Thursday, June 30, 2011

Instead Of California High-Speed Rail, Why Not Networked Regional Transit, Which We Need?

You have been reading (assuming you follow this blog) about the far greater importance of solving the urban and regional transit problems that beset our major populations centers in California than running an over-priced luxury train between San Francisco and Los Angeles.  Both of these cities anchor high-density, but also highly distributed populations, where they live and where they work throughout the Bay Area and in the LA Basin.  

And that's where there should be major development of highly integrated, networked transit systems consisting of all available modalities, of which rail is merely one.

An organization titled has provided a White Paper by Michael Setty, called Beyond High Speed Rail: California Networked Transit.  It's 18 pages long with many graphs, maps and charts.

Here is an article about it from

Beyond High Speed Rail: California Networked Transit
Written by Administrator   
Tuesday, 28 June 2011

Transportation networks are like plants: there must be a balance between the "trunks" and "branches" for both to be healthy and thrive. Unfortunately, as currently conceived, California's High Speed Rail (HSR) proposal is all trunk and no branches. Current HSR design philosophy imposes an entirely new, separate, extremely costly infrastructure that is not capable of passenger train “interoperability” to/from existing rail lines. Due to this and other problems, California’s HSR faces serious trouble. 

To address this problem, has produced White Paper 2011-1, Beyond High Speed Rail: California Networked Transit. This White Paper proposes a radical change in design philosophy: "Networked Transit." 

“Networked Transit” should become a major focus of state government, greatly enhancing the effectiveness of the intercity rail and HSR programs. Networked Transit is a customer needs-driven approach rather than the current technology-centered agenda. The benefits of Networked Transit–where each and every transit mode is considered for its place in an overall network or system, not just its technological characteristics–is best illustrated by an example from Switzerland, where the transit network connects from minibuses serving the smallest Alpine village to the country’s largest train station in Zurich. 

Last Updated ( Thursday, 30 June 2011 )

I'm not sure I agree with all of Setty's premises and my impression is that he does support the high-speed rail concept for California, but only if it is integrated far more extensively into the larger urban and regional rail networks.  I gather what he's more about is that the concept of HSR in our state has been completely de-contextualized from existing rail systems, the rail authority's assertions to the contrary notwithstanding.  Obviously, Publictransit is an advocacy organization and would not oppose high-speed rail if it were "networked" as Setty describes.

He puts it this way; HSR is putting "the cart before the horse."  The currently planned HSR train, he projects, would carry less than 5% of all of California's intercity trips greater than 50 miles.  Setty asks that the state develop "networked transit" and uses Switzerland as a model for such a systemic approach to transit. In Switzerland, you can get from, figuratively speaking, Heidi's grandfather's farm to any other place you wish, by public transit.

My concern stems from the fact that we are not Switzerland.  The Swiss, and most Europeans for that matter, are quite comfortable taking public transit from point A to point B even if that entails many transfers, which Setty details.  

In the US, confronted with more than two or three transfers, even if well synchronized, becomes quite discouraging.  Those people who do this in the US need to; they have no alternative transit available to them.   I'm assuming that if the trip requires high-speed rail use, even with a single ticket, the costs will be considerable and that makes driving, with all it's shortcomings, more attractive. Let's just say that whatever transit network and system exists, if HSR is part of it, it will, by virtue of cost, select out a majority of the public. 

Setty's model is highly rational and doubtlessly very effective in the world where it now exists and which he wishes us to emulate here, Switzerland and other European countries as examples. However, what I'm thinking is that this model, including HSR, has no transferability to the US and it's culture.

I should also say that the concept of a highly distributed transit network is a concept espoused by Alan Hoffman, a transit development consultant from San Diego, and from whom I learned a great deal. 

The traffic problem in California does not exist equally distributed throughout the state; it exists primarily within the two population regions.  Hence, in those two major regions, a distributed convenient transit network which takes the first and last mile into account will seduce many commuting drivers out of their cars.  

Unfortunately, we are intent on building just the opposite, a luxury high-speed train for travellers from LA to SF, and who can afford either to fly or take this expensive train ride. Meanwhile, all the working commuter classes in the major metropolitan regions are left high and dry.  What sense does that make?

The Privatization of Amtrak (and high-speed rail) Argument: Ron Utt; The Heritage Foundation

We recently took on the topic of privatization vs. government managed projects like Amtrak.  Here are two articles on this subject by Ron Utt, who writes for the conservative Heritage Foundation.  Obviously, he's a privatization advocate.

His arguments are compelling although I still have reservations about this.  I can't help wondering if such privatization (and the accompanying profitability) is not a usurpation of tax dollars by indirection.  The only way, it seems to me, that privatization can work on behalf of the consumer is with competition.  Thereby, management finds it in its own best interests to improve the product as much as possible at the lowest costs; in this case, train rides on Amtrak, and, eventually, high-speed rail.

That means government guaranteed profits for participating operators.  Nonetheless, passenger rail is not, inherently, profitable.  Anywhere.  Transit costs are larger than any possible farebox revenues.  The difference has to come from somewhere; and that somewhere is us. Also, when private bidders compete, one survives to get the contract. Then there's no inducement to either improve, or increase service and reduce costs.

The desired competition then is with other modalities, like flying or buses.  Yet, under the "rules" of privatization, each of those modalities should also be competing for riders from the same airports, on the same bus routes and on the same rails.  But, that's not what's going on here.

