Saturday, August 18, 2012

A Look at New Jersey Transit

In March of 2012, I spent a week bumming my way around New Jersey riding their transit, as part of my ongoing survey of transit systems. I'd like to do a series of blog posts on New Jersey, because it's a fascinating system and illustrates all three of the types of transit I discussed in my July 18 post: "heritage", "mature", and "young".

In this series, I'd like to post on the "heritage" system, the "young" systems, the rail service offered to three low-density areas of the state, and the light rail systems. Each offers interesting observations on how transit affects community development and sustainability. But first, here's an overview of New Jersey Transit (NJT), including the demographics of the state.


New Jersey Population Density (2000)
The 2010 Census counted 8,791,894 residents of New Jersey, giving an overall density of 1195.5 people per square mile, making New Jersey the most densely populated state in the nation. New Jersey has held this distinction since the 1970 census, when it surpassed Rhode Island.

As you can see from the population density map, the greatest concentration is in the northeast, adjacent to New York City, with a concentration in the southwest across from Philadelphia. Not surprisingly, that's where the heaviest concentration of transit is found as well.

The nickname of New Jersey, "The Garden State", is a clue that it's always been a place where people from the big cities go to find a peaceful home community. Soil in the state is actually not great for gardening or farming, leading to early development of industry. And New Jersey has always been on the forefront of transportation, with railroads under construction as early as 1831.

Principal highways of New Jersey
The combination of early railroads and industrialization encouraged population growth along the rail lines where industry was sited. This pattern continued until the 1950s, when highways became a popular alternative. The New Jersey Turnpike was planned in the 1930s, though construction did not start until 1948; the Garden State Parkway was started in 1947. Both are toll expressways, built before in Interstate Highway System was enacted, and development along their routes presaged the impact of the Interstates on U.S. community growth patterns elsewhere. Traffic on New Jersey's many expressways and surface streets is very congested, as you'd expect in such a densely populated region, so travel by train always remained a popular option.

None the less, people crowded the highways to make their homes in rural areas. Tim Evans, of the New Jersey Future organization, recently wrote a post (linked below) noting a reversal in state growth trends over the last three years (2008-11). Rural counties had, for the preceding 50 years, been the fastest growing in the state; now the top ten growth counties are those that are already most heavily built up. As in other parts of the nation, people are realizing the cost and time benefits of living closer to work and public transportation; most of New Jersey's out-counties have seen growth slowed, and one or two have actually lost population.

Transit patterns and history

NJ Transit rail lines
Although New Jersey has impressive industry, research,and corporate headquarters itself, the main orientation has always been toward New York City and, to a lesser extent, Philadelphia. Above the network of local roads and transit, the highways and railways are primarily directed toward one or the other of the two big cities, or to both.

The spine of the system (shown in red at left) is the portion of the Northeast Corridor (NEC) that enters the state at Trenton, the capital, with a population of 84,913, more or less at the midpoint of the state. It runs straight northeast to Newark, New Jersey's largest city (277,140), turns east and dives into the twin tunnels under the Hudson River to New York City's Penn Station. This portion of the NEC was built by the United New Jersey Railroad and Canal Company between 1834 and 1841. In 1933, under Pennsylvania Railroad ownership, electrification was completed in New Jersey (and in 1935 all the way from New York City to Washington, D.C.).

From the NEC and a terminal in Hoboken, NJT operates seven other heavy-rail commuter lines. In the southern part of the state, service is operated between Philadelphia and Atlantic City. These all follow railroads that were built in the 19th century and were operated by private rail companies until the decades of the 1960s and 1970s, when a combination of shrinking ridership, regulation, and high operating expenses drove the private lines out of business.

Private operators of commuter service in the recent past included the Central Railroad of New Jersey, Delaware Lackawanna & Western Railroad, Eire Railroad (these two merged into the Eire-Lackawanna), New York & Long Branch Railroad, and the Pennsylvania Railroad. Because these operators used rail lines built in competition with each other, commuter service hardly amounted to a "system" when Conrail, formed in 1976 through the merger of several financially troubled Northeastern railways, took them over and provided commuter service under a contract from the New Jersey Department of Transportation. Though diminished, ridership was considered "too big to fail", in the sense that highway capacity and parking space could not have been provided for all riders even if they had all owned cars.

New Jersey Transit was formed by state law in 1979 with the goal to "acquire, operate and contract for transportation service in the public interest." It currently operates 536 miles of heavy-rail commuter service and 107 miles of light-rail. According to the 2010 report submitted to the National Transit Database, NJT commuter service provided 82 million passenger-trips for a total of more than 2 billion passenger-miles. Light rail provided over 21 million trips totaling 101 million passenger-miles.

