Monday, December 10, 2007

August 2007 Lessons of Boston’s Big Dig

Lessons of Boston’s Big Dig
Nicole Gelinas, City Journal (article)

America’s most ambitious infrastructure project inspired engineering marvels—and colossal mismanagement.

States, cities, and towns across America must spend hundreds of billions of dollars annually to preserve the nation’s infrastructure—the backbone of its private-sector economy—and yet more to build the next generation of roads, bridges, tunnels, and dams. Spending so much money wisely is daunting. The good news: no matter how complex and expensive any future project is, it’s unlikely to be more so than the Big Dig, Massachusetts’s three-decade-long quest to bury and expand the Central Artery, Boston’s major interstate highway, and carve out a new underwater tunnel to Logan Airport.

Conceived in the 1970s and finished, more or less, in 2005, the Big Dig is modern America’s most ambitious urban-infrastructure project, spanning six presidents and seven governors, costing $14.8 billion, and featuring many never-before-done engineering and construction marvels. Long before construction peaked around the turn of the millennium, eating up $100 million a month for three years, the Big Dig was a local legend, spawning dozens of jokes. (Wouldn’t it be cheaper to raise Boston than to bury the highway? Congressman Barney Frank asked.) Later, when fewer people viewed the Dig whimsically, it was the setting of a 2002 murder-mystery novel. And last year, after falling concrete panels in a Big Dig tunnel that had been open for three years killed a 38-year-old car passenger, the project became a reminder that infrastructure failure can exact a cruel price.

Every major decision that could conceivably be made on an infrastructure project was made on the Big Dig, from how to pay for it to how to forge the public and political support for it to how to manage its construction and maintenance. Its stewards have encountered every imaginable public-infrastructure pitfall, and fallen into many. The Big Dig’s story is an invaluable lesson: How can America invest in infrastructure—and do it smart?

The reasons for the Big Dig date back nearly 80 years. In 1930, a city planning board noted that Boston’s “street system should be adapted to the requirements of the motor age” and proposed an elevated expressway. The Central Artery’s first planners acknowledged that “the erection of . . . elevated structures . . . in downtown Boston” would hurt some residents’ quality of life. But a “vehicular subway”—the first mention of the idea that, half a century later, would become the Big Dig—“would interfere with sewers and with . . . rapid transit subways.” The state and city had the luxury of deciding to build an elevated highway because bottom-up, Jane Jacobs–inspired urban coalitions didn’t exist yet to thwart the era’s top-down, Robert Moses–style urban planners.

The Great Depression and the Second World War temporarily interfered with the idea. By the late 1940s, Boston still didn’t have its highway, despite two decades of planning—and despite the increasing need for fast access to the city, which was hemorrhaging jobs to the suburbs. But in 1949, six years before Congress and President Eisenhower funded the Interstate Highway System, Massachusetts started building the hideous green steel Central Artery that would scar Boston, physically and psychologically, for the rest of the century. “Boston was a pioneer, but this was bad pioneering,” says Rick Dimino, former city transportation commissioner and today president of the business group A Better City.

It’s easy to follow officials’ reasoning for building the Artery along Boston’s waterfront. That’s where Boston’s business district, once centered on shipping, was located, after all. But the Artery vivisected Boston. It barred pedestrians from the water. It overwhelmed low-rise streets, a historic outdoor fruit and vegetable market, and even the historic Faneuil Hall with traffic, noise, and shadow. It erased swaths of the working-class Italian North End, displacing 573 businesses—mostly small shops and trading firms—and hundreds of families. Owners of some buildings that escaped the bulldozers bricked over windows that faced the Artery. Boston understood the Artery’s impact so quickly that in 1954 it changed tack and buried a last stretch in a tunnel.

Though it did enable suburban workers to get to new office jobs, the Artery quickly became obsolete. Its intended daily capacity was 70,000 cars, but it soon groaned under 170,000. Poorly designed and constructed, it had structural problems and an accident rate four times the national average, because drivers veering toward the Artery’s abundance of downtown exits collided with drivers continuing to the increasingly busy Logan Airport. The building of the Artery turned Bostonians so vehemently against highways that the state halted their construction in the early seventies, killing a planned inner belt that, after displacing another 4,000 families, would have carried traffic from the downtown Artery to other parts of the city. But because the belt and the Artery had been conceived as an integrated system, Artery traffic had nowhere to go. Little more than a decade after the Artery opened, Massachusetts and Boston started scheming to junk it.

When Governor Michael Dukakis’s administration started thinking about fixing this mess in the seventies and early eighties, it had learned the lessons of the Artery’s construction well. But how to fix the Artery, and heal the downtown neighborhoods that it sliced through, without uprooting more residents and slapping a “closed for construction” sign on Boston? How to ease traffic by building an airport tunnel that, unlike the two existing tunnels, would bypass downtown, when the politically powerful neighborhood near the airport opposed new traffic and the seizing of homes?

If Robert Moses and Jane Jacobs had a child, it might have been Fred Salvucci, Dukakis’s transportation secretary, who concocted the Big Dig project. Armed with two MIT engineering degrees, Salvucci had fought the inner belt from city hall before joining Dukakis; he even had firsthand experience of how highway construction affects cities, having seen the state seize and raze his elderly grandmother’s house to make way for a road. Salvucci remembers persuading Dukakis to support the Big Dig by making two crucial pledges: “It would enhance the urban environment rather than degrade it, and there would be no taking of housing.” The state then won the public over by mollifying anyone, anywhere, who had anything at all to do with the project. “We learned from Westway,” says Salvucci, referring to New York’s plan to depress its West Side Highway, which failed because the city didn’t garner various interest groups’ support before seeking congressional approval.

Massachusetts’s task was partly northeastern politics as usual. Unions knew that they’d benefit from a “project labor agreement,” through which their workers would agree not to strike if contractors, even nonunion ones, would hire through union halls. Police officers would get tens of millions of dollars annually in overtime, since local law mandates that a policeman watch over any work site. Minority-group reps were pleased with a pledge to hire blacks and women for construction jobs.

But the state had a new task, one that would become a feature of big infrastructure projects nationwide: “mitigation.” Broadly speaking, mitigation was the state’s promise to alleviate the Big Dig’s impact on Boston, from interrupting business to harming the environment. Mitigation eventually accounted for about one-third of the Big Dig’s cost—from the thousands of dollars needed to outfit North End apartments with air conditioning, soundproof windows, and firm mattresses as residents settled in for a decade of construction to the more than $1 billion needed to rework a planned bridge that business leaders, residents, and the nearby city of Cambridge considered ugly.

Mitigation made downtown businesses happy, promising not to shut down any of the Central Artery’s six lanes during construction, and promising further that companies such as Fidelity Investments wouldn’t lack electricity or telephones for even a few hours as contractors dug up miles of utilities to make room for underground highways. Mitigation made Gillette, Boston’s biggest manufacturer, happy, working with the company to marry its complicated underwater infrastructure to the Big Dig’s. Mitigation made the post office happy, building temporary roads to a distribution station. Mitigation made airport neighbors happy, vowing that cars from the airport tunnel wouldn’t exit onto residential land. Mitigation also made environmentalists happy with its promise to preserve as open space three-quarters of the land that the Artery’s demolition would create (the highway tunnels that would run underneath couldn’t support heavy construction, anyway). It made more ambitious environmentalists happy, promising to improve mass transit and to use some of the excavated dirt—which, because it had saltwater in it, couldn’t be dumped inland—to transform a Boston Harbor island from a noxious landfill into a beachfront park. It made archaeologists happy, paying to catalog artifacts dating back to colonial days. It didn’t make rats happy: after near-hysteria that construction would unleash vermin whose underground lairs also dated to colonial days, the project launched an aggressive rodent-control program.

The mitigation, some of which was sensible, tempered even reasonable criticism of the Big Dig. Few locals voiced skepticism during planning. Once you got your own interest protected, you kept quiet, to make sure that the project, free of local opposition, would win federal funding. Thanks largely to mitigation efforts, more than 80 percent of Boston residents and nearly two-thirds of state residents supported the Big Dig in its early years.

Mitigation notwithstanding, the Big Dig still would probably be a near-forgotten dream like Westway if not for Massachusetts’s Washington dominance in the late seventies and eighties. Democrats ran Capitol Hill, and Massachusetts’s wholly Democratic congressional delegation had a lot of seniority. Everyone in Massachusetts thus assumed that they would fund the project with “ten-cent dollars,” of which the feds would pay the other 90.

Even so, Massachusetts got its initial federal funding only because of Salvucci’s and Dukakis’s brilliant and successful argument: since it had built its Artery before the Interstate Highway System paid for such projects, the state should be able to use the federal money that it hadn’t spent back then to rebuild the Artery. This fluke explains why Massachusetts, at a time when other northeastern states were ignoring infrastructure in favor of expanding social programs like Med-icaid, focused on nuts and bolts: it knew that if it did so, it could tap into “free” federal money. Taking this argument to Washington, legendary Massachusetts Democrat Tip O’Neill, the House’s majority leader and soon to be its Speaker, in 1976 inserted “placeholder” funds for the Big Dig into a congressional blueprint of costs to complete the Interstate Highway System.

A decade later, though, President Reagan didn’t care to give Massachusetts Democrats billions for what skeptics considered a “highway beautification project.” When Reagan vetoed a 1987 highway bill that contained the Big Dig’s first significant federal funding, the real politics started. Tip, and Ted Kennedy in the Senate, garnered enough supporters, including 13 Republicans, for an override. In a preview of how Washington would work over the next two decades, they approved goodies that other states wanted, too. Wavering out-of-state politicians came on board.

After Tip’s override, local Big Dig planners never worried about pesky things like whether cost estimates and project scope were reasonable. Massachusetts had proved that it was more powerful than the president; surely there would always be more money where its initial funding came from. But over the ensuing decades, the Big Dig’s price tag waxed and Massachusetts’s congressional power waned. Washington imposed a firm dollar cap on its Big Dig spending at the turn of the millennium, leaving Massachusetts to pay the rest. State taxpayers would eventually foot nearly half the project’s cost.

