U.S. Department of Transportation
Federal Highway Administration
1200 New Jersey Avenue, SE
Washington, DC 20590
Status of the Nation's Highways, Bridges, and Transit:
2002 Conditions and Performance Report
|Chapter 7: Capital Investment Requirements|
Part I: Description of Current System
Part II: Investment Performance Analyses
Part III: Bridges
Part IV: Special Topics
Part V: Supplemental Analyses of System Components
This section presents the projected investment requirements for highways and bridges for two primary performance targets. The Cost to Maintain Highways and Bridges represents the annual investment necessary to maintain the current level of highway system performance. The Cost to Improve Highways and Bridges identifies the level of investment that would be required to significantly improve system performance in an economically justifiable manner. The impacts of a wider range of alternative investment levels on various measures of system performance are shown in Chapter 9. Chapter 9 also explores recent trends in highway expenditures compared to recent changes in system performance.
The combined highway and bridge investment requirements are drawn from the separately estimated scenarios for highways and for bridges, and from external adjustments to the two models. These scenarios are defined differently, due to the different natures of the models used to develop them. However, it is useful to combine them in order to show combined investment. This is particularly helpful when trying to compare these scenarios to current or projected investment levels, since amounts commonly referred to as “total highway spending” or “total highway capital outlay,” include expenditures for both highways and bridges. Chapter 8 compares current highway and bridge spending with the investment requirements outlined in this section.
The average annual investment required to Improve Highways and Bridges over the 20-year period 2001-2020 is projected to be $106.9 billion in 2000 dollars. The average annual Cost to Maintain Highways and Bridges is projected to be $75.9 billion (also in 2000 dollars).
Cost to Improve Highways and BridgesThe average annual Cost to Improve Highways and Bridges is broken down by functional class and type of improvement in Exhibit 7-2. The estimated investment requirements for urban arterials and collectors total $61.3 billion, or 57.3 percent of the total average annual Cost to Improve Highways and Bridges. Investment requirements on rural arterials and collectors are $23.8 billion or 22.3 percent of the total, while the investment requirements for rural and urban local roads and streets total $21.8 billion (20.4 percent).
The Cost to Improve Highways and Bridges scenario combines the Maximum Economic Investment scenario from the Highway Economic Requirements System (HERS) and the Eliminate Deficiencies scenario from National Bridge Investment Analysis System (NBIAS) with external adjustments to the two models.
Cost to Maintain Highways and BridgesExhibit 7-3 shows the average annual Cost to Maintain Highways and Bridges by type of improvement and functional class. The estimated investment requirements for urban arterials and collectors under this scenario total $43.2 billion, or 56.9 percent of the average annual Cost to Maintain Highways and Bridges. Investment requirements for rural arterials and collectors total $17.3 billion (22.7 percent), while the investment requirements for rural and urban local roads and streets total $15.5 billion (20.4 percent).
The Cost to Maintain Highways and Bridges scenario combines the Maintain User Costs scenario from HERS and the Maintain Backlog scenario from NBIAS with external adjustments to the two models.
Investment Requirements by Improvement TypeExhibits 7-2 and 7-3 also show investment requirements by type of improvement. The investment requirements are classified into three categories: system preservation, system expansion, and system enhancement, which are defined in Chapter 6. System preservation, as defined in this report, consists of the capital investment required to preserve the condition of the pavement and bridge infrastructure. This includes the costs of resurfacing, rehabilitation, and reconstruction, but does not include routine maintenance costs. System expansion includes the costs related to increasing system capacity by widening existing facilities or adding new roads and bridges. System enhancements include safety enhancements, traffic operations improvements, and environmental improvements. Appendix A describes how the investment requirements modeled by HERS and NBIAS were allocated among the three types of improvements.
Exhibit 7-4 displays investment requirements by improvement type for rural and urban areas, for each scenario.
