Surface Transportation News: Trends in infrastructure finance and public-private partnerships
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Surface Transportation Innovations Newsletter

Surface Transportation News: Trends in infrastructure finance and public-private partnerships

Plus: Mileage-based user fees proposal, California's locomotive emissions regulation misfire, and more.

In this issue:

Annual Privatization Report Documents P3 Transportation Finance Trends

Using long-term public-private partnerships (P3s) to develop and manage large-scale transportation infrastructure began in Europe in the 1970s, primarily to finance, develop, and operate new toll roads. The Margaret Thatcher era in the 1980s led to extensive privatization of airports and state-owned electricity, telecommunications, and water utilities. The idea of leasing major transportation assets (airports, seaports, toll roads, etc.) spread to Australia and Latin America in the 1990s and early 2000s. The first two “greenfield” highway P3s in the United States—the Dulles Greenway in Virginia and the SR 91 Express Lanes in California—both reached financial close in 1993, but for about a decade they were outliers.

With global growth in privatization and long-term public-private partnerships becoming a major phenomenon in the 1990s and 2000s, financial markets created infrastructure investment funds to raise equity from institutional investors to enable these new funds to build portfolios of privatized and P3 infrastructure. For several decades, the Reason Foundation’s transportation program has published annual reports on such developments. The reports are issued each spring: one focused on transportation finance, another on surface transportation, and a third on aviation.

This article summarizes findings from Reason’s 2024 Annual Privatization Report: Transportation Finance.

The new report first summarizes the worldwide continued growth of infrastructure investment funds. In 2023, the top 100 such funds, as tracked by Infrastructure Investor, reached a trillion-dollar milestone: Over the most recent five-year period, the investment funds raised $1.04 trillion. Of these top-100 funds, 41% of that total was raised by U.S.-based funds, with European-based funds accounting for another 33%.  Adding Australia/New Zealand funds (14%) and Canadian funds (10%), 98% of the total comes from funds in those countries.

What are these funds investing in?

Data firm Infralogic reports that in 2023, as in 2022, transportation was the largest category; its $51.8 billion accounted for 62% of 2023 investments by infrastructure funds. And 54% of the total went toward greenfield projects. However, of the largest 15 global transportation projects financed last year, the largest was the brownfield lease of Puerto Rico toll roads, at $3 billion. The only other U.S. project on that list was the $35 million New York Metropolitan Transportation Authority station refurbishment project.

Annual Privatization Report also tallies the world’s P3 developers, by number of projects, with the top five being Vinci, Meridiam, Sacyr, ACS Group, and Macquarie. The top three developers of U.S. public-private partnership projects are Meridiam (9 projects), Ferrovial/Cintra (7), and ACS (6).

The report includes an annually updated table of U.S. transportation P3 projects of two types: revenue-risk (RR) projects, financed primarily by user fees, and availability payment (AP) projects, financed by annual government payments. From the finance breakdowns of each project in the table, the 21 revenue-risk project financings averaged 28% equity, compared with an average of 6% in availability payment projects. Accordingly, the average AP project’s financing included 34.9% state government funding, compared with an average of 8.3% in RR projects.

The largest U.S. greenfield transportation project in the report is the $2.1 billion Calcasieu River Bridge project in Louisiana, which actually reached final approval in Jan. 2024.

Other important U.S. P3 transportation news in 2023 included Transurban’s withdrawal from the $6 billion Maryland express toll lanes project after a change of governor made the prospect of reaching an agreement to proceed unlikely. The Illinois legislature revised its P3 law to allow for unsolicited proposals and approved a potential P3 to add express toll lanes to congested I-55 in the Chicago metro area.

The pipeline of upcoming U.S. transportation public-private partnership projects includes the Georgia Department of Transportation’s (DOT) $1.6 billion express toll lanes on SR 400 and the much larger I-285 Top End express lanes in Atlanta.

Also in the pipeline across the United States are planned P3 express toll lanes (dubbed Choice Lanes) in Tennessee, including in Nashville, Chattanooga, and Knoxville. Other potential projects in coming years include adding express toll lanes to I-77 between Charlotte, North Carolina, and the South Carolina state line, a port-connector highway in New Orleans, a new Mississippi River bridge in Baton Rouge, LA, and possibly extending the 20 miles of express toll lanes on I-4 in Orlando, FL, further northeast and southwest.

