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Will Private Toll Roads Help Get Us Where We Want to Go?

Mary Catherine O'Connor | Tuesday February 23rd, 2010 | 3 Comments

five year anniversaryBack in 2005, 3p’s inaugural year, we looked at the role private toll roads can play in reducing traffic congestion—one of our nation’s largest contributors of greenhouse gas emissions—as well as fix struggling state budgets. Fast forward five years, and it seems like we’re still asking ourselves that same question: are private toll roads the answer to get us to a sustainable, more-efficient domestic infrastructure? You can answer that question, in part, simply by driving on any highway (privately-funded or otherwise) and reading any city newspaper. State budgets and traffic both remain equally-blinding headaches.

With that said, much has happened in the past five years that impacts the nation’s approach to road-building and general infrastructure concerns. The I-35 bridge in Minneapolis collapsed, killing 13 people and raising all sorts of questions about road safety and spending. The Great Recession hit, making already-stretched state budgets practically snap.

And, many road improvement projects got underway—but not just the old-school, tax-based road construction. States across the country are either developing public-private partnerships or contracting private firms in order to finance roads. At the same time, developers are using new means of paying for those roads, such as high occupancy toll (HOT) lanes that change based on congestion and on the number of passengers in each vehicle. Even back in 2005, the New York Times reported that nearly half of all states had already passed legislation “allowing their transportation systems to operate pay-as-you-go roads, and in many cases, letting the private sector build and run these roads.”

Pay to play

Traditionally, highways have been equal opportunity annoyers. When traffic is heaviest—before and after work hours—everyone experienced the same level of frustration and road rage. But toll systems with congestion pricing, which varies depending on traffic density, and HOT lanes that allow single drivers to pay in order to use carpool lanes, are taking root.

And many of these projects are at least partially privately funded. The reasons for this trend are tied not only to their seemingly intractably debt-strapped municipalities, but also the disconnect between the number of highway users and the quality and adequacy of roads—as the former has skyrocketed, the latter has declined. And this is despite the fact that most federal transportation funding goes to roads, rather than mass transit or pedestrian needs (more on that later).

HOT lanes

Now, those public-private toll roads are becoming a reality not just in California, but from coast to coast. In Virginia, construction on HOT lanes on the I-495 Capital Beltway is underway, through a partnership between the Virginia Department of Transportation and two private firms, Fluor and Transurban .

The project, which will erect the lanes on 14 miles of the Beltway, has an estimated $1.9 billion price tag, with the Commonwealth of Virginia contributing $409 million of that amount. Transurban and Fluor are footing $349 million, and are also backing the $1.2 billion in loans and bonds needed for the bulk project. In return, the companies received a 75-year contract to operate the toll road and receive profits it generates (up to a certain benchmark).

Back in 2005, the project was slated for completion this year, but delays in finalizing the details pushed it back to 2013 or so.
And in 2005, Chicago became the first city in the country to privatize a toll road when it signed a 99-year $1.83 billion contract with Cintra, a Spanish developer of private toll roads.

The public-private debate in Texas

Still, combining the words “private” and “road” raise all kinds of ire. In Texas, the Trans-Texas Corridor project is an eight-year old plan that calls not only for privatized toll roads but also envisions a new infrastructure, pulling together utility lines, dedicated trucking and passenger highways and rail lines into a massive corridor, designed to keep people, stuff and power all moving swiftly. But the project has been beaten down (along with its originator, Texas Governor Rick Perry) by large activist campaigns led by Texans angered by several of the plans details, including the use of private land to house parts of the 600-mile design. Opponents also say that using privately-operating toll roads is “the most expensive way to build roads, and that it’s merely selling off the state’s infrastructure to the highest bidder.”

The plan is now pretty much dead, but as the Lone Star State population grows nearly twice as fast as the national average, there aren’t many alternatives on the table for dealing with the swelling numbers of Texans and their cars.

Reform

Then there’s the tremendous need for–and quagmire around–reforming federal transportation spending and priorities. The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (or SAFETEA-LU) is a mouthful of a law that was passed in 2005 and dictates spending on “surface” transportation through the Highway Trust Fund.

This fund is where money for highways and mass transit comes from, according to Streetsblog.  When passed in 2005, SAFETEA-LU directed $40 billion a year to highways. The bulk of this “was used to expand and upgrade the Interstate highway system; some $10 billion went annually to mass transit.” The law was set to expire in September, 2009, but that date has been extended while lawmakers figure out how to pay for our transportation infrastructure (and hopefully make it more sustainable and more supportive of mass transit and pedestrian needs).

Obama has said he wants more creativity in paying for infrastructure, and there are some ideas on the table. Said Elana Schor on Streetsblog: “There is certainly no shortage of creative proposals on the table.” These include the creation of a National Infrastructure Bank to leverage private-sector contributions, backed both by Democratic lawmakers and the White House.

So, in another five years, will there be fewer freeways and more privately-operated toll roads? That seems likely. Will they reduce congestion? HOT lanes in California and other states show that they already are—for those willing to pay. However, there are some concerns that congestion pricing favors the wealthy. More study needs to be done on whether congestion pricing raises serious environmental justice issues.

High occupancy vehicle (HOV) lanes that used to sit nearly empty on highways that prohibited all single-passenger users, are now busy with paying single-driver customers. The non-carpool lanes are less congested as a result, but the lesson here also seems to be that American drivers are much more willing to pay cash-money than they are to carpool in order to avoid traffic. Ultimately, that poses the question of what is the right kind of sustainable model to be building into our roadways.


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  • Eyeball46

    Profit on private toll roads goes into the pockets of the owner. Maybe a foreign owner. This does not help generate Texas revenue for future roads. We use to build roads pay-as-you-go. We could go back to that if the Legislature would quit diverting our gasoline tax money for other non transportation feel good projects. CRONIE capitalism is what has gotten all this toll road building started. Government officials are in bed with big business. The government gets the business man contracts. The business man supports the candidate in the coming elections. They both benefit, while Texans are left paying for it. We need to return to MARKET capitalism and pay-as-we-go FREEWAYS.

  • http://www.carpoolingnetwork.com/ peter

    I think every commuter should be part of a carpool. Imagine… it would be so much easier to get into the city. It also help to reduce the GHG emissions dramatically. I tried the carbon dioxide and cost calculator on the carpooling network ( http://www.carpoolingnetwork.com ) and they suggest huge savings : up to 2000 $ and 1,5 tons of ghg per year.

  • http://www.carpoolingnetwork.com/ peter

    I think every commuter should be part of a carpool. Imagine… it would be so much easier to get into the city. It also help to reduce the GHG emissions dramatically. I tried the carbon dioxide and cost calculator on the carpooling network ( http://www.carpoolingnetwork.com ) and they suggest huge savings : up to 2000 $ and 1,5 tons of ghg per year.