Surface Transportation News: Fresh thinking about vehicle miles of travel

In this issue:

• Transportation planners and VMT: some fresh thinking
• What are asset concessions? Depends on who’s defining them
• Mileage-based user fees: academic research or pilot testing?
• Transportation ballot measures and road user charges
• New travel behavior data yields uncertainty
• The battle over port automation
• News Notes
• Quotable Quotes

Transportation Planners and VMT: Some Fresh Thinking

Several state governments have adopted policies aimed at reducing the growth of vehicle miles of travel (VMT) on their state’s roadway system. California leads the pack with a goal of reducing VMT by 20% by 2030. Other states with similar goals include Washington (reducing by 16%), Colorado (8%), Minnesota (7%), and Massachusetts (3%). I’m pleased to report that a number of transportation professionals have serious concerns about such policies.

One of these is UCLA’s Michael Manville. In an important report titled “Induced Travel Estimation Revisited,” part of which I reviewed in last month’s issue, Manville takes a detailed look at California’s VMT-reduction policy. Most of this is contained in the latter sections of the report, which I did not cover in the October issue.

The first of these sections goes into detail on “The VMT Effects of Adding Free Capacity,” raising a number of points about the many sources of vehicle miles of travel, including the potential that “some VMT that seems induced might actually have been anticipated,” leading to a decision to add capacity. This section also covers factors that might have been omitted from some induced demand papers, including a thoughtful discussion of post-2010 changes in VMT per capita and significantly reduced highway expansion since then.

The next section discusses “The VMT Effects of Managed Lanes.” Manville suggests that there is no empirical work on how a priced lane may affect regional VMT. He notes that thanks to pricing, at least during the busiest times of day, a priced lane will have higher VMT than a general-purpose lane. In addition, we also know empirically that trips in the priced lane are generally higher-value trips than in general-purpose lanes. These are not the kinds of trips “induced” by new capacity; they are existing trips that shift to the priced lanes. He also suggests that vehicles let into priced lanes without paying (e.g., electric vehicles) may rapidly congest those lanes, destroying much of their congestion-reduction benefits.

Manville also notes that the shift of high-value trips from general purpose (GP) lanes to priced lanes opens up capacity in the former (the “backfilling” effect), but he notes that the same “backfilling” is likely if drivers shift from general purpose lanes to a rail transit line.

I found part 3 of the report especially interesting: “What VMT Does and Doesn’t Tell Us.” First, in terms of greenhouse gas (GHG) emissions, Manville explains that “the relationship between VMT and transportation carbon emissions has been weakening over time,” and will continue to do so as hybrids and EVs make up larger shares of all vehicle miles of travel. Second, he discusses the very important point that VMT’s costs should not be separated from its benefits. To stimulate thinking on this, he notes that current carbon-based electricity has environmental costs, but also provides enormous benefits.

Manville explicitly challenges the premise of California policy that including benefits is not relevant for vehicle traffic, citing a Caltrans document “that compares VMT to a smokestack.” But the smokestack is a residual of the production of electricity, like a vehicle’s exhaust pipe is a residual of producing mobility. The sensible approach is to “write policies that target the externalities,” i.e., what comes out of the smokestack and the exhaust pipe. Carbon monoxide (CO), as he illustrates, has been hugely reduced from vehicle travel in recent decades, while we still have a long way to go with carbon dioxide (CO2).

He also criticizes the idea that VMT has no benefits (which is the implicit premise behind VMT reduction as opposed to targeting greenhouse gase reduction). And he goes on to explain that some modes of transit also generate significant GHGs. For example, “Many American bus miles, because they are on low-ridership coverage routes, emit more GHGs than the transit average, and some emit more per mile than a standard automobile trip.”

Lastly, Manville takes on the idea that “VMT Suppresses the Use of Other Modes.” But as he points out, in 20 large urban areas between 2000 and 2019, VMT grew almost everywhere while transit use fell in some places but not others. He also notes that in Los Angeles during this period, both VMT and transit ridership declined.