The report’s final section covers the ongoing expansion of infrastructure investment (via the major infra investment funds) by U.S. state and local public employee pension systems. Investing equity in a portfolio of revenue-generating infrastructure was pioneered decades ago by Australian and Canadian pension systems, which today invest in infrastructure worldwide (and are fully funded).

The average funding ratio of 118 U.S. state pension systems in 2023 was 76%, with only two fully-funded state pension systems (in New York and Washington). The largest U.S. public pension system, the California Public Employees’ Retirement System, or CalPERS, was the U.S. pioneer, making landmark investments in the privatized London Gatwick Airport and the U.S. Indiana Toll Road long-term P3 concession. Some of the larger state pension systems making new or expanded commitments to infrastructure investment funds in 2023 were the New York State Common Retirement Fund, the Illinois Municipal Retirement Fund, and the Employees Retirement System of Texas. City and county employee retirement funds made numerous new commitments in 2023, as well.

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Reason Foundation’s Report on Surface Transportation P3s
By Baruch Feigenbaum

Today, Reason Foundation is also publishing the Annual Privatization Report Surface Transportation chapter. Transportation privatization activity decreased in the immediate post-COVID-19 period, but the number of 2023 project closings has recovered, and now exceeds 2019.

In the United States, there are only 23 privately owned roadways. Most are bridges or highways that lead to bridges. Alabama has more than any other state with four. There are three private bridges connecting Texas and Mexico, built to speed up freight movement with the country’s number one trading partner. Two other bridges connect the U.S. with Canada, another major trading partner. Other private roads serve small communities or beachside towns. All of these bridges met a need for a facility that the state transportation department could not fund.

Public-private partnerships (P3s) are much more common than privatized highways. Reason defines a P3 as having at least four of the five parts of a full concession: design, build, finance, operate, and maintain. Almost all infrastructure is some type of public-private partnership. For example, the Georgia Department of Transportation awards some Interstate repaving build-maintain contracts to CW Matthews. However, these contracts are generally for short-term maintenance only. Design-builds, in which the three design-bid-build steps are combined into one, and design-build-finance can be considered mini-P3s. They help to reduce costs, speed up project delivery, and improve project quality. However, since they are not full public-private partnerships, they are not included in this chapter.

Unlike in past years, the two largest international surface transportation public-private partnership projects occurred in the United States. The largest of these projects was the $4.2 billion sale of State Highway 288 (from one set of private firms to another) in Houston and the second largest was the $3 billion lease of four Puerto Rico toll roads, both to Abertis. Unfortunately, the Texas Department of Transportation early this year chose to terminate the SH 288 P3 concession because the department wanted to control the toll rates and add new general purpose capacity, and contract termination was the cheapest method.

Globally, five other surface transportation P3 projects topped the billion-dollar mark. Israel reached financial close on two light rail lines. A Norwegian highway connecting a summer resort area and the largest airport in the northern part of the country reached financial close. Texas State Highway 130 was refinanced. Finally, the Dongbu Expressway, an important highway in Busan, South Korea’s second-largest city, was refinanced.

While the U.S. had the two largest deals, the report shows extensive surface transportation P3 activity occurred across the globe. Asia had a staggering 63 projects reach financial close, for $8.9 billion. Europe had 12 projects totaling $3.4 billion. The Middle East had two large projects totaling $3.3 billion. North America had 11 projects totaling $9.8 billion. Oceania (in this case Australia), Latin America, and Africa round out the list.

Currently, the U.S. has 42 surface transportation P3 projects of at least $100,000 that have reached financial close. While that may not sound impressive, it is a 24% increase from just seven years ago, showing the U.S. market is expanding. These P3 transportation projects range from the $5.7 billion Indiana Toll Road to the $0.1 million Teodoro Moscoso Bridge in Puerto Rico.

One reason that public-private partnership activity has increased is the doubling of the federal private activity bond (PABs) cap in the last surface transportation reauthorization, the Infrastructure Investment and Jobs Act. Private activity bonds are tax-exempt bonds that help level the playing field with municipal bonds. Without PABs, public-private partnership investors would have to pay a tax on P3 bonds, which they do not have to pay on municipal bonds. Given that P3s serve a public purpose, it is important that they are treated the same way as municipal bonds. Twenty-four P3 projects have used private activity bonds as part of their financing package.

