Monday, January 31, 2011

Where the game is being changed: Washington

This is the kind of news we have been following:  What is happening in Washington regarding high-speed rail?  

The mood in Washington, especially among key players such as John Mica, seems to be that if any high-speed rail is to be built anywhere in the US, it ought to be in the Northeast corridor, between Boston and Washington.  Oddly enough, we have been saying this at least since 2008. Well, better late than never.

The reasons for this position are well described in the article, below. One of the points made here is never discussed by the HSR promoters.  That what is likely to be built here in the US (if they ever get enough funding, which does not seem likely) is already obsolete in terms of cutting edge rail technology.  Japan and other countries, especially China, are working on trains far faster than the 220 mph technology we covet.  So, to put it into terms that are so popular among politicians, in the world of high-speed trains, the US can never be more than #2, second best.  Can we, with our hyperinflated egos,  live with that?

The message has become, if the trains are only fast enough, bring back the trains.  Never mind the costs. Regardless of the costs, we must have our high-speed trains or appear weak to other nations.
Note that within the rage for high-speed rail, only in California or Florida is real high-speed even an issue. The other states are happy to put those few dollars into their regular Amtrak passenger upgrades so that they go faster than they do now.

About the Northeast corridor.  Spending well over $100 billion dollars -- perhaps twice that much or more -- buys us a HSR travel time saving of 2 hours and fifteen minutes. In reality, it won't be anything close to that time saving.  It never is.  And, those who actually require that time benefit can and do fly.  For the rest of us, it's obviously a high-priced luxury we really don't need, especially at those capital costs and premium ticket prices. 

Said another way, there's something whimsical and self-indulgent about these HSR trains; somewhat like cosmetic surgery.  It's nice to have that nose or boob job; but do we really need it?  And, if we want it so much, should all us taxpayers be obliged to buy it?  I don't think so. 

Other issues.  Public/private partnerships.  Even if the government does build the trains, that rail system will be money losers requiring a permanent heart/lung machine support from each and every state with a HSR corridor.  They play; we pay.  So, why would any private investor put his or her money into a money loser? 

So, to ask that question again, who will be willing to invest in a project such as this? Nobody, unless there are government secured guarantees of an investment return.  Boy, is that a bad deal for us!  And, it's illegal in California.  Read AB3034.  That legislation prohibits any subsequent state revenues beyond the bond measure itself.  That means, no state guarantees. And, that in turn means no private investments.

As we read various legislator comments, the realities of low-ball cost projections and predictable cost overruns are finally getting a lot more attention, and it's about time.

Whatever cost estimates are being put forward, either for our California disaster-in-the-making, or the projected and now popular Northeast Coast corridor, we can already safely predict three and maybe four times as much.  Where will that much money come from?  Borrowing.  Who pays for the costs of such borrowing?  Why, we do, of course.  Unless the government finally says no.

Keep your eye on Washington.  


House Transportation Committee Knocks High-Speed Rail Funding Plan

by Lauren Darson

January 28, 2011  -  Members of the U.S. House of Representatives Committee on Transportation and Infrastructure Thursday criticized high-speed rail funding plans by suggesting that the $8 billion set aside from the American Recovery and Reinvestment Act for projects around the country instead should be pumped almost exclusively into the Northeast Corridor--where only $109 million was allocated. Committee members argued that high-speed rail development between Boston, New York and Washington would ease chronic airport delays in the region.

"This is our nation's most congested corridor, on land and in the air," said Rep. John Mica (R-Fla.), chairing the committee's first hearing of the 112th Congress. "Seventy percent of our chronically delayed flights begin in New York airspace. [Amtrak] Acela is moving at a snail's pace. Instead of providing a visionary transportation link in America, we continue to support an antiquated unproductive corridor that struggles to meet the needs of its many users."

Also including such cities as Baltimore and Philadelphia, the Northeast Corridor accounts for nearly a fifth of the U.S. population and is the only region in which Amtrak is profitable.

Amtrak's Northeast Corridor Infrastructure Master Plan, issued in June 2010, called for a $52 billion capital investment over 20 years. Committee members chastised this plan, claiming that the development outlined in it would actually require at least $117 billion and not be completed until 2040. Members pointed out that the plan would not go far enough in achieving President Barack Obama's goal of providing "within 25 years" high-speed rail access to "80 percent of Americans," according to his Jan. 25 State of the Union address.

At the current pace, "Amtrak will never be capable of developing the corridor to its true high-speed potential," Mica said. "The task is too complex and too large-scale and can only be addressed with the help of private-sector expertise. They will never get the funding for it with the plan that they currently proposed."

Said Rep. Bill Shuster (R-Penn.), who serves as chairman of the subcommittee on railroads, pipelines and hazardous materials: "Unfortunately, the United States is far behind the curve on high-speed rail. Europe [has] been at work for decades on an impressive high-speed rail network. Japan is working on a new high-speed train that will carry passengers at up to 310 miles per hour between Osaka and Tokyo, augmenting their existing bullet trains. And China is spending nearly $300 billion to develop 8,000 miles of new high-speed track by 2020."

According to testimony from former Pennsylvania Governor Ed Rendell, "We are spending money to go from 83 miles an hour to 110 miles an hour. If we are going to compete with those countries, it's too slow. We've got to get real."

Currently, Amtrak Acela between New York and Washington reaches a top speed of 83 miles per hour. Between New York and Boston, it tops out at 72 miles per hour.

Presented during the hearing, a University of Pennsylvania study on high-speed rail in the Northeast Corridor estimated that $98 billion would be needed to build two dedicated high-speed rail tracks between Boston to Washington. If built, those tracks could cut total trip time by 45 minutes between New York and Boston, and by 90 minutes between New York and Washington.

Although the National Business Travel Association did not submit testimony for the hearing, director of public policy Shane Downey previously indicated that NBTA supports high-speed rail funding, but only if there is a better plan.

Footing The Bill

Committee members and those testifying agreed that $8 billion for high-speed rail scratches the surface of the total funding needed.

According to Rep. Corrine Brown (D-Fla.), "For eight years under the Bush Administration, zero funds went to Amtrak. This is the first time we have made a major investment in high-speed rail. This is beginning."

Some Republican representatives advocated that tracks be leased to the private sector but representatives from Goldman Sachs & Co. and Morgan Stanley questioned how quickly a return on investment would be realized.

"Certainly public funds can be leveraged through private investment; however, it is a delicate balancing act," said Goldman Sachs managing director John Ma. "What risk will the public retain and what would be moved to the private?"

Separately, the Republican caucus this month in a set of recommendations on cutting government spending suggested that annual Amtrak funding be slashed by $1.5 billion annually. The committee's Republicans said Amtrak funds have been "mismanaged." They seek "stronger accountability and reform of rail service."

Source: Business Travel News

Edited by Jay Campbell, David Jonas and Mary Ann McNulty     © 2011 by Northstar Travel Media, LLC