In addition to its railway operations, NJT operates almost all the bus service in the state. 2009 figures indicate that the Northern bus division ran 83 routes, the Central ran 80, and the Southern 69 - altogether, 232 bus routes. In addition, NJT contracts with seven other operators to run 54 routes branded as NJ Transit. Average weekday bus ridership in 2009 was more than half a million. The 2010 National Transit Database report shows 2,401 buses providing more than 162 million passenger-trips and over a billion passenger-miles.

Bus service provides an extremely important link between New Jersey and New York City. My March 30 post (linked below) gives an account of how this system works.

Next post, let's take a look at the "heritage" rail lines. Check back soon!
To learn more:

Thursday, August 16, 2012

What do Michigan Voters Want?

Today's issue of Bridge Magazine (online) has an interesting analysis of votes on Michigan's 805 millage issues in the August election. Most were renewals, but others were new. The bad news...?
The bad news is for the anti-tax forces: 90% of the millages were approved by voters. Here's my summary, in order from most popular to least popular issues:
% Passed
Senior-related 100
Mosquito control 100
Gypsy moth control 100
Public Safety 96
Total of all millages 90
Roads 89
Libraries 88
Millage renewals 81
Schools 71
Requests for new millages 70
So I suppose the bad news is also for the mosquitoes and gypsy moths (though there were only 8 issues related to either). We seniors did well, as did fire fighters and police. Though a healthy 71% majority of school millages passed, kids fared less well than seniors. Food for thought.
Read the Bridge analysis here.

Friday, August 3, 2012

Two Big Es for High Speed Rail: Environment and Economy

Two Big Es for High Speed Rail: Environment and Economy

Continuing the discussion of the 8th World Congress on High Speed Rail, let's look at two important factors: the environment and the economy. Both of these aspects of HSR are key to Wake Up Washtenaw's support for it: shifting travel to HSR is good for the environment and helps grow the economy. In general - but always? The answer is nuanced, so details are important. First, the environment...


A question at the first round table was, "Are environmental concerns an appropriate justification for the investment in HSR?"

Interestingly, Joseph Boardman, CEO of Amtrak and a great HSR supporter, pointed to studies that HSR is not environmentally justified throughout US. There are certainly routes where it makes environmental sense in reducing emissions from other forms of travel - but not everywhere.

Andrew McNaughton, Chief Engineer of the UK's HS2 project (a new high speed line to serve England's west midlands), pointed out that although HSR is the most environmentally sound form of transportation (other than walking or cycling), it does create a negative environmental impact as it is built and, to a lesser extent, as it is operated. So it must be done carefully. One critical factor is how the electric energy that runs it is generated. If it's all coal-fired, the advantages of HSR are slim to none. But of course, the beauty of electricity is that there are many ways to generate it; and as better, more environmentally friendly ways are developed, they can be integrated without having to replace the vehicles that use it.

Satoshi Seino, Chairman of East Japan Railway Company (JR East), emphasized that although rail is the most efficient form of powered transportation, HSR is not a "simple solution". Yet even after nearly 50 years of HSR service in Japan, more extension of Shinkansen lines is taking place. The southern island of Kyushu completed an HSR line to its southern tip last year, and the northern island of Hokkaido is building a high speed line up to Sapporo as we speak.

JR East's E5 Shinkansen
(Wikimedia Commons)
Seino-san's company has developed new trainsets that improve not only speed and passenger comfort, but the impact of one of their most noticeable environmental disadvantages: noise. As everyone who lives near a freeway can attest, any vehicle running at high speed makes noise, and when you run a large one at 150-200 MPH at ground level through a populated area, it can get really ugly. So JR East's new equipment has several noise-reducing features, including semi-enclosed wheels, noise shields around the pantographs, and incredibly long noses to prevent sonic booms when they enter tunnels.

So, though not without negative environmental impact, HSR "done right" can be a net positive impact on the environment.


Several aspects of HSR economics were discussed: where to get the money - including public-private partnerships (PPP), the effect of competition in providing service, and what HSR does for the economy of countries it serves.

So, what are the "external" benefits from investment in a HSR line - benefits not directly related to getting from Point A to Point B?

Martha Lawrence, World Bank Sector Manager - Transport, has studied this in several countries. Looking at pairs of cities connected by HSR, the World Bank has observed increased economic activity in both cities as compared with nearby cities not connected by HSR. To fund the investment, tax districts are often created and can capture, - somewhat - the increase in economic value.

