PROFITS LOOM 91-Express goin

PROFITS LOOM

91-Express goin’ OK

California Private Transp Company (CPTC) owner of the 91-express lanes project has published its first annual report saying that it covered its operating costs in its initial year and it expects also to cover debt service and fully break-even by the end of 1998.

Toll revenues for 1996 were $6.5m and operating costs $6.3m. Unspecified other income brought operating income to a positive $0.7m against which is debited depreciation of $3.1m and debt service of $4.3m for net loss of $6.7m. Capital cost earlier described as $126m is now revised to $134m.

Among the costs are $0.6m property taxes paid to Orange County where the facility is located, payments to the state police of $0.5m for patrolling and of $0.1m to Caltrans for maintenance, customer service costs of $3.6m and $0.7m from services provided by partners.

The facility which consists of 16km of 4-lanes divided in the middle of an 8-lane freeway (SR-91) southeast of Los Angeles carries carpoolers (more than 3 occupants) free and charges cars with 1 or 2 people tolls of $2.75 in rush hours and much lower rates otherwise. It also has an Express Club program providing a discount for daily users. Only light vehicle equipped with transponders are admitted.

In an otherwise rather self-congratulatory toned report the first year is described as “moderately successful” with mention of “lower than expected overall traffic columes and revenue.” Nevertheless revenues grew steadily each quarter. The facility carried 5.7m vehicles an average of 15.6k vehs/day, but by year’s end that had grown to 25kv/d weekdays. 76k transponders were in use by end-96. The report says there is a 98% compliance rate, suggesting 114,000 violators during the year. Good potential collections business there? The tolling system from MFS/Texas Instruments is described as “more than 99.9% accurate.”

20% of the traffic was free carpoolers. The toll payers had average occupancy of 1.2 and overall vehicle occupancy was 1.65, so 9.5m passengers were carried on the facility. Carl Williams deputy secretary of transp in California has noted that these are amazing numbers — a lot better than the average roadway with unrestricted and HOV lanes.

250 to 500 vehs/hr/lane enough: A graph in the report of traffic volumes on the Express Lanes compared to the free lanes shows that despite the heavy toll rate discount the Lanes get little usage out of rush hours. Until midday eastbound flows on a Friday are about 200/hr in each of the express lanes compared to 1300 to 1500/hr/lane in the free lanes. After midday however it builds steadily and rockets up after 2.30pm to 1250 to 1500 veh/hr/lane until a bit after 6pm, during which time the free lanes are carrying about 1750 veh/hr/lane. That difference of 250 to 500 veh/hr/lane is apparently sufficient to improve traffic flow to the point where drivers are prepared to pay a $2.75 toll. On those Friday evenings the express lanes get “more than 25%” of the traffic, which compares to 33% of capacity ie 2/(2+4).

The project is a huge political success because it has helped the free lanes. And its a great customer relations success because a huge number of people like to have the option of getting by the slow moving traffic and the report contains some moving tributes from customers as well as praise from bigwigs. The report says the most common customer request is to “Make it longer.” In pursuit of 91-Express’ elongation the report says the group is discussing an eastward extension with Riverside County and a westward extension with Orange Co (see map.)

Undynamic pricing: CPTC did write algorithms to implement dynamic congestion pricing in which toll rates would be varied by the minute on variable message signs on the approaches in order to manage incoming flows to assure smooth operations of the facility. But it was decided after focus group discussions with potential customers that they wanted to plan their travel knowing beforehand what an express lanes ride would cost, so the dynamic congestion pricing software was put in storage, and the present regime of fixed toll rates during different blocks of hours was introduced.

The report says that the CPTC changes its tolls “using a proprietary formula dubbed Value Pricing.” That’s a reference to a set of price elasticity of demand estimates! Proprietary? We can’t help but sense a little bombast. “The facility is the world’s first fully-automated toll road,” the report says. Tell that to the poor spotter in the 91-Express cabin who in order to see if passing vehicles are liable for a toll or are eligible for HOV-3 exemption has to watch, camera trigger in hand, every single car go by and count the number of occupants — what the US Air Force calls EBMI - Eye Ball Mark I. Also: “The 91 Express Lanes is leading the way into the new millenium.” Now we know exactly why the state of Washington won’t allow CPTC chief Gerry Pfeffer to build a bridge there any time this century. He’d be quite unfair competition with their politicians in purple prose. Just one more reason to try get yourself a copy of this 22-page annual report about this important and apparently successful project from 91-Express at 909 278 9191 fax 312 382 7200. Just don’t say you read about it here.