In summing up, Manville recommends that in future studies dealing with induced travel, researchers should separately analyze general-purpose-lane capacity additions and priced-lane capacity additions. He also repeats that it is a mistake to classify vehicle miles of travel solely as a cost (as California policy does), and he thinks “the state would do well to revisit this practice.” And I will add, so should Washington, Colorado, Minnesota, and Massachusetts.

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What Are Asset Concessions? Depends on Who’s Defining Them

Several years ago, there was considerable discussion in Washington, D.C., about infrastructure asset recycling. Pioneered in Australia, the idea was that a government would inventory its existing infrastructure assets and decide if some could be offered to investors under long-term public-private partnership (P3) leases. (One such U.S. example is the long-term P3 lease of the Indiana Toll Road.) The usual practice with such “brownfield concessions” is that most or all of the lease payments are delivered up-front, as a lump sum. The government in question then uses that windfall for needed new infrastructure investments.

I recall phone conversations with House staffers for then-Rep. Mike Gallagher (R-WI), explaining how such asset recycling works. In the Senate, colleagues and I advised Sen. Bill Cassidy (R-LA) on asset recycling, and he got a provision into the Infrastructure Investment and Jobs Act (IIJA) legislation that defines the new program. The explanation of what became 23 USC 611: Asset Concessions and Innovative Finance Assistance is available online at https://uscode.house.gov.

Some months ago, the Department of Transportation’s (DOT) Build America Bureau (BAB) put out a Notice of Funding Opportunity for the first set of planning grants funded by that IIJA provision. In September, BAB announced the first round of Innovative Finance and Asset Concession Grant Program (IFACGP) grants awarded—49 planning grants totaling $49.46 million. But as Public Works Financing explained in a September article about the grants, there is not a single brownfield lease among them. On the contrary, because the BAB-drafted conditions limit potential projects to those that would be eligible for a Transportation Infrastructure Finance and Innovation Act (TIFIA) loan, they must be greenfield projects that improve an existing asset.

That’s not what Australia pioneered, nor what Rep. Gallagher and Sen. Cassidy worked hard to include in IIJA. And if you read the full text of “23 USC 611: Asset Concessions and Innovative Finance Assistance,” you will see that it refers to long-term leases of existing infrastructure assets. The actual language in the statute discusses points such as value-for-money analysis for the proposed long-term P3 leases. There is no mention of asset concessions to improve existing infrastructure via a P3—or of TIFIA loans.

Some of us cheered when the asset concessions measure made it into what became IIJA. It seemed like a small but important first step in enabling state and local governments to assess potentially long-term leases of existing (brownfield) infrastructure that could be leased for large sums that could be invested in new (greenfield) infrastructure that would not otherwise be affordable. Unfortunately, that is not what Build America Bureau is doing.

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Mileage-Based User Fees: Academic Research or Pilot Testing?
By Baruch Feigenbaum

When I was a student pursuing a master’s degree in transportation planning at Georgia Tech, our program director detailed a survey of what educators and practitioners prioritized in a planning degree. Some skills, such as good communications ability, were valued by both groups. However, one skill, multi-variable quantitative analysis, received vastly different scores from the two groups. Educators thought this spreadsheet- or model-based tool was essential to a planning-based education, placing it in the five most essential skills to learn. Practitioners held the opposite view, placing it in the five least essential skills to learn.

There is an important parallel in the world of mileage-based user fees (MBUFs). Educators and researchers feel that unlimited studies examining all aspects of MBUFs are fascinating. Most educators are required to conduct a large amount of research as part of their jobs and wouldn’t have chosen the research profession if they didn’t like research. Partitioners are much less interested in unlimited research; they want to get things implemented. Research is important if it leads to implementation, but research for research’s sake is not.