For better or worse, 2023 was not a banner year for state-level P3 legislation in the United States. One reason is that half of all states already have broad P3 enabling laws. Broad enabling legislation typically allows state transportation departments to enter into public-private partnerships with minimal meddling from elected officials. Another 17 states, and the District of Columbia and Puerto Rico have restrictive legislation. In this legal setup, the legislative and executive branches must approve each P3 project. While this is better than no legislation, it introduces politics and horse trading into the process, minimizing the technical guidance of the state Department of Transportation engineering, financial, and legal advisors.

Illinois shortened its prequalification process for P3s and authorized a P3 for proposed express toll lanes on I-55 in Chicago. Regarding the prequalification process, Illinois is a state with broad P3 authority, but no major projects. The hope is the change will incentivize additional projects.

A bill to expand public-private partnership authority in Texas beyond the three tollway authorities (Austin, Dallas, Houston) failed. Finally, while major P3 highway projects in Georgia and Virginia continued to move forward, the $7.6 billion Maryland managed lanes project was canceled by new Gov. Wes Moore. The Maryland process shows the danger of politicizing a transportation project. Maryland plans to use a design-build approach to add express lanes to some of the planned corridor. But, the state does not currently have the funding. Further, there is no funding for the transit services that the proposed P3 would have funded.

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New Report Argues for “Trucks-First” Mileage-Based User Fees

Last month, Washington, DC-based think tank Information Technology & Innovation Foundation (ITIF) released a nine-page policy paper titled. “Why Congress Should Enact a Mileage-Based User Fee for Heavy Trucking.” The author is Robert T. Atkinson, ITIF’s founder and CEO. In 2008-09, Atkinson chaired the National Surface Transportation Infrastructure Financing Commission, on which my Reason Foundation colleague Adrian Moore served, and which recommended mileage-based user fees (MBUF) as the best replacement for per-gallon fuel taxes. ITIF does a lot of good public policy work, and Rob is a respected public policy researcher. However, I disagree with his recommendation in this new paper, despite strongly supporting the need to replace per-gallon fuel taxes with per-mile charges.

Just so I’m not misunderstood on this subject, let me first explain where Rob and I are in agreement. First, as numerous engineering and cost allocation studies have documented over many decades, heavy trucks do substantial damage to nearly all in-use pavement designs. They also lead to weight limits on smaller bridges.

Second, the pavement damage is less severe the more axles a truck has, to better distribute its load on the pavement. Nearly all U.S. big rigs have three axles on the tractor and two on the trailer. Heavier trucks in Australia and Canada sensibly use more axles. Both countries allow what are called “B Double” rigs with a conventional tractor and two trailers, with a connecting three-axle bogie between the trailers; the Australian version also has a three-axle configuration at the rear of the second trailer. The ITIF report does not mention the benefits of more axles or how this would be incentivized by a system that charged trucks based on the weight per axle rather than gross weight.

The ITIF proposal also includes congestion pricing (which truckers argue would distort their roadway choices) and an emissions tax in the per-mile charge. What any practical MBUF proposal needs to be is simple—a user charge to pay for roadway use. The more add-on taxes and fees there are, the more politically dubious any implementing legislation would be.

My greatest concern is that imposing mileage-based user fees on heavy trucking before any other types of motor vehicles could set back the progress being made on reaching a political consensus on phasing in per-mile charging to replace fuel taxes.

As this newsletter has documented, most recently in the Oct. 2023 issue, the Eastern Transportation Coalition has led path-breaking MBUF truck pilot projects, in which trucking companies voluntarily participated, and which have led to important findings about how best to proceed. Participating trucking companies understand that—just as on toll roads—a Class 8 tractor-trailer rig could pay something like four times as much per mile as a passenger vehicle. Pilot project participants accepted that as realistic.

But they also stressed that to be workable in a complex interstate and cross-border (to/from Canada) system, the charging system should be simple. For example, there are different definitions of truck weight, and they argued that a truck MBUF system would be far less complex if it used a simple standard weight for all trips, such as the truck’s “registered weight,” regardless of a truck’s actual gross weight on any specific trip. They also pointed out that in today’s fuel-tax world, the trucking industry already has a system in operation to divvy up state truck fuel taxes among the states traversed, regardless of which state(s) a truck’s fuel was purchased in—the International Fuel Tax Agreement (IFTA). That organization cooperated with the 2022 International Mileage-Based Truck Pilot. Even though divvying up fuel taxes among states would not be needed with a truck MBUF system, IFTA would be in a good position to handle the details of interstate and international (U.S.-Canada) truck MBUF processing and record-keeping.

