To consolidate, disseminate, and gather information concerning the 710 expansion into our San Rafael neighborhood and into our surrounding neighborhoods. If you have an item that you would like posted on this blog, please e-mail the item to Peggy Drouet at pdrouet@earthlink.net

Monday, May 6, 2013

Road Privatisation: Cameron's Plan To Sell-Off Highways And Motorways


March 19, 2012 (and update below)

 England's major roads could be run by private firms in a deal compared to the sell-off of the water industry under plans to boost infrastructure spending being set out by David Cameron.

 The prime minister has ordered Whitehall experts to investigate a radical shake-up of ownership and funding in a bid to encourage investors to fund desperately-needed upgrades to the ageing network.

One model being examined would see an independent regulator set up to oversee the distribution and use of money raised through road tax, which would still be set and collected by the state.
Officials insisted the move did not amount to privatisation, with roads placed in private hands on very long leases rather than sold off altogether and said tolls were not planned for existing roads. But they said they hoped it would emulate the "great success" of the 1989 water industry privatisation.

Cameron said that the taxpayer cannot afford to pay for the improvements needed to ease traffic jams meaning the Government must turn to European-style private funding systems. In a pre-Budget speech he warned that the UK is getting left behind international competitors because of a failure of finance, vision and nerve over recent decades.

Focusing attention on roads, he told the Institution of Civil Engineers: "The problem's clear: we don't have enough capacity in places of key demand. There's nothing green about a traffic jam - and gridlock holds the economy back.

"So here's what we should do. Yes, move passengers and heavy goods onto rail. But also widen pinch points, add lanes to motorways by using the hard shoulder to increase capacity and dual overcrowded A-roads.

"The massive programme announced during last year's Growth Review made a good start. But how do we do more, when, frankly, there isn't enough money? Road tolling is one option - but we are only considering this for new, not existing, capacity.

"But we now need to be more ambitious. Why is it that other infrastructure - for example water - is funded by private sector capital through privately owned, independently regulated, utilities but roads in Britain call on the public finances for funding?

"We need to look urgently at the options for getting large-scale private investment into the national roads network - from sovereign wealth funds, pension funds, and other investors. That's why I have asked the Department for Transport and the Treasury to carry out a feasibility study of new ownership and financing models for the national roads system and to report progress to me in the autumn."

Maria Eagle MP, Labour's Shadow Transport Secretary said the plans risked driving traffic onto local roads, increasing congestion and emissions.

"Ministers seem to be intent on repeating the mistakes of rail privatisation, which was supposed to lead to cheaper fares and lower costs but has instead given powerful vested interests the chance to rip off passengers while increasing the cost to the taxpayer," she said.

"Motorists now seem set to be in the firing line for the next phase of the Tories’ ideologically driven rip off culture."

George Osborne takes first step on road to privatising Britain's highways


By Mark Leftly, March 31, 2013


The Government risks angering trades unions with plans to commercialise the running and repair of Britain's core roads network, a move likely to lead to full privatisation.
The Department for Transport is considering allowing the Highways Agency, which runs the UK's 4,300 miles of motorways and trunk roads, to raise its own cash rather than just rely on the public purse, The Independent on Sunday can reveal.

David Cameron and George Osborne have been pushing for full privatisation for the past year, but cracks in the coalition, as well as a technical concern that this still wouldn't get the agency's liabilities off the Government's balance sheet, have made that option untenable in the short term. Instead, the Highways Agency would be modelled on Network Rail, which raises money in the financial markets and competes for money-spinning advisory work internationally, but is ultimately backed by, and responsible to, the DfT.

Transport Secretary Patrick McLoughlin will announce this option of revamping the Highways Agency in a roads Green Paper this summer. Officials believe the Highways Agency must be commercialised to raise the billions of pounds, over and above its £4bn budget, needed to get Britain's most important roads up to scratch.

Industry sources said that this would be the first step to privatising roads that bear the strain of one-third of all traffic mileage undertaken in the UK.

Although something of a short-term compromise, the news will not be popular among union members. The Public and Commercial Services Union has warned that privatisation would lead to job cuts. It also argued that privatisation and out-sourcing vital repair and maintenance work to profit-making companies does "not make economic sense".

A DfT spokeswoman said: "The future of our road network is a serious and important issue and it is right that we take the time to look at all the options thoroughly in order inform the debate. This will enable us to provide a solution which is in the best interests of motorists and the country as a whole."
Will the Nation’s First Strategic Freight Plan be Multi-Modal?


By Angie Schmitt, May 6, 2013

Congress is joining U.S. DOT in committing more resources to a national freight plan, a more strategic way of moving goods than the current haphazard and fragmented current approach. As mandated by MAP-21, U.S. DOT is working on a strategic plan for a nationwide freight network, and last month, Congress kicked off its contribution, holding an inaugural hearing of the new, specially-appointed freight panel of the House Transportation Committee. At that first hearing, panel members heard from representatives of the trucking, freight rail, and shipping industries, as well as labor.
Rep. Jerrold Nadler headed a special panel hearing on freight last month in Washington.

