Surface Transportation News: Priced managed lanes rebound from pandemic, vehicle electrification concerns, and more
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Surface Transportation Innovations Newsletter

Surface Transportation News: Priced managed lanes rebound from pandemic, vehicle electrification concerns, and more

Plus: Policies for managed lane networks, urban-automated vehicles, Rhode Island heavy truck tolls, and more.

In this issue:

Priced Managed Lanes Rebound from Pandemic

When traffic flow collapsed nationwide in the first half of 2020 during the COVID-19 pandemic, many skeptics suggested that variably-priced express toll lanes risked going under. That is especially true of those that were financed based on projected traffic flows. How could these facilities survive when there was hardly any traffic congestion? Who would pay tolls to avoid non-existent congestion?

The good news is that these fears were greatly exaggerated. A Sept. 2022 report from Fitch Ratings, “Peer Review of U.S. Managed Lanes,” provides an update on the 14 revenue-bond-financed projects the company rates, ranging from the very first one (SR-91 in Orange County, CA) to yet-to-open ones (I-66 outside the Beltway and Hampton Roads in eastern Virginia). Five of these facilities were upgraded to BBB or BBB+. They are SH-288 in the Houston area, I-77 in Charlotte, NC, the LBJ (I-635) express lanes in Dallas, the North Tarrant Express lanes in Ft. Worth, and the TxDOT I-35 East project in Dallas. In addition, the recently opened C-470 in Denver had its outlook revised from negative to stable. Of the 14 projects rated by Fitch, one is rated A (SR-91), eight are rated BBB, three are at BBB- and two at BBB+.

The Fitch analysts, Anne Triceri and Scott Monroe, explain the key rating drivers of these projects, which have risk factors beyond those of standard toll roads. One success factor is their unique debt structure, such as large reserve accounts and the flexibility provided by TIFIA loans (which can operate as interest-only during downturns). In the Texas projects, because those express toll lanes allow trucks, that additional traffic provided large revenue boosts during months when commuters were few and far between.

Thinking back over the 26 years since the SR-91 express lanes opened to traffic, all the naysaying has been falsified—at least for express toll lanes that are financed based on their toll revenues and which therefore had to pass a market test in order to be financed and built. Among the concerns raised—and now answered—are these:

Claim: Hardly anyone would pay high toll rates to avoid congestion.
Fact: Millions of people welcome the chance to pay, whenever they deem the value of the time savings and reliable trip time is worth more to them than the cost of the toll. 

Claim: Too many people will crowd into the lanes, so they won’t reduce congestion.
Fact: Variable pricing works; nearly all these facilities meet federal performance standards of at least 45 miles per hour travel speeds during peak periods (except where bottlenecks exist, as on I-95 northbound in Miami and I-405 northbound in the Seattle metro area).

Claim: Who would be foolish enough to invest in such risky projects?
Fact: Global toll road companies, infrastructure investment funds and buyers of revenue bonds have readily invested in these projects and are doing well.

Claim: Long-term public-private partnership projects are a scam, intended to go bankrupt and leave taxpayers holding the bag. (I kid you not: this claim was made in a 2014 cover story in The Weekly Standard.)
Fact: Actually, it’s just the opposite. Transurban North America president Pierce Coffee told a recent conference that the company continued to make its bond payments throughout the pandemic traffic downturn. “We were bearing the revenue risk,” she explained. “We were protecting the taxpayers.”

Nonsense like the above claims should finally be put to rest. Revenue-financed express toll lanes have proved their value and viability. They have come through an unprecedented traffic collapse with the same or increased bond ratings. The market has spoken.

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Rhode Island Heavy-Truck Tolls Are Unconstitutional

In a decision with far-reaching implications, federal judge William E. Smith of the U.S. District Court for the District of Rhode Island ruled that the Class-8-trucks-only toll on Interstate highway bridges violates the Commerce Clause of the U.S. Constitution. The suit was filed four years ago by the American Trucking Associations and several others. I’m not an attorney, but from a highway policy standpoint, I think the ruling makes good sense, and I hope it will be upheld if Rhode Island decides to appeal.

