Key Moment In Highway History

Transportation Finance SummitNovember 15-17, 2005

Key Moment In Highway History

50th anniversary of the Interstate: Era of “free roads”

Reauthorization: Federal Commissions on the Future of the Interstate System and the Highway Trust Fund

Current trends in toll applications

The Next 50 years?

TOLL ROAD TRENDS AND FUTURES


Focus: Tolling As Significant Program

Toll roads as localized/niche product?

or

Significant part of future nationwide highway service?




Revenues ($B) Used for Highways 2003

Federal State Local Total

Motor -Fuel Taxes $25 $28 $55

Motor Vehicle Taxes $3 $16

$2

$19

Tolls - $5 $1 $6

Property Taxes/Assessments - - $7 $7

General Fund Appropriations $2 $3 $15 $21

Other Taxes and Fees <$1 $3 $4 $8

Investments/Other <$1 $3 $5 $8

Bond Issue Proceeds - $9 $5 $14

Grand Total Receipts $30 $68 $40 $138


Change Drivers

Congestion vs. current program credibility

New financial/entrepreneurial resources

Demonstration effect of success

Technology enablers

Leadership



Survey Data

What is the state of play?

Available material

Focus

– Project velocity– Quantities in context– Typology– Implications



What We Found


Not including TTC


What We Found



What We Found

Players

– > 20: Texas, Florida

– 10-15: California, Colorado, Virginia

– Others: Alabama, Georgia, Maryland, North Carolina, Oklahoma, Pennsylvania, Oregon



What We Found

Private sector development (of 129 projects)

– 69 are public

– 21 committed to private development/finance– 39 not committed either way– Impact of PAB legislation/SEP 15?



What it Implies

Federal/State revenues: $100B (2003) to $130B (2010)

Toll revenue share from $5B to $6.5 to stay even

Added toll miles projected (2015):4900 current plus 1440 added (600 HOT)

= 30-40% increase suggests $7B-$10B (toll rates?)

With Interstate deregulation & more conversion:Current toll revenues X 3+ $15 = 10%+ of total F/W revenues


Future Scenario Issues (FHWA study)

Transportation Institutions with candid focus on mobility

Demonstration of priced network benefits

Full deregulation for toll applications

Institutional innovation – public and private



Program Futures


OLD STYLE TOLL ROADS

NEW STYLE TOLL

PROGRAM THE HORIZON

Greenfield new capacity context

Extensions and additions Conversions of free roads Conversions of IS

Add-a-lane HOT ETL networks Fill occasional financial gap

Finance most new capacity

Stand alone facilities Beginning toll networks Conventional management

Priced and managed for service

A few ad hoc projects A program of projects

Rationale: market highway services at a price –

Based on dual (?) networks

(possibly more that one service level)


Finance Futures



Institutional Futures


OLD STYLE TOLL ROADS

NEW STYLE TOLL PROGRAM

THE HORIZON

Independent state authorities

Regional authorities P/PPs

State DOTs arms length

State DOTs as owner/operators/ facilitators

Use of GEC to develop

Use of concessionaires to develop/operate

Competing Tollway Service Corporations owning and operating road networks


Implications

1939: The Federal establishment decided to focus on “free” roads, not toll roads (based primarily on lack of traffic)

2006: Beyond “Business as Usual”: Mainstreaming of tolls and pricing?

A true paradigm shift: in finance/development & roles/relationships, public & private


Key Moment In Highway History

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