I should also mention, as I did in previous blog entries, that the UK experience with the privatization of their extensive rail service was far less than successful and there has still been no resolution to their financial crises, debt restructuring and other problems with privatization.  

It appears to me that either way, nationalized or privatized, the taxpayer is inevitably on the hook.

Using Market Processes to Reform Government Transportation Programs: Report No. 1
Published on June 6, 2011 by Ronald Utt, Ph.D.

There’s a simple solution to this traffic problem. We’ll have business build the roads and government build the cars.
—Will Rogers

The quote above, attributed to one of America’s preeminent comedians and social commentators, came at the dawn of the automobile age in the 1920s or early 1930s, but it remains an accurate assessment of the quandary confronting the nation as it struggles to devise—in an age of fiscal austerity—a transportation policy that will enhance mobility and protect the huge investment that has been made in America’s infrastructure.
Public v. Private Ownership

Today the nation’s transportation system is a mix of public and private responsibilities. In general, the private sector builds, owns, and operates the rolling stock (cars, trucks, and trains) and airplanes, while the public sector builds, owns, and operates the infrastructure—notably, nearly all of the roads as well as nearly all airports and the air traffic control system. The only exceptions to this are the privately owned freight railroads, which own and operate both their rolling stock and infrastructure (and consistently runs at a profit and pays taxes), and the federally controlled Amtrak, which owns its rolling stock and some of its infrastructure (and consistently runs at a loss and absorbs taxes).

What sparked Roger’s quote is that the transportation system has never suffered from a shortage of privately provided rolling stock and airplanes.[1] By contrast, the transportation system—notably in the leading commercial centers—does suffer from a shortage and deterioration of infrastructure that has worsened over the past two decades. Noting that the number of licensed drivers (up 71 percent), registered vehicles (up 99 percent) miles driven (up 148 percent) have all soared since 1970, former chairman of the House Transportation and Infrastructure Committee Don Young (R–AK) lamented during the last reauthorization process that “during the same period new road miles have increased by only 6 percent.”[2]
The Basic Problem with Public Ownership

Among the several reasons the public sector has difficulty in adequately responding to modern transportation needs, there are two chief ones.
1. Politicization of Transportation. Created in 1956 to build the interstate highway system, the federal highway program achieved that goal in the early 1980s and was expected to go out of business and turn responsibility back to the states. But the huge annual inflow of revenues from the federal fuel tax tempted Congress to expand the program’s mission to justify its existence.

Today, only about 65 percent of trust fund spending goes back to serve the motorists and truckers who fund the system, as lobbyists and stakeholders have succeed in expanding trust fund responsibilities to transit, truck parking lots, covered bridges, sidewalks, the National Forest Service, transit on Indian reservations, historic preservation, Appalachian and Mississippi Delta redevelopment, roadside beautification, bicycles, hiking paths, university research, earmarks, and commuter rail—to name just a few—plus a vast federal bureaucracy that costs more than $425 million to operate each year.

Every one of these diversions reflects some passing fashion or lobbyist effort from the distant past that managed to achieve a perpetual claim on the trust fund. With the trust fund going insolvent in 2008 and now subsidized by general revenues at a time of yawning budget deficits, these many whimsical, costly, and unproductive diversions represent a worsening burden on the government and the nation’s economy.
2. Transportation Ranked Low on Budget Priorities. As part of the federal budget, transportation programs must—in practice and in theory—compete with other federal programs for available resources. Until 2008, highway and transit spending escaped this constraint by virtue of a dedicated funding source (federal fuel taxes) and a trust fund that protected these revenues from congressional and presidential predation.

But after several years of spending more than it earned, the trust fund required its first ever infusion of general revenues in 2008, and many more infusions are predicted unless dedicated revenues are increased or spending is cut.

This mode of operation makes little sense from an economic perspective. Transportation services represent a vital commercial activity providing benefits to every American and every American business. Yet the amount of transportation service provided is based on overall budget priorities rather than the needs and desires of transportation users. Such a system is also independent of consumers’ willingness to “buy” more transportation services, since no market exists to accommodate an increase in demand. This results in more congestion and more infrastructure decay.

While it may be possible for a socialist enterprise to mimic the market, the politicization of transportation programs work to undermine that effort. Most Americans want to drive their cars on congestion-free roads, yet most federal, state, and local elected officials and department employees intervene by mandating the provision of non-road transportation products that most transportation consumers do not want.

In a functioning market, a report to the president of a national restaurant chain that sales of apple pies have jumped would induce him to order more apple pie production, yet if today’s transportation officials  ran that chain, they would respond by ordering more salad. In today’s transportation world, that salad is street cars, high-speed rail, Amtrak, and bicycle paths.
What’s Next?

Over the next few months, this new Heritage transportation reform series will present several reports on ways in which market processes can be integrated into the current transportation system in ways that offset diminished budget resources and the poor investment and spending choices of the past. These reports will include analyses of the benefits of competitive contracting and deregulation in transit and passenger rail, public–private partnerships for operations and infrastructure investment, general privatization, and the use of tolls and other user fees to supplement existing financial resources.
Ronald D. Utt, Ph.D., is Herbert and Joyce Morgan Senior Research Fellow in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

Chairman Mica’s New Amtrak Proposal Would Use the Private Sector to Reform Passenger Rail
Published on June 13, 2011 by Ronald Utt, Ph.D.

