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Reason Foundation

Surface Transportation Innovations # 92

New report shows BRT advantages, managed lanes pricing, ports and waterways in reauthorization, "inter-operable" electronic tolling

Robert Poole
June 10, 2011

In this issue:

New BRT Report Pulls Back the Veil

I’ve been a fan of Bus Rapid Transit (BRT) for many years now, ever since learning of the very impressive system in Curitiba, Brazil (and years later, the equally impressive BRT system on Bogota, Colombia). What has continued to surprise me since then is how infrequently U.S. metro areas opt for BRT, going instead for far more costly and less flexible rail transit systems. So I’m delighted to introduce you to the best report I’ve seen on BRT possibilities in the United States. Released last month by the Institute for Transportation and Development Policy, it’s called “Recapturing Global Leadership in Bus Rapid Transit.” (www.itdp.org/documents/20110526ITDP_USBRT_Report-LR.pdf)

Let me first caution you that, as the term is used in this country, there are two different forms of BRT: BRT-lite and BRT-heavy. The former is often called “rapid bus” and is exemplified by LA Metro’s highly successful Metro Rapid: limited-stop service using specially marked buses in mixed-traffic lanes on major arterials throughout Los Angeles County. At very modest cost, Metro Rapid has achieved large gains in bus ridership in numerous L.A. corridors. The new ITDP report is about only BRT-heavy—express services using specialized buses operating mostly on bus-only right of way, on arterials or freeways, with stations rather than just bus stops and many other special features (off-board fare collection, high-level boarding platforms, etc.). The report makes a good case that even though this kind of BRT is far more costly than BRT-Lite, it is less costly than light rail and far more flexible. The report presents a point-scoring system to rate any BRT-heavy system as to how close to “world standard” it is, and also provides profiles of five currently operating U.S. BRT-heavy systems.

While all that is good, some of this has appeared in other BRT reports in recent years. What is unique about the ITDP report is its Chapter V: “BRT and the Feds.” For years I’ve wondered, for all BRT’s advantages and the Federal Transit Administration’s recent encouragement of BRT, why nearly all FTA transit grants go to rail projects. Chapter V lifts the veil and explains why. One problem, already pretty well known, is Congress’s tendency to earmark favored transit projects, even when they score poorly in FTA’s evaluation process. But far more serious are the flaws in that evaluation process, which the report discusses under the heading “Leniency of Federal Funding Criteria Towards Dubious Rail Projects.” Local agencies are required to conduct an “alternatives analysis,” but they are allowed to rig the game. One way is to not include a BRT alternative at all, only the required “no-build” alternative. Another is to use “mode-specific constants” when comparing BRT with rail—an arbitrary factor that builds in an assumption that BRT will attract lower ridership per route-mile (or other parameter) than rail. Other techniques are simply wildly over-optimistic ridership estimates and the selection of weak alternatives. The report illustrates these kinds of “deck-stacking techniques” as used for the Woodward Avenue corridor in Detroit, the Purple Line project in Maryland, and the Dulles Corridor in Virginia (West Falls Church to Dulles Airport).

In addition to criticizing the FTA for allowing that kind of deck-stacking, the report also notes with dismay the watering down of FTA cost-effectiveness criteria in recent years, most recently FTA’s consideration of adding additional environmental or development factors, which would further reduce the weighting given to cost-effectiveness. And the authors add that “further complicating the appraisal process is only likely to make it even less transparent. This could invite further gaming of the assessment process by project proponents in favor of politically desired outcomes.”

After all these words of praise, I do have one objection. As near as I can tell, the only place in the whole 80-page report where priced lanes (HOT or express toll lanes) are mentioned is in the Introduction, on page 7. Everywhere else in the report, the discussion is always about the necessity of having bus-only lanes for BRT, even if this means taking away existing general-purpose lanes. Yet as Ted Balaker and I pointed out six years ago in a Reason Foundation study, variably priced lanes such as HOT lanes are the virtual equivalent of exclusive busways, offering enormous potential for BRT-heavy service without requiring transit agencies to pay the large capital (and political) costs of acquiring and building exclusive bus-only guideways. (http://reason.org/news/show/virtual-exclusive-busways)

This is a point the FTA still does not appear to appreciate. In a report whose authors were willing to speak truth to power and make strong pro-BRT recommendations, their failure to urge the FTA, state DOTs, and local officials to act on the synergy between BRT and priced lanes is an enormous missed opportunity.