The Congressional panel on freight will be traveling the country over the next few months seeking input on the nationwide freight plan.

At the hearing, Jerrold Nadler (D-NY) emphasized the need to develop a 21st century freight transportation system in a way that doesn’t prioritize highways over other modes.

“MAP-21 authorized some incentives to encourage states to develop highway freight plans… and required the Federal Highway Administration to designate a national freight network,” Nadler said. “There remains much work to be done to expand this vision to include all modes of transportation — highway, rail, water and air — to ensure that the resources are available to implement this vision.”

In the past, Obama administration officials have asserted some modal preferences in the “goods movement hierarchy.” Deputy Secretary John Porcari said in 2010 that “we want to keep goods movement on water as long as possible, and then on rail as long as possible and truck it for the last miles.”

Each panel witness provided recommendations guided by his own industry’s self-interest, and none offered a broad, multi-modal philosophy. There did seem to be general agreement on a few matters, primarily that the federal government has a role to play in funding major freight projects.

Fred Smith, president of FedEx, contended that regulations allowing bigger trucks would improve efficiency and environmental outcomes — an argument refuted by opponents who point out that bigger, heavier trucks will require more road maintenance and pose a greater danger on the roads.
Smith, like nearly all the other panelists, argued for more revenue.

“We need a funding mechanism in the form of a revised fuel tax or vehicle mileage tax, which the user community almost universally supports to fund additional infrastructure, particularly in the more congested parts of the country,” he said.

Wick Moorman, president and CEO of Norfolk Southern, complained about excessive government regulations limiting new investment in freight rail. ”The longer it takes to steer through regulatory hurdles, the longer we wait for economic growth,” he said, though he didn’t cite specific regulatory obstacles.

While Moorman didn’t exactly plug increased mode share for freight rail, trucking executive Derek Leathers didn’t miss his chance. He argued that lawmakers shouldn’t shift resources away from highways, noting that trucking moves about 67 percent of all freight. “While we are bullish on the future of intermodal, claims that these changes will have significant impact on modal share, in my view, are overstated,” he said.

Arguing that highway bottlenecks cost the trucking industry $19 billion a year, Leather made it clear that his industry remains a big cheerleader for highway expansion. We recommend much greater investment in the national highway system,” he said. “The trucking industry is wholly dependent on federal and state and public agencies to spend the $33 billion in highway users’ fees in a way that provides a good return on our investment.”

While MAP-21 presents some opportunities to improve freight, Nadler said, it also increases obstacles to a high-functioning, well-integrated national freight system.

For one, MAP-21 provided only one year of dedicated funding for the Projects of National and Regional Significance program, established in 2005 under SAFETEA-LU as one of the few discretionary grant programs that can think outside state boundaries. Freight projects are top candidates for funds like PNRS and TIGER, a similar discretionary program that MAP-21 failed to authorize.

States are the only eligible beneficiaries of PNRS money — to say nothing of the 92.6 percent of federal transportation funding that MAP-21 allocated to states by formula.

“Although this state-based system addresses state and local surface transportation projects well,” Nadler said, “it is poorly suited to address critical national transportation projects, such as major freight projects that provide broadly dispersed benefits but high local costs.”

At a Budget Committee hearing last week, Oregon Democrat Earl Blumenauer made a similar point. He challenged proponents of devolving federal authority to the states to show him studies proving that state and local governments were interested in planning and funding projects to improve national freight movement.

Furthermore, said Nadler, “MAP-21 did not address what are arguably the most challenging aspects of freight policy: what to pay for and how to do it.” The same could be said of all aspects of transportation.

The panel will be traveling to Memphis, Louisville, Los Angeles, and New York to hear testimony in the coming months.

Youth get involved in Long Beach

Carol Teutsch, via Sylvia Plummer 

 Young residents of west Long Beach giving voice and faces to the problem with their community's air pollution.  The Ports of Long Beach/L.A. and BNSF railroad have proposed to build a rail yard in their community in close proximity to homes and schools. The Port's environmental review, however, fails to consider the huge body of scientific literature on exposure to traffic-related air pollution and its impacts on human health, especially children's.

For Los Angeles, an End to the ‘Free’ Subway Ride


By Adam Nagourney, May 3, 2013

 A train arriving at a station on the red line of the Los Angeles subway. Transit officials there say that millions of dollars have been lost because the system has relied on an honor code for paying fares.


LOS ANGELES — There is a startling new sight at the subway station at Hollywood and Vine these days, set amid the handsome trappings of vintage film projectors and movie paraphernalia: five subway turnstiles.

Their appearance amounts to an acknowledgment of the failure of the rider honor system that Los Angeles embraced when it began constructing its subway system nearly 20 years ago. This might not exactly come as a news flash to anyone who has traveled the subways of New York or the Washington Metro, but a gateless subway entrance is not the most effective way to motivate riders to pay their carriage.