The Bay State’s experience is a lesson for state officials: the clout you have today may be gone tomorrow. If you think that an ambitious project’s benefits exceed its costs, convince your taxpayers up front—rather than getting Washington, which may change its mind down the road, to get its taxpayers to pay.

In retrospect, it’s amazing how much went right after construction started in 1991. Over 14 years, Massachusetts, its consultants, and its contractors carved canyons under Boston while the city hummed above. They designed and built seven and a half miles of highway—161 miles of separate lanes—more than half of them in tunnels. They built six interchanges and 200 bridges.

One of the innovations that made this work possible was the slurry wall, also used at New York’s World Trade Center, which allowed the state, as Salvucci puts it, to build huge underground tunnels “arthroscopically,” without pockmarking Boston with huge uncovered holes. The slurry wall, in effect, let Boston dig itself up without shutting itself down. The Big Dig’s general reliance on new technology was a major factor in one of the project officials’ biggest decisions: choosing a consortium made up of Bechtel and Parsons Brinckerhoff as the “management consultant.” Parsons was an expert in innovative urban tunneling dating to the early twentieth century, when it built New York City’s subways. Bechtel had constructed the Hoover Dam as well as most of modern Saudi Arabia, and had fabled political connections to accompany its engineering and logistics mystique. Caspar Weinberger and George Shultz, both in Reagan’s cabinet, were Bechtel men—though that connection hadn’t helped Salvucci at veto time.

One of the creative, audacious, and potentially disastrous things that Bechtel and Parsons, as well as the state’s contractors, did right on the Big Dig was jacking up the Central Artery—replacing the half-million-ton highway’s 69 support columns with temporary “underpinnings” so that contractors could remove the columns and make way for the tunnels. “Pinning the Artery” wasn’t the Big Dig’s only never-before-done feat. The striking Zakim Bridge—the one redesigned after community outrage—is the world’s widest cable-stayed asymmetrical bridge, expanding from eight lanes to ten to account for complicated traffic flow.

Elsewhere, underneath active railroad tracks, engineers froze ground too soft to withstand construction and pushed prebuilt tunnel sections through. They erected a huge temporary dam to dry out a basin in which to construct tunnel segments—and then flooded the basin, floating the segments and resinking them in their new underwater homes. They built underground bridges to hold up subways, threading highway tunnels above and below mass transit. And though insurance tables had predicted 40 serious accidents during the project, the Big Dig suffered only a quarter of that total, and three construction deaths—showing how much things had changed since, say, the 1870s, when raising the Brooklyn Bridge took 27 lives.

Leave it to Massachusetts, though, to turn the Big Dig’s reputation from resounding success to humiliating failure—first in terms of the project’s cost. From day one—even after accounting for politicians’ erring on the low side to gain public approval—the Big Dig was fated to cost more than its 1982 price tag of $2.6 billion.

That number didn’t include much of the project’s mitigation, including big changes like the billion-plus extra to remake the Zakim Bridge. Nor did it include the real costs of staying on schedule. The Big Dig often let its contractors start work on pieces of the project before designs for other key parts were complete. This approach—part of the project’s philosophy of getting things done now and asking questions later—meant expensive changes to contracts. By the early 1990s, as the state added new work, and as its consultants and contractors looked underground to see what was actually there, the Big Dig’s price tag had ballooned to nearly $8 billion.

True, critics aren’t being entirely fair when they compare the project’s final cost, $14.8 billion, with the initial estimate; $2.6 billion in 1982 is $5.6 billion today, thanks to inflation. And inflation has similarly distorted the cost of the many expensive changes made to the project—because the more realistic cost estimates that accounted for those changes were also calculated in then-current dollars, rather than in the dollars that the state eventually had to pay. Still, there’s a lesson here for managers of other infrastructure projects: be careful with that first number, because it can become a permanent benchmark against which to measure success or failure.

Perhaps it’s understandable that inflation and massive increases in scope would swell the project’s price tag. But the Big Dig’s planners truly failed the public through a deliberate decision: for years, they used dubious accounting methods that hid true costs.

In 1994, two years into construction, Bechtel and Parsons officials compiled convincing evidence that the Big Dig would cost nearly $14 billion in completion-year dollars—far more than public officials were disclosing—and took their findings to the state, says former state inspector general Bob Cerasoli, who supervised a 2001 report on the Big Dig’s finances. But the state didn’t tell the public, so alarming Bechtel that its president flew to Boston to see then-governor William Weld. Afterward, according to Cerasoli’s report, “state managers directed state and [Bechtel and Parsons] staff to . . . maintain the fiction of an . . . $8 billion project. . . . They did so by applying a largely semantic series of exclusions, deductions, and accounting assumptions that covered up the $6 billion difference,” often with the knowledge of federal highway officials.

Some state officials thought that if they delayed disclosing money woes, the public would be so thrilled with early improvements like the Ted Williams Tunnel, which opened in 1995, that they wouldn’t pay attention to boring finances. But as an internal “pros and cons” document noted, if the state didn’t inform bondholders, it risked fraud charges—and, in fact, federal securities regulators later reprimanded Weld’s Big Dig boss, James Kerasiotes, for “misleading” investors. Even more pressing, the state needed actual money to continue its project, so it had to come clean despite worries that “we could become the central controversy of the next year in Massachusetts.” It was after the state finally fessed up that the feds imposed their permanent funding cap on the project.

Massachusetts’s desire to insulate the public from the Big Dig’s costs also led to a fateful decision by Governor Weld. Weld needed a ready source of money for the project, without hiking taxes or cutting spending elsewhere. So he transferred the Big Dig’s assets to the Massachusetts Turnpike Authority, an unaccountable public entity akin to New York’s Metropolitan Transportation Authority, in return for some of the authority’s future toll revenue, which would back Big Dig bonds. This costly trade added a new layer of bureaucracy to the project, which needed, more than anything, one elected person to be ultimately accountable. After last year’s fatal ceiling collapse, Mitt Romney, governor for nearly four years, could point to the fact that his predecessor’s appointee still ran the Big Dig.

But the Big Dig’s biggest pitfall was that Massachusetts never understood a basic fact: that it couldn’t pay someone else to assume its own responsibility for an immensely complex, risky project. As the National Transportation Safety Board (NTSB) would later say in its report on the 2006 ceiling collapse, Bechtel and Parsons, the state’s long-term consultants, were “performing the role that would normally be carried out by a government agency, specifically, the state highway department.”

Since costs turned the Big Dig into a scandal, the public has often seen Bechtel and Parsons as its villains. The perception in Massachusetts—never dispelled by state officials—is that the duo’s thousand-plus white-collar workers, dwarfing their few dozen public-sector counterparts, ran the Big Dig, expertly controlling and manipulating designers, contractors, and information, without letting anyone else have much say, from colleagues at lowly engineering firms to meddling public officials. But even assuming the worst—and the reality is more complicated—people usually can’t manipulate you unless you let them. As early as 1991, the state’s inspector general warned of the “increasingly apparent vulnerabilities . . . of [Massachusetts’s] long-term dependence on a consultant” whose contract had an “open-ended structure” and “inadequate monitoring.” The main deficiency, as later IG reports detailed, was that Bechtel and Parsons—as “preliminary designer,” “design coordinator,” “construction coordinator,” and “contract administrator”—were often in charge of checking their own work. If, say, the team noticed in managing construction that a contract was over budget because of problems rooted in preliminary design, it didn’t have much incentive to speak up.

The state should also have known that when consultancy work will last years and when consultants plan to introduce technologies so sophisticated that they can overwhelm the state’s ability to oversee them, the state’s going to wind up in a vulnerable position. Massachusetts would have been smart to introduce some checks and balances early on—perhaps splitting the work that Bechtel and Parsons were doing into smaller parts, having separate consultants for preliminary design and for “project management” work, or keeping some of the “management” in house. Instead, in the name of cost efficiencies, the state further blurred the distinction between public and private sectors by folding Bechtel and Parsons employees and its own workers into one “integrated project organization” in 1998. And though the state’s Massachusetts Turnpike Authority was at the top of the new organization chart—which was immensely complicated by multiple layers of theoretical oversight, including supervision from federal highway officials as well as the feds’ General Accounting Office—the state designated Bechtel and Parsons its “owner’s representative” in some areas, complicating even further the answer to the straightforward question: Who was in charge?

Massachusetts’s laissez-faire attitude followed from a fundamental misapprehension: that Bechtel and Parsons were their partners, not outside consultants, and were thus assuming some performance risk. In a 1994 interview, Kerasiotes, then the state’s transportation secretary, argued that Bechtel’s incentive to perform its job properly was its reputation: “Go to San Francisco, walk in the lobby” of Bechtel’s headquarters, he suggested. “What you’re going to see [are] prominent pictures of the Central Artery. . . . If they are causing this project to screw up, . . . they’re not going to market themselves that way.”

But Bechtel and Parsons never took on any performance risk—risk that the public sector carries as the ultimate funder and manager. If the project were an investment-banking deal, Bechtel would have been an advisor counseling a company on whether to undertake a merger, not an investor in that merger. “Our contractual responsibility as management consultant was to deliver a professional standard of care, not to guarantee the contractors’ work,” says Keith Sibley, Bechtel and Parsons’s longtime Big Dig director. It’s a crucial distinction: Bechtel and Parsons promised not perfect results but professional advisory and management work—and reasonable people may differ about what constitutes “professional.” It’s particularly difficult to assess decisions made under an “integrated project organization,” where everything is opaque about who was responsible for which decisions, or whether particular decisions were the result of public and private collaboration.