Are Managed Lanes Under-Priced?

The question of how to price congestion-relief toll lanes is still a live issue. An important new paper adds to our knowledge of how heterogeneous people’s value of time savings may be in congested expressway corridors. Unlike previous studies of this issue, which have relied primarily on the 15-year-old 91 Express Lanes in California, this new research is based on people using the relatively new managed lanes on the Katy Freeway (I-10) in Houston, opened a couple of years ago. The paper is “Variation in the Value of Travel Time Savings and Its Impact on the Benefits of Managed Lanes.” The authors are Sunil Patil (RAND Europe), Mark Burris and Douglass Shaw (Texas A&M), and Sisinnio Concas (Center for Urban Transportation Research, University of Florida). (http://ssrn.com/abstract=1808035)

Patil, et al. understand that revealed preference surveys typically yield low average values of time for commuters, yet they appreciate that those choosing to use managed lanes (MLs) may have much higher values of time for the trips they decide are worth paying for. So they set out to test the hypothesis that people’s value of travel time savings (VTTS) would be higher for what they defined as “urgent” trips. They administered an on-line survey to thousands of people who use the Katy Freeway and have a choice to use its two MLs in each direction. A total of nearly 3,000 people answered all the questions. Among other things, each was presented with a randomly selected pair of questions about mode choice, under ordinary conditions and in an “urgent” situation. There were six of the latter, including travel to an important meeting or event, running late to an appointment or meeting, being worried about arriving somewhere on time, etc.

The complete survey data were analyzed using both a multinomial logit model (MNL) and a mixed logit model. The full methodology is explained in the paper, but here I will focus on their findings. Overall, they found that the estimated value of travel time savings “is much higher for all of the six urgent trip situations than for non-urgent situations.” The highest values were obtained for the “running late to appointment or meeting” situation, where the VTTS ranged from $27.90/hour to $47.50/hour. Those values are 3.8 to 5.5 times greater than the implied average VTTS for an ordinary situation (holding all other factors, like time of day, direction, etc. constant). They also found, consistently, that the VTTS for urgent trips was actually higher for lower-income drivers (household income less than $50,000/year) than for middle-income drivers ($50-100K/year). In fact, their results show that “many of the travelers from the medium and low-income groups who are on urgent trips will have VTTS greater than that of travelers from the high-income group on ordinary trips.” The authors guess that this “might be attributed to the fixed-schedule constraints associated with lower-paying jobs,” which strikes me as plausible.

The implications for DOTs and toll road companies planning managed lanes projects are profound. Their traffic and revenue projections should not assume that all ML users are engaged in ordinary trips; doing so could significantly understate the travel time benefits of the MLs. The authors illustrate this with a few numerical examples, and suggest that in some corridors “it is possible that the majority of ML travelers are on urgent trips.” While it may be difficult to accurately estimate the percentage of ML customers who will be making urgent trips, failing to take this into account may leave significant money on the table. This research also suggests that instead of merely analyzing variable toll rate structures that will maximize either throughput or revenue, ML traffic and revenue studies should also look into maximizing the economic value of the project. To be sure, this will end up being about the same as maximizing revenue, but the assumptions used in the arriving at that value will be different, seeking to factor in the extent of urgent-trip usage in the MLs.

From a macro perspective, it seems to me that the more we learn about how heterogeneous travelers’ value of time really can be, the stronger the case becomes for premium-priced express lanes—as opposed to charging an average peak-period toll to all expressway users.