System PreservationAverage annual system preservation investment requirements are estimated to be $48.5 billion under the Cost to Improve scenario and $37.1 billion under the Cost to Maintain scenario. These totals comprise constitute 45.4 and 48.8 percent, respectively, of the totals for the two scenarios. Figures 7-2 and 7-3 also indicate that bridge preservation investments represent about one-fifth of total preservation investment requirements under each scenario. As shown in Exhibit 7-4, system preservation makes up a much larger share of total investment requirements in rural areas than in urban areas.
The $49.9 billion in average annual investment requirements for system expansion represent 46.7 percent of the total Cost to Improve Highways and Bridges. Comparable figures for the Cost to Maintain scenario are $32.9 billion and 43.3 percent. Exhibits 7-2 through 7-4 indicate that system expansion requirements are much larger in urban areas than in rural areas, both in the total amount and as a share of overall investment requirements, under both investment scenarios.
Investment requirements for system enhancements represent 7.9 percent of both the Cost to Improve Highways and Bridges ($8.4 billion) and the Cost to Maintain Highways and Bridges ($6.0 billion). Investment requirements for safety enhancements, traffic operation facilities, and environmental enhancements are not directly modeled, so this amount was derived solely from the external adjustment procedures described on the next page.
Sources of the Highway and Bridge Investment Requirements EstimatesThe estimates of investment requirements for highways and bridges under the Improve and Maintain scenarios were derived from three sources:
The percentage of total investment requirements that are modeled in HERS is somewhat larger than was the case in the 1999 C&P report. The reason for this change is that investment requirements for new highway and bridge construction are now being directly modeled along with expansion of existing roadways, through the use of the high cost capacity improvements feature in HERS. This change is discussed in greater detail in Appendix A.
External adjustments were made to the directly modeled improvements generated by HERS and NBIAS in two areas:
Adjustments for Missing State Data
A third adjustment was made to compensate for missing State data. The reliability of the investment requirement projections derived from the HERS model depends heavily on the accuracy of the HPMS sample data collected by States and reported annually to the FHWA. In some previous editions of this report, the HPMS data for certain States was not complete enough to be analyzed by HERS or its predecessor models, so some States were excluded from the analysis, and the national results were factored upward to compensate. Such procedures were not utilized in the production of the 1999 C&P report, as the data for all States was deemed sufficiently complete to be included in the analysis. This was possible in part because of major improvements to the HPMS software provided by the FHWA to the States. The software now includes a variety of new features to assist the States in improving the quality of their data submissions.
For this edition of the report, however, the data reported by one State in the 2000 HPMS did not include pavement condition data for those roads not under State jurisdiction. As a result, the HPMS data for that State did not represent a statistically valid sample of all roads within the State. Consequently, all 2000 HPMS sample data for that State were removed from the data used to run HERS for this report, and a separate analysis was conducted processing older HPMS data through HERS to derive an adjustment factor to supplement the results of the national analysis
Highway Economic Requirements System (HERS)The investment requirements shown in this report for highway preservation and highway and bridge capacity expansion are developed primarily from HERS, a simulation model that employs incremental benefit/cost analysis to evaluate highway improvements. The HERS analysis is based on data from the HPMS, which provides information on current roadway characteristics, conditions, and performance and anticipated future travel growth for a nationwide sample of more than 113,000 highway sections. While HERS analyzes these sample sections individually, the model is designed to provide results valid at the national level, and does not provide definitive improvement recommendations for individual highway segments.
HERS initiates the investment requirement analysis by evaluating
the current state of the highway system using information on pavements,
geometry, traffic volumes, vehicle mix, and other characteristics from
the HPMS sample dataset. It then considers potential improvements on sections
with one or more deficiencies, including resurfacing, reconstruction,
alignment improvements, and widening or adding travel lanes. HERS then
selects the improvement with the greatest net benefits, where benefits
are defined as reductions in direct highway user costs, agency costs,
and societal costs. In cases where none of the potential improvements
produces benefits exceeding construction costs, the segment is not improved.
Appendix A contains a fuller description of the project selection and
implementation process used by HERS.
One of the key features of HERS as an economics-based model
(introduced in the 1997 C&P report) involves its treatment of travel demand.