This problem of murky responsibility came up repeatedly during the Big Dig, but most tragically with the ceiling collapse. Designers engineered a lightweight ceiling for the tunnel in which Milena del Valle died. But Massachusetts, annoyed by cost overruns and cleanliness problems on a similar ceiling, and at the suggestion of federal highway officials, decided to fit the new tunnel with a cheaper ceiling, which turned out to be heavier. Realizing that hanging concrete where no built-in anchors existed to hold it would be a difficult job, the ceiling’s designer, a company called Gannett Fleming, called for contractors to install the ceiling with an unusually large built-in margin for extra weight. Shortly after contractors installed the ceiling—using anchors held by a high-strength epoxy, as Gannett specified—workers noticed that it was coming loose. Consultants and contractors decided to take it apart and reinstall it. Two years later, after a contractor told Bechtel that “several anchors appear to be pulling away from the concrete,” Bechtel directed it to “set new anchors and retest.” After the resetting and retesting, the tunnel opened to traffic, with fatal consequences.

In hindsight, they all did the wrong thing. The real problem was that the poorly labeled and poorly marketed “fast set” epoxy that the contractors used for the ceiling wasn’t suitable for long-term loads of any type: the company that made the glue, Powers Fasteners, didn’t warn clearly that the epoxy wasn’t interchangeable with another, suitable “standard set” epoxy that it made. The National Transportation Safety Board’s report noted the company’s failure, and Massachusetts has indicted Powers for criminal negligence. But the feds also mentioned that neither Gannett nor Bechtel and Parsons had thought about the ceiling’s long-term performance, when the earlier ceiling failures should have made it clear to both Bechtel and a construction contractor that reinstallation hadn’t worked. Finally, the report points out, once the tunnel opened in 2003, Massachusetts was supposed to conduct regular inspections, which likely would have revealed the ceiling panels’ obvious displacement well before the collapse.

Massachusetts, after taking a hands-off approach to its project’s risks during construction, is today using its most fearsome power—the power to indict—to push Bechtel and Parsons to settle with the state for hundreds of millions of dollars and avoid criminal charges. Massachusetts’s approach is a warning to future private-sector contractors and consultants: if something goes disastrously wrong with a project in which thousands of critical decisions were made with public and private cooperation, the state may use the criminal-justice system as a cudgel to deflect its own accountability.

Massachusetts might have avoided some problems by transferring certain Big Dig risks to the private sector through discrete, well-defined deals: signing a long-term contract with a firm to help build, operate, and maintain the Zakim Bridge, for instance. Such an endeavor, though, would have required aggressive public-sector management of initial costs, scope, and complex contract language—things the state hasn’t excelled at.

Any risk transfer, moreover, would have been limited. Massachusetts could never have turned over full technical, operational, and financial risks of the Big Dig to any reputable company or group. The project had too many unknowns. Smart, reputable companies don’t take unlimited risks at the behest of a fickle, indecisive client for a limited profit. The best thing Massachusetts could have done was to realize the project’s real risks so that it could manage them effectively.

Now Democratic governor Deval Patrick has the most important job: monitoring the Big Dig’s technologically pioneering infrastructure to make sure it’s holding up now that drivers are using it every day, particularly since the NTSB report indicates a lack of attention to long-term performance in at least one “safety-critical” area, the fallen ceiling. A key question is whether the tunnels will hold up over time better than have the assets that so many states built so shabbily in the middle of the last century, such as the old Artery and the Tappan Zee Bridge that connects New York City to upstate. The Brooklyn Bridge has lasted, seemingly, forever: Will the Big Dig?

The wrong lesson to take from the Big Dig is that other states shouldn’t bother with ambitious infrastructure. While the Big Dig’s real worth will be measured in decades, its impact so far, three years after workers dismantled the Central Artery, shows its value. Travel time through downtown at afternoon rush hour is down from nearly 20 minutes to less than three, consistent with pre-construction estimates. Elsewhere on the underground highways, travel times are between one-quarter and two-thirds shorter; average speeds in some sections have shot from ten miles per hour to 43 (speed, rather than drivers’ veering toward too many exits in slow traffic, is the tunnels’ biggest safety problem). Airport trips are between one-half and three-quarters shorter. A 62 percent drop in hours spent on the new roads saves nearly $200 million annually in time and fuel.

For the first time in generations, downtown Boston viewed from above is unchoked by traffic. Cars zoom beneath the ground and reappear, emerging to leave the city over the Zakim Bridge. Downtown’s biggest challenge is making sure that the still-unfinished “greenway” parks, where the Artery used to be, weave Boston, its waterfront, and its neighborhoods together again.

Investors and residents are responding positively to the infrastructure improvement. As the Boston Globe reported in 2004, commercial properties along the old Artery increased in value by 79 percent in 15 years, nearly double the citywide increase of 41 percent. Owners have reconfigured buildings to open views where they once bricked up windows, and are renovating property in other newly accessible parts of Boston. The North End’s Italian restaurants are putting sidewalk cafés where they once hid from the Artery. The North End won’t be the North End of 1950, though, just because the Artery is gone. “The Artery preserved us,” says Fredda Hollander, a longtime resident. Tourists and well-heeled potential residents once put off by the physical and psychological barrier now happily wander over from other parts of the city, pushing up both commercial and residential prices.

By taking so long, Massachusetts has proven that infrastructure investments are for future generations. To longtime Bostonians, the new parkland may always be a marker of a phantom Artery, and the Big Dig may always be a scandal. But Boston is welcoming residents and visitors who know nothing about the Artery or the saga surrounding its successor. The state’s and city’s job is to make sure that the Big Dig runs smoothly in the future so that their new constituents don’t have to learn about it.

Nicole Gelinas, a City Journal contributing editor and the Searle Freedom Trust Fellow at the Manhattan Institute, is a Chartered Financial Analyst.

November 27, 2007 Editorial: Tysons Corner exodus is an early warning sign

Editorial: Tysons Corner exodus is an early warning sign
Nov 27, 2007 by The Washington DC Examiner Newspaper (article)

WASHINGTON (Map, News) - In an act of astonishing presumption, utility relocation has already begun on the Dulles Rail project, as The Examiner’s Bill Flook reported last week, even though the project has not yet gotten final approval from the Federal Transit Administration. The fact that the FTA is still scrutinizing the price tag of this misbegotten project doesn’t seem to faze the Metropolitan Washington Airports Authority, which is now managing it.

It should. Dulles Corridor Users Group president Chris Walker reminded FTA officials in a letter he sent them this week that the proposed Silver Line is “deficient in all respects to the San Jose [Bay Area Rapid Transit] proposal, which the FTA has already turned down” for federal funding.

There are also early warning signs that this too-expensive Metrorail project will do more harm than good in Northern Virginia, literally killing Virginia’s golden goose.

Instead of early birds flocking to Tysons Corner to take advantage of Dulles Rail’s many supposed benefits, businesses have actually begun bailing out. More corporate tenants have left Tysons than leased office space there this year. This unexpected exodus is most likely being driven by the anticipation of five years or more of major construction chaos and tolls of up to $5 per trip to pay for it. But there is another, more ominous explanation.

McLean Citizens Association Board member Mark Zetts says Tysons Corner will never become a successful transit-oriented development center like Arlington’s Rosslyn-Ballston corridor because Tysons is sealed off by already overcrowded interstates, while the R-B area has 40 access lanes — one every quarter of a mile — that facilitate the smooth flow of traffic.

Fairfax County still does not have a land use plan reflecting the unaddressed problem of poor access, which will be compounded — not alleviated — by a transit project that eats up valuable right of way on Route 7, the main arterial serving Tysons Corner. With no money left to upgrade key interchanges that connect the surrounding interstates to Tysons roads, the resulting traffic congestion will be much worse after Dulles Rail is built.

Local motorists and businesses are expected to pay $1 million per day for a transit project that will make their lives much more expensive and far less convenient.

Who wants to stick around for that?

November 28, 2007 (Tysons Corner) Tunnel supporters sue to halt rail line

Tunnel supporters sue to halt rail line
Nov 28, 2007 by William C. Flook, The Examiner (article)

WASHINGTON (Map, News) - Tysonstunnel.org, a group that has sought for more than a year to persuade officials to run the planned Dulles rail line underneath Tysons Corner, filed a lawsuit against the U.S. Department of Transportation on Tuesday aiming to halt the entire project until its plan is reconsidered.

The group was unexpectedly joined in the suit by Tysons firm Ratner Cos., which operates Hair Cuttery and Bubbles Salons. They are represented by Gary Baise, a Republican lawyer who ran an unsuccessful bid to unseat Fairfax County Chairman Gerry Connolly this year.

The suit signals that Tysonstunnel has largely abandoned any hope to pursuade Virginia Gov. Tim Kaine to reverse course on the planned overhead track through Tysons.

Kaine officially abandoned the tunnel proposal in September 2006 after being warned by the Federal Transit Administration that the popular route would cost hundreds of millions of dollars more than the alternative and make the project ineligible for federal funding.

Tysonstunnel.org also is seeking to put the project out to competitive bidding, which it argues never occurred under the project’s public-private partnership. The lawsuit says the FTA cannot approve the rail project because it does not follow its guidelines for “full and open competition.”

“We don’t want it stopped, we want it corrected so we can move forward,” Tysonstunnel president Scott Monett said. “That’s what we have been saying from the beginning. ... What we’re asking them to do is follow their own rules that if a project is to receive federal funds that it be competitively bid.”

FTA spokesman Wes Irvin could not be reached for comment Tuesday. A spokeswoman for the project declined to comment.

The Dulles rail procurement process has been a point of contention since the inception of the project. Officials are building the rail through Virginia’s Public-Private Transportation Act, which allowed for closed-door negotiation on price and details, instead of the state’s standard procurement law.

A group made up by Bechtel Infrastructure and Washington Group International won a contract earlier this year to design and build the rail’s first 11.6-mile phase. That initial leg is projected to cost $2.5 billion, if $300 million in cuts are accepted by the FTA.

wflook@dcexaminer.com

Tuesday, November 27, 2007

How Safe is America's Roadway System?

Published by the FHWA.

Road Safety Fact Sheet
Safety: A FHWA Vital Few - Fact Sheet
How Safe is America's Roadway System?

