Thoughts and Opinions On Today's Important Issues

Friday, February 19, 2010

More Michigan Taxpayer Funds Wasted

Here is the traffic projection graph that started this border mess. It was produced in 1999 as part of the Southwestern Ontario Frontier International Gateway Study that eventually morphed into DRIC.

Boy is it ever wrong!

45,000 vehicles per day at the Ambassador Bridge by 2021 was predicted. In 2009, it looks like around 36,000 vehicles on the graph. 2009 actual: 17,800, about half. In fact, volumes approached that number in 1999 and have sunk like a stone since.

Imagine how angry politicians would be at McCormick Rankin who produced this report if they had built a second bridge here based on their projections. Why it would almost have been as bad as twinning the Blue Water Bridge and seen traffic not grow as projected. No wonder Wilbur Smith put in the disclaimer it did in its MDOT report. Cannot sue them, ever! I wonder if they did the same with the Canadian one.

I am not mocking the engineers. They did their best. BUT to spend billions of taxpayer dollars on "projections" that may not be accurate, which we know with DRIC are not, seems foolhardy at best.

I feel obliged to BLOG something about MDOT's Wilbur Smith Traffic Report because, frankly, you expect me to do so. After all, if I don't, then who will?

However, I am telling you straight out. I am NOT going to do a detailed analysis of the 500 or so pages of bumph. I am sure that it is, as one commentator who knows a lot more about the subject than I do
  • "Like most Wilbur-Smith studies this seems to be a meticulous examination of the factors bearing on future traffic and a conscientious effort to put the best numbers on it."

Trouble is that there is a fatal flaw in it that the commentator missed. The MDOT director, Captain Kirk, said in his press release:

  • "We welcome the opportunity to have the traffic projections that were used for the FEIS reaffirmed by a new investment-grade traffic study"

He had to say that because Michigan law required:

  • "The department shall submit an investment grade traffic study to the legislature by May 1, 2010 from a reputable traffic company with appropriate experience intended to provide a detailed traffic projection for the ensuing 10 years, taking into account projected infrastructure modifications, expansions and improvements announced."

What did Wilbur Smith say they were doing, an investment grade traffic study. MDOT wishes. Nope, they said they were doing this:

  • "refresh [of] the comprehensive traffic study undertaken in 2008 on behalf of Transport Canada for the new proposed Detroit River International Crossing (DRIC) within the Detroit-Windsor region."

In other words, a waste of $275K because it did NOT comply with what the Michigan Legislature asked for. If the report in 2008 was the one they were retained to do by Canada (who now seems NOT to want to be Michigan's partner), why were they so modest in not mentioning their own name as the author? I think that study was to cost over $800K so clearly the MDOT study was NOT a new report independently arrived at.

In fact, if that study was the Wilbur Smith study it produced for Canada, the results of which Transport Canada refused to provide to me, then that study was "fixed" too by its terms of reference to produce a great result regardless of reality!

So what we have is a "refresh" of a poorly framed traffic study because of the criteria chosen that is not an investment grade traffic study that does NOT meet what the Legislature asked for.

Do you understand why I do not want to waste a whole bunch of time on it! The Legislators won't even consider it.

Moreover, how can I comment on this report if the 2008 one has been hidden?

Ok, ok...I will make a few comments from fisking the Report to prove I have no life:

  • "Preliminary results" [Part of the title. When do we get the "final" results? After the Bridge Company gives its findings so it can be rewritten to answer the objections?]

  • "Current accepted professional practices and procedures were used in the development of these traffic and revenue forecasts. However, as with any forecast of the future, it should be understood that there may well be differences between forecasted and actual results that may be caused by events and circumstances beyond the control of the forecasters...

    All estimates and projections reported herein are based on WSA’ experience and judgment and on a review of independent third party projections and information obtained from multiple state and local agencies including Michigan Department of Transportation. These estimates and projections may not be indicative of actual or future values, and are therefore subject to substantial uncertainty. Future developments cannot be predicted with certainty, and may affect the estimates or projections expressed in the report, such that WSA does not specifically guarantee or warrant any estimate or projections contained within this report.While WSA believes that some of the projections or other forward-looking statements contained within the report are based on reasonable assumptions as of the date in the report, such forward looking statements involve risks and uncertainties that may cause actual results to differ materially from the results predicted. WSA take no responsibility or obligation to advise of changes that may in any matter affect the assumptions contained within the report, following the date of this report as they pertain to: socioeconomic and demographic forecasts, proposed residential or commercial land use development projects and/or potential improvements to the regional transportation network. [Your mileage may vary. In other words, don't blame us if we are completely wrong and you will spend billions based on this report]

  • "The annual traffic estimates for the proposed DRIC were developed based on the following basic assumptions: The new crossing is assumed to open to traffic by January, 2016; [Now we know that the DRIC bridge is at least 3 years late! More problems for our economy if we do not allow the Enhancement Bridge project to go forward now.

