Public and private-sector, infrastructure providers in the USA are at a “branch point” in the infrastructure-market-development process. Traditional notions of value and enterprise in this market space are no longer producing adequate results.
This problem has been growing over the last 60 years to a point where, today, it is not alarmist to conclude that the industry is in near institutional and market-structural gridlock. There are growing public and private-sector failures in many geographic and functional areas of the market’s performance. The three major areas of failure and opportunity for major advances are:
- Need for Added Revenue for Public and Market-Financed, Priced and Non-Priced Systems
- Need for Updated Operations and Management Systems to Achieve Higher Financial, Economic, Environmental, Energy-Management and Operational Performance
- Need for Enterprise and Market Innovations and Reforms to Bring Forth the Best Capabilities of Public and Private Sectors in Meeting Sectoral and Shared-Value Objectives
These are the market-focus areas of Integrated Transport Planning, Inc.
One dimension of need that has plagued the transport sector over the last 50 years has been funding inadequacy. Largely because of the industry’s:
- mischaracterization of who uses transport systems, and
- consequent reliance on drver-based and farebox funding strategies,
transportation systems in the US have, for decades now, not had sufficient levels of funding to meet their capital, maintenance and operating costs at the federal, state or local levels for highways, transit and/or goods movement.
The market and enterprise responses to inadequate levels of revenue have been typical in that the industry has responded by deferring maintenance and “dumbing down” the systems actually built as a means to stretch the inadequate funding. These strategies clearly are not long-term competitive.
They have long-since pushed the industry into a position where it is clearly underserving the nation’s economic needs. The deteriorating condition of existing systems and under-delivery of needed new capacity give testimony to the crisis in infrastructure. If any proof were needed, the American Society of Civil Engineers recently estimated that over $1.2 TRILLION was needed for just rubber-tire and steel-wheeled, transit-systems’ maintenance needs.
ITP has developed approaches to revenue development that add value to infrastructure systems such that the infrastructure-enterprise bottom line is enhanced. This is accomplished through three major strategies:
- Market-based approaches
- Government/fiscally based approaches, and
- a combination (PPP) of the two.
Prominent within the Market-based and PPP-based approaches is the use of economic-sectoral integration, i.e., formally integrating other structurally-linked enterprises into the infrastructure enterprise/organization. The conceptual framework ITP created to organize/design these solutions is called, “Infrastructure-Related Enterprise Development ©” (IRED). This conceptual approach can be used in market-systems’ design or it can be applied to enterprise/facility-design needs.
Within the government’s fiscally-rooted format of IRED © there are a number of value-capture, policy-interlocked strategies using such tools as Tax Increment Financing Districts, Special Benefit Assessment Districts, Impact Fee Districts, Shared Tax Bases, Transfer Development Rights, Infrastructure Banks, Infrastructure Investment Districts, etc., all of which can be tied to market enterprises as Public Private Partnerships (PPPs).
ITP has been designing these approaches and helping its public and private sectore clients to implement these market-based, value-creation/value-capture frameworks since the early 1990s. ITP can not only help its clients to design enterprise-management strategies and policies to achieve these outcomes, it can also assist them in designing the corporate or government entity to implement them.
A significant by-product of this appraoch to deepening and broadening of revenue sources within public or private-sector, transport enterprises is the inescapable outcome of increased, risk-management capability. In today’s highly-competitive, global markets, this organziational and management strenght is an indispensible component of a sound infrastrcutre strategy.
The second major area of need that ITP has as its market focus is systems design. ITP and its staff have been instrumental in the design and development of innovations in tolled systems, goods movement systems and transit systems using
- Advanced, Enterprise Systems Design,
- Advanced Transport and Energy- Systems Technologies, and
- Advanced Environmental Residuals Management Capabilities.
