Common Cents

Thoughts on new lanes on I-270

Kai Hagen

(10/2017) Last week, Governor Hogan proposed an ambitious $9 billion project that includes adding four new lanes to the Maryland portion of the Beltway, the Baltimore-Washington Parkway and Interstate 270 from the Beltway to Frederick.

It is perfectly understandable if many Frederick County residents, especially those who regularly travel "down the road" during peak hours — rush hour — got excited about the prospect. No doubt, many who did might have imagined the pleasure of flying down the road to work, or back home, at the speed limit.

Not to rain on the party, but since we are talking about a truly massive and extremely expensive set of projects, and because, if completed, it would certainly have significant affects on Frederick County (positive and negative, depending), it’s worth thinking about a few things.

First of all, the likely timeline. If everything were to go roughly according to the initial plan (even though nothing that big and expensive ever goes so smoothly), Frederick County commuters would not actually experience the completed project until some time after the year 2030. That is not a pessimistic projection, but rather a realistic description of something akin to a best-case scenario.

We could get into the weeds about why it would take at least that long, but suffice it to say that, among other things, the process of establishing the proposed public-private partnership, the inescapable legal challenges, the complicated planning and engineering, the multilayered permitting process, the likely eminent domain battles (as some private property is taken), and the construction itself make it virtually impossible to open two new lanes in each direction all the way to Frederick in less time than that. And, in all probability, it will not happen that "quickly."

One of the most important considerations for any large capital project is cost. The announcement about this big plan was given a preliminary price tag of $9 billion. You can safely assume that number is too low, and perhaps much too low. Research has demonstrated that the overwhelming majority of transportation infrastructure projects end up costing significantly more than anticipated. Something that is touted as $9 billion on the day the basic concept is announced will be well more than that when all the details are filled in, and then, still more when all is said and done.

But, apparently, we don’t have to worry about that.

We’ve been told that because some currently unknown private sector partner is going to cover every penny of investment required to get this done, over the next thirteen or fifteen or twenty years. We’re being promised that Maryland taxpayers won’t have to worry about costs, or take any risks.

But wait! There's more!

Not only are private interests going to invest all the money to design, build, finance, operate and maintain these four additional lanes to Frederick along I270 (and the Beltway, and the BW Parkway), we’re also told the state will likely receive billions of dollars out of the revenues from the project.

So, what’s not to like? No cost to taxpayers, no risk to taxpayers, a share of the profit, and four new lanes to reduce the horrible congestion on these major roads.

What could go wrong?

A lot.

Not to sound like a broken record, but it’s almost certain to take longer than expected, and cost a lot more than expected, and there are other things to think about.

One only has to make a cursory effort to research the history of such arrangements to appreciate that things often don’t go according to plan. It has not been unusual for such public-private projects to experience bankruptcy along the way and/or have to be substantially restructured.

If local or state government privatizes a public service, and things don’t work out, that might be a problem, but it is easily remedied, relatively speaking. But if a massive road project runs into such problems, it’s an entirely different matter.

The private investor is banking on recovering the incredible costs of building the project, and operating it after that, and making a profit, by charging tolls on all of the new lanes. They assume they can set tolls at levels that regular drivers will be able and willing to pay, every day, in order to get to work or back home faster. Before you jump in on that, you might want to ask the governor just how much those tolls might cost.

Just for your consideration, one 17 mile stretch of highway in California costs $9.25 cents per car; a 7.5 mile toll road in Houston costs about $8 per car; traveling on the Chicago Skyway costs 51 cents per mile; one in Delaware costs 36 cents per mile, and one in Denver costs $15 to travel its 47 miles (about 33 cents per mile).

Nobody can tell you now what it would cost to take the new toll lanes the 39 miles from Frederick to the Beltway (ignoring the added toll lanes on the Beltway for now), but, just to offer an example: At 33 cents a mile, that would be the equivalent of $13, each way, just to the Beltway. A $26 round-trip, five days a week, would be $130 a week, or at least $520 each month. Of course, if the private owners decide to use variable congestion pricing, it could cost significantly more when the road is most busy.

No doubt, some people would be happy to pay that. And, I expect that many others assume that the traffic congestion will improve just because other people are willing and able to pay the tolls, even if they aren’t.

If only it were that simple. But it isn’t.

After experiencing the inevitable construction-related delays, for well more than a decade, you might think it will be relatively free sailing when everything is done. But a long and growing list of fully credible research and real world experience makes it absolutely clear that, for a variety of reasons, it won’t take long before the new lanes, and the entire road, are just as congested as they were before.

Before we all just sign off on this big plan, there’s a lot to think and ask about. What are the real risks to Maryland taxpayers? What might it cost to use the toll lanes? How much, if at all (in the long run) will it improve travel times?

But also: Are there good alternatives, that are less risky, that can make a difference sooner, that are more sustainable? And what are the real impacts of various approaches on Frederick County?

Too much to tackle in one column. But this conversation is just beginning.