    Moreover, if the 2016 projected numbers are wrong, then the whole Report is wrong. We are already told by MDOT that within 2 years after the FEIS numbers were prepared, this Report came up with traffic numbers 10% less! Clearly, the FEIS has a major problem in it since its assumptions were clearly wrong. Oh well, another ground to overturn it.]

  • "Toll rates and border processing times for the DRIC baseline were pegged to the existing Ambassador Bridge and are assumed to remain at parity in the future" [If Moroun lowers toll rates or chooses not to raise them, then the DRIC bridge will never pay for itself if it ever could be financed based on tolls alone. We are already hearing about "availability payments" which mean Government subsidies."]

  • "Ramp-up is assumed to be modest at 90 percent in the first year and 95 percent in the second year, given that this bridge project has been discussed publicly for many years and is in close proximity to the existing crossings" [Is 90-95% modest? Does not seem so to me. Oh wait, it probably is: "is in close proximity to the existing crossings." So much for security and redundancy advantages for DRIC]

  • "The DRIC is projected to yield a border crossing travel time saving that will range between 2.0 to 8.0 minutes compared to the existing crossings by 2025 for select representative long-distance movements." [A ton of money and a lot of risk to save a few minutes on a long-distance trip. There seems to be no appreciation anywhere of technological changes and moving Customs away from the border that makes wasting this much money a boondoggle]

  • "The DRIC will capture 34.5 percent of the overall combined 2025 traffic along the four frontier border crossings within the Detroit/Windsor/Port Huron/Sarnia region. The new crossing will result in an average overall traffic share reduction of 20.5 percent at the Ambassador Bridge, 7.2 percent reduction at the Detroit-Windsor Tunnel, and a 6.9 percent reduction at the Blue Water Bridge.

    The DRIC is expected to capture 27.6 percent of the total passenger vehicle traffic and 44.2 percent of the overall commercial vehicle traffic by 2025. The new crossing will result in a 2025 average passenger vehicle share reduction of 12.7 percent at the Ambassador Bridge, an 11.8 percent reduction at the Detroit-Windsor Tunnel, and a 3.2 percent reduction at the Blue Water Bridge. The 2025 commercial vehicle shares as a result of the new crossing will yield a 31.5 percent reduction in the Ambassador Bridge commercial vehicle shares, while the Blue Water Bridge will experience a 12.1 percent reduction in its commercial vehicle share." [Good thing the BWB numbers were now lower or people there might ask why they needed a new plaza, a project that Wilbur Smith was involved in.

    Good thing Windsor did not get Detroit's half of the Tunnel. Losing that much business means the Tunnel is broke since it does not pay a dividend now

    The numbers before were a lot higher:
  • The City of Windsor owned Detroit/Windsor Tunnel could lose up to 26% of its total traffic.
  • The Ambassador Bridge could lose up to 75% of its truck traffic and 39% of its car traffic.
  • A seven percent decline in overall auto traffic on the Blue Water Bridge and a 16 to 18percent decline in overall truck traffic with the introduction of a proposed DRIC crossing in the 2035
  • A proposed DRIC crossing could carry as much as 80 percent of the truck traffic handled by the two bridges and about 60 percent of all traffic, depending on the alternative eak hour could be expected
  • "The DRIC is anticipated to attract approximately 9,000 passenger cars and 9,500 commercial vehicles during a normal weekday by the opening year of 2016. [Effectively, by 2016 traffic will rise so dramatically that the DRIC bridge will have 18,500 crossings per day. That is about what the Ambassador Bridge has today.]

  • "The DRIC is expected to attract approximately 5.9 million vehicles annually in both directions in the opening year (2016)" [The total business of the Bridge and Tunnel in 2009 was about 10.4M vehicles. If true, DRIC will put these crossings under severe financial pressure. If not true, DRIC goes broke.]