Los Angeles transit officials say that millions of dollars in annual revenues have been lost because of riders who calculated, reasonably enough, that they could ride the subway free with minimal danger of detection, no matter the occasional deputy sheriff demanding to see a fare card and a $250 fine for violators.

“A lot of people — if not the majority of people — are not paying their fare,” said Zev Yaroslavsky, a county supervisor and a member of the board of the Los Angeles County Metropolitan Transportation Authority. “There is no reason for them to pay. The odds of them getting a ticket are slim to none.”
Xavier Nailing, 44, a hospital custodian, said he routinely rides without paying a fare, and does not fear the consequence of detection.

“Nothing ever happens when someone writes me a ticket,” he said. “The last time someone wrote me a ticket I looked at the cop and said: ‘You know what, how long have you been on the force? You can write me that ticket but you’re going to stand there and watch me tear it up because I know it’s not going to be enforced.’ ”

This remains a work in progress. Some stations on the system have gates, some do not. Some of the gates are locked, some slip open with a simple push. The whole process has been ensnared in years of delay, reflecting the complex web of underground trains, light-rail trains and buses that form the public transit system here. Its opponents continue to question whether the supposed recovery of lost revenue would cover the $46 million installation cost, plus $103,000 a month in maintenance.

Still, a locked-entry subway finally appears at hand, with officials saying that 192 turnstiles at 42 stations will be locked and ready for business by the summer. It is the latest milestone in Los Angeles’s halting march toward imposing a mass transit system on a region that has traditionally been so loyal to the automobile.

“I think the honor system is great, but if people abuse it then this is what we end up with,” said Peter Eaton, a film director, as he entered a subway station. “I know it’s just the nature of the times we’re in. I would prefer the way L.A. has been doing it and not change it, but on the other hand I can see doing it the way other cities do it.”

One reason the subways did not include turnstiles was that transit planners thought locked gates would make it even harder to persuade Los Angeles residents to dip their toes into the mass transit water. That no longer seems to be a cause of concern: in March, the M.T.A. logged an average of 360,000 rides a day on the subway system.

The system opened in 1993 with 4.5 miles of underground tracks and five stations. Now, the entire system — including subways and light rail — spans nearly 88 miles and contains 101 stations, stretching from Long Beach to Pasadena.

There is no way to know how many people had been jumping the turnstile, at least metaphorically, to avoid paying the $1.50-a-ride fare, and thus how much money the M.T.A. has lost.

“That is the $25,000 question,” said David Sutton, who is running the operation for the transportation authority. “Ask me in a couple of months. Our lessons learned will be very obvious by then.”

 Richard Katz, a member of the transportation authority board, said he did not believe that the revenue would come close to covering the cost of installing the system, which requires riders to buy fare cards and tap them on a sensor to open the gates.

“I never thought it was necessary,” Mr. Katz said. “And I don’t think it will ever pencil out. It’s a huge sinkhole of money. I think they were sold a bill of goods.”

The absence of the gates — and the length of time it has taken to get the system working — has been a matter of frustration to transit advocates.

The bottom line, said Joel Epstein, a transit advocate, is: What sort of city does not lock turnstiles in its transit system?

“As a lifelong transit rider who remembers when N.Y.’s turnstiles were waist-high — like L.A.’s are now — and easy to jump, I can’t imagine why it’s taken the agency all these years to implement a system that is sure to help raise revenue for operations,” he said in an e-mail.

It seems clear this is not going to be an easy adjustment, particularly for people who have enjoyed the free ride. At the Hollywood station the other day, evaders could be spotted knowingly pushing their way through the unlocked barriers, blithely ignoring the red flashing light that went off at each violation. There was not a police officer in sight.

“It’s not as onerous as the New York City system,” said Dave Sotero, a spokesman for the Metropolitan Transportation Authority. “Our system is not that robust. But we’re going to that point.”
Mr. Yaroslavsky said that lost revenue was not the only reason to do this.

“It’s not fair to those people who pay to have a significant percentage of people who don’t pay,” he 
said. “The credibility of the enforcement system is undermined. It’s human nature to say, ‘If he’s getting away with it, why should I pay?’ ”

Metro receives top honors at SCAG’s Compass Blueprint Recognition Awards


By Anna Chen, May 6, 2013


Metro took home the top prize at Southern California Association of Governments’ Seventh Annual Compass Blueprint Recognition Awards and received the President’s Award of Excellence for its Countywide Sustainability Planning Program, which promotes regional collaboration to increase mobility, foster walkable and livable communities, and minimize greenhouse gas emissions and environmental impact.

“It has been a pleasure to serve both Metro and SCAG boards in developing greener, sustainable and livable community policies that our 88 cities can consider implementing on a voluntary basis,” said Pam O’Connor, Mayor of Santa Monica, Past President of SCAG and Metro Board Chair of the Sustainable Ad Hoc Committee. “I am proud of Metro’s leadership that can be an example statewide and nationwide.”

In addition, Metro CEO Art Leahy received the Public Sector Leader of the Year award for Metro’s accomplishments during the past year with projects that will alleviate congestion and improve air quality.

