Monday, April 10, 2006

Poole/Reason on Tx DOT

Sorry for the late kickoff post this week. Just a quick pass-along this morning from Bob Poole's latest Surface Transportation Innovations newsletter at Reason. Oddly, I got this excerpt out of their email newsletter, but it doesn't seem to be up on their web site yet. He has some interesting and favorable things to say about Texas' approach to solving mobility challenges:

Texas Wants Long-Term Concessions

I’ve said before that Texas is far in the lead in defining 21st-century highways—and TxDOT laid down another marker in January. At a half-day workshop attended by over 400 people, senior officials laid out their plans to make use of the Texas version of public-private partnerships, called comprehensive development agreements (CDAs) in Texan. The bottom-line message is that TxDOT is taking a very aggressive approach to using all the tools the legislature gave it in 2003 and 2005. And while all forms of PPP are available (beginning with plain old design-build), TxDOT made clear that its preferred model is the long-term concession. Why? Because it maximizes opportunities for large-scale, self-supporting toll projects and transfers significant risk from taxpayers to investors.

You can get a nicely presented overview of the rationale for the whole program, called the Texas Transportation Challenge, by clicking on: There you will find that while roadway use is projected to grow by 214% over the next 25 years, highway capacity will increase only 6% with a business-as-usual approach. That’s because current transportation revenues (mostly state and federal fuel taxes) can do little more than keep pace with the need to maintain and rebuild the existing highways. To achieve an acceptable level of mobility by 2030, Texas must close a funding gap of $86 billion.

And that’s what they intend to do via tolling and CDAs. The workshop included a detailed Powerpoint presentation (available on the txdotnews/cda_index.htm portion of the TxDOT site) that explains the overall program, lists current projects being considered for, or already moving forward as, CDAs, and gives highlights of high-profile projects like the first two Trans-Texas Corridor projects, TTC-35 and TTC-69. It also explains how TxDOT will assist private partners in making use of the federal TIFIA and PAB programs. And it emphasizes that TxDOT welcomes unsolicited proposals in addition to planning to issue many RFPs for projects it has identified.

There’s no question that states and urban areas are in competition as good places to live and do business. Some, like Texas, are adopting aggressive approaches to reducing congestion and expanding highway infrastructure, while others are taking a different approach. A natural experiment is in the making. We should have some very interesting results in 20 or 25 years.


At 3:59 PM, April 10, 2006, Blogger Brian Herod said...

I wonder if the 214% increase in demand over the next 25 years assumes a fixed source of petroleum? If over the next 25 years, the cost of gas begins to rise exponentially, then this demand may fall precipitously. I wonder if the investment in highways will payoff if auto transportation drops off.

At 4:21 PM, April 10, 2006, Blogger kjb434 said...

You are thinking of people driving their personal vehicles. A large source of the increase traffic is truck traffic. This traffic will also be attempted to be spread out on to rail traffic. Either way will need gas or diesel.

Also, this TTC projects are designed in phases. At first you may just see typical 4 lane tollway, but the design for an ultimate layout that includes rail and additional lanes including dedicated lanes is planned for.

This will allow for the expansion of these roads as needed but without the red tape of federal funding. It has taken over 20 years to get the Katy Freeway project started. US 290 has been under study for the past couple of years and first sign of improvements won't be until after 2010 or 2015.

I'm currently working a design build project for TxDOT on the south side of Austin. It is the second prototype for the TTC project. The first prototype is SH 130, the second is SH 45 SE. The projects are ironing out the design process to ensure the utmost design quality. The main difference is that the TTC will be privately financed, managed, and built, but TxDOT will have oversight for engineering and design.

Currently it is one of the most comprehensive transportation initiatives in the US. The private company of Cintra that is proposing to be the first managers of these roads has track record in the US and many other countries of doing what they will be doing here in Texas. They are currently managing the cross-state tolway in Indiana that connects Illinois and Ohio.

At 5:30 PM, April 10, 2006, Blogger Tory Gattis said...

> I wonder if the 214% increase in demand over the next 25 years assumes a fixed source of petroleum?

With taxes, the cost of gas in Europe is 3-4x the cost here, yet they drive plenty. The experience across countries indicates that gas prices correlate with the types of vehicles purchased and their gas mileage (SUVs vs. economy cars), but doesn't affect their total driving all that much. People just value personal mobility too highly.

At 8:13 PM, April 10, 2006, Anonymous Anonymous said...

"The experience across countries indicates that gas prices... doesn't affect their total driving all that much"

do you have some data related to that? I would be surprised to learn that the average worker in Amsterdam or Geneva drives as much as a Houstonian.

At 10:38 PM, April 10, 2006, Blogger Max Concrete said...

TxDOT is basically the only state pursuing privatization on a large scale. The question is: Is TxDOT right, and are 49 other states wrong?

Here's the score. Only one other state, Virginia, is contemplating large-scale private projects, and as of now it is all preliminary talk. The I-81 project is looking like it will fall apart. There's talk of one project in Georgia. Florida (growing faster than Texas) is sticking to its long-term pattern of gradually adding conventional toll roads. California is doing nearly nothing in terms of toll roads. Arizona is sticking with freeways and funding them. Washington State is sticking with conventional funding but may add a few tolls (such as the Seattle bridge). A private toll road plan paralleling I-25 was stopped in Colorado.

There are a lot of risks and downsides to massive privatization, which is why it isn't being done elsewhere. It is also running into plenty of opposition in Texas but is being pushed through by Governor Perry's iron fist. So to say that Texas is "far ahead" is a matter of opinion. It would be more accurate to say that Texas is on its own, and only time will tell what the policy will bring.

At 12:09 PM, April 11, 2006, Blogger kjb434 said...

Every other state is slow to move forward because Texas is moving forward. They want to wait and see. If it works, great! If is doesn't, then change the course.

The primary difference in Texas than other privately manage facilities that Texas is bringing the private partner from the beginning versus selling to the partner after construction such as in Indiana.

Many state have a wait and see attitude by judging other states actions. A simiar situation is happening in healthcare. Several states (Tennesee, Vermont, Maine) have what would be considered socialized healthcare. Other states have realized that these systems after being implemented for several years are falling apart and all the problems they aimed to fix got worse, but some credit goes to these states for trying something.

Florida (and several other states)have been in the long distance toll road business for a while. The system is currently working for them in handling increase traffic (mainly due to vacationers). Texas, although the population growth is slower, has a greater increase in freight being moved by truck and train. Current corridors can be widen to six lane highways (which is currently happening on I-10 east of Houston to the LA state line and on I-35 between San Antonio and DFW) to handle larger traffic volumes. They also can increase to 8 lanes, but these corridors to pass through large metro areas where peak rush hours periods tax current road systems. Bypass need to occure outside of these metro areas. Currently loop systems in the metro areas are being loaded with traffic already.

I don't the TTC concept is perfect, which is part of the reason currently toll roads part of the CTTA (Central Texas Turnpike Authority) are prototypes of the TTC corridors and design process. I can tell you from experience that it is much more complicated and difficult to get a good sound design under this concept. The problem areas have been identified through these projects to improve the process for future toll projects and TTC projects that will use this process.

The TTC project is also under the eyes of the USDOT and the FHA. If the project moves forward and show some promising results in the future, prototype that Texas used will be added onto in neighboring states to connect these corridors throughout the country.


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