The Binational Border Transportation Infrastructure Needs Assessment Study (BINS)

Prepared for: U.S. – Mexico Joint Working Committee

January 2004

401 B Street, Suite 800 San Diego, CA 92101 (619) 595-5353 ACKNOWLEDGEMENTS

Special thanks to many individuals that contributed to this study. The following list is organized by organization.

SourcePoint: Marney Cox, Project Manager, Chief Economist Elisa Arias Santiago Dávila Oliver Kaplan Rosalind Lates Amir Masliyah Michael Williams

California Department of Transportation: Mark Baza

U.S. Federal Highway Administration: Lisa Dye Sylvia Grijalva Frederick Werner

U.S. General Services Administration: Larry Warner

Mexican Secretariat of Communication and Transportation: Claude Cortez Juan José Erazo Oscar Ringenbach

San Diego Association of Governments: John Hofmockel Steve Kunkel Hector Vanegas Mark Woodall

The ten state representatives of the BINS Technical Committee: Arizona – Arnold Burnham Baja California – Arq. Carlos López Rodríguez California – Sergio Pallares Chihuahua – Ing. Joaquin Barrios Coahuila – Ing. Noe Garcia Riojas New Mexico – Adrian Apodaca Nuevo León – Ing. Evaristo Gaytan and Ing. Oscar Sosa Sonora – Ing. Hector Garcia Tamaulipas – Ing. Ernesto Morris Delgado Texas – Mary DeLeon

ii TABLE OF CONTENTS

CHAPTER 1. INTRODUCTION ...... 3 BACKGROUND...... 3 RELATED JWC PROJECTS ...... 4 LITERATURE AND LEGISLATIVE REVIEW ...... 5 SCOPE OF WORK...... 5 PARTICIPANTS ...... 6 ORGANIZTION OF THE REPORT ...... 7

CHAPTER 2. BORDER TRANSPORTATION INFRASTRUCTURE NEEDS ASSESSMENT ...... 11 U.S.-MEXICO BORDER REGION...... 11 NATIONWIDE IMPACTS OF BORDER TRADE ...... 14 GROWTH IMPACTING TRANSPORTATION INFRASTRUCTURE...... 17

CHAPTER 3. BORDER TRANSPORTATION CORRIDOR EVALUATIONS...... 27 BACKGROUND...... 27 IDENTIFICATION OF MAJOR TRANSPORTATION CORRIDORS IN THE BORDER REGION...... 31 CORRIDOR EVALUATION PROCESS...... 31 CORRIDOR EVALUATION TOOL ...... 32 RESULTS ...... 38 CORRIDORS IN THE BORDER REGION ...... 38 CORRIDORS BY COUNTRY ...... 43 CORRIDORS BY STATE ...... 49 ARIZONA ...... 49 BAJA CALIFORNIA...... 52 CALIFORNIA...... 56 CHIHUAHUA ...... 59 COAHUILA ...... 62 NEW MEXICO...... 65 NUEVO LEÓN...... 68 SONORA ...... 71 TAMAULIPAS ...... 74 TEXAS ...... 78

CHAPTER 4. PLANNED TRANSPORTATION PROJECTS ON BORDER CORRIDORS...... 85 SUMMARY OF THE BORDER REGION...... 86 SUMMARY BY COUNTRY ...... 87 UNITED STATES ...... 87 MEXICO ...... 89 SUMMARY BY STATE ...... 90

iii ARIZONA ...... 90 BAJA CALIFORNIA...... 91 CALIFORNIA...... 93 CHIHUAHUA ...... 94 COAHUILA ...... 95 NEW MEXICO...... 96 NUEVO LEÓN...... 98 SONORA ...... 98 TAMAULIPAS ...... 99 TEXAS ...... 100 BINS DATA ISSUES RELATED TO PROJECTS ...... 101 DATA ISSUES ...... 101

CHAPTER 5. FINANCING OPTIONS FOR BORDER TRANSPORTATION INFRASTRUCTURE ...... 105 MEXICAN TRANSPORTATION PLANNING AND FINANCING PROCESSES ...... 105 THE UNITED STATES’ TRANSPORTATION PLANNI NG PROCESS ...... 111 COMPARING THE TRANSPORTATION PLANNING PROCESSES IN MEXICO AND THE U.S...... 120 INTRODUCTION TO INNOVATIVE FINANCE...... 122 AN INVENTORY OF FINANCE OPTIONS ...... 123 MEXICO CONVENTIONAL AND INNOVATIVE FINANCING OPTIONS...... 123 U.S. CONVENTIONAL AND INNOVATIVE FINANCING OPTIONS ...... 124 MEXICO EMERGING FINANCING OPTIONS ...... 125 U.S. EMERGING FINANCING OPTIONS ...... 125 BINATIONAL EMERGING FINANCING OPTIONS ...... 125 INNOVATIVE FINANCE OPTIONS AVAILABLE FOR MEXICO ...... 126 INNOVATIVE FINANCE OPTIONS CURRENTLY AVAILABLE IN MEXICO...... 126 EMERGING FINANCE OPTIONS JURISDICTIONS IN MEXICO MAY CONSIDER...... 131 INNOVATIVE FINANCE OPTIONS AVAILABLE FOR THE U.S...... 132 INNOVATIVE FINANCE OPTIONS CURRENTLY AVAILABLE IN THE U.S...... 132 EMERGING FINANCE OPTIONS JURISDICTIONS IN MEXICO MAY CONSIDER...... 139

CHAPTER 6. SUGGESTED LEGISLATIVE PROVISIONS AND CONSIDERATIONS FOR FUTURE WORK ...... 143 SUGGESTED LEGISLATIVE PROVISIONS ...... 143 SUGGESTED LEGISLATIVE PROVISIONS FOR MEXICO ...... 143 SUGGESTED LEGISLATIVE PROVISIONS FOR UNITED STATES ...... 144 FUTURE WORK...... 144 DATABASE SYSTEM PLAN ...... 145 TRANSPORTATION CORRIDOR AND PROJECT DATABASE...... 145 PROTOCOL FOR UPDATING THE RAW DATA ...... 146 CONSIDERATIONS FOR FUTURE WORK...... 146

iv LIST OF TABLES

Table 1 List of Organizations and their Responsibility ...... 7 Table 2 Arizona’s Corridor Summary ...... 51 Table 3 Baja California’s Corridor Summary ...... 55 Table 4 California’s Corridor Summary ...... 58 Table 5 Chihuahua’s Corridor Summary ...... 61 Table 6 Coahuila’s Corridor Summary ...... 64 Table 7 New Mexico’s Corridor Summary ...... 67 Table 8 Nuevo León’s Corridor Summary...... 70 Table 9 Sonora’s Corridor Summary ...... 73 Table 10 Tamaulipas’ Corridor Summary ...... 77 Table 11 Texas Corridor Summary ...... 81 Table 12 Mexican Transportation Agencies and Their Responsibilities ...... 107 Table 13 U.S. Transportation Agencies and Their Responsibilities ...... 112 Table 14 CBI and NCPD Allocations by State FY 1999 – 2003 ...... 118 Table 15 Transportation Planning Responsibilities ...... 122

v LIST OF MAPS

Map 1 The U.S.-Mexico Border with the 100 k.m. Border Region Outlined ...... 11 Map 2 Counties and Municipios on the U.S.-Mexico Border ...... 12 Map 3 United States Land Ports of Entry on the U.S.-Mexico Border...... 13 Map 4 Mexico Land Ports of Entry on the U.S.-Mexico Border ...... 14 Map 5 Arizona International Truck Flows, 1998...... 15 Map 6 Southern California International Truck Flows, 1998...... 15 Map 7 New Mexico International Truck Flows, 1998 ...... 16 Map 8 Texas International Truck Flows, 1998 ...... 16 Map 9 High Priority Corridors in the United States ...... 28 Map 10 Mexico’s Main Highway Corridors...... 29 Map 11 The Western Transportation Trade Network...... 30 Map 12 Map of Arizona ...... 50 Map 13 Map of Baja California...... 53 Map 14 Map of California ...... 57 Map 15 Map of Coahuila...... 63 Map 16 Map of New Mexico ...... 66 Map 17 Map of Nuevo León ...... 69 Map 18 Map of Sonora ...... 72 Map 19 Map of Tamaulipas ...... 75 Map 20 Map of Texas ...... 79

vi LIST OF FIGURES

Figure 1 Surface Trade Across the U.S.-Mexico Border in Billions of Current Dollars ...... 18 Figure 2 Population and Trade Along the U.S.-Mexico Border 1995-2000, Compound Annual Growth Rates ...... 19 Figure 3 Population in U.S.-Mexico County and Municipios Compound Annual Growth Rates ...... 20 Figure 4 U.S. Dollar Value of Goods Imported Into the U.S. by Truck and Rail Compound Annual Growth Rate ...... 21 Figure 5 Population and Number of Trucks Crossing the Border, 2000 – 2020, Compound Annual Growth Rates ...... 22 Figure 6 Average Annual Daily Traffic (AADT), Congestion and Highway Capacity, 2000-2020, Compound Annual Growth Rates ...... 23 Figure 7 Number of Transportation Corridors by Border State ...... 39 Figure 8 Distribution of Corridors by AADT in Calendar Year 2000 ...... 40 Figure 9 Distribution of Corridors Highway Length (miles) in Calendar Year 2000 ...... 41 Figure 10 Distribution of Projected Growth Rates in Corridor AADT, 2000 to 2020...... 42 Figure 11 Projected Change in Highway Congestion between 2000 and 2020...... 43 Figure 12 Distribution of Corridor AADT, By Country, Average Annual Daily Traffic for Calendar Year 2000 ...... 44 Figure 13 Distribution of Corridor Highway Length, By Country, Highway Length in Miles for Calendar Year 2000...... 45 Figure 14 Distribution of Corridor AADT Growth Rates, By Country, 2000 to 2020 ...... 46 Figure 15 Number of Transportation Projects by Mode ...... 86 Figure 16 U.S. and Mexico Highway Projects: Funding Needs ...... 87 Figure 17 U.S.: Projects by Funding Availability ...... 88 Figure 18 U.S. Highway Projects by Year of Completion ...... 88 Figure 19 Mexico: Projects by Funding Availability ...... 89 Figure 20 Arizona: Projects by Funding Availability...... 91 Figure 21 Baja California: Projects by Funding Availability ...... 92 Figure 22 California: Projects by Funding Availability ...... 93 Figure 23 California Highway Projects by Year of Completion...... 94 Figure 24 Coahuila: Projects by Funding Availability ...... 95 Figure 25 New Mexico: Projects by Funding Availability ...... 97

vii Figure 26 New Mexico Highway Projects by Year of Completion ...... 97 Figure 27 Tamaulipas: Projects by Funding Availability ...... 99 Figure 28 Texas: Projects by Funding Availability...... 100 Figure 29 U.S. Regional Transportation Planning and Programming Process ...... 114

viii CHAPTER 1: INTRODUCTION

CHAPTER 1: INTRODUCTION

BACKGROUND

In April 1994, the U.S. Department of Transportation (DOT) and Mexico’s Secretariat of Communications and Transportation (Secretaría de Comunicaciones y Transportes or SCT) signed a Memorandum of Understanding (MOU) outlining the creation of the Joint Working Committee (JWC). Through the MOU, the JWC was charged with “analyzing, developing, and coordinating border transportation plans and programs reflecting the needs of both countries.” The MOU also envisioned enhanced communications, coordination, advice, and consensus building among government entities on both sides of the border.

The JWC consists of transportation and planning agency representatives from the four U.S. states and the six Mexican states along the international border and representatives from selected federal agencies from both the U.S. and Mexican governments, including the U.S. Department of State (DOS) and Mexico’s Secretariat of Foreign Relations (Secretaría de Relaciones Exteriores (SRE)).

In Mexico, the 1995-2000 National Development Plan (Plan Nacional de Desarrollo (PND)) called for the modernization of the federal highways of national importance, which provide a link among state capitals and main maritime and border ports. The 2001-2006 PND continues these efforts with the objective of achieving a transportation infrastructure network that will facilitate Mexico’s participation in the globalization process. In addition to investments in highway improvements, railroads, airports and seaports have benefited from both public and private investments.1

In the U.S., the Transportation Equity Act for the 21st Century (TEA-21), which became law in 1998, provided some dedicated resources to address additional transportation facilities identified in the National Corridor Planning and Development (NCPD) Program and the Corridor Border Infrastructure (CBI) Program. However, these programs have not provided sufficient funding to cover border area transportation needs, and the sections authorizing these programs end with the termination of TEA-21 at the end of the 2003 federal fiscal year.

In 1998, the JWC authorized the Binational Border Transportation Planning & Programming Process (P&P Study). 2 The P&P Study conducted an inventory of infrastructure along the U.S.-Mexico border and specified some of the “disconnects” that existed in 1998. However, the P&P Study stopped short of identifying major transportation corridors and assessing their needs.

1 Secretaría de Comunicaciones y Transportes, Plan Nacional de Desarrollo 1995-2000 and Plan Nacional de Desarrollo 2001-2006. 2 Barton-Aschman Associates Inc. & La Empresa S. de R.L., “Binational Border Transportation Planning and Programming Process”, April 10, 1998.

January 2004 3 Two key conclusions of the P&P study were: (1) The JWC should focus on the area 100 kilometers on either side of the U.S.-Mexico border; and (2) More coordination is needed between the U.S. and Mexican governments with regard to border transportation planning.

The JWC recognized that the TEA-21 programs did not provide sufficient funding to satisfy the rapidly expanding border area transportation needs and, with the reauthorization of TEA-21 close at hand, that additional information was required to carry out a transportation corridor analysis and needs assessment for the U.S.-Mexico border region. The JWC anticipated that the findings from this study would be used during the TEA-21 reauthorization process as input to help ensure adequate future funding for international border transportation investment needs. With these objectives in mind the JWC authorized the Binational Border Transportation Infrastructure Needs Assessment Study (BINS).

RELATED JWC PROJECTS

The BINS project has common characteristics with other JWC work in several areas, which are the following:

• Innovative Finance Study (IFS)—The focus of this work is to specify finance options for transportation projects for which no funds have been identified or that do not use standard funding methods. The IFS is being undertaken by the U.S. DOT Resource Center in Atlanta, Georgia. The list of transportation projects compiled under the BINS project provides the JWC with a master list of funded and non funded transportation projects along the U.S.-Mexico border. Should the JWC decide to select a pilot project as part of the Innovative Finance work, this list could be used as a starting point. • Bottleneck Study— The purpose of the study is to develop a methodology to identify, price and eventually eliminate transportation infrastructure and traffic management bottlenecks at the international Ports of Entry (POEs) along the U.S.-Mexico border. This study is being undertaken by the California Department of Transportation (Caltrans), District 11, in their San Diego office. One measure of traffic congestion is the Level of Service (LOS). As part of the BINS project, LOS data was obtained for eight of the ten states along the U.S.-Mexico border, and this information may be useful in the Bottleneck study. • Port of Entry Coordination Study— The focus of this study is enhanced coordination and procedural improvements to enhance the flow of vehicles across the border. The BINS project has assisted this effort in two ways: (a) Through the Technical Committee meetings, state representatives have the opportunity to discuss topics with one another, which enhanced communication and coordination; (b) The database of transportation projects contains the lists of projects being implemented in the POEs. One list is from the U.S. Federal government and the other list is from the Mexican Federal government. This master list informs the representatives of on-going work – and helps coordinate efforts. • Binational Border Geographic Information Systems (BGIS) mapping—Originally started by the California Department of Transportation, this project has been turned over to New Mexico State University (NMSU). NMSU is developing the GIS database; however, currently no GIS maps and data are available to be included in the BINS final report.

January 2004 4 LITERATURE AND LEGISLATIVE REVIEW

Literature and legislation dealing with transportation along the border region were identified and reviewed throughout the entire study (Appendix 11 contains a complete list of sources). This research helped develop many of the ideas presented in this report. For example, as part of the literature research, the following three studies were used in the development of the corridor evaluation process, which is presented in Chapter 3. The three studies were:

• WTTN – Western Transportation Trade Network, Wilbur Smith Associates, Felsburg Holt & Ullevig, 1999. This study is the main reference used in the BINS study to identify transportation infrastructure deficiencies and needed future improvements on the U.S.-Mexico border region. • LATTS – Latin America Trade and Transportation Study, Wilbur Smith Associates, March 2001. This study served as an example of a system -wide transportation network, similar to the corridor networks identified in the BINS study. • MNHP – Mexico’s National Highway Program, SCT. This document is the main reference used in the BINS study for the identification of corridors and transportation infrastructure projects in Mexico.

Legislative research was also conducted during the different stages of the BINS report. Three documents played a significant role in the understanding of U.S. and Mexican transportation legislation, as follows:

• Transportation Equity Act for the 21st Century- A Summary – U.S. DOT, (Web site address: http://wwww.fhwa.dot.gov/tea21/sumcov.htm). This summary of the U.S.’s guiding transportation legislation outlines the mechanics of planning and funding processes at various levels of government, and the major priorities of the U.S. transportation system. • Mexico’s National Development Plan (1995-2000 and 2001-2006) – SCT. These plans are intended to provide systematic and coordinated integrated economic, social, political and cultural development, including policies for communications and transportation. • Binational Border Transportation Planning & Program Study (P&P Study) - Barton- Aschman Associates, Inc. This study provided information on the planning and programming processes in U.S. and Mexico. For Mexico, the P&P study provided BINS with knowledge on funding legislation for transportation projects at the federal and state level.

SCOPE OF WORK

The BINS project is in line with the vision presented by the JWC and the work contained in the P&P study. Specifically, the BINS project has five key objectives:

1. To develop a set of minimum criteria to be used by the JWC to identify major multi-modal transportation corridors. 2. To develop an evaluation process, accepted by the JWC, to analyze major transportation corridors identified in Objective No. 1.

January 2004 5 3. To create a border-wide database and evaluation tool to prioritize each state’s transportation corridors based on the methodology and process identified in Objective No. 2, which can be used for future assessments. 4. To compile a list of significant transportation projects on the corridors, including each project’s description, estimated cost, and anticipated completion date, and to summarize each state funding needs, as well as those for the U.S.-Mexico border, to implement these transportation projects. 5. To investigate traditional and innovative methods to fund border transportation infrastructure needs. The Scope of Work outlines the goals and objectives of the BINS project and contains a comprehensive description of the required tasks to complete the project (see Appendix 2). These tasks are grouped in the following three phases:

• Phase I: Data Collection • Phase I-A: California Transportation Corridor Assessment, Evaluation, and Recommendations • Phase II: Transportation Corridor Assessment, Evaluation Criteria, and Recommendations for Remaining Agencies

The Framework for Completing the BINS Project (Appendix 3) is a document used to complete all the tasks outlined in the Scope of Work. The tasks in the Framework do not follow the sequence outlined in the Scope of Work because SourcePoint believed the development of the methodology needed to be undertaken before the collection of data. Thus, in the framework, the creation of the methodology was moved from Phase II to Phase I.

Sixteen deliverables were produced as part of the framework, as described in Appendix 4. These deliverables correspond to the same three phases specified in the original Scope of Work and include technical memos, corridor survey instruments and evaluations, database plan, and reports, among others.

PARTICIPANTS

The binational nature of the study presented the BINS team with challenging opportunities; requiring interaction and coordination with government officials from each of the U.S. and Mexican border states and their respective federal governments. This was accomplished through extensive communication via telephone, e-mail, fax, meetings, and conference calls. Bilingual expertise was used throughout the study. Table 1 contains each of the organizations, their corresponding participants and their primary responsibilities:

January 2004 6 Table 1 List of Organizations and their Responsibility

Organization Participants Primary Responsibility U.S.-Mexico Joint The JWC includes transportation and The JWC makes the final decision on Working Committee planning agency representatives from the any recommendations related to the (JWC) 10 border-states, and from selected U.S. BINS project. and Mexican federal agencies. BINS Technical The BTC includes the SCT and the The BTC representatives are the Committee (BTC) (see technical representatives from each of the primary contacts during the collection Appendix 1 for detailed 10 border-states. of corridor and project transportation BTC Contact Information) In the U.S.: Arizona, California, New data. The BTC endorses Mexico and Texas. recommendations for approval by the In México: Baja California, Chihuahua, JWC. Coahuila, Nuevo León, Sonora and Tamaulipas. California Department of Caltrans Representatives Caltrans served as the first technical Transportation contact for the consultant (Caltrans) (SourcePoint). Caltrans & SourcePoint worked closely during the BINS project. SourcePoint, SourcePoint Project Team BINS project Primary Consultant U.S Federal Highway FHWA Representatives The FHWA provided technical support Administration during the BINS project. (FHWA) Mexican Secretariat of SCT Representatives The SCT provided technical support to Communication and SourcePoint during BINS project. Transportation (SCT)

ORGANIZATION OF THE REPORT

The BINS project is documented in three reports that provide increasing levels of detail. First, the Executive Summary highlights the major findings related to border transportation infrastructure needs, strategic transportation corridors and planned projects as well as potential financing options. Second, the BINS report describes the process, methodology and tools developed to evaluate transportation infrastructure needs along the border region and it also presents the results of the analyses in more detail. Finally, the Appendices include the raw data used as input for the various analyses as well as documentation of the study process.

January 2004 7

CHAPTER 2: BORDER TRANSPORTATION INFRASTRUCTURE NEEDS ASSESSMENT

The purpose of this chapter is twofold. First, the chapter provides an overview of the U.S.-Mexico border region that is the focus of this study – including the states, counties and POEs. Second, this chapter focuses on the demand for transportation infrastructure in the border region and shows that historical growth rates in demand (as measured by cross-border trade) have surpassed population growth in the border region. Projections to 2020 reveal that the demand for transportation infrastructure will continue to outpace the growth of the border region population.

U.S.-MEXICO BORDER REGION

The U.S. and Mexico share a 1,278-mile (2,056 kilometers – km) border that extends from the Pacific Ocean on the west coast to the Gulf of Mexico on the southeast coast. The border region contains rivers, deserts, fertile plains, and large cities. This 100 km “Border Region” is the focus of this study, as shown in Map 1. The four U.S. border states are California, Arizona, New Mexico and Texas. The six Mexican border states are Baja California, Sonora, Chihuahua, Coahuila, Nuevo León, and Tamaulipas.

Map 1 The U.S.-Mexico Border with the 100 km Border Region Outlined

Source: BINS Technical Committee

In 1994, the North American Free Trade Agreement (NAFTA) was enacted and provided for the phased removal of tariff and most non-tariff barriers on regional trade among Mexico, Canada and

January 2004 11 the U.S. Trade has flourished since NAFTA began. The results have been impressive; the value of goods transported by trucks across the U.S.-Mexico border has more than doubled from about $77 billion dollars in 1994 to about $170 billion dollars in 2000.1

For the U.S. and Mexico to benefit in future years from the shared border, the transportation infrastructure that links the two countries needs to be maintained and expanded to handle future travel demands. While NAFTA has brought economic benefit to the border region, as well as to each country, it has also resulted in infrastructure-related challenges. Current transportation infrastructure was not designed to handle the large NAFTA traffic volumes.2

As a result, the local transportation system is increasingly used by international trade related traffic destined for the interior of the U.S. or Mexico, compounding existing demands for additional transportation infrastructure from the rise in local traffic. In the U.S., DOTs have been mainly responsible for improving the local transportation infrastructure, which provides benefits to the national economy as it serves international goods movement.

Along the U.S.-Mexico border, there are 25 U.S. Counties and 35 Mexican Municipios (Map 2). These are the counties most impacted by the increase in cross-border truck traffic.

Map 2 Counties and Municipios on the U.S.-Mexico Border

Source: BINS Technical Committee

1 Includes imports and exports, see the U.S. Bureau of Transportation Statistics (BTS) web site at http://www.bts.gov/ntda/tbscd/reports.html. 2 Transportation infrastructure in the U.S. and Mexico was not historically built around binational trade and as such is not adequate for the reorientation of traffic around the border. For example, in the U.S., the main transportation arteries run east-west, following the pattern of national development. In Mexico, the principal federal highways run north-south and show a radial pattern around main population centers (Federal District, Guadalajara, and Monterrey).

January 2004 12 Within these counties and municipios along the U.S.-Mexico border there are 42 land POEs through which people, vehicles and goods pass. Maps 3 and 4 illustrate the locations of the U.S. and Mexico’s POEs, respectively.

Map 3 United States Land Ports of Entry on the U.S.-Mexico Border

Source: SANDAG

January 2004 13 Map 4 Mexico Land Ports of Entry on the U.S.-Mexico Border

Source: SANDAG

NATIONWIDE IMPACTS OF BORDER TRADE

NAFTA is an agreement among Canada, Mexico and the U.S. that provided for the phased elimination of tariff and most non-tariff barriers on regional trade among all parties. The agreement went into effect in 1994 and the growth in trade between the U.S. and Mexico has been rapid, between 1995 and 2000, the value of trade increased by over 17 percent per year.

International trade between the U.S. and Mexico is very important to both countries. In 2002, trade between the U.S. and Mexico totaled about $232 billion dollars.3 In fact, Mexico is ranked number two on the list of trade partners with the U.S..

Most of the trade between the U.S. and Mexico moves across the border on trucks – with a much smaller portion transported by rail, water and air. On the U.S. side, the national scope of border trade, represented by the flow of truck traffic, is illustrated on Maps 5 through 8. These maps were created by the U.S. DOT, Office of Freight Management,4 and show the movement of freight from the border region throughout the U.S.. The width of each line in each map is proportional to the volume (in tons) of goods moved.

3 U.S. Department of Transportation, Bureau of Transportation Statistics, U.S. International Trade and Freight Transportation Trends, 2003, page 22. 4 These maps were obtained from the World Wide Web at the following address: http://www.ops.fhwa.dot.gov/freight/Ports%20and%20Border%20Crossings/By%20State.htm

January 2004 14 Map 5 Arizona International Truck Flows, 1998

Map 6 Southern California International Truck Flows, 1998

January 2004 15 Map 7 New Mexico International Truck Flows, 1998

Map 8 Texas International Truck Flows, 1998

January 2004 16 As the maps highlight, the U.S.-Mexico border region has key national implications for the U.S.. Unfortunately, similar maps for the Mexican states were not available.

Apart from an increase in trade, there have been other effects from NAFTA including increases in foreign investment, job creation and environmental clean up.5 Many of these impacts occur in the border region—within 100 km of either side of the U.S.-Mexico border.

The importance of the border region to the success of NAFTA and to each country cannot be overstated.

GROWTH IMPACTING TRANSPORTATION INFRASTRUCTURE

Recent Trends in Population and Truck Trade at the Border

In this section, population and trade are examined for the years 1995 and 2000. Since local population and truck trade crossing the border are two of the major contributors to the volume of traffic on the highways, these two historical data sets are investigated. The population data examined are those of the counties and municipios along the U.S.-Mexico border while trade data represent rail and truck data (in nominal dollars) that passed through the land POEs on the U.S.- Mexico border.

In 2000, there were about 12.5 million people living in the counties and municipios along the U.S.- Mexico border.6 About 6.3 million people (51%) lived in the 25 U.S. counties and about 6.1 million people (49%) resided in the 35 Mexican municipios. Of the 25 U.S. border counties, San Diego County, in California, has the largest population with about 2.8 million people in 2000. The Mexican border Municipio of Juárez, in Chihuahua, is the largest with a population of about 1.3 million people, also in 2000.

Between 1995 and 2000, the growth in population for all the counties and municipios in the border region was about 2.7 percent per year (compound annual growth rate). Population growth in the counties and municipios along the border is faster in Mexico than in the U.S.. In Mexico, the 35 municipios grew at a 3.7 percent compound annual rate while the 25 counties in the U.S. grew at a 1.9 percent compound annual rate.

Regarding border trade between the two nations, trucks dominate trade along the U.S.-Mexico border. Total truck and rail imports into the U.S. along the U.S.-Mexico border were about $108 billion dollars in calendar year 2000.7 Of this total, nearly 81 percent (about $87 billion dollars) were imported by truck (see Figure 1 on the following page). The POE that accounted for the largest

5 Carrera, Olaf, “NAFTA at Five – A Revisit 5 Years later”, Mexico Connect. See http://www.mexconnect.com/mex_/travel/bzm/bzmnafta5.html. 6 All U.S. population data was obtained from the BINS Technical representatives. For Mexican states, the BINS representatives provided population data for Baja California while population estimates for the remaining states were obtained from the Mexican National Population Counsel (CONAPO). A municipio is equivalent to a county. 7 U.S. BTS web site at http://www.bts.gov/ntda/tbscd/reports.html.

January 2004 17 portion of the truck trade was Laredo8 (Texas) with about $27.4 billion dollars (31%) of the 2000 truck imports.

In calendar year 2000, truck and rail exports to Mexico totaled about $93 billion dollars.9 Of the total, nearly 89 percent, or about $82 billion dollars, was transported by truck. Again, the POE that accounted for the largest portion of the truck trade was Laredo10 with almost 40 percent (about $32.6 billion dollars) of the 2000 truck trade along the U.S.-Mexico border.

The growth in trade between Mexico and the U.S. has been substantial between 1995 and 2000. Truck imports into the U.S. increased from about $42 billion dollars in 1995 to about $87 billion dollars in 2000, while truck exports to Mexico increased from about $35 billion in 1995 to about $82 billion dollars in 2000.11 The growth in rail trade has also been substantial as rail imports into the U.S. grew from about $8.4 billion dollars in 1995 to about $21 billion dollars in 2000. Rail exports to Mexico grew from about $4.7 billion dollars in 1995 to about $10.5 billion dollars in 2000 (Figure 1). 12

Figure 1 Surface Trade across the U.S.-Mexico Border in Billions of Current Dollars

Imports into the US Exports into Mexico $90

$80 1995 2000 $70

$60

$50

$40

$30

$20

$10

$0 Rail Truck Rail Truck

Source: U.S Bureau of Transportation Statistics

8 The U.S. BTS aggregates two individual truck crossing bridges as one in their statistics and calls it Laredo. The POEs where trucks cross are the World Trade Bridge and the Laredo-Colombia Solidarity Bridge. 9 U.S. BTS web site at http://www.bts.gov/ntda/tbscd/reports.html. 10 The U.S. BTS aggregates two individual truck crossing bridges as one in their statistics and calls it Laredo. The POEs where trucks cross are the World Trade Bridge and the Laredo-Columbia Solidarity Bridge. 11 U.S. BTS web site at http://www.bts.gov/ntda/tbscd/reports.html. 12 Ibid.

January 2004 18 Translating these dollar values into growth rates reveals that total truck and rail imports and exports grew at a compound annual growth rate of 17.4 percent per year between 1995 and 2000. This is significantly faster than the growth in population for the same period, which grew about 2.7 percent for all of the counties and municipios along the U.S.-Mexico border (see Figure 2).

These data support an assertion made earlier – namely that the growth in truck trade after NAFTA was implemented far surpassed the capacity of the local transportation systems. If the trade data were reduced by three percent per year to take inflation into account, the compound annual growth rate in trade is still 14 percent – about six times faster than the population growth rate.

Figure 2 Population and Trade Along the U.S.-Mexico Border, 1995-2000 Compound Annual Growth Rate

Populations of Counties & Municipios Truck Trade in US $ 20% Dollars

18%

16%

14%

12%

10%

0% Mexico United States Total Exports to Imports into Total Mexico the US

Sources: BINS Technical Committee, Mexican National Population Council (CONAPO), and U.S. Bureau of Transportation Statistics.

While truck trade was growing about 17 percent per year, rail trade was growing even faster – about 19 percent per year. Thus, the growth in the trade of goods between the U.S. and Mexico exploded at a compound annual rate of about 17.4 percent between 1995 and 2000.

Projected Trends

This section outlines the need for additional transportation infrastructure by examining 2020 projections for population, trade, truck crossings, rail tonnage and highway travel data (average annual daily traffic (AADT), highway level of service (LOS) and highway capacity at peak hours). Trade data in dollar terms is only projected for imports into the U.S. for the year 2020. However,

January 2004 19 truck crossings projections and rail tonnage projections to 2020 are available for both countries and are used to help “paint the picture” of future trade along the U.S.-Mexico border. Results of the analysis confirm a need for additional transportation infrastructure.

Population is projected to grow between 2000 and 2020 at a slower pace than that experienced between 1995 and 2000 (see Figure 3). This growth in population will provide additional local traffic using the U.S. and Mexican transportation corridors.

Figure 3 Population in U.S.-Mexico County and Municipios Compound Annual Growth Rates

1995 to 2000 2000 to 2020 4.0%

3.5%

3.0%

2.5%

2.0%

1.5%

1.0%

0.5%

0.0% Mexico United States Total Mexico United States Total

Sources: BINS Technical Representatives and Mexican National Population Council (CONAPO).

It is projected that the growth rate in populations of the counties and municipios along the U.S.- Mexico border will slow to 2.2 percent per year between 2000 and 2020 (compound annual growth rate) from 2.7 percent per year between 1995 and 2000.13 Therefore the number of people living in this border region is estimated to increase by 6.8 million to total about 19.3 million people in 2020, with about 54 percent of the people residing in Mexico (10.5 million) and 46 percent in the U.S. (8.8 million). Mexico is projected to have a higher growth rate than the U.S. during the forecast period (2.7% vs. 1.7%).

13 Population projections for 2020 for the counties in the four U.S. states come from the BINS Technical representatives. In Mexico, the BINS Technical representative for Baja California provided 2020 population projections. The remaining Mexican municipio projections were obtained from the Mexican National Population Counsel (CONAPO).

January 2004 20 Regarding trade, there are only projections for dollar imports into the U.S. between 2000 and 2020.14 These projections reveal that future imports from Mexico will increase, but at a much slower pace than that what occurred between 1995 and 2000 (see Figure 4).

Figure 4 U.S. Dollar Value of Goods Imported Into the U.S. by Truck and Rail Compound Annual Growth Rate

1995 to 2000 2000 to 2020 21%

18%

15%

12%

0% Truck Rail Total Truck Rail Total

Source: U.S. Bureau of Transportation Statistics

Dollar values of goods imported into the U.S. by trucks are projected to grow about 5.9 percent per year (compound annual growth) while dollar value of goods imported by rail will increase at about 5.7 percent per year. Overall, imports are projected to increase by 5.9 percent per year. The important point to note is that the growth rates are positive, but lower than the growth rates of 1995-2000.

According to a 1997 study produced by the California Governor’s Office of Planning and Research (OPR), trade projections reflect a slowing of growth as we approach 2020, the end of the forecast period.15 The stimulative effects of trade liberalization and the 1994 Mexican peso devaluation (on the import side) are assumed to diminish through the year 2010, at which time additional gains in bilateral trade may largely depend on normal economic growth. OPR’s projection of normal annual growth rates are 5.1 percent for exports and 4.6 percent for imports.

