.6 means that if an uncongested trip takes 20 minutes, you need to multiply that by 1.6 to get the safe amount of time to avoid being late. Here are the metro areas with the most unreliable freeways:

Rank Metro Area Planning Time Index Time for “20-minute” Trip
1 Los Angeles 2.87 57 minutes
2 San Francisco 2.69 54 minutes
3 San Jose 2.60 52 minutes
4 San Juan 2.50 50 minutes
5 Portland, OR 2.37 47 minutes
6 Honolulu 2.29 46 minutes
7/8 San Diego 2.28 46 minutes
7/8 Seattle 2.28 46 minutes
9 Washington, DC 2.27 45 minutes
10 New Orleans 2.18 44 minutes

If you’re a quantitative guy like me, you will be interested in the 31-page Appendix A: Methodology, in which the team explains the new data and revised methodology used in this edition of the well-known mobility report. (http://mobility.tamu.edu/umr/congestion-data)

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Reason Foundation’s Annual Highway Report Has New Winners and Losers
By Baruch Feigenbaum

Reason Foundation recently released its 24th Annual Highway Report, an annual evaluation of the conditions and cost-effectiveness of state highway systems. The report uses data reported by states themselves to the Federal Highway Administration as a condition of receiving their federal highway funding. It compares each state’s highway spending against its highway system’s performance to provide an assessment of value for money spent.

For the first time in more than 20 years, overall state highway system performance declined slightly. Yet nearly half of the states (21 of 50) improved from last year. The reality is that the worst 10 states have a disproportionate share of the problems, reducing overall system performance. This year we see some improvement on structurally deficient bridges, but pavement conditions on rural and urban highways are declining, the rise in traffic fatalities is worrying, and we aren’t making needed progress on traffic congestion in our major cities.

This year’s report examines 13 categories. Four measure spending (Total Disbursements, Capital/Bridge Disbursements, Maintenance Disbursements, Administrative Disbursements); four measure pavement quality (Rural Interstate, Urban Interstate, Rural Arterial, Urban Arterial); one measures traffic congestion; and four measure safety (Structurally Deficient Bridges, Fatality Rate, Rural Fatality Rate, Urban Fatality Rate).

For the transportation professionals reading this newsletter, it’s important to note that the report is a measurement of each state’s roadway system, not a ranking of the state’s department of transportation and it is worth noting there are a number of methodological changes in this year’s report. To better balance the overall rankings, we added a fourth pavement metric and fourth safety metric. For pavement, we added urban arterial condition to provide a sense of state highway pavement quality in major metro areas.

We made more significant changes to the safety rankings. First, we measured structurally deficient bridges (those with deteriorated conditions that need maintenance or replacement), instead of both structurally deficient and functionally obsolete bridges (those that have narrower lanes or shoulders but are in good shape) as we had in previous editions. Including functionally obsolete bridges could overly penalize states for simply having old infrastructure, even if it is well-maintained. Second, we eliminated the safety ranking for rural arterial lane width since some states use electronic measures and others use eyesight. Several states that previously reported no narrow lanes, reported five percent or more of their systems as having narrow lanes due to the switch to electronic measurements. Since roadways are not becoming narrower, this was going to be a problematic metric. Instead, we added two new safety metrics: rural fatality rate and urban fatality rate. Given the troubling increase in roadway fatality rates, and the importance of safety, it seems appropriate to provide more emphasis on safety in the overall scoring.

For the calculations section, we switched from centerline miles (length of the roadway) to lane miles (the number of lanes multiplied by the length of the roadway). When we created the report several decades ago, centerline miles was the preferred metric because it is considerably more expensive to build the first lane mile of a road than to widen it. However, as the average width of state highways continues to diverge, lane miles is now a more accurate metric.

