Reason's plan for Chicago has lots of tolls

August 10, 2012
By Peter Samuel

2012-08-09: Reason's Sam Staley has published an impressively detailed report on Chicago's traffic woes. His solution has lots of tolls - both for funding and for traffic management. Titled "Practical Strategies for Reducing Congestion and Increasing Mobility for Chicago" the report is heavily researched and modeled.

Chicago's mobility is heavily restricted by lack of north-south plus several smaller east-west missing links,  but Staley's study supports the view that widespread capacity enhancement will pay off, though the report ends by suggesting some of the eleven recommended projects - with smaller payoffs - be deferred.

Everything new is to be tolled.

(1) The biggest item is 275 miles of HOT lanes in a network costed at $12 billion that promises free flow - at a price - regionwide.

(2) Second in cost is a north-south Crosstown Tunnel 11 miles long, cost $7.1b on the Cicero Avenue alignment. It could be paired with an elevated 9 mile long Midway Extension costing $5.8b  along 63rd linking to the northern end of the Chicago Skyway

Two other inner area tunnels:

(3) - under the Kennedy Expressway southeast-northwest I-90/94 9.8 miles long cost $6.4b

(4) - under the east-west Eisenhower Exwy I-290 7.3 miles, $4.8b

Outer areas

(5) Outer Beltway, 76 miles mostly north-south, $5b

All-over

(6) Arterial intersection 'queue jumpers' unders or overs, 54 of these costing $3.5b, mostly in Cook County to improve performance of signalized arterials

New outer connecting routes

(7) Illiana Expressway east-west IL-IN connector of 41 miles $2.6b

(8) Lake County Corridor 32 miles linking I-94 to Outer Beltway $2.1b

(9) Northbrook Palatine Connector 25 mile east-west route I-94/294 in Northbook to Outer Beltway $1.6b

(10) Elgin O'Hare Extension 17 mile extension of Elgin O'Hare Exwy to O'Hare Airport  and west to Outer Beltway

The outer additions help develop a grid of expressways at roughly 5 to 8 mile intervals.

(11) Bus rapid transit on HOT lanes

Texas Transportation Institute estimates congestion costs the Chicago region $8 billion/year, nearly $1,600 per commuter with time wasted 70 hours/year/commuter. And truck congestion is especially bad in Chicago, worse according to TTI than Los Angeles or New York.

More transit not helpful

Transit mostly rail is important in moving commuters to and from the central business district. Over 55% already use it. But the CBD only constitutes 15% of area employment so the potential for extra transit ridership is limited. Modeling of bus rapid transit by Staley shows small potential.

The report has a lengthy analysis of the economic costs of congestion, how it undercuts the benefits of specialization and agglomeration as well as wasting time, requiring larger inventories and reducing the reach of businesses and services.

Fatalist views on congestion are not borne out by the facts: "those urban areas that have expanded road capacity more commensurate with the increase in the demand for travel make significant progress in reducing congestion. Of the 14 urban areas where road capacity increased within 10% of travel demand, congestion peaked around 2000 and steadily declined (despite the national economic boom). For those urban areas where travel demand increased 30% or faster than road capacity (such as Chicago), congestion increased more dramatically."

Chicago's essential capacity problem: "As travel demand on the expressways more than doubled, the number of expressway lane-miles increased by just 56%."

Reason with their emphasis on tolls and dynamic pricing for virtually all major new capacity built on the metro area transport planning modeling (MTM.)

They estimate hours of delay can be reduced from 2.56m under No Build to 2.25m, or about 12%. More important however for those willing to pay there will generally be free flow conditions right through the peaks on their proposed new network.

Revenues

The network is projected to generate $18.7b annually in tolls in the target year 2040, for a net present value of $58.1b. They therefore cover the capital costs of $52b.

Costs

New surface capacity is based on a cost of $10.9m/lane-mile, tunnels at $162m/lane-mile - the costs apparently covering interchanges.  Tunnels and HOT lanes are all 2x2 lanes while the new highways are 2x3 lanes.

The tunnel projects cost some $24b, the tollroads including the HOT lanes cost $24.4b. But the tunnels generate only $3.5b to the roads $54.5b. (Net present value being 3.1x estd 2040 revenues)

The tunnels make no financial sense.  

The best of them the Crosstown only covers about a quarter of its cost as estimated by net present value (NPV) of tolls compared to capital cost. The other three tunnels require 90% subsidies.

Four of the six toll roads model as profitable, the HOT lanes network and Elgin O'Hare Extension as hugely so, and the Outer Beltway very healthy. The Lake County Corridor passes the profitability test too.

Staley recommends deferring two of the tunnels but proposes the others (Crosstown and Midway) be carried by the profitable tollroads.

COMMENT: Staley's modeling seems impressive in its efforts to build on the work of metro area forecasting and in suggesting new solutions. But you have to wonder about some of the assumptions.

For example:

(1) the assumption that an expressway lane is destined to carry the current maximum of 1,800 vehicles/hour free flow right through to 2050 and that roads need to be sized according to this static view of roadway capacity.

Isn't it possible that within five to ten years we'll be running Google-style automated cars and be able to run 3,000 or 4,000 vehicles/lane/hour? By 2025 connected vehicle technology could allow us to double the capacity of existing pavement. In which case we wouldn't need most of those tunnels, and a lot less by way of extra lanes.

Or would we travel further in automated drive vehicles and require a more dispersed highway network?

(2) the assumption that only new capacity can be tolled. Why not push for tolling of rebuilt, modernized, and managed capacity?

(3) you have to wonder whether these 40 to 50 year modeling exercises have much value given the uncertainties, many of which compound. Why not focus on the shorter term - on projects designed to make a return in 10 to 15 years.

(4) the assumption that cross-subsidization is good policy. Why pursue any loser projects? If users won't pay for the costs of a project where is the justification?

Staley report:

http://reason.org/files/chicago_transportation_plan.pdf

TOLLROADSnews 2012-08-09


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