14 The BINS Technical Representative for New Mexico provided dollar projections for New Mexico trade for 2020. Projections for Arizona, California and Texas were applying a growth rate to the 2000 data. The growth rate for each state was obtained from the Office of Freight Management, U.S. Department of Transportation, Federal Highway Administration. 15 Governor’s Office of Planning and Research, The North American Free Trade Agreement: Implications for California, 1993.

January 2004 21 Further, the projections for the number of trucks crossing the border into the U.S. and into Mexico reveal an annual growth rate that is greater than that of the population growth rate (3.0% vs. 2.2%) but less than the population growth rates or dollar value of goods (see Figure 5). A portion of the increase in dollar denominated growth is accounted for by inflation (the trade data are in nominal dollars).

Figure 5 Population & Number of Trucks Crossing the Border, 2000-2020 Compound Annual Growth Rates

Number of Trucks Population 3.5%

3.0%

2.5%

2.0%

1.5%

1.0%

0.5%

0.0% Into Mexico Into the U.S. Total Mexico U.S. Total

Sources: BINS Technical Representatives, U.S. DOT, and Mexican SCT.

Projections of truck crossings will continue to outpace population growth indicating that truck traffic will continue to impose a burden on the local communities that surround the U.S.-Mexico border region. Between 2000 and 2020 the number of northbound trucks crossing into the U.S. is expected to grow at a compound annual growth rate of 2.7 percent per year – less than the growth in southbound truck traffic into Mexico, which is projected to increase by about 3.3 percent per year.16 The overall growth for trucks crossing the border translates into a projection of 14.4 million trucks in 2020, or about 6.4 million more trucks than the number that crossed the border in 2000.

16 The BINS Technical Representative for New Mexico provided 2020 projections for New Mexico truck crossings. Projections for Arizona, California and Texas were computed by multiplying the 2000 data by a growth rate for each state obtained from the Office of Freight Management, U.S. DOT, FHWA. In Mexico, the Baja California BINS Technical Representative provided a 2020 projection of truck crossings. All other projections used a 3.0% compound annual growth rate recommended by the Mexican SCT.

January 2004 22 Three indicators were selected to analyze the current and projected performance of the transportation system along the border region: AADT, congestion (measured by LOS) and highway capacity at peak hours. Projections through 2020 for these three indicators show that AADT will increase, congestion will worsen, and planned improvements in highway capacity will not keep up with projected increases in traffic volumes, based on the data provided by the BINS Technical representatives (see Figure 6). Increased congestion and resulting delays also would cause negative impacts to the environment and the quality of life of border residents.

Figure 6 Average Annual Daily Traffic (AADT), Congestion & Highway Capacity, 2000 to 2020 Compound Annual Growth Rates

Corridors in Mexico Corridors in the United States 4.0%

3.5%

3.0%

2.5%

2.0%

1.5%

1.0%

0.5%

0.0% AADT Congestion Capacity AADT Congestion Capacity Note: Congestion is measured by the Level of Service [LOS].

Source: BINS Technical Committee.

In Mexico, between 2000 and 2020, AADT17 is projected to increase 3.6 percent per year (compound annual rate), while the LOS 18 is projected to worsen from LOS B to LOS C, and highway capacity19 is expected to increase about 2.8 percent annually.

Overall, traffic flow would deteriorate in Mexico on the corridors within 100 km of the U.S.-Mexico border. These conclusions are intended to be indicative of all Mexican corridors, but there are no LOS or highway capacity data for five corridors in two of the Mexican states.

17 The BINS Technical representative for Chihuahua, Coahuila, Nuevo León and Tamaulipas provided 2020 projections of AADT. For Baja California and Sonora, projections were derived by applying a 3.0% compound annual growth rate to the 2000 data, as recommended by SCT. 18 Projections for LOS for 2020 were not provided by Sonora and Coahuila. For Baja California, projections were developed by applying a 3.0% compound annual growth rate to the 2000 data, as recommended by SCT. 19 Highway capacity projections for 2020 were not provided by Sonora, Coahuila and Nuevo Leon. For Baja California, projections were created by applying a 3.0% compound annual growth rate to the 2000 data, as recommended by SCT.

January 2004 23 The situation is similar in the U.S.: in the 20-year period, AADT is projected to increase, congestion would get worse, and highway capacity at peak hours would increase less than the growth in traffic. AADT20 is projected to increase 2.1 percent per year (compound annual growth). For four of the five corridors for which data were provided, the LOS21 is projected to decline while highway capacity at peak hours22 is projected to expand only 0.9 percent per year.

Overall, travel conditions would deteriorate in the U.S. on the corridors within 100 km of the U.S.- Mexico border. As with Mexico, this analysis is intended to be indicative of the performance of all corridors, but as there are no LOS or capacity data for seven of the 12 corridors in two states – Texas and Arizona – it may not be representative of the performance of all the U.S. corridors. Texas accounts for about 21 percent of the U.S. border region AADT in 2000 and about 24 percent in 2020.

In conclusion, to accommodate the projected growth in trade and population over the next two decades, and its resulting increase in commercial and passenger travel, the transportation system along the border region must be improved.

20 The BINS Technical representatives for the four states provided 2020 projections of AADT. 21 LOS data were provided only for California and New Mexico corridors, which represent five of 12 U.S. corridors identified by the BINS Technical Committee. 22 The highway capacity data were provided only for two states (California and New Mexico BINS Technical representatives).

January 2004 24 CHAPTER 3: BORDER TRANSPORTATION CORRIDOR EVALUATIONS

CHAPTER 3: BORDER TRANSPORTATION CORRIDOR EVALUATIONS

This chapter describes the work conducted to accomplish the first three objectives of the BINS project, which include the identification of major multi-modal transportation corridors, the evaluation of these corridors, and the development of a border-wide database and evaluation tool to prioritize transportation corridors within each border state. Research conducted to establish the corridor identification and evaluation methodologies is presented first.

BACKGROUND

Creating a methodology to evaluate transportation corridors began with a literature review to ascertain methods that had been used to evaluate corridors in past studies. This review discovered that, usually, corridors are not formally compared in corridor evaluations—although other organizations compile and list specific data for each corridor. For example, the U.S. through Congressional Acts1 classified 44 corridors as High Priority Corridors (HPC) but did not conduct corridor comparisons or a corridor evaluation. These corridors are illustrated in Map 9 on the following page. A great deal of data has been compiled on these corridors, but no systematic method has been implemented to organize the data and evaluate the corridors.

In Mexico, the federal government lists its 14 Main Highway Corridors and provides data on each corridor, but does not evaluate them individually. Mexico’s Main Highway Corridors include all the major federal highways in Mexico and are shown on Map 10 (on page 29). Similar to the HPC in the U.S., a substantial amount of data has been compiled on each highway, but no systematic method has been applied to the data to evaluate the corridors.

1 High Priority Corridors (HPC) are defined in three U.S. Acts: The Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA), the National Highway System Designation Act of 1995 (NHS), and the Transportation Equity Act for the 21st Century (TEA-21). The first 23 HPCs were designated by ISTEA, the next 12 HPCs were designated by NHS and 18 HPCs were designated by TEA-21. In addition, one HPC was identified by the Fiscal Year 2002 Transportation Appropriations Bill. These corridors were deemed to be of national importance.

January 2004 27 Map 9 High Priority Corridors in the United States

Source: The Intermodal Surface Transportation Efficiency Act (ISTEA), The National Highway System Designation Act (NHS), and the Transportation Equity Act for the 21st Century (TEA-21)

January 2004 28 Map 10 Mexico’s Main Highway Corridors

Source: SCT

A recent study identified important corridors in the western part of the U.S.2 In the study, the authors identified key transportation corridors, developed trade and freight transportation data relevant to the Western Transportation Trade Network (WTTN), identified the most relevant freight transportation intermodal facilities, evaluated how the region’s corridors were performing, and identified possible solutions for some problems that were discovered. This study helped the BINS project identify the key components of a corridor and some of the main indicators that are used to evaluate corridors. The corridors identified in the WTTN study are presented in Map 11 on the following page. While this study provided a great deal of insight on corridors, it did not compare corridors in an evaluation process.

2 Wilbur Smith Associates, Felsburg Holt & Ullevig, “Western Transportation Trade Network – WTTN, Final Report Phase II”, 1999.

January 2004 29 Map 11 The Western Transportation Trade Network

Source: WTTN study

Another major study is the “Latin America Trade and Transportation Study” (LATTS).3 The main purposes of the LATTS were to evaluate opportunities for trade with Latin America and to determine transportation infrastructure investment needs to capitalize on the projected trade. This study also provided insights into the definition of a corridor, and explored indicators that can be used to evaluate corridors. Like the other studies, however, this study did not compare corridors to get a sense of their relative importance.

3 Wilbur Smith Associates in conjunction with DRI/McGraw Hill, R.K. Johns, VZM Transystems, HNTB Corporation, WHM Transportation, “Latin America Trade and Transportation Study”, March 2001.

January 2004 30 IDENTIFICATION OF MAJOR TRANSPORTATION CORRIDORS IN THE BORDER REGION

The first objective of the BINS project was to develop a set of minimum criteria to be used by the JWC to identify major multi-modal transportation corridors. In the BINS project, a corridor is defined as a combination of modes that move people, vehicles and goods from one location to another. In general, a transportation corridor is not just one road or rail line, but a combination of modes.

Two minimum criteria were established for a transportation facility to be part of a corridor, as follows:

1. All facilities must lie within 100 km of the U.S.-Mexico border.

2. Highways and railroads must serve an international POE, and airports and maritime ports must be designated as an international POE.

The corridor definition and the minimum criteria for transportation facilities were used throughout the BINS project and approved by the BINS Technical Committee and the JWC.

The BINS Technical Committee members were asked to identify transportation corridors, including highways, railroads, airports, and maritime ports that serve the corridors. Within the ten border states, 42 transportation corridors were identified.

In addition to the many highways that serve international POEs, there are also seven railroads that operate within 100 km of the U.S.-Mexico border and cross the border. Also, there are 22 airports and four maritime ports that are designated as international POEs within 100 km of the U.S.-Mexico border.

CORRIDOR EVALUATION PROCESS

The second objective of the BINS project was to develop an evaluation process, accepted by the JWC, to analyze the identified major transportation corridors.

Methodology

The purpose of the corridor evaluation methodology is to analyze transportation corridors identified by the BINS Technical Committee representatives. The corridor evaluation methodology seeks to combine data in a way that allows corridors within each state to be compared and listed based on the significance of the indicators—whether the indicator is AADT, number of rail cars crossing the border, LOS of a highway or some other indicator. Conducting corridor evaluations and listing the corridors in a specific order based on the indicators allow states to analyze their funding needs using a systematic methodology.

Once the transportation facilities were selected using the minimum criteria, the following data were requested for calendar year 2000 and projections for 2020 for each criterion. On the following page are the quantifiable criteria used in the corridor evaluation. The criteria are organized by mode.

January 2004 31 Highways – all highway data provided by highway segment within corridor: • AADT • Highway length • LOS • Highway capacity and volume at peak hours

Land Ports of Entry (border crossings data) • Number of passenger vehicles and buses • Number of trucks • Volume and value of goods transported by truck

Airports • Volume and value of goods exported and imported at the airport • The share of Mexican/U.S. tonnage and value of goods • Runway length for each runway at the airport

Maritime Ports • Volume and value of goods exported and imported at the maritime port • Number of twenty-foot equivalent containers (TEUs) exported and imported • The Mexican/U.S. portion of tons/TEUs/value handled at the port • Channel depth of the main channel at the port

Railroads For international rail crossings, the rail data is provided by corridor: • Number of rail cars and TEUs that cross the U.S.-Mexico border • Volume and value of goods that cross the U.S.-Mexico border

Other rail data compiled by corridor include the following: • Location of intermodal facilities • Number of intermodal facilities

CORRIDOR EVALUATION TOOL

The third objective of the BINS project was to create a border-wide database and evaluation tool to prioritize each state’s transportation corridors based on the methodology and process previously described. The corridor evaluation process and the criteria described above, as well as the methodology were approved by the JWC.

To obtain the data for these criteria, five questionnaires were developed in collaboration with the Technical Committee representatives. These questionnaires were spreadsheets that could be completed electronically. The Technical Committee members were asked to complete the spreadsheets. Appendix 7 contains one set of questionnaires.

January 2004 32 Compiling the Evaluation Data

The evaluation tool is a spreadsheet that was designed to include formulas and pertinent data to conduct the corridor evaluations. The same methodology is applied to each state’s evaluation. The difference in spreadsheets for each border state is based on:

1. The infrastructure in each border state. 2. The number of corridors specified in each border state.

In addition, some of the spreadsheets did not have data for certain criteria, due to the following reasons:

§ The infrastructure item was not present in the state. For example, seven border states do not have maritime ports.

§ A particular indicator was not compiled by a state. For example, several states do not develop LOS data for highways.

Each state could use its spreadsheet to conduct future corridor evaluations, at its discretion.

Ordinal Ranking System

The methodology used for the BINS project required an ordinal ranking system that could be used as a common denominator, allowing indicators measured in different units to be combined together (dollars, miles, number of rail cars, etc.). Further, quantifiable data were used in the evaluation to allow for easy comparisons and to provide a systematic method to evaluate the transportation corridors.

Evaluation Methodology

Overall, the evaluation was conducted by compiling data, allocating the data to corridors and comparing corridors (within a state) to one another. Data are compiled for 16 criteria4 for each corridor. The overall evaluation uses two broad categories of data:

1. Historical Data – data for 16 criteria for the year 2000.

2. Change Data – a combination of actual changes for the 16 criteria from 2000 to 2020 and percent changes for the same 16 criteria from 2000 to 2020.

4 In some cases there will be fewer than 16 criteria. For example, some states do not have maritime ports so maritime data will not be included in the evaluation.

January 2004 33 The evaluations were conducted by ordering the data from highest to lowest to determine need. For example, assuming there are three corridors in a state with the following AADT: 157,000 vehicles (Corridor A), 450,000 vehicles (Corridor B) and 30,000 vehicles (Corridor C). In this example, Corridor B is listed first because it has the highest AADT and its evaluation result is 1. Corridor A is second (evaluation result is 2) and Corridor C is third (evaluation result is 3). This process was repeated for each criterion for calendar year 2000, and for the projected absolute and percentage change between 2000 and 2020. When all the data were present, a total of 48 data items were ordered for each corridor.

Higher values for the indicators represent more traffic (AADT), more congestion (LOS), more trade (dollar value of air, maritime, rail and truck cargo across POEs), more vehicles (number of passenger vehicles, trucks, buses, and rail cars across a POE), which point to both the relative importance of the corridor and its infrastructure needs. The highest value is given “first place” or a score of 1, and it represents the highest need.

The evaluation results were summed by mode. For example, there are four indicators for highways – AADT, the highway length (in miles), the LOS and the highway capacity at peak hours. If a corridor were listed first for each indicator, its highway score would be a four (a score of one for each indicator). This was done for POEs (five indicators), airports (one indicator), maritime ports (two indicators) and railroads (four indicators).

The overall score for each corridor was then calculated by summing the five modal scores. The corridor with the lowest overall score is listed first and has the highest overall need.

Because there is one historical component (year 2000 data) and there are two change components (change in absolute terms and percent change for 2020), the historical scores were multiplied by two to accomplish equal weighting. The BINS Technical Committee agreed with weighting historical and projected values equally.

The Steps to conduct the corridor evaluation for a particular state are the following:

Step 1: Only include facilities that meet minimum criteria (a) be within 100 km of U.S.-Mexico border; (b) for highways and railroads: serve an international POE; and for airports and maritime ports: be designated as an international POE.

Step 2: Classify the data by mode (highway, land POE, airport, maritime port, and railroad)

For Steps 3 through 8, one set of computations uses the data for calendar year 2000, and a second set of computations uses the 2020 projections. These computations are the following:

Step 3: For highways, compile the data by corridor. If there is more than one highway in a corridor, the highway data for each highway needs to be summed to obtain the corridor total. The AADT for each corridor and for all corridors needs to be computed as well as the relative share of AADT amongst the corridors.

Step 4: For railroads, compile the data by corridor.

January 2004 34 Step 5: For land POEs, compile the data for all land POEs within the state. For example, the number of trucks crossing at each POE must be aggregated to obtain the total truck crossings for all land POEs.

Step 6: For airports, compile the data for all airports within the state. For example, the imports at each airport must be summed to obtain total imports at all airports.

Step 7: For maritime ports, compile the data for all maritime ports within the state. For example, the imports at each maritime port must be summed to obtain total imports at all maritime ports.

Step 8: Distribute the land POE, airport and maritime port data amongst the corridors based on the distribution of AADT amongst the corridors.

Step 9: For each indicator, calculate the absolute change between 2000 and 2020, and the percent change between 2000 and 2020. The changes for each indicator are then assigned to their respective corridors.

Implement the Ordinal Ranking Scheme.

Step 10: Utilize corridor data for calendar year 2000, corridor data changes between 2000 and 2020, and corridor percent changes between 2000 and 2020. For each mode, sort the corridor data (or data change) from the highest value to the lowest value and assign a score of 1, or first place, to the highest value; assign a score of 2 to the second highest value; assign a score of 3 to the third highest; and so forth. If there are three corridors, the corridor with the highest value is assigned a score of 1 and the corridor with the lowest value is assigned a 3.

Step 11: Sum the scores by mode. Assuming three corridors, the corridor with the lowest score is listed 1st, while the corridor with the highest score is listed 3rd or last.

Appendix 7 includes the survey instruments in English and Spanish. Appendix 8 includes the corridor evaluations and highway data.

Steps Employed to Achieve Consensus

Attaining consensus from the BINS Technical Committee for the evaluation methodology, the criteria, and the data collection questionnaire required on-going communication. Appendix 6 contains meeting notes.

In November 2002, the first BINS Technical Committee meeting was held in San Diego, California. At this meeting, SourcePoint outlined the BINS Scope of Work with the original sequence of tasks. The Committee approved a procedure that would use quantifiable criteria to evaluate transportation corridors.

On December 13, 2002, the JWC met in Baltimore, Maryland. The JWC approved the recommendations made by the BINS Technical Committee at their November 19, 2002 meeting,

January 2004 35 authorized SourcePoint to proceed with the study, and encouraged “full and timely Technical Committee participation.”

In February 2003, SourcePoint e-mailed the first Technical Memorandum requesting Committee members to review the criteria and proposed questionnaires. Telephone surveys were conducted after receipt of the questionnaires to obtain Committee members guidance on the criteria and ways to improve the questionnaires.

In March 2003, SourcePoint requested corridor data from the BINS Technical Committee members using five revised questionnaires. The questionnaires and request were transmitted by e-mail. The revisions to the proposed questionnaires were obtained from the Technical Committee members during the telephone surveys.

In April 2003, SourcePoint met with the California BINS Technical Committee representative to review questionnaire completion statistics and develop alternative data sources for those states that had not provided data. The proposed resolutions dealing with the corridor evaluation methodology and criteria were formalized. Also in April 2003, the second BINS Technical Committee meeting was held in San Diego, California. The Technical Committee tentatively approved SourcePoint’s methodology to conduct the corridor evaluations using the criteria and methodology outlined in the proposed resolutions.

In May 2003, the third BINS Technical Committee meeting was held in San Diego, California. The revisions to the proposed resolutions and corridor evaluation of Arizona were reviewed. Three additional corridor evaluations were reviewed and discussed and suggestions were made to improve the corridor evaluations.

In June 2003, SourcePoint e-mailed the BINS Technical Committee members the proposed resolutions that contain a place to vote for each resolution on the form. The Committee members were asked to vote on the form. All members voted, approved the proposed resolutions, and returned the form prior to the BINS Technical Committee meeting. Also in June 2003, the fourth BINS Technical Committee meeting was held in San Diego, California. The Committee reviewed and unanimously approved the proposed resolutions and recommended approval by the JWC. In addition, the remaining seven corridor evaluations were discussed and suggestions were made to improve some of the evaluations.

On July 10, 2003, the JWC met in Mexico City, Mexico. The JWC approved the recommendations made by the BINS Technical Committee at their June 13, 2002 meeting, authorized SourcePoint to proceed with the study, and encouraged “full and timely Technical Committee participation.” The two recommendations were: (a) the use of the 11-step corridor evaluation methodology developed by SourcePoint to evaluate the corridors selected by the states, and (b) the use of the criteria specified in the 11-step corridor evaluation methodology.

In November 2003, the fourth BINS Technical Committee meeting was held in San Diego, California. Comments and suggestions on the BINS draft final report (previously mailed to the Technical Committee) were reviewed. The votes on the proposed resolution were reviewed (seven approved, three required more discussion, one was absent). Next steps were discussed: SourcePoint agreed to create a matrix with comments and responses, mail out a revised Executive Summary, and

January 2004 36 implement comments received on revised Executive Summary. In January 2004, the BINS Technical Committee tentatively approved the BINS final reports by voting on a Resolution.

Data Issues

This section discusses missing source data and use of alternative data.

Missing Source Data: For the corridor data requested, a significant portion of historical and forecast data was not provided. In some cases it appeared the data were available, but that the BINS Technical Committee representative was unable to obtain it. This absence of data seemed to be caused by two factors: (1) not having enough resources dedicated to obtaining the relevant data and/or (2) a lack of communication between the organizations having the data and the organization requesting the data.

Airport and railroad data were not provided by all states. For many corridors, key information was missing such as LOS and highway capacity.

Regarding the timeliness of the responses, this was a debilitating problem as data continued to “trickle in” long after the deadline.

Alternative Data: Throughout the data request process, completed questionnaires were not received from all the border states. Consequently, an alternative evaluation process was implemented for those states that did not submit the requested data.

For the corridor evaluation process, the basic methodology was the same as that used for states that provided questionnaires; however, there were some adjustments to account for differences in data. If states omitted certain responses, selected data were obtained using other sources. As a result, in some cases, fewer indicators were used in the corridor evaluation compared to those states that provided a complete set of data. The difference in the number of indicators does not make the evaluation of a state’s corridors less significant than those evaluations with more indicators. A corridor that contains more indicators has added characteristics that help understand specific qualities of that corridor. A corridor with fewer indicators can still be evaluated, yet it will lack some of those added characteristics.

The alternative sources for the missing corridor data are the following:

Base Year Data – Calendar Year 2000:

Highways: SCT provided highway segment data for those federal highways for which states did not provide data. This highway information contains segment length (kilometers – km) and Tráfico Diario Promedio Anual (TDPA – a measure similar to AADT) for each segment.

Land POEs: For trucks and rail, the value of U.S. exports into Mexico was obtained from the U.S. Bureau of Transportation Statistics (BTS).

January 2004 37 Forecast Data – Year 2020:

The forecast data for highways and land POEs was derived using a growth rate of 3.0 percent provided by the SCT.

RESULTS

The border transportation corridors that were identified and the results of their evaluations are presented in the remainder of this chapter. Findings are summarized for the overall border region, by country, and by state. Appendix 8 contains the corridor evaluations and Appendix 10 includes statistical tables.

Corridors in the Border Region

Based on the BINS project corridor definition and the minimum criteria to assign facilities to the corridors, the BINS Technical Committee members were asked to identify corridors within their states and to include highways, railroads, airports, and maritime ports that serve the corridors.

Within the ten states, 42 transportation corridors were identified by the BINS Technical Committee representatives. All corridors had to lie within 100 km of the U.S.-Mexico border and serve an international POE (details can be found in Appendix 8). Within the 100 km limit there are 22 airports and four maritime ports – all of which are designated as international POEs. There are also seven railroads that operate within 100 km of the U.S.-Mexico border and cross the U.S.-Mexico border.

There was a wide range of corridors identified in each state – from one transportation corridor in Arizona, Nuevo León, and Sonora to 12 corridors in Baja California, as shown in Figure 7. The rationale used by BINS Technical Committee representatives to select corridors varied but an underlying theme was the flow of traffic from the border region into their state. Most of the representatives selected corridors that captured traffic that crossed the border. No data were provided for Coahuila’s planned Boquillas del Carmen a Múzquiz corridor.

January 2004 38 Figure 7 Number of Transportation Corridors by Border State

12 42 Total Border Corridors

0 AZ NL SO CA NM CO CH TA TX BC

Source: BINS Technical Committee. Note: AZ = Arizona, BC = Baja California, CA = California, CH = Chihuahua, CO = Coahuila, NM = New Mexico, NL = Nuevo Leon, SO = Sonora, TA = Tamaulipas and TX = Texas.

Not only did the number of corridors per state vary dramatically, so did the size of the corridors based on their AADT in 2000, as shown in Figure 8. For the 41 corridors for which AADT data were provided, the smallest corridor is located in Chihuahua with an AADT of 400 vehicles. By contrast, the largest corridor is located in California with an AADT of 719,972 vehicles.

January 2004 39 Figure 8 Distribution of Corridors by AADT in Calendar Year 2000

35%

30%

25%

20%

15%

10%

0% No Data 0 - 4,999 5,000 - 10,000 - 20,000 - 30,000 - 50,000 - 100,000 - > 250,000 9,999 19,999 29,999 49,999 99,999 249,999

Source: BINS Technical Committee.

The distribution of corridors by highway length is more evenly spread for calendar year 2000 (Figure 9 on the following page). Coahuila is the only state to identify a corridor and not assign any highways to it since it is a planned corridor, thus explaining the “No Data” category in Figures 8, 9, 10, 12, 13, and 14.

January 2004 40 Figure 9 Distribution of Corridors Highway Length (miles) in Calendar Year 2000

20%

18%

16%

14%

12%

10%

0% No Data 0 - 9.9 10 - 19.9 20 - 49.9 50 - 99.9 100 - 150 - 200 - 300 - > 400 149.9 199.9 299.9 399.9

Source: BINS Technical Committee.

Of all the corridors, the shortest one is 4.8 miles (7.8 km) in length and is located in Baja California. By contrast, the longest corridor is located in New Mexico and includes 523 miles of highway (841 km).

Looking to the future, 41 of the 42 corridors have projections showing AADT increasing between 2000 and 2020. As can be observed in Figure 12, on the following page, the growth rates range from a low of 25 percent for the corridor in Arizona, to a high of 175 percent for a corridor in Tamaulipas.

January 2004 41 Figure10 Distribution of Projected Growth Rates in Corridor AADT, 2000 to 2020

45%

40%

35%

30%

25%

20%

15%

10%

0% No Data 0 - 49.9% 50% - 74.9% 75% - 99.9% 100% - 124.9% 125% - 149.9% 150% - 174.9%

Source: BINS Technical Committee.

Highway congestion, as measured by LOS, is projected to worsen between 2000 and 2020. The definition of congestion and complete listing of the categories is contained in Appendix 12, Glossary of Terms.

Of the 42 corridors identified in the ten states, no LOS data were provided for 12 corridors (29%). For the remaining 30 corridors, it was projected that LOS would worsen in 21 corridors (70%), there would be no LOS change in two corridors (7%) and LOS would improve in seven corridors (23%), as shown on Figure 11 on the following page. In the U.S., LOS data were provided by California and New Mexico for five of the 12 corridors identified in the U.S. In Mexico, LOS data were submitted by four states – Baja California, Chihuahua, Nuevo León and Tamaulipas - and account for 25 of the 30 corridors identified in Mexico.

January 2004 42 Figure11 Projected Change in Highway Congestion between 2000 and 2020

Improves [23%]

No Change Worsens [7%] [70%]

Note: Congestion is measured by the Level of Service [LOS] and data are provided for 30 of 42 corridors.

Source: BINS Technical Committee.

Corridors by Country

Of the 42 corridors identified in both countries, 30 are located in Mexico and 12 in the U.S. The corridors identified in Mexico are very different from the corridors identified in the U.S. In general, the Mexican corridors tend to be more numerous and smaller in size (AADT and highway mileage) than their U.S. counterparts.

The reasons identified by the BINS representatives for selecting the corridors mainly dealt with the flow of traffic from the corridor into their respective states. It appears the U.S. BINS representatives were most concerned with the flow of vehicles from the border. On the Mexican side, traffic flow was a consideration and one BINS representative used local planning needs as a reason for selecting corridors. While this appears to be a subtle difference in perspective, it may be the reason there are a larger number of corridors per state in Mexico than in the U.S.

In general, corridors identified in the U.S. tend to have more traffic than corridors identified in Mexico. In 2000, the largest corridor in the U.S. carried nearly 720,000 AADT while the smallest one accommodated 1,700 AADT. In Mexico, the largest corridor served 40,000 daily vehicles while the smallest one carried 400 vehicles per day.

January 2004 43 Of all Mexican corridors, 87.5 percent carry an AADT below 20,000 vehicles. By contrast, about 25 percent of all U.S. corridors carry AADT that is greater than 50,000 vehicles. Figure 12 illustrates the distribution of corridor AADT by country.

Figure 12 Distribution of Corridor AADT, By Country Average Annual Daily Traffic for Calendar Year 2000

45% Mexico US 40%

35%

30%

25%

20%

15%

10%

0% No Data 0 - 4,999 5,000 - 10,000 - 20,000 - 30,000 - 50,000 - 100,000 - > 250,000 9,999 19,999 29,999 49,999 99,999 249,999

Source: BINS Technical Committee.

January 2004 44 In general, the 12 corridors identified in the U.S. tend to have more highway miles than the corridors identified in Mexico. The average highway length for the 12 corridors in the U.S. is 219 miles (about 352 km ). By contrast, the average highway length for the corridors identified in Mexico is about 110 miles (about 176 km). Figure 13 shows the distribution of corridor highway length by country.

Figure 13 Distribution of Corridor Highway Length, By Country Highway Length in Miles for Calendar Year 2000

35%

Mexico US 30%

25%

20%

15%

10%

0% No Data 0 - 9.9 10 - 19.9 20 - 49.9 50 - 99.9 100 - 150 - 200 - 300 - > 400 149.9 199.9 299.9 399.9

Source: BINS Technical Committee.

Congestion on corridors is measured with LOS data. LOS values range from A (free flow) to F3 (gridlock). In Mexico, in calendar year 2000, the average LOS was LOS B (free to stable flow, light to moderate volumes). In the U.S., for California and New Mexico the average LOS for calendar year 2000 is LOS C (stable flows, moderate volumes, freedom to maneuver noticeably restricted). The average LOS statistic for these two states was weighted by each corridor’s AADT.5 No border wide assessment of LOS for the U.S. is presented since LOS data from Texas and Arizona are not available.

In Mexico, the 25 corridors for which LOS data are available show a fairly uniform distribution – seven corridors (28%) are rated as LOS A; nine corridors (36%) are rated as LOS B; six corridors (24%

5 In the U.S., LOS data are provided for five corridors in two states – California and New Mexico. Further, AADT in one of the five U.S. corridors dominates with about 720,000 AADT or 83% of the AADT for the five U.S. corridors that have LOS data. In Mexico, LOS data come from four states – Baja California, Chihuahua, Nuevo León and Tamaulipas and account for 25 of 30 corridors identified in Mexico. There is no one state that dominates the Mexican statistics as is the case in the U.S.

January 2004 45 are rated as LOS C, and three corridors (12%) are rated LOS D. None of the corridors in either country is rated below LOS D.6

Looking to the future, AADT in Mexico’s corridors will tend to grow faster than in corridors in the U.S. between 2000 and 2020. For this period, the distribution of AADT growth rates by country is shown in Figure 14.

Figure 14 Distribution of Corridor AADT Growth Rates, By Country, 2000 to 2020

50% Mexico US 45%

40%

35%

30%

25%

20%

15%

10%

0% No Data 0 - 49.9% 50% - 74.9% 75% - 99.9% 100% - 124.9% 125% - 149.9% 150% - 174.9%

Source: BINS Technical Committee.

The average AADT growth rate for all 12 corridors in the U.S. is projected to be about 71 percent between 2000 and 2020. By contrast, the average growth rate for the Mexican corridors is anticipated to be nearly 98 percent.

While Mexico’s corridors are anticipated to have the largest percentage increases in AADT, the U.S. corridors would have the largest traffic volume increases between 2000 and 2020. The total increase of AADT on the Mexican corridors is projected to be about 225,133 daily vehicles, or an average of about 7,763 vehicles per day for each of the 29 Mexican corridors. By contrast, the total increase in traffic volume on the U.S. corridors is projected to be 596,101 daily vehicles – more than twice the level in the Mexican corridors.

6 Certain segments of certain highways are ranked below a “D”, however, all of the corridor average scores are above E. 7 Of the 42 corridors identified in the study, no highway capacity data are provided on 13 of the corridors or 31% of the total. Seven of the 12 corridors are in the U.S. (in Arizona and Texas). The remaining six corridors are in Coahuila, Nuevo León and Sonora.

January 2004 46 With regard to congested corridors, both countries will experience an increase in congestion as measured by LOS during the next 20 years. As noted earlier, there are five corridors in two U.S. states, and 25 corridors in four Mexican states for which LOS data was provided. In 2020, the LOS for four of the five corridors is projected to worsen. Only on one corridor in New Mexico is LOS projected to improve. In another New Mexico corridor, LOS is projected to be the same in 2020. In Mexico, six of the corridors have projections for improved LOS in 2020. These six corridors are in the state of Tamaulipas where highway capacity is projected to increase substantially.

While four of the U.S. corridors are still ranked LOS A, the fifth corridor has LOS categorized as LOS D (heavy volumes, very limited freedom to maneuver). This is the San Diego-Tijuana-Tecate Corridor, and it is the largest corridor identified in either country with a projected AADT of over 1 million in 2020. In 2020, this corridor is projected to carry 46 percent of all the traffic identified on all 42 corridors in the U.S.-Mexico border region.

In Mexico, three corridors (12%) are categorized at LOS F1 (very heavy congestion, very long queues) and are located in Baja California – directly across the border from the San Diego-Tijuana- Tecate Corridor. Five corridors (20%) are ranked LOS E and another five (20%) are ranked LOS C. Three corridors (12%) are ranked LOS B and the remaining nine corridors (36%) are ranked LOS A. Of the nine corridors rated LOS A, five are in Tamaulipas, where capacity is projected to increase substantially.

The Demand for Transportation Infrastructure

Future demand for transportation infrastructure is based on projections for the year 2020. At the border, 2020 forecasts reveal significant increases in the demand for transportation services. The number of trucks crossing the U.S.-Mexico border in both directions is expected to reach 14.4 million trucks in 2020, representing an increase of 6.3 million trucks from 2000 levels. This large number of trucks will require additional highway and POE capacity just to maintain current traffic flow.

AADT for the corridors within the 100 km limit is projected to increase about 60 percent overall. Of the 42 corridors identified in the BINS project, the San Diego-Tijuana-Tecate Corridor is the largest and its projected AADT growth between 2000 and 2020 represents 35 percent of the total increase of AADT for all 42 corridors. While the most rapid increases in AADT will occur in Mexico, the largest volume increases of AADT will occur in the U.S. with a significant portion occurring in the San Diego region.