Despite the active participation of trucking companies in the Eastern Transportation Coalition’s several truck MBUF pilot projects, the American Trucking Association’s official position is still anti-MBUF and even more opposed to “singling out the trucking industry” by requiring it to go first. What we need is not a war with the trucking industry, but a negotiated peace agreement that takes into account the industry’s serious concerns, as brought out in the truck pilot projects.

Rather than a truck-first implementation, I think a wiser beginning of the transition would be an Interstates-first implementation. The Interstates handle about one-third of all U.S. vehicle miles of travel, so that would be a significant shift from fuel taxes to mileage charges.

Second, most motor vehicles could begin using existing all-electronic tolling technology, rather than requiring new technology in their vehicles. Interstate trucks, as ITIF points out, nearly all have GPS and communications technology, and many fleets have nationwide toll accounts with either Bestpass or PrePass.

Third—and very important—state transportation departments would have to provide refunds of the motor fuel tax paid by cars and trucks driving on the converted Interstates, making good on the promise that mileage-based user fees will replace, rather than add to, fuel tax revenues. Such refunds would build political credibility that all future transitions to MBUF would be replacements, not additional payments for roadway use.

Alas, I did not see anything in the new ITIF paper about refunding trucks’ diesel taxes if/when they shifted to a truck MBUF. Perhaps, if the paper had led with that it would be taken more seriously by the trucking industry.

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California’s Locomotive Emissions Regulation Misfire
By Marc Scribner

California is seeking special approval from the federal government to implement sweeping new regulations on train locomotive emissions. The problem is California’s rule is so stringent that it would severely disrupt freight rail operations in the state and cause customers to shift to rail’s trucking competitors—thereby increasing overall emissions. In April, Reason Foundation weighed in against a waiver being considered by the Environmental Protection Agency (EPA) that would permit the California Air Resources Board’s (CARB) costly deviation from national locomotive standards.

Last year, over the objections of rail carriers and customers, CARB finalized its In-Use Locomotive Regulation. CARB’s locomotive rule contains a number of provisions, including a requirement that railroads adopt zero-emission locomotives for railyard and industrial uses by 2030, and for long-distance line-haul operations by 2035. It would also force the early retirement of locomotives that do not meet the highest Tier 4 emissions standards and require operators to pay into a restricted trust from which funds can only be expended for regulatory compliance purposes. CARB optimistically estimates compliance costs to be $13.8 billion through 2050—mostly in the form of equipment capital costs—with annual costs exceeding $1 billion for several years during the planned zero-emission phase-in deadlines.

Under the federal Clean Air Act, state and local governments are generally prohibited from enacting their own requirements on nonroad engines and vehicles. However, the law allows for a special carve-out for California if the EPA makes the following four findings:

  • California’s standards are at least as protective of public health and welfare as federal standards;
  • California’s determination is not arbitrary and capricious;
  • California’s standards are necessary to meet a compelling and extraordinary need; and,
  • California’s standards are consistent with the Clean Air Act’s mobile-source emissions requirements.

Setting aside the legal debate about the scope of federal preemption, the major policy problem for California is that CARB is far too optimistic about the state of zero-emission locomotive technology. As a result, its aggressive phase-in of unproven technology could devastate freight rail in the state and cause customers to shift their traffic to more-polluting trucks. As a result, rather than reduce emissions as intended, the expected effect of CARB’s In-Use Locomotive Regulation is an increase of air pollution emissions in both California and in neighboring states. For this reason alone, the EPA should deny CARB’s request for a Clean Air Act waiver.

Zero-emission freight locomotives for both switching/industrial and line-haul operations remain under development. Progress Rail’s EMD SD40JR Joule switching locomotive is currently undergoing a year-long test on the Pacific Harbor Line at the Ports of Los Angeles and Long Beach, with similar testing underway in Brazil. For line-haul operations, Wabtec’s FLXdrive battery-electric locomotive is scheduled to begin testing sometime in 2025 in Western Australia. In comments to the EPA, Wabtec itself stated, “Although progress is being made, [zero-emission] locomotives are still in the early development phase and not yet commercially available,” and urged the EPA to deny CARB’s waiver request.