Read the full press release from SCAG after the jump.

Four Southern California leaders were honored this week by the nation’s largest metropolitan planning organization for their “material and significant impact” in addressing the major issues facing the region.

The Southern California Association of Governments presented the two men and two women with its President’s Leadership Awards during its 2013 Regional Conference & General Assembly.

“Southern California is very fortunate to have the support, energy and enthusiasm of these four leaders who improve the lives of our 18 million residents,” said Simi Valley City Council member and SCAG President Glen Becerra. “Their partnership with SCAG has been invaluable in finding solutions to improve our 191 cities’ mobility, economic viability and livability.”

Jesse Knight, chief executive officer of San Diego Gas & Electric and co-chair of the Southern California Leadership Council, was honored as Regional Partnership Leader of the Year. Under Knight’s leadership, SCLC adopted a number of initiatives to support job recovery, modernization of the California Environmental Quality Act, international trade and minimizing the economic impact of sequestration on Southern California military bases. He also co-chaired SCAG’s December Economic Summit focusing on job recovery and attracting more businesses to the region.

Art Leahy, chief executive officer of the Los Angeles County Metropolitan Transportation Authority, received the Public Sector Leader of the Year award. Metro’s accomplishments during the past year include launching the largest public transit construction program in the nation, opening – on schedule – a $214 million high-occupancy toll program on the Harbor and I-10 freeways, and securing federal funding commitments to help clear the way for 10 additional transportation projects that will alleviate congestion and improve air quality.

Fran Inman, senior vice president of Industry-based Majestic Realty, was honored as Private Sector Leader of the Year. Inman represents several Southern California, including SCAG, on the California Transportation Commission and is a leading voice in Sacramento and Washington, D.C., on freight and transportation matters. She also is actively involved in business and economic issues through the Global Land Use and Economic (GLUE) Council.

Amanda Eaken, deputy director of sustainable communities for the Natural Resources Defense Council’s Energy & Transportation Program, was honored as Southern California Sustainability Leader of the Year. Eaken worked with local and state leaders to spread the word about SCAG’s 2012-2035 Regional Transportation Plan / Sustainable Communities Strategy, and has helped SCAG and local transportation agencies find additional funding tools to implement provisions of the RTP/SCS.

Mayors across the United States show their support for America Fast Forward bond program to accelerate transportation projects


 By Steve Hymon, May 6, 2013

The letter: http://www.scribd.com/doc/139667613/MayoralLetterAFFBonds4-30-13

April 30, 2013Chairman Max Baucus Ranking Member Orrin G. Hatch219 Dirksen SOB 219 Dirksen SOBWashington, DC 20510 Washington, DC 20510Chairman Dave Camp Ranking Member Sander Levin1102 Longworth HOB 1106 Longworth HOBWashington, DC 20515 Washington, DC 20515Dear Chairman Baucus, Ranking Member Hatch, Chairman Camp, and Ranking Member Levin:As mayors of major economic hubs throughout the country, we recognize that our nationfaces a series of difficult economic challenges. To protect our nation's long-term fiscal healthand reduce the federal deficit, we must create jobs by investing in critical transportationinfrastructure. There is a significant demand for major transportation projects now at a periodwhen early construction of these projects can be done at a much lower cost and result in theimmediate infusion of higher paying jobs into our national, local, and regional economies.As you develop tools to maximize infrastructure investment, we urge you to consider public- private financing mechanisms, such as the proposed America Fast Forward (AFF)Transportation Bonds. AFF Transportation Bonds would serve as a new tax credit bond program designed to stimulate greater investment in surface transportation infrastructure projects. These bonds could be a meaningful supplement to the Highway Trust Fund and aninnovative financing tool in which states and local governments utilize local funds to finance projects of regional and national significance. It is estimated that AFF Transportation Bondswould leverage private capital to create over 550,000 private sector jobs nationwide includingover 165,000 engineering and construction jobs.We believe these program improvements based on strong private and local commitments willaccelerate the financing of infrastructure projects and contribute significantly to increasing jobs and federal, state, and local revenues. We look forward to working with Congress andthe Administration to advance these innovative financing approaches.Sincerely,Michael A. Nutter Scott SmithMayor of Philadelphia, PA Mayor of Mesa, AZPresident Vice PresidentKevin Johnson Antonio R. VillaraigosaMayor of Sacramento, CA Mayor of Los Angeles, CASecond Vice President Immediate Past PresidentAttachment