For the 29 corridors for which highway capacity at peak hour data are available7, increases of capacity are expected to occur at a slower rate than that of average daily traffic during the next two decades. For the corridors for which data were obtained, projected increases in highway capacity at peak hours is about 31 percent during the next two decades. This is significantly less than the projected increase of 60 percent in average daily traffic for both countries.

The combination of these two factors will lead to greater congestion: AADT increases 60 percent from 2000 to 2020 while highway capacity increases 31 percent. Congestion, as measured by LOS, is

January 2004 47 projected to worsen for 70 percent of the corridors for which LOS data were provided.8 Therefore, in conjunction with the anticipated increase in border crossings and AADT, the quality of travel in the border region will deteriorate during the next two decades. While highway capacity will increase, it does not appear to be increasing at a rate that is able to maintain traffic “flow.” In order to maintain traffic flow, additional infrastructure is needed.

The increase in highway capacity comes about as transportation related projects are implemented. In fact, projections of future AADT include certain projects which will be completed during the next 20 years. Many of these projects are already under construction in the border states. If no additional projects were constructed, the level of congestion would be significantly worse than that projected.

Understanding the planned projects needed to help alleviate the predicted traffic flow problems in the border region as well as the cost of these projects are topics that are taken up in Chapter 5. These topics are crucial to the long run health of the U.S.-Mexico border region.

8 Of the 42 corridors identified in the study, no congestion data are provided on 12 of the corridors or 29% of the total. Seven of the 12 corridors are in the U.S. (in Arizona and Texas). The remaining five corridors are in Mexico (in Nuevo León and Sonora).

January 2004 48 Corridors by State

The corridor evaluations conducted under the BINS project are reviewed in this section and the states are presented in alphabetical order. For each evaluation, a general description of the states infrastructure is provided, and then the results from the analysis for current conditions and projected change are presented.

Arizona

The BINS Technical Committee representative identified one corridor in Arizona and titled it the CANAMEX Corridor. This corridor is part of the corridor by the same name identified as a High Priority Corridor (HPC) by the U.S. Federal Government that runs from Nogales, Arizona to Sweetgrass, Montana. The corridor was selected because it is the only significant corridor that serves a POE in Arizona. A map of the Arizona border region and its corridor within 100 km is presented on the following page.

Arizona Transportation Infrastructure within 100 km of the U.S.-Mexico Border

Highways The CANAMEX Corridor is composed of two highways: Interstate 19 (I-19) and State Route 189 (SR 189). Both highways run north/south. No data was provided for SR 189, and only AADT and segment length are available for I-19.

Land Ports of Entry There are seven land POEs in Arizona: San Luis, Lukeville, Sasabe, Naco, Nogales-DeConcini, Nogales-Mariposa and Douglas. Nogales-Mariposa connects to SR 189 and Nogales-DeConcini is directly connected to I-19.

Airports There are seven airports in Arizona that are within 100 km of the U.S.-Mexico border. Four of the airports are designated as international POEs and are included in this evaluation. Those airports are: Bisbee-Douglas International Airport, Douglas Municipal Airport, Nogales International Airport and Tucson International Airport. Tucson International Airport has the longest runway at 10,994 feet (about 3,350 meters).

Railroads There is one railroad that operates in the CANAMEX corridor and it is the Union Pacific (UP). The UP rail lines cross the U.S.-Mexico border at the Nogales-DeConcini POE.

Maritime Ports There are no maritime ports in Arizona.

January 2004 49 KANSAS UTAH NEVADA COLORADO INTERNATIONAL BRIDGES AND BORDER CROSSINGS OKLAHOMA NEW MEXICO J a n u r y 2 0 4

Transportation Corridors in Amarillo Los Angeles 17 Arizona Little Rock (Corridors Organized by Priority) Albuquerque CANAMEX Corridor Atlanta

MEX US Mexican/US Highways ARIZONA International Border 5 Ports of Entry 100 km 10 SOURCE: Binational Transportation Infrastructure Needs Assessment Study, SourcePoint, 2003 Birmingham Phoenix 86

1 00 km 25 San Diego 8 10

5 0 Yuma 8 Tucson 1D Montgomery Tijuana San Luis UNITED STATES Mexicali Dallas Fort Worth Shreveport

Abilene 20 Ensenada 10 Lukeville Jackson 100 km 5 20 19 Nogales- 3 Mariposa Gulf 10 1 Nogales Deconcini El Paso 0 km of Sasabe 189 Odessa California Douglas Juarez

1 00 Naco TEXAS km 83

1 00 km 45 Mobile BAJA 15 10 35 San Quintin CALIFORNIA 10

1 00 km Austin 6 Houston New Orleans 45 10 10 PACIFIC Ojinaga Hermosillo CHIHUAHUA San Antonio OCEAN Gulf of CaliforniaSONORA Galveston

Rosarito 1 0 0 Chihuahua km Gulf Delicias 35 Guaymas 37

1 Corpus Ciudad Obregon 0 of 0 km Nuevo Christi Santa Laredo Rosalia Hidalgo COAHUILA Laredo del Parral Mexico BAJA Monclova 100 km 85 CALIFORNIA MEXICO NUEVO SUR Reynosa Brownsville Loreto LEON 40 Matamoros Los Gomez Palacio Mochis Monterrey Torreon Saltillo

100 km DURANGO 180 Culiacan La Paz TAMAULIAPS Durango ZACATECAS 0 100 200 300 Kilometers SINAOLA Ciudad Victoria 0 100 200 300 Miles Mazatlan SAN LUIS SOURCE: Binational Transportation Infrastructure Needs Assessment Study, SourcePoint, 2003 Zacatecas POTOSI Ciudad Mante San Luis Potosi Tampico NAYARIT 1 Ciudad Madero Cancun Aguascalientes Progreso VERACRUZ- Merida Tepic Guanajuato LLAVE 7 4 YUCATAN Leon 3 Puerto Vallarta Irapuato Queretaro Poza Rica Guadalajara Celaya Pachuca Bahia de Campeche JALISCO Zamora 5 Tulancingo QUINTANA Texcoco Campeche Mexico Jalapa ROO Morelia 8 Ciudad del Veracruz Carmen Colima Toluca 2 Tlaxcala Chetumal MICHAOCAN Cordoba Cuernavaca Manzanillo DE OCAMPO TABASCO COLIMA 6 Puebla Orizaba CAMPECHE PUEBLA Coatzacoalcos Villahermosa

Lazaro Minatitlan Cardenas Chilpancingo Tuxtla Gutierrez

GUERRERO Oaxaca Acapulco OAXACA Salina Cruz Golfo de Tehuantepec Analysis of the Corridor Evaluation Results for Arizona

Because there is only one corridor, no corridor comparisons are necessary.

Current Conditions This discussion reviews highway, land POE, airport, maritime port and rail data and evaluation results. With regard to the highways, the CANAMEX corridor averaged about 24,000 vehicles per day over its 63 miles in 2000. Arizona did not provide LOS data or highway capacity at peak hour data so it is not possible to ascertain congestion.

The 345,000 trucks that crossed the U.S.-Mexico border into Arizona in 2000 passed through six of the seven Arizona POEs and transported more than 99 percent of the volume of all goods moved on land across the U.S.-Mexico border in Arizona in 2000. The Nogales-Mariposa POE had the most truck crossings with about 254,700 trucks, or about 74 percent of the state total. Of the 10.3 million passenger vehicles that crossed the U.S.-Mexico border north into Arizona in calendar year 2000, about 29 percent passed through the Nogales-DeConcini POE. No LOS or highway capacity data were provided; therefore, the current and future level of congestion on Arizona’s corridors could not be established.

Projected Change This discussion reviews highway, land POE, airport and rail data for both absolute changes and percent changes. With regard to changes in highway data, AADT on the CANAMEX corridor is projected to increase by 6,023 vehicles between calendar year 2000 and 2020 or 25 percent.

Annual truck crossings at land POEs are projected to increase by about 382,200 or 211 percent between 2000 and 2020 while passenger vehicles crossing at the land POEs are projected to increase by about 5.3 million vehicles or 52 percent. For railroads, the total tonnage is projected to increase by about 223,000 while TEUs are projected to increase by about 5,870 - both between 2000 and 2020. Rail cars crossing the U.S.-Mexico border into Arizona are projected to increase about 167 percent between in the same period. For airports, the total volume of tons transported at the airports is projected to increase by about 31,000 tons between 2000 and 2020, a rise of 89 percent.

Table 2 summarizes key indicators of Arizona’s transportation corridor.

Table 2 Arizona’s Corridor Summary

1. CANAMEX Corridor 2000 2020 % Change AADT 24,026 30,049 25 POE Crossings (Annual) Trucks 344,945 727,144 211 Passenger 10,321,419 15,659,112 52 Trade Value (Truck)9 $8,308 $29,826 359

9 Value of trade, by truck, in millions of dollars.

January 2004 51 Baja California

The BINS Technical Committee representative identified 12 corridors in Baja California and named most of them after road junctions. In Baja California’s case, most of the transportation infrastructure of the state is concentrated within the 100 km border region. The reason Baja California selected a large number of individual corridors was to identify and connect important highway facilities into a corridor network. Baja California selected and identified its corridors in an attempt to connect all transportation modes of the border area to the highway network, including airports, maritime ports, and railroads. A map of the Baja California border region with its corridors and 100 km limit is presented on the following page.

Baja California Transportation Infrastructure within 100 km of the U.S.-Mexico Border

Highways Baja California identified 12 corridors for evaluation. Ten of the corridors contain highway segments while two corridors include segments from local roads. The highways that are specified are MX-1D, MX-1, MX -2D, MX -2, MX-3, MX -5, BCN-2. The two local roads are Vía Rápida Oriente (Central Camionera-Garita Corridor) and Boulevard Bellas Artes (Bellas Artes Corridor).

Land Ports of Entry There are six land POEs in Baja California: Puerta México-San Ysidro, Mesa de Otay, Tecate, Mexicali, Mexicali-Este, and Algodones.

Airports There are three airports located within 100 km of the U.S.-Mexico border, but only the Mexicali and Tijuana airports are included in the corridor evaluation since they are the only two designated as international POEs. The runway length of the longest runway at both airports is 2,600 meters (about 8,530 feet).

Railroads There are two railroads that operate within 100 km of the U.S.-Mexico border and they are the Ferrocarril Via Corta Tijuana-Tecate, and the Ferrocarril Sonora-Baja California (FFRR-FSBC).

Maritime Ports Baja California has one maritime port located within 100 km of the U.S.-Mexico border and designated as an international POE. That is the Port of Ensenada, and its main channel depth is 13 meters (about 42 feet).

January 2004 52 KANSAS UTAH NEVADA COLORADO INTERNATIONAL BRIDGES AND BORDER CROSSINGS OKLAHOMA NEW MEXICO ARIZONA

Amarillo Little Rock Los Angeles

Albuquerque

Atlanta

100 km 10 Birmingham 5

Phoenix 86 86 J a n u r y 2 0 4

78 5 25 CALIFORNIA 78

111 115 10 8 86 San Diego L Mesa de Otay A Mexicali II Mexicali 8 Tijuana Tecate 7 Algodones Tecate 98

2D H J C 8 Tucson B I Montgomery Tijuana G 2 2 Yuma K E 1 ARIZONA UNITED STATES Rosarito F D Dallas BAJA 10 Fort Worth 0 km Shreveport 3 PACIFIC 1D OCEAN SONORA 5 3 Ensenada CAL3 IFORNIA Abilene 20 Transportation Corridors in 10 Baja California Jackson

(Corridors Organized by Priority) 100 km Ports of Entry Baja California Corridors 20 A Bellas Artes G Tecate-Tijuana (libre) 5 B Mexicali-Ejido Puebla H Tecate-Tijuana (cuota) 19 C Mexicali-Progreso I Bataquez-Algodones D Mexicali-San Felipe J Hongo-Tecate (libre) Gulf 10 E Tijuana-Rosarito (libre) K Tijuana-Rosarito (cuota) El Paso 0 km of Odessa F Tecate-Ensenada L Central Camionera California MEX US Mexican/US Highways Juarez International Border San Felipe SOURCE: Binational Transportation Infrastructure Needs Assessment Study, SourcePoint, 2003 TEXAS Nogales 83

1 00 km 45 Mobile 15 10 35

San Quintin 10

1 Austin 00 km 6

Houston New Orleans 45 10 10

Ojinaga Hermosillo CHIHUAHUA San Antonio SONORA Galveston

Rosarito 1 0 0 km Chihuahua Gulf 35 Delicias

Guaymas 37

Corpus Ciudad Obregon 1 0 of 0 km Nuevo Christi

Santa Laredo COAHUILA Laredo Rosalia Hidalgo

del Parral Mexico 100 km BAJA Monclova 85 CALIFORNIA MEXICO SUR NUEVO Reynosa Brownsville Loreto LEON 40 Matamoros Los Gomez Palacio

Mochis Monterrey

Torreon Saltillo

100 km DURANGO 180

Culiacan

La Paz TAMAULIAPS Durango ZACATECAS 0 100 200 300 Kilometers SINAOLA Ciudad Victoria 0 100 200 300 Miles SAN LUIS SOURCE: Binational Transportation Infrastructure Mazatlan Needs Assessment Study, SourcePoint, 2003

Zacatecas POTOSI Ciudad Mante

San Luis

Potosi Tampico NAYARIT 1 Ciudad Madero Cancun Aguascalientes Progreso VERACRUZ- Merida Tepic Guanajuato LLAVE 7 4 YUCATAN Leon 3 Queretaro Puerto Vallarta Poza Rica Irapuato

Guadalajara Pachuca Campeche Celaya Bahia de

JALISCO Zamora 5 Tulancingo QUINTANA

Texcoco Campeche Mexico Jalapa ROO Ciudad del Morelia 8 Carmen Veracruz Colima Chetumal Toluca 2 Tlaxcala MICHAOCAN Cordoba Cuernavaca Manzanillo TABASCO DE OCAMPO Puebla Orizaba COLIMA 6 CAMPECHE PUEBLA Coatzacoalcos Villahermosa

Minatitlan Lazaro

Cardenas Chilpancingo Tuxtla

Gutierrez

GUERRERO Oaxaca Acapulco OAXACA

Salina Cruz Golfo de Tehuantepec Analysis of the Corridor Evaluation Results for Baja California

Of the 12 corridors evaluated in Baja California, the Bellas Artes corridor is listed first - this is one of the local road corridors. Shown below is the comprehensive listing, which reflects the ordering from the evaluation.

1. Bellas Artes Corridor 2. Mexicali-Ejido Puebla Corridor 3. Mexicali Progreso Corridor 4. Mexicali-San Felipe Corridor 5. Tijuana-Rosarito (free) Corridor 6. Tecate-Ensenada Corridor 7. Tecate-Tijuana (free) Corridor 8. Tecate-Tijuana (toll) Corridor 9. Bataques-Algodones Corridor 10. El Hongo-Tecate (free) Corridor 11. Tijuana-Rosarito (toll) Corridor 12. Central Camionera-Garita Corridor (a local road)

Current Conditions This discussion reviews highway, land POE, airport, maritime port and rail data and results. With regard to the highways, the Central Camionera-Garita Puerta Mexico is listed first in three of the four highway categories – AADT, LOS and capacity. This corridor dominates the AADT listing with 40,000 daily vehicles. Highway length is the only indicator for which the Central Camionera-Garita Corridor is not listed first; the Tecate-Ensenada Corridor is listed first with 104.5 km.

For truck, airport and maritime port modes, the Bellas Artes Corridor is listed first because of its truck traffic and trade volumes. Trucks do not traverse the Central Camionera-Garita Puerta Mexico Corridor; therefore, no truck, airport or maritime port data are allocated to it. For passenger vehicles, the Central Camionera-Garita Corridor is listed first since is has the largest portion of AADT among the 12 corridors, and the Bellas Artes Corridor is listed second. For railroad cars, the Tecate-Tijuana Corridor (G) is listed first since the FFRR Via Corta Tijuana-Tecate rail line is assigned to this corridor. For railroad volume, the Mexicali-Ejido Puebla Corridor (E) is listed first since the FFRR-FSBC rail line is assigned to this corridor. Had data for both rail cars and tonnage been provided for both POEs, it would impact the corridor scores - but not the final listing (for greater detail see Appendix 8).

Projected Change This discussion reviews highway, land POE, airport, maritime port and rail data for both absolute and percent changes. The Central Camionera-Garita Corridor dominates the highway mode with the Bellas Artes Corridor listed second. With regard to highways, the Central Camionera Garita is listed first for three indicators (AADT, LOS and capacity), and tied for first with the Mexicali-Progreso Corridor for highway length. The same annual compound growth rate – 3.0 percent per year was used for AADT, LOS, and Capacity. There are no projected changes for highway length.

January 2004 54 For truck, airport, and maritime port modes, the Bellas Artes Corridor is listed first because it supports the highest trade and vehicle volumes for the year 2000 and the growth rates for the 12 corridors are the same (the Central Camionera Garita Corridor is excluded because it does not serve crossborder truck traffic). For passenger vehicles, Central Camionera-Garita Corridor is listed first. For railroad cars, the Tecate-Tijuana Corridor (Corridor G) is listed first since the Ferrocarril Via Corta Tijuana-Tecate rail line is assigned to this corridor. For railroad volume, the Mexicali-Ejido Puebla Corridor (Corridor E) is listed first since the FFRR-FSBC rail line is assigned to this corridor. Had data for both rail cars and tonnage been provided for both POEs, it would impact the corridor scores – but not the final listing. Table 3 summarizes key indicators of Baja California’s transportation corridors. Corridors are listed by priority based on the results of the evaluation.

Table 3 Baja California’s Corridor Summary

1. Bellas Artes Corridor 2. Mexicali-Ejido Puebla 3. Mexicali-Progreso 2000 2020 % 2000 2020 % 2000 2020 % AADT 20,000 36,122 81 6,500 11,740 81 7,000 12,643 81 POE Crossings (Annual) Trucks 245,141 532,012 117 79,671 172,904 117 85,799 186,204 117 Passenger 3,869,861 6,989,357 81 1,257,705 2,271,541 81 1,354,451 2,446,275 81 Trade by Truck ($) N/A N/A N/A N/A N/A N/A N/A N/A N/A

4. Mexicali-San Felipe 5. Tijuana-Rosarito (free) 6. Tecate-Ensenada Corridor 2000 2020 % 2000 2020 % 2000 2020 % AADT 4,600 8,308 81 10,600 19,145 81 4,200 7,586 81 POE Crossings (Annual) Trucks 56,382 122,363 117 129,925 281,966 117 51,480 111,722 117 Passenger 890,068 1,607,552 81 2,051,027 3,704,359 81 812,671 1,467,765 81 Trade by Truck ($) N/A N/A N/A N/A N/A N/A N/A N/A N/A

7. Tecate-Tijuana (free) 8. Tecate-Tijuana (toll) 9. Bataques-Algodones 2000 2020 % 2000 2020 % 2000 2020 % AADT 5,000 9,031 81 5,700 10,295 81 2,100 3,793 81 POE Crossings (Annual) Trucks 61,285 133,003 117 69,865 151,623 117 25,740 55,861 117 Passenger 967,465 1,747,339 81 1,102,910 1,991,967 81 406,335 733,882 81 Trade by Truck ($) N/A N/A N/A N/A N/A N/A N/A N/A N/A

10. El Hongo-Tecate (free) 11. Tijuana-Rosarito (toll) 12. Central Camionera 2000 2020 % 2000 2020 % 2000 2020 % AADT 4,600 8,308 81 5,100 9,211 81 40,000 72,244 81 POE Crossings (Annual) Trucks 56,382 122,363 117 62,511 135,663 117 0 0 0 Passenger 890,068 1,607,552 81 986,815 1,782,286 81 7,739,723 13,978,713 81 Trade by Truck ($) N/A N/A N/A N/A N/A N/A N/A N/A N/A

January 2004 55 California

The BINS Technical Committee representative identified two corridors in California, the San Diego- Tijuana-Tecate and the Imperial-Mexicali Corridors. These corridors were selected because they are the two main routes trucks use as they cross into California from Mexico. In short, they are the truck trade routes for NAFTA trade. A map of the California border region and the corridors in the 100 km limit is presented on the following page.

California Transportation Infrastructure within 100 km of the U.S. Mexico Border

Highways The San Diego-Tijuana-Tecate Corridor is composed of various segments from nine highways: Interstate 5 (I-5), I-8, I-15, I-805, State Route 11 (SR 11), SR 94, SR 125, SR 188 and SR 905. The Imperial- Mexicali Corridor is composed of segments from eight highways: I-8, I-10, SR 7, SR 78, SR 86, SR 98, SR 111, SR 115 and SR 186.

Land Ports of Entry There are six land POEs in California: San Ysidro, Otay Mesa, Tecate, Calexico, Calexico East, and Andrade. A new POE is proposed at East Otay Mesa, approximately two miles east of the existing Otay Mesa POE.

Airports There are six airports located within 100 km of the U.S.-Mexico border, but only Lindbergh Field is included in the evaluation because it is the only airport designated as an international POE. The runway length of the longest runway is 9,400 feet (about 2,860 meters).

Railroads There are three railroads within 100 km of the U.S.-Mexico border and they are the Burlington Northern Santa Fe (BNSF), the San Diego & Arizona Eastern (SD&AE) Railway, and the Union Pacific (UP). The SD&AE Railway crosses the U.S.-Mexico border at the San Ysidro POE and east of the Tecate POE while the UP crosses the U.S.-Mexico border at the Calexico POE.

Maritime Ports California has one maritime port located within 100 km of the U.S.-Mexico border that is designated as an international POE. That port is the Port of San Diego with a main channel depth of 42 feet (about 13 meters).

Analysis of the Corridor Evaluation Results for California

Of the two corridors evaluated in California, the San Diego-Tijuana-Tecate Corridor is listed first overall with the Imperial-Mexicali Corridor listed second. The San Diego-Tijuana-Tecate Corridor obtains its overall first place listing with respect to the current conditions and the projected changes.

January 2004 56 KANSAS UTAH NEVADA COLORADO

OKLAHOMA NEW MEXICO ARIZONA

Amarillo Little Rock Los Angeles

Albuquerque J a n u r y 2 0 4 Transportation Corridors in California

(Corridors Organized by Priority) San Diego-Tijuana-Tecate Corridor 17 5 Imperial-Mexicali Corridor 10 MEX US Mexican/US Highways 100 km International Border 10 Ports of Entry

79 SOURCE: Binational Transportation Infrastructure Needs Assessment Study, SourcePoint, 2003

76 15 Phoenix ARIZONA CALI78 FOR111NIA 5 7 5 86

79 78 67 San 78 25 Diego 111 115 10 8 86 94 El Centro 805 125 8 94 Calexico 7 Andrade 905 Tecate 11 98 188 186 Otay Mesa Mexicali Tijuana Yuma 8 Tucson Tecate 1D Calexico San Ysidro Calexico East BAJA UNITED STATES SONORA CALIFORNIA Dallas 1 Fort Worth 00 km Shreveport

Abilene 20 Ensenada 10

100 km 5 20 19

3 1 1 El Paso 00 km Odessa

Juarez TEXAS Nogales 83

1 00 km 45 15 10 35

San Quintin 10

1 Austin 00 km 6

Houston 45 PACIFIC 10 10 Ojinaga Hermosillo CHIHUAHUA San Antonio OCEAN Gulf of CaliforniaSONORA Galveston

Rosarito 1 0 0 km Chihuahua Gulf 35 Delicias

Guaymas 37

Corpus Ciudad Obregon 1 0 of 0 km Nuevo Christi

Santa Laredo

COAHUILA Laredo Rosalia Hidalgo

del Parral Mexico 100 km BAJA Monclova 85 CALIFORNIA MEXICO SUR NUEVO Reynosa Brownsville Loreto LEON 40 Matamoros Los Gomez Palacio

Mochis Monterrey

Torreon Saltillo

100 km DURANGO 180

Culiacan

La Paz TAMAULIAPS

Durango ZACATECAS

SINAOLA Ciudad

Victoria

SAN LUIS Mazatlan

Zacatecas POTOSI Ciudad Mante

San Luis

Potosi Tampico NAYARIT 1 Ciudad Madero

Aguascalientes VERACRUZ- Tepic Guanajuato LLAVE 7 4 Leon 3 Queretaro Puerto Vallarta Poza Rica Irapuato

Guadalajara Pachuca Celaya Bahia de

JALISCO Zamora 5 Tulancingo

Texcoco Campeche Mexico Jalapa Ciudad del Morelia 8 Carmen Veracruz Colima Toluca 2 Tlaxcala

MICHOACAN Cordoba Cuernavaca Manzanillo TABASCO DE OCAMPO Puebla Orizaba COLIMA 6 PUEBLA Coatzacoalcos Villahermosa

Minatitlan Lazaro

Cardenas Chilpancingo Tuxtla

Gutierrez

GUERRERO Oaxaca Acapulco OAXACA

Salina Cruz Golfo de Tehuantepec Current Conditions This discussion reviews highway, land POE, airport, maritime port and rail data and results. With regard to highways, the San Diego-Tijuana-Tecate Corridor is listed first. This comes about because the San Diego-Tijuana-Tecate Corridor is listed first in three categories (AADT, LOS and capacity) and the Imperial-Mexicali Corridor is listed first in only one category (highway length). The San Diego-Tijuana-Tecate Corridor had almost eight times as much AADT as the Imperial-Mexicali Corridor (719,972 vehicles compared to 92,755 vehicles), 77 percent more highway capacity (42,177 versus 23,871) and its LOS is lower (LOS C versus LOS A). By contrast, the Imperial-Mexicali Corridor has 29 percent more mileage than the San Diego Corridor (377.8 miles versus 292.4 miles).

For truck and trade volumes, passenger vehicles, airports, and maritime ports, the San Diego- Tijuana-Tecate Corridor is listed first primarily because of its AADT counts. For railroad data, the Imperial-Mexicali Corridor is listed first because the number of rail cars and the amount of goods transported in the Imperial-Mexicali Corridor by the UP is larger than the number of rail cars and goods transported by the San Diego Imperial Valley (SDIV) railroad in the San Diego-Tijuana-Tecate Corridor. The SDIV operates freight service on the SD&AE Railway.

Projected Change This discussion reviews highway, land POE, airport, maritime port and rail data for both absolute changes and percent changes. With regard to highway data, the San Diego-Tijuana-Tecate Corridor is listed first in three of the four categories (AADT, highway length and capacity), indicating that the changes are forecast to be greater in the San Diego-Tijuana-Tecate Corridor. The San Diego- Tijuana-Tecate Corridor is listed first with a higher percent increase in highway length (4.8%) and capacity (42.0%). AADT is projected to grow faster in the Imperial-Mexicali Corridor (101%). For LOS, congestion in the Imperial-Mexicali Corridor is anticipated to increase more than in the San Diego-Tijuana-Tecate Corridor.

For trucks, passenger vehicles, airports, and maritime ports data, the San Diego-Tijuana-Tecate Corridor is listed first because the growth rates for both corridors are the same, and the San Diego- Tijuana-Tecate Corridor had larger volumes in the year 2000. For railroad data, the Imperial-Mexicali Corridor is listed first for the same reason. The growth rates are the same for both railroads, but the UP in the Imperial -Mexicali Corridor had larger volumes in calendar year 2000 than the SDIV railroad in the San Diego-Tijuana-Tecate Corridor had in the year 2000.

Table 4 summarizes key indicators of California’s transportation corridors. Corridors are listed by priority based on the results of the evaluation.

Table 4 California’s Corridor Summary

1. San Diego-Tijuana-Tecate Corridor 2. Imperial-Mexicali Corridor 2000 2020 % 2000 2020 % change change AADT 719,972 1,008,392 40 AADT 92,755 186,422 101 POE Crossings (Annual) POE Crossings (Annual) Trucks 910,694 1,478,428 170 Trucks 117,326 273,318 170 Passenger 26,566,907 43,633,792 72 Passenger 3,422,661 8,066,624 72 Trade by Truck 10 $14,121 $41,543 309 Trade by Truck $1,819 $7,680 309

10 Value of trade, by truck, in millions of dollars. January 2004 58 Chihuahua

The BINS Technical Committee representative identified six corridors for evaluation, which are México-Ciudad Juárez, Ojinaga-Chihuahua, Ciudad Juárez-Tijuana, El Berrendo-Jano-Sueco- Chihuahua, Guadalupe-Samalayuca-Chihuahua and Jerónimo-Samalayuca-Chihuahua Corridors. The reason for selecting these corridors is that these are the main routes trucks use as they carry freight between the U.S. and Mexico. In short, they are the truck trade routes for NAFTA trade. A map of the Chihuahua border region and its corridors in the 100 km limit is presented on the following page.

Chihuahua Transportation Infrastructure within 100 km of the U.S. Mexico Border

Highways The highways specified in the Chihuahua corridor evaluation are the MX-2, MX -10, MX-16 and MX- 45. Two unnumbered roads, the Jerónimo-Samalayuca-Chihuahua highway and the Guadalupe- Samalayuca-Chihuahua highway, are also specified.

Land Ports of Entry There are ten land POEs in Chihuahua: El Berrendo, Gral. Rodrigo M. Quevedo (Palomas), Jerónimo, Paso del Norte (Santa Fe-Juárez), Buen Vecino (Puente Lerdo), Cordova, Zaragoza, Guadalupe Bravo, El Porvenir and Ojinaga.

Airports There are two airports that meet the minimum corridor evaluation criteria (located within 100 km of the Mexico-U.S. border and designated as an international POE), and they are the Chihuahua airport and the Juárez airport. The longest runway length for the Chihuahua airport is 2,640 meters (about 8,712 feet) and the longest runway at the Juarez airport is 2,750 meters (about 9,075 feet).

Railroads There are two rail lines that cross the U.S.-Mexico border in Chihuahua, although information on the rail lines was not provided.

Maritime Ports Chihuahua has no maritime ports.

Analysis of the Corridor Evaluation Results for Chihuahua

Of the six corridors evaluated in Chihuahua, the México-Ciudad Juárez Corridor is listed first, the Ojinaga-Chihuahua Corridor is listed second, the Ciudad Juárez-Tijuana Corridor is listed third, the El Berrendo-Janos-Sueco-Chihuahua Corridor is listed fourth, the Guadalupe-Samalayuca-Chihuahua Corridor is listed fifth, and the Jerónimo-Samalayuca-Chihuahua Corridor is listed last. The Mexico- Ciudad Juárez Corridor obtains its overall first place listing with respect to current conditions and projected changes.

Current Conditions This discussion reviews highway, land POE, airport data and results. With regard to highways, the Mexico-Ciudad Juárez Corridor is listed first because it is listed first in three of the four highways.

January 2004 59 KANSAS UTAH NEVADA COLORADO

CALIFORNIA OKLAHOMA NEW MEXICO ARIZONA

Amarillo Little Rock Los Angeles Albuquerque Atlanta

17 5 100 km 10 Birmingham Phoenix 86 25 10 San Diego 8 8 Tucson 1D Montgomery Tijuana UNITED STATES Mexicali Yuma Dallas 1 00 km Fort Worth Shreveport

Abilene 20 Ensenada 10 Jackson 100 km

5 J a n u r y 2 0 4 20 19 Gral. Rodrigo M Quevedo Jerónimo 3 El Paso 10 1 Cd. Juarez 0 k m Odessa El Berrendo Paso del Norte, Buen Vecino, Cordova, Zaragoza 2 Guadalupe TEXAS Nogales Guadalupe 83 1 00 km Mobile Samalayuca Porvenir 10 45 BAJA 15 Janos 10 45 35 San Quintin CALIFORNIA Galeana 10

1 00 k Austin m Sueco 6 F. Magon Houston New Orleans Ojinaga PACIFIC Ojinaga 10 10 Ojo Laguna Hermosillo 45 San Antonio OCEAN 16 Galveston

Rosarito 1 0 6 0 CHIHUAHUA 0 k Chihuahua m Transportation Corridors in Gulf Chihuahua 35 Guaymas Delicias 37 (Corridors Organized by Priority) Gulf of California Mexico - CCidu. dJuaadrez Corridor 1 Corpus Obregon 0 of 0 k Nuevo Ojinaga - Chihuahua Corridor m Christi Santa Laredo Rosalia Cd. Juarez - Tijuana Corridor Laredo El Berrendo - Janos - Sueco - Chihuahua Corridor Hidalgo Mexico del Parral Guadalupe - Samalayuca - Chihuahua Corridor 100 km BAJA Monclova Jerónimo - Samalayuca - Chihuahua Corridor CALIFORNIA 85 SUR MEX US Mexican/US Highways NUEVO International Border LEON Reynosa Brownsville Loreto Ports of Entry 40 SOURCE: Binational Transportation Infrastructure Needs Assessment Study, Matamoros SourcePoint, 2003 Los Gomez Palacio Mochis Monterrey Torreon Saltillo

100 km DURANGO 180 Culiacan La Paz TAMAULIAPS Durango ZACATECAS SINAOLA Ciudad Victoria

SAN LUIS Mazatlan POTOSI Zacatecas Ciudad Mante

San Luis Potosi Tampico NAYARIT 1 Ciudad Madero Cancun Aguascalientes Progreso VERACRUZ- Merida Tepic Guanajuato LLAVE 7 4 YUCATAN Leon 3 Puerto Vallarta Irapuato Queretaro Poza Rica Guadalajara Celaya Pachuca Bahia de Campeche JALISCO Zamora 5 Tulancingo QUINTANA Texcoco Jalapa Campeche ROO Mexico Ciudad del Morelia 8 Carmen Colima Veracruz Chetumal Toluca 2 Tlaxcala MICHAOCAN Cordoba Cuernavaca Manzanillo DE OCAMPO TABASCO Puebla COLIMA 6 Orizaba CAMPECHE PUEBLA Coatzacoalcos Villahermosa

Lazaro Minatitlan Cardenas Chilpancingo Tuxtla Gutierrez

GUERRERO Oaxaca Acapulco OAXACA

Salina Cruz Golfo de Tehuantepec categories – AADT, highway length and capacity. This corridor dominates the AADT listing with 6,937 vehicles - this is twice as large as the corridor listed second (Ojinaga-Chihuahua Corridor) and 17 times larger than the corridor listed sixth (Jerónimo-Samalayuca-Chihuahua). The highway length of the Mexico-Ciudad Juárez Corridor is about 26 percent longer than the Ojinaga-Chihuahua Corridor (580 km vs. 508 km) and its capacity is significantly greater than the other corridors. The El Berrendo Corridor is listed first in terms of LOS (LOS B).

For truck, passenger vehicle and airport data, the Mexico-Ciudad Juárez Corridor is listed first because it has the largest AADT of the six corridors.

Projected Change This discussion reviews highway, land POE and airport data for both absolute changes and percent changes. With regard to absolute changes, the Mexico-Ciudad Juárez Corridor dominates the highway mode being listed first for two indicators (AADT and LOS) and tied for first for the other two indicators (highway length and capacity - there was no change in capacity or highway length for any of the six corridors). The Jerónimo-Samalayuca-Chihuahua Corridor is listed first with respect to the percent increase in AADT (82.5%). The other five corridors experienced a growth rate of 65.3 percent. For LOS, the Mexico-Ciudad Juárez Corridor is listed first with a decline in LOS from LOS A to LOS B.

For truck, passenger vehicles and buses, and airport data, the Mexico-Ciudad Juárez Corridor is listed first because it had the largest volumes in 2000, while the growth rates for each mode are the same for all six corridors (80.6% for trucks, 65.8% for passenger vehicles and buses, and 80.6% for airports). Table 5 summarizes key indicators of Chihuahua’s transportation corridors. Corridors are listed by priority based on the results of the evaluation.

Table 5 Chihuahua’s Corridor Summary

1. Mexico-Ciudad Juárez 2. Ojinaga-Chihuahua 3. Ciudad Juárez-Tijuana Corridor Corridor Corridor 2000 2020 % 2000 2020 % 2000 2020 % AADT 6,937 11,466 65 2,625 4,338 65 2,326 3,845 65 POE Crossings (Annual) Trucks 305,796 550,843 81 115,695 208,407 81 102,531 184,716 81 Passenger 7,708,758 12,747,812 66 2,916,543 4,823,027 66 2,584,688 4,274,775 66 Trade by Truck ($) N/A N/A N/A N/A N/A N/A N/A N/A N/A

4. El Berrendo-Janos-Sueco- 5. Guadalupe-Samalayuca- 6. Jerónimo-Samalayuca- Chihuahua Corridor Chihuahua Corridor Chihuahua Corridor 2000 2020 % 2000 2020 % 2000 2020 % AADT 2,258 3,732 65 1,500 2,480 65 400 730 83 POE Crossings (Annual) Trucks 99,523 179,274 81 66,121 119,141 81 17,632 35,070 81 Passenger 2,508,855 4,148,833 66 1,666,824 2,757,202 66 444,486 811,596 66 Trade by Truck ($) N/A N/A N/A N/A N/A N/A N/A N/A N/A

January 2004 61 Coahuila

The BINS Technical Committee representative identified four corridors for evaluation and they are the Piedras Negras-Ciudad (Cd) Acuña Corridor, the Morelos-Cd. Acuña Corridor, the Sabinas-Piedras Negras Corridor and the Boquillas del Carmen a Múzquiz Corridor.

The primary reasons Coahuila chose its corridors are their geographical proximity to the Ports to Plains Corridor and they also represent the shortest distance between the Mexico-U.S. border and Mexico City. Another important reason is an initiative, from the state of Coahuila, to start developing Coahuila natural resources and the tourism industry. A map of the Coahuila border region and its corridors in the 100 km limit is presented on the following page. Because no facilities were identified for the planned Boquillas del Carmen a Múzquiz Corridor, it is not shown on the map.

Coahuila Transportation Infrastructure within 100 km of the U.S. Mexico Border

Highways The Piedras Negras-Cd. Acuña Corridor is composed of one highway: MX-2 and the Morelos-Cd. Acuña Corridor is composed of one highway: MX-29. The Sabinas-Piedras Negras Corridor is also composed of one highway: MX-57, and no highways were identified and assigned to the Boquillas del Carmen-Múzquiz Corridor as it is a planned corridor.

Land Ports of Entry

There are four bridge POE crossings on the Mexico-U.S. border in Coahuila: Ciudad Acuña, Ciudad Acuña II Presa La Amistad, Piedras Negras, and Camino Real-Coahuila Piedras Negras II. Trucks cross at the Ciudad Acuña and Camino Real-Coahuila Piedras Negras II bridges while passenger vehicles and buses cross at all four.

Airports

No data for airports were specified by the Coahuila BINS Technical Committee Representative.

Railroads

The Ferrocarril Mexicano (FERROMEX) Rail Line operates in two of the four corridors: The Piedras Negras-Cd. Acuña Corridor and the Morelos-Cd. Acuña Corridor. No data were provided for this rail line by the Coahuila BINS Technical representative.

Maritime Ports

Coahuila has no maritime ports.

January 2004 62 KANSAS UTAH NEVADA COLORADO INTERNATIONAL BRIDGES AND BORDER CROSSINGS CALIFORNIA OKLAHOMA NEW MEXICO ARIZONA

Amarillo Los Angeles Little Rock Albuquerque Atlanta

17 5 100 km 10 Birmingham Phoenix 86 25 San Diego 8 10 8 Tucson Montgomery Tijuana 1D UNITED STATES Mexicali Yuma Dallas 1 00 km Fort Worth Shreveport

Abilene 20 Ensenada 10 Jackson 100 km 5 20 19

3 1 1 El Paso 00 km Odessa Juarez

Nogales 83

1 00 km 45 Mobile 15 10 35 San Quintin 10

1 00 km Austin 6 J a n u r y 2 0 4 Houston New Orleans 45 Presa de la Amistad 10 10 PACIFIC Ojinaga Ciudad Acuña Hermosillo Ciudad Acuña OCEAN Gulf of California San Antonio Galveston 2 Rosarito 29 Piedras Negras1 0 Chihuahua Piedras Negras 0 km Piedras Negras II 57 Gulf 35 Morelos Guaymas 53 37

Ciudad Obregon of Sabinas 1 0 0 km Nuevo Corpus Santa Laredo Laredo Christi Rosalia Hidalgo del Parral 6 3 COAHUILA Mexico Monclova 100 km 77 Transportation Corridors in 85 Coahuila (Corridors Organized by Priority) Reynosa Brownsville Loreto Sabinas - Piedras Negras Corridor Morelos - Cd. Acuña Corridor 40 Matamoros Los GomePzie Pdraalsa Nceiogras - Cd. Acuña Corridor Mochis MEX US Mexican/US Highways Monterrey Torreon Saltillo International Border

100 km Ports of Entry 180

NOTE: No facilities were identified for the planned Boquillas Culiacan del Carmen a Múzquiz Corridor. SOURCE: Binational Transportation Infrastructure Needs La Paz Assessment Study, SourcePoint, 2003 Durango 0 100 200 300 Kilometers Ciudad Victoria 0 100 200 300 Miles Mazatlan SOURCE: Binational Transportation Infrastructure Needs Assessment Study, SourcePoint, 2003 Zacatecas Ciudad Mante San Luis Potosi Tampico

Ciudad Madero Cancun Aguascalientes Progreso Merida Tepic Guanajuato Leon Puerto Vallarta Irapuato Queretaro Poza Rica Guadalajara Celaya Pachuca Campeche Zamora Tulancingo Texcoco Mexico Jalapa Morelia Ciudad del Veracruz Carmen Colima Toluca Tlaxcala Chetumal Cordoba Cuernavaca Manzanillo Puebla Orizaba Coatzacoalcos Villahermosa

Lazaro Minatitlan Cardenas Chilpancingo Tuxtla Gutierrez

Oaxaca Acapulco

Salina Cruz Analysis of the Corridor Evaluation Results for Coahuila

Of the four corridors evaluated in Coahuila, the Sabinas-Piedras Negras Corridor is listed first, the Morelos-Ciudad Acuña Corridor is listed second, and the Piedras Negras-Ciudad Acuña Corridor is listed third. No data for the Boquillas del Carmen-Múzquiz Corridor were provided; therefore, it was not included in the evaluation. The Sabinas-Piedras Negras Corridor obtains its overall first place listing because it is listed first with respect to the current conditions and listed first with respect to the projected changes.

Current Conditions This discussion reviews highway and land POE data and their results. With regard to highways, the Sabinas-Piedras Negras Corridor is listed first, followed by the Piedras Negras-Cd. Acuña Corridor, and then by the Morelos-Cd. Acuña Corridor. The Sabinas-Piedras Negras Corridor is listed first for AADT (99,016 vehicles) and second in highway length (133 km) while the Piedras Negras-Cd. Acuña Corridor is listed first for highway length (219.3 km) and third for AADT (1,521 vehicles).

For truck and passenger vehicle modes, the Sabinas-Piedras Negras Corridor is listed first because of its AADT volumes. No LOS or highway capacity data were provided; therefore, the current and future level of congestion on Coahuila’s corridors could not be established.

Projected Change This discussion reviews highway and land POE data for both absolute changes and percent changes. With regard to highway data, the Sabinas-Piedras Negras Corridor is listed first because of its projected AADT increase of 9,978 vehicles. The Piedras Negras-Cd. Acuña Corridor is listed first in terms of its anticipated AADT percent growth (165.3%). No change in highway length is projected for any of the corridors.

For trucks and passenger vehicles, the Sabinas-Piedras Negras Corridor is listed first because it has the highest volume of vehicles in 2000 and all the corridors use the same projected growth rates. The Boquillas del Carmen-Múzquiz Corridor is a planned corridor with no information available.

Table 6 summarizes key indicators of Cohauila’s corridors. The corridors are listed by priority based on the results of the evaluation.

Table 6 Coahuila’s Corridor Summary

1. Sabinas-Piedras Negras 2. Morelos-Ciudad Acuña 3. Piedras Negras-Ciudad Corridor Corridor Acuña Corridor 2000 2020 % 2000 2020 % 2000 2020 % AADT 6,050 16,028 165 1,916 5,015 162 1,521 4,035 165 POE Crossings (Annual) Trucks 116,648 211,143 81 36,942 66,065 81 29,326 53,155 81 Passenger 3,476,785 7,728,572 122 1,101,078 2,418,193 122 874,081 1,945,644 122 Trade by Truck ($)11 N/A N/A N/A N/A N/A N/A N/A N/A N/A

11 Value of trade, by truck, in millions of dollars.

January 2004 64

New Mexico

The BINS Technical Committee representative identified three corridors for evaluation, which are the I-10, the North-South, and the Midwest Corridors. These corridors were selected because each corridor serves a different destination and incorporates different routes. A map of the New Mexico border region and its corridors in the 100 km limit is presented on the following page.

New Mexico Transportation Infrastructure within 100 km of the U.S. Mexico Border

Highways

The I-10 Corridor is composed of seven highways: Interstate 10 (I-10), U.S. Highway 180 (U.S.-180), New Mexico Route 9 (NM 9), NM 11, NM 81, NM 136 and NM 146. The North-South Corridor is composed of one highway, Interstate 25, the Midwest Corridor is composed of two highways: U.S. 54 and U.S. 70.

Land Ports of Entry

There are three land POEs in New Mexico: Antelope Wells, Columbus and Santa Teresa. It is envisioned that a new land POE will open about five miles east of Santa Teresa at Sunland Park around 2020. The primary role for this new POE is the movement of passenger vehicles across the U.S.-Mexico border.

Airports

There are two airports located within 100 km of the U.S.-Mexico border that are designated as international POEs; they are the Doña Ana County Airport and Las Cruces International Airport. The longest runway at Doña Ana at 8,500 feet (about 2,590 meters), and the longest runway length at Las Cruces is 7,499 feet (about 2,280 meters).

Railroads

There are two railroads that operate within 100 km of the U.S.-Mexico border, and they are the Burlington Northern Santa Fe (BNSF) and the Union Pacific (UP). The BNSF operates in the North- South Corridor and the UP operates in the I-10 Corridor. No rail lines currently cross at any land POE in New Mexico. There is a plan to move the rail crossing that currently traverses the international boundary between downtown Ciudad Juárez, Mexico and El Paso, Texas, to the Santa Teresa POE in New Mexico. The projected timeframe for this project would be during the next 20 years.

Maritime Ports

New Mexico has no maritime ports.

January 2004 65 KANSAS UTAH NEVADA COLORADO INTERNATIONAL BRIDGES AND BORDER CROSSINGS CALIFORNIA OKLAHOMA

ARIZONA

Amarillo Little Rock Los Angeles Albuquerque J a n u r y 2 0 4 Atlanta Transportation Corridors in 17 New Mexico 5 (Corridors Organized by Priority) 100 km 10 NEW MEXICO I-10 Corridor Birmingham Midwest Corridor

Phoenix North-South Corridor

MEX US 25 Mexican/US Highways International Border 10 San Diego 8 Alamogordo Ports of Entry SOURCE: Binational Transportation Infrastructure Needs 8 Tucson Assessment Study, SourcePoint, 2003 1D Silver City Montgomery Tijuana Yuma 70 Mexicali Dallas 1 00 km 180 Fort Worth Shreveport 6 54 Lordsburg Abilene 20 Ensenada 10 Las Cruces Jackson 100 km Deming 20 5 146 19 9 11 1 00 km 3 136 1 El Paso 81 Juarez Columbus Santa Teresa

Nogales 83

1 Antelope Wells 00 km 45 Mobile BAJA 15 10 45 35 San Quintin CALIFORNIA 10 1 00 km Austin

Houston New Orleans PACIFIC 10 10 Ojinaga Hermosillo CHIHUAHUA OCEAN Gulf of CaliforniaSONORA San Antonio Galveston

Rosarito 1 0 0 km Chihuahua Gulf 35 Delicias Guaymas 37

Corpus Ciudad Obregon 1 of 0 0 km Nuevo Christi Santa Laredo COAHUILA Laredo Rosalia Hidalgo del Parral Mexico BAJA Monclova 100 km 85 CALIFORNIA MEXICO NUEVO SUR Reynosa Brownsville Loreto LEON 40 Los Matamoros Gomez Palacio Mochis Monterrey Torreon Saltillo

100 km DURANGO 180

Culiacan

La Paz TAMAULIAPS Durango ZACATECAS 0 100 200 300 Kilometers SINAOLA Ciudad Victoria 0 100 200 300 Miles SOURCE: Binational Transportation Infrastructure Mazatlan SAN LUIS Needs Assessment Study, SourcePoint, 2003 Zacatecas POTOSI Ciudad Mante

San Luis Potosi Tampico NAYARIT 1 Ciudad Madero Cancun Aguascalientes Progreso VERACRUZ- Merida Tepic Guanajuato LLAVE 7 4 YUCATAN Leon 3 Queretaro Puerto Vallarta Irapuato Poza Rica

Guadalajara Celaya Pachuca Bahia de Campeche JALISCO Zamora 5 Tulancingo Campeche QUINTANA Texcoco Jalapa ROO Mexico Ciudad del Morelia 8 Carmen Colima Veracruz Chetumal Toluca 2 Tlaxcala MICHAOCAN Cordoba Cuernavaca Manzanillo DE OCAMPO TABASCO COLIMA 6 Puebla Orizaba CAMPECHE PUEBLA Coatzacoalcos Villahermosa

Lazaro Minatitlan Cardenas Chilpancingo Tuxtla Gutierrez

GUERRERO Oaxaca Acapulco OAXACA

Salina Cruz Golfo de Tehuantepec Analysis of the Corridor Evaluation Results for New Mexico

Of the three corridors evaluated in New Mexico, the I-10 Corridor is listed first, the Midwest Corridor is listed second and the North-South Corridor is listed third. The I-10 Corridor obtains its overall first place listing both for current conditions and projected changes.

Current Conditions This discussion reviews highway land POE data and their results. With regard to highways, the I-10 Corridor is listed first in all four categories (AADT, highway length, LOS and capacity). The Midwest Corridor is listed second in all four categories while the North-South Corridor is listed third or last in all four categories. The I-10 Corridor has 42 percent more AADT then the Midwest Corridor (26,450 vehicles versus 15,340 vehicles) and is more than three times larger than the North-South Corridor (26,450 vehicles versus 7,964 vehicles). The I-10 Corridor has five times as many highway miles as the Midwest Corridor (522 miles versus 104 miles), and about nine times more than the North-South Corridor (522 miles versus 60 miles). The LOS is the same for the three corridors (LOS A). The I-10 Corridor has about ten percent more highway capacity than the Midwest Corridor (13,816 versus 12,344) and twice as much capacity as the North-South Corridor (13,816 versus 6,120).

For truck and passenger vehicle data, the I-10 Corridor is listed first because of its AADT.

Projected Change

This discussion reviews highway, land POE and rail data for both absolute and percent changes. With regard to highway data, the I-10 Corridor is listed first in two categories (LOS and capacity), both in terms of absolute and percent changes. Highway length is not expected to change for any of the corridors evaluated. The Midwest Corridor’s AADT is projected to increase slightly more than the AADT for the I-10 Corridor (16,420 vehicles versus 15,477 vehicles). The Midwest Corridor is anticipated to have the highest AADT growth rate (107% versus 58.5% for the I-10 Corridor and 55.4% for the North-South Corridor).

For trucks and passenger vehicles, the I-10 Corridor is listed first because all three corridors use the same growth rates. The change in rail crossings is expected to be the same for the I-10 and North- South Corridors. Table 7 summarizes key indicators of New Mexico’s corridors. Corridors are listed by priority based on the results of the evaluation.

Table 7 New Mexico’s Corridor Summary

1. I-10 Corridor 2. Midwest Corridor 3. North-South Corridor 2000 2020 % 2000 2020 % 2000 2020 % AADT 26,450 41,927 59 15,340 31,759 107 7,964 12,378 55 POE Crossings (Annual) Trucks 19,576 172,260 860 11,353 130,484 860 5,895 50,856 860 Passenger 247,558 1,778,749 684 143,571 1,347,376 684 74,542 525,135 684 Trade by Truck 12 $481 $8,056 1,728 $279 $6,102 1728 $145 $2,378 1,728

12 Value of trade, by truck, in millions of dollars.

January 2004 67 Nuevo León

The BINS Technical Committee representative identified one corridor in Nuevo León: the Monterrey- Colombia Corridor. The primary reason Nuevo León chose that corridor is because it is the only one that directly connects the state with the international border. This corridor also connects the City of Monterrey, one of the largest cities in Mexico, with the U.S. border. A map of the Nuevo León border region and its corridor within the 100 km limit is presented on the following page.

Nuevo León Transportation Infrastructure within 100 km of the U.S. Mexico Border

Highways

The Monterrey-Colombia Corridor is composed of one highway which is the NL-01. The highway runs north/south.

Land Ports of Entry

There is one POE in Nuevo León, the Puente Internacional Solidaridad and it is directly connected to highway NL-01.

Airports

Nuevo León has no airports that meet the minimum criteria

Railroads

There is one railroad that operates in the Monterrey-Colombia Corridor and it is the Transportación Ferroviaria Mexicana (TFM). The TFM rail line crosses the international border in Tamaulipas; therefore, there is no rail crossing data for Nuevo León.

Maritime Ports

There are no maritime ports in Nuevo León.

January 2004 68 KANSAS UTAH NEVADA COLORADO INTERNATIONAL BRIDGES AND BORDER CROSSINGS CALIFORNIA OKLAHOMA NEW MEXICO ARIZONA

Amarillo Los Angeles Little Rock Albuquerque Atlanta

17 5 100 km 10 Birmingham Phoenix 86 25 San Diego 8 10 8 Tucson Montgomery Tijuana 1D UNITED STATES Mexicali Yuma Dallas 1 00 km Fort Worth Shreveport

Abilene 20 Ensenada 10 Jackson 100 km 5 20 19

3 1 1 El Paso 00 km Odessa Juarez TEXAS Nogales 83

1 00 km 45 Mobile BAJA 15 10 35 San Quintin CALIFORNIA 10

1 00 km Austin 6 Houston New Orleans 45 10 10 PACIFIC Ojinaga Hermosillo CHIHUAHUA San Antonio OCEAN Gulf of CaliforniaSONORA Galveston

Rosarito 1 0 Chihuahua 0 km

Delicias 35 Guaymas 37 J a n u r y 2 0 4

1 Ciudad Obregon 0 Colombia 0 km Laredo Corpus Christi Santa Nuevo Rosalia Hidalgo NL-01 Laredo del Parral Monclova 77 BAJA 100 km 85 CALIFORNIA

SUR Reynosa Loreto Brownsville 40 Matamoros Los Gomez Palacio Mochis 6 9 Monterrey Saltillo NUEVO DURANGO 180 100 km Culiacan LEÓN La Paz Transportation Corridors in Durango Nuevo León Gulf (Corridors Organized by Priority) of 300 Kilometers SINAOLA Monterrey-Colombia Corridor MEX US Mexican/US Highways Ciudad Mexico International Border Victoria 200 300 Miles Ports oSf EAntryN LUIS SOURCE: Binational Transportation Infrastructure Needs Mazatlan Assessment StudyP, SoOurcTePOoint, S2003I Zacatecas San Luis Potosi Tampico NAYARIT 1 Ciudad Madero Cancun Aguascalientes Progreso VERACRUZ- Merida Tepic Guanajuato LLAVE 7 4 YUCATAN Leon 3 Puerto Vallarta Irapuato Queretaro Poza Rica Guadalajara Celaya Pachuca Bahia de Campeche JALISCO Zamora 5 Tulancingo QUINTANA Texcoco Campeche Mexico Jalapa ROO Morelia 8 Ciudad del Veracruz Carmen Colima Toluca 2 Tlaxcala Chetumal MICHAOCAN Cordoba Cuernavaca Manzanillo DE OCAMPO TABASCO COLIMA 6 Puebla Orizaba CAMPECHE PUEBLA Coatzacoalcos Villahermosa

Lazaro Minatitlan Cardenas Chilpancingo Tuxtla Gutierrez

GUERRERO Oaxaca Acapulco OAXACA Salina Cruz Golfo de Tehuantepec Analysis of the Corridor Evaluation Results for Nuevo León

Because there is only one corridor, no corridor comparisons are necessary.

Current Conditions

This discussion reviews highway and land POE data and results. With regard to highways in 2000, the Monterrey-Colombia Corridor averaged about 778 passenger vehicles per day over its 118 km length, with an average LOS C.

The 560,000 trucks that crossed the Mexico-U.S. border in 2000 in Nuevo León transported about 3.4 million tons of goods valued at about $12 billion dollars.

Projected Change

This discussion reviews highway and land POE data for both absolute and percent changes. With regard to highway data, AADT on the Monterrey-Colombia Corridor is projected to increase from 778 vehicles to nearly 1,700 vehicles or 117% between 2000 and 2020. The highway length of NL-01 would remain constant. The corridor's LOS is anticipated to change from LOS C to LOS F during the same period.

Annual truck crossings at the land POE are projected to increase by about 450,000 (80%) between 2000 and 2020, while crossborder passenger vehicles would increase by about 151,000 (117%).

Table 8 summarizes key indicators of Nuevo León’s corridor.

Table 8 Nuevo León’s Corridor Summary

1. Monterrey-Colombia Corridor 2000 2020 % AADT 778 1,691 117 POE Crossings (Annual) Trucks 561,035 1,013,285 81 Passenger 130,664 284,272 118 Trade by Truck ($) N/A N/A N/A

January 2004 70 Sonora

The BINS Technical Committee representative did not identify any transportation corridors. The SCT identified one corridor in Sonora and titled it the Sonora Corridor. The reason this corridor was identified was because of its physical relationship to the prominent POEs. The highways were selected because of their relationship to the U.S.-Mexico border, the POEs, and because they are all identified as “Main Highways” by the SCT. The BINS Technical representative for Sonora indicated that the corridor provides for the connection of ‘Pacific States’, including Gulf ports (Guaymas Maritime Port and Puerto Peñasco) with the U.S. A map of the Sonora border region and its corridor within the 100 km limit is presented on the following page.

Sonora Transportation Infrastructure within 100 km of the U.S.-Mexico Border

Highways

The Sonora Corridor is composed of five highways and they are the following: MX-2, MX-8, MX -15, MX-15D, and MX-17.

Land Ports of Entry

A rail crossing, a pedestrian crossing, and seven POEs serve vehicle traffic in Sonora. The names of the seven POEs are the following: San Luis Rio Colorado POE (directly connected to the MX -2); Sonoyta POE (directly connected to the MX-2 and MX-8); Sasabe I POE; Nogales-DeConcini POE (directly connected to the MX-15 and MX -15D); Nogales III-Mariposa POE (directly connected to the MX-15 and MX -15D); Naco POE; and Agua Prieta POE (directly connected to MX-2 and MX -17).

Airports

No data were available for airports located within Sonora.

Railroads

There is a rail crossing at the Nogales POE; however, Sonora did not provide any rail data.

Maritime Ports

No data were available for maritime ports in Sonora.

January 2004 71 KANSAS UTAH NEVADA COLORADO INTERNATIONAL BRIDGES AND BORDER CROSSINGS CALIFORNIA OKLAHOMA NEW MEXICO ARIZONA

Amarillo Little Rock Los Angeles Albuquerque Atlanta

ado R. 17 5 Red R. Mississippi R. 100 km 10 ande Birmingham Color Phoenix 86 25 J a n u r y 2 0 4 10 Rio Gr San Diego 8 Yuma 8 Tucson Montgomery 1D UNITED STATES Tijuana San Luis Rio Colorado Mexicali 1 Dallas 00 km Fort Worth San Luis Shreveport Rio Colorado 2 Abilene 20 Ensenada Sonoyta 10 Sonoyta Jackson 100 km 5 20 8 Sasabe 19 Nogales III 3 Nogales I Naco El Paso 10 1 Agua Prieta 0 km Odessa Puerto 2 Juarez Peñasco Nogales TEXAS 83 2 1 45 Mobile 00 km 17 10 San 35 Quintin 10

Benjamin Hill 10 Austin Gulf of California Cumpas 0 km 6 15 Houston

7 2 Rio Gr New Orleans 45 PACIFIC SONORA 10 10 Ojinaga ande Rio Br Hermosillo a San Antonio Galveston OCEAN vo Rio Gr

Rosarito 1 0 0 k Chihuahua Rio Conchos m ande Gulf Transportation Corridor in Delicias 35 Sonora 37 Guaymas (Corridors Organized by Priority) Ciudad

1 Corpus Obregon 0 of 0 k Nuevo Sonora Corridor m Christi Santa Laredo COAHUILA Laredo MEX US Mexican/US Highways Rosalia Hidalgo del Parral International Border Mexico Monclova 100 km Ports of Entry

SOURCE: Binational Transportation Infrastructure Needs 85 Assessment Study, SourcePoint, 2003 MEXICO NUEVO Reynosa Brownsville Loreto LEON 40 Matamoros Los Gomez Palacio Mochis Monterrey Torreon Saltillo

100 km DURANGO 180 Culiacan La Paz TAMAULIAPS Durango ZACATECAS 0 100 200 300 Kilometers SINAOLA Ciudad Victoria 0 100 200 300 Miles SOURCE: Binational Transportation Infrastructure Mazatlan SAN LUIS Needs Assessment Study, SourcePoint, 2003 Zacatecas POTOSI Ciudad Mante

San Luis Potosi Tampico NAYARIT 1 Ciudad Madero Rio V Cancun Aguascalientes Progreso erde VERACRUZ- Merida Tepic Guanajuato LLAVE 7 4 YUCATAN Leon 3 Puerto Vallarta Irapuato Queretaro Poza Rica Guadalajara Celaya Pachuca Bahia de Campeche JALISCO Zamora 5 Tulancingo Campeche QUINTANA Texcoco Jalapa ROO Mexico Ciudad del Morelia 8 Carmen Colima Veracruz Chetumal Toluca 2 Tlaxcala MICHAOCAN Cordoba Cuernavaca Manzanillo DE OCAMPO TABASCO COLIMA 6 Puebla Orizaba CAMPECHE PUEBLA Coatzacoalcos Villahermosa Rio Balsas

Lazaro Minatitlan Cardenas Chilpancingo Tuxtla Gutierrez

GUERRERO Oaxaca Acapulco OAXACA

Salina Cruz Golfo de Tehuantepec Analysis of the Corridor Evaluation Results for Sonora

Because there is only one corridor, no corridor comparisons are necessary.

Current Conditions

This discussion reviews highway and land POE data and results. With regard to highways in 2000, the Sonora Corridor averaged 11,520 vehicles per day over its 784 km length.

There were about 345,000 trucks and 10.3 million passenger vehicles and buses that crossed the Mexico-U.S. border into Sonora during calendar year 2000.

The Sonora BINS Technical Committee representative did not provide any data and did not specify any airports, maritime ports, or railroads. No data on LOS or capacity was provided; therefore, the level of current or future congestion on Sonora’s highways could not be established.

Projected Change

This discussion reviews highway and land POE data for both absolute and percent changes. With regard to highway data, AADT on the Sonora Corridor is projected to increase by about 9,300 vehicles to nearly 21,000 daily vehicles or 80 percent13 between 2000 and 2020, while the highway length of all the five highways would remain constant.

Annual truck crossings at land POEs are projected to increase to 623,000 vehicles (by 278,000 trucks or 80%) between 2000 and 2020, while passenger vehicles crossing at the land POE are projected to increase by about 8.3 million to reach approximately 18,640,000 vehicles annually.

Table 9 summarizes key indicators of Sonora’s corridor.

Table 9 Sonora’s Corridor Summary

1. Sonora Corridor 2000 2020 % AADT 11,520 20,806 81 POE Crossings (Annual) Trucks 344,945 623,005 81 Passenger 10,321,419 18,640,483 81 Trade by Truck ($) N/A N/A N/A

13 The Mexican SCT recommended a compound annual growth rate of 3.0% per year. For the 20 year projection, this translates to about 80.6%.

January 2004 73 Tamaulipas

The BINS Technical Committee representative identified six corridors for evaluation. They are the Nuevo Laredo Corridor, Reynosa Corridor, Matamoros Corridor, Miguel Alemán Corridor, Camargo Corridor, and Nuevo Progreso Corridor. The primary reason Tamaulipas chose its corridors is because they connect major population centers. Cargo and tourist traffic, coming from Coahuila and Nuevo León into Tamaulipas, move towards the U.S. border along these corridors. In addition, cargo and tourist traffic accessing the maritime ports along the Gulf of Mexico also travel on these corridors to the international border. A map of the Tamaulipas border region and its corridors within the 100 km limit is presented on the following page.

Tamaulipas Transportation Infrastructure within 100 km of the U.S. Mexico Border

Highways The Nuevo Laredo Corridor is composed of portions of two highways: MX-2 and MX-85. The Reynosa Corridor contains portions of three highways: MX-2, MX-40, and MX-97. The Matamoros Corridor is composed of portions of two highways: MX-2 and MX -180. The Miguel Alemán Corridor includes portions of two highways: MX-2 and MX-54. The Camargo Corridor is composed of portions of two highways: MX-2 and MX-SIN NUM (SN), and the Nuevo Progreso Corridor contains portions of one highway: MX-2.

Land Ports of Entry Tamaulipas has 14 POEs on the Mexico-U.S. border that are served by 13 bridges and one ferry. The names of the POEs are the following: Nuevo Laredo I (Puente Viejo), Nuevo Laredo II, Comercio Mundial-Puente III, Nuevo Ciudad Guerrero, Miguel Aleman, Camargo, Gustavo Diaz Ordaz (ferry crossing), Puente Reynosa, Puente Nuevo Amanecer (at Reynosa), Nuevo Progreso, Puerto Mexico- Puente Nuevo (at Matamoros), Puente Viejo (at Matamoros) Los Indios-Puente Lucio Blanco and Los Tomates-Puente General.

Airports There are three airports in Tamaulipas that meet the minimum corridor evaluation criteria (located within 100 km of the U.S.-Mexico border and designated as an international POE). These airports are located in Nuevo Laredo, Reynosa and Matamoros. The longest runway at Nuevo Laredo is 2,000 meters (about 6,560 feet). The runway length for Reynosa was not provided, and the longest runway length at Matamoros is 2,300 meters (about 7,540 feet).

Railroads The Ferrocarril del Noreste (FNE) operates within Tamaulipas and has rail lines that cross the Mexico-U.S. border at Nuevo Laredo, Reynosa, and Matamoros.

Maritime Ports Tamaulipas has one maritime port that meets the minimum corridor evaluation criteria (within 100 km of the U.S.-Mexico border and designated as an international POE). That port is located at Mezquital and has a channel depth of 4 meters (about 13 feet).

January 2004 74 KANSAS UTAH NEVADA COLORADO INTERNATIONAL BRIDGES AND BORDER CROSSINGS CALIFORNIA OKLAHOMA NEW MEXICO ARIZONA

Amarillo Little Rock Los Angeles Albuquerque Atlanta ado R. 17 5 Red R. Mississippi R. 100 km 10 ande Birmingham Color Phoenix 86 25 10 Rio Gr San Diego 8 8 Tucson Montgomery 1D UNITED STATES Tijuana Yuma Mexicali Dallas 1 00 km Fort Worth Shreveport

Abilene 20 Ensenada 10 Jackson 100 km 5 20 19 3 El Paso 10 1 0 km Odessa Juarez TEXAS Nogales 83

1 00 km 45 Mobile BAJA 15 10 CALIFORNIA 35 San Quintin 10

1 00 km Austin 6 vispe Rio Gr Houston New Orleans 45 PACIFIC 10 10 Ojinaga ande Rio Br Hermosillo CHIHUAHUA Gulf of California a San Antonio Galveston OCEAN SONORA vo Rio Gr

Rosarito 1 0 Rio Ba Chihuahua Rio Conchos 0 km ande Delicias 35 Guaymas 37 J a n u r y 2 0 4

1 Ciudad Obregon 0 0 km Laredo Corpus Christi Santa Nuevo Laredo Rosalia Hidalgo Nuevo Laredo I, II, III del Parral 85 Presa Internacional Falcón 100 km Monclova 2 Miguel Alemán BAJA Camargo CALIFORNIA Rio V 85 erde Diaz Ordaz SUR Reynosa Nuevo Progreso Lucio Blanco 54 Reynosa

Loreto 40 2 2 Brownsville & Matamoros 97 40 Matamoros Los 180 Gomez Palacio Matamoros III Mochis Monterrey S Saltillo Torreon A

7 5 Transportation Corridors in 100 km DURANGO Tamaulipas Culiacan (Corridors Organized by Priority) Reynosa Corridor La Paz 180 Matamoros Corridor ZACATECAS Durango Gulf Miguel Alemán Corridor ULIP Nuevo Laredo Corridor SINAOLA Ciudad Nuevo Progreso Corridor of Victoria Camargo Corridor Mexico 300 Miles MEX US Mexican/US Highways Mazatlan SAN LUIS AMA PInOtTerOnaStioInal Border Zacatecas T Ciudad Mante Ports of Entry

SOURCE: Binational Transportation Infrastructure Needs Assessment Study, SourcePoinSt,a 20n03 Luis Tampico Potosi NAYARIT 1 Ciudad Madero Rio V Cancun Aguascalientes Progreso erde VERACRUZ- Merida Tepic LLAVE Guanajuato 7 4 YUCATAN Leon 3 Queretaro Puerto Vallarta Irapuato Poza Rica

Guadalajara Celaya Pachuca Campeche

JALISCO Zamora 5 Tulancingo QUINTANA ROO Texcoco Jalapa Mexico Ciudad del Morelia 8 Carmen Colima Veracruz Chetumal Toluca 2 Tlaxcala MICHAOCAN Cordoba DE OCAMPO Cuernavaca Manzanillo TABASCO Puebla Orizaba CAMPECHE COLIMA 6 Rio Balsas PUEBLA Coatzacoalcos Villahermosa

Lazaro Minatitlan Cardenas Chilpancingo Tuxtla Gutierrez

Oaxaca GUERRERO Acapulco OAXACA

Salina Cruz Golfo de Tehuantepec Analysis of the Corridor Evaluation Results for Tamaulipas

Of the six corridors evaluated in Tamaulipas, the Reynosa Corridor is listed first, the Matamoros Corridor is listed second, the Miguel Alemán Corridor is listed third, the Nuevo Laredo Corridor is listed fourth, the Nuevo Progreso Corridor is listed fifth and the Camargo Corridor is listed last. The Reynosa Corridor obtains its first place listing because it is first with respect to current conditions, and listed second with respect to the projected changes. The Matamoros Corridor obtains its second place listing because it is listed second with respect to current conditions, and listed first with respect to the projected changes. With regard to current conditions, the Reynosa Corridor obtained one third fewer points when compared to the Matamoros Corridor (34 vs. 52). With regard to projected changes, the Reynosa Corridor obtained five points more than the Matamoros Corridor (38 vs. 33).