The U.S. roadway system's positive trends have plateaued at a fatality rate that is the lowest in history at 1.5 deaths per 100 million miles of travel (down from 5.5 fatalities in 1966). However, that's still not good enough. In 2003, almost 3 million people were injured and 42,643 people died on our nation's roads. The number of annual roadway fatalities had remained virtually unchanged (40,000-42,000) for the past ten years, but now there is an upward trend.
How Significant is the Roadway Safety Problem?

Roadway safety is a serious, national public health issue. In 2003, there were 42,643 fatalities and almost 3 million injuries occurred on our nation's roads.

Out of the total 42,643 fatalities in 2003, there were:
25,321 road departure fatalities (59%)
9,213 intersection fatalities (21%)
4,749 pedestrian fatalities (11%)
Can You Put This In Perspective?

Fatalities
One road departure fatality every 21 minutes
One intersection fatality every hour
One pedestrian fatality about every two hours

Average Day
117 fatalities a day
30% of daily fatalities (35) are under the age of 25
Daily financial loss is $630 million
What is the FHWA Goal to Reduce Roadway Fatalities?

As a safety agency dedicated to saving lives, FHWA has identified improving roadway safety and mobility as a Vital Few -- one FHWA's top three priorities. The other two Vital Few priorities are Congestion and Environmental Streamlining.

The FHWA Safety Programs focuses on high risk areas, such as road departure, intersections and pedestrian safety, in order to make the biggest difference in improving traffic safety.

To reduce road departure, intersection and pedestrian fatalities by 10% by 2007,
FHWA is focusing on six national target areas, two of which are concerned with road departure. They are as follows:
- Road Departure Fatalities: Reduce run-off-the-road, head-on and opposite direction side-swipe crashes by 10% by 2007. Save 2,514 lives.
- Preventing road departure fatalities from occurring
- Minimizing the severity of road departure crashes
- Intersection Fatalities: Reduce by 10% by 2007. Save 921 lives.
- Pedestrian Fatalities: Reduce by 10% by 2007. Save 475 lives.
- Safety Belt Use: Raise seat belt use to 90% by 2008. Save 5,536 lives.
- Safety Awareness: FHWA is working to make sure that safety is an integral part of planning, project development and operations at the state, MPO and local levels.
- What is the FHWA Doing to Solve This National Safety Problem?

FHWA provides national safety leadership through: conducting innovative safety research; setting national highway safety guidelines; and promoting proven or promising safety technologies.

FHWA is actively pursuing improved roadway safety through a multi-faceted approach in the fields of engineering, education, enforcement, and coordination with public safety agencies (police and fire services).

FHWA also partners with a variety of organizations that are interested in improving roadway safety including: the International Association of Chiefs of Police (IACP), the Institute of Transportation Engineers (ITE), the American Association of State Highway and Transportation Officials (AASHTO), State Departments of Transportation, the National Association of County Engineers (NACE), the American Public Works Association (APWA) the Governors Highway Safety Association (GHSA), the Transportation Research Board (TRB), the American Automobile Association (AAA), the Association of Metropolitan Planning Organizations (AMPO), and National Association of Regional Councils (NARC).
Engineering

On the engineering front, FHWA both conducts research and supports private sector research into a variety of innovative design features that create safer roads, intersections and pedestrian crossings.

Road safety design features that help to reduce road departures and minimize the severity of roadway crashes include: rumble strips, retroreflective signs, and forgiving roadside hardware (i.e. guardrails and breakaway poles), skid resistance pavements, and all-weather pavement markings.

Intersection safety design features that make intersections safer for drivers and pedestrians include: traffic signal timing, improved signage, exclusive turn lanes, and roundabouts.

Pedestrian safety design features that create safer pedestrian crossings for all pedestrians, including those with disabilities include: pedestrian-signal timings and pedestrian signals; improved lighting to enhance visibility; truncated domes for blind pedestrians; and refuge islands on a median.

In addition, FHWA is currently developing the Interactive Highway Safety Design Model (IHSDM) software -- an innovative road safety evaluation software that marshals available safety knowledge into a useful form for highway planners and designers.

FHWA is also actively promoting the use of proven or promising safety technologies that will help improve roadway safety including: rumble strips, retroreflective signs and pavement markings, and roundabouts. As the federal agency responsible for setting national highway safety guidelines, FHWA issued a technical advisory on rumble strips; is working on national guidelines for minimum sign retroreflectivity levels; and published a comprehensive information guide on roundabouts.
Education

FHWA's safety program has a strong educational component. Through a variety of educational tools and workshops, FHWA is dedicated to improving public safety awareness and updating highway engineers and roadway planners on the latest safety research.
To this end, FHWA has funded and sponsored numerous videos, handbooks, websites, multilingual brochures, CDs, manuals, computer modeling software, clearinghouses and training courses. Although these educational materials and courses are too many to detail here, a few are listed below.

For example, FHWA funded and sponsored the Pedestrian Safety Roadshow (PSRS), a four-hour educational workshop that is designed for use by community leaders, concerned citizens, and business leaders. The purpose of PSRS is twofold: to assist communities in developing their own approach to pedestrian safety and to increase awareness of pedestrian safety concerns.

Also, to help roadway planners and engineers apply the latest research and technologies on the needs of older drivers and pedestrians, FHWA published The Older Driver Highway Design Handbook and also offer a one-day workshop.
Enforcement

As part of our comprehensive safety program, FHWA engineers work closely with state highway engineers and law enforcement officials to identify appropriate engineering safety countermeasures for high risk locations and for new roads. Working with state and local law enforcement is one of the ways that FHWA makes sure that roadway safety is always a top priority.

Partnership Activities
FHWA believes that partnerships create synergy and are very important to improving roadway safety. FHWA participates in roadway safety partnerships with state and local officials, concerned citizens, local business leaders, schools and youth organizations. The partnership activities listed below are just a few of the safety partnerships that FHWA participates in. More information on FHWA partnership activities can be found on the FHWA Office of Safety web site.

FHWA's top partnership is working with AASHTO on the AASHTO Strategic Highway Safety Plan (SHSP). The goal is to reduce the annual number of highway deaths by 9,000 by 2008 to a rate of 1.0 (down from the current rate of 1.5). This will accomplished through improved safety in 22 key areas concerning infrastructure, vehicles, drivers, and emergency medical services (EMS). FHWA's role is that of providing national leadership, direction, and the development and demonstration of new safety innovations, technologies, and programs. (For more information.)

The successful National Work-Zone Safety Information Clearinghouse website is a good example of what can be accomplished when FHWA partners with other roadway safety groups. It was created in a partnership by FHWA and the American Road and Transportation Builders Association (ARTBA) and the Texas Transportation Institute (TTI) handles the site's day-to-day operations. The National Utility Contractors Associations (NUCA) and the Institute of Transportation Engineers (ITE) assist ARTBA in marketing and publicizing the clearinghouse.

Started in 1995 by FHWA, Stop Red Light Running (SRLR) is a national initiative to improve intersection safety by reducing the number of red light running incidents. The American Trauma Society became a partner with FHWA in 1998. Over 200 communities, including local law enforcement departments, are currently part of t his nationwide safety program.

In addition, FHWA is a founding member of the Safety Conscious Planning (SCP) Working Group. This group is a national organization dedicated to providing state and metropolitan planners with “best
practices' and opportunities to integrate safety in the planning process. Other partners in the SCP Working Group include: AASHTO, TRB, GHSA, AAA, AMPO, NARC, ITE, and FHWA's DOT sister agencies -- NHTSA, FTA, and FMCSA. For more information on SCP publications and projects there are two web site addresses.

The extensive implementation of yellow-green fluorescent signs around heavily traveled pedestrian crosswalks at school zones, hospitals and airports, is a visible, day-to-day result of successful FHWA and local community partnerships. To improve pedestrian safety through the use of this new pedestrian sign, FHWA partnered with local police departments, schools and hospitals. This new sign has proven to be more visible than the standard, non-fluorescent yellow sign that had been previously used to warn motorists of pedestrian crossings.
Who Is Responsible for Roadway Safety?

Everyone. We all are responsible for driving, walking, and biking safely on our Nation's roads. The engineers and planners have the responsibility to make sure that roads are designed and operating properly -- with safety for all road users in mind. Drivers and pedestrians have the responsibility to always be alert and obey the traffic rules. Passengers should always buckle up and act responsibly. The police and the courts have the responsibility to make sure that the traffic and pedestrian laws are enforced. Public safety agencies have the responsibility of responding to and securing crash locations and enforcing traffic laws. Local communities and county and state governments need to allocate funding for safe roads and increase public awareness about road safety. Everyone should take responsibility for roadway safety.
10 Tips for Driving and Walking Safely
1. It's your responsibility to drive and walk safely so always be alert and attentive to the motorists and pedestrians around you.
2. Never drink and drive. And don't let friends drive drunk.
3. Always buckle up. The life you save could be your own.
4. Obey traffic signals and signs. They are there to keep you and others safe.
5. Make sure you have plenty of time to get to your destination so you don't feel pressured to speed or disobey traffic signals.
6. Don't give into road rage. Your life and the lives of your passengers are more important than angrily reacting to an irresponsible driver.
7. Pedestrians should always wear light-colored or reflective clothing at night to be more visible to drivers.
8. Before you take a left turn at an intersection, make sure it is safe to do so. (More than one-third of all deaths to vehicle occupants occur in side-impact crashes. Most of these occur at intersections.)
9. Obey the speed limits and make sure you drive carefully through intersections and work zones.
10. Don't drive when you are drowsy. If you are drowsy, pull over at a rest area and take a nap before proceeding.

Sunday, November 25, 2007

August 14, 2005 (Houston I-45) Worried residents voice opposition to freeway expansion plan

Worried residents voice opposition to freeway expansion plan
Gene Apodaca

ABC13 Eyewitness News(8/14/05 - HOUSTON) - Hundreds of residents faced off with the Texas Department of Transportation. They're worried about a proposed plan to expand Interstate 45 and they made their concerns heard at a town hall meeting.
Residents are concerned that under the proposed plan their homes would be in jeopardy. Now they're asking the state to look at other alternatives.