AFF Transportation Bonds
Summary of the Proposal
$45 billion Qualified Tax Credit Bond (QTCB) program for surface transportation(highways, transit, rail):
Congress has already authorized over $35 billion of QTCBs in recent years for other purposes.
$4.5 billion per year annual volume cap:
Partial discretionary allocation to major projects and partial formula distributionto states for state/local projects to ensure that all states receive a portion of funding.
Issuance by state and local governments; can include Public-
Private Partnerships (P3’s)
Estimated scored cost of ~$10 billion in tax expenditures (20-25% of face value of  bonds) over 10-year budget window.
Policy Rationale for AFF Transportation Bonds
AFF Transportation Bonds can meaningfully address the nation’s infrastructure
investment gap
without relying on spending increases to fund more grants or loans.
Supplements the federal Highway Trust Fund (HTF) without increasing the federal fueltaxes or relying on more General Fund transfers to the HTF.
Leveraging potential of AFF Transportation Bonds will encourage state and local projectsponsors to
 generate new revenues
(user fees and dedicated taxes to repay the bond principal) for infrastructure investment.
Involves private and other 
capital investment (potentially including pensionfunds).
Potential Impact of AFF Transportation Bonds
A state or local project sponsor could more than double the amount of capital investmentsupportable by its dedicated revenues compared to conventional tax-exempt bonds.
An issuer can invest in 2.39x more infrastructure with AFF Transportation Bonds.
A national program of $45 billion would be a significant supplement to the federal HTFand would create an estimated 560,000 jobs.
The federal budget score, based on Joint Committee on Taxation cost estimates for similar proposals, would be about 20-25 percent of the face value of the programauthorization or about [$10] billion over the 10-year budget window
 - - -- - - - - - -- - - - - - - - -- - - -- - - -- - --

The America Fast Forward initiative got a nice boost last week when the U.S. Conference of Mayors issued a letter (above) to Congress supporting Metro’s attempt to create a new class of bonds that could be used to accelerate transportation projects across the country, including Metro’s Measure R highway and transit projects. From Metro’s government relations staff:
A letter sent by well over 100 Mayors from across the United States is encouraging the United States Congress to back our agency’s America Fast Forward Transportation Bond initiative.

America Fast Forward Transportation Bonds represent a new class of qualified tax credit bonds that would, if enacted into federal law, significantly increase transportation infrastructure investments across the nation.

The correspondence was spearheaded by the Immediate Past President of the United States Conference of Mayors, Los Angeles Mayor and Metro Director Antonio Villaraigosa.

The letter secured strong bi-partisan support, including from Scott Smith, the Vice-President of the Conference of Mayors.  Mayor Smith is a Republican who is currently the mayor of Mesa, Arizona.

Please find here a copy of the United States Conference of Mayors letter to Congressional leaders in support of America Fast Forward Transportation Bonds.  For your review, please also find here a brochure that includes details on our innovative transportation bond initiative and an illustration on how the America Fast Forward Transportation Bond process would work.
Here’s a helpful pamphlet from Metro explaining how the bonds would work. Congress last year approved another part of the America Fast Forward initiative that expanded a program that offers federal backing of low-interest loans. The bond program is the other equally important part of America Fast Forward.

Will natural-gas cars start to catch on? 


By Claire Thompson, May 6, 2013


Honda's natural gas-powered Civic.

 Honda’s natural-gas-powered Civic.

Could the U.S. boom in natural gas lead to a boom in natural-gas cars? It can cost as little as $1 a gallon to fill them up in the U.S., says Bloomberg Businessweek, and there could be 25 million of them on roads worldwide by 2019.

To provide demand for a swelling supply of natural gas, the rush is on for investors, entrepreneurs, and the auto and energy industries to figure out how to power our transportation fleet with this abundant and relatively cleaner-burning fuel. Bloomberg reports:
Commercial vehicles, which generally rack up two or more times the annual mileage of consumer cars, are going first. In the last year many companies, including GE, UPS, FedEx, AT&T, PepsiCo, and Waste Management, the biggest trash hauler in the U.S., have announced plans to begin or expand conversions of their fleets to natural gas. Cities such as Los Angeles, New York, Phoenix, Fort Worth, Dallas, and San Francisco all have CNG [compressed natural gas] bus fleets. Large fleets of airport shuttles are converting as well.

According to the American Public Transit Association, nearly one-fifth of all transit buses were run by either CNG or LNG [liquefied natural gas] in 2011. Almost 40 percent of the nation’s trash trucks purchased in 2011 were natural gas-powered, the association said. Garret Alpers, founder and CEO of World CNG, a Seattle-based company that converts traditional gasoline cars into dual-fuel vehicles for as little as $8,000, estimates a taxi owner could recoup his expense in a year.
There are around 120,000 natural gas-powered vehicles on U.S. roads today, and over 1,000 natural-gas fueling stations (although only about half of those are open to the public). To encourage the fuel’s expansion from the commercial to the consumer realm, President Obama has advocated for the $7,500 tax credit for hybrids and plug-in vehicles to apply to natural gas-powered ones too, and in January he signed a bill extending a 50-cent-per-gallon tax credit for natural gas used in vehicles.
Brad Plumer says not to expect a natural-gas revolution on our roads anytime soon, though, pointing out that prices for natural gas-powered vehicles and conversions haven’t fallen enough yet:
The vehicles are still far pricier than gasoline-powered cars — or even hybrids. It can take between 13 and 20 years for drivers to recoup those savings in lower fuel costs. What’s more, fueling stations are hard to find.

