Bacon's Rebellion

How’s this for a Catch-22?

Starting tomorrow, the cost of the proposed Metrorail extension to Dulles International Airport, now estimated at $2.7 billion, will increase by some $3 million to $6 million a month. The cost escalation is built into the contract between the state of Virginia, the Metropolitan Washington Airport Authority and the Bechtel-lead construction team.

But work can’t begin until the U.S. Department of Transportation finishes reviewing the project to determine if it qualified for $900 million in federal support. As part of that review, the feds are conducting a cost-benefit analysis. The Office of Inspector General has already warned that escalating costs threaten to undermine the economic viability of the project, which could result in the feds dropping out of the project.

How much longer will the federal review take, adding $3-6 million for each month that goes by? Writes Bill Turque with the Washington Post:

The timetable for approval of final design is unclear. The Federal Transit Administration said it needs at least an additional two weeks to complete its “risk assessment,” meaning its estimate of the project’s overall cost and completion time. If those numbers exceed Dulles Transit Partner’s, then the consortium, the state and the airports authority will have to revisit the project plans to prune costs. How long that would take is not clear. The project would then go back to the Federal Transit Administration for additional review.

This is just one more argument in favor of getting the federal government out of the business of funding state and local transportation projects. Let all projects — highways, heavy rail, mass transit buses, what have you — live or die on their own merits as determined by the people who benefit from them and pay for them directly.

This week’s column was inspired by a recent trip to Arlington County. Squiring me around their remarkable community, Arlington officials explained how they approach local development and re-development. I was especially attuned to anything that might shed light on a notion frequently expressed by commenters in this blog: the idea that increased density necessarily translates into greater traffic congestion.

Arlington irrefutably proves otherwise. Poorly planned density may aggravate traffic conditions, but well-planned density can have quite the opposite effect. All one has to do is visit the high-density development around Arlington’s Metro stops to see the proof of that. For all the retail, the high-rise offices and the apartment/condo complexes, the streets around Clarendon station are are freer of traffic than any suburban commercial corridor. The traffic statistics convey the same message.

That may be so, skeptics may say, but Arlington has a huge advantage that most other Virginia localities do not: a heavy rail system largely paid for by someone else. Maybe Arlington escaped the density/congestion trap, but no one else (with the possible exception of Fairfax County) can afford to build a Metro line. Arlington is the exception that proves the rule.

Board Chairman Paul Ferguson has heard that argument, too, and in refutation, he points to the re-development that’s taking place in the Shirlington Town Center — an emerging “urban village” that has no Metro station. Shirlington, he says, is a model that can be replicated in any metropolitan area in Virginia.

Some of the tools used by Arlington planners are known to anyone who reads this blog: Greater density, finely grained mixed uses, and special care in the design of pedestrian-friendly streetscapes. Arlington planners are big believers in narrow streets, wide sidewalks, plazas and other small public spaces, and ground-level retail in large office and apartment buildings — whatever it takes to avoid presenting a blank wall to the sidewalk.

But pedestrian-friendly streetscapes are not the entire solution. Vibrant communities should not just avoid dead spaces, they should avoid dead times. Arlington planners envision a town center that’s jumping 24/7. Well, maybe not 24/7, but definitely 18/7. The trick, which seems to be working, is loading up the town center with major traffic generators including a quality urban grocery store (though with a smaller, urban footprint), a theater and a public library. The formula seems to be working. Shirlington is a happening place.

My visit to Shirlington and its library, which is housed in the same building as the popular Signature Theater, prompted a closer look at the role of libraries in defining human settlement patterns. Sadly, I found that an otherwise marvellous new facility in my Henrico County neighborhood reinforces the community’s old auto-centric habits. An opportunity to create enormous added economic value was lost. In today’s column, “Libraries as Liberators,” I explore what different communities are doing — or not doing — to capture libraries’ phenomenal economic value for the public good.

Here’s Bill Turque’s story about the Office of Inspector General’s report on the Rail-to-Dulles project in the Washington Post. Turque summarized the thrust of the study better than I did in my insta-analysis yesterday: “The estimated cost of the proposed Metrorail extension to Dulles International Airport has grown so significantly over the past three years that it may not meet guidelines for federal funding.”

Turque also noted an important finding that I neglected to include in my summary: “The report said costs will continue to rise. It cited a clause in the state’s contract with Dulles Transit that calls for the contract price to increase each day past Aug. 1 that federal approval to begin work on final design is delayed.”

Rep. Tom Davis told Turque he would continue fighting for federal funding but said changes would have to be made in the project’s cost structure.

“I think the project has issues,” he said. He expressed particular concern about tolls from the Dulles Toll Road, which are expected to pick up a major share of the local costs. At the moment, he said, no one really knows how much they would have to increase to finance the rail line.

“There’s a lot of work to be done,” he said.

Here is the Associated Press’ story on the report.

The Rail-to-Dulles heavy rail project is in big trouble — even more than it already was. A report by the Inspector General of the Department of Transportation, posted online this afternoon, highlights major project risks and recommends a potentially fatal change to the cost-benefit calculus used to determine whether the project warrants federal support.

Plans for financing the controversial Metro extension call for a $900 million federal “New Starts” grant, a $375 million federal loan and a $200 million federal line of credit. But there is intense competition nationally for federal transit funds, and Rail-to-Dulles must leap a number of hurdles, including a cost-benefit analysis, assurance that local funds will be available, and credible plans for managing the project. Among the alarums raised by the Inspector General:

Cost growth and schedule slippage. In December 2004, Phase One of the project to Tysons Corner was estimated to cost $1.52 billion and to be completed by 2009. By March of this year, the cost had escalated to $2.4 – $2.7 billion, and the completion date had slipped to 2013.