Current Conditions This discussion reviews highway, land POEs, airport, rail and maritime port data and their results. With regard to the highways, the Reynosa Corridor is listed first because it is first for two of the four indicators (AADT and capacity) and second for highway length. The Reynosa Corridor's AADT is about two times larger than the Matamoros Corridor (24,372 vehicles vs. 10,638 vehicles) and its capacity is 49 percent larger than the Matamoros corridor (10,158 vs. 6,800). Highway length for the Matamoros Corridor is greater than for the Reynosa Corridor (493 vs. 407 km).

For truck and passenger vehicle, airport, and maritime port modes, the Reynosa Corridor is listed first because of its AADT.

Data were provided on the number of rail cars and tonnage that cross south into Tamaulipas from the U.S. through the POE at Puente Viejo (at Matamoros), and Nuevo Laredo. The rail line that crosses at Nuevo Laredo is assigned to the Nuevo Laredo Corridor and the rail line that crosses at Puente Viejo is assigned to the Matamoros Corridor. More rail cargo is handled through Nuevo Laredo than through Puente Viejo (Matamoros).

Projected Change This discussion reviews highway, land POE, airport and maritime port data for both absolute and percent changes. With regard to highway data, the Reynosa Corridor is listed first for two of the four indicators (AADT & capacity), with no change expected for highway length. AADT on the Reynosa Corridor is expected to reach nearly 77,000 vehicles (175% growth) and highway capacity at peak hours would increase by 121% to 22,430 vehicles. The Matamoros Corridor is listed first for LOS.

For truck data, passenger vehicles and bus data, airport data and maritime port data, the Reynosa Corridor is listed first because its volumes in 2000 are higher than the other three corridors and all the corridors use the same growth rates. Growth rates are anticipated to be the same for all corridors (80.6% for trucks, 148.2% for passenger vehicles and buses, 63.9% for airports). Imports and exports at the port at El Mezquital are projected to grow from 6,000 to 5 million annual tons between 2000 and 2020. Regarding railroads, the Nuevo Laredo Corridor is listed first and the Matamoros Corridor is listed second because there are larger rail crossing increases expected at Nuevo Laredo; however, the same rate of growth is projected for both corridors (80.6%).

Table 10 summarizes key indicators of Tamaulipas’ corridors. Corridors are listed by priority based on the results of the evaluation.

January 2004 76 Table 10 Tamaulipas’ Corridor Summary

1. Reynosa Corridor 2. Matamoros Corridor 3. Miguel Alemán Corridor 2000 2020 % 2000 2020 % 2000 2020 % AADT 24,372 66,955 175 10,638 22,803 114 9,904 21,799 120 POE Crossings (Annual) Trucks 538,602 1,124,085 81 235,097 382,826 81 218,870 365,980 81 Passenger 8,852,628 25,390,060 148 3,864,137 8,647,018 148 3,597,413 8,266,510 148 Trade by Truck ($) N/A N/A N/A N/A N/A N/A N/A N/A N/A

4. Nuevo Laredo Corridor 5. Nuevo Progreso Corridor 6. Camargo Corridor 2000 2020 % 2000 2020 % 2000 2020 % AADT 8,855 17,999 103 8,290 20,147 143 7,480 15,620 109 POE Crossings (Annual) Trucks 195,684 302,179 81 183,205 338,242 81 165,309 262,243 81 Passenger 3,216,319 6,825,403 148 3,011,221 7,639,977 148 2,717,075 5,923,357 148 Trade by Truck ($) N/A N/A N/A N/A N/A N/A N/A N/A N/A

January 2004 77 Texas

The BINS Technical Committee representative identified six corridors for evaluation. They are the Interstate Highway 10 (IH-10) Corridor, the IH-35 Corridor, the IH-69 Corridor, the U.S. 83 Corridor, the La Entrada al Pacifico Corridor and the Ports to Plains Corridor. Some of the corridors have been defined in other studies and they are the major trade and passenger corridors linking the international border in Texas. A map of the Texas border region and its corridors in the 100 km limit is presented on the following page.

Texas Transportation Infrastructure within 100 km of the U.S.-Mexico Border

Highways The IH-10 Corridor is composed of five highways: I-10, I-110, U.S. 62, U.S. 85 & U.S. Loop 375. The IH- 35 Corridor is composed of three highways: I-35, U.S. 90 and State Spur (SS) 20. The IH-69 Corridor is composed of four highways: U.S. 59, U.S. 77, U.S. 281 and State 359 (S 359). The U.S. 83 Corridor is composed of two highways: U.S. 83 and SS 200/Business 83. The La Entrada al Pacifico Corridor is composed of one highway; U.S. 67; and the Ports to Plains Corridor is composed of three highways: U.S. 57, U.S. 83 and U.S. 277.

Land Ports of Entry The Texas BINS Technical Committee representative provided data on 26 POEs: Santa Fe (El Paso), Stanton (El Paso), Bridge of America (El Paso), Ysleta (El Paso), Fabens (El Paso), Ft. Hancock, Presidio, Amistad Dam, Del Rio, Eagle Pass I, Eagle Pass II, Colombia (Laredo), World Trade Bridge (Laredo), Laredo I, Laredo II, Falcon Dam, Roma, Rio Grande, Los Ebanos, Hidalgo, Pharr, Progreso, Los Indios (Brownsville), B&M (Brownsville), Gateway (Brownsville), and Veterans (Brownsville). which include bridges, two dams, and one ferry at Los Ebanos on the U.S.-Mexico border. Trucks cross at 14 of the POEs. Passenger vehicles and buses cross at 24 POEs, with the exception of the Los Ebanos POE which handles only passenger vehicles and pedestrians. No passenger vehicles or buses cross at Stanton and World Trade Bridge.

Airports There are eight airports in Texas that meet the minimum corridor evaluation criteria (located within 100 km of the U.S.-Mexico border and designated as an international POE). The airports are at Brownsville, Del Rio, El Paso, Laredo, Maverick, McAllen-Miller, Presidio Lely and Rio Grande. The airport with the longest runway is at El Paso, with a runway length of 11,010 feet (about 3,350 meters).

Railroads There are a number of railroads in Texas that operate within 100 km of the U.S.-Mexico border. However, the BNSF, the UP, and the Tex Mex are the only railroads that transport goods across the land POEs. Of the 26 POEs, rail crossings occur at four POEs: Eagle Pass II, El Paso - Santa Fe, Laredo II, and Brownsville B&M. The BNSF operates in the IH-10 Corridor and interchanges with Ferrocarril Mexicano at the Santa Fe (El Paso) POE. The UP operates in four corridors: The Ports to Plains, the IH-10, IH-35 and IH-69. UP interchanges with Transportación Ferroviaria Mexicana (TFM) at the Laredo II POE; UP interchanges with TFM at the Brownsville B&M POE; and UP interchanges with Ferromex at the Eagle Pass II POE. The Tex Mex railroad interchanges with TFM at the Laredo II

January 2004 78 INTERNATIONAL BRIDGES AND BORDER CROSSINGS

KANSAS UTAH NEVADA COLORADO J a n u r y 2 0 4

Transportation Corridors in Texas 287 CALIFORNIA OKLAHOMA (Corridors Organized by Priority) NEW MEXICO I-10 Corridor ARKANSUSA-8S3 Corridor ARIZONA I-69 Corridor Ports to Plains Corridor Amarillo Los Angeles Little Rock Albuquerque I-35 Corridor La Entrada al Pacifico Corridor Atlanta

17 5 MEX US Mexican/US Highways International Border 100 km 10 Birmingham Phoenix Paso del Norte 86 Ports of Entry 25 Good Neighbor SOURCE: Binational Transportation Infrastructure Needs Assessment Study, SourcePoint, 2003 8 10 San Diego Bridge of the Americas 87 8 Tucson 1D Ysleta Montgomery Tijuana TEXAS Mexicali Yuma Dallas 1 00 Fort Worth km Abilene 20 Ensenada 10 Jackson 100 km LOUISIANA 5 20 19 3 El Paso Tornillo 1 Odessa Juarez Fort Hancock 87 1 00 km Nogales 59

10 0 km 10 45 Mobile

BAJA 15 7 9 35 San Quintin CALIFORNIA

67 Austin 10 277 6 1 00 k Houston CHIHUAHUA m New Orleans 45 Presidio Del Rio 10 PACIFIC Ojinaga Hermosillo Amistad Dam Galveston 1 San Antonio 0 Gulf of California 0 OCEAN k SONORA Eagle Pass m Rosarito Chihuahua Eagle Pass II Delicias 35 Gulf 83 Guaymas 37 1 0 0 k m COAHUILA 59 Ciudad Obregon Dolores (Solidarity) Corpus Laredo (World Trade) Nuevo Christi of Santa Laredo Rosalia Laredo (Convent Street) Laredo 77 Hidalgo 281 Los Ebanos del Parral Laredo (Lincoln-Juarez) Hidalgo 100 km Mexico BAJA Monclova 85 Pharr CALIFORNIA Falcon Dam 83 Los Indios NUEVO SUR Los Tomates Loreto RomaLEON Reynosa Rio Grande City 40 Los Gomez Palacio Mochis Progreso Monterrey Brownsville Torreon Saltillo

100 km DURANGO 180 Culiacan La Paz TAMAULIPAS Durango ZACATECAS 0 100 200 300 Kilometers SINALOA Ciudad Victoria 0 100 200 300 Miles Mazatlan SAN LUIS SOURCE: Binational Transportation Infrastructure Needs Assessment Study, SourcePoint, 2003 Zacatecas POTOSI Ciudad Mante San Luis Potosi Tampico NAYARIT 1 Ciudad Madero Cancun Aguascalientes Progreso VERACRUZ- Tepic Guanajuato LLAVE 7 4 YUCATAN Leon 3 Puerto Vallarta Irapuato Queretaro Poza Rica Guadalajara Celaya Pachuca Bahia de Campeche JALISCO Zamora 5 Tulancingo QUINTANA Texcoco Campeche Mexico Jalapa ROO Morelia 8 Ciudad del Veracruz Carmen Colima Toluca 2 Tlaxcala MICHOACAN Cordoba Cuernavaca Manzanillo DE OCAMPO TABASCO COLIMA 6 Puebla Orizaba CAMPECHE PUEBLA Coatzacoalcos Villahermosa

Lazaro Minatitlan Cardenas Chilpancingo Tuxtla Gutierrez

GUERRERO Oaxaca Acapulco OAXACA Salina Cruz Golfo de Tehuantepec POE. In 2004, the Presidio POE rail crossing is anticipated to reopen and may potentially affect rail traffic at the El Paso POE.

Maritime Ports Texas has one maritime port that meets the minimum corridor evaluation criteria. That port is located at Brownsville and its main channel depth is 42 feet (about 13 meters).

Analysis of the Corridor Evaluation Results

Of the six corridors evaluated in Texas, the IH-10 Corridor is listed first, the IH-69 Corridor is listed second, the IH-35 Corridor is listed third, the U.S. 83 Corridor is listed fourth, the Ports to Plains Corridor is listed fifth and the La Entrada al Pacifico Corridor is listed last. The IH-10 Corridor obtains its overall first place listing because it is first with respect to both current conditions and projected changes.

Current Conditions This discussion reviews highway, land POEs, airport, maritime port and rail data and their results. LOS and highway capacity data were not provided; therefore, it is not possible to describe current or projected highway congestion. With regard to highways, the IH-69 Corridor is listed first for highway length (262.3 miles) and second for AADT (49,514 vehicles). The IH-10 Corridor is listed first for AADT with 137,541 vehicles – almost three times larger than the IH-69 Corridor and 80 times larger than the La Entrada al Pacifico Corridor.

For truck and passenger vehicle, airport, and maritime port modes, the IH-10 Corridor is listed first because of its AADT. For railroads, the IH-10 Corridor is listed first because the BNSF and UP railroads transport goods across the POE on this corridor, while three other corridors use only the UP rail line. The La Entrada al Pacifico and U.S. 83 Corridors have no rail data.

Projected Change This discussion reviews highway, land POE, airport, maritime port and rail data for both absolute and percent changes. With regard to highway data, the IH-10 Corridor is listed first for AADT with a projected increase of 53,423 vehicles (62%) to reach nearly 223,000 daily vehicles. No change in highway length is anticipated in any of the six corridors. The IH-35 Corridor is projected to have the highest AADT growth at 97 percent.

For trucks and passenger vehicles, airport data, and maritime port, and railroad data, the IH-10 Corridor is listed first. Crossborder truck traffic is projected to increase from 1.6 million annually to nearly 2.5 million vehicles (60%) while passenger vehicle crossings would increase from 28 million annually to 42.6 million vehicles (59%) between 2000 and 2020. During the same period, trade by air is anticipated to grow from 375,000 to 831,000 tons (132%) while maritime imports and exports would increase from 2.9 million to 5.3 million tons. Rail tonnage is projected to rise from 1.9 million to almost 3 million tons.

Table 11, on the following page, summarizes key indicators of Texas’ corridors. The corridors are listed by priority based on the results of the evaluation.

January 2004 80 Table 11 Texas’ Corridor Summary

1. IH-10 Corridor 2. IH-69 Corridor 3. IH-35 Corridor 2000 2020 % 2000 2020 % 2000 2020 % AADT 137,541 222,719 62 49,514 84,693 71 20,129 39,655 97 POE Crossings (Annual) Trucks 1,626,015 2,481,109 60 585,360 943,486 60 237,965 441,765 60 Passenger 28,036,448 42,553,402 59 10,093,032 16,181,690 59 4,103,098 7,576,693 59 Trade by Truck ($)14 $34,786 $96,803 192 $12,523 $36,811 192 $5,091 $17,236 192 4. U.S. 83 Corridor 5. Ports to Plains Corridor 6. La Entrada al Pacifico Corridor 2000 2020 % 2000 2020 % 2000 2020 % AADT 20,475 36,916 80 16,633 30,794 85 1,717 2,933 71 POE Crossings (Annual) Trucks 242,058 411,242 60 196,640 343,051 60 20,293 32,677 60 Passenger 4,173,673 7,053,200 59 3,390,557 5,883,652 59 349,901 560,437 59 Trade by Truck ($) $5,178 $16,045 192 $4,207 $13,384 192 $434 $1,275 192

14 Value of trade, by truck, in millions of dollars.

January 2004 81

CHAPTER 4: PLANNED TRANSPORTATION PROJECTS ON BORDER CORRIDORS

The fourth objective of the BINS project was to compile a list of significant transportation projects on the corridors, including each project’s description, estimated cost, and anticipated completion date, and to summarize each state’s funding needs, as well as those for the U.S.-Mexico border, to implement these transportation projects.

The purpose of compiling transportation project-level information is both to get a sense of the infrastructure improvements planned for the border region and of the unfunded needs identified by the states. Each of the ten states in the BINS project was asked to submit a list of significant projects, on the major transportation corridors, that are planned for the next 20 years. Only those projects located within 100 km of the U.S.-Mexico border and belonging to a corridor identified by the BINS Technical representative were compiled.

The project information requested from each state included the following items: the name of the project, county in which the project resides, the project mode (highway, airport, maritime, railroad), a brief description of the project, the year the project is schedule to begin and to be completed, and the cost of the project. Data for the binational geographical information system (GIS) was also requested, such as project’s GIS coordinates, date and source of the data, data resolution, coordinate/projection system, description of attributes, documentation of valid values for each attribute, and data limitations.

For highway projects, additional information was requested, including highway project location, LOS for the segment before and after project implementation, and current and projected traffic capacity and AADT of the segment before and after project implementation.

To summarize the amount of funding needed by each state to implement the identified transportation projects, the projects were classified into projects that are fully funded and projects that are not fully funded.

The remainder of this chapter presents border wide findings from all projects submitted by all states, as well as findings by country and from each state’s project submissions. Appendix 9 includes the list of projects by state and Appendix 10 contains statistical analyses of project data.

January 2004 85 SUMMARY OF THE BORDER REGION

A total of 311 transportation related projects were submitted by the BINS Technical Committee representatives from the ten border states. More than 90 percent of the projects are highway and roadway related projects. The second largest category was airports (4.2%), the third largest category was rail (about 3.5%) and there were no projects submitted for maritime ports or intermodal projects (see Figure 15).

Figure 15 Number of Transportation Projects by Mode

Railroads = 11 projects / 3.5% Airports = 13 projects / 4.2%

Highway = 287 projects / 92.3%

Source: BINS Technical Committee

Problems encountered included obtaining cost estimates for projects submitted by the states as well as obtaining long-term projects themselves. Of the 311 projects, 14 projects did not have cost estimates. Of the 287 highway projects, no cost estimates were provided for nine projects.

The total cost of the projects submitted is estimated at $16.3 billion dollars (in constant 2003 dollars).1 This amount is subject to a significant increase with the inclusion of missing cost estimates of projects submitted and of long-term projects from Texas. Of the total cost, about 83 percent is associated with highway projects. Airports only account for 0.2 percent of the total project cost; however, no cost data were provided for one third of the airport projects. Railroad projects account for almost 17 percent of the total cost; however, cost data were not provided for two of the 11 railroad projects.

Regarding the funding level of the 311 projects, 176 (57%) are anticipated to be fully funded through 2020 while the remaining 135 projects (43%) are not considered fully funded.

The implementation of highway projects represents the initiative from the border states to deal with future traffic congestion. With regards to the funding availability of these highway projects, almost

1 To make this calculation, the cost for projects in Mexico , in 2003 Mexican Pesos, are converted to U.S. Dollars using an exchange rate of 1 USD = 10.5 Mexican Pesos. For projects in the U.S, project cost estimates for Arizona, California and Texas are all converted to 2003 constant dollars using adjustments provided by each state’s Technical representative. January 2004 86 half of the projects (43%) in the U.S. and Mexico are not fully funded. Furthermore, the 57 percent of projects that are fully funded do not necessarily have the monetary resources readily available. In the case of Mexico, many of the highway projects that are categorized as fully funded are still waiting for the share of funding from the federal government.

The cost of all not fully funded highway projects in U.S. and Mexico is about $11.5 billion dollars2 (constant 2003 dollars). The cost of all the fully funded projects is about $4.8 billion dollars (see Figure 16).

Figure 16 U.S. and Mexico Highway Projects: Funding Needs

Fully Funded Projects (4.8 billion dollars)

Not Fully Funded Projects (11.4 billion dollars)

Source: BINS Technical Committee

SUMMARY BY COUNTRY

This section presents a project analysis for the U.S. and Mexico. First, the analysis focuses on the U.S. and its transportation projects, with greater detail given to the highway or roadway projects. Second, a similar analysis focuses on Mexico and its transportation projects.

United States

The BINS Technical Committee representatives for the four U.S. border states identified 258 transportation projects with an estimated cost of $15.3 billion dollars. Of the 258 projects, 236 (91%) are highway projects, 12 (5%) are airport projects, and ten (4%) are railroad projects. Regarding their funding level, 151 of the 258 projects are considered fully funded, and 107 projects are not fully funded (see Figure 17). Of the 258 projects, 14 have no cost estimates.

2 To make this calculation, the Mexican project costs, in 2003 Mexican Pesos, are converted to U.S. Dollars using an exchange rate of 1 USD = 10.5 Mexican Pesos. January 2004 87 Figure 17 U.S.: Projects by Funding Availability

Source: BINS Technical Committee

Of the 236 highway projects, 137 (58%), are considered fully funded and 99 (42%) are not fully funded. Nine highway projects do not have cost estimates. Projects without cost are assumed to be not fully funded.

The anticipated cost of the 137 fully funded highway projects is about $3.9 billion dollars (in constant 2003 dollars). For these 137 highway projects, the projects range from about $448 million dollars (largest) to about $36,000 dollars (smallest). The median project cost is about $4.1 million dollars.

The total cost of the 90 not fully funded highway projects (with cost data) is about $10.5 billion dollars (in constant 2003 dollars). For these 90 projects, the projects range from about $900 million dollars (largest) to about $393,000 dollars (smallest). The median project cost is about $70 million dollars.

Of the 236 highway projects, 78 projects contain project completion dates. Figure 18 shows the distribution of projects by implementation date.

Figure 18 U.S. Highway Projects by Year of Completion

33 34

7 Number of Projects 2 2

<2006 2007-2008 2009-2013 2014-2017 >2018 Year of Completion

Source: BINS Technical Committee

January 2004 88 Of the 12 airport projects, nine are considered fully funded, and three are not fully funded and have no cost estimates. The anticipated cost of the nine fully funded airport projects is about $10.9 million dollars (in constant 2003 dollars).

Of the ten railroad projects, five are considered fully funded, and five are not fully funded. Two projects do not have cost estimates. The anticipated cost of the five fully funded railroad projects is about $812.6 million dollars (in constant 2003 dollars). The total cost of the three not fully funded projects (with cost data) is about $112.5 million dollars (in constant 2003 dollars).

The fully funded projects will help accommodate the projected growth in travel demand in the U.S. corridors over the next two decades. However, there is a significant share of not fully funded highway projects (42%), which represent an identified need of $10.5 billion dollars, and additional resources needed for airport and railroad projects. Also, this amount is subject to a significant increase with the inclusion of missing cost estimates of not fully funded projects submitted and of long-term projects from Texas. More funding is needed for the U.S. border states to be able to deliver planned transportation projects to serve future travel and alleviate current or projected congestion on key facilities in the international border region.

Mexico

The BINS Technical Committee representatives for the six Mexican border states identified 53 transportation projects with an anticipated cost of $10,773 million pesos. Of the 53 projects, 51 (96%) are highway projects, one (2%) is an airport project, and one (2%) is a railroad project.

Slightly more than half of the projects (53%) are not fully funded and represent an identified need of $9,030 million pesos. The 25 fully funded projects account for $1,743 million pesos, which indicates that only the smallest or less costly projects have obtained funding. Figure 19 illustrates the number of projects by funding availability.

Figure 19 Mexico: Projects by Funding Availability

Fully Funded Not Fully Funded 25 Projects 28 Projects

Source: BINS Technical Committee

January 2004 89 Of the 51 highway projects, 25 (49%), are considered fully funded and 26 (51%), are not fully funded. The total cost of the 25 fully funded highway projects is estimated at $1,743 million pesos (in constant 2003 pesos). These projects range in cost from about $425 million pesos (largest) to about $5 million pesos (smallest). The median project cost is about $29.3 million pesos.

The total cost of the 26 not fully funded highway projects (with cost data) is about $8,878 million pesos (in constant 2003 pesos). These projects range in cost from about $1,500 million pesos (largest) to about $3 million pesos (smallest). The median project cost is about $165 million pesos.

Of the 51 highway projects, scheduled completion dates were provided for 49 of the projects. All projects are anticipated to be implemented by 2010, with 44 of them completed before 2006 and five of them implemented between 2007 and 2008.

The one airport project is considered not fully funded and has a total cost of about $62 million pesos (in constant 2003 pesos). The one railroad project is considered not fully funded and has a total cost of about $90 million pesos (in constant 2003 pesos).

The fully funded projects will help accommodate the projected growth in travel demand in the Mexican corridors over the next two decades. However, slightly more than half of the highway projects (51%) are not fully funded, which represents a need of $8,878 million pesos, plus additional resources for airport and railroad projects. Only with this funding would Mexico be able to implement planned transportation projects to serve future travel and improve current or projected congestion on major facilities in the international border region.

SUMMARY BY STATE

BINS Technical Committee representatives submitted transportation project data for their own states. The data were edited to achieve consistency. For example, projects were dropped from a state’s list if the project submitted was not on one of the identified corridors. For the states of Arizona, California and Texas, the cost estimates were provided in dollar values that were either 2001 or 2002 dollars. These dollar values were converted to 2003 constant dollars using inflation factors provided by the states. For Mexico, all the cost estimates were provided in 2003 constant pesos.

Arizona

The BINS Technical Committee representative identified 21 transportation projects in Arizona’s CANAMEX Corridor through 2020. All of the projects are highway projects on I-19 (none of the projects relate to SR-189, the other highway in the CANAMEX Corridor). They include reconstruction of an interchange at Valencia and bridge rehabilitation.

Of the 21 projects, 13 are considered fully funded and programmed in the State Transportation Improvement Plan (STIP). Eight of the projects are not fully funded, and no cost estimates were provided for them (see Figure 20). The source for the projects that are not fully funded is the Arizona Department of Transportation’s District Office database.

January 2004 90 Figure 20 Arizona: Projects by Funding Availability

Not Fully Funded 8 Projects

Fully Funded 13 Projects

Source: BINS Technical Committee

The total cost of the 13 fully funded projects is about $38.8 million dollars (in constant 2003 dollars).4 For these 13 projects, the projects range from about $20.8 million dollars (largest) to about $43,000 dollars (smallest). The median project cost is about $320,000 dollars.

Of the 21 projects, 11 of the projects contained dates relating to project origination. All 11 projects were started between 1999 and 2001. None of the projects contained dates relating to the project completion date.

The fully funded highway projects will help accommodate the projected growth in travel demand in the CANAMEX Corridor over the next two decades. However, Arizona has identified eight additional projects (not fully funded) for the border region, and these projects represent an unmet need. Since no cost estimates were provided for these eight projects, it is not possible to quantify that need.

Baja California

The BINS Technical Committee representative identified 17 transportation projects in Baja California through 2020 and all of them are highway projects. The information received was not sufficient to identify the precise location of the planned projects on each corridor, but it is known that there are projects on the following corridors: Tijuana-Rosarito (free), Mexicali-San Felipe, Tecate-Ensenada Corridor, Tecate-Tijuana, El Hongo-Tecate, and Bellas Artes. Projects include the Tijuana-Rosarito 2000 highway, the Ejido Cuernavaca-La Rosita project in Mexicali, and improvements to the Tecate- Mexicali free highway.

Of the 17 projects, 14 are considered fully funded and 3 are considered not fully funded. Cost estimates were provided on all 17 projects (see Figure 21).

4 Costs were provided in 2001 constant dollars and are inflated to 2003 constant dollars using an inflation factor of 3.2% per year. This inflation factor was obtained from the BINS Technical Committee representative. January 2004 91 Figure 21 Baja California: Projects by Funding Availability

Not Fully Funded 3 Projects

Fully Funded 14 Projects

Source: BINS Technical Committee

All of the projects were obtained from the State of Baja California’s Development Plan (Plan Estatal de Desarrollo or PED). All of the projects that are fully funded obtain their funds from the following sources:

• State government only (nine projects). • A combination of state and municipal governments (four projects).

• A combination of state government and private developers (one project). Private funding includes monies from developers that are interested in developing a specific area.

The three projects that are not fully funded would obtain their funds from the federal government and the state government. The state is waiting for the federal government to provide its share of the funds.

The total cost of all 17 transportation projects is about $4,164 million pesos (constant 2003 pesos). For these 17 projects, the projects range from about $1,500 million pesos (largest) to about $5 million pesos (smallest). The median project cost is about $25 million pesos.

The fully funded projects have a lower cost than the projects that are not fully funded. The total cost of the 14 fully funded projects is $464 million pesos with ranges from $90 million pesos (largest) to $5 million pesos (smallest). The median project cost is $20 million pesos.

The total cost for the three projects that are not fully funded is $3,700 million pesos with ranges from $1,500 million pesos (largest) to $900 million pesos (smallest). The median project cost is $1,300 million pesos.

For all 17 projects, data relating to either the project initiation or the estimated project completion date were provided. Sixteen projects are scheduled to be completed before 2006 and one is scheduled to be completed between 2007 and 2008.

January 2004 92 The three highway projects in Baja California which are considered not fully funded represent an outstanding funding need related to the state’s border transportation infrastructure estimated at $3,700 million pesos.

California

The BINS Technical Committee representative identified 110 transportation projects in California’s two corridors through 2030. Of the 110 projects, 103 (85%) are highway projects and seven (15%) are railroad projects. They include the construction of State Route (SR) 905, improvements to I-5 and I-805, construction of Brawley Bypass expressway, and upgrades to SR 111.

The sources of the list of projects provided by the California Technical Representative are the 2030 San Diego Regional Transportation Plan (RTP), the 2002 San Diego Regional Transportation Improvement Plan (RTIP), the Imperial Valley Association of Governments (IVAG)-Near Term Projects, and the IVAG-Long Term Projects.

Twenty-six of the 110 projects are considered fully funded and 84 projects are not fully funded (see Figure 22). All 110 projects have cost estimates.

Figure 22 California: Projects by Funding Availability

Fully Funded 26 Projects

Not Fully Funded 84 Projects

Source: BINS Technical Committee

Of the 103 highway projects, which total approximately $12.9 billion dollars (constant 2003 dollars), 22 highway projects (21%) are considered fully funded and have an estimated cost of about $2.6 billion dollars.1 For these 22 projects, the costs range from about $448 million dollars (largest)2 to about $300,000 dollars (smallest). The median project cost is about $47 million dollars.

The remaining 81 highway projects (79%) are not fully funded and are estimated to cost $10.3 billion dollars. These projects range in cost from about $900 million dollars (largest) to about $393,000 dollars (smallest). The median project cost is about $72 million dollars.

1 Costs were provided in 2001 constant dollars and are inflated to 2003 constant dollars using an inflation factor of 3.5% per year. This inflation factor was obtained from the BINS Technical Committee representative. 2 This project is a toll road and all the funding comes from the private sector.

93 Of the 103 highway projects, 73 of the projects contain dates when the project is scheduled to be completed. For completion dates, one is schedule for completion between 2007 and 2008, 32 between 2009 and 2013, seven between 2014 and 2017, and 33 in 2018 and beyond (see Figure 23).

Figure 23 California Highway Projects by Year of Completion

32 33

7 Number of Projects

0 1

<2006 2007-2008 2009-2013 2014-2017 >2018 Year of Completion

Source: BINS Technical Committee

Of the seven railroad projects, which total approximately $923 million dollars (constant 2003 dollars), four projects are considered fully funded at an estimated cost of approximately $811 million dollars while three projects are considered not fully funded and are anticipated to cost $112 million dollars.

The fully funded highway projects will help accommodate the projected growth in travel demand in the two California corridors over the next two decades. However, California has identified a need of $10.3 billion dollars to fully fund identified highway projects and $112 million dollars to implement rail projects in the state’s border transportation system.

Chihuahua

The BINS Technical Committee representative identified four transportation projects in Chihuahua through 2020 and all of them are highway projects. Each of the four projects is located on a different corridor in Chihuahua (Chihuahua has identified six corridors). One project is on the Ciudad Juárez-Tijuana Corridor, another one is on the El Berrendo-Janos-Sueco-Chihuahua Corridor, a third project is on the Ojinaga-Chihuahua Corridor and the fourth project is on the Guadalupe- Samalayuca-Chihuahua Corridor. The corridor that is listed first in the corridor evaluation does not have any projects (the México-Ciudad Juárez Corridor) while the corridor that is listed second has one project (the Ojinaga-Chihuahua Corridor).

Projects include the new Zaragoza-Dr. Porfirio Parra highway, upgrades to the La Mula-Ojinaga highway, and other road rehabilitations.

The source of the projects is the State of Chihuahua’s Development Plan (Plan Estatal de Desarrollo or PED) and the funding source is identified as the state government. None of the projects are

January 2004 94 considered fully funded and the cost estimate for all four projects is about $503 million pesos (constant 2003 pesos). Project costs range from about $188 million pesos (largest) to about $30 million pesos (smallest). The median project cost is about $143 million pesos.

There are no data available for the four projects that relate to the origination of the project. However, all four projects are anticipated to be completed before 2006. This time distribution suggests that most of the needs of Chihuahua’s transportation infrastructure are immediate needs that do not have immediate funding solutions.

The four highway projects, which are not fully funded, total approximately $503 million pesos (constant 2003 pesos). Therefore, this amount represents the funding needs identified for Chihuahua’s border transportation infrastructure.

Coahuila

The BINS Technical Committee representative identified ten transportation projects in Coahuila’s corridors through 2020. Nine of them are highway projects and one of them is an airport project. Projects include the construction of the El Melón-La Linda highway, improvements to the Zaragoza- Ciudad Acuña highway, and runway improvements at the International Airport in Acuña. The sources of the 10 projects are the State of Coahuila’s Plan Estatal de Desarrollo (PED) and the municipality of Acuña.

Of the nine highway projects, one is located in the future Boquillas del Carmen-Múzquiz Corridor. This planned project would construct the 150 km El Melón-La Linda highway. Seven of the highway projects would benefit the Piedras Negras-Ciudad Acuña Corridor and the Morelos-Ciudad Acuña Corridor. The remaining two highway projects would improve the Sabinas-Piedras Negras Corridor. The Sabinas-Piedras Negras Corridor is listed first in the corridor evaluation for Coahuila.

Two of the ten projects are considered fully funded and eight are considered not fully funded (see Figure 24). Cost estimates were provided for all ten projects.

Figure 24 Coahuila: Projects by Funding Availability

Fully Funded 2 Projects

Not Fully Funded 8 Projects

Source: BINS Technical Committee

January 2004 95 Of the nine highway projects, which total approximately $1,363 million pesos (constant 2003 pesos), two are considered fully funded at an estimated cost of $307 million pesos. Seven projects are not fully funded and are anticipated to cost about $1,056 million pesos.

