Friday, May 13, 2011

How to keep your high-speed rail system operating: Replace it every 30 years.


Here's a quickie comment for you about High-Speed Rail costs.  There are endless discussions about the cost estimates regarding construction.  In California, those estimates have gone from $33 billion several years ago, to the current $67 billion and we will doubtless see much higher numbers as the Rail Authority is compelled to include all the components that they are currently and conveniently overlooking.  And they won't even start digging holes until late next year.  Just wait until actual construction bids start coming in.

Then there are the operating costs that the rail authority claims will be covered by ticket sales.  That, of course, is transparent nonsense.  All high-speed rail systems now in operation require extensive government subsidies except, ostensibly, two that break even on operating costs (ignoring debt service) including the heavily used Paris to Lyon TGV route. Frankly I'm not convinced that there are not indirect subsidies provided by the government that aren't factored in when these results are calculated.

But, here's a line item that no one has had the temerity to calculate into the cost equation.  Replacement.  Randal O'Toole, a professional transportation guy, says it this way:

In estimating track maintenance costs, the analysts appear to have looked ahead only 30 years. But the real rail maintenance costs begin AFTER the system is 30 years old - when the entire system must be rebuilt at nearly the same cost as the original construction. The 35-year-old Washington Metrorail system is falling apart today because no one foresaw or budgeted for this cost. 
From The Detroit News: http://detnews.com/article/20110513/MIVIEW/105130362/O’Toole--The-Great-Train-Con-2---Michigan-Cooks-the-Books#ixzz1MHFizGvF

In other words, as financier and former CFO William Warren puts it, the California train, if ever built, will cost the state from $1 billion to perhaps $3 billion per year.  If, after 30 years of operation, equipment replacement costs are included, it will be many billions more.  

Operating costs are not merely electric power (fuel) costs, high as those will be, since they will be carbon fuel based. (We won't have alternative energy cost-effective production for many generations.)  Please calculate the energy costs for a train going 200 mph at over twice the energy costs of one going 100 mph. (The same is true for your car driving at 40 mph or 80 mph.) Will these costs be high?  Have you looked at your electric bill lately?

In the same way that speed costs for energy consumption, it also costs for hardware depreciation and wear.  At the high speeds of HSR, things wear out much, much faster. Especially those components that require high precision will wear out beyond acceptable safety levels much more quickly.  

Rather than comparing high-speed rail with the regular Amtrak heavy-rail systems, they should be compared to commercial aircraft, the structural and mechanical safety of which is highly critical and the wear considerable.  We are currently watching with considerable anxiety as 25 year old commercial aircraft demonstrate metal fatigue and component deterioration exceeding safety levels.  (Smart travellers avoid flying on those aircraft.)  Same with high-speed trains.  

A good comparison is between racing cars and regular cars on the streets. Racing cars wear out very rapidly. Engines, tires, and other components require constant replacement.  To remain competitive, these cars are frequently upgraded or totally replaced with newer, better ones.  High-speed rail is exactly like that.

Add more dollars to high-speed rail operating costs for 30 year replacement, and figure out who will pay for that.  Here's a clue; the taxpayer; i.e., your kids and their kids. They may not ride them, but they sure as hell will be paying for them.

As sailors say about yachts; it's not the high purchase price that kills you; it's the up-keep.  That's why they call boats "holes in the water surrounded by fiberglass that you pour money into."