Including Ports and Waterways in the Reauthorization Bill

A number of recent news articles have indicated the interest of Rep. John Mica (R, FL), who chairs the House Transportation & Infrastructure Committee, in crafting a bill that includes not just highways and transit but also possibly ports and waterways. Since Mica generally supports the users-pay/users-benefit principle, he is not proposing that the already strapped Highway Trust Fund pay for such spending. Rather, the money would come from those using ports and waterways.

That makes sense, and there is a large need to reform how the federal government currently deals with those issues. For years, port authorities have been complaining, rightly, that the Harbor Maintenance Trust Fund is being misused, with Congress spending far less each year on needed dredging projects than what comes in each year from the dedicated user tax on cargo containers. But there are more fundamental problems with this trust fund. First, nearly all the dredging projects (which, by law, must be done by the Army Corps of Engineers) are selected via congressional earmarks, chosen from a list which the Corps has vetted by means of a benefit-cost assessment. Ports whose projects fail to achieve an earmark sometimes go ahead and use their own funds to hire a dredging company to do the needed work.

But that very fact suggests that we rethink the whole idea of a centralized trust fund for port dredging. Ports are inherently in competition with one another: Los Angeles and Long Beach compete with Oakland and Portland and Seattle and Vancouver; Miami competes with Ft. Lauderdale and Jacksonville; Savannah competes with Charleston, etc. There is no need for a federal body to sit in judgment on which projects should get funded. If a port needs dredging, its users can and should pay directly, as part of that port’s operating cost. So the best reform in this case would be to abolish the harbor maintenance tax and the trust fund it poorly supports. That would also eliminate one of the larger sources of congressional earmarking.

Eliminating the harbor maintenance tax would be a modest help to plans to expand short-sea shipping of containers, since those carriers currently are subject to the tax but derive no benefits from it, since their vessels don’t require the channel depth needed for ocean-going container ships. But I still remain highly skeptical of the fledgling “marine highway” program, which was mandated by the 2007 Energy Act. All it takes to become a skeptic is to read the Maritime Administration’s April 2011 report to Congress, “America’s Marine Highway.” It makes a grandiose case for the vital role that containers and trailers on barges and roll-on/roll-off vessels can make: relieving highway congestion, saving energy, reducing greenhouse gases, providing a more resilient transportation system, improving national defense (via subsidized ship-building, of course), etc. But you will search in vain for any real numbers documenting the magnitude of such benefits or comparing them to taxpayer costs.

At some points, this 71-page report is surprisingly honest about the weakness of its case. Consider this from p. 23:

Fuel efficiency, however, is but one of an array of considerations that affect the choice of shipping mode by private industry, and even here only indirectly . . . . In many cases, the quality, convenience, frequency, speed, and reliability of a transportation mode are critical factors in shippers’ choices of a transportation mode that outweigh higher costs of a particular service attributable to higher fuel consumption. Accordingly, except under situations of extraordinarily high fuel prices that significantly increase shippers’ costs, the broader range of national benefits associated with reducing fuel consumption by using water transportation will not be realized unless national policies promote the use of America’s Marine Highway.

In other words, hardly anyone will do this unless they are heavily subsidized to do so.

Elsewhere, under the heading of Marine Highway Research (p. 44), the report describes “proposed” research that would seek to quantify public benefits (such as reduced congestion, reduced emissions and energy use, etc.). That’s just great: Congress creates the program based on nice-sounding generalities and several years later the agency in charge modestly suggests that maybe, if somebody gives it some research money, it will attempt to see if the program’s benefits could conceivably worth its costs. My advice to Chairman Mica on America’s Marine Highway is to pull the plug before it starts spending serious money.

Finally, we come to inland waterways, supported by another failing trust fund. The Waterways Trust Fund gets its revenue from a 20¢/gallon diesel fuel tax paid by barge operators who move bulk cargo. By law, this Trust Fund is supposed to pay half the cost of building, maintaining, and modernizing or replacing locks and dams on inland waterways. General taxpayers pay for the other half—and also for all the dredging needed to keep those channels (like the Lower Mississippi) navigable. The Army Corps does all the lock and dam work, as well as the dredging. So what we have here is another large subsidy, rather than a real users-pay/users-benefit situation. The Administration’s  budget proposal called for a “historically low” funding level for the Corps, which has prompted the Waterways Council (representing the barge operators) to propose an increase in their diesel tax in exchange for commitment to a 20-year spending plan for lock and dam modernization and applying the 50% user-support rule only to projects larger than $100 million. So the subsidy game would continue. The best approach here would be to increase the user tax to whatever level would fully support an industry-agreed plan for both lock and dam improvements and ongoing waterways dredging. And apply that tax to all users of the inland waterways, not just barge operators.