Exhibit A in the research for research-sake toolkit is the Mineta Institute’s report titled, “What Do Americans Think About Federal Tax Options to Support Transportation? Results from Year Fifteen of a National Survey.” The annual study has used a longitudinal approach to examine public opinion on this topic over the last 14 years.

This year’s study asks participants a series of questions about MBUFs:

1. Which Option Would you Prefer:  A flat three-cent per-mile rate, a “green” rate that charges vehicles based on propulsion technology, or a business road fee that would be charged to heavy-duty vehicles, taxis, and ride-hailing vehicles.
2. How Frequently Should MBUFs be Paid: A monthly bill or an annual bill after the miles are driven.
3. Should Less Driving be Incentivized: A lower rate charged for the first 5,000 miles?
4. Should Electric Vehicles Receive a Preferred Rate?
5. Should Low-Income Drivers Receive a Discount?
6. Should Drivers Pay a Flat Annual Fee Instead?

For what it’s worth, here are my answers to the study’s questions. Charging a green rate or charging electric vehicles a lower rate would increase the general MBUF rate needed to fund roads. (For now, forget about the question of whether adding more electric vehicles to the roads is the best way to reduce greenhouse gas emissions.) A special rate for commercial vehicles makes sense, but it needs to be tied to the vehicle’s weight, and that needs to be clearer in the question.

Drivers are already incentivized for traveling fewer miles. That’s the whole purpose of a users-pay/users-benefit system. Giving drivers an additional discount does not make sense.

Generally, low-income drivers don’t drive as much as other drivers. Given the users-pay principle, I don’t see a reason to provide a discount here. A related policy question is whether local transit agencies are providing high-quality bus service for these customers.

Adopting a flat annual fee instead of a mileage-based user fee goes against the entire principle of a users-pay system. Those who drive more would pay less, while those who drive less would pay more. That’s the all-you-can-eat buffet approach to infrastructure use, and it would exacerbate transportation funding challenges.

Regardless of my preferences, public policymakers will solve these kinds of questions in the implementation process. Some of the states that are implementing permanent programs, such as Washington, are having these discussions. But fixating on these problems before a state conducts a pilot project threatens implementation across the board, regardless of the type of system.

Sometimes, research can be educational. But this stated preference research is not the best way to educate people. Asking survey questions when the participant is distracted by their children in the other room does not increase education or acceptance. Physically experiencing the technology increases acceptance. The MBUF community has found that participating in pilots provides the best education. My colleagues at Reason and I have a saying along the lines of, ‘If you think mileage-based user fees are the best idea ever, you should support a pilot. And If you think MBUFs are the worst idea ever, you should support a pilot.’

We need a greater focus on pilot projects and implementation, given the likely 10-year time frame from when a MBUF pilot is implemented to when a state program in which all drivers participate begins.

But research can still be helpful if it is focused on the implementation questions of political viability, cost of collection, and different collection mechanisms. Political viability includes whether there is a path forward for legislation can be passed by the legislature and signed by the executive. Typically, this involves creating coalitions. The cost of collection in some pilots has been well above 25% of the revenue collected. Actual collection costs need to be no higher than 10% of revenue, program-wide, to be viable. Finally, to help reduce those costs, states are examining new collection methods including smartphones and piggybacking on back-office tolling systems.

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Transportation Ballot Measures and Road User Charges

The American Road & Transportation Builders Association (ARTBA) released its usual report, the day after election day, on the fate of state and local transportation tax ballot measures. The headline notes that “Voters Approve[d] $41 Billion in Local Transportation Investment.” That result is due to 370 transportation funding measures that were approved, representing 77% of all those on state and local ballots.

The most common form is a time-limited (e.g. 20-years) transportation sales tax that typically funds roads, bridges, transit, and perhaps sidewalks and bikeways. This approach was pioneered in California. By the time my wife and I left Los Angeles for South Florida in 2003, every urban area in California had this kind of transportation sales tax, generally at the county level, and those counties were referred to as transportation “self-help counties.”