For more than 30 years Maria Hurtado has worked to make her Woodland Heights house a home. But now she worries an expansion project could leave her homeless. She said, "I'm still paying on my house. I'm very close to finishing the payments." Hurtado was one of about 800 concerned residents packing Davis High School Saturday. Each was worried about what the proposed I-45 expansion would mean for them.

Heights resident Robin Franklin said, "Destruction of quality of life, taking out homes." "If they take more land than they need and more than the public is willing to give, then it's a lose-lose situation," explained Terry O'Conner, a Woodland Heights resident.

Last month, the Texas Department of Transportation presented its preferred plan for expansion. It's a plan calling for the addition of four managed lanes along I-45 in addition to the existing eight lanes already there. But critics say there are better plans out there. Some want a tunnel to be built, sparing neighboring communities..

Ken Lindow with the I-45 Coalition explained, "We're concerned about losing our homes. We're concerned about more noise, more pollution."

On Saturday, TX-DOT promised to take the suggestions into consideration. "I hope this is a wakeup call to all our mobility advocates and leaders, that you have to listen to the public," said US Rep Sheila Jackson Lee.

A final plan isn't expected until at least October. Until then, those like Hurtado can only wait and worry about their homes. It's estimated that some 90,000 residents would be affected under the current plan.
(Copyright © 2005, KTRK-TV)

Friday, November 23, 2007

Cracking China's car market

Cracking China's car market
By Steve Schifferes
Globalisation reporter, BBC News, Liuzhou, Guangxi Province, China

The sleepy, provincial town of Liuzhou is more than 1,200 miles (1,931km) from Shanghai, and 10,000 miles from Detroit. Yet for General Motors, which Toyota claims to have overtaken as the world's largest car company, it is Liuzhou rather than Detroit where the company's future may be decided.

GM has come to Liuzhou to produce a tiny minivan, the Wuling Sunshine, which is a best-seller in China, selling more than 460,000 vehicles a year. The van costs $3,700 (£1,872), has a 0.8 litre engine, have a top speed of 60 mph, and weighs less than 1000kg - yet cheap labour costs mean that GM makes a substantial profit on each vehicle it sells.

Rather than use automation, the Wuling Sunshine is made on an old-fashioned assembly line, which would not look out of date in 1940s Detroit. But with labour costs of just $4 per hour - half the rate in Shanghai - GM Asia Pacific boss Nick Reilly says that the company is only spending $100 per vehicle on labour - and the factory is working around the clock on a three-shift system.

Now GM is investing $350m in building a modern engine plant on the site of the Wuling factory to build 1.1 litre engines, which will open in August, and has expanded production by acquiring another factory in Qingdao. It is the opposite of GM's North American strategy, which has concentrated on selling big, expensive SUVs and trucks - a strategy now threatened by higher petrol prices and changing consumer tastes.

For GM boss Rick Wagoner, China represents a "new model" of production, where the company can make money again as a volume producer of cheap cars, unhindered by union contracts and huge fixed costs.

Rush to China
GM is not alone in identifying China as its key market for the future. There will soon be more cars in China than the US. China's car market grew 25% last year and it has overtaken Japan to be the second-largest car market in the world with sales of 8 million vehicles, including light trucks and minivans.

But with just six car owners per 100 people, compared with 90% car ownership in the US and 80% in the UK, the potential for growth is enormous. According to the research company AC Nielsen, China also has more people who aspire to own a car, but currently do not, than any other country. Also, analysts Roland Berger Associates estimate that the worldwide demand for small cars will rise by 30% in the next decade.

But with the average income in China less than $3,000 a year, reaching the mass market in China is a very different exercise to selling cars in the US or Europe.

Rural marketing
According to James Hu, the sales director of GM-Wuling, the typical Sunshine minivan buyer is male, a small businessman, a high school graduate, and earns between $200 and $500 per month. Over 80% are first-time buyers and most plan to use their minivans for both home and business - sometimes replacing the three-wheeled bicycles in which they used to transport their goods.

Most pay in cash, with sometimes the whole family coming into the dealership with the money in hand. Wuling markets the vehicle through rural China and is expanding its dealer network, which is strong in the poorer, Western regions. In some smaller cities, it shows films in town squares to attract customers.

Fierce competition
Wuling also markets GM's low-priced entry-level car, the Chevrolet Spark, which was designed in Korea. But the Spark, which sells 40,000 vehicles a year, is facing fierce competition from Chinese rivals, especially the Chery-made QQ, which GM at one time accused of stealing its design.

The Chery QQ is 10,000 yuan (£658) cheaper than the Spark and according to vice president Jin Yibo it can compete successfully with the Spark because it has lower development costs. Its sells four times as many small cars as GM. Chery - also based away from coastal China, in Anhui province - is aggressively rolling out new models, including a new A1 compact that was one of the stars at the Shanghai Motor Show.

Overall, rising competition is causing the price of new cars in China to fall by between 7% and 8% per year - cutting into the profit margins of companies like GM.

Rich toys
But China is still a diverse market. Buick is marketed as a luxury brand in China. While GM is selling minivans in rural areas, it is also building and marketing Buicks and Cadillacs in Shanghai, where the Buick van has become a status symbol for companies.

Although the number of private car owners is increasing rapidly, an important part of the Chinese car market is still corporate, especially in the rich coastal cities. With chauffeur-driven cars customary for executives, GM found that the most important modification it had to make for the Chinese market was to increase the size and comfort of the back seat, where the company bosses tend to sit.

GM has even designed a new concept-car version of the Buick at its China-PATAC design centre. But the luxury market is also getting crowded, as multinationals such as Toyota launch their own luxury brands in China. And GM's joint venture approach - its Buicks are built with state-owned Shanghai Automotive Industy Corporation - means it has given its potential rivals access to its technology.

Opportunity
It is not just car companies that are flooding into China. Consumer companies and retailers from around the world are rushing to capitalise on the world's third-largest economy, which has been growing at a rate of 10% per year for two decades.

For most multinationals, Chinese consumers, not Chinese workers, are now their main focus. But understanding how to make a profit in this crowded and diverse market is the real challenge. This is part of series on how globalisation is changing China. Future articles will look at the financial services industry, China's drive overseas, and how Shanghai is tackling pollution.

May 27, 2007 Can Shanghai turn green and grow?

Can Shanghai turn green and grow?
By Steve Schifferes

Shanghai has been transformed into a global city - but its rapid growth has produced pollution, traffic jams and overcrowding. In becoming one of the centres of the world economy, Shanghai has grown faster than almost any other global city in the past 15 years. The population increased from 13.5 million to 21.5 million as migrant labourers flooded in from the surrounding countryside, and the standard of living rose even faster, with per capita income now at $7,000, the highest in China.

The physical size of the city increased sixfold, from just 100 sq km to 680 sq km, as people sought more space and the city government rushed to develop nearby areas, such as Pudong. Three ring roads and six motorways now criss-cross the city, and gridlock grips the bridges and tunnels across the Huangpu river during rush hours.

The city has also seen an explosion in car ownership, with over 1 million car owners in 2006, and private car ownership has doubled in two years. The increased traffic levels contributed to rising levels of atmospheric pollution. Now the city of Shanghai has begun to tackle some of the environmental problems that could threaten its future growth.

Building new towns
Despite its size, Shanghai is still much more densely populated than Western cities, with four times more people per square kilometre than New York. And according to Michael Kwok, head of the architectural consultants Arup in Shanghai, there is very little land left to build on in the central city, after a decade of rapid development. So Shanghai's planners want to limit population growth in the centre by building satellite towns in the outskirts.

Like the UK's New Towns, constructed not long after World War Two to disperse population out of London's most overcrowded districts, the idea is to provide cheaper housing and jobs to attract people to leave congested areas.

Under Shanghai's "One City - Nine Towns" plan, Shanghai is planning nine new cities which will eventually house 500,000 people each. Six of the cities are themed to look like European cities, including the UK, Germany, Italy, Spain, the Netherlands and Sweden. Thamestown, which opened in October 2006, has themed pubs and Tudor-looking architecture concealing high-rise blocks. But critics say that so far, most of the housing built in such towns is out of reach of ordinary citizens. And they argue that the cities have so far not created enough jobs to prevent most residents from commuting into Shanghai, adding to transportation pressures.

Discouraging car ownership
Shanghai has made it expensive to own a car in the city. The city sets a strict limit on the number of licences it will issue for private car ownership - currently around 80,000 per year - and then auctions them off. With the high demand for cars, the current cost of getting a car license in Shanghai is over 40,000 RMB ($5,500; £2,750).

However, a significant factor in Shanghai is the use of cars - and minivans - by private businesses. Over half of all cars in Shanghai are owned by companies - who are less sensitive to financial constraints.

Investment in public transport
(The modern metro carries 1.8 million a day) According to Professor Chen of Tongji University School of Transportation Engineering, the city is now investing heavily in public transport. Since the mid-1990s, it has built an extensive metro system, with five lines, now used by 1.8 million people per day, and it is now planning six new lines. If it carries out all its plans, the length of the system will exceed London's, the world's biggest.

Buses and the poor
Overall, one-quarter of journeys in Shanghai are by public transport, and the city would like to increase that to 30% by 2010. According to Professor Chen, that will mean boosting the numbers who ride the buses as well. Shanghai has more than 1,000 bus routes, run by a variety of private bus companies, but the system of interchanges between lines is confusing and expensive. She has convinced the city that it should make all transfers free in order to encourage more people to ride the system.

Bicycles and scooters
Despite the spread of car ownership, two-thirds of private journeys in Shanghai are by two-wheeled vehicles such as bicycles and scooters. The city has already banned larger motorbikes, and has introduced restrictions on bikes on the many commuter highways in the city. But it is also building 180km of dedicated bike lanes, especially in newly built areas like Pudong, where bicycles will be segregated from scooters.

