A report released today by the Michigan Department of Transportation predicts that a proposed Detroit River bridge would generate $70.4 million in toll revenue its first year and nearly $240 million by 2040.
MDOT did not plan to release its revenue forecast for the $5.3 billion Detroit River International Crossing bridge because it feared losing a competitive position in the bid process, but the Michigan Senate demanded the numbers amid hearings this week on enabling legislation on the project.
Commercial truck traffic will generate $56.2 million of the $70.4 million in the bridge’s proposed opening year of 2016, according to the report.
That’s based on a prediction of 5.8 million cars and trucks crossing the new bridge.
The numbers conflict with a more conservative, by comparison, set of revenue numbers issued earlier this month that say the bridge would garner $60 million in its proposed opening year of 2016.
Revenue numbers released June 4 originated with Transport Canada, one of the DRIC partner agencies, and not from MDOT as reported at the time.
MDOT acknowledged it was aware that those numbers would be released and that they were calculated based on the agency’s traffic study.
However, MDOT said the June 4 revenue projections were not generated by it and instead came from Canada and its Transport Minister John Baird. The agency did not dispute the numbers when they were released.
A message was left with MDOT spokesman Bill Shreck asking to explain the conflict between the set of revenue projections.
The June 4 revenue numbers were released by Lansing-based Marketing Research Group Inc. , which has been a source of pro-DRIC information but has declined to say who is paying it. The firm has organized at least one DRIC event in which MDOT and state officials participated.
The House last month approved a bill that would authorize MDOT’s continued participation in the project, but it has been under fire in the Senate, where a vote could come soon. Hearings on the bill wrapped up Tuesday.
The revenue numbers were given to lawmakers and the media today.
Critics, including some in the Senate and private-sector infrastructure analysts, have questioned MDOT’s traffic study as overly optimistic, and worry that the project could expose taxpayers financially if the tolls fail to generate enough revenue to pay construction financing debt and operational costs.
MDOT and its partners on the project say tolls will be enough, and have promised that a concession agreement with a private-sector partner to build and operate the bridge will completely shield Michigan taxpayers from ever being at risk.
The span would be constructed between Detroit’s industrial Delray neighborhood near Zug Island and Windsor’s Brighton Beach area. The plan is to have the private sector privately finance its construction and operate it while the governments retain ownership. Tolls would repay debt.
Critics say it would unfairly compete with the privately owned Ambassador Bridge two miles away because border traffic remains at half the rate of 1999, when the DRIC process began.
Supporters say DRIC is needed to bolster trade, protect jobs and provided redundancy for the 80-year-old Ambassador Bridge.
Grosse Pointe trucking industrialist Manuel “Matty” Moroun bought the Ambassador Bridge in 1979 and is trying to build a new second span adjacent to the original. That project is actively opposed by Canada because of traffic concerns in Windsor and passively by many DRIC supporters.
Moroun has ongoing litigation over both bridge projects.
The new DRIC revenue report estimates the span will siphon about half of the Ambassador Bridge’s commercial truck traffic, dropping it from 65 percent of what crossing between Detroit and Port Huron to 33 percent.
“The forecast also shows that the Ambassador Bridge as well as the Blue Water Bridge in Detroit-Windsor Tunnel will continue to be financially viable and important crossings,” the report said. “Thus, while the Ambassador Bridge’s market share will drop somewhat, this hardly represents a bankruptcy scenario that some have claimed would occur.”
The Ambassador Bridge is believed to generate about $60 million annually now in revenue. According to the new MDOT report, the bridge will generate $53.3 million in 2016 and $150.2 million by 2035.
The traffic study said that toll rates are assumed to be the same as the Ambassador Bridge, but the new revenue number included this line: “Revenue calculation includes toll revenue inflation based on an estimated future consumer price index.”
It did not provide a methodology.
The Detroit International Bridge Co. , which operates the Ambassador Bridge, on May 25 released a study that shows border traffic will remain relatively flat at the Ambassador Bridge in coming years, which conflicts with a state-sponsored report showing marked increases that are being used to justify a new public bridge.
The new estimate says that car and truck traffic at the bridge won’t come near its 2008 level of 7.34 million vehicles again until 2035. Commercial truck traffic, which is more lucrative because of higher tolls, is expected to grow an average of 2 percent through 2035.
The DIBC study was done in May 2009 by London-based engineering consultants Halcrow Group Ltd. , which has 20 U.S. offices. It based its estimates primarily on forecasts for the U.S. auto industry and local employment, based on a variety of sources.
The legislatively-mandated DRIC traffic study completed earlier this year by Columbia, S.C.-based engineering and planning firm Wilbur Smith Associates for MDOT predicts that 3.1 million cars and 2.7 million commercial trucks would use the new bridge by its tentative January 2016 opening.
The Halcrow study estimates that 3.85 million cars and 3.39 million trucks will use the Ambassador Bridge in 2016 without a competing bridge.