Generally speaking, these changes tended to increase the scores of small northeastern states and decrease the scores of larger western states slightly. Overall, the rankings of 11 states saw a movement of 10 positions or more in the rankings. Virginia, Vermont, West Virginia and Maine improved dramatically in the overall rankings—by 25, 20, 20 and 19 positions in respectively. Virginia’s move put it all the way up to second overall. In contrast, Delaware, Iowa, South Carolina, Mississippi, Arizona, Nebraska, and South Dakota saw their rankings worsen by 23, 16, 15, 14, 13, 11 and 11 positions, respectively.

For the past two editions of the Annual Highway Report, North Dakota has been the top-performing state. But its high ranking is not a function of placing number one in many categories. In fact, the state’s only first-place ranking is in Urban Interstate Pavement Condition. Rather, North Dakota ranks first overall because it scores in the top half of 11 of the 13 categories. It ranks in the bottom 10 states in only one category, Structurally Deficient Bridges. Its next-worst ranking is 28th in Urban Arterial Pavement Condition.

Two more-populous states, Virginia and Missouri, rank second and third. They benefit from consistency across the board. Neither state ranks in the bottom 10 of any category. Virginia’s lowest ranking is 39th in Urban Congestion; Missouri’s worst ranking is 40th in Structurally Deficient Bridges. Virginia and Missouri show that high population states (12th and 18th) with large state highway systems (3rd and 7th largest) can do well and rank highly in the report.

The worst-performing state is once again New Jersey. New Jersey’s ranks well in two categories: it is actually first in Rural Interstate Pavement Condition and fourth in Overall Fatality Rate. But, New Jersey is last overall because of its large number of poor rankings. The state ranks last in Total Disbursements, Capital/Bridge Disbursements, Maintenance Disbursements, and Traffic Congestion. It ranks in the bottom five in Administrative Disbursements Per Mile, Rural Arterial Pavement Condition, and Urban Arterial Pavement Condition. New Jersey spends far more than average for a highway system that performs worse than average.

We frequently hear that it is unrealistic for New Jersey to have the same performance as North Dakota. But states like New Jersey could focus on improving pavement conditions and reducing traffic congestion, which would significantly help its ranking. Or it could look for ways to improve efficiency and reduce its per-mile expenditures to levels that are comparable with states with similar geographic characteristics, such as Maryland. It may be unrealistic for any poor-performing state to become a top-performing state in a year or two. However, the really poor-performing states can make progress and improve in ways that take them closer to average performance and spending levels for similar states.

States that rank poorly can also learn from neighboring states. Each state has strengths and weaknesses. For example, Georgia has long been an expert at maintaining high quality urban Interstate pavement at an affordable cost. Arkansas struggles at maintaining high-quality pavement. Arkansas officials might consider speaking with GDOT officials about pavement quality.

The report also praises Utah, which shows that efficient departments of transportation (DOTs) tend to have higher rankings. The state has long been considered an innovative DOT, winning several national awards for administration and creativity. The state has been a thought leader in many groups, including the American Association of State Highway and Transportation Officials (AASHTO). Utah’s efficiency is the result of having a DOT leader who is a transportation professional rather than a politician, a metric-driven project selection process and a collaborative relationship among the federal, state and local governments.

You can find links to each state’s detailed rankings, along with more information on the categories, findings and methodology here.

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Alabama Governor Declares I-10 Toll Bridge “Dead”

After months of political opposition to using toll finance to pay for replacing the obsolete Mobile River Bridge on I-10, Gov. Kay Ivey (who has championed the project) suddenly declared the project “dead.” This occurred immediately after the Eastern Shore Metropolitan Planning Organization (one of several MPOs in the project area) voted to remove the project from its short-term transportation improvement plan (TIP). Without being included in the TIP, the project cannot qualify for federal funding to cover a portion of its cost. There is no alternative plan to fund the needed bridge replacement.

This short-sighted move has larger consequences than many of those involved may have realized. Inframation News pointed out (September 5th) that the project had already been accepted for a $125 million INFRA grant (based on the project being procured as a long-term P3), and had been approved for $420 million in tax-exempt Private Activity Bonds (PABs) and an anticipated $800 million TIFIA loan. The latter two, totaling $1.2 billion, were intended to be paid off out of toll revenues from the project.