CARB acknowledged in its Initial Statement of Reasons that smaller railroads reliant on older locomotives may be bankrupted by its rule and thereby cause communities to lose access to rail service. As a result of the infeasible compliance requirements in CARB’s In-Use Locomotive Regulation, freight would increasingly shift to trucks.

In its Initial and Final Statements of Reasons, CARB claims it “did not find empirical research that focused on the impact of regulatory costs on freight diversion or mode shifts from rail to trucks.” But this is untrue. In fact, CARB had commissioned a study in 2016 from the Rail Transportation and Engineering Center at the University of Illinois at Urbana-Champaign, which found that a CARB-style locomotive rule is likely to substantially raise costs and degrade the rail network. Based on Europe’s experience, the study concludes, the “net result of these outcomes will likely be a decrease in freight rail market share.”

According to the EPA, when compared to freight rail, trucks produce approximately 10 times as much carbon dioxide (CO2), more than three times as much fine particulate matter (PM2.5), and two-and-a-half times as much nitrogen oxides (NOX) per ton-mile.

Given that trucks emit far more pollutants than trains to move the same volume of freight, a modal shift from rail to truck would increase the air pollution emissions intensity of the transportation sector. CARB’s In-Use Locomotive Regulation, by reducing rail’s cost advantage over trucks, can thus be expected to increase total emissions—at least until zero-emission locomotives are developed and commercialized for line-haul service. Given that long-haul freight movements occur across state lines, CARB’s rule would also have the expected effect of increasing emissions in neighboring states.

As laudable as some might view CARB’s intentions, the agency’s assumptions about the state of freight rail technology and intermodal competition are so mistaken that CARB’s locomotive regulation would have the perverse effect of worsening pollution. Federal regulators should not allow California dreaming to trump basic facts. For more detail, Reason Foundation’s full comment letter to the EPA is available here.

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Changed Criteria May Kill Planned California Express Toll Lane Project
Yolo 80 is a proposed Caltrans tolled managed lane project to relieve peak-period congestion on the stretch of I-80 between Sacramento and Davis (where the University of California-Davis is located). Politico reported on April 16 that both the U.S. Environmental Protection Agency (EPA) and the Federal Highway Administration (FHWA) are objecting to the environmental analysis of the project. It is also being opposed by the California Air Resources Board (CARB) and the usual environmental groups. In March, the California Transportation Commission postponed a vote on the project, after CARB sent it a letter saying the project is inconsistent with its emissions plans and failed to mitigate its potential increase in vehicle miles of travel (VMT) and greenhouse gases.

Underlying these objections is a profound change imposed by the state legislature last decade. Under California Senate Bill 743, highway planning is no longer supposed to be based on improving the level of service (LOS), meaning reduced congestion. Instead, projects are to be evaluated based on reducing VMT, as a proxy for reducing greenhouse gas (GHG) emissions. Never mind that California has the most aggressive program in the nation to phase out internal combustion engine vehicles over the next 20 years and that highways are long-term investments with a useful life (if well-maintained) of 50 years. In 2019 the state’s Natural Resources Agency updated the state’s California Environmental Quality Act (CEQA) Guidelines to include the Senate Bill 743 changes, which have been in effect since mid-2020. Nearly all highway projects now have to carry out an “induced travel” assessment, and if that shows significant increases in VMT, they must propose ways to mitigate those increases.

There are several “induced demand calculators” in being, including one from Rocky Mountain Institute that was critiqued in this newsletter by my colleague, Baruch Feigenbaum in the Jan. 2022 issue. As he pointed out, that calculator treats all VMT increases as bad, yet new capacity offers benefits such as better access to jobs and the ability to reach a larger variety of retail and services. It also ignores the potential safety benefits of shifting traffic to safer limited-access roadways from ordinary arterials. And in the case of variably priced express toll lanes, vehicles avoiding stop-and-go conditions at speeds around 45-50 miles per hour produce far less greenhouse gas emissions than those in the congested general-purpose lanes.

