Ferrovial Profit Surges, Powered By Toll Roads Performance
Reuters reported, Ferrovial announced Tuesday that “its core third-quarter profit rose 36% to 400 million euros ($433 million) as investments in toll road concessions in North America continued to pay off.” The Q3 gain in profit exceeded analysts’ expectations. The firm’s core profit for the first nine months of 2024 rose 50 percent to 1 billion euros ($1.08 billion). Quarterly revenue amounted to 2.4 billion euros (about $2.6 billion).
Reuters noted, “Toll roads, one of [Ferrovial’s] most profitable units, reported an 11.4% rise in revenue to 321 million euros [$348.7 million] in the quarter, aided by the growth of traffic and revenue on the U.S. managed lanes, a company presentation said.” The 407 ETR concession in Ontario recorded a 16 percent increase in revenue over the quarter. Reuters notes that Ontario Premier Doug Ford recently said his government won’t rule out an attempt to buy back the lucrative tollway concession, an idea some analysts dismiss because of the cost (more than 23 billion euros) involved.
Ferrovial construction revenue also rose by a comparatively small margin during the period. A results presentation, results report, and “brief report” on 407 ETR financials are available for download.
Texas Commission Approved TxTag System Handoff To HCTRA
KXAN reported, the Texas Transportation Commission on Thursday authorized TxDOT to outsource all TxTag transaction processing, toll billing, and customer service operations to the Harris County Toll Road Authority (HCTRA), an arrangement contemplated for several months. The vote was unanimous to approve a “toll services agreement” between the agencies along lines outlined in a board minute order.
KXAN has assiduously reported on complaints about deficiencies in TxTag systems and customer service, problems that were acknowledged by commission chair Bruce Bugg and TxDOT chief Marc Williams. Bugg admitted he’s known for almost a decade about system flaws that the department and various vendors have been unable to fix. Williams said delegating all back office operations to another agency ultimately seemed the best option for resolving the predicament.
A short TxDOT slide deck presentation outlined the expected benefits of an agreement with HCTRA for commission members. The KXAN article discusses what’s currently known about the transition to HCTRA and how it will end TxDOT’s relationship with its current back office system vendor, TTEC Government Solutions.
KVUE reported that Mr. Williams told commissioners outsourcing will be “a significant savings and efficiency gain for the state of Texas and for both us and the Harris County Toll Road Authority as well.” He expects HCTRA’s cost for processing a transaction will be cut in half, from 30 cents to 15 cents. “We believe that, too, will begin to, over time, approach about $100 million of savings for the state of Texas,” Williams said.
Two Colorado Express Lane Corridors Will Transition To Dynamic Pricing
Colorado DOT announced it will shift from variable (time-of-day) tolling to dynamic tolling of the I-25 South Gap and I-70 Mountain Express corridors at an unspecified date later this fall, The Gazette reported. Rates will be adjusted every five to 15 minutes, but CDOT expects many drivers to incur costs similar to what they now pay.
On the 18 miles of I-25 between Monument and Castle Rock (the South Gap), express lane prices will range between $1.50 to $4.75 — although motorcycles, commercial transit vehicles, and HOV3+ vehicles with switchable transponders will travel free. On I-70, driving the 12 miles between the Veterans Memorial Tunnels and Empire will cost up to $9, with all vehicles, including motorcycles, subject to tolling.
“The South Gap and the Mountain Express Lanes are two of the most traveled corridors in the state, and we want to do everything we can to help keep Express Lane speeds reliable,” said Piper Darlington, director of the Colorado Transportation Investment Office (CTIO). CTIO ultimately intends to transition all 10 active or pending express lane facilities to a dynamic pricing model.
TRN notes, the CTIO board reviewed a presentation on a recommended dynamic pricing algorithm and related memos at its September 23 meeting. During its October 16 meeting, it voted on a resolution approving the algorithm criteria.
These are a few of the toll industry developments TRN covered last week. If you’re not a subscriber to Daily News Briefs, click here for a free, 14-day trial. Read the news as it happens every weekday.