While Gov. Ivey had worked hard for the toll-financed P3 megaproject, Lt. Gov. Will Ainsworth has opposed the project, calling it an “ill-conceived and fatally-flawed toll bridge.” He also said the toll plan “violates every conservative belief and principle that I hold.”

Let’s consider what Mr. Ainsworth could mean by that. Most conservatives believe in private enterprise and oppose socialism—i.e., government running businesses. Milton Friedman, the noted free-market economist who won a Nobel Prize in 1976, wrote that, apart from toll roads, “The provision of [U.S.] highway services is a socialized industry removed from the test of the market.” His assessment was the theme of a 1952 paper co-authored with Daniel Boorstin.

The reality of the situation facing Alabama and every other state with inadequate, obsolete bridges and aging and inadequate Interstate highways is that these vital facilities need to be replaced—and there is no miracle Tooth Fairy in Washington able or willing to shovel out billions of dollars for such megaprojects. Congress long ago converted the Highway Trust Fund—created in 1956 to pay 90 percent of the cost of building the original Interstates—into an all-purpose surface transportation program, that for the past decade has spent far more than motorists and truckers pay in user taxes. With that money now spread over more than 100 programs, there is no realistic likelihood of the federal government paying for more than token amounts for replacing Interstate facilities such as the I-10 Mobile River Bridge.

Alabama DOT was right to decide on both toll financing and procurement as a long-term public-private partnership (P3). If Alabama tries to use only state resources (plus token federal funds) for this project, then it will be mostly Alabamans whose taxes will be used. But if the project is financed by toll revenues, then nearly 60 percent of the tolls will be paid by non-Alabamans. That’s an example of another conservative principle: users-pay/users-benefit. And since the Mobile River Bridge and Bayway is a megaproject—and megaprojects have a sorry U.S. and worldwide history of cost overruns and late completion—P3 procurement would shift those and other risks to the investors who finance the project, shielding Alabamans from those risks.

I hope cooler heads prevail and the decision to kill the project is re-thought. As I noted last month, there are ways to ease the toll burden on local commuters, including time-of-day charges (as on the new Elizabeth River tunnels in Virginia) and frequent-user discounts. Supporters of free enterprise, markets, and limited government should challenge Lt. Gov. Ainsworth on his anti-toll “conservative” principles. Were Milton Friedman still alive, he would certainly do so.

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Are There Enough P3 Companies for U.S. Projects?

At a large conference on public-private partnerships (P3s) in Washington, DC earlier this year, several people expressed concern that for the immense (over $9 billion) set of P3 express toll lane projects planned in Maryland, there might not be enough qualified teams for genuine competitive bidding. And at another P3 conference in DC this summer, one panel featured senior officials from two construction companies expressing concerns about the viability of their involvement in P3 megaprojects.

Several factors seem to underlie these concerns. First, there has been a series of announcements over the past year that a number of big firms are no longer going to take part in fixed-price design-build projects, due to having to absorb too much risk. Companies making such announcements include AECOM, Fluor, Granite, Skanska, and SNC-Lavalin. A January report from Fitch Ratings suggests two causes of that risk transfer: the public sector being too aggressive in risk-shifting and the equity sponsors not looking out for the interest of their design-build partners.

Another factor may be that U.S. construction companies are more comfortable with availability-payment project P3s than with revenue-risk P3s (such as toll-financed projects). In the U.S. transportation sector, there has been a narrative that AP concessions are the wave of the future rather than RR concessions. In fact, in the short history of U.S. P3 concessions in transportation, there have been 14 of each kind (see Table 7 in my 2019 Annual Privatization Report: Transportation Finance). While the total value of the AP projects slightly exceeds that of the RR projects ($22.6 billion vs. $19.3 billion), the amount of equity invested in the AP projects averaged only 5.9 percent of the project cost, compared with an average of 27.9 percent for the RR projects.