Michele Elia, CEO of Italy's state railway, pointed to the reduction of travel risk brought about by HSR, and indicated that it can be monetized. Also, the increase in economic competitiveness for the regions served and the country as a whole can be considerable. In Italy, congestion relief brought about by HSR has been measurable; several studies the I know of in the US have quantified the cost of congestion, both in fuel and in time wasted. Sr. Elia remarked that since new HSR lines must be linked to other transportation services, indirect development is needed and produces further economic benefits.

Where HSR is concerned, how much should a government sink into the project? The whole cost, capital and operating?

RENFE's Talgo 350
(Wikimedia Commons)
Julio Gómez-Pomar Rodriquez, President of RENFE, the Spanish Rail Transport Operator, reminded us of Spain's difficult moment - the banking and finance problems they are experiencing. In spite of the troubles, Spain's rail spending continues year-by-year averaging about $7 billion USD, though down to only $5 billion this year, and project time-lines have been extended. (We'd be glad in the US if Congress would appropriate even half that much for HSR.) It's seen as a good stimulus: after all, isn't it more risky not to do the project, when a billion dollars translates into about 25,000 jobs? Sr. Gómez-Pomar emphasized that although Spanish government has changed parties, commitment to HSR is viewed as non-partisan, and continues as strongly as possible.

It's well known that China has invested billions to quickly bring a vast HSR network into service. Jianping Zhang, an officer of the People's Republic of China's Ministry of Railways, confirmed what we've been hearing: China uses HSR, among other things, as an investment a tool to stimulate the economy. But how much they decide to invest depends on the specific recovery of investment estimated from any given HSR project.

China's planned and existing HSR network
Click map to see larger size; original here
(Wikimedia Commons)
Ms. Lawrence, of the World Bank, added some useful detail. The World Bank did a study in cooperation with China to determine how much traffic needed to support HSR. The result: to repay operating costs, a line needs about 20 million passengers per year; to fully recoup the capital investment, annual ridership should top 40 million.

Barbara Dalibard, CEO of SNCF Voyages, the French HSR operator, noted that while a line may be estimated to recover its costs in 20 years through revenue alone, if carbon offsets are part of the computation, the payback period is only 11-12 years. That's a great way to monetize the environmental benefits of HSR. (France's population density of 289 per square mile is less than or similar to the US states of New Jersey, Rhode Island, Massachusetts, Maryland, Delaware, New York Florida, Pennsylvania, and Ohio.)

But not many places can expect the level of ridership considered by the World Bank to be self-sustaining. That means that HSR is a good bargain for investment if the project itself can meet the ridership levels. According to Amtrak, ridership on Acela (the US's only claim to HSR) was 3.219 million in 2010; total Northeast Corridor (NEC) ridership for that period was 14.925 million, though ridership has been increasing steadily.

What to do about that? Well, you can either grow your ridership or continue to get support from the government. Acela trains are running near capacity now, and Amtrak is getting ready to add two more cars to each trainset. Beyond that, the NEC itself is at or near capacity with regional and commuter trains. Amtrak might do what France's SNCF did - run double-deck high speed trains - except that double-deckers won't fit through the tunnels to New York City. Not serving NYC would cut the route in half and the ridership way down, so the only other option would appear to be building new crossings to the Big Apple - which Amtrak has been planning to do (if they can find a fistful of billion-dollar bills).

Who's got that kind of money? If governments won't come through with it, how about the private sector?

What about Public-Private Partnership (PPP)?

Wake Up Washtenaw has always advocated strong partnership between public and private sectors in funding transportation. True, successful models for doing it are not easy to find. Investment in transportation can be both risky and slow to return profits, making private enterprises and banks leery of jumping in. One question to roundtable participants was, Should ridership risk - that is, the risk that ridership won't be high enough to generate an operating surplus - be public or private?

Mr. McNaughton has been intimately involved in the risks of setting up a new high-speed line as Chief Engineer for England's HS2. As a project is launched, it needs political support - but it is inappropriate (or unlikely) for politicians to risk their careers for HSR. It's also inappropriate for engineering firms to risk their own money planning the details. Acquiring land, which some alternatives may require, is an inappropriate risk for private capital as well. On the other hand, design-build-maintain-operate arrangements are appropriate for private companies in some circumstances. But revenue risk? That gets difficult again! In all cases, Mr. McNaughton feels that government must carry most of the risk, and hence maintain overall specification and quality control, lest private firms cut corners, compromise public safety, and milk the government for undue profit.