Recognizing that drivers will respond to changes in the relative price
of driving and adjust their behavior accordingly, HERS explicitly models
the relationship between the amount of highway travel and the price of
that travel. This concept, sometimes referred to as travel demand elasticity,
is applied to the forecasts of future travel found in the HPMS sample
data. HERS assumes that the forecasts for each sample highway segment
represent a future in which average conditions and performance are maintained,
thus holding highway-user costs at current levels. Any change in user
costs relative to the initial conditions calculated by HERS will thus
have the effect of either inducing or suppressing future travel growth
on each segment. Consequently, for any highway investment requirement
scenario that results in a decline in average user costs, the effective
VMT growth rate for the overall system will tend to be higher than the
baseline rate derived from HPMS. For scenarios in which highway user costs
increase, the effective VMT growth rate will tend to be lower than the
baseline rate. A discussion of the impact that future investment levels
could be expected to have on future travel growth is included in Chapter
9. Appendix A includes a further discussion of how travel demand elasticity
is implemented in HERS, as well as recent changes in the elasticity procedures
to account for traffic diversion and segment length.
While HERS was primarily designed to analyze highway segments, and the HERS outputs are described as “highway” investment requirements in this report, the model also factors in the costs of expanding bridges and other structures, when deciding whether to add lanes to a highway segment. All highway and bridge investment requirements related to capacity are modeled in HERS; the NBIAS model considers only investment requirements related to bridge preservation.
Highway Investment Backlog
The highway investment backlog represents all highway improvements that could be economically justified for immediate implementation, based on the current conditions and operational performance of the highway system. HERS estimates that a total of $271.7 billion of investment could be justified based solely on the current conditions and operational performance of the highway system. Approximately 82 percent of the backlog is in urban areas, with the remainder in rural areas. About 58 percent of the backlog relates to capacity deficiencies on existing highways; the remainder results from pavement deficiencies.
Note that this figure does not include rural minor collectors, or rural and urban local roads and streets, because HPMS does not contain sample section data for these functional systems. The backlog figure also does not contain any estimate for system enhancements. Appendix A explains how the backlog was calculated.
HERS Investment Scenarios
Two HERS investment scenarios were developed in order to generate the HERS-modeled portion of the two highway and bridge investment requirements scenarios. The HERS portion of the Cost to Improve Highways and Bridges was drawn from the HERS Maximum Economic Investment Scenario, and the HERS Maintain User Costs scenario fed into the Cost to Maintain Highways and Bridges. Exhibit 7-6 shows the estimated investment requirements under the two HERS scenarios. The impact of the various levels of investment on user costs and other indicators of highway condition and performance is presented in Chapter 9.
The Maximum Economic Investment scenario is of interest mainly because it defines the upper limit of highway investment that could be economically justified. It was used to generate the highway preservation and system capacity expansion components of the Cost to Improve Highways and Bridges. In this scenario, all improvements with a benefit-cost ratio greater than or equal to 1.0 are implemented in HERS. While this scenario does not target any particular level of desired system performance, it would eliminate the existing highway investment backlog and address other deficiencies that will develop over the next 20 years due to pavement deterioration and travel growth. As shown in Exhibit 7-6, the average annual investment modeled by the HERS Maximum Economic scenario is $69.1 billion.
The second major highway investment requirement scenario in this report is the Maintain User Costs scenario. It was used to generate the highway preservation and system capacity expansion components of the Cost to Maintain Highways and Bridges. This scenario gives the level of investment sufficient to allow total highway user costs per vehicle miles traveled (VMT) at the end of the 20-year analysis period to match the baseline levels. Highway user costs include travel time costs, vehicle operating costs, and crash costs. The average annual investment modeled by HERS under this scenario is estimated to be $48.4 billion.
The Maintain User Costs concept was introduced in the 1997 C&P report to provide a new highway system performance benchmark based on economic criteria. It focuses on highway users, rather than the traditional engineering-based criteria, which are oriented more toward highway agencies. This scenario is also an important technical point in the operation of HERS, since the VMT growth rates in the model are partly dependent on changes in user costs, due to the operation of the travel demand elasticity feature. The impact on individual highway user cost components at this and other levels of investment are discussed in Chapter 9.