One lesson from this is to avoid asking construction company partners to invest equity in the P3 special purpose entity (the concession company). Another is for both the concession company and the public sector partner to re-examine the risk-sharing provisions related to the design-build contracts that investors typically insist on for major projects.

As for the question of whether there are or will be enough bidders for upcoming P3 megaprojects, here are two important points. First, for the most recent such project to start the procurement process—the $2.1 billion Alabama I-10 Mobile River Bridge replacement—three highly qualified teams were short-listed, led by the following equity providers:

  • Cintra and Meridiam
  • ACS, Macquarie, Hochtief, John Laing
  • InfraRed, Shikun & Binui, Astaldi, Southland Holdings.

These are all major players, globally and in the United States. Each team had its own construction company partners.

The other development is the entry of a new P3 concessionaire into the U.S. market. At the ARTBA P3 conference in July I met a representative of Itinera Infrastructure & Concessions, headquartered in Italy. It is the world’s third largest tolling concessionaire and has nearly 3,000 road miles under concession, mostly in Brazil and Italy. Like Cintra and ACS, Itinera has affiliated construction companies, Itinera Spa (based in Italy) and Halmar International (based in New York).

With an estimated $580 billion raised by global infrastructure investment funds over the past five years, there is ample equity looking for good infrastructure projects to invest in. Those funds have incentives to develop workable arrangements with major construction companies in teaming for P3 megaprojects. And I have little doubt that they will continue to do so.

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I-66 HOT Lanes Working Better This Year

During the Q&A at a presentation I gave in June, a questioner cited $40 tolls on the I-66 (inside the Beltway) high-occupancy toll (HOT) lanes as an example of what driving would be like if tolling were more widely used. I had to explain to the largely non-Virginia audience why occasional peak-period I-66 tolls get that high—and why this situation is unique to this particular tolled roadway. The good news is that its average tolls this year are lower than last year, and rush-hour throughput has increased.

This 15-mile stretch of I-66 was built later than the rest of that Interstate due to fierce local (Arlington County) opposition to a new freeway. The final compromise that allowed it to be built limited it to two lanes each way (very low for an urban Interstate) and required it to be HOV-only during AM and PM peak periods—the only such urban Interstate corridor in the nation.

As the DC metro area is now well along in developing a regional express toll lanes network—especially with a $3.5 billion, 21-mile project under construction to add express toll lanes (ETLs) to I-66 outside the Beltway—Virginia DOT made the sensible decision to open the inside-the-Beltway segment of I-66 to paying customers. This converted it during peak periods from HOV-only to a HOT lane system instead. But unlike the HOV policy of the emerging ETL network, which permits only HOV-3s to go free, VDOT continued the pre-existing policy of HOV-2 for I-66 inside the Beltway, but promises to change this to HOV-3 once the outside-the-Beltway ETLs open in 2022.

The unfortunate result of this is that HOV-2s take up nearly a majority of road space on the inside-the-Beltway I-66, leaving far fewer spaces available for paying customers than would like to use it during rush hours. Basic supply/demand economics results in the price during certain time segments, especially in the morning rush, to be occasionally driven to $40 or above. Tolling opponents then take that price as typical, assume that a commuter uses that corridor twice a day 5 days a week, and is forced to pay $400 a week, or $20,000 a year. That’s a great propaganda technique, but is totally bogus.

Since we have ample data showing that most of those who pay to use HOT lanes and ETLs use them only occasionally, it is far more meaningful to focus on the average toll rather than the occasional peaks. On the I-66 HOT lanes last year, the average was $8.31 in the AM and $4.43 in the PM period. VDOT tweaked the tolling algorithm late last year to maintain a somewhat lower speed target, and as a result, for the first quarter of 2019 the AM average toll dropped to $6.35 and the PM average to $4.14. As word got around about lower tolls, more people tried using the lanes as paying customers, with morning trips up 11.1 percent this year and afternoon trips up 8.6 percent. Speeds are somewhat lower, but more people can use the lanes to save time, compared with alternative routes. There are still some tolls above $40, though, with 1,072 such trips in first-quarter 2019. With 13 weeks of 5 workdays each, that amounts to only 16.5 such high-cost trips per day. That’s how un-typical such extreme tolls are.