Chairman Mica is right to see value in users-pay/users-benefit. In the new era of fiscal constraint, where general fund monies will be increasingly scarce, the best way to safeguard needed infrastructure investment is to make them purely user-funded. That means strengthening the users-pay/users-benefit principle.

Time for Heavier Trucks?

After having been criticized by both sides last fall when I wrote about pending congressional proposals to increase the federal truck weight limit to 97,000 lbs. (requiring six rather than five axles so as to spread the heavier pavement loading), I hesitate to jump back into the issue. But bills on both sides of the issue are once again pending in Congress. Companion bills in both houses would raise the six-axle limit to 97,000 lbs., but a Senate bill by Frank Lautenberg (D, NJ) would retain the current 80,000 lb. limit on Interstates and extend it to the entire 160,000-mile National Highway System.

It’s important to keep in mind that the states are the owners, operators, and maintainers of all of these highways (but Congress gets to set the rules in exchange for providing federal funding). The increase to 97,000 lbs. and six axles would not be imposed on any state; it would merely be allowed, if a state DOT could be persuaded (or required by the state’s legislature) to implement the higher limit. Many highway engineers would object, arguing (I think, correctly) that a large fraction of the bridges on the highways involved would be over-stressed by gross weights higher than the bridges were designed for. We already have 13.7% structurally deficient bridges across the country, so unless a state had a near-term plan in place to strengthen or replace the bridges likely to be used by heavier trucks, upping its weight limit would be irresponsible. And even doing that would still leave the question of enforcement. It’s one thing to mandate that 97,000 lb. trucks use only certain bridges, but how enforceable would that be in the real world?

On the other hand, as one who strongly favors a decentralized federal system, the idea that the central government in Washington, DC would tell the owner-operators of the states’ highways how to run them strikes me, in general, as overkill—especially so if extended to the 160,000 miles of NHS routes. So there is a case for the feds to back off and allow each state to make its own decisions on truck size and weight—as they were largely free to do before the 1991 federal freeze on size and weight.

Then again, the rationale for creating the Interstate system was to have a uniform, nationwide superhighway network with the same standards everywhere, to facilitate Interstate commerce.  I accept that case, despite my overall decentralist framework. That’s also why I support an Interstate 2.0 program, under which the federal government would assist the states in reconstructing and modernizing the Interstates for a 21st-century America that is a far different place than the 1940s country for which the current Interstate map was drawn up. And that replacement system should be designed from the outset with heavy-duty truck-only lanes, capable of handling longer combination vehicles such as triples and turnpike doubles. Uniform size and weight standards would apply to the rebuilt Interstate system, nationwide. But other than that, states would be responsible for the rest of the highway system, and could set their own standards.

Progress on Interoperable Electronic Tolling

Back in November, I wrote about the U.S. toll industry’s Alliance for Toll Interoperability moving to create a License Plate Interoperability Hub. In plain language, this would be a national clearinghouse in which participating toll road operators could gain access to each others’ state motor vehicle license plate and vehicle registration databases, as already exists in the Northeast and Midwest for the E-ZPass system. I’m pleased to report that in response to the ATI’s RFP to set up a demonstration hub, 11 firms submitted proposals, including several large toll system providers, a major French toll road operator (Cofiroute), a major bank card processor, and several more-specialized firms. ATI plans to select three companies, to each develop a demonstration hub and test it for three months with real data this fall. These initial tests will be limited to license plate camera readings, but future plans include processing transponder readings, as well. (www.tollroadsnews.com/node/5313)