Case in point: Honda has been selling a Civic that runs on compressed natural gas since 2008. So far, sales have been fairly torpid, with just 1,500 sold last year. Why is that? Well, for one, the price starts at $26,305, or about $8,000 more than a gasoline-powered Civic and $2,000 more than the hybrid version.
Plumer says this could change if oil keeps getting pricier and the technology surrounding natural-gas vehicles — manufacturing, building fueling stations, etc. — keeps getting cheaper. But, he wonders, …
… does it make sense to promote natural-gas vehicles at the expense of other technologies — like hybrids or plug-ins? [An] MIT report suggested that it might just be easier and more efficient to use America’s natural gas to power electric cars rather than set up an entirely new fueling infrastructure. And, so far, the country is nudging along in exactly that direction.
Indeed, Plumer notes, EV charging stations are proliferating much faster than natural-gas fueling stations, so it’s easier to fill up your car with electricity than natural gas. Bonus: EVs can also be charged with solar and wind power, so fracking is not necessarily required.

The Scary Future of Public Roads


By Eric Jaffe, May 6, 2013

 The Future of Public Roads Is in Private Hands

A few weeks ago, the Colorado Department of Transportation reached a 50-year deal with a private investment group to handle the improvement, maintenance, and operation of US 36 between Denver and Boulder. On paper, everyone seems to have made out well. The state gets money up front, the investors get a share of the toll revenue, and commuters get an upgraded corridor 20 years ahead of schedule. CDOT officials are already hoping that this "first public-private partnership" is just the first of many.

"We certainly look at public-private partnerships as an opportunity to provide additional improvements and services to the traveling public," says spokeswoman Amy Ford, who adds that the department is actively considering similar arrangements for several other major roads — segments of I-70, C-470, and I-25, among them — in the metro area.

Public-private partnerships for infrastructure (often called PPPs or P3s) have been on the rise in recent years, and many experts believe the trend has yet to peak. If the activity of the past several weeks is any indication, they may be right. A billion-dollar PPP for the East End Crossing, in Indiana, was announced in late March. News of a $1.5 billion PPP overhaul of the Goethals Bridge, in New York City, came in April. The Pennsylvania D.O.T. placed an open call to private firms for PPP projects just last week.

PPPs provide a valuable public service while shifting the financial risk to private wallets. Advocates also mention efficiency: private developers, driven by an urgent push for profits, can keep costs lowers and complete work faster than the public sector. Supporters believe that in exchange for this revenue share they provide the public with the broader economic advantages of improved metro area mobility. Besides, states just don't have the money right now to do these projects on their own.
"There's a whole series of these efforts that involve both the public and the private sector," says transport scholar R. Richard Geddes of Cornell University. "A lot of this simply would not get built without some private sector investors coming in to put up the capital and to bear the risk of trying it."
But as public-private partnerships become more common, there's a heightened fear that local governments are giving away too much in the deal. Some scholars, public interest groups, and lawmakers caution that PPPs often fail to deliver the improvements they promise, cuff the hands of local officials for generations, undermine comprehensive urban planning, and threaten the core value of roads as a public service. For every new attempt at PPP success, they say, there are multiple examples of partnerships that failed.

"The notion right now is that PPPs are the solution to the problem of not being able to use public funding as much, and that it becomes a win-win situation," says Elliott Sclar, director of the Center for Sustainable Urban Development at Columbia University. "Right now that's the conventional wisdom, but if you actually look at what happened to so many PPPs, you begin to see where these problems are going to begin to creep up."
•       •       •       •       •
The idea of putting public roads in private hands has a long and shaky history. In the late 18th century, during a surge in stagecoach travel, turnpike developers flooded local governments with petitions to lay toll roads for profit. Enough new miles of road were laid in New England alone during a fifteen-year building spree to nearly reach the Pacific. But the cost of construction and the proximity of free (if very poor) roads doomed these ventures en masse. Few turnpikes from this era ever returned the 12 percent profit that would have transferred them back to public ownership — though when they went bankrupt, that's what happened anyway.

By the early 20th century the federal government had determined road provision to be an essential taxpayer service. The public funding approach worked well through the long era of interstate highway construction, and beyond. That's not to say the private sector wasn't part of the equation — on the contrary, the individual projects were contracted out to engineers, construction workers, etc. — but with few exceptions roads were funded by the people for the people. Then in the late 1980s, with the interstate network filling out and public passion for big new roads running low, private investors made another go.

The first "major" public-private road partnership of this new era was the E-470 tollway in Denver in 1989, says William Reinhardt, editor of Public Works Finance. That $323 million project, organized by a highway authority distinct from the state DOT, didn't rely on public funding. In doing so it sent the country down a new road for new roads.