The revenue source for one of the fully funded projects is the state while the revenue sources for the other one are the federal and state governments. The projects that are not fully funded would rely on the municipal, state, and federal governments as well as private developers as potential sources of revenue.

Eight of the nine highway projects contain dates when the project is scheduled to be completed. For completion dates, seven are scheduled for completion by 2006, and one is scheduled for completion between 2007 and 2008.

The airport project, which is not fully funded, has an estimated cost of $62 million pesos (constant 2003 pesos).

The Coahuila corridors will experience an increased demand for highway capacity resulting from the projected AADT increase. The fully funded highway projects will help accommodate the projected growth in travel demand in the corridor over the next two decades. However, Coahuila has identified eight additional not fully funded projects, which represent a need of $1,118 million pesos for highway and airport projects.

New Mexico

The BINS Technical Committee representative identified ten transportation projects in New Mexico’s corridors through 2020. Five of those projects are highway projects, three of them are airport projects and two of them are rail related. All five of the highway projects are on the I-10 Corridor (two are on I-10 and three are on New Mexico Route 273).7

Projects include highway widenings, the extension of Sunland Park Drive, construction of a new intermodal center, railroad crossing at Santa Teresa, and extension of the Doña Ana County airport runway.

The sources for the project data are the following:

• The Doña Ana County International Airport (DAC) project data was obtained from DAC airport management. • The railroad project data was obtained from railroad representatives and a consultant hired by the City of El Paso. • Three highway projects come from the STIP. • The remaining highway projects come from “Governor Richardson’s Investment Partnership.”

Of the ten projects, three are considered fully funded and seven are considered not fully funded (see Figure 25).

7 NM-273 was not identified as a highway in the I-10 Corridor. However, the BINS Technical representative asked that the projects on NM-273 be included in the list because they are important to the corridor. January 2004 96 Figure 25 New Mexico: Projects by Funding Level

Fully Funded 3 Projects

Not Fully Funded 7 Projects

Source: BINS Technical Committee

Of the five highway projects, three are considered fully funded and have an estimated cost of $57 million dollars (constant 2003 dollars). The remaining two highway projects are not fully funded. No cost estimates were provided for one of these projects. The other project, the Sunland Park Drive Extension, is projected to cost $13 million dollars. Funds for Phase 1 have been programmed for a total of $5 million dollars. The remaining funds for Phase 2 of the Sunland Park Drive Extension have not been identified.

All of the five highway projects contain dates when the projects are scheduled to be completed. For completion dates, two are scheduled for completion by 2006, one between 2007 and 2008; one between 2009 and 2013, and one in 2020 (see Figure 26).

Figure 26 New Mexico Highway Projects by Year of Completion

1 1 1 Number of Projects

<2006 2007-2008 2009-2013 2014-2017 >2018 Year of Completion

Source: BINS Technical Committee

The I-10 Corridor is projected to accommodate more than 50 percent of the traffic in New Mexico’s border corridors and is the only corridor that has planned highway projects. Since New Mexico has

January 2004 97 identified two highway projects that are not fully funded, these projects represent an unmet need to help improve the quality of travel in New Mexico.

The unmet funding need identified for New Mexico’s border highway infrastructure is $8 million dollars. Since no cost estimates were provided for any of the airport or rail related projects, the unmet funding need for those infrastructure projects could not be quantified.

Nuevo León

The BINS Technical Committee representative identified one transportation project in Nuevo León’s Monterrey-Colombia Corridor through 2020 and it is a highway project. The project involves highway improvements to NL-01 between Ciudad Lampazos and the Colombia POE. It is not fully funded and is estimated to cost approximately $656 million pesos (constant 2003 pesos).

The source of the project is the State of Nuevo León’s Plan Estatal de Desarrollo (PED) and no potential sources of revenue have been identified for the project. No information relating to project initiation or completion dates was provided.

Therefore, the funding needs identified for Nuevo León’s border transportation infrastructure are estimated at $656 million pesos.

Sonora

The BINS Technical Committee representative identified four transportation projects in Sonora’s corridor through 2020. All of them are highway projects and are considered fully funded. The four highway projects represent improvements to the MX -2 highway, such as modernization of the San Luis Río Colorado southern access, upgrades at Paso por Agua Prieta, and improvements at Imuris- Cananea and Pitiquito-Caborca.

There are four other highways in the corridor (MX-8, MX -15, MX-15D, and MX -17) for which projects have not been identified. These other four highways run south-north to the U.S.-Mexico border and are projected to accommodate 74 percent of the traffic on the corridor.

The source of the projects is the federal transportation work plan and the federal government is anticipated as the sole source of revenue for the projects.

The total cost of all four highway projects is $106.3 million pesos (constant 2003 pesos). The projects range in cost from $35.6 million pesos (largest) to $12.6 million pesos (smallest). The median cost is $29.1 million pesos.

All of the projects contain project date information and are expected to be completed in the short- term.

Even though these four highway projects are categorized as fully funded, the BINS Technical Committee representative indicated that the source of the funding is the federal government, and an unknown portion of the $106.3 million pesos needed still has to be provided to the state.

January 2004 98 Tamaulipas

The BINS Technical Committee representative identified 17 transportation projects in Tamaulipas’ corridors through 2020, of which 16 are highway projects and one is a rail project. They include improvements to the Nuevo Laredo-Reynosa highway and the Tejón-Reynosa roadway, and improvements to the railroad bridge at Matamoros.

Of the 17 projects, 5 are fully funded, and 12 are not fully funded (see Figure 27). Cost estimates are provided for all 17 projects.

Figure 27 Tamaulipas: Projects by Funding Availability

Fully Funded 5 Projects

Not Fully Funded 12 Projects

Source: BINS Technical Committee

The source for the highway projects is the State of Tamaulipas Development Plan (Plan Estatal de Desarrollo or PED). The five projects that are fully funded obtain their funds from the following sources:

• Federal government only (three projects). • A combination of federal and state governments (one project). • A combination of state government and private developers (one project). Private funding includes resources from developers that are interested in developing a specific area.

The 16 highway projects are estimated to cost $3,829 million pesos (constant 2003 pesos). Five of those projects are considered fully funded and are anticipated to cost approximately $866 million pesos. The cost of these projects ranges from $425 million pesos (largest) to $25 million pesos (smallest). The median project cost is $36 million pesos.

The remaining 11 highway projects are considered not fully funded at an estimated cost of approximately $2,963 million pesos. The costs for the 11 highway projects that are not fully funded range from $800 million pesos (largest) to $15 million pesos (smallest). The median project cost is $150 million pesos.

The one rail project, which is considered not fully funded, is estimated to cost $90 million pesos (constant 2003 pesos).

January 2004 99 All 16 highway projects contain data on the estimated project completion date. For the completion dates, 13 projects are scheduled to be completed before 2006, and three are scheduled to be completed between 2007 and 2008.

The fully funded highway projects will help accommodate the projected growth in travel demand in the six Tamaulipas corridors over the next two decades. However, there is a significant percentage of not fully funded projects (70%), which represents a need of $2,963 million pesos for highway projects and additional $90 million pesos needed to implement a rail project in the state’s border transportation system.

Texas

The BINS Technical Committee representative identified 117 transportation projects in Texas’ corridors through 2005. Of the 117 projects, 107 (91%) are highway projects, nine (8%) are airport projects, and one (1%) is a railroad project. They include improvements to I-H 10, I-H 35, U.S. 77, modernization of the Del Rio International Airport, and the rehabilitation of the Presidio POE rail crossing.

With regards to the funding level of these projects, 109 of the 117 projects are considered fully funded, and eight projects are not fully funded (see Figure 28). Projects submitted for Texas’ corridors reflect short term projects through 2005 and do not represent 20 years of unfunded projects. All 107 highway projects have cost estimates.

Figure 28 Texas: Projects by Funding Availability

Not Fully Fund 8 Projects

Fully Funded 109 Projects

Source: BINS Technical Committee

The total cost of the 107 highway projects is estimated at $1.4 billion dollars (constant 2003 dollars). With regards to their funding level, 99 projects are considered fully funded and eight projects are not fully funded.

January 2004 100 The total cost of the 99 fully funded highway projects is about $1.2 billion dollars (in constant 2003 dollars). 8 Projects range in cost from about $86 million dollars (largest) to about $36,000 dollars (smallest). The median project cost is about $3.6 million dollars.

The total cost of the eight not fully funded projects is $185.6 million dollars (in constant 2003 dollars). Their estimated costs range from about $78 million dollars (largest) to about $468,000 dollars (smallest). The median project cost is about $12 million dollars.

Of the 107 highway projects, 100 projects contain either beginning or completion dates and are expected to begin implementation before 2005.

The nine airport projects are fully funded, with a total cost of approximately $11 million dollars (constant 2003 dollars). The one railroad project, which also is fully funded, has an estimated cost of $1.4 million dollars (constant 2003 dollars).

The projects identified by Texas in the border region reflect only short-term projects through 2005 and do not represent unfunded projects through 2020. Therefore, a funding need of $185.6 million dollars is anticipated through 2005. A quantification of long-term funding needs in Texas over the next two decades could not be conducted.

BINS DATA ISSUES RELATED TO PROJECTS

Data Issues

Not all the transportation project data requested were provided by the states, including complete project description, cost estimates, and project funding availability. Some states submitted planned transportation projects in the short- and medium-term, but not through 2020.

A significant portion of historical and forecast data for projects was not provided. In some cases it appeared the data were available, but that the BINS Technical Committee representative was unable to obtain it. This absence of data seemed to be caused by two factors: (1) not having enough resources dedicated to obtaining the relevant data and/or (2) a lack of communication between the organizations having the data and the organization requesting the data.

One example of missing project data was the inability of the states to provide GIS data to pinpoint the location of the projects. For many other projects, key information was missing such as the dates when the projects would become operational or the cost of the project.

The lack of complete data for planned projects limited the BINS project ability to provide an estimate of long-term funding needs for border transportation infrastructure for some states. Missing data, as well as new information that may become available, could be incorporated in future phases of the BINS project.

8 Costs were provided in 2001 constant dollars and are inflated to 2003 constant dollars using an inflation factor of 4.0% per year. This inflation factor was obtained from the BINS Technical Committee representative. January 2004 101 There were several obstacles encountered as the project data were assembled which restricted the project’s team ability to analyze planned transportation projects.

• Missing data with respect to the location of the projects and the distribution of projects on the corridors. Even though the project location data were requested on both sides of the border, many states did not provide the location of their transportation projects. By not having the location of the projects on the identified corridors, most of the relationship between the needs of the corridor, and the influence that the projects have on these transportation needs, is lost. In some cases, states with more than two corridors provided transportation projects for only one of their corridors. The remaining corridors could not be analyzed since there was no information on the location of projects.

• The information provided pertains heavily to highway projects. A limited amount of comparable information for the other transportation modes was available. • Missing data with respect to the cost of the projects. This is the most significant data limitation since, incomplete cost information, prevents the study from establishing the total cost of the border transportation infrastructure that has been identified as a need by the states. Moreover, it is not possible to establish the additional funding resources that are required to complete or implement the projects.

• An analysis of purchasing power parities would allow U.S.-Mexico comparisons of transportation investments. Such analysis would eliminate the differences in price levels between countries. Throughout the data request process, completed project data were not received from all the border states. Consequently, an alternative evaluation process was implemented for those states that did not submit the requested data.

For projects with missing data, the basic project analysis was the same as that used for states that provided complete data; however, the quality of the analysis was affected if data for key indicators were not present. These key indicators include each project’s cost, the year projects began / will begin, or the estimated project completion date, the location of the project with respect to the identified corridors, and the type of project (highway, rail, air, or maritime). Without these data, a complete needs assessment could not be conducted.

Projects with no cost data have been placed under the not fully funded category. Out of 137 not fully funded projects in U.S. and Mexico, 18 of them have no cost data. Out of total 312 projects in U.S. and Mexico, 284 had time implementation data. Of those 284 projects with implementation data, 215 of them had data related to the year the project began/ will begin, and 136 had data related to the estimated project completion date.9 No dates, at all, were provided for 28 projects. Finally, the location of projects on corridors was hard to obtain, leaving uncertainty with respect to the effect of the projects listed on the corridors’ traffic needs.

9 A project could have both, dates when the project began / will begin, and estimated project completion. January 2004 102 CHAPTER 5: FINANCING OPTIONS FOR BORDER TRANSPORTATION INFRASTRUCTURE

CHAPTER 5: FINANCING OPTIONS FOR BORDER TRANSPORTATION INFRASTRUCTURE

The fifth and last objective of the BINS project was to investigate traditional and innovative methods to fund border transportation infrastructure needs. This chapter examines funding opportunities for transportation projects. In order to understand the options, it is important to provide some background on the planning and financing processes used in the U.S. and in Mexico. It is also important to understand financing options that are available and then, specifically, the options available to the states to finance their transportation projects. The chapter is divided into five main sections, as follows:

• Description and comparison of the transportation planning and financing processes in Mexico and the U.S. • Introduction to Innovative Finance • Inventory of Financing Options • Innovative Funding Options for Mexico • Innovative Funding Options for the U.S.

MEXICAN TRANSPORTATION PLANNING AND FINANCING PROCESSES

A. Overview of the Mexican System

Mexico’s transportation planning system is characterized by its centralization. This means the majority of transportation funding and planning originates at the federal level. The federal government is responsible for interstate or federal highways, international border crossings, bridges, and border roadways. Historically, this has meant that important highway corridors have been designated based on the “national interest” (e.g., maximizing economic value for the nation as a whole). Additionally, the federal government has viewed transportation infrastructure as a “border-wide system”, rather than sets of roads that pertain to individual states. The federal process is mostly self-contained, with little input from the states and municipalities (e.g. counties). Federal government policies largely dictate the construction agenda for binational projects such as interstate highway projects and border crossings. However, within the past few years the federal government is becoming more de-centralized, giving states and municipalities more involvement and responsibility in the transportation planning process.

The key federal agencies involved in transportation planning are the SCT, SRE, Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Público (SHCP)), Federal Toll Highways and Bridges (Caminos y Puentes Federales (CAPUFE)) under the SCT, and National Bank of Public Works and Services (Banco de Obras y Servicios Públicos (BANOBRAS)). Table 11 includes a list of the Mexican transportation agencies and their responsibilities.

January 2004 105 The G.I. (Intrastate Group), which oversees the development and implementation of transportation projects, is formed by the SCT, SRE, Ministry of National Defense (Secretaria de la Defensa Nacional (SEDENA)), Commission on Appraisals and National Valuations (Comisión de Avalúos de Bienes Nacionales (CABIN)), Secretariat of Social Development (Secretaría de Desarrollo Social (SEDESOL)), and International Border and Water Commission (Comisión Internacional de Límites y Aguas (CILA)).

The federal dominance of the planning and funding of transportation has limited the ability of state and local governments to develop their own funding sources. In recent years, the government’s reliability of private funds for transportation projects (toll roads) is temporarily not being used. This type of funding proved to be very complex and it is currently being reviewed for future re-implementation (see “Privatization” under Section E – Important Facts on page 108).

States and local governments are responsible for major arterials and connections with federal highways. The key state and local transportation agencies are the Department of Public Works and the Department of Budget and Planning (SPP).

Transportation plans at both the federal and state levels are typically short-term. Federal transportation plans are projected out only six years (mirroring the presidential term of office), and local plans look ahead only three years (mirroring the mayoral term of office). Only recently the federal and state governments have started looking at long-term planning (10-20 years).

The National Development Plan (Plan Nacional de Desarrollo (PND)) requires state and local governments to formulate their own development plans, but ultimate planning authority is reserved for the federal level. As the Mexican transportation planning system becomes more de- centralized, development plans at the state and local level will be given more priority.

January 2004 106 Table 12 Mexican Transportation Agencies and Their Responsibilities

Level of Agency Modes Primary Relation to other Government Responsibility Agencies Federal SCT Roads(mainly), In charge of interstate Each Mexican state has a Airports, highways and border SCT center of their own Ports, Railway crossings. which coordinates with the state’s Dep. of Public Works and the Dep. Of Budget and Planning (SPP). Also part of the Intrastate Group (G.I.). Federal CAPUFE Toll roads Owns and operates Part of the SCT (part of the SCT) federally owned toll roads. Federal BANOBRAS Public Works Provides financial Acts as a fiscal agent for credits to states and transportation issues. municipalities Federal SRE Border Coordination with U.S. Works as part of the G.I. Crossings in border relations Federal Hacienda Management Assigns monetary Works as part of the G.I. and Budget resources according to the federal budget Federal SEDESOL Urban Urban Planning Part of the G.I. Planning Concentrated in planning for urban areas State Department of Public Works Developing the state’s SCT relies on Public Works Highway network Dep. Public Works for (i.e. SIDUE) (includes city plans) planning and construction of the regional network State Dep. of Budget Public Works Developing the Monitored by the SCT and Planning State budget for compliance of (SPP) COPLADE ( the annual public works budget) State COPLADE Public Works Planning Committee for State Government State Development Local COPLADEM Public Works Planning Committee for Municipal Government (Councils for Municipal Development Municipal Development)

B. Government Authority

1. Federal Level:

Mexico’s federal government is responsible for the interstate highways, starting with the initial planning, construction oversight, and the operation and maintenance of existing roads. International border crossings, including bridges and roadways, are also the responsibility of the federal government. SCT, Mexico’s counterpart to FHWA, is the predominant federal agency in charge of interstate highways and international border crossings.

January 2004 107 • The SCT is divided into three sub-secretariats: Transportation, Infrastructure, and Communications. There is also an Office for General Coordination and Planning by state. • The SCT is responsible for the identification and initial planning for the possible routes of new toll roads under the Federal Toll Road Program (see “Privatization” under Points of Interest below). • CAPUFE (part of the SCT) owns and operates federally owned toll roads and provides a source for equity investment in the concessions of new toll roads. • SHCP works with the SCT to decide the budget and financing for transportation projects and also manages equity investments (from CAPUFE) for existing or new toll road projects. • BANOBRAS is Mexico’s National Development Bank and serves as the conduit for loans and grants from the World Bank and Inter-American Development Bank. • SRE coordinates diplomatic relations for international border crossings with the U.S. Department of State via the U.S.-Mexico Binational Group on Bridges and Border Crossings.

2. State and Local Level:

State and local governments are responsible for major arterials that connect to federal highways and lead to border crossings. State and local governments play an important role in the operation and maintenance of state highways and have started to play a bigger role in the planning and construction of transportation projects.

• State and local governments are interested in transportation projects to promote tourism, industrial, commercial, and infrastructure development. Local governments play a limited role in highway planning in Mexico and only appropriate funds for maintenance of arterial roads. • The primary agencies involved in transportation planning at the state level are the Department of Public Works and the Department of Budget and Planning (SPP). In Baja California, SIDUE is responsible for developing the state development plan, which includes individual city plans. • The SPP presents a plan which forms the basis for the COPLADE, which is the budget request for the state and part of the national planning exercise. After the SCT and Hacienda approve the budget, SPP informs SCT’s state centers of its authorized spending allowances for various categories of public works (i.e., roads).

C. Legislation: The PND

The guiding legislation in Mexico is characterized by a series of Plans and Laws. The PND imposes laws for state and local governments, requiring them to formulate their own distinct development plans which include transportation.

• At the federal level, transportation policy is outlined by Mexico’s Law of Roads, Bridges and Federal Transportation. Article 2 gives responsibility to the SCT for their share of transportation projects. Article 5 gives jurisdiction to the SCT to create policies; supervise, verify and inspect roads and bridges; establish tolls and perform any other activities related to federal roads. • At the state level, the legal basis for transportation planning is the Law of State Development and the Law of Urban Development. Similar to the Planning Law, these laws require the production of a series of plans, such as the Plan for Development, the Plan for State, the Plan for Urban Development, the Plan for Housing, and the Plan for the Environment.

January 2004 108 D. Planning Processes & Funding

The planning process starts at the federal level typically with the SCT, while the SRE acts as a communicator for binational relations. The state Urban Development and Public Works Departments are in charge of planning at the state level, such as SIDUE in Baja California. These agencies are similar to state transportation departments in the U.S.. Federal Funds are largely derived from the national income tax. These funds are then distributed to state and local governments.

1. Planning Processes

• At the federal level, priorities are set by the PND. At the state level, strategic action plans are set according to the PND for the construction of projects. • The SCT reviews and analyzes federal plans, which are then consolidated into the PND. States and local plans are approved by local legislatures. Coordination with the U.S. in border related plans is carried out by the SRE, with participation from the SCT during the planning process. Some states are more deeply involved in binational coordination and planning than others. • The updating of transportation plans is done every six years at the federal and state level, while local plans are modified every three years. • In each Mexican state, the State Department of Public Works is responsible for preparing an urban development plan for the state, which includes plans for each of its municipalities (i.e., counties). The plans are given to each municipality for review and input. • The State plan forms the basis for the CODESOL, which is the budget request for the state. In each state, this process is coordinated by the governor’s budget office. The budget request is reviewed and approved at the Federal level by Hacienda in conjunction with the SCT. The result of this process is the establishment of an aggregate spending allowance for each state, which in turn, determines how to allocate the budget across various categories of public works projects.

2. Funding

• In order for a program to be funded, it has to be consistent with the six-year plan objectives and a feasibility study must be conducted. Finally Congress must debate and approve the budget which is then allocated to different modes of transportation and state governments. • Federal roads connect states and international borders, while state roads connect the population centers within each state. SCT funds fifty percent of state roads, with each state funding the rest. State funding comes from user fees and property taxes. • Local roads include primary and secondary roads. Primary roads are main lanes that connect state and federal highways. These are funded by SCT and the state. Primary roads eventually become the responsibility of local governments. Twenty-five percent of secondary roads are funded by the federal government, twenty-five percent by state and local agencies, and the remaining fifty percent by development loans. The loans are repaid through a system of assessments on property adjacent to the street being constructed. • During the past years, state and local governments have been developing their own funding techniques, softening the reliance on federal funds.

January 2004 109 E. Important Facts

1. Privatization

• The large scale of transportation programs has dwarfed the level of funds that are available from public sources. As a solution, many of the newer roads in Mexico today are privately funded toll roads. • Under the Toll Road Program, the investment put into private roads has not yet been recuperated. Several of Mexico’s largest construction companies are in default on their construction debt owed to the banks. • Privatization of roads is still considered as a very effective tool used for project’s funding. Consequently, the federal government is trying to review and re-implement the old techniques in order to make them more efficient and cost-effective. • The process by which Mexican toll roads will be developed under the new Build-Operate- Transfer (B-O-T) program is as follows: • Identify routes and develop specifications • Solicit public bids • Secure financing of construction • Construct roads • Operate the initial phase and secure financing for take-out • Return of the project to the public domain • Privatization of other types of modes (seaports, airports, and rail systems) proves to be efficient and has been implemented.

2. Other Issues

• The planning process in Mexico is challenging because of the over-involvement of the state and federal governments and the limitations (political, technical, and funding) placed on local governments. Recently, the federal government has started a process of “decentralization”, which gives the state and local level governments more input in the planning process and funding techniques. • Federal agencies experience high turnover every six years as a new president is elected. This makes border planning a challenge because staff change positions, creating overlap and disagreement over priorities and funding commitments for specific transportation projects. In recent years, this turnover has decreased and more emphasis is put into developing a more stable and technically skilled staff. • Local government officials try to execute and complete as many infrastructure projects as possible, since their efficiency performance is based on a high number of projects completed. As a result, local governments will have a strong structure directed to construction of public works, and a less-developed structure related to planning activities. Typically, not enough resources are devoted at the state and local level to develop and implement strong planning techniques. • Mexico does not have a permanent civil service at the state and local levels. Key personnel working in the transportation sector are appointed when a new government is elected. The length of tenure for civil service employees depends on the level of government. At the state

January 2004 110 level, elections are held every six years, so civil servants can turnover at least that often. At the local level, elections are held even closer together—every three years. In contrast, the local and state civil servants in the U.S. remain in place when new officials are elected. While the policies of the elected officials may change, the civil service in the U.S. provides continuity. In addition to civil service turnover in Mexico, the term length of a government administration has profound effects on the time frame selected for transportation planning. The President and state governors are elected to single six-year terms, so their plans look ahead six years. The local mayoral administrations are elected to three-year terms, so local transportation plans are often for three years. In contrast, the planning horizon in the U.S. is typically more long-term, ranging anywhere from 10 to 20 years into the future. Mexican officials have recently begun to develop institutional solutions to bridge planning from one administration to the next. Both Tijuana and Ciudad Juarez have started regional planning agencies staffed by civil servants to make long-term plans (the IMPLAN, Institute of Municipal Planning, in Tijuana and the IMIP, Municipal Institute of Research and Planning, in Ciudad Juarez ). In these agencies, civil servants are retained between mayoral administrations to promote long-term planning.

THE UNITED STATES’ TRANSPORTATION PLANNING PROCESS

A. Overview of the U.S. System

In the United States, most of the funding for transportation projects is allocated at the federal and state levels, while the majority of planning occurs at the regional level. Congress authorizes multi- year transportation funding levels through legislation such as the TEA-21, followed by annual appropriations through the budgetary process. The funds are administered by the U.S. DOT through the FHWA, and the Federal Transit Administration (FTA). For highways, the FHWA grants funds to state DOTs by formula. The states have taken the initiative to prioritize the financing of transportation infrastructure projects statewide, and consequently along the border. Metropolitan Planning Organization (MPOs) also play an important role in establishing funding priorities for transportation projects. Table 12 shows a list of U.S. Transportation Agencies and their responsibilities.

• Through the early 1990s, the majority of state and federal funding was devoted to the development of the highway system. • ISTEA, enacted in 1991, increased funding flexibility to support transit and other transportation alternatives. This was followed by the National Highway System Act of 1995 (NHS) and the current act, TEA-21. • Under ISTEA, local MPOs have taken on a larger role in transportation planning. MPOs in urbanized areas work in concert with the state DOTs to select projects and plan for the long- term. • In general, the U.S. process is characterized by transparency and opportunity for public input. • Because there is a multitude of federal agencies with specific missions engaged in planning for transportation and other infrastructure improvements in the border region, coordination on binational transportation issues has historically been poor.

January 2004 111 Table 13 U.S. Transportation Agencies and Their Responsibilities

Level of Agency Modes Primary Relation to other Government Responsibility agencies Federal U.S. DOT All modes Coordinates Oversees FHWA, other transportation at agencies federal level Federal FHWA Roads Disbursement of Administers funds to federal funds; state DOT maintain interstate system Federal Federal Transit Transit—buses, Disbursement of Administers funds to Administration light rail federal funds for state DOT (FTA) transit projects Federal Department of Border Selects sites and State, GSA crossings, maintains bridges infrastructure State State DOTs Roads, State planning, Coordinates with MPO passenger rail assistance to and local jurisdictions localities State State All 7-year funding Oversees State DOTs, Transportation estimate; adopts 5- provides budget Commissions/Boards year STIP constraint Local Metropolitan Roads, transit Systemic regional Works with state DOT Planning planning and local jurisdictions Organizations to develop metro-area (MPOs) plans Local Cities, Counties Roads City, County roads; Land-use and border land-use issues

B. U.S. Government Authority

1. Federal Level:

The U.S. DOT receives funding from Congress in TEA-21 (1997-2003). The FHWA as well as agencies in charge of other transportation modes (Federal Aviation Administration, Federal Railway Administration, FTA, etc.) are part of the U.S. DOT. The FHWA provides funding to states through the “Federal-Aid Highway Program” (FAHP), which uses a funding formula based on each state’s usage and need.

• FHWA funding provides reimbursement for approved project expenditures. • FHWA provides funding for the interstate highway system and other transportation facilities and monitors conditions of transportation capital and infrastructure. The federal government also has jurisdiction over border crossings. The U.S. Department of State (U.S. DOS) is responsible for the permitting process in the U.S. The U.S. General Services Administration (GSA) manages the funding for their construction and maintenance. In March 2003, the U.S. Department of Homeland Security (DHS) was created and is responsible for border and transportation security. Before the creation of DHS, the border inspection agencies were the Customs Service, Immigration and Naturalization Service (INS), U.S. Department of Agriculture (U.S.

January 2004 112 DA), the U.S. Food and Drug Administration (FDA), U.S. Department of Transportation (U.S. DOT), and U.S. Fish and Wildlife. Under DHS, the Border and Transportation Security directorate consolidates the major border security and transportation operations, including:

• The U.S. Customs Service (Treasury) • The Immigration and Naturalization Service (part) (Justice) • The Federal Protective Service (GSA) • The Transportation Security Administration (Transportation) • Federal Law Enforcement Training Center (Treasury) • Animal and Plant Health Inspection Service (part)(Agriculture) • Office for Domestic Preparedness (Justice)

Table 13 on the following page illustrates the U.S. regional transportation planning and programming process.

January 2004 113 Figure 29 U.S. Regional Transportation Planning and Programming Process

Source: “Regional Transportation Plan Guidelines”, Appendix H, California Transportation Commission, 1999.

January 2004 114 2. State Level:

The main actors at the state level are the state DOTs, which are principally funded by the federal government and have similar roles from state to state. However, it is important to point out that individual state DOTs might implement alterations in their planning and programming process as a way to incorporate preferred methods and specific necessities. State DOTs are in charge of planning and programming (selecting, designing, and constructing projects), and maintaining federal-aid highway facilities. In California, state law has established a cooperative planning process involving the California Transportation Commission (CTC), Caltrans, and the MPOs. In some other states, the state legislature must approve transportation capital investment programs.

• State DOTs produce long-term 20-year State Transportation Plans (STP) which include the plans produced by the MPOs, cover all modes of transportation, and are updated every two years. They also develop three-year (minimum) State Transportation Improvement Programs (STIPs). Individual states sometimes incorporate preferred methods into their planning and programming process. For example, the border states of California, Arizona, New Mexico, and Texas each have individual characteristics that differentiate their approach towards the planning and programming processes.

Arizona

• Arizona develops a five year Transportation Facilities Construction Program (TFCP), which they use to develop their STIP for the first three years. The TFCP is a budget of what Arizona expects to receive in funds from various sources and how it proposes to spend them project by project. This TFCP is evaluated yearly through a comprehensive review process. • The SHP (State Highway Plan) is combined with a number of characteristics in the development of the ADOT’s priority programming process. These characteristics include: public requests, corridor studies, safety studies, the pavement management system, and project ratings. They are overseen by the Council of Governments, ADOT’s planning and district engineers, and the FHWA. Once the projects have been prioritized and are balanced with revenue forecast, public participation is conducted before the creation of the final five-year highway program. • In Arizona, the State Transportation Board (STB), a seven-member panel, has statutory power to prioritize individual highway projects. There is a committee known as the Priority Planning Committee, appointed by the ADOT, who assist the STB in setting priorities.

California

• The California Transportation Commission (CTC – a nine member board) oversees Caltrans, provides a seven-year forecast of future available funding, and adopts the STIP with 75 percent of the funding for projects selected by MPOs and 25 percent for projects selected by Caltrans. • Caltrans prepares a statewide policy plan, with the MPOs responsible for the more detailed 20- year Regional Transportation Plan (RTP). • Caltrans divides its transportation planning responsibilities into 12 districts, with District 11 encompassing the border area (and responsible for planning the binational infrastructure).

January 2004 115 New Mexico

• In New Mexico, the STP is still developed at the state level with local input. However, in metropolitan areas, MPOs develop their own plans called Metropolitan Transportation Plans (MTPs). • In New Mexico, as part of the transportation planning process, MPOs set regional priorities within the metropolitan planning areas only. Any priorities outside the MPO’s planning area fall under the responsibility of the NMDOT. Even though the NMDOT has final authority, they may contract services to other entities.

Texas

• Texas develops a statewide planning process that will result in a STP for all areas of the state. This plan needs to be consistent with the elements outlined in the federal regulations, it should include all modes, develop long term projections (20 years), involve metropolitan transportation plans, provide for public involvement, and include a financial plan. • The Texas Department of Transportation (TXDOT) also develops a STIP for all areas of the state. This STIP consist of the metropolitan and rural TIPs. The STIP should include a list of projects for a three-year period, provide for public involvement, be consistent with the STP, be updated every two years, and be financially constrained.

3. Local Level:

MPOs in urbanized areas work in conjunction with state DOTs, cities, and counties to create transportation plans for their region. Although MPOs are funded by the U.S. and state DOTs, with increased authority under TEA-21, planning increasingly originates at the local MPO level (in Arizona plans are still developed at the state level with local input).

• Some MPOs today have significantly more authority in setting planning priorities. While MPOs must still consult with the state, in areas with 200,000 people or more (“Transportation Management Areas” or TMAs, such as San Diego, El Paso, and McAllen), they have final authority in planning decisions. State DOTs cannot add or make changes to the local plans. • MPOs develop 3-year (minimum) TIPs and longer-term 20-year RTPs, which consist of priority lists and financing recommendations. The short-term programs must be consistent with the MPO’s long-term plans and must integrate the entire metropolitan transportation system. • As described in the TEA-21, MPOs must develop their plans in consultation with key stakeholders and citizen groups. • Local jurisdictions (cities, counties) use their own funding to plan and construct city streets and county roads, and can make land-use decisions that affect the regional transportation planning process. Border cities’ land-use authority and surface-street planning makes them interested parties in border-crossing transportation planning.

January 2004 116 C. Guiding Legislation

Border and Corridor Grant Opportunities The ISTEA (formerly the Federal Highway Act), the nation’s omnibus transportation legislation, was passed in 1991 and was reauthorized in 1998 as the TEA-21, which expired on September 30, 2003. The ISTEA set new goals for inter-modality, flexibility, air quality, and energy conservation. The bill included two programs to develop and maintain infrastructure along the border: the CBI and the NCPD. The CBI and NCPD programs were jointly allocated $140 million per year for the five year period of 1999 to 2003, equaling a total of $700 million.

However, the need for improvements greatly exceeds the availability of public funds in these programs. For example, eligible applications for 1999 and 2000 totaled approximately $2 billion dollars, compared to the $280 million dollars available for those two years. The draft transportation reauthorization act recognizes the need for improvements by increasing the funding under the new versions of this program (Section 1806 Multistate Corridor Planning Program with $76.5 million dollars the first year and $84 million dollars thereafter, and Section 1807 Border Planning, Operations, and Technology Program with $76.5 million dollars the first year and $84 million dollars thereafter). Additionally, recognizing the binational nature of the required projects, Section 1807 contains a provision for allowing projects in Canada or Mexico proposed by the border states that directly and predominantly facilitate crossborder vehicle and commercial cargo movements at the states’ POEs to use funds allocated under this program, given assurances related to construction standards and maintenance of the project.