Affluence and growth
Shanghai has had some success in tackling its environmental issues. One fact has been a strong planning system, coupled with the fact that the government owns all the land. This has allowed the rapid redevelopment of the city and its infrastructure - as well as generating money to pay for big infrastructure projects.

Air quality has improved with unacceptable days dropping from 20% to 10% in the past five years. But water pollution, is worse, as the rapid growth of industry in the Shanghai region, upstream of the city, has made it harder to keep the city's main water source, the Yangtze River, clean.

Human cost
The city's speed at developing its infrastructure has also come with a human cost, with millions of people displaced for public and private building projects. According to Michael Kwok, in the early days of Shanghai's development it was relatively easy to relocate people to outlying areas, but now people are demanding more compensation.

More broadly, Shanghai is the still the embodiment of China's economic dream of living in an affluent society on a Western scale. Those aspirations - for more land and housing, as well as more consumer durables like cars and air conditioners - are likely to put further pressure on Shanghai's environment in the future.

This is part of a series on how globalisation is changing China's largest city, Shanghai. Further articles will explore the issue of migrant labour and look at plans for an eco-city.

Thursday, October 18, 2007

October 17, 2007 Houston, North Freeway Tunnel Could be in the Future

Published by KTRH

North Freeway Tunnel Could be in the Future

One group says it's plan will move traffic better than any other.
By KTRH's Bill O'Neal
Wednesday, October 17, 2007

It's a whole new way of thinking about your ride on I-45. Imagine traveling several miles-- underground in a tunnel-- as you commute from North Houston to the downtown area.

The I-45 Coalition's plan is a stark contrast with what the Texas Department of Transportation envisions for improving the freeway. And while you might think constructing such a long underground roadway might be prohibitively expensive, I-45 Coalition President Jim Weston doesn't see it that way.

"The Freeway would cost $297 million a mile, the tunnel would be $317 million per mile, it's a five percent difference in the end," Weston said before the group took its plan to Houston's City Council Tuesday.

And, Weston said, the plan could be completed in half the the time it would take TexDot to complete it's tunnel-less improvements, while adding more lanes for express traffic, and cutting down on both environmental and noise pollution.

As for flooding, Weston said there's no need for concern. "A tunnel can be easily engineered not to flood. The reason 45 floods is it's an open pit where all the water goes in. A tunnel is not designed that way."

The group's goal is to garner as much support as it can for the idea, and some Council Members seem to be intrigued. "We need to send a friendly message, but a firm message to TexDot saying we don't want anymore Katy Freeway expansions in Houston. This city can not tolerate that," said Council Member Peter Brown. Council Member Ada Edwards wants the Transportation Committee to take a closer look, "So we can have a more thorough discussion of what a tunnel might look like."

However, Edwards and other Council Members also encouraged the group to enlist State lawmakers in their efforts to convince TexDot their plan is best.

Tuesday, October 09, 2007

June 1992, Principles of Efficient Congestion Pricing

Published by Victoria Transport Policiy Institute

Principles of Efficient Congestion Pricing
William Vickrey
Columbia University
June 1992

Introduction

William Vickrey, winner of the Nobel Prize for Economics, is considered the father of Congestion Pricing. He first proposed it in 1952, for the New York City subway system, recommending that fares be increased in peak times and in high-traffic sections and be lowered in others. Elected officials considered it risky, and the technology was not ready. Later, he made a similar proposal for road pricing.

Vickrey considered time-of-day pricing as a classic application of market forces to balance supply and demand. Those who are able can shift their schedules to cheaper hours, reducing congestion, air pollution and energy use – and increasing use of roads or other utilities. “You’re not reducing traffic flow, you're increasing it, because traffic is spread more evenly over time," he has said. “Even some proponents of congestion pricing don't understand that.”

He has admitted that his ideas have sometimes not been well received by those who set public policy because, “People see it as a tax increase, which I think is a gut reaction. When motorists' time is considered, it's really a savings.”

He suggested, “One possible detection and billing method would use electronic identifier units carried in each vehicle, which would activate recording devices in or on the road. Computers would sort the information and determine charges; motorists would be billed monthly.” This is exactly how modern Road Pricing systems function.

Principles of Efficient Congestion Pricing

Here are some of William Vickrey’s thoughts on how to implement efficient congestion pricing for roads and parking.

1. Charges should reflect as closely as possible the marginal social cost of each trip in terms of the impacts on others.

Charges may be set to exceed such costs as a means of obtaining additional revenues for the government at slight excess burden, justified possibly in naive terms as imposing a surcharge tax on this activity comparable to tax surcharges on other activities and purchases. There is no excuse for charges below marginal social cost. If it be urged that such charges in a particular case would be desired on distributional grounds, there will always be more efficient and equitable ways of effecting such redistribution. If efficiency and revenue are both sacrificed, it will seldom if ever be possible to recoup the loss of efficiency elsewhere.

2. Charges should vary smoothly over time.

Only in this way can everyone be given an incentive to shift the time of travel, if only by small amounts, away from the peak. If charges vary discontinuously, excessive incentives are given to rush to get ahead of a jump in the charge, or to lag waiting for a drop in the charge. There is a likelihood of creating mini-peaks just before a scheduled increase or just after a scheduled decrease. Few of those moving at the height of the peak will be willing to make the substantial shift in travel time of an hour or more necessary to obtain a lower charge. It will often be easier and cause less disruption to get 12 drivers to shift the time of their trip by 10 minutes each than to get one person to shift his trip by two hours.

If staggering of working hours were to succeed initially in eliminating peak congestion, in the absence of road pricing it would then fail, as firms seeing that congestion has been abated then drift back to their preferred times and recreate the congestion. Reasonably smooth variation of the prices over time is needed to prevent this from happening.

3. Efficient charges cannot be determined solely by conditions at the time of the individual trip, but must take into account the impact of the trip on other traffic from the time the trip is made until the end of the congestion period.

Example: If queuing conditions are such that flow through a choke point is at capacity from 7am to 10am, a car going through the choke point at 7:10 may encounter a short queue and be delayed by only 5 minutes, but will be responsible for there being one more car delayed in the queue from 7:10 until 10:00, or 2.83 vehicle-hours of delay; conversely, a car going through the choke point at 9:55 may have been delayed by 15 minutes, but will impose only 5 minutes of delay on others. A motorist who starts his trip 30 minutes earlier may reduce his own waiting time from say 15 minutes to five minutes, but unless he gets entirely free of the queue, he will increase total waiting time by 30 vehicle-minutes and the aggregate waiting time of others by 40 vehicle-minutes. If charges were calculated in terms of his own delay, the incentive would be perverse. Efficient congestion charges would eliminate the bulk of the queuing delay without any decrease in peak flow and possibly an increase in shoulder flow. Marginal social cost is measured by the expected time from the passage of the particular car through the choke point until the next time at which the queue drops to zero.

Where hypercongestion exists, such that traffic density is above the point of maximum flow, which is generally the case whenever speeds are below about 60 percent of the low-density speed, impacts may be even more severe. Injecting an additional car into the area decreases the total flow, decreasing the rate at which cars succeed in getting off the congested street network, increasing the density and further decreasing flow in an exponential manner. I have estimated that, under the 1983 conditions in midtown Manhattan, an additional 3-mile trip at 11 a.m. can account for between 100 and 300 additional vehicle-hours of delay over the remainder of the day. By keeping the accumulation of traffic density below the point at which flow begins to decrease, efficient road pricing can actually increase peak hour flows, and in many cases increase total daily flows, while increasing speeds, reducing air pollution, and yielding needed public revenues.

4. Efficiency can be enhanced, for a given level of data collection, by charging on the basis of the trip segment from one observation point to the next, rather than by merely the passage of an observation point.

This can be handled by dividing the congested area into zones of suitable size, large enough so that checkpoints can be installed at every crossing of a zone boundary by a thoroughfare. In processing, each entry of a zone by a vehicle can be matched with its exit and a charge assessed according to the indicated trajectory, rather than separately for merely passing a control point.

5. There is much to be said for charging on an ex post, strict liability basis in terms of the actual impact that a trip can be calculated to have had on the traffic as actually experienced, over the balance of the day, rather than according to some schedule fixed in advance.

A present schedule will be unable to allow for increased congestion caused by weather, sporting events and the like, whereas motorists would have the opportunity to inform themselves of these situations and adjust their trips accordingly. In the case of adventitious events such as fires, accidents and the like, one could perhaps allow a grace period of 15 or 30 minutes from the time the occurrence has been broadcast before increased charges become effective, to avoid unduly charging motorists who would have had no opportunity to alter their plans. The question is whether motorist expectations can be relied upon to make better estimates of impending conditions than can be represented to them in schedules and broadcasts. The problem is that where congestion threatens, traffic conditions seem often to vary very widely from day to day even when there is no broadly recognizable cause for the variation.

6. All vehicles should be charged without exception, including trucks, doctors' cars, press cars, and cars of public officials and diplomats, among others.

Even where these charges are borne by third parties, it is useful to maintain the integrity of the market pricing principle and avoid disputes as to qualification for exemption. Public vehicles such as police cars and fire trucks should also be charged, even if this is only an accounting transfer, in order to give a true picture of the cost of these operations and provide an incentive for performing their functions more efficiently, and possibly induce a better budgeting of public funds with due regard for true costs. One could even argue in principle for the application of surcharges where sirens or other priority signals are used, though many would consider this to be carrying principle too far.

7. Taxicabs present a special problem of ascertaining the charge at the time of incurrence, so that it can be charged to the customer.

Where other vehicles are being billed monthly, on a segment by segment basis, it may nevertheless be possible to adopt for taxicabs a special regime in which they are charge on a modified point basis. The beam emitted by beacons or scanners can be modulated to indicated a level of charge per mile to be added to the meter charge until the next checkpoint is encountered, or until a set mileage increment has been run up, the latter to avoid excessive charges for portions of trips outside the zoned area. While not as accurate as the segment charging method, it should be sufficiently accurate to serve the purpose so that the cost of a more accurate system might not be justified.