At May congressional hearings, Representative Jon Mica (R–FL), chairman of the House Committee on Transportation and Infrastructure, proposed (1) that 363 of the 456 miles that comprise the Northeast Corridor (NEC) owned by Amtrak be transferred to the U.S. Department of Transportation (DOT) or a newly created government entity and (2) that the U.S. DOT seek competitive bids from private-sector investors/operators to provide the funds and expertise to reconstruct the corridor and provide genuine high-speed rail (HSR) service over the newly renovated line.[1]

One witness at the hearing claimed that as much as $50 billion to $60 billion could be attracted from private investors to accomplish the plan, which Amtrak claims will cost $117 billion.[2] While the obstacles facing the project are substantial, Mica should be applauded for this bold step to end to the death grip that the Federal Railroad Administration, Congress, rail unions, and Amtrak management have on passenger rail in America.
A Major Challenge

Experience indicates that public–private partnerships (P3s) for major transportation projects can be complicated to assemble, finance, and implement, and the prospect for financial success can be elusive. Amtrak’s exotic legal existence—it still has common shareholders, is a government corporation, and is a party to numerous and costly labor contracts—could be a deterrent. On top of these liabilities, passenger rail throughout the world—high-speed or slow-speed—is mostly a money loser.

Thus, overcoming these many obstacles will involve significant challenges. Nonetheless, good-government types, fiscal conservatives, and advocates of cost-effective mobility should support Mica’s effort to shift responsibility to the private sector.
Taking It Step-by-Step

While this is an effort worth making, it will take time, involve complicated legal issues, create intense political battles with entitled unions, and require a costly construction project to rebuild the NEC roadbed to accommodate HSR. As plans for this challenging restructuring get underway, Congress and the President have an opportunity to create and implement a companion program that would boost the quality of service, reduce Amtrak’s operating costs, and allow the U.S. DOT to sharpen its skills in working cooperatively with the private sector.
Implement Mandatory Competitive Contracting

Specifically, Congress should require Amtrak to contract the operation of its existing lines competitively with private-sector providers that have been displacing and/or substituting for Amtrak in operating a number of commuter rail lines throughout the nation, most of which do not use Amtrak to run the service. Examples include:
Virginia. In 2009, the Virginia Railway Express (VRE), a two-line commuter rail system connecting the Virginia suburbs with the District of Columbia, issued a Request for Proposal (RFP) seeking qualified bidders to operate the system. Amtrak had been the contract operator for the previous 17 years, but under a sole-source contract, as no other operators existed when VRE began service. Now that other firms do exist, a competitive procurement was required. VRE subsequently put the operating/maintenance contract out for bid, and the American subsidiary of the French company Keolis won a five-year contract with a bid to provide better service at a cost below that proposed by Amtrak. Keolis took over operations in July 2010.

Massachusetts. The commuter rail operations of the Massachusetts Bay Transportation Authority (MBTA) had been operated under contract with Amtrak since 1987, but in 1999 the MBTA split its commuter operation into three segments and prepared an RFP for the smallest: train cleaning and maintenance. Four companies including Amtrak submitted bids, and a partnership of two U.S. companies won the five-year contract with a bid of $175 million, compared to Amtrak’s $291 million. 

Amtrak and its unions complained, and the Clinton Administration forced MBTA to continue with Amtrak for three more years, at which time the contracts were again put out for bid and Veolia, another French firm, won the contract.[3] Veolia still holds the contract and is in discussions with the MBTA for a third five-year extension.[4]

Maryland. The Maryland Area Rail Commuter (MARC) system operates three commuter rail lines connecting its suburbs with Washington, D.C., and Baltimore. Two of the lines (Camden and Brunswick) have been operated by private providers (most recently CSX) since the Maryland government assumed financial responsibility for the service in 1974. CSX informed MARC that it would not be renewing its contract, which expires in 2012, and MARC put the contract out for bid. Keolis was the only bidder after Amtrak, which operates the third MARC line, withdrew from the competition. MARC is planning to rebid the contract once a series of political issues are resolved.[5]

Make Amtrak Compete for Its Routes

Given that these three and other U.S. commuter rail systems have opted to contract with private operators to achieve better service at lower cost to riders and taxpayers, Congress should impose the same process on Amtrak. At present, Amtrak operates about 23 lines within its own system and about 21 lines that are financially supported by the states.[6] Some of these lines—say between five and 10 per year—should be subject to competition, in which Amtrak would be permitted to participate. In the event a privately financed and operated HSR service can be established on the NEC, DOT will have become skilled at working with competitive contracts.
Ronald D. Utt, Ph.D., is Herbert and Joyce Morgan Senior Research Fellow in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

Isn't it time to face the financial facts about High-Speed Rail?

In intensely Democratic California, there are a few conservative Republican demographics, Orange County being among them.  So, this editorial from the Orange County Register comes as no surprise. Remember the rule:  Democrats for High-Speed Rail, Republicans against it.

By now, a lot of issues have become clear; that is, whether the CHSRA cleans up its act, or is removed from the management of the project which becomes relocated elsewhere in the State Administration, isn't that important.  What's important is the bottom line.  The cost factor.  Can this state and the federal government afford to build California's $100 billion high-speed train?

