Joseph Krist

Publisher

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TEXAS HIGH SPEED RAIL UNDER LEGISLATIVE ASSAULT

The Texas Central Railroad would provide high speed rail service on a route covering a 240-mile stretch of mostly rural land sandwiched between the urban hubs of Dallas and Houston. The project is being privately financed. Its owners have gone out of their way to emphasize its private character. Nonetheless, the project is of interest to the municipal bond space. The resolution of its efforts to secure right of way will be a good indicator of whether high speed rail can be produced privately.

Rural landowners and their supporters say the project would unfairly strip land from private property owners for a project that could easily fail. It is primarily legislators from districts in those areas who are leading the legislation against the train. One proposed measure would prevent a company from surveying land for a high-speed rail project until it has all the necessary funding for construction. Another would prevent state agencies from issuing permits or negotiating rights-of-way with a high-speed rail company unless they’ve received what bullet train supporters have called an “alphabet soup” of all necessary federal approvals and permits.

The point of interest is to see how these issues are resolved in terms of whether the politics of high speed rail are effectively prohibitive. If a privately financed venture in a pro-business state like Texas cannot succeed, where can it?  If it cannot, then public financing will be the only route for high speed rail. That would likely be its death knell as the support for public subsidies seems lacking.

PUERTO RICO

The U.S. House Committee on Natural Resources has scheduled a hearing for May 2 titled “The Status of the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA): Lessons Learned Three Years Later.”  It is likely that the hearing will be designed to highlight complaints over the actions taken by the Board reduce government spending, often affecting essential services the government provides to residents. The committee chair has expressed the view that potential amendments to the statute, created to oversee the fiscal policies of the elected government of Puerto Rico, that would allow for a “less oppressive” law be considered.

One of the hallmarks of Congressional involvement in the Puerto Rico debt crisis has been the politicization of the issue of Puerto Rico. This is true regardless of the change in the majority in the House. The unpopular board is being questioned in the midst of the unfolding legal process surrounding a ruling that declared the Financial Oversight and Management Board unconstitutional because its members were not confirmed by the U.S. Senate.

The whole process reflects Puerto Rico’s unfortunate role of being stuck in the middle between the partisan factions in Congress. None of it is helpful to any of the stakeholders involved in the process of dealing with the Commonwealth’s debt and still damaged economic realities.

AV TIDE RECEDES A BIT

The assumption of so many is that the technology wave is an unstoppable tsunami. Then every once in a while we get news that should cause one to step back. One example is the recent announcement that Toyota Motor Corp said it was halting plans to install Dedicated Short-Range Communications technology on U.S. vehicles aimed at letting cars and trucks communicate with one another to avoid collisions. Toyota announced plans in April 2018 to begin the installation of DSRC technology in 2021 “with the goal of adoption across most of its lineup by the mid-2020s.”

The move reflects the fact that “unfortunately we have not seen significant production commitments from other automakers.” One of the recurring issues to hold up momentum for adoption of AV is the lack of regulatory guidance. Without the establishment of standards for AV development and implementation, it will be impossible for infrastructure providers to respond to technological change as it relates to transportation.

Use a DSRC system or use a 4G- or 5G-based system? With questions as basic as this outstanding, how are municipal infrastructure providers supposed to adapt roads and systems to meet the needs of these emerging technology? Given the track record in this space, can the process be market based?

After all, automakers were allocated a section of spectrum for DSRC in the 5.9 GHz band in 1999 but it has essentially gone unused. Some FCC and cable company officials want to reallocate the spectrum for Wi-Fi and other uses. Testing has gone on for years to see if the band can be shared.

DSRC transmissions enable vehicle-to-vehicle and vehicle-to-infrastructure communications and broadcast precise vehicle information up to 10 times per second, including location, speed and acceleration. It is reported that the NHTSA has estimated that connected vehicles technologies could eliminate or reduce the severity of up to 80 percent of crashes not involving impaired drivers.

Not everyone is willing to wait on a federal regulatory effort. In Oklahoma, legislation just passed would establish rules regulating how to safely operate driverless vehicles navigating state highways. One legislative sponsor said that “it is crucial for the state to implement uniform regulations when it comes to automated driving systems, adding that it is also important to encourage development of the emerging industry. We don’t want to have a hodgepodge of rules from city to city and county to county regulating this technology. It makes sense for the state to oversee that with guidance from (the Oklahoma Department of Transportation, Department of Public Safety) and other experts. 

IT’S STILL A SUBSIDY

We were caught by a story about The Florida Department of Transportation wanting to construct two new CSX railroad bridges over Interstate 4 that would include plans for high-speed rail. Plans submitted to the Southwest Florida Water Management District show an I-4 configuration that accommodates a multimodal envelope in the median for high-speed rail.

Qui bono? Who benefits? Well surprise, surprise  it’s Virgin Trains USA, formerly known as Brightline. Plans for connecting from Orlando International Airport to Tampa would use rights of way along I-4 and two other state roads.  “The corridor will then enter the I-4 median and the preserved rail corridor, proceed west through the Lakeland area, where a planned future station is under consideration, and continue until it exits I-4 near downtown Tampa to a terminal station,” according to the railroad.

In fairness,  Polk County’s 2040 long range transportation plan that was adopted in 2015  assumed high speed rail. At the time five stations were proposed along the I-4 corridor, with downtown Tampa and Orlando International Airport stations anchoring each end. The additional three stations would be located in Polk County, Disney World, and at the Orange County Convention Center, according to the 2040 plan.

If the state pays the cost of your infrastructure than the state has subsidized your business. It is a legitimate policy tool to support projects in this way. It would just be simpler for everyone if project participants were honest about the role of government and subsidy (by policy, funding, or finance) in their endeavors.

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