The state took advantage of a provision in Section 129 of the highway code that allows toll financing to be used to replace non-tolled bridges on the Interstate system with toll bridges. The Federal Highway Administration (FHWA) granted approval for the state’s proposed Rhode Works program under this provision. ATA and its allies argued that the tolls discriminated against out-of-state trucks, which would clearly violate the Commerce Clause—that is, the so-called “dormant” Commerce Clause which says that states may not interfere with interstate commerce (as opposed to the “active” Commerce Clause under which Congress can regulate interstate commerce).

The best explanation of the ruling that I’ve seen is by Eno Center for Transportation’s Jeff Davis (see Quotable Quotes for the link). Here are a few key facts about Rhode Works. The tolls were charged only to heavy trucks (Class 8 and above). An individual Class 8 truck could be tolled only once per day per bridge, and a maximum of $40 per day. Tolls were collected at only 12 bridges, nine of them on I-95. The revenues were spent on an array of bridges statewide that are not tolled.

Judge Smith understood and cites previous Supreme Court decisions regarding state regulation of interstate commerce: that states must not discriminate against interstate (as opposed to in-state) commerce and that they must not impose undue burdens on interstate commerce. He ruled that the tolls were not really related to the costs of replacing the bridges being tolled because Rhode Works uses much of the revenue on other bridges. He also cited evidence that Class 8 trucks were only 3% of the traffic on the tolled bridges—which he ruled is “inherently unfair.”  He also cited data (presumably from ATA’s brief) that 80% of the tolled vehicles are from out of state. Also, the 20% of tolled trucks that operate only within the state disproportionately receive benefits from the $40 per day maximum. Hence, the tolling program discriminates against interstate commerce, as Davis put it, “in both intent and effect.”

Let me add my two cents worth to Jeff Davis’s excellent summary. First, I think what Rhode Island enacted was a disguised border toll, something like Virginia contemplated in a quickly-abandoned plan to toll I-81 in 2019, with a high toll once vehicles crossed the border into Virginia but a very generous frequent-user rate available to state residents. That was less disguised than Rhode Works, but with the same motivation of making non-Virginians pay the bulk of the tolls.

Second, I’m very disappointed that FHWA approved Rhode Works, as being allowable under 23 USC 129, which specifically permits tolling to pay for a new bridge that replaces an old non-tolled bridge on the Interstate. When RIDOT people ran this idea by me prior to enacting Rhode Works, I suggested this was contrary to the wording and intent of 23 USC 129 and would likely run afoul of the dormant commerce clause. So I was surprised and dismayed by FHWA’s expansive reading of that provision.

State departments of transportation (DOTs) should take notice. Trying to make non-residents pay the majority of the tolls on a replacement bridge is likely to violate the dormant commerce clause. And in any future liberalization of Interstate tolling, Congress should insist that toll rates be the same for in-state and out-of-state users.

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Growing Concerns About Vehicle Electrification

Late last month at an event in Denver, the chairman of the Mercedes-Benz Group announced that this high-end automaker would cease making internal combustion engine (ICE) vehicles by 2030 (a shift from its previous plan to do this by 2039). That means just about every large automaker except Toyota plans to go electric vehicle(EV)-only by around 2035. But a number of recent studies have raised serious questions about whether this timetable is actually doable.

One concern is the availability and cost of battery ingredients—especially minerals such as lithium and cobalt. There aren’t enough mines, and many are in developing countries where mining raises serious questions (regarding child labor, for instance). A good overview of this question is “The EV Revolution: Cell-Side Analysis,” in the Aug. 20 issue of The Economist. A much longer assessment is provided in Volt Rush, a recent book by British journalist Henry Sanderson. That book and other reports document the growing dominance of China in rare earths, battery production, and EV production. In his review of Volt Rush in The Wall Street Journal (Sept. 10, 2022), energy analyst Mark P. Mills notes questions that Sanderson leaves unanswered: “Whether the world can mine enough minerals for our current EV ambitions, and what the energy used in those massive mineral supply chains does to claims of carbon-free EVs.”

Besides reading these and a number of recent papers on the shortcomings of the U.S. electricity grid for the projected EV future, what motivated me to write this article was the long lead article in the October issue of The Dispatcher, written by Michael L. Sena, a very knowledgeable transportation consultant. “Batteries: Theme of the Next Mad Max Dystoposeries” is well-researched, with citations to many of Sena’s sources.

