How Should Proposed Surface Transportation Projects Be Evaluated?

There appears to be an implicit bias in favor of implementing new surface transportation projects that are either tax supported or funded/controlled by the government (federal, state, local) versus projects that involve tolling, pricing, or public-private partnerships.

Are tolled projects subjected to a higher level of scrutiny than government controlled or funded projects? If so, why? If all surface transportation projects -- whether tolled or non-tolled -- were subjected to the same evaluation framework, would we see more tolled projects proceed than we do now? What criteria should be included in the evaluation of surface transportation projects to remove the apparent bias in favor of government controlled projects?

Where is Innovation Coming from in Transportation?

(UPDATE: We’re keeping this blog question open for another week because innovation takes time. We’ve all heard the story of how Herb Kelleher and Rollin King came up with the idea for Southwest Airlines over drinks at a local bar. As the story goes, Mr. King laid out his plan by drawing three dots on a cocktail napkin representing Dallas, Houston, and San Antonio. And Mr. Kelleher supposedly responded: "Rollin, you're crazy. Let's do it." While very inspiring, the napkin story is fiction. But we do know that innovation does happen, usually with lots of fits and starts and, yes, failure. We invite you to add your perspective, which can be something new or a commentary on one of the earlier responses. Thanks for all you do to make this blog a source of thoughtful inspiration for our industry. – Pat)

Keeping in mind that U.S. Transportation Secretary Ray LaHood will address IBTTA’s Legislative Conference on Monday, March 22, it might be useful for us to reflect back to him our thoughts on where innovation is coming from in transportation and the toll industry.

When you’re in a recession like the one we’ve been in for nearly two years, innovation and competitiveness take on major importance – especially if you want to get out of the recession and emerge stronger on the other side. In a recent New York Times op-ed column, Thomas Friedman uses a striking image to illustrate the innovation gap between the U.S. and another global powerhouse. “We are the United States of Deferred Maintenance. China is the People’s Republic of Deferred Gratification. They save, invest and build. We spend, borrow and patch.”

Friedman cites a recent study by the Information Technology and Innovation Foundation (ITIF) titled, “The Atlantic Century: Benchmarking EU and US Innovation and Competitiveness.” ITIF uses 16 indicators to assess the global innovation-based competitiveness of 36 countries and 4 regions. The 16 indicators fall into six broad categories called (1) human capital, (2) innovation capacity, (3) entrepreneurship, (4) IT infrastructure, (5) economic policy, and (6) economic performance.

The report finds that while the U.S. still leads the EU in innovation-based competitiveness, it ranks sixth overall. Moreover, the U.S. ranks last in progress toward the new knowledge-based innovation economy over the last decade. All of the other 39 countries and regions studied have made faster progress toward the new innovation-based knowledge economy in recent years than the U.S.

The EU-15 region has made some progress over the last decade, but slower than the overall average and as a result, ranks 29th among the 40 nations/regions. The country that ranks highest in the overall score for 2009 is Singapore. The country that ranks highest in the change score from 1999-2009 is China.

So, where does innovation come from in transportation? Where should it come from? What can we in the transportation sector do to raise the innovation score (and hence competitiveness) of our respective countries? Are we destined to spend, borrow, and patch? Or can we – once more – save, invest, and build?

What is the Appropriate Role for Public-Private Partnerships in Surface Transportation?

The Congressional Research Service (CRS) of the U.S. Congress recently released an updated version of a report titled “Public-Private Partnerships (PPPs) in Highway and Transit Infrastructure Provision.” You can read an earlier version of the report dated July 9, 2008 here: http://opencrs.com/document/RL34567/2008-07-09/

According to CRS, “This report describes the wide variety of public-private partnerships in highways and transit, but focuses on the two types of highway PPPs that are generating the most debate: the leasing by the public sector to the private sector of existing infrastructure; and the building, leasing, and owning of new infrastructure by private entities.”

Advocates of PPPs frequently argue that private sector involvement in infrastructure is the best hope for injecting new resources into the maintenance and expansion of transportation systems and could potentially reduce costs, project delivery time, and public sector risk. Opponents argue that PPPs have limited applicability and could disrupt the operation of the surface transportation network, increase driving costs, and subvert the public planning process – unless they are carefully regulated.

What do you think? Is it time to encourage greater private sector involvement in the development and maintenance of our road infrastructure – in the face of congressional gridlock on transportation authorization and government deficits as far as the eye can see? Or are the risks and uncertainties of private sector involvement in the maintenance and expansion of roads too great for the public to bear?