Incidentally, more space may be opened up for paying vehicles in the I-66 lanes, which would further reduce average toll levels. As of Sept. 30, the only “clean” vehicles allowed in HOV/HOT lanes without meeting the HOV occupancy requirement will be plug-in hybrids and all-electric vehicles; all others with clean fuel license plates will have to either pay the toll or meet the occupancy requirement.

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Electric Vehicles and Declining Fuel Tax Revenues

A key factor that is motivating state DOTs to engage in pilot projects to test mileage-based user fees is the likely decline of fuel tax revenues over the next several decades. The two main factors in this decline are increasingly high federal miles per gallon (mpg) regulations for new vehicles and market penetration of electric vehicles. In some of my recent presentations I have included a set of projections of total U.S. federal+state fuel tax revenues through 2050, developed in 2017 by Ed Regan of CDM Smith. The worst-case result by 2050 would be a nationwide shortfall of $54 billion per year in fuel tax revenues.

We aren’t there yet, to be sure, but two recent research papers shed some light on where we are today and where at least one state is heading. The first is a paper by Lucas Davis and James Sallee of the University of California-Berkeley, published by the National Bureau of Economic Research. In “Should Electric Vehicles Pay a Mileage Tax?,” Davis and Sallee analyze what they see as the pros and cons of such an electric vehicles (EV) tax, but also provide some useful data on the initial penetration of EVs into the U.S. auto market.

Using data from the 2017 National Household Travel Survey (NHTS), they estimated the population of EVs by state and assessed the demographics of those who own them. It turns out that 10 states account for 75 percent of all EVs, with California in the lead with 40 percent of them. They also used data on state and federal gas tax rates to estimate the extent of foregone gas tax revenue in 2017. Using their baseline assumptions, that totaled $249 million—which is less than half of 1 percent of the $41 billion in fuel tax revenue in that year. Using demographic data from NHTS, they showed how EV ownership is very proportional to household income. And therefore, so is the gas tax amount not paid. For example, households with incomes of $200,000 and above account for 31 percent of all foregone gas tax revenue, despite being only 5 percent of households.

Except for the quantification, none of these findings should be surprising. However, the second paper, by Martin Wachs, Hannah King, and Asha Weinstein Agrawal of the Mineta Transportation Institute, presented findings on California that surprised me. “The Impact of ZEV [Zero Emission Vehicle] Adoption on California Transportation Revenue” assesses revenues generated from vehicle users that fund transportation infrastructure in that state. They projected the revenue from each of these sources through 2040, making a range of assumptions about types of vehicles purchased and other relevant factors. The surprising conclusion was that California policymakers appear to have anticipated the decline in gas tax revenues by adding other user-payment mechanisms. Their aggregate projection, with high and low bands, is that total transportation revenues (in 2019 dollars) will be largely flat over this 20-year period.

The key to this result is that the 2017 legislature adopted two new annual vehicle fees that go into effect in 2020. The Transportation Improvement Fee (TIF) will range from $25 to $175 per vehicle per year, depending on the vehicle’s value. And the Road Improvement Fee (RIF) will be $100 per ZEV annually. The TIF applies to all vehicles while the RIF applies only to ZEVs (presumably electric). It’s the TIF that saves the day, revenue-wise—assuming that EV prices remain higher than prices of comparable petroleum-fueled vehicles.

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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.