First, Sena provides details on the surprising extent to which the Chinese government has set out to become the world’s dominant player in battery electric vehicles (BEVs). He’s been following these efforts since a trip to China in 2007 and discussed it in his 2008 book, Beating Traffic: Time to Get Unstuck. I was surprised to learn (from his current article) how much of the battery minerals sector, battery production, and BEV production is Chinese. His second point is that “battery production numbers just don’t add up.” As EV production has ramped up, the cost of the needed materials has risen, and the long-term downward trend of EV batteries (as measured by the cost per kilowatt-hour) has leveled off and started to rise. Another point is the current difficulty in recycling EV batteries—which, if it can be done cost-effectively, might reduce the need for new battery production. So far, this is far-from-proven technology.

To me the most chilling point is about the electricity needed to power a complete replacement of ICE vehicles with BEVs. Sena cites calculations by energy analyst Roger Andrews. For a hypothetical one billion BEVs worldwide, at realistic annual driving (20,000 km/year), Andrews came up with 4,400 Terawatt-hours of electricity to power those vehicles. His paper has tables for several countries, the European Union, and the world. The table for the United States estimates a need for 49% increase in installed electricity generation capacity to handle a complete transition to BEVs. Since federal policy also calls for replacing all fossil fuel electricity generation (which accounts for 61% of current generation), the total need for new electricity generation would be 110%—a staggering number.

These are sobering points. One thing that will help is the billions of venture capital going into developing alternative EV battery concepts that do not rely to the same extent on rare-earth minerals. Nearly all projections involving responses to climate change assume current technologies and their costs, because you can’t do projections of things that don’t yet exist. But I think the concerns that many researchers have raised, and which Sena has nicely summarized, call for some hard thinking about 2030 or 2035 termination of ICE production. Toyota may be right that hybrids may be more feasible for the medium term than a complete transition to BEVs.

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Consistent Policies for Managed Lanes Networks
By Baruch Feigenbaum

After metro areas build out their networks of priced-managed lanes, the next step is to develop regionwide operating guidelines for those lanes. Having managed lanes on every limited-access highway helps form an interconnected network that motorists and buses use to reach their destinations in a consistent, reliable time. However, having different operating rules for different portions of the network makes travel more complicated for users and reduces the number who will use the lanes. This is a problem because the lanes are only effective at reducing congestion and increasing transit usage if drivers understand how to use them.

The Northern Virginia area of Washington, DC, provides a good case study. In Northern Virginia, every Interstate highway (I-66 outside the Beltway, I-95, I-395, and I-495) has (or for I-66 outside the Beltway will have by December) managed lanes. For this analysis, I have included Interstates with congestion pricing (I-66 inside the beltway) but not fixed-rate toll roads such as the Dulles Toll Road and the Dulles Greenway.

Some managed lane features, such as geometric design, cannot be changed. I-95 and I-395 are reversible; I-66 outside the Beltway and I-495 have lanes in both directions. Who operates various links (Cintra, Transurban, or the Virginia Department of Transportation) is part of long-term contracts and will not change for many years (unless the contract is violated).

Operating rules are policies that detail which vehicles can use the lanes when the lanes operate, and how drivers can pay for the lanes. Making some operating rules more uniform would help drivers. For example, trucks are allowed to use the I-66 outside the Beltway lanes but not the lanes on I-66 inside the Beltway, I-95/I-395, or I-495. It is not difficult to imagine a truck driver using the direct connector from the I-66 lanes to the I-495 lanes and then finding out he is not supposed to be in the lanes when he gets a visit from a friendly Virginia State Patrol officer.

The trucking community has generally opposed tolling, citing among other things bogus numbers on the cost of toll collection that assume tollbooths and human operators. All managed lanes use all-electronic tolling. However, the way to build support for managed lanes is not to exclude truckers but rather to offer them the option to use the lanes. The feasibility and costs of retrofitting other managed lanes in the region for trucks are unclear, but it seems worth studying from both a policy and political perspective. (Having trucks use I-66 inside the Beltway does not make sense from an operational perspective.)

In addition, the lanes have different operating hours. I-66 outside the Beltway and I-495 operate 24 hours a day, seven days a week (24/7). I-95/I-395 operates 24/7 except when the lanes are being reversed, generally late mornings on weekdays and Saturday afternoons on weekends. However, I-66 inside the Beltway operates peak period/peak direction only. As a congestion-priced highway I-66 inside the Beltway is different from the other managed lanes, but given that its traffic flows are largely bi-directional, the “non-peak” direction needs pricing as much as the peak direction. Ideally, the entire road would be priced 24/7 because traffic congestion can be a problem middays, evenings, and weekends. Originally, VDOT planned to price peak periods in both directions, but then-Gov. Terry McAuliffe prevented off-peak-direction pricing for political reasons.