National Bridge Investment Analysis System (NBIAS)
The bridge investment requirements shown in this report are derived primarily from the NBIAS, which is summarized in this section. Appendix B provides a more comprehensive look at this approach. Although NBIAS was introduced in the 1999 C&P report, this edition is the first to use it as the primary model for estimating future investment requirements for bridge preservation.
NBIAS is the latest in a series of bridge models used by the FHWA and its partners. It replaces the Bridge Needs and Investment Process (BNIP) model, which estimated bridge investment requirements for the 1999 C&P report. Like BNIP, NBIAS is based on data from the NBI, which provides information on the characteristics and conditions of more than 525,000 bridges in the United States.
The internal logic of NBIAS is derived from the PONTIS Bridge Management System. PONTIS is licensed by the American Association of State Highway and Transportation Officials to 45 State departments of transportation. Because this approach relies on having element-level condition data, which is not currently contained in the NBI, NBIAS begins its analysis by synthesizing element condition data from the general bridge condition ratings that are available. NBIAS considers individual bridges for improvement and replacement needs, but the current version of the model analyzes maintenance, repair, and rehabilitation (MR&R) needs on an aggregate level, rather than looking at individual bridges.
NBIAS improves upon BNIP in several ways. NBIAS includes a benefit/cost screen, which filters out improvements that are not cost-beneficial within the 20-year funding horizon. NBIAS is also more accurate in evaluating bridge subcomponents and determining the value of routine repair and rehabilitation of bridge elements. Finally, NBIAS provides estimates that are more reflective of the way State and local transportation agencies undertake bridge management strategies.
Bridge Investment Backlog
As defined in this report, the bridge investment backlog represents the cost of improving all existing bridge deficiencies, if the benefits of doing so exceed the costs. NBIAS, like BNIP, defines deficiencies broadly, and covers more than the structurally deficient and functionally obsolete categories defined in Chapter 3. NBIAS estimates that $54.7 billion of investment could be invested immediately in a cost-beneficial fashion to replace or otherwise address currently existing bridge deficiencies.
The $54.7 billion bridge investment backlog is substantially lower than the $87.3 billion backlog reported in the 1999 C&P. This is due to the use of benefit/cost analysis in the NBIAS model. NBIAS determines that the optimal time to address some bridge deficiencies may not be in the first year of a 20-year planning horizon; instead, improvements or replacements may be made at other points of the planning period. This is more consistent with the real world experiences of State and local transportation agencies, which deal with bridge deficiencies over a multi-year planning period.
Bridge Investment Requirements Scenarios
While modeling techniques have changed from the BNIP to NBIAS models, the investment requirements scenarios are defined similarly. Two scenarios are examined: the Eliminate Deficiencies and Maintain Backlog scenarios. The results are described in Exhibit 7-7.
The Eliminate Deficiencies scenario is the bridge component of the Cost to Improve Highways and Bridges described earlier in this chapter. Where it is cost-beneficial to do so, the Eliminate Deficiencies scenario would eliminate the existing bridge investment backlog and correct other deficiencies that are expected to develop over the next 20 years. The average annual investment required under this scenario is estimated to be $9.4 billion, which is 8.8 percent of the $106.9 billion average annual investment required to improve highways and bridges over a 20-year period.
The Maintain Backlog scenario is the bridge component of the Cost to Maintain Highways and Bridges. The Maintain Backlog scenario identifies the level of annual investment that would be required so that the bridge investment backlog would not increase above its current level. Existing deficiencies and newly accruing deficiencies would be selectively corrected to minimize the investment required to maintain the same backlog of deficient bridges in 2020 that exists in 2000. The average annual investment required under this scenario is estimated at $7.3 billion, or 9.7 percent of the $75.3 billion average annual investment required to maintain highways and bridges over a 20-year period.