Quarterly Meeting of the Mileage-Based User Fee Alliance, MBUFA, Washington, DC (Robert Poole speaking). Details from: Barbara.rohde@mbufa.org

Rethinking America’s Highway Institutions, Sept. 13, 2019, Institute for Transportation Studies, UC Berkeley, Berkeley, CA (Robert Poole speaking). Details from: https://its.berkeley.edu/node/13497

Road Diets and Complete Streets Conference, Oct. 5, 2019, American Dream Coalition, Los Angeles, CA (Baruch Feigenbaum speaking). Details from: https://www.keeplamoving/com/conference

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News Notes

Australia Plans $10.6 Billion P3 Toll Road
A long-planned missing link in the expressway system of Melbourne—the North East Link—has been approved for development as a long-term DBFOM concession. Contracts are now being sought for $142 million in preliminary works, and a shortlist of major firms has just been announced for the main project, which will begin construction after the preliminary works are completed in 2020. The North East Link will connect the M8 to the Eastern Freeway and will include twin 6 km tunnels under the Yarra River. Although tolls will be charged, the concessionaire will be compensated via availability payments.

Asset Recycling in India and Mozambique
The National Highway Authority of India (NHAI) plans to expand its asset recycling program under which existing toll roads are leased to investors who pay up-front for the right to toll and manage those highways, with NHAI using the proceeds to improve other roadways. NHAI is seeking a consultant to inventory highway assets and assess which are the best candidates for such toll-operate-transfer (TOT) leases. Last month the government of Mozambique announced the launch of a similar program, under which sections of major highways, totaling 697 km, will be leased. The National Roads Administration (ANE) will lease the roads for 30 years. None of those highways is currently tolled.

Contractor to Fix Damaged US 36 in Colorado
In mid-July a short section of U.S. 36 cracked and collapsed, requiring eastbound traffic to be diverted to a portion of the westbound lanes. The section is part of the project’s conventionally procured phase 1 and not, as some have reported, part of the phase 2 that was built as a P3 concession. Colorado DOT has contracted with Kraemer North America to lead the emergency repair and reconstruction of the damaged section.

Another Major Express Toll Lane Project in Texas
Financial close was reached last month for an extension of the North Tarrant Expressway (NTE) in Fort Worth. The Segment 3C project encompasses adding seven miles of express toll lanes, reconstructing the general lanes, and adding direct connectors. The $910 million project is a DBFOM toll concession, managed by the same team of Cintra and Meridiam that has developed the existing NTE. Financing includes $160 million in equity and $654 million in private activity bonds (PABs).

Private-Sector Bridge Replacements in Smaller Cities
A trend is under way in which smaller cities that are having difficulty replacing an obsolete bridge are engaging private companies to toll-finance the replacement facilities. Bay City, MI last month selected United Bridge Partners as the winning bidder to deal with its aging Liberty and Independence drawbridges. UBP proposes to rehabilitate and modernize the former and replace the latter. UBP is proposing 100 percent private financing in exchange for the right to charge city-approved tolls. UBP is currently building a new toll bridge on Cline Avenue in East Chicago, IN, under an agreement similar to what it has proposed in Bay City. The latest city to consider this approach is Parkersburg, WV. In this case, the city anticipates the Parkersburg Memorial Bridge will need replacement within 20 years, but the city “is not likely to have the money to replace it.” So on August 20th, the council voted to send out an RFP to see if there is private sector interest in buying the bridge and committing to its future replacement.

“Iron Law of Roadway Congestion” Critique Now Online
Due to demand from readers of this newsletter, I have summarized my critique of the alleged “iron law” that is portrayed as showing that expanding a congested freeway is futile since it “just fills up” with additional traffic. My commentary is “Examining Claims About Induced Demand, Adding Road Capacity, and Traffic Congestion,” subtitled “The ‘Iron Law of Roadway Congestion’ Isn’t.” Go here.

UPS Pilot Project Uses Level 4 Autonomous Trucks
Since May, freight hauler UPS has been operating Level 4 trucks between Phoenix and Tucson, AZ. The vehicles are Navistar 18-wheelers with an automation system provided by TuSimple. That system includes a suite of cameras plus a pair of LIDAR sensors. While the system is designed to operate without a driver on major limited-access highways, during the pilot each truck has a safety driver and an engineer on board. A previous TuSimple pilot involved trucks of the U.S. Postal Service hauling packages between Phoenix and Dallas.

Fourteen Teams Vie for Louisiana P3 Project
Louisiana DOT is easing into public-private partnerships, with its first project being a $250 million design-build-finance highway upgrade project. It would add one lane each way to an existing two-lane highway between I-12 and LA 21. The 14 companies that submitted letters of interest are hoping they will be invited to respond to a forthcoming Request for Qualifications.

Federal Funding Sought for Chicago-Cleveland Hyperloop
The House version of the 2020 Transportation/HUD appropriations includes $5 million for U.S. DOT to develop a safety and environmental regulatory framework for hyperloop projects, none of which has ever been built.

Florida Turnpike to Add EV Charging Stations
Gov. Ron DeSantis in July announced that the state will use funding from the 2018 multi-state Volkswagen Settlement to pay for electric vehicle recharging facilities at the service plazas along Florida’s Turnpike. Similar announcements have been made earlier this year by other long-distance toll roads, such as the Ohio Turnpike. Too few people know that adding such facilities to Interstate highway “rest areas” is still illegal, expressly prohibited by a 1956 law that was part of creating the Interstate Highway System.

New Traffic Management System Improving Indiana Toll Road
The Indiana Toll Road Concession Company announced in July that its software-driven ITS network has reduced traffic incidents by 30 percent. The system uses the Smart Omni-Edge technology from Extreme Networks to provide real-time updates on traffic patterns, update variable message signs, and keep key people informed via IP-connected phones and cameras. Planned functions include variable speed-limits based on weather and traffic, wrong-way driver detection, and smart truck parking systems.

Musk’s Boring Company Raises $120 Million from Investors
Elon Musk’s Boring Company sold stock to venture capitalists, raising $120 million, in addition to the $113 million raised from investors last year. The company’s first contract is a $49 million shuttle to serve the Las Vegas Convention Center. An earlier project to link downtown Chicago with O’Hare Airport has failed to survive the transition to a new mayor, after former champion Rahm Emanuel declined to run for another term.

Colorado’s Jefferson Parkway Hits a Possible Roadblock
In late July it appeared that the long-planned Jefferson Parkway, to close the missing link in the beltway around greater Denver, was close to going forward. But on September 1st, the Bloomfield City Council disclosed a finding of elevated plutonium levels near the long-closed Rocky Flats nuclear site. The finding was the result of soil sampling along part of the planned right of way, and was disclosed by the Jefferson Parkway Public Highway Authority. The City Council said the process to seek a private developer of the tollway was now on hold, pending assessment of the radiation findings.

Grand Parkway Remains in TxDOT 10-Year Plan
The general prohibition on using tolls for any highway project using TxDOT money had put remaining segments (B and C) of the tolled outer beltway of metro Houston in jeopardy. The question was whether or not the Texas Transportation Commission would remove those projects from its 10-year Unified Transportation Program. But at its meeting on August 30th, the Commission left the projects in the plan. That means not only segments B and C but also the planned widening of Segment D can go forward, totaling about $1.35 billion.

Bestpass and PrePass Expand Across Canadian Border
In July, trucking service provider Bestpass announced that it has added the Thousand Islands Bridge Authority to its integrated nationwide toll management and payment platform. The Authority operates a major bridge across the St. Lawrence Seaway from the United States to Hill Island, Ontario. And in August, PrePass announced its first expansion into Canada, via an agreement with the transport ministry of British Columbia. PrePass users can now bypass weigh stations and use the PrePass electronic toll payment services within BC.

“The World’s First Solar Road Has Officially Crumbled Into a Total Failure”
That was the headline on an August 16th story by James Pasley on ScienceAlert.com. As I predicted last year in this newsletter, the French road’s solar panels were damaged by traffic and produced far less electricity than had been projected—a rate of 40,000 kWh/year as of July compared with a projected 150,000 kWh/year. Grandiose plans for the government to fund thousands of miles of solar roads now appear to be in limbo.

Correction
Last month’s article on toll-financed Interstate highway projects confused the names of two state senators who had spoken on a panel at the ARTBA P3 conference. Due to a mistake in my notes from the conference, I confused Arkansas Sen. Mathew Pitsch with Alabama Sen. Chris Elliott. My apologies to both.

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Quotable Quotes

“The U.S. Navy has had enough of touchscreens and is going back to physical controls for its destroyers. . . . It’s a warning that the auto industry could do well to listen to. Touchscreens continue to proliferate into car infotainment systems, a trend fueled by the plaudits given to Tesla for its huge touchscreens . . . . But there’s mounting evidence that touch interfaces are an awful idea for a driver who is supposed to be—literally—focusing on the road ahead, not hunting for an icon or slider on a screen.
—Jonathan M. Gitlin, “The US Navy Says No to Touchscreens—Maybe Automakers Should, Too,” Arstechnica.com, Aug. 12, 2019

“Mobility as a Service is fundamentally labor-intensive, whether it be done with a chauffeur, taxi driver, or gig worker. Most of the revenue goes to labor. Unfortunately, the demand for mobility only affords a very few trips that can support a living wage. That’s why most personal mobility is ‘do it yourself’—we walk, we bike, we drive our own cars. When we aren’t willing to ‘do it ourselves,’ then we have to share the driver, big time . . . get into a packed train, bus, or airplane. So the only opportunity for Uber/Lyft to achieve ‘network effects’ is to cut out the labor—the driver—via autonomous taxis. At the size they are now, neither Lyft or Uber are close to break-even. If they grow, it gets worse (unit labor charges go up and average revenue goes down—fundamental supply/demand). Driverless in a sufficiently large Operational Design Domain to substantially increase their size is not going to happen soon enough to save them as they exist today. They were just too early.”
—Alain Kornhauser, “What Will It Take for Uber to Become Profitable?” Smart Driving Cars, Aug. 23, 2019

“The new left urbanists’ fatal mistake is to view cities as collections of buildings, roads, tunnels, and bike lanes. Urbanists can demolish and rebuild physical environments, but they can’t pave over people. Life in a metropolis is simply too complex, too variable, too ephemeral—it will evade even the most careful planning. Making cities better and more beautiful requires bringing neighbors, developers, employers, and governments into the conversation. Thriving cities are built through cooperation, not compulsion.”
—Christopher F. Rufo, “‘New Left Urbanists’ Want to Remake Your City,” The Wall Street Journal, Aug. 23, 2019

“The research conducted for TCRP Research Report 201 included extensive consideration of the values, preferences, and attitudes for each relevant age category; this allows additional understanding of what may happen to millennials’ transit use as they proceed through the life cycle. . . . Of all age groups, it was the 25-34 age group who agreed most strongly that they ‘love the feeling of freedom and independence that owning several cars provides for my household.’ Approximately 56 percent of that key age group also agreed with the following statement: ‘As I grow older, I think I will eventually want to settle in the kind of house and neighborhood that my parents had.’”
—Matthew A. Coogan, “Understanding Demographics, Preferences, and Locations Influencing the Future of Public Transportation,” TR News, March-April 2019

“The latest toll hike solidifies the Turnpike as the ultimate symbol of Pennsylvania government gone wrong. . . . Nearly half of the tolls collected in fiscal year 2020 will be spent to pay down debt, debt that the Turnpike has been forced to incur because state government is bleeding it dry. . . . It’s time for lawmakers to break that cycle. . . . They passed legislation in 2007 to use the Turnpike as a piggy bank to fund other transportation needs. The money used to go to highways, bridges, and mass transit and now goes entirely to transit, mostly in Philadelphia and Pittsburgh. . . . Mass transit should be paid for locally, through local taxes and fares. . . . The only way the state gets away with this is because Turnpike drivers are a captive audience. A lot of them are from out of state and don’t know, or care, what’s happening with their toll money.”
—Paul Muschick, “Stop Milking the Pennsylvania Turnpike So It Can Stop Milking Drivers,” Mcall.com/Opinion, July 18, 2019

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