What does the current situation look like? Does anyone see this Congress coming up with tens of billions of dollars to keep this project going? Does anyone see this economy suddenly recovering and surplus revenues becoming available for the largest infrastructure project ever undertaken in California?

Emeritus Professor of Economics Alain Enthoven has estimated a total final cost of the proposed rail system at $243 billion. Is that too far-fetched?  Is a price rise from less than $2 billion to more than $7 billion too far-fetched for the new Bay Bridge? How about the Boston Big Dig, that went from an estimated $2 billion to the current number of $22 billion? Too far-fetched?

And, by the way, behind each of these enterprises stands the Parsons Brinckerhoff Corporation as the prime contractor.

How can it not be obvious to everyone that the $10 billion state bond issue for the train, if sold, will cost state taxpayers over $1 billion a year for the next generation?  And if not sold, the rules of "GO" bonds is that the promised funds can be spent anyhow. Our tax dollars at work!

How can it not be obvious that this train will, like all other high-speed trains in the world, lose money and require government subsidies permanently to keep operating?

Why would any private rail operator take on this project unless government subsidies are provided to create the surplus revenues necessary for the investors in this train to make their investments in the first place?  And those, the law specifies, aren't allowed.

At this point, the State Democrats continue to cling to this project, despite all the mitigating facts, for one reason only.  And that is the promised $3 billion from the Department of Transportation in Washington.  

So, now the train advocates have to justify their train support with an explanation of why that "free" $3 billion will not cost California endless billions which it does not have and cannot obtain from the federal government or private investors.  And, blather about how it's good for our future is not an answer.

Published: June 29, 2011
Updated: 4:26 p.m.

Editorial: Bullet train's folly factor rises

California's High-Speed Rail Authority "is plunging forward despite repeated warnings that it may be tens of billions of dollars short of the money needed to build and operate the system," according to a June 23 report by investigative reporters Ronald Campbell of the Register and Lance Williams of California Watch, a news organization founded by the independent, nonpartisan Center for Investigative Reporting.

Their report detailed shortcomings of the touted train to link San Francisco with Los Angeles. It was the latest in a series of red flags signaling trouble ahead for the project, including critical reports by the state treasurer, legislative analyst, the Legislature and separate university studies. In 2008 voters approved $9.95 billion in bonds to cover a fraction of the cost. But costs and their burden to taxpayers are only part of the problem.

As the Register-California Watch report noted, estimates have escalated dramatically. In 1996 costs were projected to be a mere $15 billion. That increased to $26 billion by 2002, $45 billion by 2010 and now are projected to soar to an unimaginable $243 billion if the project follows the cost-overrun patterns of the new San Francisco Bay Bridge and Boston's Big Dig road project. We see no reason to think it won't.

Train advocates dismiss the $243 billion estimate by Stanford management professor Alain Enthoven, but their best counter-argument seems to be the words of train spokesman Jeffrey Barker, who concedes it's difficult to put a precise price tag on the project. Difficult indeed.

"All megaprojects have cost overruns," Mr. Enthoven said. "For a state project, if they figure on $43 billion, and then it turns out to be $66 [billion] or $80 billion, then it's the taxpayer of the state of California" who pays.

Perhaps the most stable aspect, reported the Register, is the voter-approved bond financing. But even that will cost taxpayers far more than the $9.95 billion they approved. The state's legislative analyst said selling all the bonds would trigger $1 billion per year in interest payments from the state's general fund, "to be recouped from either new taxes or program cuts," the Register reported.

The bond money and interest payments will be wasted if the balance of funding is not obtained. The state treasurer fears the train's "lack of a disciplined business plan that makes any sense" will discourage Wall Street from investing the private capital required. And that's if costs are held to $45 billion.

The Register-California Watch reported that the legislative analyst said federal funding may fall $15 billion short of what is needed, and that two studies show the train prospects for profitability are founded on deeply flawed ridership forecasts.

If the bullet train cannot attract enough riders to operate profitably, the ballot measure approved by voters prohibits tax subsidies. No private operator, which is what the project envisions, will continue in business at a loss, which means that if this boondoggle ever is built, whole or in part, it may end up as a museum to folly.

Next year the Legislature will be asked to approve selling construction bonds. If this train isn't derailed before then, legislators should stop it dead in its tracks at that point.

Wednesday, June 29, 2011

On High-Speed Rail, speed costs. But, what are the cost-benefits?

•A new high-speed rail service will cut travel times from Paris to Bordeaux to just two hours and five minutes—down from the current three hours and 10 minutes. French national rail operator Reseau Ferré de France (RFF) has signed a EUR7.8 billion ($11.26b) deal with private-sector French construction firm Vinci, which calls for Vinci to build and maintain the new line. The project will begin early next year, and the new high-speed service is slated to be operational by 2017.

What am I missing?  Twelve billion dollars (it will probably end up being much more by 2017) spent to go one hour faster between Paris and Bordeaux.  This appears to be a pattern in many countries, including China, even though China is learning the harsh lessons of the costs of speed and are slowing their trains down to cost less operationally.

Improbably, the GAO issued a report this past March accusing the FRA/DOT of failing to conduct cost-benefit studies for their High-Speed Rail Program. I would have thought that this question is the very heart of the issue; that is, whether HSR is worth building or not.