8. Curb parking, where permitted at all, should be charged on the basis of clearing the market.

In principle the price should be made to reflect as closely as possible the marginal social cost of the occupancy of a space in terms of the cost to other would-be parkers of added difficulty in finding a space, or of having to resort to other modes. In practice, this could be approximated by a rule saying that if, over a suitable number of weeks, fewer than, say 5% of the spaces are typically vacant during a particular time slot, the charge should be increased, and if vacancies are consistently more than, say 20%, the charge should be reduced, or eventually eliminated. Charges may appropriately be made to vary with the size of the vehicle.

The coin-operated parking meter controlling a single space is an inappropriate device for collecting such charges. Existing meters operate at only a single rate when specified to be on, and adjusting the rate to adapt to changing conditions is expensive. Collecting and auditing the proceeds are expensive, and theft and vandalism are often problems.

9. One simple and inexpensive method of collection would be by means of parking cards.

Parking cards can be sold in convenient denominations through service stations, or along with lottery tickets, or by mail. Cards would be imprinted prior to use with the license number of the vehicle with which they are to be used. One or more of these cards having a total value equal to the anticipated charge would then be punched or mutilated by the user to specify the time at which parking begins, and displayed on the vehicle. The time paid for would be determined by comparing the value of cards displayed to a schedule posted at suitable intervals.

The main problems are the sophistication required of the driver unless the schedule of charges is simplified to the point of failing to obtain the most efficient use of the space, and the longer time it would take the wardens to ascertain whether or not a car is in violation, as compared to merely observing the flag on a mechanical meter. On the other hand, capital, maintenance, collection and auditing costs should be much lower than for the mechanical meter. Charges can be adjusted from time to reflect current circumstances by merely changing the posted schedules. Some difficulty may be encountered in getting habitual users to adjust promptly to comply with a new schedule.

10. Another method would use parking ticket vending machines.

Vending machines would be set up at convenient intervals where a button can be pressed to indicate the class of vehicle, and money inserted until a display indicating the time up to which parking has been paid for reaches a satisfactory value. Especially where the appropriate level of charges would involve an inconvenient number of coins, payment can be by inserting a credit card or a stored value card and using a button until the desired time limit has been reached. Pressing another button then causes a ticket to be issued showing the type of vehicle and expiration time, and possibly the serial number of the card used, which might include the license plate number of the vehicle with which it is to be used. This ticket would then be displayed on the vehicle. The data on the ticket can be indicated in a large-scale coded form that can be checked by the warden from a moderate distance, expediting the checking process.

A major advantage of this scheme is that the schedule of charges can be fairly closely graduated to balance demand and supply without causing difficulty for the parker or the warden, and can be updated fairly easily as conditions change. A minor disadvantage is the need for the parker to walk from his parked car to the ticket machine and back. Capital and maintenance costs are higher than for the card method; The cheaper card method might be considered an interim measure pending a decision as to how large an area to cover with the ticket machine method.

In either case it would be part of the duty of parking wardens to make a daily record of the usage observed, to serve as the basis for adjusting the charges to an efficient pattern.

11. Delivery vehicles and other vehicles making frequent short stops need special treatment, such as by using on-vehicle meters.

Delivery and similar vehicles could be provided with a meter capable of being set to run at varying rates that would be displayed for checking by enforcement agents. The meter would be periodically reset much like a postage meter. Double parking or parking in space subject to restrictions could be charged for at a suitably high rate rather than being erratically penalized or tolerated. It is ridiculous to see trucks double-parked just beyond bus stops when parking illegally in the bus stop would cause much less of an impediment to bus operations. Such charges would provide incentives not only for shifting deliveries to off-peak hours, but for shortening the time traffic is obstructed by employing additional helpers to speed the pick up and delivery operations. In the longer run, there can also be the replacement of congestion generating activities by activities creating less congestion, and for arranging loading bays that do not obstruct traffic. The main problem here is likely to be that of finding an objective and administrable basis for setting the level of charges at various times and places.

12. Political interference and bureaucratic bungling can spoil the game.

Unfortunately experience with the pricing of public services is not such as to give confidence that in practice a close approach to an efficient optimum can be achieved. In many instances, efficiency requires a substantial disruption of the patterns of activity of many, although especially in the case of persistent queuing and hypercongested networks the change may not be as great as many fear. Of perhaps greater political impact is the fact that, in many cases, individuals will be asked to pay fairly high market-clearing prices for what they have been getting at no direct money cost, though in many cases at a very high cost in terms of loss of time. It is an unfortunate fact of political life that those who expect to be injured by a change feel the threat very vividly and make a correspondingly great amount of political noise, whereas the potential beneficiaries are often not so vividly aware of the goodies that await them and thus tend to throw relatively less weight into the political balance.

At the bureaucratic level there is also the tendency to be satisfied with the status quo, especially where tenure of office is relatively secure. Even where change is obviously called for, it tends to come in homeopathic doses and to follow lines of proportional adjustment along traditional patterns rather than break into innovative territory. There is also a "not invented here" syndrome that is especially prevalent among large organizations that regard themselves as sui generis.

It is thus going to take a lot of pushing and earnest education to get progress made along the lines laid out above. But the potential gains are so great that it may just be possible to keep the meddling of special interests within bounds and overcome the drag of traditionalists to come out with something really worthwhile. And once a start has been achieved, who knows how much further one will be able to go.

Biography

William Vickrey was born in Victoria, British Columbia, in 1914, he received a bachelor of science in mathematics from Yale in 1935. He went to Columbia University for graduate work in economics from 1935 to 1937, when he received the M.A. degree. His doctoral thesis, "Agenda for Progressive Taxation," written for Robert Murray Haig for a 1948 Ph.D., was reprinted in 1964 as part of a series of economic classics.

His first study of efficient pricing of public utilities in 1939 and 1940 was of the electric power industry for The Twentieth Century Fund. In 1951, he studied transit fares for the Mayor's Committee on Management Survey in New York and in 1959 he presented to Congress a proposal to control the District of Columbia's traffic congestion with electronically assessed user fees. He has addressed urban planning problems in Calcutta with the Ford Foundation and in Buenos Aires and New Delhi for the World Bank.

A conscientious objector during World War II, he spent part of his alternate service designing a new inheritance tax for Puerto Rico. After the war, he joined Columbia economist Carl Shoup on a team of economists who toured Japan in 1949 and 1950 to recommend reforms of the country's tax system.

Vickrey began his Columbia career as a lecturer in economics in 1946. He joined the faculty as assistant professor in 1948 and was named associate professor in 1950, professor in 1958 and McVickar Professor of Political Economy in 1971. He was chairman of the department of economics from 1964 to 1967 and retired as McVickar Professor Emeritus in 1982. He maintains an active schedule on campus and continues his research.

He was elected to the National Academy of Sciences in 1996 and served as president of the American Economics Association in 1992. He was elected a Fellow of the Econometric Society in 1967 and received an honorary doctorate from the University of Chicago in 1979 for work in game theory and social choice theory. He was awarded the Nobel Prize for economics in October, 1996. He died at age 82 of natural causes, two days after the Nobel award was announced.

Bibliography

During the course of his 60+ year academic career William Vickrey published hundreds of books and papers covering a broad range of economic subjects. Two excellent summaries of his work are listed below.

Richard Arnott, William Vickrey; Contributions to Public Policy, Dept. of Economics, Boston College (http://fmwww.bc.edu/ec-p/wp387.pdf), October 1997.

William Vickrey (edited by Richard Arnott, Anthony B. Atkinson, Kenneth Arrow, Jacques H. Drèze), Public Economics; Selected Papers by William Vickrey, Cambridge University Press (www.uk.cambridge.org), 1994.

March 26, 2006 New York, Smart Streets

Published by The New York Times.

The City
Smart Streets
Published: March 26, 2006

This is a tale of two cities.

One had a plan to curb traffic. The other actually implemented it. The city that took action was London. The other — the one with the vision thing — was New York, which came upon the idea of congestion pricing a half century ago. The plan then went to that dark, lonely place where great ideas often go, never to be resurrected.

But now, a discussion of congestion pricing as part of the broader debate on how to limit traffic on New York's busiest streets can no longer be avoided. On any given day of the week, some 800,000 cars — more than half of them personal vehicles — pour onto the streets south of 60th St. in Manhattan. Forget a tipping point; New York's traffic has long passed that.

And every year, the daily number of cars creeps upward by the thousands — some 13,500 annually, according to a study conducted by Bruce Schaller, a Brooklyn-based consultant. Transportation Alternatives, the group that commissioned the study, is one of several organizations pointing out what should be obvious — that the city is choking in traffic.

While Mayor Michael Bloomberg has taken some steps to address traffic flow problems — including restricting turns on designated Manhattan "thru streets," and moving to encourage walking and cycling for commuters — the larger issue of actually containing or reducing traffic seems to be on the back burner. It could be that the mayor too clearly remembers the hostile reception that forced him to abandon the idea of adding bridge tolls in his first term. Even so, ducking the traffic problem seems at odds with the sensibilities of a mayor who has otherwise given high priority to productivity, health and other quality of life issues — all of which are negatively affected by the traffic logjam.

The mayor could start by taking a harder look at the success of London's congestion pricing program. The city charges daytime drivers in the central business district a fee of $14 a trip, allowing a 90 percent discount for residents who take the car for a spin in the area.

The result has been a drop of nearly one-third in vehicle traffic. But commuters have not been seriously discomfited; in almost all cases, workers who once relied on cars have been using public transit, which in turn has been upgraded with funds from the congestion surcharge.

Critics who fear congestion pricing argue that crowded streets reflect a vital economy. But in New York, traffic congestion has always been too much of a good thing. William Vickrey, a Columbia professor who came up with the notion of congestion pricing in the 1950's, could not have imagined the clogged streets we have today.

Gridlock can be measured in appointments missed, tardiness, environmental damage and even elevated blood pressure. Taking a third of the vehicles off New York's most heavily used streets can't hurt.