In related news, the E-ZPass Group has established a working group with Florida’s SunPass to develop interoperability between these two systems, representing nearly all the electronic toll collection east of the Mississippi (and 70% of all such toll collection nationwide). As Peter Samuel explained in TollRoadsnews (May 19th), interoperability between these two systems would mean that “vehicles with E-ZPass transponder accounts would be able to drive on Florida’s many toll roads and have their regular E-ZPass/I-Pass/iZoom/FAST LANE accounts debited for the tolls. Also, Florida motorists with SunPass or the compatible Orlando brand E-Pass could drive throughout E-ZPass territory and have their Florida accounts debited. Tolls in North Carolina would also be part of the E-ZPass/SunPass interoperability.” (www.tollroadsnews.com/node/5306)

Once national interoperability has been achieved, which is ATI’s goal, interesting possibilities emerge. At last month’s International Bridge, Tunnel & Turnpike (IBTTA) conference on interoperability in Dallas, Ed Regan of Wilbur Smith Associates outlined a scenario in which that goal is achieved by 2016, while tolled managed lanes are added to congested expressways, many of which are Interstates. The growing familiarity with toll finance and electronic toll collection (along with continued declines in fuel tax revenues) could then set the stage for reconstructing the aging Interstate system via toll-based financing, getting seriously under way in 2015 through 2025. In his presentation, Regan projected that the fraction of U.S. motor vehicles with transponders will increase from about 15% today to 40% in 2025 as these developments proceed.

I’m broadly in favor of this kind of scenario, which will require significant easing of current federal restrictions on Interstate tolling. An excellent step would be for Congress, as part of the current reauthorization, to remove the numerical limits from the two current Interstate tolling pilot programs, while leaving intact the existing restrictions on the use of toll revenue (which ensure that tolls paid by Interstate users are used for Interstate modernization only).

Upcoming Conferences

Note: I don’t have space to list all the transportation conferences going on; below are those that I or a Reason colleague am participating in.

2011 Mileage Based User Fees Symposium, June 13, 2011, Breckenridge, CO. Details at:
http://tti.tamu.edu/conferences/mbuf11/  (Adrian Moore speaking)

InfraAmericas’ 7th Annual US P3 Infrastructure Forum, June 14-15, 2011, New York, NY, Grand Hyatt. Details at: http://bit.ly/P3RFWEBH. (Reason Foundation is a Supporting Organization.)

Transportation Research Board Joint Summer Meeting, July 10-12, 2011, Boston, MA, Seaport Hotel. Details at: http://www.trb.org/conferences/JointSummer2011.aspx. (Robert Poole and Adrian Moore speaking)

Cato Hill Briefing, July 14, 2011, Washington, DC, Capitol Hill (location t.b.a). Details to come at www.cato.org. (Shirley Ybarra speaking)

Funding Transportation Projects for Arizona, August 25, 2011, Phoenix, AZ, Arizona Biltmore. Details at: http://ncppp.org/calendars/AZ_1108/AZ_SaveTheDate_LINK.pdf.
(Shirley Ybarra speaking)

News Notes

Update on PPP Legislation
Three states that I reported last month had passed public-private partnership enabling legislation through one house of their legislature saw the other house agree in recent weeks. The Illinois legislation gives PPP authority to both Illinois DOT and the State Toll Highway Authority. The bill approved in Nevada grants the OK to do just one PPP project, the Boulder City Bypass; a broader enabling measure is still being debated. Texas legislators approved a bill that reinstates TxDOT’s ability to enter into long-term toll concessions—but only for about a dozen named projects, and only through August 2015. But that does include a number of promising projects. Assuming the governor signs the bill, TxDOT is ready to release requests for information (RFIs) on two of the projects: SH 99 Grand Parkway and I-35E Managed Lanes.

