28 May 2006

Tolls, Trains and Traffic Studies

Experts are not always neutral. Traffic studies predicting toll road traffic are consistently too high, in Colorado's experience, dramatically so. Meanwhile, traffic studies predicting light rail ridership are consistently too low, in Colorado's experience, dramatically so.

As Colorado, other states and federal officials increasingly look to toll roads to spur growth or clear clogged highways, a review of 23 new turnpikes nationwide shows that a clear majority are failing to meet revenue projections to justify their costs.

Even with adjustments for the break-in period in the opening years, 86 percent of new toll roads in eight states failed to meet expectations in their first full year.

By year three, 75 percent - 15 of the 20 that have been open that long - remained poor performers. . . .

The $416 million, 11-mile [Northwest Parkway] from Broomfield to E-470 has attracted just half the cars forecast since it opened in 2003.

Its director, Aurora City Councilman Steve Hogan, said that before seeking outside investors in the road, he didn't believe the optimistic forecasts for its profit potential. But, he said, he treated those estimates as a tool to persuade bond experts to give the debt a favorable rating, not as a solid predictor.

From here.

(For all those securities fraud litigators out there, I will leave it is an exercise to determine if the Northwest Parkway bond offering is protected by governmental immunity, or simply not covered by the securities laws. If the answer is in the negative, the next step should be obvious.)

While toll road traffic predictions are consistently high, however, this is not, as the article from the Denver Post implies a failing common to all traffic prophets. When it comes to light rail, the errors are consistently in the other direction. For example, actual ridership on Denver's Southwest rail line was 66% above the levels projected by experts in advance of the project (see also here).Under estimates were also made in Dallas, Salt Lake City, St. Louis, and Portland. Ridership doubters were also disproven in San Diego (see also here).

As of 2001, shortly after the Southwest Corridor opened, downtown Denver through a combination of HOT lanes favoring carpools, a downtown housing explosion and a healthy public transportation system, already had a remarkably low level of automobile use.

Of all commuters into downtown Denver, 25 percent use transit, while an additional 15 percent carpool, bike or walk.

The light rail line built as part of the T-Rex construction project, alone I-25 providing a link that connects downtown Denver to the Denver Tech Center in the Southeast will no doubt significantly increase that percentage when it opens in December of this year. The Western Corridor rail line, which will connect downtown Denver to Jefferson County's Taj Mahal (the court house), will likely have another big impact when it opens in about seven years.

The bottom line is that metroplitan Denver residents should pat themselves on the back for voting in favor of FasTracks, which has committed the metropolitan area to a dramatic light rail expansion over twelve years, while area governments should think twice before supporting the Northwest Corridor plan through Golden which would complete the E-470/C-470 out loop around Denver.


Off Colfax said...

Andrew, as far as whether the Northwest Parkway bond folks are removed from civil and/or criminal penalties due to the governmental exemption clauses... Well I'm far from a litigator, much less in the securities field, but my brief once-over says yes. Do I like it? No.

Can we use it to finally drive a stake through the SuperSlab project? Quite probably. Governor Owens doesn't have all that much political capital sitting around these days, particularly not after the veto swarm on Friday, so the one of the project's biggest cheerleaders is about to become a bit player.

Toll roads may make sense in the East, particularly where there are many strategic choke points in the road designs. Here in the West, with our wide-open spaces and vast multitude of commute-path options available, it just doesn't work.

Now, if they decided to make the Eisenhower Tunnel into a toll area, that one could work. There's no way to get around it, and heavy traffic is year-round. (Particularly with we Denverites heading up for all that fresh powder.)

Andrew Oh-Willeke said...

This story was apparently broken at unbossed. A Daily Kos diary also discussed the matter: