Surface Transportation News: Key Bridge replacement costs soar

In this issue:

• More trouble for the Key Bridge replacement
• Spain de-tolls motorways; problems arise
• Brightline West: Xpress West Reborn
• Fixing the Highway Trust Fund
• BBC report on electrifying passenger rail
• News Notes

More Troubles for the Key Bridge Replacement

Things are not looking good for a speedy replacement of the destroyed Francis Scott Key Bridge in Baltimore. To begin with, last month, the National Transportation Safety Board (NTSB) cited Maryland officials’ failure to conduct a critically important risk assessment (based on guidelines from the American Association of State Highway and Transportation Officials) on the adequacy of bridge protections from collisions with major ships.

NTSB correctly identifies the Maryland Transportation Authority (MDTA) as having been at least partly responsible for the bridge’s collapse. NTSB noted that countermeasures such as “dolphins” could have been implemented if MDTA had performed the AASHTO risk assessment. As I have reported previously in this newsletter, MDTA also ignored “repeated warnings” from the Baltimore Harbor Safety and Coordination Committee about the lack of meaningful protection of the bridge piers. I believe it can be argued this is what attorneys call “contributory negligence.”

The second bad news was that the estimated cost of the replacement bridge will be between $4.3 billion and $5.2 billion, much higher than the previous estimate of $1.7 to $1.9 billion. The reasons for this include the fact that the new bridge will have a longer span, will be much higher, and (of course) have pier protections. I think Maryland officials should be taken to task for this. First, they claimed that the bridge would be a simple “replacement” of the old bridge, and therefore no environmental impact study would be needed. But then they went ahead and developed specifications for a very different and obviously much more costly bridge.

Politico recently reported that Senate Environment & Public Works Committee Chair Shelley Moore Capito (R-WV) is outraged by this double-cross, given Congress’s over-hasty commitment to paying 100% of the replacement bridge’s cost. In relating her conversation about this with Gov. Wes Moore, she told Politico that, “I felt it was unfair for Maryland to ask for 100 percent on $1.7 billion, when now it’s $5.2.”

Moore said that, at this point, she would not be leading a charge to alter the federal commitment, which she said would need to clear the 60-vote filibuster threshold in the Senate.

My own view is that, due to its contributory negligence in not protecting the Key Bridge piers, in no way should all U.S. taxpayers be on the hook for the new bridge’s construction cost. Maryland should provide funds based on the following sources:

• The amount of revenue bonds it could issue based on reinstating tolls on the new bridge;
• Proceeds from its own bridge insurance policies; and,
• Proceeds from the shipping industry’s insurance pools, which are capable of providing up to $3.1 billion per ship collision.

As Rep. John Garamendi (D-CA) told Bloomberg TV last year, “I don’t think this has to be federal taxpayer money. Let’s go first to the insurance side of it, and then we’ll see what’s left over.”

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Spain De-Tolls Motorways; Problems Ensue

In 2018, the national government of Spain began de-tolling the country’s long-distance motorways, in an apparently populist move to make all of its extensive highway system (the world’s third-largest) available for free. The consequences were not exactly what the government expected.

Until 2018, nearly all the major motorways were operated and managed via long-term public-private partnerships (P3s). The motorway companies charged tolls, which paid for improvements as well as operating and maintenance costs. They also paid corporate taxes to the national government.

How the government is de-tolling is by failing to renew these long-term P3s as they reach their final year. Once a P3 is terminated, the tolls are removed, and the obvious consequence is that far more cars and trucks move onto the “free” motorways. The initial de-tolling has led to nearly 40% more personal vehicles and 89% more trucks. Most of these increases were from nearby roadways, but in the freight sector, some of the increased truck traffic has been a shift from rail to truck.

Thus far, according to Julian Nunez, head of the Spanish Association of Construction and Infrastructure Concession Companies, the government is losing €409.8 million per year in tax revenue from the former tollway operators and spending an additional €89.7 million per year in motorway maintenance costs. And this is just the beginning. In 2029, three more long-term P3 agreements are set to expire, potentially de-tolling another 527 km of motorways.

Nunez points out that because there is no dedicated fuel tax to pay for highways in Spain, all the cost of building, upgrading, and maintaining de-tolled motorways comes from the national government’s general budget. By contrast, users of Spain’s railways pay €690 million in taxes per year, maritime transport pays €515 million per year, and airport users pay €2.24 billion per year. But users of the de-tolled motorways pay nothing.

The motorway association has proposed to the government a replacement tolling plan for the entire 13,000 km motorway system. Under the plan, light vehicles would pay €0.03 per km and heavy vehicles €0.14 per km. This plan has also been submitted to the European Commission. That plan includes over €18 billion in motorway investments. It also proposes new long-term P3 concessions with 25-year terms.

Nunez says the Spanish government appears to be awaiting support for the plan from the European Commission before making any decisions. But it’s pretty clear that the government did not think through the consequences of de-tolling the country’s motorways.

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Brightline West: Xpress West Reborn

Engineering News-Record reported in its Oct. 22 issue that the estimated cost of the planned Brightline West high-speed rail line between Las Vegas and Rancho Cucamonga, CA, has ballooned from $12 billion (the Dec. 2023 estimate) to $21.5 billion. To cover most of the shortfall, the company has applied for a $6 billion loan from the federal Railroad Rehabilitation and Improvement Financing (RRIF). That would be a very high-risk loan.

On Nov. 17, Infralogic, an infrastructure finance newsletter, reported that Brightline West is in deep financial trouble, with mandatory redemption of $2.5 billion in revenue bonds that were due by Nov. 30 and many other dire problems. (See “Brightline West Faces USD 2.5 Billion Bond Redemption Amid Financial Uncertainty—2Q Credit Report”)

We’ve seen this high-speed rail story before, and it did not have a happy ending. The previous attempt to provide a privately financed high-speed rail line between Las Vegas and (in this case) Victorville was called Xpress West. In Aug. 2012, Reason Foundation published “The Xpress West High-Speed Rail Line from Victorville to Las Vegas: A Taxpayer Risk Assessment,” authored by consultant Wendell Cox. Like Brightline West, it planned to use right-of-way in the median of I-15, the primary highway route between Southern California and Las Vegas (which would make future expansion of that highway far more expensive).

The report assessed a number of risks, but the most serious was a speculative consumer market. “There is no parallel for large numbers of drivers and airline passengers to travel well outside the urban areas in which they live to connect to a train to any destination, much less one so close to Southern California as Las Vegas.”

Hence, ridership and revenue would likely be a fraction of what Xpress West projected, making repayment of its federal loan difficult, if not impossible. The study also pointed out that there are six commercial airports throughout the LA metro area that are far more convenient for most Las Vegas-bound travelers than driving out to Victorville. And those air fares are very economical. Hence, the Express West traffic and revenue numbers were highly exaggerated.

The story did not have a happy ending for Xpress West. Like Brightline West, it had applied for a federal RRIF loan. In March 2013, Rep Paul Ryan, then chair of the House Budget Committee, and Sen. Jeff Sessions, ranking member of the Senate Budget Committee, sent a letter to Transportation Secretary Ray LaHood opposing the RRIF loan. They also asked the Government Accountability Office to evaluate the project. Those actions led to a U.S. Department of Transportation (DOT) letter on June 28, 2013, rejecting their RRIF loan request. And that was basically the end of Xpress West, though it lingered on for a number of years trying to find other funding.

Brightline West, with its much higher estimated cost and similarly dismal ridership potential, is likely not much longer for this world.

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Fixing the Highway Trust Fund
By Marc Scribner

In November, the Tax Foundation released a new report by Alex Muresianu and Jacob Macumber-Rosin, “How to Refuel the Highway Trust Fund.” Their brief focuses on the federal Highway Trust Fund’s (HTF’s) persistent structural deficit and examines four alternatives that could eliminate the revenue-outlay imbalance. While these are not the only options for addressing the HTF’s fiscal problems, they are under somewhat serious political consideration. Most importantly, the authors’ comparative analysis accurately highlights the advantages and disadvantages of each approach. However, some of their policy conclusions and recommendations will generate criticism even from those who directionally agree with them.

Muresianu and Macumber-Rosin examine four potential revenue fixes to the Highway Trust Fund, assuming continued baseline growth of HTF expenditures:

• Option 1: Replacing all existing HTF taxes with mileage-based user fees (MBUFs);
• Option 2: A combination of replacing existing truck taxes (including the diesel tax) with a truck MBUF, establishing a new flat registration fee on electric vehicles (EVs), and increasing the gas tax;
• Option 3: Raising gas and diesel taxes and indexing the rates to inflation; and
• Option 4: Replacing all existing HTF taxes with flat registration fees.

The Option 1 full MBUF approach uses a rate schedule dictated by a gross vehicle weight rating formula (see Appendix Table 1), which is in part based on Oregon’s existing weight-distance tax for heavy trucks. Adopting this rate schedule would roughly double the per-mile tax liability on commercial trucks, while gas-powered passenger cars would face a tax burden similar to what they pay today. This approach would be propulsion-neutral, so hybrid-electric vehicles and EVs would pay to support the system they currently use and future-proof it for any subsequent advances in vehicle propulsion technologies.

The Option 2 hybrid approach recognizes that scaling an MBUF regime for all vehicles may be administratively or politically challenging. So, the authors propose instead to impose MBUFs on heavy trucks only, add a $100 annual fee for EVs, and increase the gas tax by 2 cents, each of which would be indexed to inflation. Muresianu and Macumber-Rosin estimate that total HTF revenue would grow slightly slower under Option 2 than under Option 1, but it would still be sufficient to cover baseline HTF expenditures over the next decade.

Option 3 is the most “conventional” of the alternatives: simply raising fuel tax rates and indexing them to inflation. This has long been proposed in Congress, but raising a tax on nearly all Americans has rendered it a political dead-end. The Tax Foundation proposal would increase gas tax rates from 18.4 cents to 28 cents per gallon and diesel tax rates from 24.4 cents to 40 cents per gallon. Out of the four options, this approach scored the worst. While a large fuel tax increase would be sufficient to cover baseline expenditures for a few years, it would fail to eliminate the HTF’s structural deficit because rising fuel economy and electrification are expected to dramatically decrease per-mile fuel tax collections going forward.

Option 4 is the most dramatic departure from the status quo: abolishing any tax relationship from the intensity of system use (i.e., gallons of fuel consumed while driving, miles driven) and imposing flat annual registration fees. Tax Foundation’s registration fee rate schedule (Appendix Table 2) is based on the gross vehicle weight rating formula from Option 1. Under this approach, a 4,000-pound passenger car would pay $68.14 per year, a 6,000-pound full-size SUV or light-duty pickup would pay $118.84, and an 80,000-pound Class 8 semi-truck would pay $7,354.31.

Replacing existing HTF taxes with registration fees has been proposed by the American Highway Users Alliance (NAPA testimony, page 5), under which most passenger cars would pay $135 per year, large SUVs and pickups would pay $165, and the heaviest trucks would pay $4,600. There are clearly vast differences in who would bear the burden in these registration fee proposals, with the Tax Foundation concentrating tax liability on heavy trucks that cause most of the wear and tear on roads and the American Highway Users Alliance shifting the burden to smaller passenger vehicles.

This question of who wins and who loses in a registration fee scheme would likely become a major source of political controversy. The concept itself faced strong backlash earlier this year when House Transportation and Infrastructure Committee Chairman Sam Graves attempted to attach his own registration fee proposal to the Republican reconciliation bill, which was quickly rejected as a new “car tax.” Under the Tax Foundation’s Option 4, registration fees also appear to be a weak revenue-raiser, with HTF baseline outlays exceeding projected revenue by year eight of the 10-year budget window.

Muresianu and Macumber-Rosin conclude that the Option 1 full MBUF approach “is the most efficient and sustainable option for US highway funding amid rapidly changing markets and technologies. It best achieves the user-pays principle, aligning taxes paid with actual road use, vehicle weight, and infrastructure costs.”

However, they acknowledge that a national MBUF system for all vehicles would be difficult to establish and administer, with significant implementation and operating cost uncertainties. They suggest that the Option 2 hybrid approach—which would establish truck-only MBUFs and EV registration fees, as well as modestly increase the gas tax—would deliver most of the benefits of Option 1 with fewer policy challenges.

While it is certainly true that a national truck MBUF and EV registration fee is less complex to administer, the politics on the ground are less favorable to Option 2. The trucking industry has been clear that it will fiercely oppose any MBUF proposal that singles out trucks. As such, MBUF advocates for years have been stressing the importance of developing collection methods capable of scaling across the entire vehicle fleet. A truck-only MBUF could generate a political backlash that kills MBUFs for all. Tying this counterproductive strategy to another proven political lead balloon—federal gas tax increases, however modest—likely dooms not only Option 2 to failure, but potentially Option 1.