  • "The forecasted growth of commercial and passenger cross-border traffic, under certain project scenarios, has been projected to exceed the capacity of the existing crossings as early as 2015, under certain project scenarios. [So much for those discredited scenarios]

  • "The WSA team is comprised of Wilbur Smith Associates, IBI Group (current consultant for the DRIC study model development)...[Why not get the whole DRIC team involved to have complete apprehension of bias, or actually, real bias!]

  • "The automobile traffic at the three crossings reached their highest volumes in 1999, and demonstrated an average annual growth of approximately 2.4 percent between 1972 and 1999. The Ambassador Bridge, during this same period, had an average annual traffic growth of approximately 3.2 percent...Since 1999, the traffic declined at an average rate of -6.6 percent...The commercial vehicle traffic at the three crossings plateaued in 1999 and demonstrated an average annual growth of approximately 5.6 percent between 1972 and 1999. The Ambassador Bridge, during this same period, showed commercial vehicle average annual traffic growth of approximately 5.9 percent...Since 1999, the traffic plateaued with unprecedented declines occurring in 2008 and 2009....The historical annual total vehicular traffic for the three crossings exhibited significant increases in traffic between 1972 and 1999...The Ambassador Bridge had the highest average annual growth of 3.8 percent for the total vehicles among the three crossings over this traffic volumes at the three crossings since 1999 declined at a combined average annual rate of approximately -5.9 percent" [With these horrific numbers, how can one realistically demonstrate that "The DRIC is expected to attract approximately 5.9 million vehicles annually in both directions in the opening year (2016), and is forecasted by 2025 to capture 8.4 million vehicles, representing an average annual growth rate of 4.0 percent (with ramp-up included)."]

  • "(however these projections do not take into account the more recent economic turmoil)" [Yes, that is the problem especially when an auto part crosses the border so many times. If the auto business is down, traffic will be down too. If distribution changes eg mother and satellite plants, then traffic volumes will not grow rapidly. If Canadian businesses relocate to the US to be close to Mom....big trouble]

  • "The border crossing automobile traffic has been continuously decreasing since 1999 with an almost 37.1 percent reduction in the total United States-Canada border crossing traffic currently tracked by PBOA in 2009" [And why should it grow? Latest numbers "Closer to home, in 2000, almost nine million Americans made same-day trips to Windsor. That number has fallen consistently every year over the last decade. In 2009, little more than 1.5 million Americans made same-day trips to Windsor.]

  • "The traffic in 2001, prior to the events on 9/11, had shown signs of a decline as a result of the economic downturn that was already underway at the time, such that following the events on 9/11, the downward trend continued" [Key point. We were in economic trouble before 9/11]

  • "The overall total traffic demand across the frontier is currently 40 percent below the previous DRIC-EIS projections and the revised projections are shown to be close to 35 percent less than previously forecasted by 2015. Beyond the 2015 time horizon, the forecasts were expected to converge, such that the revised forecasts were expected to be approximately 10 percent below the DRIC-EIS forecasts by 2035. This is primarily driven by the reduction in same-day traffic that is expected to continue in the short-term as a result of several factors including the Western Hemisphere Travel Initiative, the collapse and restructuring of the automotive industry, and the economic recession. The return of the same day markets are expected to be gradual and are likely to increase over the long-term as the regional economies diversify and begin recovering. The commercial vehicle markets are, to a lesser extent, dependent on the local economies and are expected to rebound faster such that these are forecasted to be approximately 15 percent below the DRIC-EIS study forecasts by 2015, and approximately 10 percent less by 2035. A detailed description of the factors influencing these forecasted trends are further described in the detailed report in Appendix C." [The economy was turning sour before 9/11. The Report lists a host of reasons why traffic is down. No one expected the sharp decline in 2008-9 either. Frankly, what makes these long range positive predictions any more likely than the mistakes made by DRIC already in such a short period of time. In the Report I did not see what would grow trafic to the rate required.]

