High-occupancy toll (HOT) lanes are expected to reduce congestion by using capacity more efficiently than either conventional high-occupancy vehicle (HOV) lanes or general-purpose lanes. In an article entitled "HOT Lanes: A Better Way to Attack Urban Highway Congestion," the authors contend that HOV-to-HOT conversions are always attractive, noting further that adding new HOT lanes can be feasible, too, under a wide range of conditions. The article provides the following cost estimates.
HOV-to-HOT Conversion Costs
The cost of converting an existing HOV lane to a HOT lane is relatively low, according the source article, which notes that HOV-to-HOT lane conversions are almost always financially attractive, further contending that a HOT lane on the same grade as other lanes may be self-supporting if no major interchanges need to be rebuilt. A HOV lane that carries fewer than 700 vehicles an hour is a candidate for conversion to a HOT lane. The I-15 facility in San Diego included an eight-mile stretch of two reversible lanes in the median. The HOV lanes, which were open to southbound traffic from 5:45 to 9:15 AM and to northbound traffic from 3:00 to 7:00 PM, had been operating well below capacity since their opening in October 1988. In 1999, the San Diego Association of Governments converted those HOV lanes to HOT lanes to make better use of the unused capacity on those lanes as well as to generate revenue for transit improvements in the I-15 corridor.
The primary capital-cost items included plastic pylons, dynamic message signs, tolling and video enforcement equipment, and back-office processing systems such as computer hardware and software. The total capital cost to convert two reversible HOV lanes on an eight-mile stretch of the I-15 in San Diego to HOT lanes was $1.85 million. In-vehicle tags, required for electronic toll payment, were paid for by the drivers, although project operators bought the tags first and then leased or sold them to motorists.
In addition to capital costs to implement the I-15 HOT lanes, there were costs associated with operating the sale or leasing of tags, operating and maintaining the toll collection system, advertising to explain and publicize HOT lanes, and enforcing the payment of tolls.
New Capacity HOT Lane Costs
In congested corridors where space for new, at-grade lanes is available in the median, the addition of brand-new HOT lanes can cost substantially more, but still be financially feasible, although data on such deployments are still limited. The 91 Express Lanes project in California added four 10-mile-long lanes to the wide median of the Riverside Freeway. The total capital cost was $130 million, which also covered a short stretch of an additional lane in each direction for HOV enforcement. The expenditure was financed through taxable revenue bonds, borrowed at an interest rate of 9 percent. Even with the high cost of debt service, the private operator was reported to be covering all costs including debt service, and beginning to show a profit after only three years of operation.
A feasibility study of adding two HOT lanes, one in each direction, in the median of U.S. Route 101 in Sonoma County, California was conducted. The study experts proposed two alternatives: a 15-mile version at a cost of $85-$119 million; and a 24-mile version at a cost of $125-$177 million. For either length-alternative, toll revenues from the lower-cost version would cover all costs; toll revenues from the higher-cost version might cover costs if the revenue estimates, based on variable rather than flat-rate tolls, were achieved. The study experts concluded, "this project is financially, physically, and operationally feasible."
$1.85 million for conversion. $85 million to $177 million for new construction.