SPECULATING ABOUT THE FUTURE OF SURFACE TRANSPORTATION Presentation by C. Kenneth Orski EditorPublis

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SPECULATING ABOUT THE FUTURE OF SURFACE
TRANSPORTATIONPresentation by C. Kenneth
OrskiEditor/Publisher of Innovation Briefs

• New York Metropolitan Transportation Council
• Program Finance and Administration Meeting
• September 21, 2006

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Three predictions/speculations

• Use of tolls and variable road pricing as tools
  of augmenting transportation revenue and managing
  travel demand will continue and may even
  accelerate
• Private sector and private investment capital
  will assume a more prominent role in
  construction, financing and operation of
  transportation facilities both new and
  existing
• Both these trends may profoundly influence the
  federal role in surface transportation.

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Growing interest in tolling no longer in dispute.

• 23 states have plans to build toll facilities.
  Of these, 16 states already have toll roads and
  are planning additional toll facilities and 7 are
  planning their first toll facilities (toll roads
  or toll lanes)
• Highway Tolling Has Reached the Tipping Point
  Over 50 documented announcements and news items
  concerning tollroad and toll lane projects since
  March 2006
• Interest in tolling is rising because of its
  potential to meet multiple objectives augmenting
  existing gas tax revenues, financing new road
  capacity and managing congestion
• Widespread reluctance to raise fuel taxes at
  state and federal level contributing to the
  acceptance of tolling
• Priced lanes becoming increasingly accepted by
  the driving public because they are offering a
  tangible option to getting stuck in traffic
• Toll revenue and toll-financed bonding have
  come to be viewed as a logical means of meeting
  shortfalls in transportation budgets which many
  states currently experience.

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Conclusion

• It is quite conceivable even likely that toll
  facilities with variable pricing will constitute
  the bulk of all future additions to the nations
  highway capacity.

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• Toll facilities of the 21st century will bear
  little resemblance to the toll roads of our
  parents generation.
• HOT lanes
• Express toll lanes
• Truck only toll (TOT) lanes
• Virtual Fixed Guideways

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Common denominator

• Use of pricing not only to generate revenue but
  also to manage demand
• Use of electronic toll collection and dynamic
  pricing to allow control of traffic flow in real
  time and keep toll lanes congestion-free
• Use of toll lanes as virtual fixed guideways
  for high-volume Bus Rapid Transit
• Built in partnership with the private sector.

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Growing Private Sector Participation

• Chicago Skyway (99-year concession of an
  existing toll road, 1.8 billion)
• Indiana Toll Road (75-year concession of an
  existing toll road, 3.85 billion)
• Dulles Greenway, Northern Virginia (purchase of
  an existing toll road, 533 million)
• Capital Beltway and I-95 HOT lanes in No.Virginia
  (construction long-term concession of new toll
  lanes)
• TransTexas Corridor (TTC-35) (construction
  50-year concession of a new toll road)
• South Bay Expressway (SR 125) ( construction
  45-year concession of a new toll road, 635
  million)
• Pocahontas Parkway (VA) (99-year concession of
  existing toll road, 611 million)

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• Fanning the spread of public-private
  partnerships are visions of highway projects
  built entirely with private funds and prospects
  of multi-billion concessionary cash payments that
  could jump-start ambitious transportation
  improvements years in advance of their planned
  execution.
• Innovation Briefs, March/April 2006

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• "Virtually every major financial institution on
  Wall Street has created or is in the process of
  creating an infrastructure fund with
  transportation as a major component. They
  correctly recognize the enormous potential in
  American infrastructure. And it is imperative
  that future transportation decision-makers
  continue to foster this interest, not take steps
  to discourage it."
• Transportation Secretary Norman Y. Mineta

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• Conclusion
• We may be on the verge of a fundamental change
  in our approach to funding new highway
  infrastructure an approach where private capital
  rather than tax dollars becomes the chief source
  of financing new road capacity.

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Changing Federal Role

• With toll revenues flowing directly to the states
  and to private toll concessionaires, the federal
  fuel tax would cease to play a dominant role in
  financing new highway construction.
• The federal-aid highway program would focus
  primarily on the vital mission of preserving and
  enhancing the Interstate system and on funding
  other national priorities
• Conclusion
• This would mean a partial de facto devolution of
  the Federal program to the states.

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• Prediction is very difficult, especially about
  the future!