Bus Toll Lanes Study Nearing Launch in Tampa
The Tampa-Hillsborough County Expressway Authority and Hillsborough Area Regional Transit last month issued the RFP for their $1 million feasibility study of “Bus Toll Lanes.” The project is largely funded by a grant from the FHWA Value Pricing program. It proposes a new twist on managed lanes: that they be developed, funded, and operated jointly by transit agencies and toll agencies (or potentially state DOTs). A BTL would use variable pricing to ensure uncongested traffic flow at all times, offering fast and reliable trips to bus operators as well as paying motorists. The study will use potential corridors in the Tampa Bay metro area to assess the operational, economic, and community benefits of a BTL network. The contract is expected to be awarded by September.

GDOT Puts PPP Managed Lanes on Hold
At the request of Gov. Nathan Deal, the Georgia DOT has put on hold its first major toll concession project: West by Northwest, which will add managed lanes to congested I-75 and I-575 northwest of downtown Atlanta. The action came as GDOT was close to issuing an RFP to three pre-qualified teams, led by (respectively) Vinci, Cintra, and ACS Infrastructure. The reason for the time-out is uncertainty over whether or when a requested TIFIA loan for the project will be approved by the Federal Highway Administration.

British Highway Users Back Road Pricing
The Royal Automobile Club Foundation for Motoring released a well-done study, “The Acceptability of Road Pricing” last month. Written by transport expert John Walker, PhD, it examines the case for road pricing from the customer’s perspective. It finds that road pricing can be pro-motorist if it meets certain conditions: be equitable (users-pay/users-benefit, but with assistance for the less-fortunate), revenue-neutral, low-overhead (e.g., 5%), and that persuasive demonstrations take place before any switchover. The report also challenges a number of misconceptions about road pricing. (www.racfoundation.org)

Porous Asphalt Pavement Offers Benefits
In the Transportation Research Board’s TRB News 272 (January-February 2011) is a fascinating article, “Developing Porous Asphalt for Freeways in the Netherlands,” by J.T. van der Zwan. Although the life-cycle cost of porous asphalt are higher since its life-span is shorter (11 years vs. 15) than conventional asphalt, its benefits—lower road noise, much better wet-weather performance—have led to its use on about 80% of freeways in the Netherlands.

Historian Sees Parallels between HSR and Transcontinental Railroad
Stanford University history professor Richard White had an op-ed in the New York Times (April 24th) comparing current U.S. high-speed rail projects to the transcontinental railroad project of the 1860s. The parallels he sees include heavy federal subsidies, many promised benefits that were not delivered, and a focus on the wrong objectives. “Fast Train to Nowhere” is based on White’s forthcoming book, Railroaded: The Transcontinentals and the Making of Modern America. (www.nytimes.com/2011/04/24/opinion/24white.html)

How Shale Gas Changes Energy Outlook
Two of my friends and colleagues have written insightful articles on the potential of huge domestic sources of natural gas deposits like the Barnett Shale in Texas and the Marcellus Shale in Pennsylvania and adjacent states. Steven F. Hayward of American Enterprise Institute’s article is “The Gas Revolution,” in the April 18th issue of The Weekly Standard (www.weeklystandard.com/articles/gas-revolution_557014.html).
And Reason magazine’s science reporter, Ronald Bailey, explains that “Environmentalists Were for Fracking Before They Were Against It.” (http://reason.com/archives/2011/05/10/environmentalists-were-for-fr)
 
Quotable Quotes

“Determining whether the federal government—rather than state or local governments—should fund infrastructure projects depends, at least in part, on whether a project will benefit the nation as a whole more than it will a particular state or locality. Economic efficiency could be improved if the federal government limited its support to projects (such as the Interstate highways) that offer significant multistate benefits, leaving state and local governments to fund projects with more localized benefits. If the people who benefit from a project bear its costs, the likelihood is diminished that too large a project (or too many projects) will be undertaken or that too many infrastructure services will be consumed relative to the resources needed to provide them.”
--Joseph Kile, “The Highway Trust Fund and Paying for Highways,” testimony before the Senate Finance Committee, Congressional Budget Office, May 17, 2011

“Planning only for the current level of delays leaves the region at a competitive disadvantage, given the low delay rankings of the New York [expressways]. Therefore, this analysis goes a step further by postulating higher standards, i.e., a lower level of acceptable delay closer to the norms experienced at most major [expressways] in the nation. The actions to address current [expressway] capacity limitations will also be judged against these higher standards. Rather than institutionalizing a low level of service that permanently locks the region into the worst [expressway] delays in the nation, these higher standards would establish a level of service that would allow the region to thrive.”
--Jeffrey Zupan, Richard E. Barone, and Matthew H. Lee, “Upgrading to World Class,” Regional Plan Association, January 2011. [Note: your editor has substituted the word “expressway” where the original used “airport.” Think about it.]