Friday, September 07, 2007

August 31, 2007 Spiegel Interview with Urban Guru Charles Landry

Article published by Spiegel. Charles Landry's company is COMEDIA.

'The Redevelopment of a City is an Art'

Charles Landry, 58, is considered one of the world's leading urban researchers and is the author of "The Creative City." He talks to SPIEGEL about how cities can harness their inhabitants' skills so they show up on the international radar and the German tendency to make cities too neat and tidy.


A computer-generated picture of the exterior of the Elbe Philharmonic concert hall being built in Hamburg's harbor. Landry believes buildings like this one can help to define a city.

SPIEGEL: What does a city need to have for you to feel good in it?

Landry: Contradictions, most of all, a balance between chaos and order. It needs neighborhoods vibrating with energy just as much as cozy little corners and parks; well-tended, middle-class sections as well as an alternative scene; technology centers for innovative youth and social facilities for older people. In other words, it needs creativity to retain the high performers who have lived there for years as well as to attract new, interesting residents.

SPIEGEL: Can this creativity be regulated?

Landry: Not really, but it can be encouraged. The redevelopment or revitalization of a city is an art. It depends on the individual strengths of a place and the will of the leadership to bring about change. The goal is to establish a cultural infrastructure. Creativity is also needed in the administration. There is no magic formula, no 10-point plan where you can check off items and suddenly be successful.

SPIEGEL: What in particular do city officials have to take into account, and what should they focus on?

Landry: First, they must be conscious of the international competitive situation dictated by globalization. As industries migrate toward the Far East, the future of many Western cities will no longer lie in manufacturing products but ideas and patents. Young, mobile elites can choose where they want to live, and they can easily move, which means that cities are involved in a heated competition for the best people. Only the most attractive cities can benefit from this development.

SPIEGEL: But some cities just happen to be more attractive than others, perhaps because they're on the coast or in the mountains, or their history creates a certain atmosphere.

Landry: That's true, of course. Some remain great cities, but they shouldn't stand still. They should move in the direction of a knowledge-oriented society. Most cities have to do something to draw attention to themselves and make their particular assets visible on the international radar. I'm not talking about developing countries, but about the United States and Europe.

SPIEGEL: Surely it's a tall order to attract creative people when your city has a high crime rate, collapsed infrastructure and slums?

Landry: Like Detroit, an urban hell. But even in this city of the dying auto industry, there is reason to hope, if they manage to combine the creative forces of designers and other intellectual "suppliers" in other ways. All cities have one key resource: the special abilities of the people who live in them. You just have to find out what they are. In the Australian city of Adelaide, for example, which is overshadowed by Sydney and Melbourne, I discovered a number of experts in the penal system. I advised them to work with these special skills.

SPIEGEL: Which European city is the best at utilizing its particular human resources?

Landry: I like what Barcelona is doing. This city almost perfectly combines its natural advantages with cultural attractions, IT parks and first-rate educational opportunities. The same applies for Dublin, which manages to achieve a blend of complexity, tolerance and artistry and makes a point of not devoting every part of the city to the tourism industry. Sometimes creativity also means forgoing short-term profits and simply saying no.

SPIEGEL: Is multiculturalism an advantage or a drawback?

Landry: It can be both. In a city like London, the fact that cultures live together and cross-fertilize is a beautiful and natural thing. The many cultures in Amsterdam contribute to the city's high level of craziness -- something which every interesting city should offer. But sometimes immigrants can live in parallel worlds which can exclude others and not be very attractive. As far as population size goes, big is no longer important, and it can even be a drawback. In fact, the future belongs more to second-tier cities. Any place can become a world-class center today by finding an area in which it outperforms others, by thinking for the long term, by expanding its competitive abilities and by operating globally.

SPIEGEL: What do you think of German cities?

Landry: Hamburg is getting a new symbol with its new Elbe Philharmonic concert hall. Such an architecturally impressive building is built somewhere in the world maybe once every five years, if you're lucky. Hamburg will have a new and important attraction with which it can distinguish itself from other cities. But the important thing is that activities should not just be limited to the building, but that the concert hall should symbolize a general mood of creative rejuvenation. Another thing I like about German cities -- and it's an advantage which they haven't sufficiently exploited yet -- is that they are pioneers when it comes to environmental technologies. And green solutions are becoming more and more important.

SPIEGEL: Are there things about Germany which you don't like?

Landry: The Germans are often too bureaucratic, too fixated on rules and not risk-oriented enough. And some of their officials have the feeling that they need to make everything in the cityscape look nice and pretty as quickly as possible. That was particularly apparent in the former East Germany after reunification. Then cities sometimes get a bit too neat and tidy.

SPIEGEL: Where do you live when you're not on the road?

Landry: I travel a lot and my job means that I'm almost always in big cities. I sometimes stay in one city for a few months for my consulting work, as I did recently in the Australian city of Perth.

SPIEGEL: But don't you need a place that you can call home?

Landry: Yes, of course. I live not too far from London, in the countryside in Gloucestershire -- in a village with just 20 houses.

Interview conducted by Erich Follath.

Thursday, August 16, 2007

August 13, 2007 Venezuela, Urban Development - Aiming for a New Pittsburgh, and Falling Short

Article published by The New York Times.

Michael Stravato for The New York Times - A Warao Indian squatter camp, not part of the Harvard and M.I.T. planners’ original design.

Ciudad Guayana Journal
Aiming for a New Pittsburgh, and Falling Short
By SIMON ROMERO
Published: August 13, 2007

CIUDAD GUAYANA, Venezuela — When a group of urban planners from Harvard and M.I.T. arrived here in the early 1960s to design an industrial city almost entirely from scratch, they envisioned a “Pittsburgh of the tropics” that could anchor industrialization and population growth in southeastern Venezuela.

That vision of a city for 250,000 people materialized into a place known for its relative prosperity. But as the population grew — it is now estimated at one million — and some of the competition for land and jobs grew violent, Ciudad Guayana has become emblematic of a new kind of urban disarray. Its problems are attracting scrutiny as President Hugo Chávez embarks on a phase of utopian city building.

Bands of Warao Indians who migrated from the Orinoco River delta beg for food at intersections here. For commuters too poor to afford cars in a sprawling city with scant public transportation, bulging pickup trucks called perreras, a term loosely translated as dogmobiles, are the only option.

And not far from subdivisions for elite civil servants, with ranch-style houses and spacious driveways for sport utility vehicles, wooden shacks put up by migrants from throughout Venezuela reflect a severe housing shortage that has led to frequent clashes between the police and squatters.

“Today, we share the same problems as the rest of Venezuela,” said Leopoldo Villalobos, a prominent historian who lives here and who has tracked the city’s evolution.

Mr. Villalobos said Mr. Chávez’s efforts were part of a Venezuelan tradition of presidents trying to leave their mark by erecting new cities. Rómulo Betancourt was the force behind Ciudad Guayana, and Rafael Caldera built Ciudad Sucre on the southwestern border a decade ago to help prevent guerrilla incursions.

Mr. Chávez’s ambitious plans include a steel city near here in Bolívar State and other cities focused on oil refining, aluminum production and diamond extraction.

One Sunday in July, he began his weekly television program from a helicopter above a site near Caracas where the first of his so-called socialist cities, called Camino de los Indios, or Indian Path, is under construction. The project set off protests in Federico Quiroz, a Caracas slum from which residents will be forcibly relocated to this new city.

Ciudad Guayana remains a bastion of support for the president, its aging factories holding strategic importance for the country’s seemingly eternal quest to lessen reliance on oil exports.

Workers have been largely supportive of the changes at companies like Alcasa, an aluminum producer run by Carlos Lanz, a former Communist guerrilla and now a leading theorist on Venezuela’s efforts to allow workers to co-manage state factories.

But these experiments with socialism have not created enough economic opportunities for residents here. The housing shortage and a spate of killings in gun battles between unionized workers competing for construction jobs have raised questions about how far the commitment to a better life for Venezuela’s people extends.

“This is the most dangerous place in Venezuela for union members,” said Laurent Labrique, a director of Provea, a human rights group that is investigating more than 100 killings of unionized workers here in the last three years.

Unemployment here is estimated at nearly 14 percent, compared with the national rate of 8 percent.

Ciudad Guayana was founded in an atmosphere of optimism. Wide paved avenues and rectangular apartment blocks evoke the modernist feel of other planned cities like Brasília, built a few years earlier. Politicians in Caracas, lured by the nearby supplies of iron ore and bauxite, poured billions of dollars into building this city around steel plants and aluminum smelters.

The problems began in the early 1980s, when the federal government absorbed heavy losses at poorly managed state enterprises. By the time Mr. Chávez was elected in 1998, there was also a housing shortage that could not be solved by the high-rises built decades ago by the Corporación Venezolana de Guayana, the state holding company that controls most industry here.

A surge in land seizures ensued, with squatters empowered by Mr. Chávez’s populist statements, said Clara Irazábal, an urban planner at the University of Southern California who is from Venezuela, as shantytowns spread from San Félix, the old colonial quarter, to Puerto Ordaz, where the middle and upper classes live.

“We have no running water or asphalt for the roads, and the only electricity comes from up there,” said Niurka Muñoz, 31, a homemaker, as she pointed to a maze of wiring that illicitly siphons power off the grid into her home in Hugo Chávez Frías, a shantytown assembled from discarded wood and cinderblock that the residents named in honor of the president.

No one at state agencies has precise estimates of how many squatters there are here, though housing rights advocates say more than 10,000 new homes are needed.

The white-collar employees at Venezolana de Guayana, which manages many aspects of life in the city, say they do what they can to improve the situation. “We are trying to impose order on a difficult situation,” said Andrés Cabezas, the corporation’s vice president for territorial development, who oversees the building of new neighborhoods for squatters.

Yet even with its challenges, this city remains a magnet for those fleeing desperation elsewhere. “I dream of returning home someday,” said José Contreras, 35, one of the Waraos who live near the bus station in a camp of tents and hammocks strewn with garbage. “But this is where I’m able to find something to eat and drink.”