High-Speed Rail development has become an international race. What is the prize for the winner? And, without an answer to that question, no one seems to challenge this premise. Nor does anyone acknowledge the geometric cost increases with increased speeds.  

The 10 mph gain on top of 250 mph is far more expensive in operational terms than the 10 mph gain above 150 mph.  Is there a proportional value increase also?  Or is it no more than the insubstantial prestige and status of the host countries and their manufacturers who obtain momentary bragging rights?

By the way, the US has no manufacturers to promote. We will need to buy everything off the shelves of other countries in order to even get in this race. This is the race that Obama must be talking about when he says we should be "winning the future." 

And, of course, there's the personal prestige factor of exclusivity. That's what luxury is all about; its costs impose selective barriers based on wealth. Is this what the Obama Administration and the Democrats are so determined to build? Are they catering to the consumer luxury industries and their clientele?

There must be an equation out there where enough people are willing to pay X dollars per minute of faster train travel. And those costs increases multiply per mile. 

Even though, we are told, over and over, that these trains have wi-fi and all those professionals with their travel expense accounts won't be merely wasting time sitting on these luxury trains, but will be getting work done.  Shouldn't that become a variable in the value/desirability for travel-time reduction? After all, if you're productive in two hours and five minutes, wouldn't you be more productive in three hours and ten minutes and at lower cost?

The Acela/Amtrak example

The cost difference between the regular express and Acela on the Wash. to NYC route, as well as the NYC to Boston route, is considerable.

Here are some revealing comments from the online forum version of The Chronicle of Higher Education in 2007 discussing exactly this issue:

Acela-- worth it? (Acela vs. Amtrak)

I am curious how "forumites" here think of Acela trains.
The one-way trip from New Haven to Boston costs 42 bucks, if I take one ordinary Amtrak.
The same trip costs 113 bucks, if I take one Acela.
I took Acela from New Haven to Boston today. I saved 30 min, but I spent a lot of cash. The trip itself certainly is more comfortable than that inside one ordinary Amtrak, but I do not know if I spent too much on the trip.

Re: Acela-- worth it? (Acela vs. Amtrak)

I know Acela is lap-top-friendly.
(Amtrak trains are not-- they are too crowded)
But is Acela also wifi?
I am not sure.
I see so many passengers, obviously rich, using all the high-tech gadgets. Each passenger owns a Blackberry, except me.

Re: Acela-- worth it? (Acela vs. Amtrak)

My time is not worth $142 an hour.  I would not pay the extra price for Acela, even if there is wifi.  Ordinary Amtrak is comfortable enough and fast enough.

And here's somebody's comment from another more recent website that asks people to compare the Acela with regular Amtrak trains. This comment is from 2010:

Just got off the Acela express train from NYP (New York Penn Station) to BOS (Boston South Station).
It was a very nice smooth ride it is exactly as advertised it has very nice leather seats, WIFI and electric outlets but I regret taking the Acela.
Because the price for Acela is $90.00 for a regular ticket and if you want to travel first class you need to add $70.00 but I took a regular fare for $90.00 and it is not worth it over the Regional train service which is only $40.00 but does not have leather seat which I find to be more comfortable because I was sweating in the leather seat.
Acela advertised as the taking 3 hours and 20 minutes but it actually took 4 hours and 10 minutes when the regional takes 4 hours and 20 minutes so if it is for timing that you think of taking the Acela then its not worth it unless you want the comfort of the Acela.
Can we all agree that the Acela and all future HSR in the US, is not for what used to be called "blue collar" working stiffs? So, who is it for? I assume it's for the potential high-speed rail market.  And, who is that market? Most Americans?  I don't think so. 

So, the point here is to raise the question about cost-benefit.  Are the benefits of HSR worth the costs?  What we have been told, over and over, is that the benefits of spending these federal dollars to create solutions for unemployment are indeed worth it. 

Even granting this questionable assumption, and given the huge dollar amount involved, shouldn't we be asking if the vast costs of building and operating high-speed rail are justified for most Americans most of the time?  

Obama has promised that 80% of Americans will have HSR access by 2030. He did not first ask the question about whether 80% of Americans either want, need or can afford such access.

With Friends Such As "Friends of Caltrain," Who Needs Enemies?

Note the complete circumnavigation of the Bay Area with BART, Caltrain (the yellow line on the Peninsula) and the Capital Corridor line from Fremont to San Jose.  All three should be folded into one continuous, state-level organization. What we're talking about mostly in this blog is that yellow Caltrain line.

For those few of you in America who still don't know, Caltrain is the  commuter train that runs the 50 miles from San Francisco to San Jose.  They have a permanent annual fiscal crisis, declaring a "financial emergency" each year. 

And after getting the entire Peninsula all riled up, they manage to resolve their operating deficit for yet another year.  Isn't this the story of the boy who cried WOLF too often?  Except in this case, I wish the wolf would finally appear and swallow Caltrain up.

There are a small number of Caltrain entries on this blog.  I'd really rather not be bothered with Caltrain, since they're a distraction from the real big-time issue of High-Speed Rail.  But, again I have to make an exception here.

The "Friends of Caltrain" are a bunch of Peninsula do-gooders who secretly love high-speed rail on the Peninsula. They think that helping Caltrain will get them the HSR they want and under their particular conditions.  How naive that is!