The “period of availability” for obligation for projects under these programs is the fiscal year of authorization plus three years. States that receive funds from the CBI and NCPD programs are allowed an increase in their obligation authority equal to the allocation so as to permit a total higher obligation (in other words, these supplementary funds will not count against other spending authority).

Table 14 indicates how the funds were allocated in FY 1999 through FY 2003. Of the approximately $1.5 billion dollars allocated, a large share of the funds went to Texas and California. However, in total, non-border states received nearly three times as much funding from these programs as the states that border Canada and Mexico.

January 2004 117 Table 14 CBI and NCPD Allocations by State, FY 1999–FY 2003 Percent of CBI/ FY 1999-FY 2003 NCPD Funding (1)

Individual Southwest Border States:

Arizona $11,223,343 1% California $61,631,218 4% New Mexico $10,971,000 1%

Texas $90,524,701 6% Total U.S. States Bordering Mexico $174,350,262 12% $196,447,453 13% Total U.S. States Bordering Canada All U.S. Border States $370,797,715 25% Non -border States $1,095,037,730 75%

$1,465,835,445 100% Total of Border and Non-border States GSA $6,292,338 T otal CBI/ NCPD Funding $1,472,127,783

(1) Funds allocated to GSA are not included in the computation of the Percent of CBI/NCPD Funding. Source: U.S. DOT, FHWA

In 2002, a large amount of additional funding was obtained for these two programs through Section 1105 of the TEA-21 legislation (“Revenue and Aligned Budget Authority”), increasing the total amount of funds awarded to $492 million dollars.

In the case of Mexico, funding for transportation projects is strongly dependent on federal resources. This dependency can be traced back to Mexico’s centralized governmental system. Even though Mexico has begun a process of decentralization in which state and local governments are developing their own funding techniques, there is a significant reliance on federal funds to implement transportation projects. Some partnerships among local, state, and federal funding sources also have taken place.

Scarcity of transportation funding can prove challenging for states along the border as they attempt to fulfill the increased demand for transportation infrastructure. Two possible solutions to this problem are described in the remainder of this section.

First, the application of innovative financing techniques should be studied. Innovative finance initiatives respond to the need to supplement rather than replace traditional financing techniques. An inventory of conventional and innovative financing options is presented in this chapter.

Second, the evaluation of major border transportation corridors along the U.S.-Mexico border should be updated regularly. The BINS project developed an evaluation process and tool to analyze and prioritize each state’s transportation corridors. This analysis gives states a quantitative guide to organize projects based on the infrastructure needs of their corresponding corridor. The BINS methodology takes a multimodal approach to gathering data for road, rail, maritime, airport, port of entry, and intermodal facilities. By using this quantitative method, transportation funding can be distributed giving priorities to the identified needs of corridors.

January 2004 118 D. Planning Process and Funding

The TEA-21 built on the initiatives established in ISTEA. TEA-21 combined the continuation and improvement of current programs with new initiatives to meet the challenges of improving safety as traffic continues to increase at record levels, protecting and enhancing communities and the natural environment as we provide transportation, and advancing America’s economic growth and competitiveness domestically and internationally through efficient and flexible transportation.

Under TEA-21 there is flexibility in transferring funds between programs and projects. For example, money from the Highway Trust Fund that is allocated to a given state is allowed to be transferred between funding programs. For example, funds can be transferred between the STP and the National Highway System (NHS).

• In a major change to Federal budget rules, highway (including most highway safety programs) and transit programs are now guaranteed a minimum level of spending under TEA-21. Prior to enactment of TEA-21, funding for surface transportation programs was one item among many on a list of priorities for Federal program spending in the budget. Under the new budget rules, highway guaranteed amounts are keyed to actual Highway Trust Fund (HTF) Highway Account receipts and can only be used to support projects eligible under Federal highway and highway safety programs. Transit funding is guaranteed at a selected fixed amount over the TEA-21 period and can be used only to support projects eligible under transit programs. • The HTF is the source of funding for most of the programs in TEA-21. The HTF is composed of the Highway Account, which funds highway and Intermodal programs, and the Mass Transit Account. Federal motor fuel taxes are the major source of income into the HTF. The HTF is the largest FHWA fund. Because the revenue comes from user fees, it is a “pay as you go” system, meaning there is only as much money available as is collected from recent tax receipts. • For each State, TEA-21 specifies a certain share of the aggregate funding for the following programs: Interstate Maintenance (IM), National Highway System (NHS), Bridge, Congestion Mitigation and Air Quality (CMAQ) Improvement, Surface Transportation Program (STP), Metropolitan Planning, High Priority Projects, Appalachian Development Highway System, Recreational Trails, and the Minimum Guarantee funding itself. The shares specified were pegged to meet the objective of a 90.5 return (described below) based on the data available at the time of enactment. • In general, when state or local planners propose a project, the FHWA will provide matching funds in the ratio of 80 percent federal funds to 20 percent state funds. States get a “line of credit” from FHWA and are then later reimbursed the federal share as project milestones are completed. • States are guaranteed to receive at least a 90 percent apportionment of their fuel tax contributions. This prevents a state from paying an amount into the fund that is significantly greater than what they get out of the fund. • States must obligate federal funds within a certain time period, or they will lose them. In other words, the federal government will not reimburse after the period of availability is up. • Congress limits the maximum obligation that states can collectively incur in a given fiscal year as a means of managing the federal budget. This places a restriction on a state’s annual use of the credit line and promotes the deferment of spending to later years.

January 2004 119 • State DOTs receive funds from the fuel tax, general obligation bonds, and grant anticipation notes. The variability of fuel consumption plus the requirement of voter approval on bond issues has meant that these sources fluctuate with the state of the economy. • In many urban areas of California, local sales taxes make up the largest single revenue source for transportation projects.

E. Other Issues

• As required by the TEA-21, STIPs are financially-constrained by year, meaning that plans are limited by the amounts of funding available to be spent on projects. This helps ensure that funding sources for new projects are clearly identified, and that the maintenance of the existing transportation system is not neglected. • Air quality “non-attainment” and “maintenance” areas designated by the U.S. Environmental Protection Agency (EPA) must incorporate measures to reduce air pollution into their transportation plans. Non-attainment areas in the border region include El Paso, San Diego, and Imperial counties. The CMAQ program provides non-attainment areas with additional funding for non-single occupancy vehicle projects such as transit, bicycle, and high occupancy vehicle (HOV) projects. • States provide information on the expected availability of funding to MPOs early in the planning process to facilitate the preparation of the financially-constrained TIPs.

COMPARING THE TRANSPORTATION PLANNING PROCESSES IN MEXICO AND THE U.S.

This section describes the structure of the U.S. and Mexican transportation planning processes. General descriptions of each country’s process for transportation planning are presented, including information on the roles of the different levels of government, the allocation of funding, and significant legislation. The three major differences between the planning processes in each country are centralization, legal framework, and privatization.

Centralization

Transportation planning in Mexico is “centralized” as much of the planning authority is held by the federal government. This means that a large share of transportation planning begins and ends with federal planning agencies, such as the SCT. In the U.S., by contrast, ultimate planning authority rests with state and local agencies. For example, while the Federal Highway Administration (FHWA) is in charge of maintaining the federal Interstate Highway System, it has little jurisdiction over state and regional transportation plans.

One benefit of the U.S. system is that most plans tend to have the public’s support because they are formulated at the local level. A benefit of the Mexican system is that it tends to prevent political conflicts among states over transportation policy. However this sometimes comes at the price of having little local input. Although centralization has been the standard in Mexico, planning is beginning to be done by state and local governments. Historically state and local governments had been discouraged from finding their own funding mechanisms, but now they are finding local revenue sources, and with them, more planning independence.

January 2004 120 In the U.S., the Highway Trust Fund is the largest FHWA fund and it is user-supported, with revenues coming from federal gasoline taxes. Because the revenue comes from user fees, it is a “pay as you go” system, meaning there is only as much money available as is collected from recent tax receipts. States are guaranteed to receive at least a 90 percent apportionment of their fuel tax contributions from the Highway Trust Fund. In contrast, this type of financial mechanism does not exist in Mexico.

Privatization

The two main differences between the use of private funding in the U.S. and Mexico are (1) the proportion of roads privatized, and (2) the country’s financial necessity for privatization. Mexico has privatized a greater number of roads compared to the U.S. According to the SCT, 15 percent of Mexican Interstate Highways and two percent of Mexican Toll Roads are privatized. According to the FHWA, five percent of U.S. Interstate Highways are privatized. In the U.S., privatization accounts for only a small part of transportation funding. Mexico relies on privatization to fund new roads to a much larger extent.

Mexico has taken to privatization because the large scale of transportation programs has dwarfed the amount of public funds available. As a practical solution, many newer roads in Mexico today are privately operated toll roads. The toll road concession process in Mexico is led by the Federal government. The SCT grants a concession for a toll road to a winning bidder, who then builds, operates and, after a set number of years, transfers the project back to government ownership. However, this pattern is beginning to change. The newly structured concession process will emphasize a more rigorous project preparation including: thorough traffic studies; complete project design; right-of-way acquisitions prior to construction; environmental impact studies; and marketing analyses to set tolls commensurately with the user’s ability to pay. Concessions will be awarded in a competitive process to ensure affordable tolls for users and quality road construction at reasonable costs.

According to the Texas Turnpike Authority, an organization that provides opportunity for private investment in U.S., agreements are created between public or private entities to construct, maintain, repair, and operate turnpike projects. A turnpike project that is the subject of a development agreement with a private entity, including the facilities acquired or constructed on the project, is public property and belongs to the authority.

Table 15 on the following page compares the responsibilities of U.S. and Mexican agencies for various aspects of binational transportation planning.

January 2004 121 Table 15 Transportation Planning Responsibilities

Aspects of Binational Planning U.S.* Mexico*

Agency initiating planning process Federal: FHWA, Dept. of State Federal: G.I., SRE, SCT State: State DOTs State: SIDUE, SPP Local: Municipal Government Agency responsible for Federal: U.S.DOT (FHWA, FTA) Federal: SCT Infrastructure planning State: State DOTs, MPOs State: SIDUE, SPP Local: Municipal Government Setting priorities MPOs set metropolitan priorities, The three levels (federal, state, and States set state priorities based on local) set priorities according to MPO plans each others Development Plan Approval of the plan MPOs approve metropolitan plans, States approve regional plans, FHWA approves state plans for Municipal Governments approve interstate highways local plans, and the SCT approves interstate highways Coordination with neighboring Federal: Department of State Federal: SRE maintains ongoing countries State: DOTs and MPOs coordination with the Department communicate with counterparts of State (U.S.) State: Some states are more involved than others (i.e. Baja California is very involved) Frequency of plan updates Regional Plans: 3 to 5 years SCT: Six-year plan State: Six-year plan Municipalities: Three-year plan SRE: Ongoing process Planning scope State: 20 years minimum Federal: 10-20 years Regional: 20 years minimum State: 10 years

*See Appendix 11: Glossary of Terms for descriptions of all the acronyms.

INTRODUCTION TO INNOVATIVE FINANCE

Innovative finance, as it relates to funding transportation projects, refers to non-traditional methods of financing transportation projects. Transportation officials at all levels of government face a significant challenge when considering ways to pay for improvements to transportation infrastructure. Traditional government funding sources are insufficient to meet the increasingly complex and diverse needs of the border transportation system. Despite record levels of investment in surface transportation infrastructure in recent years, funding is not keeping pace with demands for improvements to maintain the vitality of the nation's transportation system. As forecasts have shown in this study, demand for transportation services is outpacing the supply of highway capacity by a two to one factor in the U.S.-Mexico border region.

Innovative Finance for transportation is a broadly defined term that encompasses a combination of specially designed techniques that supplement traditional highway financing methods. While many of these techniques may not be new to other sectors, their application to transportation is innovative.

Historically in the U.S., the FHWA has financed highways primarily through grants that generally cover up to 80 percent of project costs. However, this approach alone cannot meet the border

January 2004 122 region’s current and future transportation investment needs. Innovative finance initiatives respond to the need to supplement – rather than replace traditional financing techniques. In Mexico, much of the funding for transportation projects comes from the Federal government. Again, innovative finance techniques aim to supplement these federal funds.

The primary objectives of innovative finance are to:

• Maximize the ability of states and other project sponsors to leverage Federal capital for needed investment in the nation's transportation system; • More effectively utilize existing funds; • Move projects into construction more quickly than under traditional financing mechanisms; and • Make possible major transportation investments that might not otherwise receive financing.

AN INVENTORY OF FINANCE OPTIONS

An inventory of conventional and innovative financing options has been created and is the following1:

Mexico Conventional and Innovative Financing Options: • Concession arrangements (consider use for highway corridors where Mexico’s federal policy targets implementation of Fideicomiso de Infraestructura (FINFRA) and/or Public Finance Initiative (PFI) concepts, explained in body of document) • Participaciones federales (federal participation payments) to individual states and municipalities • Federal grant funding for specific projects, through Fideicomiso para la Infraestructura en los Estados (FIES) or other sources • State grant funding for specific projects • General obligation bonds issued by states, municipalities and special districts (consider U.S. where credit rating/borrowing capacity is high) • Revenue anticipation bonds issued by states and municipalities, secured by future Federal participation payments/transfers (consider use where credit rating/borrowing capacity is high) • Revenue bonds, secured by tolls charged on public or private tollways • Banco Nacional de Obras y Servicios Públicos (BANOBRAS) programs; assistance targeted to highway development and general financial services • North American Development Bank (NADB) lending/credit enhancement (consider use where project will positively impact environment) • Export/Import Bank (EXIM Bank) lending/credit enhancement (may be appropriate where U.S. wishes to provide assistance to U.S. private sector firm) • Overseas Private Investment Corporation (OPIC) lending/credit enhancement • Other state and municipal credit assistance programs • U.S. state or county borrowing benefiting projects in Mexico (consider use where there is strong U.S. state or local support for a trans-border project) • U.S. state Commercial Paper financing benefiting projects in Mexico

1 Werner, Frederick, FHWA, “U.S./Mexico Joint Working Committee Innovative Finance Team FY 2004 Work Plan Products,” July 10, 2003.

January 2004 123 U.S. Conventional and Innovative Financing Options:

• Traditional Federal-Aid Highway Grant Program (including National Highway System (NHS ), Interstate Maintenance (IM), and Bridge Programs) • Federal National Corridor Planning and Development Program (NCPD) and Coordinated Border Infrastructure Program (CBI) • Other discretionary Federal Highway programs (consider U.S. where probability of obtaining discretionary funding is high, e.g. where competition is minimal) • Federal Transit capital and research programs (consider use where FTA has concluded that project is a high priority) • Other Federal agency grant and loan programs • Individual state grant programs • General obligation bonds issued by states, municipalities and special districts • Revenue Anticipation Notes (RANs) • Transportation Infrastructure Finance and Innovative Act (TIFIA) credit assistance (consider use for large projects (over $100 million dollars) with well defined revenue streams to repay debt service; principal advantage is deferral of debt service payments) • GARVEE and RVEE Revenue Anticipation Bonds (consider use for projects where expected economic benefits exceed debt service costs; principal advantage is lower, Federally tax -exempt interest rates) • State Infrastructure Bank (SIB) lending (consider use for small projects where local revenue stream can be dedicated to debt service; principal advantage is below market interest rates) • Section 129 State Loan programs (consider use for project included on state transportation program where local revenue stream can be dedicated to debt service) • Toll Credit Program • Other state credit assistance programs • Commercial paper financing • Tax increment financing and special assessment districts • Tax incentive or abatement zones • Enterprise zones designated under Federal and state law • Development impact fees • Initiatives/programs to promote public-private joint development arrangements • Concession arrangements with private sector, sometimes under design-build arrangements • Municipal lending/credit enhancement programs (consider use where municipality has indicated high level of interest in supporting given project) • Industrial and economic development agency programs/initiatives • Donation of right-of-way • Donation of funds, materials and services • Federally tax-exempt “public activity” bonds under either Section 63-20 or a qualified 501(c)(3) corporate structure (consider use where a non-profit public benefit corporation can be formed to accomplish project; principal advantage is lower, Federally tax-exempt interest rates)

In addition to the conventional and innovative finance techniques listed above, there are also some emerging or potential financing options that the FHWA study has compiled. Some of these may need additional legislation or administrative action to make them fully functional.

January 2004 124 Mexico Emerging Financing Options:

• Establish investment banks to be operated as revolving funds managed by states, municipalities and special districts. • Establish tax increment financing and special assessment districts to develop additional revenue streams from property taxes. • Establish tax incentive or abatement zones to encourage private sector investment by reducing state and local taxes. • Assess development impact fees on developers and property owners to generate additional revenues to cover the cost of public investment. • Introduce initiatives/programs to promote public-private joint development arrangements to encourage private sector investment.

U.S. Emerging Financing Options:

• Establish investment banks to be operated as revolving funds managed by states, municipalities and special districts. • Implement design-build (DB), design-build-operate-maintain (DBOM), and design-build-operate- maintain-finance (DBOMF) arrangements. These arrangements are used to transfer construction, operations and/or financing risk to the private sector. • Use shadow tolling to compensate a project concessionaire. Under the shadow tolling concept, payments are based on the usage of a given project: i.e., x$ per vehicle mile traveled on facility. • Deploy Texas Mobility Fund’s and Texas Regional Mobility Authorities’ statutory authority to back bonds for highway construction and other transportation projects. Funding sources for these bonds include fees and taxes that are not constitutionally dedicated to some other state activity/purpose. • Deploy Texas Transportation Commission’s authority to participate in financing a start-up toll project through grants.

Binational Emerging Financing Options:

• Establish dedicated U.S.DOT funding program (possibly in coordination with North American Development (NAD Bank) for binational border projects. Such a Program could be administered through the U.S.DOT Borders and Corridors program, NAD Bank, BANOBRAS, or some other administrative mechanism. • Implement U.S. state borrowing for projects benefiting both U.S. and Mexico jurisdictions (e.g. borrowing through the Texas International Cooperation Initiative). • Expand mandate for NAD Bank lending beyond projects having an environmental benefit, or define environmental benefit more broadly. • Extend U.S. Federal income tax exemption to debt issued by Mexican government entities, using the legal precedents established to develop the Texas International Cooperation Initiative. • Extend definition of “public benefit” to include benefits in the Mexican border zone to allow the use of a qualified 501(c)(3) corporate structure. This structure allows not-for-profit corporations organized for a public benefit to issue federally tax-exempt debt. • Extend allowable scope of Private Activity Bonding (private sector’s ability to issue federally tax- exempt debt to finance manufacturing facilities) to investment in transportation infrastructure.

January 2004 125 • Extend tax credit bonding proposals made in the current reauthorization cycle (FY 2004 to 2009) to binational border projects. • Extend mandate of World Bank lending?

INNOVATIVE FINANCE OPTIONS AVAILABLE FOR MEXICO

This section provides details for the finance options listed for Mexico.

Innovative Finance Options Currently Available in Mexico

• Revenue anticipation bonds issued by states secured by future Federal participation payments • Revenue anticipation bonds issued by cities secured by future Federal participation payments • Revenue bonds secured by tolls charged on private toll way projects (built by private companies under concession arrangements) Assistance Targeted to Highway Development (Banco Nacional de Obras y Servicios Públicos (BANOBRAS)). The following programs are designed to promote investment in highway infrastructure and/or clearly relate to the highway development process.

1. Program-wide credit line to assist states and municipalities to purchase equipment and construct public works (Linea global para equipamiento y obras públicas de gobiernos estatales y municipals). This program provides states and municipalities with a credit line for the total cost of projects included on their annual programs of capital investment. This arrangement, a change from the project-by-project financing that has been conventionally available, provides the local government units with enhanced flexibility to meet project costs on a timely basis.

2. Short-term credit for states and municipalities (Fortalecimiento financiero a corto plazo para gobiernos estatales y municipios). This program is designed to ameliorate the adverse impact on states and municipalities of the staggered receipt of participaciones federales (federal participation payments) or federal transfers. The program’s goal is essentially to ensure timely payments to contractors and vendors by providing states and municipalities with working capital and/or funds for project payments prior to the scheduled receipt of federal payments. The federal payments are then used to close out or liquidate any short-term credit provided.

3. Cash flow financing for contractors (Programa de crédito para liquidez a contratistas de obra pública). This program is designed to provide short-term cash flow financing to contractors assigned to public works programs. The program’s intent is to enable contractors to weather fluctuations in cash flow due to unforeseen climatic, political or project events, as well as to survive delays attributable to financial difficulties at the contracting state or municipality.

4. Self-liquidating credit (Créditos con fuente de pago propia). This credit program is designed to be self-liquidating in the sense that project-generated revenues are used to pay project debt service. Similarly to the U.S. Federal credit program TIFIA, this program’s objectives are to encourage major national infrastructure projects and promote the private sector’s participation in these projects.

January 2004 126 5. Promotion of preinvestment research studies (Fomento de estudios de preinversión). This program is designed to improve the planning process performed to identify infrastructure investment needs. Specific programs objectives are to:

• Strengthen development of local government organizations • Plan and develop projects to maximize the benefit from the public expenditure by selecting the best economic alternative with the greatest positive social impact • Support the performance of detailed sector-by-sector analyses of needed projects in order to identify projects needed in the short-term vs. projects needed in the intermediate-term • Develop a bank to provide financing for needed projects, balancing the use of credit and with other revenue sources • Increase creditors’ coverage ratios • Reduce Banobras’ credit risk for financial assistance extended • Increase and diversify Banobras’ investment portfolio 6. Strengthening State and Municipal Organizations (Fortalecimiento Institucional para Estados y Municipios (FORTEM)). This program is designed to strengthen states and municipalities by:

• Supporting the federal policy of government decentralization by enhancing creditors’ financial capabilities and institutional capacity

• Promoting the development of local financing mechanisms to fund capital investment, research studies, and service contracts

7. Fund for Research Studies (Fondo para el Financiamiento de Estudios (FFE)). This program is designed to promote a solid base of studies to support infrastructure projects eligible to be financed under the FINFRA concession concept (discussed later in this document). The specific objectives of this program are to:

• Grant financial support for those studies required to identify projects most appropriate for participation in the FINFRA concession arrangement • Provide resources to both public and private sector organizations, in their role as promoters and developers of infrastructure projects, to perform technical, financial, socioeconomic, organizational, analytical and toll impact studies at different phases of a project: pre- feasibility, feasibility, and project execution. These studies should be performed prior to the request for bids.

General Financial Services (BANOBRAS). Banobras provides six principal categories of service to the public sector, public sector concessionaries, selected corporate clients, and the non-banking financial sector (“Nota” describing Banobras programs forthcoming per January 2003 meeting with SCT):

1. Money Management (Mesa de Dinero). The following services are provided:

• Financing of working capital needs • Issuance of promissory notes • Placement/sale of bonds through public auction • Credit guarantees and support • Investments in term and/or fixed rate dollar-denominated securities

January 2004 127 • Purchase, sale and hedging of currency transactions • Foreign letters of credit

2. Appraisal services (Avalúos). The following services are provided:

• Detailed analysis to establish value of real estate and personal property • Assessments required to support credit guarantees and legal proceedings

3. Leasing (Arrendamiento). The following services are provided:

• Simple lease arrangements where lesser does not have purchase option at lease termination • Lease arrangements where lesser does have purchase option at lease termination • Sale and lease back arrangements that are generally executed to generate revenue for seller and convey tax benefits to purchaser

4. Fund to Manage Risk for States and Municipalities (Fondo de Apoyo a Estados y Municipios (FOAEM)). FOAEM protects states and municipalities against exchange rate risk

5. Research Center for Socioeconomic Evaluation of Projects (Centro de Estudios para la Preparación y Evaluación Socioeconómica de Proyectos (CEPEP)). CEPEP promotes the development of a group of professionals qualified to assess the socioeconomic impacts of public and private investments in infrastructure and other major projects.

6. Fiduciary services (Fiduciario). These services assist the federal government to protect the public good, define responsibilities, and manage public assets with respect to the following:

• Development of sound public administration in municipalities • Urban development and investment, including development of housing • Creation and management of territorial and ecological reserves • Public services • Investment in infrastructure, including construction, telecommunication, and transportation

North American Development Bank (NADB) lending/credit enhancement. NADB credit assistance is available to assist transportation projects with a positive environmental impact within 100 kilometers (extension to 300 kilometers pending) of the U.S./Mexico border. This assistance, available to both public and private sector borrowers, is provided in the form of direct loans, interim financing, participation in municipal bond issues, and partial loan guaranties.

The NADB loan program provides direct financing for infrastructure projects with a demonstrable and reasonable assurance of repayment when private sector financing is not available on reasonable terms and conditions on a timely basis. In other words, NADB loans are intended to fill financing gaps not covered by other funding sources. The NADB guaranty program is designed to encourage the participation of private and public sector lenders in financing infrastructure projects by providing partial repayment protection against commercial risks for loans.

NADB loans for transportation projects with a positive environmental impact carry a market-based interest rate, which can be fixed or variable. This interest rate is based on

January 2004 128 • a standard margin per annum over a market benchmark (normally U.S. Treasuries) to reflect the Bank’s own cost of borrowing, the cost of warehousing or hedging these funds through the period of project disbursements, and the basic return on the Bank’s capital; and • a risk exposure element that adequately covers the risks in each transaction, chargeable annually on the outstanding amount of the direct loan or the present value of the full amount of the guaranty. • NADB loans also require a small application fee and a commitment fee (¾ of one percent on undisbursed loan balances). Loan maturities generally range up to 25 years, depending on individual project requirements and the project sponsor’s ability to meet annual debt service, but cannot exceed project’s useful life. Grace periods for principal repayment are negotiable and may cover the anticipated project construction and start-up phase. Loans must be repaid in the currency in which they are originally funded. • In addition, NADB provides technical assistance and guidance, including assistance related to the design of alternative financial structures, to communities and potential borrowers to assist them in the financial design and structure of environmental infrastructure projects. Such assistance may include i) development of financial criteria and procedures to be used in the economic, credit and financial analysis of the project and in procurements for concessionaires and contractors, and ii) coordination of preliminary economic and financial reviews of the project. • Export/Import Bank (EXIM Bank) lending/credit enhancement. EXIM Bank credit support is available “to aid in financing and to facilitate exports and imports and the exchange of commodities and services between the U.S. and any foreign country.” Note that project construction activities may be structured in a way consistent with this definition, particularly where the design-build-operate-maintain (DBOM) method is used, that the prime contractor is principally providing his expertise, or a service. Also note that EXIM can provide assistance to address political risk and devaluation risk, in addition to the more common credit risk. 12 U.S.C 635. • Project Finance Program. The project finance program refers to the financing of projects that are dependent on the project cash flows for repayment as defined by the contractual relationships within each project. This program may be appropriate for providing financing to a U.S. private sector firm that has been awarded a concession contract, typically under a “design- build-maintain-operate” arrangement for a toll or other revenue-generating highway facility. • Medium and Long-Term Loan Program. Medium-term financing is available for up to $10 million dollars and seven years, while long-term financing is available for more than $10 million dollars and beyond seven years. Interest rates are based on Treasury rates for a comparable term plus 100 basis points. The medium and long-term loan program is a “foreign buyer credit program” in which Ex-Im Bank establishes a credit and repayment schedule by concluding a credit agreement with a foreign buyer. Loan disbursements are remitted to the U.S. exporter, while the exporter delivers products or services to the foreign buyer. This program may be appropriate for providing financing to a U.S. exporter delivering a product or service to a Mexican purchaser, whether public or private. • Medium-Term Guarantee Program. The medium-term guarantee program guarantees a lender’s loan to a foreign buyer. The guarantee includes accrued interest. Because Ex -Im Bank approves the documentation before granting the guarantee, the lender is assured that any claim will be paid if presented within the appropriate timeframe. The interest rate on the

January 2004 129 underlying loan is negotiated between the lender and the buyer. usually Ex-Im Bank is approached by the lender or foreign buyer. This program may be appropriate for providing a loan guarantee to a U.S. exporter delivering a product or service to a Mexican purchaser, whether public or private. • Credit Guarantee Facility Program. The credit guarantee facility program guarantees the amount of credit extended to foreign banks, including banks located in Mexico, by U.S. banks. Under this program, the foreign banks accept the credit risk of end users within their own country, enabling smaller companies to have access to dollar financing. Since Ex -Im Bank does not review the underlying credit, the guarantee can be provided as soon as the foreign bank approves the end user’s request for credit. This program may be appropriate for guaranteeing a Mexican bank’s loan to one or more companies that have bid for and/or are /working on a border project. • Medium-Term Insurance Policy. The medium-term insurance policy covers one or a series of shipments to a foreign buyer that has been found creditworthy. Frequently a bank is the insured, and will make a loan to the foreign buyer indirectly by remitting funds to the exporter once insurance coverage has been approved. Ex-Im Bank agrees to pay any unpaid loan principal and interest. The lender takes responsibility for the documentation on the loan, such as the invoice, bill of lading and exporter’s certificate, and does not submit them to Ex-Im Bank. Insurance brokers are often used to provide required application information to Ex-Im Bank and assist the bank with appropriate documentation. Applications may be submitted by an exporter, bank or insurance broker. Obtaining such an insurance policy may be appropriate when a bank extending credit to a public or private Mexican entity desires to insure against the risk of non-payment. • Working Capital Guarantee Program. The working capital guarantee program encourages commercial lenders to make loans to U.S. businesses for various export-related activities. It is designed to help small and medium-sized businesses with exporting potential that need working capital to buy or produce goods, and/or to provide services, for export. It may be used to cover working capital loans to a U.S. business if the lender shows that the loan would not have been made without Ex -Im’s guarantee, and Ex-Im determines that the exporter is creditworthy. The exporter may use this guaranteed financing to pay for raw materials, labor and overhead to produce goods and/or to provide services for export; cover standby letters of credit serving as bid bonds, performance bonds or payment guarantees; coverage retainages and warranties; and finance foreign receivables. This program may be appropriate for providing short-term, working capital financing to smaller U.S. firms that are considering providing a product or service to the Mexican border area for the first time. • Overseas Private Investment Corporation (OPIC) lending/credit enhancement. OPIC, an agency of the U.S. government, is designed to provide “financing, guarantees, insurance and reinsurance of U.S. investments in certain countries around the world”. Note that OPIC and Mexico have negotiated a bilateral agreement that extends specific categories of OPIC assistance to Mexico. Some of the risks for which OPIC assistance is available include risks related to devaluations, expropriation or confiscation, war/ revolution/ insurrection/ civil strife, and business interruption caused by the above events. (Reference: 22 U.S.C 2191) • Small Business Direct Loan Program in Mexico. Under the small business loan program, OPIC has the statutory authority to provide direct loans for U.S. small business without the intergovernmental agreement that is required for OPIC’s insurance and loan guaranty programs. OPIC can lend from $100,000 to $200 million dollars for project investments in Mexico

January 2004 130 that significantly involve U.S. small business or cooperatives; significant involvement is generally defined as at least a 25% ownership interest or other significant involvement. OPIC lending is targeted to those sectors that are not sensitive with respect to environmental and labor issues. This program may be appropriate for providing direct loans to projects in Mexico that significantly involve (at least 25% participation) U.S. small business or cooperatives for small to large dollar-value projects. • New Concession Program for Toll Highways/FINFRA. The New Concession Program is supported by the Fideicomiso de Infraestructura (FINFRA), within the Banco Nacional de Obras Publicas (BANOBRAS). FINFRA translates, roughly, as the Trust Fund for Development of Infrastructure. The project evaluation and planning activities within FINFRA are supported by the Fondo para el Finaciamiento de Estudios (FFE), designed to ensure that SCT selects viable projects in the designated highway corridors: • Two-part federal Concession Program. The first part of the federal Concession Program is an initial or start-up grant funded from FINFRA. This start-up grant, functioning as seed capital, is intended to reduce required private sector investment to a level deemed necessary to attract bids from concessionaires to build, operate and maintain a given toll facility for a period of no more than 30 years. The amount of the start-up grant is capped or limited to a specific amount consistent with the needs of each given project. The second part of the federal Concession Program is a credit element referred to as the Compromiso de Aportacion Subordinada (CAS ). This essentially translates as “Agreement to Provide Subordinated Credit Assistance”. The CAS, designed to finance the gap between the amount of projected toll revenues and cost of the project’s long-term debt service, is limited to the amount identified in the concessionaire’s proposal. It is intended to encourage banks to provide long-term project financing (for terms consistent with a toll highway’s useful life) by assuring them that CAS will be available to cover non-debt service expenses, thereby leaving toll and other project revenues available to meet debt service. The cost of providing the CAS is shared by the Federal and state governments. • Public Finance Initiative (PFI). The PFI, modeled on Britain’s recent experience in partnering with the private sector to advance infrastructure investments, is currently being deployed in Mexico’s southern and southeastern states. Accordingly, unless current federal policy is revised, the PFI may have limited usefulness to projects in the U.S./Mexico border region.

Emerging Finance Options that Jurisdiction in Mexico May Consider

• Investment banks operated by states, cities, or special districts (where interest earned on loans is used to augment capital available for subsequent lending; i.e. a revolving fund concept) • Tax increment financing and special assessment districts (used to generate additional revenues that can be used to pay project construction and/or debt service costs) • Tax incentive or abatement zones (used to promote/stimulate infrastructure investment through reductions in state and local taxes, often property taxes) • Development impact fees (fees assessed on property developers and/or owners to defray the cost of public improvements needed due to private investment) • Initiatives to promote public -private joint development arrangements

January 2004 131 INNOVATIVE FINANCE OPTIONS AVAILABLE FOR THE U.S.

In the U.S., in the early 1990s, the U.S. DOT recognized the need to expand investment in the nation's transportation infrastructure and launched a comprehensive initiative to create new funding tools and expand flexibility of the Federal-aid highway funding program. This "innovative finance" initiative was an attempt to meet the increasing gap between transportation capital needs and available resources, without direct increases in federal grant funding. The initiative also responded to states' calls for greater flexibility in the use of their federal-aid funds.

Nearly a decade later, at least $29.1 billion dollars in innovative finance projects have been advanced, which were supported by $8.6 billion dollars in federal -aid funding. On average, for each federal dollar invested in an innovative finance project, $3.40 of construction investment has been enabled, which compares quite favorably to the ratio of $1.25 to $1.00 for every dollar invested in the traditional grant program. This "leveraging ratio" is an important indicator of the effectiveness of U.S. federal-aid funding. Simply put, greater leveraging means that each dollar invested has gone further - building more projects for the same amount of Federal-aid funding2.

Innovative finance options currently available in the U.S. are reviewed, followed by a review of emerging financing options.

Innovative Finance Options Currently Available in the U.S.

• Transportation Infrastructure Finance and Innovation Act (TIFIA). TIFIA credit assistance is provided in the form of direct loans, loan guarantees, and lines of credit. TIFIA credit assistance may be appropriate for very large projects (typically costing more than $100 million dollars) where 1) a revenue stream can be identified and dedicated to TIFIA debt service and 2) the private sector is willing to play a key role in project finance and/or project management. Ideally the private sector partner will be providing equity, but he/she can also provide borrowed funds and/or expertise. TIFIA is currently being used to finance the California SR 125 project, a privately-constructed toll road, to serve border-related traffic in the San Diego area. ¨ GARVEE and RVEE Revenue Anticipation Bonds. GARVEE and RVEE bonds are revenue anticipation bonds secured by future Federal highway grant funding, but at different stages of the funding cycle. GARVEE is the term used to describe Grant Anticipation Revenue Vehicles, a type of bond secured by future Federal highway grant funds appropriated or allocated to a given state. RVEE, on the other hand, is the term used to describe Reimbursement Vehicles, a type of bond secured by future Federal reimbursement of construction invoices. GARVEE and RVEE bonds may be an appropriate method for financing a project where the expected economic benefits to be derived from the project exceed the cost of the debt; or where the social benefit is so compelling (as in the case of safety or national security enhancements) that debt service costs are deemed reasonable.

2 Cambridge Systematics, Inc., prepared for the U.S. FHWA, “Performance Review of U.S. DOT Innovative Finance Initiatives, Final Report,” July 2002.

January 2004 132

• Arizona. Arizona has issued a total of $182.3 million dollars in GARVEEs: $39.4 million dollars in June 2000 and $142.9 million dollars in May 2001 issued to accelerate a number of freeway and other highway projects. Arizona’s GARVEEs are backed by future Federal-aid with a secondary pledge from certain state “subaccount transfers”. Arizona apparently has not issued any RVEEs. • California. As of February 2003, California has not issued either GARVEE or RVEE bonds. California has no plans to issue RVEEs due to limitations imposed by Article XIX of its Constitution. However, California recently obtained the legislative authority to issue GARVEEs and plans to develop guidelines for implementation of a GARVEE Program by spring 2003. In April 2002, the California Transportation Commission (CTC) programmed the first project for GARVEE financing - the I-15 Managed Lanes Project in San Diego County. In addition, the CTC is currently evaluating GARVEE bonds for other projects, and may amend its STIP to include • GARVEE financing for three Santa Clara Valley Transportation Authority projects. California will probably issue GARVEE bonds for the I-15 Project in January 2004, and may issue GARVEE bonds at the same time for the Santa Clara projects if they are approved. • New Mexico. New Mexico has issued a total of $118.7 million dollars in GARVEEs: $100.2 million dollars in September 1998 and $18.5 million dollars in February 2001 issued to accelerate the U.S. 550/State Route 44 project. New Mexico’s GARVEE bonds are backed by future Federal-aid; although no secondary or back-up revenue was pledged, bond insurance was obtained. New Mexico apparently has not issued any RVEEs. • Texas. As of June 2003, Texas has not issued either GARVEEs or RVEEs. However, after a multi-year debate, Texas obtained legislative authority to issue GARVEEs in early June 2003. Accordingly, Texas is currently investigating the possibility of issuing GARVEE and/or GARVEE-like debt to advance its transportation program, beginning in FY 2004. ¨ State Infrastructure Bank (SIB) Lending. SIBs are state investment banks operating as a revolving fund, in which interest and other income earned is used to make new loans. SIBs are capitalized by a combination of Federal and state funds. SIB loans may be attractive for a small project (varies by state, but typically under $50 million dollars) where a local revenue stream can be identified and dedicated to pay SIB loan debt service. SIB loans are often used to accelerate a project that already is included in a state’s transportation improvement program (STIP).

• Arizona SIB. As of September 2002, 40 loan agreements valued at $430 million dollars have been executed. The Arizona SIB, designated as the Highway Expansion and Loan Extension Program (HELP), was initially capitalized with Federal dollars and State matching funds. In light of the growing demand for SIB credit assistance and limited Federal capitalization available to fund the SIB, in 1999 comprehensive state legislation (SB 1201) was enacted to increase SIB funding through a combination of direct General Fund appropriations, additional state highway funds, and an innovative financing mechanism called Board Funding Obligations (BFOs). BFOs are short-term funding obligations issued by the State Transportation Board, purchased by the State Treasury, and paid back by ADOT program funds. The interest rate on BFOs is tied to U.S. Treasury rates. By leveraging these new funding sources by making short-term loans, from FY 1999 through FY 2007 it is estimated that HELP will provide $600 million dollars in loans to accelerate needed highway programs throughout the state.

January 2004 133 • California SIB. As of September 2001, California has obtained authority to establish an SIB and issue debt through this SIB. Caltrans is currently working to capitalize the SIB, referred to as the Transportation Finance Bank (TFB), with $3 million dollars that was made available through the ten-state pilot project under the National Highway System Designation Act. Additional capital will be provided by required state and local matching funds, once the source of these funds has been identified. California is not currently considering any debt issuance to leverage the TFB. • New Mexico SIB. As of September 2001, one loan agreement valued at $541,000 dollars has been executed. • Texas SIB. As of September 2002, 41 loan agreements valued at $253 million dollars have been executed. As of April 2003, the SIB balance is $15.9 million dollars, and the SIB forecasts that approximately $23.6 million dollars will be available for new loans by January 2004. Although the Texas SIB possesses the authority to leverage its deposits by issuing debt, it has not yet implemented this authority. In order to promote transportation investment in economically-distressed border counties, the SIB has established favorable loan terms, including below market interest rates, for border projects. ¨ Section 129 State Loan Program. The Section 129 program is a state-managed lending program that functions in the same way as the SIB program, but without the administrative structure and expense. Under this program, the state loans Federal-aid funds to a project sponsor - generally a unit of local government - to finance projects that are eligible for the Federal-aid program. Debt service payments return to the state and are generally used for transportation program purposes. Some states may wish to consider deploying such a program where the need for state credit assistance is limited to one or a few projects). A Section 129 Loan may be appropriate where a locality wishes to advance a project that is already included in the Federally-approved state transportation improvement program and where a local revenue stream can be identified and dedicated to pay debt service, but where an SIB loan is not available. An SIB loan may not be available because an SIB has not been established, SIB lending authority has been consumed, or the lag between application and approval is deemed unacceptable.

• Arizona. • California. California has not developed a Section 129 lending program, nor is it currently considering the implementation of such a program. • New Mexico. • Texas. TXDOT has used the provisions of Section 129 to finance construction of the North Texas Tollway Authority and may again use Section 129 to make several additional loans in the future. Projects are selected at the discretion of the Commission. • Toll Credit Program. The Toll Credit Program allows states to calculate a toll credit, based on toll and other program revenues generated by certain eligible facilities. The state can then apply this toll credit as a substitute for its typical 20% cash match, enabling the deployment of cash resources for other needed projects. • Arizona. No Toll Credit Program. • California. No existing Toll Credit Program. However, the state is considering applying for toll credits in the future, using toll revenues associated with its Toll Bridge Seismic Retrofit

January 2004 134 Program. The state has not yet made a decision regarding the use of toll credits as a substitute for its local match, nor has it identified a milestone date for making this decision. • New Mexico. No Toll Credit Program • Texas. $153.6 million dollars in cumulative toll credit is available to substitute for state match. TXDOT began to use some of this available toll credit in FY 2001 for “Public Transportation and Construction Projects”. In addition, the state plans on applying for a toll credit in both FY 2003 and FY 2004. ¨ Other State Credit Assistance Programs (Lending and Credit Enhancement)

• Arizona. • California. The California Infrastructure and Economic Development Bank (created in 1994) provides state credit assistance for highways and other public facilities through the Infrastructure State Revolving Fund (ISRF), the Rural Economic Development Infrastructure Program (REDIP) and the Conduit Revenue Bond Program (CRDP): • ISRF/Road Program: This ISRF program is designed to provide financing for city streets, county highways and state highways. Eligible applicants are local public entities; the project must meet tax-exempt financing criteria. Loans are available for up to $10 million dollars per project. Interest rates are set at 67% of Thompson’s Municipal Market Index for a comparable “A” rated security. Loans can carry up to a 30-year term. • ISRF/Community Facility Program: This ISRF program is designed to provide financing for publicly owned educational facilities, public safety, parks, and recreational facilities. Eligible applicants are local public entities, while the project must meet tax -exempt financing criteria. Loans can be made up to $2 million dollars per project and can carry up to a 30-year term; an annual funding limit applies. Interest rates are set at 67% of Thompson’s Municipal Market Index for a comparable “A” rated security. • ISRF/Community Facility Direct Loan Program: This ISRF program is designed to provide financing for essential community facilities such as clinics, child care facilities, fire stations and public buildings. Eligible applicants are unincorporated areas and cities with a population of under 20,000. Loans amounts can range from $200,000 up to $2 million dollars over a maximum 40-year term. Interest rates range from 4.5% to 5.25%. • ISRF/Public Infrastructure Project Program: This ISRF program is designed to provide financing for public transit, environmental mitigation, port facilities, solid waste collection and disposal, defense conversion, power transmission and distribution and communications projects. Eligible applicants are local public entities, while the project must meet tax-exempt financing criteria. Loans can be made for up to $10 million dollars per project, except for environmental mitigation measures which are capped at $2 million dollars. Interest rates are at 67% of Thompson’s Municipal Market Index for a comparable “A” rated security, while loans can carry up to a 30-year term. • REDIP/Road Program: This REDIP program is designed to provide financing for city streets, county highways, state highways, bridges and related improvements. Eligible applicants are local public entities in cities or counties as defined in the appropriate statute; the project to be financed must support job creation/retention efforts. Loans are available for up to $2 million dollars per project, and can extend up to 30 years. Interest

January 2004 135 rates are set at 67% of Thompson’s Municipal Market Index for a comparable “A” rated security. • REDIP/Public Infrastructure Project Program: This REDIP program is designed to provide financing for utility connections and other projects necessary for industrial or commercial activities that support job creation/retention efforts. Eligible applicants are local public entities in eligible cities and counties as defined in the appropriate statute. Loans can be made for up to $2 million dollars per project, while loan terms can extend up to 30 years. Interest rates are at 67% of Thompson’s Municipal Market Index for a comparable “A” rated security. • CRBP: This program is designed to provide financing for infrastructure investment by issuing industrial development bonds for manufacturing companies, 501(c)(3) bonds for non-profit organizations, exempt facility bonds, and other types of revenue bonds. • Other California lending programs are the State Highway Account (SHA) Loan Program established under the provisions of Assembly Bill 1012 (Chapter 783, Statutes of 1999) to provide credit assistance to regional transportation agencies and Caltrans Grant Anticipation Revenue Vehicle Bonds. Under the SHA legislation, the California Transportation Commission is authorized to advance unallocated State Highway Account funds, in the form of loans to regional transportation agencies, to accelerate transportation projects with a total cost of $10 million dollars or greater, whenever the cash balance in the SHA exceeds $400 million dollars. Interest on the loans is set at the rate paid on money in California’s Pooled Money Investment Account, which is generally higher than other loan rates available to regional agencies. For this reason, there has been no interest on the part of these agencies to borrow money under this Program. • Under the concept of the Caltrans Grant Anticipation Revenue Vehicle Bonding, bonds are sold to finance and accelerate the completion of needed highway improvements, while related debt service is repaid with Federal-aid highway funds, California state highway allocations, or a combination of the two. • California also provides credit enhancement in the form of guaranteed loans under the Rural Development Guaranteed Loan Program for essential community facilities such as clinics, child care facilities, fire stations and public facilities. Eligible applicants are banks and other commercial lenders that are making loans to nonprofits, tribes and other public entities representing unincorporated areas and cities with a population of fewer than 20,000. Loans amounts range from $100,000 up to $6 million dollars. Interest rates, either fixed or variable, are negotiated between the borrower and lender. • New Mexico. • Texas. State credit assistance is offered through the following Texas Economic Development agency programs: (INSERT SAMPLE/ ILLU.S.TRATIVE LOAN TERMS) • Texas Enterprise Zone Program. This program is designed to help cities and counties develop and revitalize economically distressed areas within their jurisdiction. This development tool allows communities to provide state and local incentives to new and expanding businesses. The targeted area, however, must meet certain size and distress criteria. Enterprise zones have been established in El Paso city (5 zones); El Paso county (2 zones); Hidalgo; McAllen; city of Presidio; county of Presidio; Rio Grande City; and Rio Grande Valley FEZ (Empowerment Zone). Incentives available in these enterprise zones

January 2004 136 include tax abatement; tax increment financing; freeport exemption; bonds; and low- interest loans. • Texas Small Business Industrial Revenue Bond Program. This program is designed to provide tax -exempt financing to finance land and depreciable property for eligible industrial or manufacturing projects. • Capital Access Fund. This fund is a public/private partnership between the State of Texas and lending institutions to assist “near bankable” businesses in accessing the capital they need. • Texas Capital Fund - Real Estate Development. This fund provides interest free loans to non-entitlement cities, or cities that do not receive community development block grant money directly from the U.S. Department of Housing and Urban Development. • Texas Capital Fund - Infrastructure Development. This fund provides loans that can be used for private and public infrastructure projects. These projects include water and sewer, natural gas lines, harbor/channel dredging, landfills, street improvements, and various other projects. • Texas Capital Fund - Main Street Improvements. This fund is designed to provide financial assistance to cities for public infrastructure improvements in the central business district. This is turn stimulates the growth and development of small businesses in the area. • Texas Leverage Fund. The fund is an “economic development bank” offering an added source of financing to communities that have passed the economic development sales tax. • In addition, the Texas Water Development Board has established a revolving loan program for border communities. Additional information is available from the Deputy Executive Administrator at (512) 463-8221. • Moreover, the 77th Legislature Appropriations Bill, Rider 42, established the Trade Transportation Initiative. As part of this initiative, TXDOT is directed to: • Consider significant increases to the department’s North American Free Trade Agreement (NAFTA) Discretionary Fund; • Retain any funds replaced by allocation through TEA-21 Section 1119 for use by the department on high priority trade transportation related projects; • Consider immediate relief from local contribution requirements for TX DOT- designated border trade transportation projects; • Consider allocating additional department resources to the planning, design and construction activities related to high priority border trade transportation projects in the border districts; and • Consider more aggressive SIB loan terms for TX DOT-designated high priority trade transportation projects in the border districts. • Commercial Paper Financing of Improvements in Mexico or Mexico Border Zones • California. The state has not yet issued commercial paper to finance border transportation projects, and moreover does not have any authority to spend state funds in Mexico.

January 2004 137 However, the state may consider the use of commercial paper as short-term financing for other non-border projects. • Texas. The sale of $175 million dollars in general obligation bonds and notes, including commercial paper, for financing transportation improvements in the border zone was authorized in November 2001 elections. Specifically, Proposition 2 modified the Texas Constitution (Article III) by adding Section 49 which enabled the Governor to authorize the Texas Public Finance Authority to issue up to $175 million dollars in debt to finance road improvements and enhanced highway access in the border colonias. Accordingly, TX DOT - working in conjunction with the Texas Public Finance Authority - issued $175 million dollars in commercial paper in 2002 to finance improvements to roads serving the border colonias. This debt issuance and constitutional amendment were done in accordance with Senate bill 1296, 77th legislature, which established a transportation program to improve highway access to colonias located in border regions within the TXDOT El Paso, Laredo and Pharr highway districts. • Tax increment financing and special assessment districts (municipalities, counties, special districts) • Tax incentive or abatement zones (municipalities, counties, and special districts)

• Enterprise zones designated under Federal and/or state law • Development impact fees. Development impact fees are fees assessed on developers and/or property owners to defray the cost of public improvements needed due to private investment. The city of San Diego has used development impact fees to pay for a portion of the 905 project. This tool is widely used throughout the San Diego region, and could be targeted to border projects needed to accommodate increases in traffic related to specific private investment. • Initiatives/programs to promote public-private joint development arrangements • Concession arrangements with private sector • Municipal lending/credit enhancement programs • Brownsville TX • McAllen TX • Laredo TX • El Paso TX • El Paso County TX • Santa Teresa NM • Nogales AZ • Calexico CA • San Ysidro CA • San Diego CA

• Industrial and economic development agency programs/initiatives (t/b/d) • Brownsville Economic Development Council • McAllen Economic Development Corporation • Rio Grande Valley Partnership

January 2004 138 • Laredo Development Foundation • Greater El Paso Chamber of Commerce • City of El Paso Economic Development Department • Donation of publicly and privately-owned right of way to serve as state share • Donation of funds, materials and services to serve as state share • Use of Section 63-20 bonds. Bonds are issued under Section 63-20 of the Internal Revenue Code in order to obtain federally tax-exempt status. This status is available where a bond is issued by a not-for-profit corporation and for a public benefit: (e.g. a public facility that a government entity builds or accepts). • Use of a qualified 501(c)(3) corporate structure. This structure is used to issue Federally tax- exempt debt by means of Section 63-20 bonding, revenue bonding, or other tax -exempt financing mechanisms. The 501(c)(3) corporation must meet all appropriate U.S. Internal Revenue Code requirements for a not-for-profit corporation organized for a public benefit.

Emerging Finance Options Jurisdictions in Mexico May Consider

• Investment banks funded by states, cities or special districts; a revolving fund concept (i.e. where interest earned on loans augments the capital balance available for subsequent lending). These would be in addition to state-operated SIBs. • DB, DBOM, DBOMF arrangements (with particular emphasis on including the Finance function, thereby transferring the finance risk to the private sector) • Concession arrangements by which contractor is compensated through user fees (typically hard or shadow tolling); joint development revenue; or contractual payments from government that are usually negotiated. • Shadow tolling • Texas Mobility Fund (authorized by November 2001 election; but no statutorily dedicated funding source; per James Bass, Texas Mobility Fund can be used to back bonds for highway construction and other transportation projects, including light-rail systems; possible sources a funding source include fees and taxes that are not constitutionally dedicated to some other state activity/purpose) • Texas Regional Mobility Authorities (authorized by 2001 legislation; but again no statutorily dedicated funding source • Texas Transportation Commission ability to participate in financing of a start-up toll project through grants (authorized by 2001 legislation

January 2004 139

CHAPTER 6: SUGGESTED LEGISLATIVE PROVISIONS AND CONSIDERATIONS FOR FUTURE WORK

This first part of this chapter provides some guidance for federal legislative provisions for Mexico and the U.S. The focus of the recommendations is roadway related legislation. The remainder of the chapter identifies recommended enhancements for a potential second phase of the BINS project.

SUGGESTED LEGISLATIVE PROVISIONS

The ideas presented in this section are just a glimpse of a wide array of options available to the U.S. and Mexican governments.

In general, legislation should be proposed that addresses the “disconnects” between transportation planning and programming in the U.S. and transportation planning and programming in Mexico along the border. This report and others have highlighted the significant trade volumes (and increase in trade volumes) that move across the U.S.-Mexico border. The growth rate of dollar trade between 1995 and 2000 was more than 17 percent per year for cargo that crossed the U.S.-Mexico border by truck. This dramatic increase in trade volumes has put tremendous pressure on the transportation infrastructure in place – which was not envisioned for the NAFTA related trade. Transportation planning and programming that helps coordinate the activities of agencies on both sides of the border should be encouraged to help trade and passengers transit the border safely, efficiently, and securely.

Suggested Legislative Provisions for Mexico

In Mexico, there is already discussion about methods and technology that would expedite truck crossings at the U.S.-Mexico border while improving security. These ideas entail securing the cargo inland in Mexico before it reaches the U.S.-Mexico border and automating the bill of lading which contains the details of the cargo. If the Mexican government should decide to pursue this avenue, it is suggested that formalized discussions occur with the U.S. to ensure agreement on the methods and techniques to be used. If Mexico and the U.S. agree to a set of procedures, these procedures should be formalized into legislation with financial support so that the necessary infrastructure can be implemented along the border.

The Mexican Federal Government funds all federal highways and sets priorities. One suggestion would be for the Mexican Federal Government to designate a portion of the highway funds to be used in the border region. This would ensure some monies are always allocated to the U.S.-Mexico border. In the United States, TEA-21 specifically allocated funds for projects in the border region. The future transportation act also proposes to continue those programs.

January 2004 143 Suggested Legislative Provisions for the United States

The legislation that has funded most of roadway improvements in the United States from federal fiscal years 1998 to 2003 is TEA-21. The Highway Trust Fund (HTF) is the source of funding for most of the programs in the Act and is composed of the Highway Account (which funds highway and intermodal programs) and the Mass Transit Account. Federal motor fuel taxes are the major source of income into the HTF.

TEA-21 contained provisions for varied topics such as Congestion Mitigation and Air Quality Improvement (Section 1110), National Corridor Planning and Development (Section 1118), and the Coordinated Border Infrastructure Program that funded infrastructure in the border region (Section 1119). These three sections were important to all of the U.S. states along the U.S.-Mexico border, and it is suggested that more funds be designated to these programs and that they are maintained in future U.S. legislation. Growth in population and economic activity in the binational border region will result in increased traffic and state and local agencies will come under increasing pressure to expand their transportation infrastructure. The three sections of TEA-21 specified above provide crucial funds that will help U.S. state and local agencies better prepare the border region for the future.

It is suggested that legislation be proposed that relates border security with transportation infrastructure. Since the tragic events of September 11, 2001, the U.S. has implemented increased security measures at all of its international ports of entry. On the U.S.-Mexico border there are 44 land ports of entry and each of them has its own security focus. In considering legislative provisions for the border area, technologies that can improve traffic flow while maintaining security are pivotal. From this perspective, it is suggested that language for future security measures be intertwined with improvements to transportation infrastructure due to this key linkage. Both security and transportation could benefit from some of the newer technologies and legislation needs to address this fact.

Also with regard to security, the U.S. should consider allowing a portion of the fees obtained from secured and expedited border crossing programs (such as the Secure Electronic Network for Travelers’ Rapid Inspection - SENTRI) to remain in the geographical area in which they are collected. These funds could be used to help develop infrastructure around the POE.

FUTURE WORK

The third objective of the BINS project was to create a border-wide database and evaluation tool to prioritize each state’s transportation corridors, based on the methodology and process approved by the JWC, which can be used for future assessments. The database system plan for the BINS project and considerations for future work to enhance the assessment of border transportation infrastructure are presented in the remainder of this chapter.

January 2004 144 Database System Plan

The maintenance and enhancement of the database system plan of the BINS project would continue to provide transportation planners and other users with a tool to update the assessment of transportation infrastructure along the U.S.-Mexico border region. The system plan describes two main sections: the corridor database and the project database.

Transportation Corridor and Project Database

The Scope of Work for the BINS project contained the following objective with regard to developing a system area data base plan.

“Establish a broadly accessible border-wide data bank with protocol for an ongoing updating process; closely coordinate the development of the databank with work on the Binational Geographic Information System tasks.”

The specifics tasks associated with the data bank objective are detailed in Task 4 of the Scope of Work (see Appendix 2).

The database system plan consists of storing the transportation corridor and project data related to the BINS project in Excel spreadsheets, posting the spreadsheets on a Web site, and allowing users to download them at their leisure. The rationale for this approach is described below.

The border-wide database refers to all border data related to this project and the U.S.-Mexico Binational Border Transportation Planning and Programming Study. While the list of facilities in the earlier study provides a great deal of detail, it does not provide the information used to conduct the corridor evaluations. For example, the earlier study lists all the highways; however, it does not contain details about highway segments such as volume, capacity, LOS, and AADT. In short, the data collected for the BINS study and the earlier study are not compatible.

Rather than attempt to combine the two different databases, the BINS project focuses on the data collected by the BINS project. These data are collected in Excel spreadsheets. There are five types of spreadsheets and a copy of each is contained in Appendix 7.

Discussions with a database specialist revealed that it is not easy to convert the data in the data collection forms (the Excel spreadsheets used to collect the corridor evaluation data from the ten states) into a format that could be used as input into an MS Access database. In addition, the evaluation component would require extremely complex database queries to generate the output tables.

Thus, the plan is to store the corridor evaluation and project raw data in the Excel spreadsheets that were used to obtain the data from the states. The key advantage of this approach is that spreadsheets are more widely used and understood than databases, and therefore more user- friendly. This approach allows every state to use the same methodology to update corridor evaluations and lists of significant transportation projects.

January 2004 145 Accessibility

Those desiring the corridor evaluation data and the transportation project data can obtain it in two methods. First, they can contact SourcePoint to obtain a CD ROM containing the report and the data contained in Appendices 7, 8, and 9. Second, FHWA will post the report and data on FHWA’s Web site (Web page to be determined), and users can download it.

Protocol for Updating the Raw Data

This section describes the protocol that states can follow to conduct future assessments. Updating the data used to compile the corridor evaluations requires two steps: modifying the questionnaires, and inserting the data, as presented below:

Step 1: Modifying the Questionnaires

There are two modifications that need to be done: Changing the dates and changing the facilities. The dates are located at the top of the columns and currently read year 2000 and year 2020. Those wishing to update the questionnaires need to insert the new dates they desire. Regarding the list of facilities, the listing in the questionnaires represents the facilities in place that were appropriate when the survey was undertaken in March 2003. This list should be reviewed to determine if additions or deletions need to occur.

Step 2: Inserting the Data

After the questionnaires have been modified, the next step is to insert the appropriate data. Each questionnaire contains its own set of instructions, and has an example of the proper manner to complete the questionnaires. A copy of each of the five questionnaires is contained in Appendix 7.

Considerations for Future Work

A second phase of BINS could accomplish improvements in the process of corridor and project identification of binational and multistate transportation corridors. The concept of establishing binational corridors would capture the synergy of crossborder trade and travel more fully. It would allow the prioritization of corridors and projects under a new light by providing a better understanding of the mutual economic benefits for both countries. Also, it would point to the positive results of coordinated binational planning and, at the same time, would provide a signal when that coordination is not present. For example, establishing binational corridors and identifying key transportation projects would show whether both countries are planning to implement improvements on transportation facilities or POEs on a similar schedule.

January 2004 146 In addition, a second phase of BINS could enhance the corridor evaluation process by incorporating a broader set of criteria. Issues such as security, environment, and safety should be considered as additional elements. Current criteria could be reviewed to determine whether thresholds should be established, such as minimum levels of daily traffic on a facility, among others.

Although a binational geographical information system (GIS) database was not available during the development of the BINS project, a second phase of BINS could incorporate its capabilities. Such a system could facilitate the process of corridor data administration and, most importantly, it could assist in locating and analyzing transportation projects on the identified corridors. A binational GIS database could also assist in the production of maps, which are important visual tools for transportation studies and decision making.

Finally, it is recommended that the evaluation of U.S.-Mexico border transportation corridors be updated regularly, building upon the BINS project.

Further details on the additional elements proposed to be included in the corridor evaluation criteria, which include environmental, security, and safety issues, are presented below. Future work to integrate BINS and the binational GIS also is discussed.

Environmental Issues

Pollutant emissions from mobile sources, such as automobiles, buses, trucks, airplanes, marine engines, and locomotives adversely impact regional air quality and the climate. These factors have not been incorporated in the evaluation process in the BINS project.

Transportation planning agencies focus air quality planning mainly on pollution from on-road motor vehicles, including cars, trucks, and buses. Future work on border related issues needs to examine the current level of emissions for key pollutants and estimate future emissions associated with projected traffic volumes to provide an understanding of the environmental implications of projected growth in travel. In addition, sensitivity analysis could be undertaken to understand the environmental implications of funding or not funding projects.

Below is a description of key transportation related air pollutants:

Ozone - Ozone is the main component of smog, which is caused by emissions from cars, power plants, chemical plants, and other sources. Oxides of Nitrogen (NOx) and Reactive Organic Gases (ROG) react in the presence of sunlight to form smog. These pollutants are called ozone precursors.

On-road motor vehicles generate a high proportion of the smog-forming emissions. Other large sources of air pollution are off-road mobile sources, such as ships, airplanes, trains, utility engines, and construction and farm equipment. In the U.S., all mobile sources currently generate about half of the smog-forming pollutants.1

1 U.S. Environmental Protection Agency, Mobile Source Emissions: Past, Present and Future, http://www.epa.gov/otaq/invntory/overview/ (site accessed on 8/14/03).

January 2004 147 Fine Particulates - Particulate matter represents solid or liquid particles found in the air, such as dust or soot. Mobile source particulate emissions consist mainly of very tiny particles, also known as PM2.5, because they are less than 2.5 microns in diameter.

In the U.S., about one-fourth of PM2.5 is generated by mobile sources. Diesel -powered vehicles and engines contribute more than half the mobile source particulate emissions.2

Although not generated directly by vehicle engines, dust from traveling vehicles on unpaved and paved roads also contributes to fine particulates in the air.

Carbon Monoxide - Carbon monoxide forms when carbon in fuel does not burn completely (incomplete combustion). In the U.S., the main source of carbon monoxide in the air is vehicle emissions.3

Tracking air quality in the U.S. has provided insights into emission change over time. As technology has progressed, ozone and carbon monoxide emissions have decreased during the last two decades. By contrast, particulate matter is increasing as the volume of “miles traveled” by vehicles increases. Further, there is an abundance of air quality statistics for the U.S., but fewer statistics are available on air quality in Mexico.

As part of the recommended work, forecasts of on-road motor vehicle emissions inventories should be prepared to understand the impact of projected travel on the future road networks (which would include the proposed transportation projects). Emission projections for off-road vehicle sources, especially those related to transportation would also assist in understanding air quality impacts of future travel.

A review of proposed legislation should be undertaken to get a sense of proposed changes to emission laws and their impact on air quality and global warming. Finally, analyses need to be undertaken that will relate vehicle emissions to idling and roadway speeds in order to determine the relationship between air quality and congestion.

In addition to air quality issues there are also “land use” issues associated with transportation infrastructure. For transportation related projects identified in an improvement plan, environmental analyses are prepared to ascertain the impacts on the environment from the planned projects. Future work on border issues should examine these environmental documents and summarize two items:

1. The main impacts from implementing the transportation projects. 2. The mitigations being implemented to minimize the environmental impacts.

Security Issues

The Department of Homeland Security (DHS) was created in 2002 in response to the terrorist attacks of September 11, 2001. DHS consolidates 22 diverse agencies into one department. One of DHS’ five divisions is the Border and Transportation Security (BTS) Directorate. BTS is responsible for maintaining the security of the nation's borders, ports of entry, and transportation systems. It

2 Ibid 3 Ibid

January 2004 148 includes agencies such as the Transportation Security Administration, U.S. Customs Service, the border security functions of the Immigration and Naturalization Service, and Animal & Plant Health Inspection Service.

DHS has begun implementing new security requirements and has deployed new technologies at land, air and sea borders. DHS also has held bilateral meetings with Canada and Mexico to discuss security initiatives of mutual interest.

DHS also will establish an automated entry/exit system called the US-VISIT (U.S. Visitor and Immigrant Status Indicator Technology) program.4 It is envisioned as an automated border security and enforcement tool that will capture point of Entry and Exit information by visitors to the United States. The system would establish an electronic check-in/check-out system for people who come to the U.S. to work, study or visit, using biometric identifiers, such as photographs and fingerprints.

New security requirements for international and domestic maritime trade have been proposed for implementation in July 2004 at ports throughout the country. These requirements include screening of cargo and development of vessel, facility and port security plans, among others.5

Application of new technologies will be vital to implement DHS’ responsibilities while considering the economic, social, and cultural linkages between the United States and Mexico. One area of technological improvement that is important at the border is the ability to expedite the crossing of people and goods over the international border while maintaining security of the border. SENTRI has already been implemented at several border crossings on the U.S.-Mexico border. This system expedites border crossing of individuals in passenger vehicles.

New programs are under development to expedite commercial vehicle crossings. The Free and Secure Trade (FAST) system is operating in El Paso-Juarez and will be implemented in Otay Mesa in 2004. At least one study has envisioned a “CyberPort” concept that “looks beyond technology and beyond the port compound to consider a holistic, system-wide approach to the development of the entire trade-flow process – from the point of origin to the point of destination, and the CyberPort concept evaluates equally and simultaneously the considerations of safety, security and trade-flow efficiency.” All of these ideas are important to the border region – especially after the events of September 11th, 2001. Future border related work should incorporate data on the volume of passenger vehicles and number trucks that cross the border that use these “smart” systems.

Future work on key U.S.-Mexico transportation corridors should consider the implementation and impacts of new security requirements.

Safety Issues

Accident rates are a function of many factors – some are related to drivers, some factors are related to congestion, some factors are related to transportation facilities while others are a function of the

4 U.S. Department of Homeland Security, Fact Sheet: US-VISIT Program. 5 U.S. Department of Homeland Security, Fact Sheet: Maritime Security Requirements, October 2003.

January 2004 149 vehicles and equipment. According to U.S. DOT, transportation facilities rank third as the cause of lost years of life in the U.S. (behind heart disease and cancer).6

U.S. DOT established a program titled the Safety Data Initiative (SDI). The goal of the SDI is to improve the quality of transportation data so that U.S. travel risk factors can be identified, quantified and minimized. Within the SDI, there are 10 projects each dealing with different topics, ranging from reengineering DOT data programs, to expanding, improving and coordinating safety data analysis. One of the projects (Project 6) examines leading indicators or precursors to accidents.

Future work on the corridors within 100 km of the U.S.-Mexico border needs to incorporate safety data collected by the U.S. states under the SDI. By collecting some of the pertinent data, the safety of the highways and the corridors can be quantified and included as part of the analysis. Conducting a search of Project 6 of the SDI initiatives to obtain a list of leading indicators that cause accidents should be undertaken, particularly those items related to highway infrastructure that cause accidents. To the extent these “leading indicators” can be obtained for each corridor, they should be compiled and included in the corridor evaluation. Availability of similar data for corridors in Mexico should be investigated.

Geographic Information Systems (GIS)

The current BINS project was not able to incorporate the BINS data into a GIS database to plot corridors and projects. Future work should build upon the work already done under the corridor evaluations and be fully integrated with the GIS system being developed by the Binational Border Geographic Information System (BGIS) project. In this manner, a visual representation of all the data could be created to help planners understand the similarities and differences of the corridors.

One issue that will facilitate the integration of the corridor evaluation data with the GIS is the conversion of the BINS data into a form that is compatible with the GIS database. As is recommended, it is believed that the BGIS project should convert the BINS data to a database compatible with the BGIS database. Further, the BGIS project should recommend a form to collect future data that would meet two criteria:

1. Be easy to incorporate into the GIS database 2. Be easy to incorporate into the spreadsheets currently used to evaluate transportation corridors

Separate from the BINS data, the BGIS project should recommend a schedule for periodic updates of the GIS database.

6 U.S. Department of Transportation, Safety Data initiative, see the website http:/www.bts.gov/sdi

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