“[S]tandard theory says that people respond to prices. Surely people should respond to increased petrol prices by changing their mode of travel. But why hasn’t it happened in the past? More important, will it magically happen in the future? The answer is that most drivers do respond to increased oil prices, but they have many choices as to how to respond. You may switch to public transport, provided it takes you where you want to go at a reasonable price. The problem is that part of the ‘reasonable price’ includes the price of the increased time it takes to get to the final destination. . . . So, given time, people change their behavior in many ways, so as to maintain the comfort, convenience, and overall efficiency of the car. For example:

  1. They may decide to buy a smaller or more fuel-efficient car.
  2. They may relocate either their home or their job to reduce travel costs and times—provided the land market is flexible.
  3. If the local land market is inflexible, they may move to another town, or another country.
  4. They may modify all their travel behavior by better trip planning, commuter car-pooling, and general ride and task-sharing.
  5. They may choose to telecommute.

--Owen McShane, “The Public Transport Revolution: Why Does It Never Arrive?” New Geography, May 1, 2011 (www.newgeography.com/content/002207-the-public-transport-revolution-%E2%80%93-why-does-it-never-arrive).

“[C]oastal Californians would have to live cheek-by-jowl—as do Japanese people in the megalopolis that stretches from Tokyo to Osaka—to have any chance of a high-speed rail service that offered at least half a dozen trains an hour and did not require huge taxpayer subsidies. Few would be prepared to make such a sacrifice. With petrol costing half the price paid in Japan and Europe, they will doubtless continue to use their cars for two-to-three hour journeys and fly for anything longer.”
--Babbage, “The Difference Engine: Fast Track to Nowhere,” www.economist.com/blogs/babbage/2011/05, May 20, 2011

“Silicon Valley, the world’s predominant high-tech concentration, remains to a large extent a vast suburb. The headquarters of such firms as Intel, Apple, and Google are not in urbanized, transit-oriented San Francisco, but in sprawling, car-dominated places like Santa Clara, Cupertino, and Mountain View. Although there are some pockets of density, the Valley essentially functions along suburban lines with no significant real urban core. Transit ridership in the Valley now stands at 3 percent, closer to a Phoenix or Houston than a New York or San Francisco.”
--Joel Kotkin, “The Dispersionist Manifesto, New Geography, May 6, 2011 (www.newgeography.com/content/002221-the-dispersionist-manifesto)

“Because of the current public financing pressures, some [rail] infrastructure managers expect the private sector to step in to bridge the funding gap through PPPs. Fitch believes PPPs are no panacea and must not be considered a funding method, but rather a procurement method. As such, they are helpful where they can bring better value for money. This is particularly true where private partners are incentivized to perform better. In some cases, such as very large and complex projects, PPPs may not be appropriate at all. When [rail] PPPs are implemented, it is generally not easy to attract private investors, because rail projects are particularly complex. Investors are concerned with managing risk, and in rail projects even more than for other infrastructure segments, this needs to be transparently documented, thoroughly analyzed, and wisely allocated. Since most debt investors are not familiar with rail projects, a lot of project preparation and investor education will be necessary to ensure a good understanding of the sector and the projects by the financial community.”
--Nicolas Painvin and Antonio Martin, “Funding Issues for Rail Networks: Public-Private Partnerships Are No Panacea,” FitchRatings Transport/Rail Europe Special Report, May 25, 2011.


Robert Poole is Searle Freedom Trust Transportation Fellow and Director of Transportation Policy


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