Utah DOT Launched Public Scoping Of Big Cottonwood Canyon Tolling And Transit Plan
Utah DOT announced Thursday it has started an environmental study to evaluate tolling and enhanced bus service to address winter-time traffic congestion management on SR 190 in Big Cottonwood Canyon. The study is required under budget legislation (SB 2 of 2023) that makes UDOT responsible for using funds to “provide enhanced bus service, tolling, a mobility hub, and resort bus stops for Big and Little Cottonwood Canyons.” The announcement listed project features the department will study.
UDOT has scheduled two public scoping meetings, an in-person event on the evening of November 13 in Cottonwood Heights, and a virtual event on the evening of November 14. The department has public scoping information posted on the project website. A scoping process public comment period will be open from November 13 through December 13. The environmental study process is scheduled to be completed by the fall of 2025.
Virginia DOT Will Reopen Norfolk Express Lanes Closed For Construction Project
Virginia DOT announced that, weather permitting, contractors will end work closures on the I-64 Reversible Express Lanes in Norfolk between I-264 and I-564. “These closures were implemented to facilitate the completion of essential roadway activities and bridge widening as part of construction for the first phase of the Hampton Roads Express Lanes (HREL) Norfolk Segment.” With the lifting of the closures, westbound tolling will be reinstated for solo drivers using the reversible lanes to travel to I-564 or I-64 west toward the Hampton Roads Bridge Tunnel. VDOT noted that HREL Norfolk Segment construction started last year and includes the conversion of the existing inside shoulder along I-64 into a high-occupancy tolled, part-time shoulder express lane running alongside three existing general purpose lanes. (TRN inserted a link in quoted text.)
Proposed Bay Area Bridge Toll Hikes Will Offset Cost Inflation And Revenue Dips
Marin Independent Journal reported that five years of proposed toll increases on the Bay Area’s seven state-owned bridges wouldn’t fund new capital investments. Instead, the additional money would help the Bay Area Toll Authority (BATA) avoid borrowing money to keep up bridge maintenance, the cost of which is continually skyrocketing. In addition to construction and maintenance budget blowouts, a persistent reduction in traffic since the pandemic has affected the agency’s bottom line. A spokesperson for BATA’s parent, the Metropolitan Transportation Commission (MTC), says increases were expected to become necessary by 2027, but dips in traffic and revenue moved up the rate adjustment timeline.
“The proposed toll hike would raise about $60 million of additional revenue in the first year and about $300 million annually when tolls go up $2.50 in 2030.” About $740 million over a decade would be allocated for painting and corrosion control on the steel structures, and $690 million would go to basic integrity, operations and safety. Rate increases also will improve BATA’s position for building up capital reserves and are intended to incentivize FasTrak adoption for more cost-effective administration.
Illinois Tollway’s Proposed 2025 Budget Submitted For Public Review And Comment
The Illinois Tollway Authority announced that its tentative 2025 budget is now undergoing public review and comment through November 22. The authority board will hold public hearings on the plan on Monday evening, November 18, in Burr Ridge, and Thursday afternoon, November 21, at authority headquarters in Downers Grove. A final budget will be submitted for approval at the board’s December 19 meeting.
Some highlights of the balanced budget cited in the announcement were:
- Annual revenue is projected to be $1.72 billion, an increase of 4.2 percent over 2024. Tolls and “evasion recovery” are expected to yield $1.65 billion.
- Passenger car tolls won’t increase for a thirteenth consecutive year, but the toll revenue projection reflects an annual commercial truck toll rate increase first approved by the board in 2008.
- The authority plans to issue $500 million in new bonds in 2025 for capital program funding.
- $1.25 billion will go to direct funding and debt service.
- Annual maintenance and operations expenditures are budgeted at $470.6 million.
- $1.15 billion in capital spending is planned, including funding for the fourteenth year of the Move Illinois program.
The 2025 Tentative Budget Book and a budget presentation slide deck are accessible online.
Nova Scotia Bridge Toll Elimination Will Worsen Congestion, Transportation Experts Say
CBC News reported, several experts are pushing back against a proposal to remove the modest tolls charged on the MacKay and Macdonald Bridges operated by Halifax Harbour Bridges. Nova Scotia Premier Tim Houston made toll elimination by April 2025 a plank of his party’s platform in the snap legislative election called last week.