The U.S. transportation community is in the early stages of devising ways to shift roadway funding from per-gallon fuel taxes to per-mile charges, generally referred to as mileage-based user fees (MBUF) in the East and road user charges (RUC) in the West. Many MBUF/RUC advocates assume that the new per-mile charges should fund all kinds of transportation, as these transportation sales taxes do. I’d like to offer an alternative approach.

As most transportation people know, per-gallon gas taxes were invented in Oregon and first implemented there in 1919. Within a decade, all 48 states had done likewise. The overwhelming desire for paved roads was the driving force for this. Nearly all these new state fuel taxes were dedicated to highway funding, either by statute or via constitutional amendments. It was only much later, in the 1950s and 1960s, that state governments converted their highway departments to transportation departments and began using some fuel-tax receipts for other modes, including sometimes even airports and seaports.

When Congress created the first dedicated fuel taxes in the 1956 law authorizing the Interstate Highway System and the federal Highway Trust Fund, those gasoline and diesel taxes were likewise 100% dedicated to building the Interstates. It was only after much of the Interstate system was completed that Congress began to realize it could win political support by shifting portions of the revenue to transit, and later to dozens of other transportation purposes.

There is an uphill road ahead in gaining enough motorist/trucking/taxpayer support to phase out fuel taxes and phase in MBUF/RUC. One lesson from state pilot projects is ‘keep it simple!’

The replacement should be dedicated to fully supporting highways and bridges rather than being an ever-expanding revenue source for state governments. But here is the sticking point: how, then, will transit be funded (since we don’t know any way to make transit self-supporting from the farebox)?

The answer could be the already popular local transportation sales tax. Once a robust MBUF/RUC is in place in a state, those local measures could be re-purposed as transit sales taxes. This would have the advantage of local support and control, removing the tension between roadway and transit funding. And it would make it clear that the MBUF/RUC would not be an all-purpose tax for anything that could conceivably be considered transportation.

Replacing 100-year-old per-gallon fuel taxes with dedicated road user charges is a once-in-a-hundred-year opportunity. The transportation community should give this serious consideration.

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New Travel Behavior Data Yields Uncertainty

Data for 2023 from three federal sources are provided in a new report by Steven Polzin, Irfan Batur, and Ram Pendyala, “Emerging Travel Behavior Insights from 2023 National Surveys.” The three surveys are the American Community Survey (ACS), the American Time Use Survey (ATUS), and the Consumer Expenditure Survey (CES). For those interested in post-pandemic transportation patterns, this report will be of great interest.

The most familiar report is the ACS, which is widely used to evaluate changes in commuter behavior. Table 1 in the report shows commute mode choices from 2005 through 2023. Among the surprising results are that drive-alone commuting in 2023 shows up as only 69.2% compared with annual figures in the high 70s pre-pandemic. Carpooling is down slightly at 9% in 2023 compared with figures ranging between 10.7% (2005) and 8.9% (2019). Public transit has recovered somewhat from a low of 3.2% in 2020 but is well below the average for 2005-2019 which is slightly less than 5%. Walk, bike, and other is about the same as pre-pandemic, at 4.4% in 2023. What I found most surprising is the 2023 figure for work from home, down to 13.8% from 17.9% in 2021.

The ATUS presents a contrasting picture, especially for work from home. Its figure for 2019 (pre-pandemic) is 7.8% in 2019, leaping to 27.0% in 2021, 24.2% in 2022, and 21.6% in 2023. The reason for this disparity with the much lower ACS telecommuting figures is explained by how the two reports obtained their data. The ACS procedure is to ask full-time workers their “usual” means of commuting in the prior week. That means for those who worked at home part of the week, we have no way of knowing how many answered that as work-from-home and how many listed drove-alone, rode transit, etc. By contrast, ATUS asked respondents the mode used on the day of the interview. The considerably higher numbers logged by ATUS strike me as less ambiguous than the more-random nature of answers given to ACS interviewers.