“Earlier this year,” writes the Inspector General, “the project was already near an unacceptable cost-effectiveness rating of low, when the cost estimate was much lower, $2.065 billion. Now the cost estimate could be as much as $2.7 billion. The project must achieve a final cost-effectiveness rating of at least medium-low or it will not be eligible for New Starts funding.”

Dulles Toll Road revenues. Under its agreement to manage the Dulles Toll Road, the Metropolitan Washington Airports Authority is responsible for funding improvements and repairs to the road. States the Inspector General: “The project could be endangered if these revenues are not sufficient to cover [rail] project costs and maintain the road. Users of the Dulles Toll Road could be subjected to large toll increases in the future if higher project costs require more and more local funding.”

Cost-Benefit Analysis. The Federal Transportation Authority has refined its methodology for calculating the cost-benefit ratio of transit projects. An old version of the software included as benefits certain travel-hours saved during off-peak hours. Now FTA officials are inclined to exclude those travel hours. With that change the economic viability of the project, marginal to begin with, becomes even more problematic.

Management oversight. The project’s complex organizational structure — management by the Virginia Department of Rail and Public Transportation transitioning to management by the MWAA, and then to ultimate ownership and operation by the Metropolitan Washington Area Transit Authority — increases the risk of cost overruns.

“In the past, we reported on projects that failed to implement an effective project management and oversight structure,” the Inspector General writes. “For example, the Boston Central Artery/Tunnel (CA/T) Project, which experienced massive cost overruns and schedule delays, presents many lessons learned regarding the project sponsor’s ineffective oversight. These lessons are relevant in light of the MWAA’s lack of experience in managing a mass transit project.”

Design-Build contract. Washington Metro was not a participant in negotiating the contract even though it will be forced to live with the consequences. The Metro needs guarantees of protection against defects in design and construction, and it needs assurances that the MWAA will not declare “substantial completion” of the contract on a product that does not meet Metro’s needs.

This report foreshadows the eventual federal rejection of the Dulles Rail project. And without federal funding, the project is a dead. The political reaction to this report undoubtedly will be furious. Virginia’s legislators will try to mau-mau federal administrators into revising their appraisal. But facts are facts, and Rail-to-Dulles faces stiff competition from transit projects around the country, each backed by its own lobbyists and Congressmen.

The Kaine administration had better start preparing a Plan B to improve mobility and access in the Dulles corridor.

The Reason Foundation’s annual report on privatization is now online, covering topics from transportation to education and more.

There’s an interesting section on emerging issues — privatizing state lotteries and government transparency. Strangely, they omit some private attempts at the latter, especially in Virginia through the Waldo-created Richmond Sunlight. Maybe next year.

Fluor Virginia and Transurban Development Inc. have proposed converting the High Occupancy Vehicle (HOV) lane running down Interstate 95 in Northern Virginia into a variable-pricing toll lane. The public-private partnership would collect tolls from motorists wanting a fast lane around traffic congestion but would allow carpoolers to use the lanes for free, as they do now. Sounds good in theory. But how do you tell the difference between cars with a single passenger and cars with multiple passengers?

That was the critical question asked by people attending the first public hearing on the proposal, in which Fluor-Transurban also would extend the HOT lanes 28 miles to the south and invest in Bus Rapid Transit along the corridor. Remarkably, Virginia Department of Transportation officials had no clear answer.

Reports Lillian Kafka with the Manassas Journal-Messenger:

How electronic tollbooths would differentiate between high occupancy vehicles and ones that should pay the toll is unclear. Toll booths deduct money from prepaid devices as cars pass through at constant speeds. Marsheela Hines of Dale City pressed [senior VDOT official Dennis] Morrison on the issue.

“We don’t have the right answer for that,” he said.

“This is a lynchpin issue,” said Steve Walters of Dumfries. “You can’t move forward without this technology.”

A VDOT engineer said Fluor, which operates toll roads around the world, was still working on developing that technology.

Sounds like a core issue: Will the HOT lanes enable carpoolers to ride for free or not? Fluor and VDOT had better figure out the answer.

I have no idea if these technologies will prove commercially viable, but they show the incredible range of creativity and innovation driven by our free market economy. If only our government systems could prove as adaptable!

First, the Air Car, a mini-car that runs on compressed air. The vehicle reaches top speeds of 68 and has a driving range double that of the most advanced electric car, making it ideal for city driving. The cost of re-filling the “gas” tank is about 1.5 Euros (less than $3). Oil changes are needed only once per 50,000 kilometers. Oh, and did I mention that it has zero pollution? Watch out, Detroit (and Tokyo), the car, designed by a small French firm, will be manufactured by India’s Tata Motor. (Read the BusinessWeek article.)

Second, the SeaPhantom, a powerboat capable of cruising comfortably at 120 miles per hour. Foils lift the vehicle out of the water, reducing the wave pounding and attendant shock on passengers that can take the fun out of riding it. Besides its obvious military uses, the SeaPhantom has potential as a fast water taxi with a range of several hundred kilometers. (Read the Gizmag article.)

Why would Hampton Roads crave upgraded railroad service when passengers could reach Washington, Baltimore, Philadelphia and New York even faster by sea?

Third, a slew of services that create a marketplace for parking spots. Parkingsearch.com is a “virtual exchange” that lists parking spaces for rent, lease or sale within a specific zip code, reducing search times for drivers desperate for parking spaces. Another service, Bestparking.com, allows motorists to compare locations and rates of commercial parking services. Meanwhile, XM Satellite Holdings is testing a service that downloads real-time parking data into automobile GPS systems. (The Wall Street Journal has that article here.)

The private sector can’t solve every transportation malady. As Ed Risse frequently observes, there are physical limits to society’s ability to provide mobility. But entrepreneurial innovation can open up options that never existed before. (Hat tip: Larry Gross.)