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.

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