And, Caltrain wants HSR on their rail corridor so that HSR can buy them all the capital development goodies they lust after, such as electrification and grade separations.  They don't need them, you understand, but being old white railroad  guys, they are fixated on the macho-glamour of hardware upgrades.  Operating deficits, after all, are boring.

Where am I going with this story?  Be patient, we'll get there.  I just received one of the "Friends of Caltrain" notices talking about the Dumbarton Rail debacle.  Dumbarton Rail is another ambitious Caltrain empire building intention, seeking to cross the Bay with their trains and heading into BART territory on the East Bay.  It's totally unnecessary.  Ironically and without realizing this, the "Friends of Caltrain" email notice makes that very point:
At a Dumbarton Rail Policy Advisory Committee meeting last Friday, committee members discussed a plan to increase the amount of bus service across the Dumbarton bridge, connecting Bart and Caltrain. The bus service would be supported by funds from by Regional Measure 2, approved by voters in 2004 to pay for a rail line across the Dumbarton bridge. The Dumbarton Rail project has stalled, but buses crossing the Bay have been increasingly popular. The goal of the increased bus service would be to build ridership for a train service.

They appear to be trying to scratch their left ear with their right hand. They don't have to.  The obvious alternative to a Caltrain railroad crossing the Bay near the Dumbarton Bridge, is a BRT, bus-rapid-transit system using the existing Dumbarton Bridge to carry Bay crossers back and forth. The current bus line can be a precursor to such a bus improvement to BRT.  But, of course, that won't give Caltrain a new tentacle across the Bay.

One bad thing about Caltrain choo-choos crossing the Bay is that they require a multi-billion brand new, seismically up to date rail bridge.  The "Friends of Caltrain" and the Dumbarton Rail committee survivors don't ever talk about that. Maybe because such a bridge would price out at well over $4 billion. 

But, that's still not my point here.  Caltrain, it should be obvious by now, is as badly managed as the California High-Speed Rail Authority.  They are top-heavy and over-salaried. It's an unaccountable management that should be terminated.  

The map of the Bay Area shows where BART now runs, and where Caltrain runs on the Peninsula.  Both organizations could be folded within the Capital Corridor Joint Powers Board to complete the circle, which would then operate at the state, not county level.  That way, there is a rail commuter "spine" that goes clear around the Bay, as it should. 

Caltrain's hardware upgrades can successfully be far more modest than now projected by them.  A good personnel house-cleaning is in order.  Both organizations, the "former" Caltrain,  BART and Capital Corridor would have tight, cooperative linkages at their inter-face terminals.  The annually deficient operating subsidies would not have to be begged from other commuter operators, but would be stabilized at the state level. 

So, as far as I can see, the biggest problem with Caltrain now is that the "Friends of Caltrain" can't see or think outside the Caltrain box.  Such shortsightedness will cost all of us more in taxes even as we get ever less service at ever greater cost.

Privatize or Nationalize High-Speed Rail? I wish I knew.

You have to watch what's happening with Amtrak to understand what will happen with high-speed rail.   Amtrak has become a political football, being kicked between the two teams of Republican "privatization" and Democratic  "nationalization." 

This article reflects on the British experience since they took their nationalized railroad system and privatized it.  (Remember Margaret Thatcher?)

Each side claims the other side's solution will cost the taxpayers more money. But the debate is conducted at the ideological level, with the Republicans proposing that everything in government except the military gets privatized.  (Although the military certainly has become far more private contractor-ized.) It's a version of government down-sizing.  

The Democrats, on the other hand, want to expand the role of government into as many social functions as possible; i.e. the 'Mommy State.'  Both viewpoints are highly exaggerated versions of what's been going on, more or less, for some time. 

The fact is that public mass transit, intra or inter city, has been government developed and subsidized for over fifty years, as private operators got out of that passenger moving business.  (I remember, as a kid, a trolley car system in our town that was owned by one guy who made lots of money off it. However, it was grossly mismanaged and corrupt.  Eventually, the city and then the county took it over.)

Let's just say that fully or partially "nationalised" or fully or partially "privatized" passenger rail is not the problem or the solution.  The solution that is absent in either case is that the people involved are not honorable or committed to public service.  To the contrary. Therefore, their self-serving agendas are designed to either enrich themselves as privatizing profiteers who provide campaign funding for their office holding supporters, or as government bureaucrats dedicated to empire building, croney politics and often less obvious self-enhancement.

Practically (rather than ethically) what is missing with either ownership/management model is adequate oversight, accountability and sufficient control for enforcement. 

What we are now watching in California is an unaccountable government agency, the CHSRA, run amok, like an autocratic Mid-Eastern government. There is no enforcement to bring them to task for their outrageous and flagrant misbehaviors.

If ever built, will this HSR rail system be turned over to Amtrak for operation, and therefore one mis-managed bureaucracy following another, with enormous cost overruns and endless massive subsidy drains on the taxpayers? Or will it be turned over to private enterprise, as in the UK, still a drain on the taxpayer pocketbook, but now providing government subsidized profits to share-holders and management?

I see no hope for either system benefitting all the rest of us.  Right now, if Amtrak takes over high-speed rail, either in the Northeast Corridor or in California, we will come to realize what a permanent enormous drain it will be on the state and nation to operate a highly subsidized white elephant, just as Amtrak has been doing since its formation.