But California’s mandated anti-VMT policies force transportation agencies to use potentially flawed models to estimate “induced demand” and then set forth measures to reduce it. In the Yolo 80 project case, Caltrans came up with a large array of possible measures, such as increasing passenger rail service in that corridor, adding “microtransit” services, and subsidizing monthly transit passes, at a cost of $55 million. It rejected another array of mitigations that would cost another $95 million as either too expensive or not feasible.

A brief produced by consulting firm Kimley Horn for a different California roadway project outlined potential short-term and long-term induced demand based on a calculator from the National Center for Sustainable Transportation, called the California Induced Travel Calculator, which is what Yolo 80 is confronted with. The brief notes that the NCST Calculator and metro area travel demand models are not the only tools to estimate induced demand—and that no travel demand models in use in California can estimate long-term induced demand. It also points out that Caltrans recommends that heavy vehicle VMT not be included in such assessments, because the same factors that influence personal vehicle use are not relevant for most heavy vehicle travel. Kimley Horn also points out several limitations of the NCST calculator. Among these are that it:

  • Does not reflect findings of some of the studies on which its elasticity estimates are based;
  • Does not include rural areas;
  • Uses lane-miles instead of travel time to estimate induced VMT;
  • Does not address correlation vs. causality in some of the studies it relies on; and
  • Does not include the context of the roadway under study.

I think the legislature imposed on Caltrans a conceptually flawed approach. Given the emerging shift to electric vehicles in California, it’s bizarre to focus on reducing the amount of driving in the name of greenhouse gas reduction.

The vast majority of Americans choose personal vehicles because they best meet their mobility needs. Dreams about radical densification of urban areas are unrealistic, and the findings about access to jobs in metro areas being very much higher via automobiles than transit—both in Europe and the United States—suggest that the proper focus should, in fact, be on improving the Level of Service, rather than limiting the amount of driving. This approach to transportation will make California even more unlivable if continued.

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News Notes

Florida DOT Announces Two Megaprojects
Last month, the Florida Department of Transportation announced two much-needed congestion-reduction megaprojects. A $2.5 billion project will widen 14 miles of chronically congested I-4 southwest of Orlando from six lanes to 10. Let’s hope the new lanes will be extensions of the I-4 express toll lanes already in operation on 20 miles of I-4 through the Orlando metro area. The second project, at $908 million will rebuild the Golden Glades interchange in Miami-Dade County. The interchange includes I-95 (general-purpose and express toll lanes), Florida’s Turnpike, the SR 826 expressway, and US 441. The outmoded design and limited capacity have led to a northbound afternoon and evening peak bottleneck for the I-95 express toll lanes, made worse by a legislative limit on peak-period tolls.

I-77 Express Toll Lanes Decision Expected This Year
North Carolina DOT is nearing completion of a study comparing conventional and P3 procurement for adding express toll lanes to I-77 between Charlotte and the South Carolina border. The study was requested by the Charlotte Regional Transportation Planning Organization last year when it rejected an unsolicited proposal from Cintra for doing the project as a toll-financed public-private partnership. If the NCDOT analysis finds in favor of the public-private partnership alternative, it will lead to a competitive procurement.

Brightline West Breaks Ground on Las Vegas to California Project
The public-private partnership between Brightline West and the departments of transportation (DOTs) of Nevada and California held a ground-breaking ceremony near the end of April, launching the construction of this $10 billion project. It is being financed by private equity, tax-exempt private activity bonds, and $3 billion in federal Infrastructure Investment and Jobs Act (IIJA) funding. The 218-mile route will be built mostly in the median of I-15 and will link Las Vegas with Rancho Cucamonga in San Bernardino County, CA. At the station there, passengers will be able to transfer to the Metrolink commuter rail line to complete their trip to locations in the Los Angeles metro area. Scheduled travel time from Vegas to Cucamonga is planned to be 2 hours and 10 minutes. From there to Union Station in downtown Los Angeles takes an hour and 15 minutes on Metrolink, making the Vegas-LA trip time three hours and 25 minutes, not counting transfer time at the Cucamonga station.