There are some operating rules that are uniform to all lanes but this might not be the best long-term solution. For example, all of the lanes allow vehicles with three or more people to travel for free. All allow motorcycles to travel for free. Thankfully, none allow alternative fuel vehicles to travel for free as is common in California. But allowing carpools and motorcyclists into the lanes reduces the amount of capacity for toll-paying customers. These carpools and motorcyclists have no incentive to leave the lanes regardless of the price of the tolls. Therefore, the tolls need to be higher than they would be without carpools and motorcyclists to deter enough potential customers from the lanes to reduce congestion.

Many high occupancy vehicle (HOV) lanes began as busways. But because there were not enough buses to justify their own dedicated lane, busways were converted to four-person carpool lanes, and then three-person, and often down to two. But even three-person carpools include many fam-pools or school-pools, where a parent is transporting two children to school. These are not the envisioned carpools (the children cannot drive themselves) that would get a car off the road. Instead, managed lanes should provide free passage only to truly high-occupancy buses and registered vanpools. Both are legitimate transit options that help take vehicles off the road.

The easiest way to pay tolls for each highway is to use an EZPass transponder or via Payviam (if you drive a vehicle with a built-in transponder such as trucks or some Audi and Mercedes Benz vehicles). However, for those from outside of the region or others without an EZPass, all Virginia highways provide a pay-by-plate option. All allow drivers to pay a toll online within five days for a modest administration fee, generally $1.50. However, not all drivers are going to know which website to use or how to pay the toll. And if the lane operator needs to mail you a bill the administration fee increases to $12.50. A $12.50 administration fee seems excessive for a $5 toll. Certainly, toll-road operators want to encourage drivers to get an EZPass but other major entities including the Florida Turnpike Authority and other local entities such as the Dulles Toll Road and Dulles Greenway charge a smaller $2-$5 administration fee or no fee at all.

As other regions build out their managed lanes network, they will need to tackle the same operational questions as Northern Virginia. When the physical infrastructure is complete, policymakers, transportation agencies, and lane operators need to coordinate on regionwide operating rules.

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Some New Questions About Urban AVs
By Marc Scribner

On July 21, the National Highway Traffic Safety Administration (NHTSA) acknowledged receipt of and requested comments on two petitions for temporary exemption from Federal Motor Vehicle Safety Standards (FMVSS) submitted by General Motors and Ford for those automakers’ newly developed automated vehicles (AVs). These petitions generated numerous public responses, but the responses to GM’s petition are most interesting given the unconventional design of its Cruise Origin and indicate that cities are likely to approach AVs with varying levels of enthusiasm.

Cruise, GM’s AV subsidiary, has made recent headlines for operational challenges experienced in San Francisco. In early June, a Cruise ridehailing AV, a modified Chevrolet Bolt equipped with an automated driving system (ADS), was struck by another vehicle that resulted in minor passenger injuries after it attempted to make an unprotected left turn. A San Francisco police investigation found the vehicle that struck the Cruise AV to be the “party at most fault,” but this incident led Cruise to initiate a voluntary recall of all 80 of its ADS units to avoid similar events in the future. Later in June, Cruise experienced a network malfunction that caused several of its ridehailing AVs to cluster on a downtown San Francisco street late at night, impeding traffic on the block for two hours. These events were referenced by some commenters in response to GM’s FMVSS exemption petition to NHTSA.

The exemption petitions submitted by GM and Ford are similar in that they both propose to deploy purpose-built AVs. But they differ significantly in that the Ford vehicle would be equipped with conventional manual controls allowing it to be operated by human drivers. GM’s battery-electric Cruise Origin, in contrast, is a specially designed autonomous passenger shuttle that lacks a steering wheel and pedals for manual human operation.