The ACS work-from-home figures seem unrealistically low, given the ongoing controversies between employers and employees over employees’ unwillingness to return to the office full-time. They also seem somewhat at odds with continued downtown office building vacancies. In addition, higher-than-ACS levels of telecommuting help to explain ACS’s reduced drive-alone and transit mode shares.

There is a lot more interesting material in this new report, including insights provided by the CES data. So if you are a transportation data maven, this report is for you.

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The Battle Over Port Automation
By Marc Scribner

The three-day strike in early October by the International Longshoremen’s Association (ILA) at East Coast and Gulf Coast ports brought public attention to long-simmering disputes over the future of U.S. port infrastructure and operations. One main source of the dispute is the ILA’s demand that a new collective bargaining agreement include “absolute, airtight language that there be no automation or semi-automation,” according to ILA President Harold Daggett. The United States Maritime Alliance (USMX), which represents ocean carrier and port employers, has resisted a strict ban on all forms of automation. The ILA and USMX reached a tentative agreement to increase wages by 61% over six years and extend the current contract until Jan. 15, but both parties appear no closer on the issue of automation, so this strike pause may prove temporary.

Automated cargo handling equipment is increasingly used at seaport container terminals around the world. These technologies can be categorized as semi-automated or fully automated. Semi-automated terminals involve manned equipment to move containers from the ship berth to the storage yard and then automated equipment stacks them. Fully automated terminals complete all vertical and horizonal container movements within the terminal without human intervention.

There are numerous safety and productivity benefits. Removing human operators from hazards in the field reduces injury risk, which can be especially serious given the heavy equipment and cargo involved. Safety risks aren’t eliminated because human handling onboard ships is still necessary, and often a major source of accident risk, but researchers have estimated that terminal automation could reduce injury rates by 40%.

While reducing safety risk itself represents a financial benefit to terminal operators, their economic motivations are primarily centered on reducing the unit cost of container handling, increasing performance consistency, and reducing labor costs. Unsurprisingly, it is that final motivating factor for automation that has engendered backlash from organized labor.

In the United States, terminal operators are particularly interested in automation as a means to address physical capacity constraints. New terminals are few and far between, and most existing ports have little or no room to add acreage. Hence, densifying container yards through more efficient stacking is seen as critical for accommodating growing import and export volumes. In recent negotiations with the White House, USMX made clear that “[t]here is not enough land or berth capacity in US ports to handle future trade growth without implementing new technology,” according to documents obtained by the Journal of Commerce.

As it stands, automated cargo handling equipment is uncommon given its novelty, with a 2021 survey identifying just 63 semi-automated or fully automated container terminals in 23 countries globally. That being said, a 2024 Government Accountability Office (GAO) report found that U.S. ports are already lagging behind comparable ports in Asia, Europe, and the Middle East in the adoption of automated gantry cranes, automated guided vehicles, and remotely operated ship-to-shore cranes.

The GAO report also noted that while some jobs might be eliminated by automation, others would be created. The new jobs would be more focused on operations strategy rather than manual tactical work. And if enhanced port efficiency leads to greater throughput, more jobs will be needed to handle the additional traffic. These jobs will tend to be in safer and more comfortable office environments, rather than the dangerous manual labor that occurs mostly outdoors today. While automation-related jobs require a different skillset, some port stakeholders interviewed by GAO said they plan to “upskill” their existing workforces to fill these new positions.

The ILA is hardly alone among unions in opposing the adoption of labor-saving technology. As I have highlighted repeatedly in this newsletter, unions representing truck drivers, freight railroaders, and transit workers oppose any movement towards automated operations. What makes the ILA’s anti-automation demands stand out is the union is seeking to prohibit automation technologies that are already widely deployed, such as automated truck entry and exit gates at ports. In expressing his opposition to automation in all forms, the ILA’s Daggett lamented the proliferation all-electronic tolling and self-service retail checkout kiosks.

The ILA enjoyed sympathy during President Joe Biden’s administration, which rejected calls to exercise its authority under the Taft-Hartley Act of 1947 to end the strike, as President George W. Bush did when West Coast dockworkers and maritime employers reached an impasse in 2002. Section 206 of the Taft-Hartley Act (29 U.S.C. § 176 et seq.) grants the president the authority to halt or prevent strikes by seeking a court injunction to force employers and employees to continue negotiating. The Biden administration’s support for union demands on the eve of the 2024 election undoubtedly affected the calculus of both the ILA and USMX.

The election of Donald Trump will significantly alter the negotiating strategies of both unions and employers as the Jan 15 deadline approaches. The new Trump administration is likely to be much less tolerant of labor actions that negatively affect wide swathes of the economy and more inclined to invoke its authority under the Taft-Hartley Act to prevent strikes that affect national security. This may dash the ILA’s hopes of securing a total ban on any future automation, but unions are unlikely to make the deployment of automated cargo-handling equipment cheap or easy for terminal operators.

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News Notes

Charlotte Transportation Planning Organization Approves I-77 South Express Lanes P3 Project
The Charlotte Region Transportation Planning Organization (CRTPO) voted last month to proceed with developing the P3 procurement process for the proposed express toll lanes on I-77 between Charlotte and the South Carolina border. Earlier this year, the North Carolina Department of Transportation explained its assessment that conventional state construction would delay this much-needed project for many years, compared with a toll-revenue-financed public-private partnership. Because much of the project will be elevated, the estimated cost has increased to $3.2 billion. The project has been in CRTPO’s long-range transportation plan since 2014.

Texas A&M Considers 4.3-Mile Tunnel Transport System
University administrators are considering a $350 million below-grade tunnel system to be called the Aggie Loop. The project, offered by Elon Musk’s Boring Company, would be somewhat like the larger underground system the company is developing in Las Vegas, but it would be entirely on the Texas A&M campus. It would include six surface stations and three subsurface stations in “pedestrian hot spots.” It would run from a parking area on the east side of campus to apartments on the west. Boring Company’s headquarters, formerly in Hawthorne, CA, is now in Austin.

VDOT Unveils Beltway Express Lanes to Maryland
After several years of study, Virginia DOT has released its plan for the last link in its I-495 Beltway express lanes network, extending from I-395 to the Woodrow Wilson Bridge and terminating at Maryland 210. Maryland opponents have already described it as “Lexus lanes,” ignoring the popularity and high usage (for both motorists and express buses) of the existing lanes in Virginia. Last year Maryland’s new governor and DOT director abandoned the former administration’s plan to add express toll lanes to its portion of the I-495 Beltway and I-270.

Urban Institute Points Out Politicization of Discretionary Grant Programs
Researchers at the Urban Institute studied more than 1,200 projects that received $14.3 billion from 15 rounds of transportation discretionary grant programs enacted by Congress, between 2009 and 2024. Only about 9% of the applicants received a grant, and the choices made by U.S. DOT reflected each administration’s priorities: Democratic administrations favored transit and other non-highway projects, while Republican administrations priorities were the opposite. The four major recommendations were more-procedural than substantive. I hope these findings encourage Congress to scale back or eliminate discretionary grants in favor of formula funding, in the 2026 surface transportation reauthorization.

More Toll Roads Planned in Austin
Despite the populist opposition to tolling and express toll lanes in the Texas legislature, two additional toll road projects are in the planning stage in rapidly growing Austin. The Central Texas Regional Mobility Authority (CTRMA) is studying an expansion and extension of tolled US 290. New industries served by this highway include Samsung and Tesla. CTRMA is also considering adding a fourth lane each way to the SH 183A Toll Road.