Hybrids Extend Lead Over Battery Electric Vehicles
The Wall Street Journal recently reported that hybrids increased their lead in sales over battery electric vehicles in each quarter of 2023, with the trend continuing in the first quarter of 2024. In the first quarter of 2024, hybrid sales increased 43% while BEVs increased by only 2.7%. Auto companies, which had downplayed hybrids in favor of BEVs in recent years, are now re-emphasizing hybrids. Incidentally, Consumer Reports’ annual auto reliability survey in 2023 found that BEVs are 79% more likely to have problems than internal combustion vehicles, but hybrids have 23% fewer problems than gas-powered cars.

Florida P3 Legislation Bill Signing
On April 15, Florida Gov. Ron DeSantis signed into law House Bill 781, which streamlines the process under which Florida DOT deals with unsolicited proposals. The measure was generally supported by public-private partnership advocates. The other P3 bill in Florida, House Bill 287, allows for revenue-financed highway P3s to have concession agreements for as long as 75 years. Florida has not yet implemented any revenue-risk P3s, but now that Gov. DeSantis has signed HB 287, the way is clear for FDOT to consider using revenue-risk P3s for both greenfield and brownfield projects.

Portland Moving Ahead with I-5 Deck in Rose Quarter Area
In a project to both reduce congestion and reconnect a minority neighborhood bisected decades ago by I-5, the Oregon Department of Transportation will use a $450 million federal reconnecting-communities grant to add auxiliary lanes where I-5, I-405, and I-84 intersect—the worst traffic bottleneck in the state, congested 12 hours per day. The reduced congestion should lead to lower emissions in the Rose Quarter, and the  “substantial cover” over I-5 will reconnect and improve street travel in the area, while also adding bicycle and pedestrian facilities on the new deck over the freeway.

Georgia DOT RFI for Major Atlanta Express Toll Lanes P3
In March, the Georgia Department of Transportation issued a request for information (RFI) to kick off the development of its plan to add express toll lanes to the “top half” of ring road I-285 around the core of the Atlanta metro area. This initial RFI is for the first of several planned toll-financed P3 projects, referred to as I-285 East. It will add express toll lanes to the eastern and northern portions of I-285 (referred to locally as “the Perimeter”) from I-20 on the east to Northside Drive on the north. The RFI asked for input from potential P3 developers of this megaproject, with responses due before the end of April. Public Works Financing has more details in its March 2024 issue.

Alabama Purchasing Private Toll Bridge and Expressway
The Alabama state government announced in mid-April that the privately developed and operated Foley Beach Express Bridge will be bought by the state and operated, without tolls, by Alabama Department of Transportation. ALDOT will pay the Baldwin County Bridge Company $57 million for the bridge and will also pay the city of Orange Beach $3 million for local road improvements. The bridge will continue to operate in both directions until 2026, when a parallel bridge will be completed and opened to traffic. At that point, one bridge will operate northbound and the other southbound.

Delays Announced on Virginia’s Hampton Roads Bridge-Tunnel Expansion
Virginia DOT’s $3.9 billion project to double the number of tunnel lanes beneath the main channel of Virginia’s major port has announced a revised schedule, delaying the project’s completion date by 18 months to Feb. 2027. The project has encountered “unforeseen cost and schedule impacts,” reported Engineering News-Record in its April 15 issue. The two new tunnels are on I-64 across the harbor, and each will be 7,500 feet long and 45-feet in diameter. The project team includes Dragados USA, VINCI Construction, and several other companies.

Grants Available for Asset Concessions
The Infrastructure Investment and Jobs Act included a small program to assist owners of existing infrastructure to study brownfield public-private partnership concessions, sometimes referred to as “long-term asset leases” or “infrastructure asset recycling.” In March, the Build America Bureau of U.S. Department of Transportation issued a Notice of Funding Opportunity for Technical Assistance Grants to state agencies that own such assets and also Expert Services Grants to be used for hiring consultants to plan such asset concessions. More details are in the March 2024 issue of Public Works Financing.

Massachusetts Seeks P3s for Highway Service Plazas
Infralogic reported on April 9 that MassDOT issued a request for information for the management, operation, and potential redevelopment of its 18 highway service plazas. The agency wants potential developers/operators to include fast-charging electric vehicle facilities. Responses to the RFI are due May 24. Current service plaza leases expire Dec. 31, 2025. Since 2009, six states have entered into long-term P3 agreements to expand and modernize their service plazas, including Florida, Indiana, and New York.