Deny Sullivan, a Canadian economist who makes toll road traffic and revenue projections for investors, told a CBC reporter the proposal would likely make Halifax traffic congestion worse — the opposite of what Houston says he intends — because lifting a facility’s tolls usually produces an increase in volume. (Sullivan is co-author of a recent CSRB Group white paper on road pricing’s relationship to traffic volume.) In a radio interview, Peter Lougheed, a road safety engineer, agreed that Houston’s idea might affect traffic volume and congestion but emphasized its potential safety implications, saying the existing toll plazas “basically manage” traffic flow onto the bridges. Steven Snider, the retired CEO of the public corporation that operates the bridges, told CBC removing tolls would be unlikely to improve traffic, especially since more than 80 percent of drivers are already using Halifax Harbour Bridges’ MacPass electronic collection system. In his experience, “traffic backups generally happened on the approaches to the bridge, not at the toll plaza.”
Premier Houston, responding to the experts’ assessments, insisted his proposal would save motorists both money and time, since, “If you don’t have to stop at a toll booth, it’ll save you time.” He told CBC he “relied on a number of experts who assured me that if you have to stop and are not moving forward, it’s taking you longer.”
Board Presentation Prompted Debate Over Efficacy Of US 101 Express Lanes
A recent presentation to the board of a San Mateo County, California, association of governments revealed, among other things, that the average operating speed within the 101 express lanes has continued to meet federal requirements despite the increase in average daily volume that has occurred since 2023. However, it also showed that traffic has slowed in the adjoining general purpose lanes at some times and in some parts of the 22-mile express lanes corridor.
According to San Francisco Chronicle (also accessible via PressReader), the presentation data has renewed a debate among officials and Bay Area transportation stakeholders over the express lanes project’s success in achieving its ultimate goal of improving travel time and predictability for all commuters. A spokesperson for the government entities that developed the project says it’s premature to draw any long-term conclusions about a facility that’s only been fully operational for about 18 months. Metropolitan Transportation Commission spokesperson John Goodwin maintains perceptions about the Bay Area’s express lanes are “often driven more by emotion and envy than facts and figures.”
On the other side of the debate are critics of the expensive 101 project who claim the latest data support anecdotal evidence that travel in the general purpose lanes has slowed considerably.
The Chronicle article also delved into the issue of express lane toll payment. Officials are aware of a significant revenue leakage problem that’s attributable primarily to drivers with FasTrak Flex transponders who flout HOV requirements to obtain a toll discount or waiver.
The express lanes performance presentation was delivered at the September 12, 2024, meeting of the board of the City/County Association of Governments of San Mateo County (See Item 2.1).
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SANDAG Board Voted To Write-Off $67 Million In Uncollectible SR 125 Tolls
The San Diego Union-Tribune (via Microsoft Start) reports on one of the significant financial implications of the controversy surrounding the SR 125 toll system built by ETAN and its possible replacement. “Facing a trove of suspect financial data, two new unflattering audits and an ongoing federal investigation, the San Diego Association of Governments [SANDAG] voted [on October 11] to write off $67 million in uncollectible fees and penalties as a first step toward broader reforms.” The write-down — it includes all delinquent toll accounts more than three years old — is greater than the annual $56 million in toll revenue the agency collects from SR 125 drivers. SANDAG staff told the board “they have already accounted for the $67 million in uncollectible fees and penalties, and the annual budget would not suffer from the 10-figure revenue hit. ‘This cleanup is huge,’ finance and accounting director Kimberly Trammel told the board. ‘It will make that (reform) effort manageable going forward.’”
During the meeting, the board also learned that replacing the existing faulty toll system will take months longer than was originally expected. In January, members voted to approve a sole source contract with a Deloitte Consulting and A-to-Be team to create a new system. Although the work was scheduled for completion this year, staff members reported that a new completion date of July 2025 has been established.
Proposed New York Thruway Rule Changes Include Authorization To Exclude Scofflaw Use
The New York Thruway Authority is in the process of revising its administrative regulations on toll collection. The revisions are intended to provide “a clear description of the tolling process” and bring the authority into compliance with a recently enacted statute (the “Toll By Mail Enhancement Act”) that reforms state toll-by-mail procedures. At its September 24 meeting (scroll down to page 8 of the agenda), the authority board approved a resolution that included a draft of the revised rules and authorized staff to initiate a formal adoption process. On October 16, the authority published the draft in the New York Register (at page 18-20) to permit public review through mid-December.
“Land Line” Magazine reported on the “key” elements of the draft, which include a proposed new section (21 NYCRR Section 102.9) on exclusion of vehicles from the Thruway for non-payment of tolls or other breach of the authority’s rules and regulations. Among other things, the proposed section specifies that “[v]ehicles violating any of the rules and regulations of the Thruway Authority, as well as other vehicles or vehicle types owned or operated by the owner and/or operator of such vehicles or types, may be excluded from the Thruway system permanently or for a specified time. Violators of such rules and regulations shall be subject to the penalties made and provided in these regulations and statutes of the State of New York.”
FHWA Awarded $635 Million In Bridge Investment Program Grants
On Thursday, FHWA announced the award of almost $635 million in FY 2024 Bridge Investment Program “Other Than Large” grants to 22 small and medium-sized bridge projects across 19 states. The source of funds is the $40 billion the Infrastructure Investment and Jobs Act (IIJA) allocates over five years to reduce the nation’s backlog of bridge repair and replacement projects.
Applicants requested a total of $3.68 billion in FY 2024 grants. The announced funding goes to both urban and rural projects. Six of the projects received grants of $40 million or more. A Mississippi DOT project to replace 13 obsolete bridges in the state’s central region received the largest single award, $67.5 million. Brief descriptions of all 22 awards are included in the announcement.
FHWA noted, “To date, the Bridge Investment Program has invested $8.1 billion into 100 bridge projects in 44 states across the country, and an additional $21 billion in dedicated bridge formula funds – the full amount provided by [IIJA] over 2022-2025 – has been distributed to states.” (TRN inserted a link in quoted text.)
Cuomo Bridge Design-Build Team Countersued NY Thruway For More Than $1 Billion
“The consortium that built the Gov. Mario M. Cuomo Bridge sued the New York State Thruway Authority Friday, the latest salvo in a three-year legal battle over nearly $1 billion in disputed costs,” Lohud.com reported. Tappan Zee Constructors (TZC) accuses the authority of breaching the $4 billion project’s design-build contract through disruptions, delays, and change orders that drove up construction costs. TZC claims that, with interest, a judgment in its favor could cost the authority — and, ultimately, tax and toll payers — more than $1.5 billion.
The two parties failed to reach agreement through a three-year dispute resolution process that followed an earlier TZC lawsuit in which it claimed the authority owed it $960 million. In August, the Thruway sued TZC over its claim that “dozens of anchor pipes used to connect cables on the $4 billion twin span were not up to the contract’s standards.”
A US Sovereign Wealth Fund Could Boost Domestic Infrastructure Investment
Marketplace observed that one economic policy proposal this year’s major-party presidential candidates agree on concerns creation of a US sovereign wealth fund. “China, Norway and many countries around the Persian Gulf have them. The funds pool government revenue — often from oil and gas resources — and invest it in everything from stocks to office buildings, soccer teams to infrastructure projects. Neither the Trump campaign nor the Biden administration have offered many details about how exactly a fund like this would work in the States, though Trump has mentioned that a fund could invest in infrastructure.”
The article suggested Quebec’s Caisse de Depot et Placement du Quebec (CDPQ or “the Caisse”) could be a paradigm for a US fund. Strictly speaking, the Caisse is a pension investment fund that provides social security benefits for retired Canadians. “Unlike Social Security, the Caisse has acted more like a sovereign wealth fund, investing in stocks, private equity and real estate. However, it’s also a little different from big U.S. pension funds. It’s supposed to maximize returns, but also contribute to Quebec’s economic development. The Caisse had over $310 billion USD in assets last year.”