'What now?'

By Don C. Brunell

On Nov. 6, voters rejected Proposition 1, the $17.8 billion highway and transit measure to fund transportation projects in the Puget Sound region. In light of that defeat, the obvious question is, "What now?"

The cost of road and bridge construction in Washington is staggering. Despite $11 billion in new taxes and fees over the last five years, traffic congestion is choking the state's economy and leaving drivers trapped in 30 mph "rush hour" traffic.

As expensive as highway projects are, doing nothing is not an option.

Traffic congestion increases the price of groceries, electronics and everything else that's shipped by truck - and virtually everything is shipped by truck at some point. Nationwide, Americans spend 3.7 billion hours a year stuck in traffic, costing drivers $63 billion a year in wasted time and fuel costs. Cars crawling along congested roads and highways pump thousands of tons of pollutants into the air every day.

If we wait, congestion will only get worse and costs will go even higher. For example, the cost of road repair materials has increased an average of 33 percent in the past three years. And if we wait too long, we could experience a tragedy like the collapse of the I-35 Bridge in Minneapolis.

Spiraling costs, increasing congestion, big tax hikes and voter frustration. So, what's the answer?

Perhaps it's time to think outside the box.

One idea is to hand major projects over to the private sector. In Europe - and increasingly here in the United States - governments are selling the rights to build or maintain major highways and bridges to private companies. The companies do the projects and then charge a toll.

In Chicago, the city recently turned over operating and maintenance responsibilities of the 50-year old Chicago Skyway Bridge, a 7.8-mile toll road, to a private company. In exchange for $1.83 billion in cash, the city granted the Skyway Concession Company a 99-year lease to maintain and operate the Skyway. The company has the right to all toll and concession revenue.

In 2006, the ITR Concession Company paid the state of Indiana $3.85 billion for a 75-year lease to operate and maintain the Indiana Toll Road, which stretches 157 miles across the northern part of the state.

Both lease companies are owned by a Spanish firm called Cintra Concesiones de Infraestructuras de Transporte SA, or Cintra. Cintra operates hundreds of miles of toll roads in Spain and is expanding worldwide.

In February, Cintra paid the state of Texas $2.1 billion for a 50-year contract to operate State Highway 121 as a toll road. The minimum and maximum tolls are specified in the contract.

Increasingly, companies like Cintra are building the roads, and motorists pay them back through tolls. Supporters point out that the private companies assume all the risk of construction overruns and bear the consequences if the road or bridge doesn't attract enough vehicles. Another big selling point is the huge upfront payments, which the state can use for other road projects that would otherwise languish on the back burner, becoming more expensive over time.

On occasion, public officials have complained about the amount of the toll set by Cintra. The company counters that its tolls are carefully balanced to encourage use but discourage congestion.

That concept, called "congestion pricing," is another option for Washington's highways, whether those roads are publicly or privately operated.

Congestion pricing is a traffic management tool. Tolls are placed on the most heavily traveled roads and can vary throughout the day - higher during peak hours, lower during off-peak hours. Drivers have other non-toll alternatives, which means they have a choice to pay a toll or not. Another benefit: Construction and maintenance costs are paid by the people who use those particular roads, without raising taxes on everyone who buys gas.

Private-sector leases and congestion pricing are not the only answers to our traffic woes. But they're worth considering as voters balk at new taxes, and we struggle to answer the question, "What now?"

Ask yourself: "Would you pay more to go faster?"

Don C. Brunell is president of the Association of Washington Business and is available via donb@awb.org