Thursday, October 28, 2010

Why I am not worried about the ecnomy

I just did a return on investment calculation for the payoff of the Queensboro dedicated BRT line. I use a partial sum of gas saved plus time saved, then add a multiplier for these traffic gains.I have looked at four of the  variety of these lines across the USA. It is a revolution and is paying off as we speak:

The USA has about 200 high priority corridors like the Queensboro, each solution should generate $200 million in value/year. Another 500 should generate $150 million, and the much larger group generates $80 million. This is my guesstimate, resulting from my job as human search engine.

So, just applying lane control and dedication to specific chokes point, and dealing with commuters only, we end up with 2-3% gain in GDP above baseline. But as you add cargo, fill in the high speed long haul and get traffic control down to the last mile, then one can predict a 10% boost to the recessed baseline GDP over the next ten years.  These are simply unplanned endogenous gains, pure gold dug from sand and a little concrete.

Remember the price to install these things, $20 -$60 million is a likely two sigma range, so their pay-off is in three to five months.  That pay-off ratio is gold to the venture community.  It is a virtuous cycle when the technology lets us boost speed up to the wheel technology, basically anywhere.  So each boost in the variety and capability of the wheeled transports gets us that multiplier all over again.

Those links to the right on this page, the transportation links, all have similar stories.

No comments: