Surface Transportation News: Managed Lanes Are Booming, a War on Tolling, and P3 Benefits
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Surface Transportation Innovations Newsletter

Surface Transportation News: Managed Lanes Are Booming, a War on Tolling, and P3 Benefits

Plus: dueling surface transportation outlines in Congress, what Americans actually pay for highways, and more.

In this issue:

Priced Managed Lanes Are Booming

Fitch Ratings released the latest in a series of reports on the performance of priced managed lanes (MLs) for which it has issued bond ratings. The reports, “Managed Lanes Driven to Strong Performance,” Dec. 3, covers eight ML projects that have been in operation at least two years and five others scheduled to open by January 2023. Since the report is limited to managed lanes financed by issuing toll revenue bonds (whether by a government agency or a P3 company), it excludes MLs paid for out of state department of transportation (DOT) budgets, such as simple conversions of high-occupancy vehicle (HOV) lanes and some new-capacity MLs.

Fitch’s big news is that with more years of operational data to work with, from twice as many projects in operation as four years ago, it can now report that these revenue-based projects are growing faster than the “base case” figures on which the financing was based. This is true of projects such as I-95 Express in northern Virginia, the LBJ and NTE projects in Dallas/Ft. Worth, and the SR 91 express lanes in Riverside County, CA. Among the factors Fitch identifies as leading to higher-than-projected traffic and revenue are:

  • More traffic attracted from parallel arterials;
  • Attracting more truck traffic than expected (nine of the projects allow trucks);
  • Additional growth due to extensions (e.g., I-95 in Virginia, NTE in Ft. Worth); and,
  • Better understanding customers’ value of reliability.

Fitch also cites the plans of a number of large metro areas for ML networks, noting that, “Once complete, ML networks should provide paying motorists more-reliable and faster journey times across economically important regions that are large, densely populated, and suffer from sometimes severe congestion that can stymie mobility during peak hours.” The report also notes that if and when financings cover multiple projects that are part of a network, “Fitch would view such financings as stronger than stand-alone facilities.”

One project in the group of five rated projects for which the report has no operating data—the I-77 managed lanes in Charlotte, NC—just opened to traffic in mid-November. Preliminary data are very encouraging, with an average of 25,000 weekday customers. Speeds in the general-purpose lanes have increased, and travel times have accordingly decreased, in both AM and PM peak periods. And already the usage pattern looks similar to most other express toll lanes around the country, with about 10 percent of those customers using the new lanes every day and the other 90 percent using them only for time-urgent trips that are worth paying for. This is not at all what the very vocal populists who opposed the project predicted.

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Florida Legislators’ War on Tolling

The state of Florida has been among the leaders in embracing express toll lanes, starting with its first project on I-95 in Miami, a major success. Since then, the Florida DOT has adopted a statewide express toll lanes policy, envisioning networks in the Jacksonville, Miami, Orlando, and Tampa metro areas. Individual projects are in operation in all four of those areas, with more in the planning stages.

Unfortunately, the Florida legislature includes a small group of anti-toll members from the Miami area. Every year they introduce legislation aimed at restricting the growth and use of tolling—and too often they succeed.

In 2017 they enacted a measure claiming to protect express lane users from paying for congestion relief they don’t get. Specifically, it provides that when the speed drops below 40 miles per hour, instead of charging the usual variable toll, only the minimum toll for that corridor may be charged. If speed drops that low it means the price charged should be higher, to keep the lanes from getting overcrowded, but the measure passed anyway. (It was portrayed as a “local” issue, affecting only Miami, though it applies to every express toll lane in the state.)

The results on the I-95 Express Lanes in Miami have been devastating. In the northbound PM peak, there is a physical bottleneck—the obsolete, congested Golden Glades interchange. As traffic on I-95 and its express lanes have increased in recent years, that bottleneck led to the maximum-allowed toll for that segment ($10.50) to be charged nearly every weekday at the peak of the northbound peak period, but some congestion developed, despite the $10.50 toll. But since the “poison pill” went into effect in 2018, only 50 cents can be charged during that time of peak congestion. A recent TRB analysis by CDM Smith consultants found that for the first year (July 2018 to June 2019) the loss of revenue was 20 percent—some $10.6 million. And Express Lane customers suffered daily gridlock during the northbound peak. (This was obviously what the legislative sponsors of the poison pill hoped for. Now they can point to this and say, “See, express toll lanes do not work.”)

The second attack on express lanes is pending in the current legislative session. The same two Miami-area legislators have a bill that would abolish the brand new express lanes on the chronically congested Palmetto Expressway (SR 826) in Miami. The proponents claim that “residents have experienced more congestion than ever” since the new lanes opened in September. That is flatly wrong, as I pointed out in an op-ed in the Miami Herald on Dec. 3. Data from Florida DOT show that peak-period travel times in the general-purpose lanes are significantly less than the year before, and those using the new express lanes are getting even faster and more reliable trips.

The threats to Florida tolling extend far beyond Miami, even though the legislative impositions on tolling have so far only affected Miami facilities. The same small group of legislators has repeatedly attacked the Miami-Dade Expressway Authority (MDX). Several years ago they got a law passed mandating that MDX turn over part of its revenue to the county government to subsidize transit. Last year they got through a bill to abolish MDX, replace it with a state-run entity, and prohibit the issuance of any new toll revenue bonds. That measure is under challenge in the courts as a violation of Miami-Dade’s home rule status, so MDX continues to operate while its initial court victory is appealed.

The MDX law has alarmed the bond market and the rating agencies. Prior to Florida Gov. Ron DeSantis signing the MDX termination bill last year, Municipal Market Analytics wrote, “Outstanding MDX bonds have already been downgraded. . . . At least with respect to tolls, Florida is demonstrating a growing problem with willingness to pay, a long-term concern for all holders of state and local toll revenue bonds in the state.”

Ironically, while the state legislature continues to chip away at tolling and express lanes, last year it also passed a bill to authorize three new north-south toll roads, with strong support from the Florida Chamber of Commerce and most of the business community. If those multi-billion-dollar projects are to be financed via toll revenue bonds, legislators must face up to the fact that Florida is increasingly being viewed as a higher-risk state for such financing. If the legislature today can attack and undermine successful toll entities in Miami, who’s to say what a future legislature might do to toll projects elsewhere in the state—including the three new projects embraced by the governor.

As fuel tax revenues begin their long-term decline, Florida will need more tolled corridors, not fewer. A must-read January 2020 report by Ed Regan of CDM Smith (“The Motor Fuel Tax: A Critical System at Risk”) crunches the numbers for Florida, projecting that annual state fuel tax revenue by 2040 will be $2.5 billion less than if current federal miles/gallon standards were frozen at current levels, and assuming increasing electric vehicle market share. This will make it a lot harder to keep pace with Florida’s ever-increasing population—unless the state continues expanding its tolled capacity.

If I were asked to advise the powers that be, I would propose that they repeal the MDX abolition law and the express lanes poison pill law, and of course defeat the proposed abolition of the Palmetto Expressway express lanes. Those are not “local” issues. They threaten the planned express lanes networks in all four metro areas, planned expansion of the urban toll road systems and Florida’s Turnpike, as well as the three new toll roads the business community wants.

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Comparing Surface Transportation Outlines From House Democrats and Republicans
By Baruch Feigenbaum

With the Fixing America’s Surface Transportation (FAST) Act, the law that sets federal surface transportation policy, set to expire on Sept. 30, congressional leaders have started working on a new transportation bill.

The Senate Environment and Public Works (EPW) Committee agreed on the highway portion of a proposed bill. But there has been limited work on the transit, freight and funding components by the relevant Senate committees.

The House has taken a different tack. Instead of writing a bill, the Democratic majority recently released a set of principles and ideas titled the Moving Forward Framework. Due, in part, to differences over environmental and funding policy, the Republican minority released a brief, separate set of principles.

The next surface transportation reauthorization bill needs to answer one major question. What is the role of the federal surface transportation program? The federal program and gas tax were created in 1956 to fund the Interstate highway system. The 1991 Intermodal Surface Transportation Equity Act (ISTEA) declared the era of Interstate construction over, but it never clarified a vision for ongoing surface transportation funding.

Most free-market experts agree that the federal role is to promote Interstate commerce, which is one of the few mentions of transportation in the Constitution. That could include a major highway network, aviation, freight rail and passenger rail where it makes sense. And funding should follow the users-pay/users-benefit approach.

Under that framework, there are major problems with the Democratic approach and smaller problems with the Republican approach.

Let’s break the bill components into categories. For funding, both want sustainable sources. The Democratic proposal suggests increasing the gas tax while the Republican principles propose replacing the gas tax with a federal mileage-based user fee (MBUF). The Democratic proposal would spend $760 billion over five years (although it includes water, waste-site remediation, and telecommunications). The Republican principles are limited to surface transportation at $285 billion over five years.

The Democratic proposal is not friendly to tolling, seeking to restrict where tolling and congestion pricing can be implemented. But it does increase the private activity bond (PAB) cap to $21 billion, a much-needed increase for public-private partnership (P3) projects. The Republican principles are silent on tolling and financing.

I’ve likened the gas tax to a rock star on his farewell tour. It’s been around at the state level for 100 years, but a replacement is needed. The Republican plan, if implemented, would be better in this regard. But it is also true that MBUFs are not ready to be rolled out on a national level. A good interim solution would be charging tolls on a per-mile basis to modernize limited-access highways. Yet the Democratic proposal limits tolling and the Republican proposal is silent on the issue. Both political parties need to be more realistic about funding. It’s unlikely that many free-market groups would support a gas tax increase, but if they supported a hike over the short-term it would likely only be if diversion of the fuel tax proceeds to non-roadway projects is reduced. The Democratic proposal would do the opposite.

For policy, parts of the Democratic proposal read like a wish-list for environmentalists and public employee unions. The environmental components include things like “set a path for zero-carbon pollution from the transportation sector, ensure a green transportation system, and help combat climate change by creating jobs in green energy.” The “strong-union” proposals strengthen Davis-Bacon protections and other “worker” protections and ensure that U.S. products are used in construction by increasing Buy-America protections. Unfortunately, this would drive up construction costs, reducing the number of projects.

The Democratic proposal would also expand and empower local agencies. It allows local agencies that cannot currently receive federal funds to be direct beneficiaries. The Republican principles allow some flexibility, but less direct funding for local governments. They also refocus attention on core national highway programs.

The Democratic proposal would expand the number of federal programs while the Republican proposal keeps programs the same or consolidates them.

The Democratic proposal expands non-roadway transportation funding and scope. It would spend $105 billion on transit, mostly on new rail transit capacity. It also reforms bus policy and funds mobility-on-demand projects. It would spend $10 billion on safety, particularly enforcement. And it calls for $55 billion for railroad improvements, particularly Amtrak in the Northeast Corridor.

The Republican proposal focuses on streamlining project delivery, something that has been a priority of both the Obama and Trump administrations, along with addressing rural community needs.

The Democratic approach would likely increase the cost of infrastructure significantly. The more projects cost, the less infrastructure we can build and maintain. Some of the end-goals should be viewed differently. For example, enacting mileage-based user fees and congestion pricing would ultimately reduce greenhouse gas emissions more effectively than subsidizing jobs in green energy. Likewise, reducing project costs would do more to increase employment than mandating Buy America provisions.

The Democratic approach expands federal funding to more local projects and allows small cities to become direct funding recipients. But most smaller cities don’t need direct federal funding. In rural areas, the state DOT typically administers funding and in metro regions the MPO administers funding. If that approach is not working well, we need to reform it. Creating a whole new level of bureaucracy is not necessary.

The Democratic approach also increases funding for heavy and light-rail projects. Local rail projects are by definition “local” and should not receive federal funding. Passenger rail operated by an entity with a sound business plan could be interstate in mission. But Amtrak is not that entity.

The Republican approach focuses on investment in rural parts of the country, ignoring suburban and urban needs. Both a rural Interstate in Forsyth, GA, and a suburban Interstate in Sandy Springs, GA, have major needs, for example. Congress should not be the entity to prioritize one geographic region over another.

And the Republican proposal needs a lot more details. Streamlining infrastructure sounds good, but what does that actually mean?

These Congressional proposals are a long way from becoming law. Additionally, 2020 is an election year and Congress is rarely focused on long-term policy in those years. Many Congressional experts don’t expect a bill to pass until 2021, likely requiring at least one short-term extension of the current bill.  The previous five-year surface transportation bill, SAFETEA-LU was extended numerous times over three years before the successor MAP-21 bill finally passed.

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New CBO Report Explains P3 Highway Benefits

In the October 2019 issue of this newsletter, I called attention to an important new report that explains the design/build/finance/operate/maintain (DBFOM) P3 model in very clear terms (“Leveraging Private Capital for Infrastructure Renewal,” NCHRP Synthesis 540). It is especially good at explaining the role of equity investment in enabling significant risk transfer from taxpayers to investors. This key point has often been missed in public debates on this form of P3.

I’m pleased to report that the Congressional Budget Office’s (CBO’s) January 2020 report, “Public-Private Partnerships for Transportation and Water Infrastructure” does likewise. My comments here concern the transportation portions of the report which take up the majority of its pages.

Now that there is a larger number of transportation projects to examine, CBO is able to come to some tentative conclusions about this method of procuring large transportation projects. It finds some evidence of lower cost to complete P3 projects and somewhat shorter time to complete them (pp. 13-14). It acknowledges that a few toll projects have declared bankruptcy (just 4 out of 24 listed in Table 3 on p 15) and notes that in no cases have taxpayers bailed out the investors. It explains that the federal Transportation Infrastructure Finance and Innovation Act (TIFIA) program made a full recovery of its loan to the South Bay Expressway in California, but that it remains to be seen if that will be true of its loan to SH 130 Segments 5 and 6 in Texas (pp. 15-16).

By far the most important information conveyed by the CBO report is the large risk transfer benefits of a well-structured design-build-finance-operate-maintain (DBFOM) P3 project (p. 11). “When infrastructure is financed by public debt that is backed by the government, taxpayers are effectively equity-holders: they benefit from greater-than-expected revenues [if any] but also suffer from shortfalls in receipts or increases in costs.” And the report notes that “State and local governments do not typically include the cost of risk as part of the cost of publicly financing infrastructure. . . . Nonetheless, state and local taxpayers will bear the cost if the project does not perform as planned.”

The report also explains that there is significantly less risk transfer if the DBFOM project is financed via availability payments. A private partner in a revenue-risk project (i.e., which bears demand risk), “has a particular incentive to enhance the quality or otherwise improve users’ experience.” But if the private partner receives availability payments instead, “then the government [taxpayers] bears the demand risk.” And it notes that, of course, if the private partner takes on more risk, it will seek a higher return on the equity it invests. And as Figure 5 (p. 19) shows, the fraction of project cost covered by equity averages 28 percent in revenue-risk projects, compared with only 6 percent in availability payment projects.

A few other points to note in passing:

  • “Private financing has probably helped accelerate projects in some states by providing financing more quickly than under more traditional arrangements.” (p. 2)
  • “Even though the interest rates on tax-exempt municipal bonds are low, ultimately the cost of private financing itself is roughly equal to the cost of public financing when interest subsidies, the cost of risk, and transaction costs are accounted for. (p. 10)
  • “Some transaction costs differ depending on whether a project is publicly or privately financed, though such differences are generally small.”

These and a number of other points in the CBO report debunk a whole array of claims often made by opponents of privately-financed infrastructure.

I found fault with only a handful of minor points, and will mention only one. On p. 14, the report mentions that the Chicago Skyway concession company, after suffering reduced traffic and revenue in the wake of the Great Recession, “was later sold for substantially more than its initial price.” But it adds only that the nearby Indiana Toll Road concession company declared bankruptcy. Not stated is that the ITR concession company was also sold for very substantially more than its initial price. And that both were purchased by groups of public pension funds is a very important development.

That nitpick aside, this report is a welcome addition to the literature on DBFOM P3s.

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US Department of Transportation’s Puzzling DSRC Decision
By Baruch Feigenbaum

At the Transportation Research Board’s annual meeting last month, Secretary of Transportation Elaine Chao made three major autonomous vehicle policy announcements. Two of the policies have broad bipartisan support: expanding a data-sharing partnership between the federal government and industry and standardizing advanced driver assistance systems (ADAS) terminology. However, the third policy announcement—that DOT plans to invest $38 million to equip emergency vehicles, transit vehicles and related infrastructure with dedicated short-range communication (DSRC) technology in the 5.9 GHz public safety band—is a head-scratcher.

For the last 20 years, USDOT has envisioned using DSRC for connected vehicle technology (now referred to as vehicle-to-anything communication (V2X)). The technology would allow vehicles and infrastructure to “speak with each other,” thereby reducing traffic accidents and decreasing congestion (by allowing vehicles to travel closer together). However, DSRC relies on dedicated roadside units that governments have to pay for and maintain. Given that most state and local governments struggle to keep their roads in a state of good repair, governments have no realistic way to pay for the billions of dollars in DSRC equipment, ongoing maintenance, etc.

Over the past five years, another technology has developed: 5G cellular V2X. In contrast with DSRC, vehicles would use the emerging 5G cellular network for the same types of communications as DSRC. And given that 5G has a commercial purpose, it is being implemented by phone companies at no cost to governments. Most experts did not think that 5G would be installed until 2021 or later. Yet Verizon and T-Mobile are installing 5G today. 5G has other expected advantages over DSRC: greater interoperability, wider bandwidth, increased cybersecurity, and a decentralized network.

Many in the intelligent transportation systems world have remained skeptical of 5G. Although DSRC is expensive, we know it works. Can 5G work in the real world, they ask?

A presentation delivered at the TRB Intelligent Transportation Systems Committee meeting last month shows that it can. Ford and Qualcomm compared DSRC and 5G on Michigan roadways to determine if 5G “works” in the real world. The test examined eight aspects of congestion relief, reliability, and interference. Congestion relief refers to whether the technology is able to relieve traffic congestion on the highway. Reliability refers to whether the information reached the vehicle in a consistent, accurate manner. Interference refers to other technologies that can interrupt the signal. 5G was equivalent to DSRC in three of the categories and better than DSRC in five categories.

The tests found that 5G was effective between 92 and 100 percent of the time in real-world situations. And the 92 percent was only for long distances in rural areas where vehicles are further apart and need to receive more communications. Communications are reliable almost 100 percent of the time when the two vehicles or the vehicle and infrastructure are in closer proximity. Ford and Qualcomm have provided more information on the following website.

Some remain skeptical that 5G will work in every situation. But most admit that 5G is likely to be adopted. Both AASHTO and ITS America have become more open-minded about 5G. Many sessions at last year’s ITS America Conference featured honest discussions about the technology tradeoffs. And many in the industry who originally supported DSRC are now exploring 5G. While GM remains committed to DSRC, last year Toyota abandoned plans to install DSRC in all US vehicles. Ford and BMW have supported 5G for the past several years.

The DOT is partially responsible for the change in attitude at many automobile companies. Based on the evolution of 5G, the Trump administration killed an Obama-era DOT mandate to install DSRC technology in all new vehicles. DOT reversed course because 5G is evolving rapidly, and the department does not want to “pick winners” and require an expensive technology that may not be the best choice in the longer term. The plan is for both technologies to develop and have original equipment manufacturers choose the superior technology.

DOT’s position makes Secretary Chao’s announcement puzzling until you consider recent FCC actions. Two months ago, the FCC voted to free up the 5.9 GHz band for wifi and other unlicensed uses. Even though DOT does not need the band for 5G, its technology-neutral stance allows both technologies to compete for industry support. And DSRC cannot compete unless it has the 5.9 GHz band.

But instead of simply opposing reallocation, DOT decided to allocate DSRC bandwidth for emergency vehicles. It is, in effect, picking a winner: DSRC. Perhaps some unexpected flaw will occur with 5G, but given the department’s stance, it is premature to make that decision.

The reality is that DOT is under immense pressure to use the 5.9 GHz band. Remember, DOT has had that spectrum for 20 years without much progress. The defensive move is designed to counter FCC’s vote and show the industry that DOT is not going to roll over to the FCC.

Yet this move is an example many free-market people often point out about government flaws: One government department is advancing a technology, contrary to its policy goals, to thwart another government department from asserting its power. An inter-governmental cage match is not good for policymaking.

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What Americans Pay in Highway User Taxes

HNTB Corporation last month put out a useful analysis that compares what Americans pay for roads and highways (via gasoline taxes) with what they pay for other basic infrastructure, such as electricity, water, cell phones, broadband, etc. I was not surprised to see that their results showed a far lower annual cost to use roadways (excluding tolled facilities) than for other user-charge-funded infrastructure. But I was surprised by how low the reported gas tax charge was.

In my book, Rethinking America’s Highways (University of Chicago Press, 2018), I presented a similar comparison, using data mostly from 2012-2013. My results were very similar to HNTB’s, except for the highway number. Here are the comparative monthly figures:

HNTB Poole
Electricity $111.67 $107.28
Water $ 70.42 $ 71.06
Cell phone $100.00 $102.17
Broadband internet $ 66.17 $ 80.00
Highway (fuel tax) $ 22.92 $ 46.00

My numbers make the same basic point—that people don’t realize how little they pay for roads compared with other basic infrastructure. But my fuel tax figure is about double that of HNTB. The answer appears to be that all HNTB’s figures are per household, except for fuel tax, which is per driver. By contrast, all of mine, including fuel tax, are calculated on a per-household basis.

I’m grateful to HNTB for making this kind of comparison, but we should not be presenting an unfairly low figure for what households pay for roads. The main point is to get people to understand that even $46 per household per month is far below what they pay for other basic infrastructure and is not sufficient to cover the capital and operating costs of our extensive roadway network.

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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.

Future Investment Resources for Sustainable Transportation, Raleigh, NC, NCDOT Headquarters, February 28, 2020 (Robert Poole speaking). Details here.

Transportation Research Forum Annual Forum, Jersey City, NY, Jersey City University School of Business, March 13, 2020 (Baruch Feigenbaum speaking). Details to come.

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News Notes

Michigan Senate Passes Bill for State Tolling Study
A bill authored by Sen. John Bizon would authorize an 18-month feasibility study of tolling to finance major highway improvements in Michigan. It passed the Senate by a lopsided 31-7 vote and now goes to the House for consideration. The bill calls for competitive selection of a consulting firm to estimate the feasibility of electronic tolling to pay for capital and operating costs of major highways, such as the Interstates. Similar bills are up for consideration in South Carolina and Wyoming.

Revived Interest in Major I-10 Bridge in Alabama
The “Build the I-10 Bridge Coalition” is working to build local support for the much-needed replacement of the Mobile River Bridge on I-10 in Alabama. The previous $2.1 billion project, which also included rebuilding the adjacent Bayway, was expected to have a toll of $6 each way—which triggered huge opposition and led to the Eastern Shore MPO removing the project from its five-year plan. But late last month that MPO suggested that doing only the bridge replacement could be a $1.2 billion project. Now ALDOT Director John Cooper is talking about tolls of about $2 for residents. Cooler heads also seem to be prevailing in Talladega County, where the County Commission voted in favor of a new toll bridge to link Hwy 280 to I-65.

Louisiana Approves P3 Bridge Replacement
In early January Louisiana DOT signed a 30-year agreement with Plenary Infrastructure to replace the aging Belle Chasse bridge and tunnel with a new toll bridge over the Gulf Intracoastal Waterway. With a project cost of $162 million, the toll will start out at 25 cents but will increase over the life of the agreement to 60 cents.

Truckers Win One, Lose One Over Tolling Policy
The American Trucking Associations (ATA) can continue its litigation over trucks-only tolling in Rhode Island. The First Circuit Court of Appeals ruled that ATA’s lawsuit against that state can continue, rejecting the state’s claim that its tolls are a tax; hence the tolls are not immune from challenge in federal court under the interstate commerce clause of the Constitution. Meanwhile, the U.S. Supreme Court declined to accept the Owner Operator Independent Drivers Association’s case that the Pennsylvania Turnpike should not be allowed to charge tolls that pay for transit subsidies.

Amtrak’s Package Service Has Security Flaws
The Amtrak Inspector General’s office has found that the paper-based system that Amtrak uses to manage its Amtrak Express package service has “security weaknesses” that “continue to place employees, passengers, and the company’s brand at risk.” The old-fashioned cash- and paper-based system often leads to delaying trains, since employees do not have needed information at their fingertips, as they would with a modern electronic tracking system.

Another Spanish Highway Firm Plans North American Entry
Sacyr, a major highways player in Europe and Latin America, announced last year that it is planning to make significant investments in Canada and the United States, identifying 16 projects on which it may bid. Its P3 concessions in Europe total €1.8 billion. Its 44 concessions worldwide are in 10 countries, including Spain, Portugal, and Italy in addition to Latin America.

More Express Toll Lanes Getting Express Bus Service
Last month saw announcements of new express bus service to be offered on recently opened express toll lanes. In Florida, a new 75 Express Bus route began service Jan. 13 on the ETLs on I-75 in Broward County, the new Palmetto Expressway ETLs, and then the Dolphin Expressway to the Miami Airport Intermodal Center. That’s the third such route in southeast Florida, with others using the ETLs on I-95 and on I-595. In Charlotte, NC, the express bus service called Route 77x will now use the new ETLs on I-77 rather than the congested general-purpose lanes.

Environmental Permitting Helps New Energy Projects
A Jan. 9  Washington Examiner article quotes Sasha Mackler, director of the Energy Project at the Bipartisan Policy Center as follows: “When you think about all the infrastructure that needs to be financed, permitted, and built to drastically reshape our energy system, there is no doubt that our current regulatory system is not designed to facilitate that kind of transition.” Hence, it would be good for environmental groups to think twice before denouncing changes like the streamlined permitting process unveiled by the Council on Environmental Quality last month.

Jamaicans Can Buy Shares in TransJamaican Highway Limited
The government announced that it will soon divest part of its ownership in the TransJamaican Highway, a limited-access 4 to 6-lane toll highway connecting Kingston with Ocho Rios and Montego Bay. The initial public offering, expected within the next few months, will offer shares to individuals, as did last year’s IPO of Wington Windfarm Limited, in which 31,000 citizens purchased shares priced at 50 cents each.

Retirement Fund Buys More of I-595 Concession
Teachers Insurance and Annuity Association (TIAA) has bought another 37.5 percent of the equity in the concession company that rebuilt and operates the I-595 expressway in southeast Florida. The original concession company was owned by Spanish developer ACS. After reconstruction was completed in 2014, ACS sold a 50 percent interest to TIAA. The new purchase brings TIAA’s ownership to 87.5 percent

Studies Project Rapid Electric Vehicle Growth
Boston Consulting Group projects that worldwide electric vehicle sales will constitute one-third of all new vehicle sales by 2025, which strikes me as aggressive, though this includes both hybrids and fully electric vehicles. The current figure is 8 percent of sales worldwide, though much lower in the United States. Bloomberg New Energy Finance projects that by 2038 hybrids and full EVs will account for 50 percent of all new-car sales. By contrast, the U.S. Energy Information Administration projects much slower market penetration.

Oregon Officials Bullish on Interstate Tolling
In December, Gov. Kate Brown called on Oregon DOT to implement tolling on I-5 in the Portland metro area and to consider decking over portions of the freeway so that structures could be built on it. House Speaker Tina Kotek told reporters last month that she supports regionwide congestion-priced tolling from the Columbia River to Wilsonville, due in part to the “skyrocketing cost of I-5 widening.” The Oregon Transportation Commission has been studying tolls and congestion pricing, and ODOT has discussed this with FHWA officials who verified that it is legal to put variable pricing on urban Interstates to manage congestion.

FRA and California High-Speed Rail Authority Slammed by DOT Inspector General
The Office of Inspector General at USDOT released a report showing that the Federal Railroad Administration (FRA) failed to adequately oversee the use of the largest grant in FRA history, for the troubled California high-speed rail project. Among other shortcomings, OIG found that neither FRA nor CHSRA were proper stewards of federal money. For example, out of 30 requests to FRA for reimbursement, 18 (more than half) lacked proper documentation. Also, CHSRA failed to provide a credible plan for independent use of the current Central Valley portion of the planned route, a requirement of the grant. (Report # ST2020015)

Is Urban Transit an “Energy Hog”?
That is the contention of transportation analyst Randal O’Toole, in the latest analysis on his Antiplanner blog. When most Americans drove gas-guzzlers, transit used less BTUs of energy per passenger mile than the average passenger car. But as O’Toole crunches the numbers, he says it appears that transit has been less energy efficient than cars since 2009, with the worst being ferries and streetcars. The piece includes a detailed table of energy and CO2 emissions per passenger for individual commuter rail systems, heavy rail systems, light rail, streetcars, and hybrid rail. IT also explains the factors that lead to these surprising outcomes.

Expressway Agency Providing Transponders for Car Renters
During a three-month trial, the Central Florida Expressway Authority, operator of an array of urban tollways in the Orlando metro area, is providing loaner transponders to incoming airline passengers who have complained about fees charged by car rental companies. Near the airport rental car counters, CFEA staff appear with signs reading, “Travel like a local. Pay tolls. Skip fees.” The signs direct potential customers to go to VisitorTollPass.com to obtain the transponder.

Highway Corporations Proposed for Australia
The OECD’s International Transport Forum has produced a report suggesting that Australians would be better served if their highways were de-politicized. It urges consideration of creating self-supporting government highway corporations that would be directly accountable to their users.

New Highways P3 Course Available
USDOT’s Build America Bureau and FHWA’s Center for Innovative Finance Support have announced a new course on P3s. It consists of 13 modules and is available at no charge to federal, state, and local public entities. The course can be customized to take into account the level of P3 experience of the requesting agency. Contact patrick.decorla-souza@dot.gov for more information.

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Quotable Quotes

“Maryland state and local politicians who oppose Gov. Larry Hogan’s plan to add express toll lanes with adjustable tolls to the Capital Beltway and Interstate 270 are doing their best to impede improvements to one of the East Coast’s most congested commuter corridors. That puts them at odds with most of their own constituents. Those officials . . . are pushing a wrong-headed bill that would allow localities to veto toll roads running through their districts. It’s an inconvenient truth that most of the people they represent drive to work, hate traffic, and favor road improvements to prevent even worse congestion. . . . Allowing suburban localities to ban major road projects is an invitation for grandstanding and NIMBYism by parochial-minded officials uninterested in promoting regional solutions. Had localities been so empowered in the 1950s and ‘60s, it’s unlikely the federal Interstate highway system would exist today.”
—Editorial Board, “Maryland Commuters Want Less Traffic. So Why Are Democrats Opposing Hogan’s Plan?The Washington Post, January 23, 2020

“Long-term financing costs for both public-sector and private-sector ventures are currently both low and narrowing. ‘Patient’ pools of capital, like pension funds, are bidding-down the price for reliable, long-term infrastructure investments. At worst, the cost-of-capital differential on risk-adjusted projects is now marginal. Now is the time to build and finance infrastructure to take advantage of low interest rates.”
—Michael Fenn and Andy Manahan, “Industry Perspectives Op-Ed: Building, Financing Nova Scotia Highways Using P3s a Sensible Approach,” Daily Commercial News, January 15, 2020

“In 2017 Philip Howard’s outfit, Common Good, estimated the cost of a blanket six-year delay on big projects. He came up with $3.7 trillion, including environmental losses, injuries to health, highway congestion, and so forth. Think about it: 13 years of studying I-70 is 13 years of Coloradans cursing traffic while their engines vaporize gasoline in first gear. . . . NEPA also slows progressive priorities, like public transit. A study of Maryland’s Purple Line ran for 9,225 total pages and 10 years. The American Wind Energy Association welcomed NEPA reform last week, blaming outdated rules for ‘unreasonable and unnecessary costs and long project delays.’”
—Editorial, “Getting Closer to ‘Shovel Ready,’” The Wall Street Journal, January 14, 2020

“Planes have been autonomous for 30 years, and you still have a pilot and a co-pilot. There’s always that one situation that the autonomy hasn’t dealt with that you need the pilot to deal with. At some point with things like Level 4 platooning, you might take the second driver out. That is probably the first time you would see drivers taken out (of the cab). In the short term, the driver is still going to be in the vehicle. But then at some point, somewhere in the future, this also has to get through social acceptance. Are you going to feel comfortable with a Class 8 truck running down the road with no driver in your rearview mirror? It’s going to take some time.”
—Richard Beyer (Bendix), in Josh Fisher, “The Future Is Now, But . . . ,” Fleetowner, January 2020

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