Monday, November 28, 2011

Lessons from US Mainland on How to Ease Congestion and Build Infrastructure

GOAL: Ease traffic congestion that cripples economy and quality of life

: Deliver lanes and tunnels as quickly as possible

: US mainland success stories involve private financing and tolls so that infrastructure can actually be done instead of squeezing local taxpayers and depending on broke state and federal coffers.


(1) There is plenty monies in private funds: Pension Fund Invests in Florida Toll Project. One of America’s largest pension funds—Teachers Insurance and Annuity Association of America (TIAA) has purchased a 50% stake in Florida’s I-595 concession project, a complete reconstruction of this major freeway, including the addition of three reversible express toll lanes. TIAA purchased the stake from developer/operator ACS Infrastructure Development, which holds a 35-year concession to develop and operate the highway, which is now under construction.
Honolulu application: The level of traffic demand between H-1/H-2 merge and downtown easily justifies a tolled HOT Lanes and mainland investors as well as local pension funds will be attracted to it. (Note that none of them will invest a dime in the rail project.)

(2) Use Public Private Partnerships or PPP:
A well-researched and fairly comprehensive overview of long-term concession toll projects appeared in the Oct. 22nd issue of The Washington Post. Written by Cezary Podkul, formerly of Infrastructure Investor, the article discusses a number of recent projects, both large-scale investment in new highways and bridges and the leasing of existing toll roads. It includes the growing involvement of pension funds as investors, and also discusses who won and who lost when a recent start-up toll road filed Chapter 11. (Note: at press time, this piece was available on the Post’s website, but with a very long URL. It’s simpler to just Google the title: “With U.S. Infrastructure Ailing, Public Funds Scant, More Projects Going Private.”)
Honolulu application: State of Hawaii does not have a suitable PPP yet.

(3) Deliver network short-cuts with tunneling
: Tunnel Boring Begins for Port of Miami Tunnel. The huge (41-ft. diameter) tunnel boring machine from Germany began digging the first of two parallel tubes for the new Port of Miami Tunnel on Nov. 4, 2011. Each of the two tubes is expected to take six months to drill and line with concrete panels. The $1 billion project is being procured by Florida DOT under a 35-year concession awarded to a team led by France-based Meridiam Infrastructure Partners and Bouygues Travaux Publics.
Honolulu application: A toll tunnel from Iroquois Point to Lagoon drive will save leeward Oahu commuters to town over 30 minutes one way.

(4) Use
Congestion Pricing to spread traffic demand: Higher peak-period tolls, and charging half-price (instead of zero) to carpools have reduced congestion and increased speeds on the San Francisco-Oakland Bay Bridge, according to UC Berkeley research commissioned by the Metropolitan Transportation Commission. The biggest impact was that more than half the traffic formerly in the carpool lanes disappeared; officials speculate that some shifted to BART and some changed the time of their commute, and many were probably cheaters who now drive in the regular lanes. The overall reduction in AM peak traffic was about 4%, and time savings varied greatly depending on which approach road people use to get to the bridge and the time (within the peak period) that they travel.
Honolulu application: Both tolls and bus fares need to have peak and off-peak pricing. Use of inexpensive passes should not be allowed for 3-4 peak hours during normal workdays.

Thanks to Robert Poole of the Reason Foundation for these recent examples.

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