Exemptions from FMVSS were first provided by Congress in 1968, two years after it had authorized federal auto safety regulation with the National Traffic and Motor Vehicle Safety Act of 1966. The current framework was largely established in subsequent 1972 amendments, which granted the Secretary of Transportation the authority to approve exemptions to “facilitate the development or field evaluation of new motor vehicle safety features,” “facilitate the development or field evaluation of a low-emission motor vehicle,” and to avoid “prevent[ing] a manufacturer from selling a motor vehicle whose overall level of safety is equivalent to or exceeds the overall level of safety of nonexempted motor vehicles,” in addition to the economic hardship exemption created by the 1968 law. This general exemption authority is currently codified at 49 U.S.C. § 30113.

In its petition for exemption, GM argued that its Cruise Origin vehicles should be exempt under two FMVSS exemption bases because the Origin provides an overall safety level at least equal to that of non-exempt vehicles and exempting the battery-electric Origin would make development of a low-emission vehicle easier.

In its response to the GM petition, the San Francisco Municipal Transportation Agency (SFMTA) urged NHTSA to condition approval of the Cruise Origin exemption on 12 requirements involving data sharing, vehicle design, and operations, repeatedly referencing the operational problems Cruise had experienced in San Francisco. While conceding that it “does not have the technical expertise to conclude that the absence of fatal crashes from the testing to date of the Cruise AV signals superior driving,” SFMTA urges NHTSA to “launch a rulemaking proceeding to prescribe minimum standards for performance of all automated driving systems operating on public roads.”

The operational mandates SFMTA suggests to NHTSA would have been better directed at California’s state and local regulators (including SFMTA itself), which have the clear authority to regulate the operations of any vehicles on their public roads—unlike NHTSA, which is authorized to regulate motor vehicle safety and performance and not the operation of those vehicles.

With respect to SFMTA’s request that NHTSA develop new regulations on automated driving system (ADS) performance, those rules will need to reference consensus technical standards that are still under development. Regulating ADS performance in the absence of consensus standards through the development of government-unique standards is both extremely challenging due to limited regulator technical expertise and explicitly discouraged by the National Technology Transfer and Advancement Act of 1995.

Like San Francisco, the National Association of City Transportation Officials (NACTO) requests that NHTSA put the regulatory cart before the technical standards horse with respect to ADS performance. But NACTO goes further, urging NHTSA to deny GM’s petition by alleging several socioeconomic and environmental problems well beyond the purview or expertise of safety vehicle regulators at NHTSA in addition to claiming GM has not proven the Cruise Origin’s safety equivalence to non-exempt vehicles.

On the safety equivalence claim, NACTO appears to misunderstand what NHTSA is supposed to evaluate. The main question NHTSA will be investigating is, does exempting the Origin from specific FMVSS preserve the safety equivalence with a compliant Origin? For example, would removing the Origin’s rearview mirrors degrade safety when compared to an Origin with rearview mirrors? Given the lack of historic crash data due to the novelty of the Cruise Origin and NHTSA’s limited tools to evaluate ADS performance, the extremely high standard of safety proof that NACTO demands is unlikely to exist in the near-term. Worse, adopting NACTO’s interpretation of NHTSA’s exemption authority would likely prevent any exemptions for ADS-equipped vehicles and deny NHTSA the data needed to develop eventual minimum performance requirements, effectively short-circuiting the process NACTO claims to support.

Not all big city transportation stakeholders have expressed skepticism toward NHTSA granting GM’s exemption petition. The San Francisco Chamber of Commerce urged NHTSA to approve GM’s petition. So too did the National Federation of the Blind. In contrast to San Francisco, Phoenix, Arizona, Mayor Kate Gallego personally wrote to NHTSA supporting GM’s petition, stating that Phoenix officials believe deployment of the Cruise Origin would help promote “a thriving environment, livable communities, enhanced productivity, and bustling commerce.”

Academic AV experts have also offered their support for GM’s exemption petition. Kara Kockelman, the Dewitt Greer Centennial Professor of Transportation Engineering at the University of Texas at Austin and one of the world’s most prominent AV scholars, wrote to NHTSA to express her “very strong support of GM and Cruise’s request for temporary exemptions,” citing the potential safety, congestion, environmental, and social equity benefits of the Cruise Origin.

To be sure, the benefits of AVs extend will extend well beyond dense urban cores. But the responses to GM’s Cruise Origin exemption petition suggest the benefits to urban cores may not be distributed evenly. This may have less to do with the performance of the AVs and the features of the built environment and more to do with the varying political enthusiasm for deploying AVs among officials in particular cities.