As unsatisfying as it may be, there are likely no politically viable Highway Trust Fund fixes that can sustain current baseline expenditures. Perhaps addressing excessive spending rather than insufficient revenue would be more fruitful. One option Muresianu and Macumber-Rosin did not consider is aligning HTF expenditures to expected tax receipts and then relaxing federal constraints on tolling and public-private partnerships. This would make states less dependent on federal-aid grants and expand the users-pay principle at the individual facility level. To be sure, fiscal restraint also faces strong immediate political headwinds, but it might prove to be the most realistic option as entitlement programs become insolvent and the national debt explodes as anticipated over the next decade, as we at Reason Foundation have suggested.

See Alex Muresianu and Jacob Macumber-Rosin’s full Tax Foundation analysis, “How to Refuel the Highway Trust Fund,” which is well worth reading.

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BBC Report Touts “Electrifying Rail”

In an odd news article, BBC technology reporter Chris Baraniuk wrote that passengers on a British train leaving Aldershot station may not notice a cluster of solar panels beside the tracks. But, he writes, they would be surprised to learn that “the train they are on is drawing power from it.”

Hurrah, the BBC seems to be reporting. And the headline writer penned the story’s headline as, “This is the big one—tech firms bet on electrifying rail.” Well, one of the great many things I learned by earning two engineering degrees from MIT is that solar power is very, very diluted. It might light up a few bulbs, but in no conceivable way could it power any train (apart from a model railroad).

But the story goes on to quote the co-founder of start-up company Riding Sunbeams, Leo Murray, who says, “On a sunny afternoon, if you are catching a train through Aldershot, a little bit of the energy for the train will come from those solar panels.” His company installed the solar panels beside the tracks in 2019. They produce 40 kilowatts on a sunny day. Murray adds, “If you are a railway, this is the cheapest energy you can buy.” Also, the most diluted.

So what is solar power actually used for?

It’s never made clear, but Murray is quoted as saying that his panels are the only solar array in the country that delivers power directly to the rail to move trains. Nowhere does the article explain how a tiny bit of electricity fed into the track can help power the train, which does not appear to be powered by electricity. Moreover, by paragraph 12, the story notes that solar panels produce direct current (DC) while overhead lines used to power trains use alternating current (AC). The piece goes on from there to discuss various electric-powered rail ideas in a number of European countries. But it never explains how the tiny bit of solar electricity connected to the track at Aldershot makes any difference at all.

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News Notes

Work Begins on $4.6 Billion Georgia 400 Express Toll Lanes
The Georgia Department of Transportation’s largest public-private partnership (P3) thus far got underway in October. The entirely privately funded project will add priced express lanes in both directions to sixteen miles of this north-south expressway in the Atlanta metro area. The toll-financed P3 project has a 50-year term. In addition to passenger vehicles, the express lanes will be used by a new MARTA Bus Rapid Transit line, and the P3 project will construct several BRT stations along the right of way. The P3 consortium, SR400 Peach Partners, is led by ACS Infrastructure, Acciona, and Meridiam.

Replacing the Cape Fear Bridge May Be a Toll-Financed P3
North Carolina DOT has concluded that the aging steel lift bridge across the Cape Fear River is functionally obsolete and needs to be replaced. With an estimated cost of $1.1 billion, and only one third of that available from a $242 million federal grant and an $85 million state grant, NCDOT and its Turnpike Authority are considering both tolling and a public-private partnership (P3) to finance and manage the replacement. David Roy of the Turnpike Authority pointed out at a recent public hearing that a state agency is not allowed to provide toll discounts to any kind of user, but that a P3 concession company would be able to do that –e.g., for local residents.

South Carolina May Consider I-77 Toll Lanes
In its $3.2 billion express toll lanes project, North Carolina DOT will be adding express toll lanes to I-77 between Charlotte and the South Carolina border. Unless South Carolina adds lanes on its side of the border, there will be a huge bottleneck as 10 NC lanes meet far fewer lanes on the South Carolina side. SCDOT director Justin Powell is aware of the problem. He told the Rock Hill Herald on Nov. 24 that he plans to discuss this with his North Carolina counterpart in the near future.

