Presentation to NJTPAPresentation to NJTPA

Joseph M. Giglio, Ph.D

June 26th, 2008

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The Current State of U.S. TransportationThe Current State of U.S. Transportation

Insufficient Capacity Lack of revenues Need for capital

investment Current state of

disrepair

Insufficient Capacity Lack of revenues Need for capital

investment Current state of

disrepair

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Bureaucratization of the Highway programBureaucratization of the Highway program

Government Monopoly; No incentives for innovation or risk; Lack of user pricing to differentiate service; Uniformly mediocre products; Perpetual shortages; User satisfaction not a consideration; The construction industry Primary customer; Unachievable long range plans; and Local hoarding of resources

Government Monopoly; No incentives for innovation or risk; Lack of user pricing to differentiate service; Uniformly mediocre products; Perpetual shortages; User satisfaction not a consideration; The construction industry Primary customer; Unachievable long range plans; and Local hoarding of resources

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Innovative Finance: Net New ResourcesInnovative Finance: Net New Resources

Need to develop Net New Resources; Not simply shifting monies from one time period to another; Net new resources are funds that would otherwise not be

available; Resources do not only include money; Resources also include savings from the provision of more

efficient services with less cost; and The basic criteria for determining an innovative source of

funding is the addition of new funds to transportation

Need to develop Net New Resources; Not simply shifting monies from one time period to another; Net new resources are funds that would otherwise not be

available; Resources do not only include money; Resources also include savings from the provision of more

efficient services with less cost; and The basic criteria for determining an innovative source of

funding is the addition of new funds to transportation

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Cumulative Highway and Transit Needs Compared to Cumulative Highway and Transit Revenues, 2005-2025*

Cumulative Highway and Transit Needs Compared to Cumulative Highway and Transit Revenues, 2005-2025*

$0

$1

$2

$3

$4

$5

$6

Needs Existing Revenues

Funding Gap

*Data is Pre-SAFETEA-LU Legislation

Source: Cambridge Systematics based on FHWA and AASHTO data.

AASHTO

C&P Improve

AASHTO Maintain

$1.9 trillion gap

$1.4 trillion gap

$1.0 trillion gap

$600 billion gap

$100 billion uncertainty in

MFT yield

C&P Maintain

$5.3 trillion

$4.8 trillion

$4.4 trillion

$4.0 trillion

$3.3 trillion

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A Pricing Framework

Strategic Pricing Program

Price Objectives

Price Strategy

Price Structure

Price Levels

Risk assumptive

vs. Risk-averse

Flexible vs.

Standardized

Market based vs.

Cost based

Proactive vs.

ReactivePrice Promotions

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The Arrival of TechnologyThe Arrival of Technology

Finance, manage and integrate all modes of surface transportation

Enhance safety, mobility, efficiency, the environment and other social benefits; and

Market pricing for highways

Finance, manage and integrate all modes of surface transportation

Enhance safety, mobility, efficiency, the environment and other social benefits; and

Market pricing for highways

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Vehicle Infrastructure IntegrationVehicle Infrastructure Integration

Connecting Vehicles and InfrastructureConnecting Vehicles and Infrastructure

Enabling on-the-go communication infrastructure

Enabling on-the-go communication infrastructure

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Component PartsComponent Parts

IBM Compatible

Power Supply

OBU

Omni Directional Ant

Powersource

In Vehicle Computer

RSU

NEMA-4Enclosure

RSUElectronicsUnit

RSUPowerAdapter

•Roadside readers

•Onboard transponders integrated with vehicle

•Public and private applications

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ConclusionConclusion

1. Transportation FinanceTransportation investments must be financed from a comprehensive set of revenue sources that are sustainable and reflective of customer choice;

2. Mobility ManagementThe U.S. must establish a transportation system where all modes operate as one in a Mobility Management environment; and

1. Transportation FinanceTransportation investments must be financed from a comprehensive set of revenue sources that are sustainable and reflective of customer choice;

2. Mobility ManagementThe U.S. must establish a transportation system where all modes operate as one in a Mobility Management environment; and

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ConclusionConclusion

3. TechnologyThe U.S. must advance the rapid deployment of technology in all aspects of its transportation system to achieve optimal safety, security, and operational benefits into the future and promote market based pricing;

3. TechnologyThe U.S. must advance the rapid deployment of technology in all aspects of its transportation system to achieve optimal safety, security, and operational benefits into the future and promote market based pricing;