Dynamic Tolling to Begin on Two Denver Express Toll Lanes
Colorado DOT announced last month that time-of-day variable pricing will soon be replaced by dynamic tolling, adjusted every 5 to 15 minutes based on the level of traffic in those lanes. The change will be implemented this fall. The change will apply to 18 miles of express toll lanes on I-25, between Monument and Castle Rock. It will also be implemented on the 12-mile express toll lanes on I-70.

Oregon and Washington State Discuss I-5 Bridge Tolling
The Joint Washington State and Oregon Transportation Commission met in late September to discuss the tolls that will be charged to help pay for the I-5 replacement bridge across the Columbia River, now expected to cost close to $9 billion (compared to a 2020 estimate of $4.8 billion). Up to $3 billion of that cost is attributed to Oregon’s commitment to extending its light rail line across the bridge to Vancouver, WA. The relatively low variable toll rates being considered (either between $1.55 and $3.20 per trip or between $2.00 and $4.70) are estimated to finance either $1.24 billion or $1.6 billion, respectively. That would be a much larger contribution if the bridge cost $6 billion (without light rail, using express buses instead) rather than $9 billion with light rail. Oregon DOT has also proposed new tolling rules, allowing any government agency or any private group to propose toll financing of specific highway projects.

Can Robotaxis Be Much Less Costly?
Forbes contributor Brad Templeton discussed Waymo’s 2nd-generation robotaxi, which is made in China by Geely/Zeekr in his Aug. 20 column, using it to assess how such vehicles could become far less costly due to technological progress and large-scale production. He cites today’s $5,000 LIDARs that could drop to as low as $1,000 if autonomous vehicle production volumes greatly increased. He also itemized an array of costly components that would not be needed, including steering wheel, pedals, power steering motor, dashboard, adjustable driver’s seat, rear-view and side-view mirrors, high-end audio, and (for local-driving robotaxis) no extra-range batteries. The high cost of today’s prototype robotaxis is partly due to them being conversions of conventional vehicles.

More Bad News for U.S. Downtowns
Office vacancies have hit 20.1% as of September, according to Moody’s, the highest vacancy rate since 1979 when it started keeping track of this parameter. Downtowns are generally the worst-affected. The Economist (Sept. 7) cited downtown vacancies of 32% in San Francisco and 23% in downtown Austin, whose overall population is still growing rapidly. Partly empty downtown offices have dire implications for mass transit systems, most of which are designed to bring commuters to and from downtowns.

Sao Paulo Plans $1.07 Billion Port Tunnel
The Port of Santos is the largest container port in Latin America. Yet roadway access to nearby Guaruja takes place via ferry. Last month the Sao Paulo legislature approved a long-term public-private partnership (P3) to build and operate a $1.07 billion roadway tunnel beneath the waterway. Because no tolls will be charged, the project will be financed 86% by the federal and Sao Paulo governments, with the balance from private investors. Presumably the revenue stream will be government availability payments. Travel time using the tunnel is estimated at less than five minutes, far faster than the current ferry. The project is related to the upcoming privatization of the Port of Santos.

North Carolina Express Toll Lanes to Open in 2025
NC DOT has announced that the new express toll lanes on I-485 in Charlotte will be open to traffic by late summer 2025. The $346 million project is adding one express toll lane in each direction on that freeway between I-77 and US 74. This is the second step in the gradual implementation of a network of express lanes in the Charlotte metro area, with the third project being the planned elevated express lanes on I-77South.

CCR Wins Concession for Brazil’s Rota Sorocabana
Infralogic reported (Oct. 30) that transportation conglomerate CCR won the auction to design, build, finance, operate, and maintain the $1.5 billion Rota Sorocabana highway in the state of Sao Paulo. The project will modernize a system of 12 highways crossing 17 municipalities. The roads will be widened and adjacent walkways and bus stops will be added on the shoulders. CCR has operated a portion of the route under contract since 2005. The P3 concession is for 30 years.