Amtrak Privatization Foes Point To Britain
Updated: June 29, 2011

Opponents of a plan to privatize Amtrak are pointing to experiences in Great Britain, saying privatization would lead to layoffs, higher fares and poor service.

Two House Republicans are spearheading efforts to privatize the nation's passenger rail system - Rep. John Mica of Florida, chairman of the House Transportation and Infrastructure Committee, and Rep. Bill Shuster of Pennsylvania, chairman of the Railroads, Pipelines and Hazardous Materials Subcommittee.

Sen. Jay Rockefeller and Rep. Nick J. Rahall, both D-W.Va., are longtime supporters of using federal funds to support Amtrak's national railroad system.

Last week, Rockefeller warned that the Republican legislation would likely eliminate passenger train service in West Virginia, which serves cities including Charleston, Huntington, Montgomery, White Sulphur Springs, Hinton, Martinsburg and Harpers Ferry.

When Mica and Shuster proposed their legislation - the Competition for Intercity Passenger Rail in America Act of 2011 - on June 15, they cited the privatization of railroads in Great Britain, which happened in the early 1990s. The bill was formally introduced last Tuesday.

Mica and Shuster say their plan would reduce taxpayer subsidization of Amtrak, and hasten the development of high-speed rail.

But Gary Zuckett, executive director of West Virginia Citizen Action Group, called the proposal to privatize Amtrak using the British model "the wrong road to go down."

"British privatization ended up costing taxpayers there even more money, after the railroads went bankrupt, than the public subsidies cost before privatization," Zuckett said.

"Why are we proposing to go down the same road?" Zuckett added. "I agree with Congressman Rahall and Sen. Rockefeller that this is not a good idea. We need to support our rail system, not sell it off."
Reconnecting America, a Washington, D.C.-based think tank that advocates for transit-oriented development, is working to preserve Amtrak.

Today, heavily traveled, profitable rail lines in the Northeast help finance railroad lines in less populated areas throughout the United States.

"Very few, if any, of the long-distance lines will attract private sector funding," said John Robert Smith, president and CEO of Reconnecting America. "The focus on privatizing the Northeast Corridor will weaken the existing national system ... Removing the profitable Northeast Corridor from the current system of shared benefits deprives the rest of the nation's rail system of critically needed operating assistance."

In a report, Reconnecting America wrote that Mica's proposed changes were likely to "weaken or terminate the intercity rail connections that are the lifelines in small towns from Montana to West Virginia, as well as big cities such as Chicago and Los Angeles."

Zuckett said the plan would "allow private entities to cherry pick the profitable lines and leave the other ones to flounder."

"We need to keep Amtrak intact and support the whole system," he said. "It is good that profitable areas help areas like West Virginia and western states that really need rail service."

The legislation proposed by House Republicans to privatize Amtrak would put it on sale to the highest bidder in the private market.

Reconnecting America says the Republican-backed legislation would put at least 110,000 jobs at risk later this year.

The group also compared Mica's proposed legislation to what happened in Great Britain.

"The plan is very similar to the United Kingdom's attempt to privatize its rail network. Taxpayers had to bail out the infrastructure company and increase their annual subsidy to support the rail network," the group wrote in the report. "The system is now more expensive than before privatization."

Reconnecting America predicts private investors in the U.S. would show little or no interest in investing money in railroads anywhere outside the Northeast.

Amtrak has operated its rail system for more than 40 years sharing revenues between different regions in the country. As a result, Amtrak has political support from both conservative Southern Republicans and liberal Democrats along the Northeastern coast.

In Great Britain, Railtrack, the railroad infrastructure and maintenance company, went bankrupt after five years of private ownership.

"The taxpayer portion of passenger rail funding in the UK increased after privatization [and] proposed savings did not materialize," Reconnecting America stated in its report.

Earlier this year, Edward Wytkind, president of the AFL-CIO's Transportation Trades Department, told a congressional committee that British privatization had poor results.

"Fares jumped, severe layoffs were implemented, and maintenance and safety suffered," he said, adding that accident rates increased.

Last week, Rockefeller called Amtrak "a lifeline for our nation's communities - including many among the Cardinal and Capitol Limited lines in West Virginia - and is an engine of economic growth."

"Amtrak provides West Virginians with an affordable way to get between small communities and big cities," he said, "and the Republican plan would put it in jeopardy."

Reach Paul J. Nyden at

Tuesday, June 28, 2011

The California State Treasurer says that HSR does not pencil out. He's right.

I'm not comfortable with Lockyer's alternative suggestions for starting HSR in the Bay Area or the LA Basin.  Why would that make more sense than starting in the Central Valley if the project doesn't pencil out regardless of its routes or where construction begins? 

They can only start it.  They can't finish it. It can't be more simple than that.

The ONLY way the state bond funds or the FRA federal funds can be spent is for HSR as proposed in AB3034, the enabling legislation.  Rail alternatives other than the entire SF to LA route are not permitted, either at the state or federal level.

They will either acquire at least the entire $60+ billion or, more likely, the $100 billion, necessary to build what the law requires, or they won't.  If they can't, they have no business starting it.

The State Treasurer has already said numerous times that these Prop.1A bonds are not marketable. His criticisms of the rail authority, which reiterate what the LAO and the other government oversight agencies have been saying, is correct.

