|Toll forecasting slammed, grossly overstated|
|Written by Terri Hall|
|Saturday, 04 February 2012|
Link to article here.
Wilbur Smith Assoc forecasting record slammed in report for Reston VA groupPosted on Fri, 2012-01-27 15:30
Toll Road News
Wilbur Smith Associates (WSA) record of traffic and revenue forecasting is blasted in a study done by a retired federal government economist Terry Maynard for the Reston Citizens Association (CRA) in northern Virginia. The report supports a call for an independent review of the WSA/CDMSmith traffic and revenue forecast of the Dulles Toll Road.
The analysis titled Traffic and Revenue Forecasts: Plenty of Room for Error by Terry Maynard finds that forecasts of revenue by WSA as it then was (just recently merged to form CDMSmith) are on average 2.27 times - or 127% too high - as compared with subsequently realized toll revenues.
This is based on the first five years of 12 toll projects forecast.
In addition Maynard finds that WSA had a pattern of understating the sensitive profit maximizing toll initially, then subsequently raising those estimates.
Maynard says that WSA routinely uses the highest population and employment forecasts for forecasting traffic.
Despite poor forecasts tollroads stuck with WSA.
WSA estimates for Dulles Toll Road revenues are suspect, Maynard writes, because they are already using numbers overstating Fairfax County employment by 25%.
What it calls the "pattern of overestimates" in WSA forecasting suggests a "substantial risk" in proceeding with the MWAA financial plan, Maynard writes.
- lenders won't fund the project without state guarantees or at investment grade rates
- tolls much higher than those forecast will emerge
- corridor economic growth will be hampered by the high costs
- MWAA may default and face much higher costs than cited
Terry Maynard: "RCA has long been enthusiastic about Metrorail to Dulles via Reston, but we do not want a rail line at any price, especially one that forces Dulles Toll Road users to absorb most of the financial burden and area communities to absorb added traffic on already crowded local roads. The prospects are even worse if the WSA forecasts overestimate revenues as much as our research suggests. We hope that an independent forecast, combined with ‘value engineering’ for Phase 2 and restructuring the financial arrangements will lead to a better outcome for everyone.”
2nd stage of Dulles Rail at stake
Future Dulles toll road revenues are being used as the security for
selling the debt needed to fund a $5 billion Dulles Metrorail branch
line from West Falls Church through Reston County to Dulles Airport and
out into Loudoun County. Over half the capital cost is proposed to be
covered by toll revenue bonds of the Dulles Toll Road issued by the
Metropolitan Washington Airports Authority (MWAA) that has a 50 year
franchise on the tollroad and is building the rail line.
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