Highway Construction Costs Continue to Increase
The Federal Highway Administration (FHWA) reported in late September that U.S. highway construction costs increased in the first quarter of 2024 at an annual rate of 9.6%. Since FHWA began the National Highway Construction Cost Index in 2003, highway construction cost has increased to become 3.19 times higher than in 2003. That equates to an annual increase averaging 15.2%. The most recent series of high annual increases began during the recovery from the Covid pandemic.

MassDOT Begins Service Plaza P3 Procurement
Like most other toll roads east of the Mississippi, the Massachusetts Turnpike has service plazas that offer fuel, food, restrooms and other services. MassDOT recently released an RFP for a project to redevelop and modernize its 18 service plazas under 30-year P3 agreements. Initial responses are due Nov. 19. Requirements include trucker amenities and DC fast chargers for electric vehicles. The 30-year P3 concession(s) will be structured as leases with an option for a 10-year extension, as reported by Public Works Financing (Sept. 2024). Interestingly, only 11 of the 18 service plazas are on the Turnpike. The others are on I-95 and state routes 3, 6, and 24.

Italy Needs €70 Billion in Toll Road Investment
World Highways (Nov. 4) reports that the country’s Ministry of Infrastructure and Transport is in the process of determining long-term investments needed to maintain, upgrade, and develop Italy’s vast toll roads network. The scope of the analysis is comparable to the U.S. Transportation Research Board’s 2019 report on the future of our Interstate Highway System, which is much larger than Italy’s toll roads system. The TRB estimated a $1 trillion price tag over several decades to rebuild and modernize the Interstates.

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Quotable Quotes

“While robotaxis spare the expense of paying a human driver, they are far from cheap. Analysts from Bernstein estimate that Waymo’s driverless cars cost between $150,000 and $200,000 apiece, factoring the cost of the vehicle itself and the sensors and computing power to run them. And those cars are nearly always operating and—thus—generating costs for their operators, while fleets of cars with human drivers can be scaled up and down based on demand and don’t generate costs when not carrying passengers. The high fixed costs of a fully autonomous vehicle network ‘creates economic questions around up-front costs and utilization rates during non-peak hours.’ Bernstein’s analysts wrote in a report last month.”
—Don Gallagher, “Uber Has a Leg Up on Tesla in the Robotaxi Race,” The Wall Street Journal, Oct. 5-6, 2024

“I think one of the biggest challenges for our industry is getting the public to appreciate the real costs of infrastructure projects. It is the easiest thing in the world to argue to reject or cancel a project, but given the time value of money for these projects, changing the delivery model or going back to the drawing board would simply never pencil out. Owners need to be constantly emphasizing that tradeoff and pushing projects forward, because these projects simply aren’t going to get any cheaper by waiting. . . . At the same time, I think we need to understand that user fees are part of the solution, and not necessarily going to cover the entirety of these projects. For us, Calcasieu and the [new] Mississippi River bridge collectively will cost more than $6 billion. To put that into perspective, that’s more than our total capital construction spend over the previous 7.5 years combined.”
—Shawn Wilson (WSP, former Louisiana Secretary of Transportation & Development) in Michael Bennon, “PWF Interview with Shawn Wilson,” Public Works Financing, Sept. 2024

“In Europe, the term ‘induced traffic’ has been weaponized by the anti-road (ultimately anti-car) lobby to the extent that the phrase has become confused and meaningless. More and more professional folks are avoiding it (and being more precise with their language). The argument generally goes as follows: ‘Build new roads and after a short time, congestion returns, so you’re back to square one. So there’s no point.’ However, expanded highways are built in places where congestion has clearly become a problem. The additional traffic is not ‘induced’ by the road as such. In many cases, it’s simply the release of pent-up demand. And who is to say that these ‘new’ trips (when and where they crystalize) are any less valid than other trips that folks are currently making on the highway network.”
—Rob Bain, CSRB Group transportation consultant, email to Robert Poole, Oct. 10, 2024. Used with the author’s permission.

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Source: https://reason.org/transportation-news/fresh-thinking-for-industry-planners-and-vmt/