Since then the growth of private partnerships has been steady if not overwhelming. Twenty-four states plus Washington, D.C., have engaged in 96 public-private road partnerships worth about $54.3 billion. In 2011, PPPs accounted for roughly 11 percent of capital investment in highways, according to Reinhardt, and that's with about 20 state legislatures yet to permit these types of deals. In a brief history of PPPs for a road builders association in 2011 [PDF], Reinhardt concluded that PPPs "will likely be the primary model for building new highway capacity in heavily congested urban areas in the decades ahead" — particularly for mega projects valued in the billions.

"These are solutions to congestion that governments just haven't been able to do," he says. "The public is best served by having an improvement of mobility — a real transportation improvement delivered sooner rather than later."

Figure via "Moving Forward on Public Private Partnerships: U.S. and International Experience with PPP Units" (Brookings, 2011)

The political climate is certainly ripe. The user-pay, fuel-tax model of federal highway funding is damaged beyond repair, and raising revenue for road projects remains challenging at best across the nation. Meanwhile, in the latest highway authorization, Congress expanded a federal credit assistance program called TIFIA that's designed to leverage private investments in public infrastructure. And this past March the Obama administration called for a "Rebuild America Partnership" plan whose mission is to pair public infrastructure needs with private capital.
"There's a bunch of P3 projects bubbling up," says Reinhardt. "Probably 20 projects out there across the country. All of them huge, all complicated, all controversial."
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Denver residents certainly something about PPP controversy. They found themselves on the wrong end of it just a few years back regarding a toll road called the Northwest Parkway. In 2007, a state highway authority leased the parkway to a private consortium for 99 years. (Once again, this authority was distinct from CDOT) Before long legislators became upset to discover that the terms of the deal prevented the state from improving a public road in the same corridor, because this upgrade might draw traffic away from the parkway — and toll revenue with it.
Despite this frustration, the stipulation had been right there in the official contract, clear as legal jargon [PDF]: "… the construction of a Competing Transportation Facility shall constitute an Adverse Action."

As it turns out, part of the reason there's so much debate about public-private partnerships is that these "adverse action" clauses are standard operating procedure. Law professor Ellen Dannin of Penn State University recently reviewed the fine print for a number of PPP contracts and, in a 2011 paper, concluded that various provisions in road partnership contracts effectively made the public "the guarantor of private contractors’ expected revenues" [PDF]. In other words, private infrastructure investors weren't taking nearly as much risk as they'd have the public believe.

"This is being sold as the latest, greatest thing," says Dannin. "The more I dug into this stuff, the more I was blown away by it. It just seemed really astounding to me. These finance people know what's going on, but the rest of us don't."
Dannin's work outlined several types of PPP provisions designed to expose investors to as little danger as possible. The most objectionable of the bunch is a non-compete clause, which expressly prohibits local authorities from building more attractive transportation options — from other roads to mass transit — in the same corridor. The Northwest Parkway is one example of a non-compete unfavorable to the public, but the poster child is SR 91 in Orange County, California [PDF]. After these express lanes opened in the mid-1990s, word got out that the deal prevented officials from improving the free roads nearby until the year 2030. The ensuring uproar led Orange County to purchase the road back from investors in 2002.

Then there are compensation clauses. Though less directly pernicious than non-compete clauses, these provisions also had the power to harm the public good, writes Dannin. Take the example of new toll lanes on the Virginia Beltway. That PPP deal called for the state to pay investors whenever carpooling exceeded 24 percent of traffic (ending after 40 years or $100 million in profit). As Dannin points out, this and similar compensation clauses create a scenario in which public officials must choose between their larger responsibility of promoting more sustainable transport or forking over some cash — the very cash they hoped the PPP deal would save them in the first place.

What these adverse action clauses really do, argues Dannin, is compromise the integrity of the entire transportation network — and elected office as a whole — to ensure investors a profit. "We're sort of selling off part of our democracy as part of the cost" of PPPs, she says. "It's hard to put a financial tag on that."
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The scholar Geddes, who is author of the 2011 book The Road to Renewal: Private Investment in U.S. Transportation Infrastructure, says adverse action clauses are necessary precisely because road partnerships are "truly risky ventures." Over time, he says, they've evolved to become more fair. Gone are the days of SR 91-style non-compete clauses. Now reimbursement often cuts both ways: if the government does something to increase traffic on a toll road, for instance, the private partner might be the one compensating the public.

Still, he says, the fact is that private investors come to the negotiation with many things the states both need and want: quick cash, and the ability to fund projects without raising debt, and the flexibility to use limited public resources in other ways. At the end of the day there's just too much on the line for investors to complete these deals without some reasonable safeguards for success. State pension funds across the country — the massive California Public Employees’ Retirement System notable among them — have made enormous investments in infrastructure precisely because the payoff feels sizeable yet certain.

"Big public sector pension funds that want a long-term cash flow that the toll road generates — that's who's on the other side of the table," says Geddes. "I'm going to put the fireman's pension fund away for 30 years in this toll road, and what do I need to make that a sensible decision."

Wall Street certainly feels confident that the risk will bear rewards. Before the crash, Businessweek wrote that investment banks had "fallen in love with public infrastructure," and the New York Times said they'd prepared for a "tidal wave of infrastructure projects." That gusto seems to have weathered the recession intact; this March, the Wall Street Journal reported that wealth advisors were still nudging clients into infrastructure.