Ms. Lawrence of the World Bank advised that the risk must be placed where it can best be borne. Private companies are no longer willing to take ridership risk - that is, gambling on sufficient ridership to repay their investment. Seino-san told us that JR East is big on demand forecasting. If their forecast determines that a line won't be profitable, they'll lease the line to a private company, where the forecast determines the terms of the lease. Presumably, the lower the demand forecast, the lower the lease payments, giving the operating company a better chance to make a few yen from their fares.

Sr. Gómez-Pomar insisted that PPP is not new. It works well for Spain. A good example is the 25-mile link with France uses PPP and is profitable. Stations are leased to or built by private concerns; 100 miles signaling and telecom was installed in which a private firm provided 35% of capital and entered into a 20 year maintenance agreement. However, the risk must be clearly delimited, and competition is key to success. (I believe he meant competitive bidding on contracts, though this wasn't totally clear to me.)

England's HSR plans
(Wikimedia Commons)
Mr. McNaughton said he believes public funding is needed, but not 100%. Capital expenditure on track, stations, and similar long-term infrastructure, with a payback period of 25 to 30 years, can be handled by the private sector. (This may be true in the UK, but sounds very unlikely in the US!) On the other hand, ultra-high cost features like tunnels and bridges can most effectively be built with public funding. He cautioned that "Funny money" (known to investment firms as "creative financial instruments") are absolutely no good for rail. This caution may be the result of some highly controversial techniques used in Britain to fund public works with private money, the result of which (according to some) was private enterprise simply milking the taxpayer's cash cow.

OK, so capital expenditure by private parties is unlikely; what about operating concessions, such as the British arrangement to run private trains on government rails? Mr. McNaughton felt that since the rail line is a public system built for the public good, public must have a say in it. Public financing parties will inevitably have authority in setting fare policies. This is the case in the UK, and the rail infrastructure company charges the operators "tolls" for the use of their rails. But the tolls don't cover the costs of maintaining or improving the infrastructure - the government pays about half that cost.

Interestingly, China has been trying to engage the private sector in infrastructure investments. They've had very limited success, with an insurance company being the largest investor. Why insurance? Because insurance is a long-term business, and such companies are willing to wait if they can be assured of adequate return.

Mr. Boardman of Amtrak reminded us of an early example in American history: many farmers along the route of the Eire Canal voluntarily helped dig it, in expectation of later returns as their products fetched higher prices in urban markets. He also held up Amtrak and Conrail as examples of public-private partnerships, which goes to show that PPP means many things to many people.

Does competition enhance projects?

One issue that's relevant to the economics of high speed rail and to building public-private partnerships is the role of competition. Competition is often presented as a panacea to high costs and poor customer service, and there's no doubt that it often helps. There have been some industries in which the benefit of competition has been questioned, so the topic was discussed at the first round table.

The question presented to participants was, "Is competition in the rail sector favorable to rail infrastructure projects, If so, how?". Although the question focused on infrastructure, the discussion was more wide-ranging.

Fabio Senesi, Manager of RFI, the Italian rail infrastructure provider, appears to have been referring to competition among operators when he said that it does increase expectation of performance and leads to higher demands on infrastructure. His company's studies show that a 300km/h "slot" can be sold every 5 minutes thanks to the advanced signaling system they recently installed. He believes the competition on Italian high speed lines has produced "virtuous cycle", in which companies have indeed improved their offerings.

However, Sr. Senesi cautioned that private companies will want to "cherry-pick" profitable routes and leave the state railway to take the losses on unprofitable ones, so for competition to really work, there must be a policy that balances the "cherries" against the "lemons". But the bottom line is that competition is good for customers.

Mr. Boardman pointed out that competition in some cases can degrade service, citing competition for capacity into Penn Station. This is a classic case of competition for a scarce resource, which often leads to a stronger competitor eliminating weaker ones. Not good. (Though Amtrak owns Penn Station and its approaches, the public is clearly best served by having NJ Transit and MTA Long Island Railway providing regional commuter service while Amtrak provides long-distance trains.) But competition helps in a sense, because everybody knows there must be infrastructure capacity improvement. (Well, almost everybody...New Jersey Governor Chris Christie appears to be a prominent exception, having turned down multiple billions of federal dollars for the Access to the Region's Core project in 2010.)

The second round table ended by asking whether a capital-heavy system like HSR can be flexible enough to serve the needs of generations to come. Deputy FRA Administrator Karen Hedlund and Mme. Dalibard agreed that Investments must be made in the very best technology available today: rolling stock must last 30 years, and infrastructure far longer.

I sincerely hope my grandchildren will be able to say that our generation built the beginnings of a really high-quality, high speed rail system in the United States.