Its work in the 90s in the development of Modally-Integrated, Tolled, Managed-Lane Systems (ML) is just now being widely embraced by the industry. Three of the most advanced ML designs which ITP and/or its staff led are now in start-up operation or construction:
- 95 Express for FDOT in the median of I-95 between Miami and Fort Lauderdale, Florida,
- LBJ Managed Lanes for TxDOT in the median of IH-635 in Dallas, Texas,
- IH-10 Toll Lanes for the Harris County Toll Road Authority in the median of IH-10 in Houston, Texas.
All three are all Open Road Tolled, and all three have integrated, Bus-Rapid-Transit service as a prime, operational, service, revenue and financial components as well free HOV 3+.
ITP staff was instrumental in working with the US Federal Transit Administration in helping them to generalize/promulgate the new policy of allowing the application/use of new-start, transit funds for development/construction of these types if tolled systems. This innovation was first done on a de facto basis by ITP staff in the systems identified above. Now it is national policy thanks to the ground-breaking work of ITP staff.
Some of ITP’s most-advanced, systems-enterprise designs which combine the financial and economic retruns from direct-transport uses with the associated revenues from
- joint, real-estate-developoment
- environmental-residuals management, and
- alternative energy or advanced, energy-systems management components
have not yet been implemented, but clients and projects in these areas have been served by ITP and/or its staff. Markets that were targeted with these approaches have included goods movement, transit, rail, roadway and air services. These market spaces represent a very large opportunity space in which new, integrated systems can capture very high returns while creating as-yet-undeveloped ,shared value across a range of market sectors.
In moving beyond the physical and institutional gridlock that has increasingly reduced teh productivity of the transport industry over the last 50 years, the industry will need to innovate new forms of: public; private; and PPP enterprises that can enable the unlocking of the capabilities of new technologies, systems and services that are needed if our transportation facilities are going to be market viable and environmentally sustainable.
Market viabiltiy is not a performance characteristic that should be solely applied to private sector transport systems. For public policy to be successful, the systems governments offer the market also need to be productive from a market-output perspective. In addition, this adaptation is essential if our economy is to reach effective levels of global competitiveness that are needed in today’s world.
It is ITP’s fundamental position that (as with sustainable, private-sector infrastructure) designs for public-sector systems must to be capable of recovering their costs as a general, base-line condition. While market-based strategies for cost recovery need not be an operational part of public-sector enterprise/systems design, the capability must be an essential condition/performance measure for market-efficient, capital allocation within public-sector infrastructure. In the globalized economy our nation is facing, this pre-requisite will be a de facto/essential condition of all, new, systems development and implementation in rubber-tire and steel-wheeled submarkets across this nation as well as around the world.
Evidence of ITP’s performance in helping its clients to be successful in this essential area of enterprise viability can be seen in the fact that virtually all of the private, public/agency, non-governmental organizations and public-private partnerships in the market spaces of transport services and systems that ITP and/or its staff helped its clients innovate and implement are still in operation today. Some of these enterprises have been in operation for over 20 years, delivering millions of dollars in services, shared value and environmental returns every year. These services and facilities include:
- Tri-state/DVRPC Transit-Chek, comprised of over 25 transit agencies, AMTRAK and 3 state DOTs having sold over $130 million dollars in transit services
- 7 Transportation Management Associations, private, non-profit NGOs each delivering millions of dollars of services each year
- 95Express Managed Lanes, a 4-lane bi-directional, ORT tolled facility with integrated BRT/HOV services
- IH-10 Toll Lanes, a market-financed, 4-lane bi-directional, ORT tolled facility with integrated BRT/HOV services
- IH-635/LBJ Toll Lanes, a market-financed, 4-lane bi-directional, ORT, private-concessioned, tolled facility with integrated BRT/HOV services
- Harris County Toll Road Authority
- Delaware Department of Transportation
- Texas Department of Transportation
ITP continues to provide a range of management consulting services to the:
- traditional public or private-sector, toll facility, transit agency, rail-systems providers,
- government departments of transportation,
- new industrial, commercial or residential developers seeking market-viable, access systems to create a successful business platforms
- private-sector enterprise and government agency to position or reposition their enterprises, programs and projects to successfully manage their way forward in this market.