New Zealand Moving to Road User Charges
Last month, the New Zealand Parliament passed a bill to authorize nationwide road user charges. Local agencies are encouraged to partner with the NZ Transport Agency. The proposed charging is called “time-of-use charging,” with higher rates applying during the busiest hours for roadway use. The Auckland Council is expected to be the first local government to engage with the Transport Agency. Also, in late November, the Agency announced that tolls and road user charges will be indexed to inflation, as measured by the NZ Consumer Price Index.

EPA Changes Definition of Waters of the United States
For decades, the Environmental Protection Agency defined waters of the United States (WOTUS) very comprehensively, to include even ditches that were often dry. Litigation over many years challenged this policy as inconsistent with the legal definition of those waters as “navigable.” On Nov. 17, the EPA announced a revised definition, consistent with a 2023 Supreme Court decision, which has led to cheers from highway organizations.

I-10 Bridge Replacement to Begin in March
Louisiana DOTD has announced that construction of the $2.4 billion I-10 Calcasieu Bridge replacement will begin in March. The bridge is to be designed, built, financed, operated, and maintained by Calcasieu Bridge Partners, formed by Plenary Americas, Acciona Concesiones, and Sacyr Infrastructure USA under a 50-year toll-financed public-private partnership. That river has something of a pirate history, so a Louisiana pirate symbol of crossed pistols will be incorporated into the bridge’s four towers.

Express Toll Lanes Expanding in California’s Bay Area
18 miles of new express toll lanes are nearing completion on I-80 in Solano County, from Red Top Road in Fairfield to I-505 in Vacaville. Variable tolls will be charged between 5 AM and 8 PM, and a FasTrak tag will be required, as on other express toll lanes in the region. Vehicles with two occupants and a switchable FasTrak will pay half price, and those with three will go at no charge with the FasTrak set at 3.

Brightline Florida in Trouble
The privately financed “higher-speed” passenger rail line between Miami and Orlando is in financial trouble. Its tax-exempt revenue bonds are trading at below their nominal value, and non-insured bonds have recently traded in the low 80s. While ridership has increased over the last year, it is well below projections. Moreover, due to a number of collisions with motor vehicles and pedestrians, in recent years, the rail line is under attack in Miami media. Separately, Brightline and Florida East Coast Railroad are in litigation over Brightline’s planned commuter service, which FEC claims violates Brightline’s agreement on its use of FEC trackage.

Four Dallas Suburbs May Withdraw From Rail Transit System
The cities of Plano, Irving, Farmers Branch, and Highland Park have scheduled referenda for next March on whether they should withdraw from the regional rail transit system DART. The agency says its 93-mile system is the largest light rail system in the United States. Thirteen cities dedicate a share of their sales tax revenue to DART, but these four cities say their sales taxes to DART cover far more than what the agency spends on their DART service. In the Dallas/Fort Worth metro area, only 0.6% of commuters used transit in 2024, down from 1.2% in 2019 and 3.4% in 1980.

Metro Pacific to Sell Shares in Its Toll Roads
Metro Pacific Investments Corporation announced plans to sell 20-30% stakes in its Indonesian and Philippine toll roads via private placement, according to the Manila Standard. MPIC chief finance officer June Cheryl Cabal-Revilla said the sale will involve 20-30% of the Indonesian toll road and a similar stake in Metro Pacific Tollways Corp. MPTC CEO Gilbert Sta. Maria said the company is in talks with overseas and local investors for the private placement.

Japanese Maglev Project Costs Have Doubled
The cost of the main segment of the Chuo maglev line planned for Tokyo to Nagoya is now double the original estimate. That section—between Shinagawa and Nagoya—is now expected to cost $72 billion, compared to less than half that in 2014. The reasons for the large increase were cited as price surges, responses to challenging construction work, and enhanced specifications. This news is based on an article in Infralogic dated Oct. 30, 2025.

Nashville Loop Project in Trouble?
ENR reported late last month that the $240 million Music City Loop tunnel project has experienced a walkout by local contractor Shane Trucking & Excavating partway through boring the nine-mile tunnel. Boring Company CEO Steve Davis, on a Nov. 24 livestream, discussed worker safety innovations and said the project remained on schedule.

Vietnam Considering $1.4 Billion Expressway
Infralogic (Nov. 28) reported that the Vietnamese government is considering a public-private partnership for a 141 km expressway linking two other expressways in Lam Dong province. The national Ministry of Construction has asked the Lam Dong government to assess the pros and cons of a P3 for this project.

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Source: https://reason.org/transportation-news/key-bridge-replacement-costs-soar/