More Express Toll Lanes Open in Tampa Area
On April 26, new express toll lanes opened on the Pinellas side of Tampa Bay on Florida’s west coast. Elevated toll lanes on local arterials were opened to traffic heading to I-275 on its way to the Howard Frankland Bridge, with new express toll lanes also added to I-275 itself. When the current expansion of that bridge is completed, it will include express toll lanes, as well.

Baltimore Claims Container Ship Was “Unseaworthy”
On April 22, the city of Baltimore filed suit against the owner and the operator of the container ship, the Dali, that ran into the Key Bridge on March 26. The court document says the companies are “potentially criminally negligent” due to having an “incompetent crew” and the ship not being seaworthy due to an inconsistent power supply, as demonstrated by alarms having sounded. The National Transportation Safety Board is conducting a detailed inquiry into the cause(s) of the collision, but its findings are many months from release. In addition, the FBI is looking into whether any of the crew members know of any serious problems prior to the ship’s departure.

California High-Speed Rail Board Issues RFP for Trainsets
Despite having only a relatively short rail line (from Merced to Bakersfield) under construction in the Central Valley, the California High-Speed Rail Authority board has approved issuing a request for proposals for trains to operate on that corridor. The RFP will go to the two pre-qualified companies, Alstom Transportation and Siemens Mobility. Proposals will be due sometime this fall.

“Is the Shine Coming Off Japan’s Bullet Trains?”
That’s the title of a story posted on TechXplore on April 12. Among other things, the article noted that these bullet trains were designed with a wider gauge than the rest of Japan’s railroads, and that seems to have dampened interest in some other countries for adopting the Japanese trains. One example cited is the $7.3 billion Indonesian high-speed rail project, where Japan’s trains lost out to high-speed trains from China.

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Quotable Quotes

“When the Francis Scott Key Bridge is rebuilt, experts agree that it won’t be like the old bridge from the 1970s. Sen. Ben Cardin (D, MD) said last week that the current vehicle and maritime traffic and height needs are being evaluated in order to make sure it’s ‘replaced with a bridge that represents the modern capacities for a bridge of this type.’ Bridge pier protection will undoubtedly factor into the new design to guard against future ship strikes, but other features of modern bridges are under consideration. ‘It might be a completely new design; it might have cable stays and towers and everything looks different,’ said Rick Geddes, director of the Cornell University infrastructure policy program. ‘We would probably design it so that there would be wider shoulders, maybe bike lanes.’”
— Oriana Pawlyk and Tanya Snyder, “Build Back Better,” Politico, April 15, 2024

“An autonomous car is complicated technology, to say the least. But there is a way we can know that [Musk] really stands behind it as ready: when Tesla takes liability for crashes that occur under its vehicles’ control. Or, to put it another way, when Musk is willing to put his money on the line with our safety. That should be the red line. Otherwise, it is just glorified cruise control. ‘Unless Tesla says humans do not have to pay any attention and humans are not driving and humans are not responsible for what happens when they’re not driving and when they’re not paying attention, then Tesla does not have self-driving,’ said Bryant Walker Smith, an expert in laws around automated driving at the University of South Carolina law school. . . . Waymo, Alphabet’s driverless car unit with vehicles transporting passengers around select cities without anyone sitting behind the wheel, is responsible for the liability in a crash. German automaker Mercedes-Benz, too, has said it is responsible for its limited-autonomous vehicles, owned by customers, when those vehicles are driving themselves.”
—Tim Higgins, “Musk’s Driverless Car Faces Key Hurdle,” The Wall Street Journal, April 15, 2024

“We are not having such a crisis now. But we are doing everything we would do if we wanted to have a crisis: running up debt, not on productive investments in the future but on ordinary government operating expenses. When we do trim spending or raise taxes, it is generally to fund something new—such as Obamacare or the current administration’s green energy agenda—rather than to ensure that what we’re already doing is fiscally sustainable. This means that when we need to restore some semblance of balance, we’ll already have used up the most politically palatable options. If we can’t balance our books now, when everything is going well, how will we manage it later, when our growing debt might push up interest rates, crowding out private investment and worsening the budget math? What will we do if, God forbid, another crisis needs to be finessed with borrowed money, but no one will lend to us at reasonable rates? Almost no one in government is even asking those questions.”
—Megan McArdle, “The Economy Is Strong. Why Are Our National Finances So Weak?” The Washington Post, April 8, 2024

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