  • "The addition of the DRIC is not expected to divert much of the current Blue Water Bridge traffic, since the Blue Water Bridge will still hold its advantage of providing shorter travel distances to some local and long-distance markets." [Wow, that means the EIS for the Blue Water Bridge need not be thrown out and the plaza can still be built at a cost of $500M. Wasn't Wilbur Smith involved in that too]

  • "The DRIC, under the baseline assumptions, is forecasted by 2025 to capture 4.4 million and 3.9 million passenger cars and commercial vehicles, respectively, representing an average annual growth rate of 4.1 percent and 4.0 percent between 2016 and 2025. The passenger car traffic along the DRIC is expected to grow to 6.0 million by 2035 and 7.7 million by 2060, which reflects a long-term annual growth rate of approximately 1.0 percent during the 25-year period. The commercial vehicle traffic growth during the same time period is expected to grow from 4.9 million to 7.0 million, which reflects an average annual growth rate of approximately 1.5 percent." [That is a huge percentage considering we no longer have the Free Trade growth spurt. Remember, between 1972 and 1999, the commercial vehicle traffic at the three crossings demonstrated an average annual growth of approximately 5.6 percent. The drop after 2035 seems shockingly low after the big increase before.]

  • "The DRIC is anticipated to attract approximately 9,000 passenger car traffic and 9,500 commercial vehicle traffic during a normal weekday by the opening year of 2016. These will by 2025 grow to 12,800 and 13,500 for the passenger car and commercial vehicle, respectively. The DRIC is therefore expected to serve a total of approximately 26,500 daily vehicles by 2025, and over 37,000 by 2040 when the miscellaneous traffic is included." [The DRIC 2016 number is more than that of the Ambassador Bridge today.]

A lot of the report was a description of traffic modelling and risk anlysis and other things that made my eyes glaze over. So be my guest and read it for yourself. To be honest, I did not get much out of it!


Sure, sure you say, what else would one expect from the Blogmeister but showing the fault of what was done. Obviously concerned about my brilliant rejoinder, DRIC had a peer review of the report undertaken. Sort of.

They had what is called

  • "Internal Peer Review of the Comprehensive Traffic and Toll Revenue Study for the Detroit River International Crossing Project Forecast Refresh and Update"

An independent peer review. Don't be silly. They might find soemthing wrong.

Instead get a team member to do an internal one! What does that mean:

  • "1.1 Report Purpose

    The purpose of this report is to summarize the findings of an internal peer review performed by IBI Group on the traffic and revenue forecasts for the Detroit River International Crossing (DRIC) Study, as prepared by Wilbur Smith Associates (WSA) for the Michigan Department of Transportation (MDOT).

    The internal peer review involves a review of the assumptions, methodology and results of the DRIC traffic and toll revenue forecasts and includes a review of data validity, economic parameters, travel demand procedures and parameters and toll rate sensitivity analysis. The objective was thus to assess the credibility, reasonableness and any associated risks with the forecasts and their reliability with respect to supporting informed decision-making by MDOT. As an internal peer review, IBI Group was part of the WSA Team responsible for the development of traffic and revenue forecasts and thus was involved in discussions with WSA throughout the study. Given the aggressive time schedule, this was beneficial as IBI Group was able to provide timely input on assumptions and methodology, allowing refinements to be incorporated into the development of the WSA forecasts as required.

    1.2 Internal Peer Review Process

    IBI Group is a leading transportation consulting firm that includes specialties in the areas of transportation planning, travel demand forecasting and toll forecasting. The firm has been responsible for the development of traffic forecasts for the Detroit River International Crossing over the past decade, supporting major US-Canada Bi-national Partnership efforts as part of the Planning/Need and Feasibility Study (2004) and the DRIC Study (2007), and undertaking several Windsor Gateway traffic analysis studies for Transport Canada and the Ministry of Transportation, Ontario (MTO). IBI Group was also part of the WSA Team that prepared the draft Investment Grade Windsor Gateway Traffic and Revenue Study for Transport Canada (2008). IBI Group has also undertaken toll traffic and revenue studies and peer reviews for toll facilities across North America and abroad, and thus provides the historic understanding and technical skills necessary to be uniquely qualified to perform an internal peer review of WSA’s DRIC Refresh for MDOT.

    The internal peer review was initiated with the notice to proceed provided to WSA by MDOT. As part of the WSA technical team in the Windsor Gateway investment grade study, IBI Group’s role in the MDOT Refresh included providing input and updates to networks, trip tables and assumptions, continuing this role from the previous Windsor Gateway study."

Honest. I cannot make this stuff up!