Sclar, the Columbia professor who's author of the 2000 book You Don't Always Get What You Pay For: The Economics of Privatization, casts a wary eye at these overtures. In a paper from 2009 [PDF], he drew parallels between the way bankers and investors are bundling public-private infrastructure partnerships and the way they handled mortgages just a few years ago. He even went so far as to wonder if PPPs had become the "new subprime."

"If sub-prime is no longer the magic elixir that produces money, what's beginning to happen is the public-private partnership is becoming that, and nobody is looking closely at them," he says. "The problem becomes, in a stagnating economy, when there aren't very many private opportunities to get return on investment, the last thing left standing is the public stream of revenues. And that's what they're going after."

Still, as an urban scholar, Sclar is more frustrated that public-private partnerships tend to interfere with comprehensive approaches to city planning. He uses the example of State Highway 130 near Austin, Texas, a public-private toll road that made traffic worse because truckers chose to take the free I-35 through the city rather than pay the toll. The point is that seeing roads as individual profitable projects distracts from their role as part of the greater public network — capable of influencing everything from transport equity to urban density to environmental sustainability.

"What's financially beneficial to the private party doesn't necessarily easily coincide with what's beneficial in terms of the public interest," says Sclar.
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No amount of concern is likely to curtail the rising interest in public-private partnerships. Rather, their use only stands to increase as governments at all levels continue to struggle with new methods for funding transportation projects. Besides, PPPs offer elected officials the glitter of ribbon-cutting with the grit of fiscal austerity — all while limiting their responsibility for any toll hikes that might occur. They're high-quality political catnip.

In light of this reality, a number of think tanks have offered suggestions on how to protect the public from bad PPP deals. In a 2011 report [PDF], Brookings advised states to establish dedicated PPP units with the knowledge to match wits with private investors at the negotiating table. According to Dannin's work, some states currently seek advice on these deals from investment firms that lose the bids — creating a genuine if indirect conflict of interest.

U.S. PIRG recently offered six principles for road privatization agreements. Among them is the belief that no deal should last more than 30 years, since no one knows what transportation will look like that far down the line. If automatic cars become the norm halfway through an agreement, for instance, who will be on the hook for upgrading the highway's mobile network accordingly? PIRG prefers another analogy to demonstrate the danger of multi-generational deals: in 50 years time, American travel went from the release of the Model T to the beginning of the interstate highway era.

Public awareness of PPPs does seem to have increased with their prevalence. Just last week, a group of concerned residents in Portsmouth, Virginia, successfully challenged a public-private project called the Midtown Tunnel. A circuit court ruled the tunnel deal "unconstitutional" — casting doubt on Virginia's entire menu of PPPs. (The state attorney general has already announced the intent to appeal.)

Some lawmakers have tried to address the problem, too. Former House transportation chief James Oberstar issued a series of PPP guidelines as early as 2007, calling for an end to non-compete clauses, toll relief (or transit provisions) for low-income residents, and a general rule not to "undermine broadly supported social and public policy goals." In 2011, Senator Dick Durbin of Illinois proposed a bill for PPP transparency (he also wanted states that lease federal roads to pay back any taxpayer funding). That idea hasn't gone anywhere, though, just like a 2012 state bill to end non-compete clauses — which failed, of all places, in the Colorado legislature.
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For it's part, of course, the Colorado Department of Transportation believes the new deal for U.S. 36 is a step in the responsible direction. Outside observers might see reason for caution as well as hope. While the 50-year terms exceed the 30-year recommendations, CDOT has a dedicated PPP office leading the way (called the High-Performance Transportation Enterprise), and the experience of the Northwest Parkway can't be far from local memories. The contract is also a minnow by PPP standards: the private investor will pay for two thirds of phase two of the U.S. 36 improvement, which CDOT spokeswomen Ford estimates will cost $120 million.

(Plenary Roads Denver, the private consortium in the deal, didn't return requests to discuss the project.)
Beyond these basics, C.D.O.T. says it's outlined very strict maintenance standards and imposed
penalties if they're not met. The state has given Plenary the right to collect tolls on the newly built U.S. 36 express lanes as well as I-25, but Ford says there's no guaranteed rate of return (contrary to reports), and that any toll hikes must be pre-approved. Officials have also created some encouraging multi-modal protections: road improvements will include bus-rapid transit and H.O.V. lanes in addition to tolled express lanes, and the toll can never dip below the regional bus fare — a measure designed to discourage single-occupancy driving.

As for compensation or non-compete clauses, Ford insists the agreement doesn't have any worth noting. She adds that C.D.O.T. plans to make the contract available to the public, with the exception of certain confidential financial details, in the coming weeks. "There's a number of different points and triggers within the contract that protect us, the traveling public, and assure that we're moving forward in ways everyone agrees to," says Ford. May we all still be around in half a century to find out just how far they've come.