Is it not yet totally apparent that this project has no business existing?  There should be no CHSRA.  There should be no waste of $9.95 billion of state bond funds.  There should be no wasting of federal funds already dedicated to this sinking ship of a project.

Enough is enough.  Stop it now.

Treasurer worried about high-speed train funding
June 28, 2011

California’s top financial official is warning that the numbers are not penciling out for the proposed controversial 800-mile bullet train system. [California Watch]

State Treasurer Bill Lockyer says that the $45 billion rail system is brimming with “unanswered questions: about construction financing and operating revenues.

The state is slated to begin the planned sale of  $9.95 billion in bonds next year so that construction can begin—Lockyer wants the process delayed until key questions can be answered.

“I think the federal funding is too speculative,” Lockyer said of the project’s financial plan. “I think the likelihood of significant private capital is questionable.”

Lockyer went on to say, “I’ve been disappointed by the lack of a disciplined business plan that makes any sense, and I’m not sure the economics work out.”

The  treasurer’s criticism is consistent with similar critiques made by the state Legislative Analyst’s Office, the state auditor and UC Berkeley’s Institute of Transportation Studies.

Lockyer also suggested the California High-Speed Rail Authority might have made a strategic mistake by opting not to begin construction in either the Bay Area or the Los Angeles basin.

Instead, the initial line will run between Corcoran, near Bakersfield, and Borden, near Fresno.

State treasurer worries about bullet train’s finances
June 28, 2011 | Lance Williams

California’s vision for an 800-mile bullet train system is bold and appealing, but the project’s finances aren’t penciling out, the state’s top financial official warns.

In an interview with California Watch, state Treasurer Bill Lockyer said the state’s $45 billion high-speed rail project is fraught with “unanswered questions” about construction financing and operating revenues.

He said it was important for Gov. Jerry Brown and the state Legislature to get satisfactory answers before the state begins the planned sale of $9.95 billion in bonds next year so construction can begin.

“I love the idea – the idea is bold,” Lockyer said. 

But he said he worries the project is counting on billions in federal aid and private financing that may never materialize.

“I think the federal funding is too speculative,” Lockyer said of the project’s financial plan. “I think the likelihood of significant private capital is questionable.”

At another point, he said, “I’ve been disappointed by the lack of a disciplined business plan that makes any sense, and I’m not sure the economics work out.”

Some of Lockyer’s comments were included in a weekend report by California Watch and The Orange County Register about the bullet train’s financing issues. The treasurer’s criticism mirrored aspects of critiques made by the state Legislative Analyst’s Office, the state auditor and UC Berkeley’s Institute of Transportation Studies.

Here are some other highlights of his remarks:

Initial concerns

In 2008, after voters approved the rail bond measure, Lockyer said he was concerned that Wall Street would shun the bonds.

Lockyer said he initially presumed that “we would go to market with a high-speed rail bond;” that is, bonds tied to the bullet train project.

“I was worried that if I had to sell a pure high-speed rail bond, that the uncertainties, the (issues of) revenue stream and passenger volume and fare box revenues were so unsettled that no investor would want to take that risk,” he said.

Actually, the rail bonds are to be “just a vanilla general obligation bond, backed by the state’s credit,” Lockyer said. Thus, they pose no special marketing problems.

Bonded debt

Nevertheless, the bonds for rail raise questions about the state’s overall debt load, he said.
Lockyer said that in the next 25 years, the state will be asked to build about $400 billion worth of infrastructure projects -- everything from schools to flood control measures. “I don’t see the likelihood of public bond financing for as much as half of that number,” he said.

He continued: “There is a growing sensitivity to public debt loads. The state’s debt service obligation has been increasing rapidly.

“It‘s the fastest-growing segment of the state budget. … We’re getting in the neighborhood of 7 percent of the general fund being for debt service.”

And so, “because of the inability to finance all the needed infrastructure investments and the constraints on the growth of debt, it requires us to start allocating between the differing competing needs,” he said. That’s the question for the governor, the state Department of Finance and the Legislature, he said: Is it prudent to cancel another worthwhile project and sell bonds for rail, given the project’s unsettled finances?

A strategic error

Lockyer also suggested the California High-Speed Rail Authority might have made a strategic mistake by opting not to begin construction in either the Bay Area or the Los Angeles basin.

Instead, the initial line will run between Corcoran, near Bakersfield, and Borden, near Fresno.

“It seems to me they made a serious error in starting in the Central Valley, rather than building out either one of the two ends of the line that are going to be experiencing high traffic volumes,” he said.

“They need to show some success, and Bakersfield to Borden I don’t think is going to convince people that this is a great thing to do.

“I understand why – they say, ‘Well, we’re ready to go and we can lay some track now, and we’re going to have to do it eventually.'

“But in terms of convincing the public that it makes sense, that’s not a home run.”

Lockyer is one of California’s most prominent Democrats – before he was elected treasurer, he was state attorney general, president of the state Senate and an assemblyman from San Leandro.

But concerns about the California bullet train’s finances are shared by some Republicans. Last week, U.S. Rep. Paul Ryan, R-Wisconsin, chairman of the House Budget Committee, mockingly bestowed a “budget boondoggle award” on the project. He ridiculed the Central Valley route as a “train to nowhere.”