Saturday, March 5, 2011

The Chinese are screwing up their HSR program; pay attention!

This subject of Chinese HSR scandals has been around in various US and English-language Chinese newspapers for some time.  China's high-speed rail program is in trouble.  We bring it up here for specific reasons.

First, we can consider this, in a perverse sort of way, good news.  That is, if the Chinese are screwing up high-speed rail, and we so wish to emulate their so-called success, why are we not also screwing up our high-speed rail efforts for the very same reasons, greed and haste?  

The fact is, we already are.  Perhaps not exactly in the same way, but the history of the CHSRA in California is a deplorable record of incompetence and dishonesty.  That's not a good start.  Only those of us whose radar screens are tuned to watch for all the pit-falls in the HSR efforts are willing to see China's HSR rise and "fall" as red-flag warnings for us. Which is to say, watch China closely; it's an object lesson from which we should learn before we make their mistakes as well as our own.

Second, there have been many discussions in the US about receiving a massive dose of financial help from overseas. Both China and Japan have already dangled very tasty bait for us to jump at, offering package deals of rolling stock and the money to pay for it, as well as invest in the construction and development of the project in California.  To this I also say, beware of such gifts. If there is the suggestion that this is generous charity from highly competitive nations as we seek to surpass their economies and rail systems, we will be sadly mistaken. These offers are not gifts, they are -- for us -- further and perhaps permanent indebtedness.  Just what we don't need at this time.

Being a life-time pessimist, I take no comfort in China's troubles or that we will learn from them.  The reason is that the rail promoters on our side of the Pacific are not out to build a marvellous high-speed rail system in the most effective way; they are out to build whatever they can with whatever funding they can get our hands on, regardless of the outcome.  The people who have their hands on the cash keep showing us glitzy pictures of the future with sleek trains whizzing across the California or Florida landscape.  But that's not the reality.  That's marketing.  The reality is sleazy back-room politics and deal making. Probably just like in China.

There are reasons for having hope that the Congressional Republicans will be successful as they negotiate the Transportation budget with high-speed rail removed from it.  If that becomes the case, then desperation will enter the thinking of our California HSR efforts, and those overseas offers will  become far more attractive.  Let's hope not, but in my mind, with desperate people, desperate measures are highly likely.  This article raises these concerns.

China’s Growing High-Speed-Rail Troubles
March 2, 2011 2:07 P.M.

By Lou Dolinar

The Chinese high-speed-rail scandal appears to be metastasizing. The latest casualty, reported this week by AP, is Zhang Shuguang, an engineer in charge of research and development, under investigation for “severe violation of discipline.”

In February, the head of China’s Ministry of Railways, Liu Zhijun, was removed on corruption charges. No official details, but kickbacks, bribes, illegal contracts, and sexual liaisons are part of the picture. Unless the mess is a big one, some analysts say, the Chinese government would tend to protect such a high-level bureaucrat.

The Chinese rail system has been touted by American rail enthusiasts, including President Obama, as the great wave of the future. In fact, it seems to be fulfilling most of the dire prophecies of HSR opponents in the U.S. Ridership on many of the lines is below projections. Cash-flow problems have pushed the price of financing significantly higher, and may well be unsustainable. Substandard workmanship is widespread, with concrete bases for system tracks deteriorating to the point where trains may have to run below rated speed in the near future. Cost overruns are anyone’s guess, thanks to China’s opaque securities reporting. Foreign firms that have worked on the projects say China is stealing their intellectual property.

And the system is deeply unpopular with working- and middle-class Chinese, who can’t afford the pricey tickets. Part of the rationale for the HSR system was to shift passenger traffic to make room for more freight trains on existing standard-speed lines. But tickets on those lines were a fraction of the price of comparable HSR seats, and those trains are disappearing, leaving million of Chinese without economical transportation options.

It will interesting to see whether the scandal spills over to any of the Chinese companies that are currently angling for contracts to build similar projects in the United States and elsewhere.