Tolling and Public Private Partnerships:How Can They Help California Achieve High Performance Transportation?

Michael ReplogleEnvironmental DefenseMarch 2007 CFEE Public Private Partnerships ConferenceNapa, California

A Means To What End?

► Tolls and PPPs are tools not outcomes

► Outcomes depend on how tools are applied

Tolls and PPP Deals Can Be Designed To:

► Finance transportation► Save motorists time► Improve reliability &

customer service► Boost transit choices► Curb fuel use and

emissions► Reduce harm to

communities and the environment

But Tolls and PPP Deals Can Alternatively:

► Increase congestion on existing roads

► Spur pollution, fuel use, GHG emissions

► Facilitate sprawl ► Spur public backlash

against tolls and PPPs

Will California Use Tolls and PPPs to:

► Build more roads faster?► Increase short-term cash flow?

Or to► Manage transportation systems for

high performance: mobility, travel choices, environment, public health?

► Develop profitable strategies to respond to climate change challenges facing road industry

Build and Sustain Public Support for PPPs With:

► Timely public review, input, oversight of PPP goals and frameworks

► Performance-focused contracts that avoid non-compete agreements

► Independent monitoring, performance oversight

► Tolls set but not retained by operator - deposited to public fund

Build and Sustain Public Support for PPPs With:

► Use of toll and concession proceeds to finance integrated metropolitan transportation networks for better performance, expanded choices

► Fix-it-first planning comparing cost-effectiveness of O&M and capital investment alternatives meeting goals

► Public equity in project deals

Can We Reframe Tolls to Emphasize Performance Not Revenue?

► Toll-managed lanes carry 2x more traffic at 3x higher speed vs. unmanaged “free” lanes

► Investors could unlock more asset value by managing existing lanes than building new lanes

Traffic in Peak Hours on Eastbound SR91 Friday Afternoons 2004

0200400600800

10001200140016001800

CongestedGeneral

Purpose Lanes

Toll ManagedLanes

Vehi

cles

Per

Hou

r Per

Lan

e

HOT Lanes Help, But Toll Management of Entire Motorways is Cheaper, More Effective

Full motorway tolling delivers greater congestion relief with much lower toll rates compared to median HOT lanes

Singapore in the 70’s…before road pricing

Source: LTA

Singapore today…after 30 years of road pricing

CBD and motorway toll rates adjusted 4x/year to keep traffic speeds at peak system performance

Public has approved of tolls on formerly free roads when used to improve public transport, cut congestion, boost travel speeds:

London Singapore Oslo

Tolling Existing Lanes: Acceptable When It Boosts Performance, Choices

Source: Kristian Wærst, Norwegian Public Roads Administration

Don’t Know1%

Approve88%

Disapprove11%

San Diego’s I-15 HOT Lane is Popular

Popular opinion on cordon charge in Stockholm for - against::BeforeBefore tolling (12/05): tolling (12/05): 3131%% - - 62%%AfterAfter tolling (6/06): tolling (6/06): 52%52% - 40%%February 2007: February 2007: 67%-67%-31%31%

TrondheimBergenStockholm

Payment Mechanisms and Toll Increases► Rigid toll caps limit ability to manage road capacity for

high performance and improved travel choices► Apply toll rate caps to average daily toll collections -- not

to the peak hour tolls for individual road segments

Toll Rate Caps Can Affect Performance

Contract for System Performance

Payment based on speeds and volumes by 2km road segment

Congestion Management Payment Contract Darrington to Dishforth A1 Highway in Yorkshire, UK

Base concessionaire payment on how effectively they move vehicles, people, and goods, with incentives for superior congestion relief

Get to Yes With Performance Agreements

LAX International Airport» Enforceable Community

Benefits Agreement» Groups agreed to support

airport expansion planSan Pedro Bay Clean Air Plan» Expansion of ports while cutting

emissions with health standardLondon » Emission-based tolls encourage

clean vehiclesTXU Buyout » Environmental agreements

helping to secure deal

Making Environmental Performance Matter for Public or Private Financed Transportation

► Establish environmental performance goals-» Curb air pollution hotspots» Cut corridor greenhouse gases» Curb thermal and pollution loads to streams» Cut noise near roads

► Establish independent performance monitoring► Use performance payments/penalties to reward superior

performance and ensure targets are met, re-tendering the agreement should operator/contractor default

3 M’s of Pollution Hotspots: Measure, Monitor, Mitigate

► Large local health impacts from fine particle vehicle emissions

► PPPs should ensure good monitoring► Regional, corridor, local strategies can

cut this pollution, including:» Emission-based truck tolls» Truck lanes, new clean rail services» Diesel retrofits/cleanup» Cleanest construction equipment» Put roads in tunnels and filter air» Exposure management

Link level benzine emissions PhiladelphiaSource: Richard Cook, US EPA

For More Information

Michael ReplogleTransportation DirectorEnvironmental Defense

1875 Connecticut Ave. NWWashington, DC 20009

mreplogle@ed.org202-387-3500

www.environmentaldefense.org/go/transportation