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Undercutting Users-Pay/Users-Benefit

A number of governors from both parties are touting their temporary suspension of state fuel taxes in the run-up to the November election. Most of them say this won’t harm highway finances because they are drawing on higher-than-expected federal money (from the Infrastructure Investment and Jobs Act or left over from various COVID-19 relief measures). That may fool some, but those federal dollars could have been used for net new investment, rather than paying for politicians’ gas-tax holidays.

When gas prices were nearly $4 per gallon, Florida’s populist Republican Gov. Ron DeSantis, got the legislature to approve a 25 cents per gallon gas tax holiday for the month of October, leading up to the November election, where he’s seeking a second term. In late August he upped the ante by also using federal dollars to compensate for temporary cuts in the toll rates on Florida’s Turnpike and other state-run toll roads. For six months beginning Sept. 1, 2022, customers on state-run toll roads are eligible for discounts of 22% to 25% (if they have SunPass transponder accounts). At least the three independent metro-area toll agencies (in Miami, Orlando, and Tampa) are exempt from this political grandstanding. And why isn’t the Florida Department of Transportation objecting? Its leadership is appointed by the governor, so they must remain silent.

Adding implicit support for these measures, Transportation Secretary Pete Buttigieg told a House Transportation & Infrastructure Committee hearing in July that general fund transfers are “a legitimate way to fund highways.” According to Politico’s account of the hearing, he left open the question of whether Congress should retain a users-pay approach in the future.

Several previous Democratic administrations have wanted to convert the federal Highway Trust Fund into an all-purpose transportation trust fund, but Congress has never signed on to that idea. The concept would be that while highway users would continue to pay, the revenues would be distributed to Amtrak, bicycle networks, and anything else that could conceivably be considered surface transportation. That is a recipe for poorly funded roads and highways.

It is critically important for those of us who want a robust, state-of-the-art highway system to retain and restore not just users-pay but its corollary, users-benefit. The eventual transition from per-gallon fuel taxes to per-mile charges provides a once-in-a-century opportunity to restore the users-pay/users-benefit paradigm, converting the highway system into a utility, analogous to water supply, telecoms, and electricity.

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Clearing Debris from Highway Lanes, Safely

Debris in active traffic lanes is a hazard to moving vehicles and to state DOTs whose crews must get out of their vehicles to remove it. All too often, these workers get injured or killed by moving vehicles. In a 2016 study, the AAA Foundation for Traffic Safety identified an average (over four years) of 50,000 annual crashes into roadway debris, leading to 10,000 injuries and 125 deaths.

At the annual meeting of the International Bridge, Tunnel, & Turnpike Association (IBTTA) in August, I was intrigued to see a video of a better way (than an on-foot worker) to quickly and safely get debris out of traffic lanes. A company called J-Tech is now offering a device called LaneBlade that can be attached to a utility truck to push debris over to the breakdown lane. LaneBlade consists of a large center surface with “wings” on each end that keeps the debris from sliding to the side while it is being pushed. The company’s Fred Bergstresser told me that (mounted on a large enough truck), LaneBlade can move a disabled car, a refrigerator, a mattress, or even a fully loaded truck.

Not wanting to be seen as promoting a particular product, I asked him who their competitors are. There appears to be no commercial competition. One state DOT built its own Gator Getter to move “road gators” (truck tire treads) from roadways. A device aimed at small debris is called Debris Clear. That’s about it. Consequently, LaneBlade has been purchased by a number of DOTs, including those of Florida, Illinois, Ohio, Pennsylvania, Tennessee, and Texas.

I get no commission for writing this. I’m doing so because I’m impressed by this clever, life-saving device.

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News Notes

Toll Road Company Buys Stake in the Chicago Skyway Concession
Two of the three Canadian public employee pension funds that jointly own the 99-year concession to operate and manage the Chicago Skyway, a 7.8-mile toll bridge linking downtown Chicago to the Indiana Toll Road, are selling their stakes. Canada Pension Plan Investment Board and OMERS Infrastructure last month agreed to sell their combined 67% of the concession to Atlas Arteria, an Australian toll road company. Atlas is paying $2 billion for the two-thirds interest. The original 99-year lease valued the concession at $1.8 billion; the Atlas bid implies a $3 billion valuation of the concession. Ontario Teachers’ Pension Plan is retaining its one-third stake.

Warren Buffet Buys Majority Stake in Pilot/Flying J
Buffett’s investment company Berkshire Hathaway has acquired 80% of Pilot/Flying J, the largest truck stop operator in North America. Some analysts think Buffett is eying the company’s land holdings, on the assumption that automation may reduce the need for truck stops. An alternative view is that Buffett understands the ongoing shift to truck electrification and the need to expand the number and location of truck stops. With 80% ownership, Buffet could buck trade association NATSO which has strongly opposed allowing truck stops directly alongside long-distance Interstates. Buffet shook up freight railroads by purchasing BNSF and taking it private. Might he now be planning to shake up trucking and truck stops?

Georgia DOT Gets Qualifications from Three Teams for SR 400 P3
In the first of three major revenue-risk DBFOM concessions for express toll lanes, GDOT has received qualifications from three teams for the first project: adding express toll lanes to 16 miles of SR 400. The three teams are led by ASTM/Shikun & Binui, Cintra/Macquarie, and Meridiam/Acciona. The estimated cost of the project is between $2 billion and $2.4 billion, according to Public Works Financing. The concession term will be 50 years. The express lanes will include state-funded Bus Rapid Transit service in addition to toll-paying motorists.

TxDOT 10-Year Plan Devotes $85 Billion to Improved Highways
As one of America’s largest and fastest-growing states, Texas needs an expanded-capacity highway system. And that is what the new 10-year plan calls for. The expansion plans include I-35 through Austin and San Antonio and further expansions in the Dallas/Ft. Worth and Houston metro areas. In addition, $14 billion of the total is devoted to roadways in rural areas.

A Toll Truckway for the Port of Tacoma?
Washington State DOT is building two miles of toll lanes alongside I-5 linking the Port of Tacoma with SR 167. The $376 million project began construction in July. It’s part of the state DOT’s Puget Sound Gateway Program. Since much of the traffic to and from the port consists of drayage trucks, and the new corridor will charge tolls, this may become, de facto, America’s first toll truckway.

Chile Unveils $13 Billion P3 Portfolio
The Ministry of Public Works last month unveiled its plans for large-scale public-private partnership (P3) projects for 2022-2026. About $4.6 billion of the total will be dedicated to unfinished portions of the Pan-American highway and its accesses to nearby cities, via 12 separate projects. The plan also includes long-term concessions to improve four regional airports.

Denver Tollway Unveils 3-Year Widening Project
The E-470 Public Highway Authority announced the beginning of a third-laning project (each way) along 11 miles of this ring road around the eastern half of the Denver metro area. The 47-mile toll road runs from I-25 South to I-25 North and passes near Denver International Airport in the metro area’s eastern suburbs. The $350 million project began its initial construction phase in late September.

Gateway Tunnel Will Cost $16 Billion, Be Completed in 2035
The new tunnel beneath the Hudson River, bringing Amtrak and commuter trains from New Jersey to Manhattan, is already over budget and very late, before it even begins construction to replace the aging tunnel that was damaged by Hurricane Sandy in 2012. The poor performance of U.S. transit rail tunnels and light rail projects is analyzed in a new report from the Eno Center for Transportation, “On the Right Track: Rail Transit Project Delivery Around the World.” It documents that the United States pays far more per mile for such projects than the average of 10 peer nations overseas. The report singles out Chile, Italy, and Norway for best practices and more bang for the buck.

Battery Swapping May Work for Commercial Vehicles
An article in The Economist (Aug. 27) explains the pros and cons of a system developed by Taiwanese firm Gogoro, which allows subscribers to exchange a depleted battery from a moped or scooter. A consortium of Japanese vehicle producers is considering a similar service for electric delivery vans and light trucks. This appears to be a good fit for local commercial electric trucks that are on the road all day and require frequent recharging but does not appear to be a good fit for personal EVs, which have many different sizes and makes of battery and need recharging much less often.

Israel Plans New Express Toll Lanes
An interagency request for qualifications (RFQ) was issued last month for three new express toll lane projects in Israel. The project is envisioned as a 29-year DBFOM concession for the express lanes and includes the development and implementation of a tolling system. Qualifications are due Dec. 15. Israel has one operational express toll lane project—the only one outside the United States. The express lanes will include express bus service and incentives for three-person carpools.
Werner Planning 24/7 Automated Long Haul Truck Service
Trucking company Werner Enterprises and technology company Kodiak Robotics announced a partnership on Sept. 29, aiming at autonomous long-haul truck operations with human drivers handling only the first-mile pickup and last-mile delivery portions of the trip. The agreement came after a week-long pilot project in which a Kodiak-automated truck (with a safety driver) operated four round trips between Dallas and Lake City, FL. The automation system is called Kodiak Driver. No specifics were announced about where and when the operations would begin without a human driver on the long-haul portion of such trips.

Setbacks for Electric Bikes and Scooters
Battery fires on e-bikes in New York City have led the city’s public housing authority to propose banning such bikes from their buildings. City firefighters have responded to 26 battery-based fires in public housing since 2021, Ars Technica reports. Elsewhere in the city, battery-based fires have resulted in 73 injuries and five deaths. Many e-bikes in New York are do-it-yourself conversions, which do not comply with UL battery safety standards. And in San Francisco, the city has proposed banning e-scooters from sidewalks, due to injuries to pedestrians. The only exception would be for scooter-share companies that use geofencing to disable scooters from operating on sidewalks.

Ground-Breaking for Toll Border Crossing Near San Diego
Last month saw the ground-breaking ceremony for a tolled border crossing at the Otay Mesa East port of entry from Mexico. The four-lane toll bridge is expected to decrease border wait times by 50%. Variable tolling will be used in order to reduce congestion. Toll rates for personal vehicles will range from $5 to $25 and for commercial vehicles from $15 to $45. Target date for completion of the project is Dec. 2024.

Correction to September Article
In September’s article “Canada Points the Way on P3s for Highway Rest Areas,” the number of years since the federal ban on commercial services at U.S. Interstate rest areas was mistakenly written as 72 years ago. Since the ban went into effect in 1960, the correct number is 62 years ago. This error has been corrected in the online edition of the September newsletter.

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Quotable Quotes

“This analysis is straightforward. Rhode Island has a legitimate—even compelling—interest in the maintenance of its ailing bridges. But there is no reason that interest cannot be served by a tolling system that does not offend the Commerce Clause. Indeed, many states have implemented tolling systems that fairly apportion their costs across various users and do not discriminate against interstate commerce. Applying strict scrutiny, Rhode Works’ tolling program fails the test.”
—Judge William E. Smith, in American Trucking Associations v. Alviti, in Jeff Davis, “Federal Judge Finds Rhode Island’s Truck Tolls on Interstate Bridges Unconstitutional,” Eno Transportation Weekly, Sept. 23, 2022

“Let us reset the clock and stop forcing battery electric cars into the market. Instead, we should focus on reducing emissions from the cars we can produce without creating a completely new business ecosystem and infrastructure that will be controlled by China. Hybrid vehicles that charge themselves looked like the perfect place to start 20 years ago, and, in my book, it is still the best option we have right now. We learned a hard lesson with ‘Dieselgate,’ which is that if you set unreachable goals, but at the same time make it economically impossible for companies to hit these goals, businesses will cheat. It’s either that or go out of business. Passing a law that makes it impossible to sell a car that does not have zero emissions at the tailpipe turns the car business over to those who will pollute the air from their countries, beyond the reach of US and EU courts and totally unresponsive to climate activists.”
—Michael L. Sena, “Batteries: Theme of the Next Mad Max Dystoposeries,” The Dispatcher, Oct. 2022

“Self-driving ‘all the time, everywhere’ hasn’t stalled. It’s always been and always will be a pipedream. (I’ve never been able to drive my own car ‘all the time, everywhere’ even though Madison Avenue has forever suggested that I can (or should be able to if I wasn’t such a …) Self-driving doesn’t need to be ‘all the time, everywhere’ because there is a driver in the car. Let them do the driving at times and places where the system doesn’t work very well. In fact, more should be done to not allow them to drive either in heavy snow, torrential downpours, dense fog, when they are tired, when they’ve had too much to drink, smoke, or snort. We need to get to a point at which Driverless (self-driving in an operational design domain—ODD) actually delivers safe origin to destination mobility in some ODD that delivers real value to society. Let’s define the ODDs where this technology does work. Put it to work there and begin recouping some value from all the sunk investment. Then focus on the most efficient and effective way to grow the ODDs such that they most expeditiously generate the most value to society,”
—Alain Kornhauser, “Why Self-Driving Cars Have Stalled” Smart Driving, Sept. 12, 2022

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