Friday, July 29, 2011

Just how many are actually going to ride the High-Speed trains?

Let's get to the bottom line of this story quickly.  All railroad development projects over-state the number of passengers they will carry. That's how they convince us to get the funding to build it.  And, they want to build it to get their hands on the money.

The CHSRA is no exception to that empirically demonstrable rule.  They began by projecting 117 million annual passengers.

Let me remind you that this will be the most expensive project ever in the state of California and probably in the entire United States.  People kill for that kind of money. 

With lots of complaining about such ridiculous ridership estimates, the rail authority has been reducing the number and making their search for the correct number sound more and more scientific and mathematical, with "models" and consulting companies who are in the business of projecting future numbers.  

Making such forecasts with mathematical models and research is ever so much more attractive than using Tarot cards of crystal balls. However, most consulting companies, and I suspect that Cambridge Systematics is no exception, stay in business because they tell their clients what they want to hear.

(Could you imagine getting a million dollar contract to project future ridership and telling the rail authority; "Sorry, your numbers are far too low. You have no reason to build this train."  Yeah, right!!)

Anyhow, the current proposed number of annual riders is 39 million annual riders.  Still a ridiculous number.  Do they want us to believe that, figuratively speaking, each and every resident of California will ride this train once a year? Of course not. By the way, the entire Amtrak passenger rail network in the US carried less than 30 million annual passengers this past year. And that's over 23,000 miles of track.

What's important here is that these forecasts drive (or should drive) a huge amount of decision-making about the design of this rail project, and whether it should even be built at all.  Not enough riders means no need for such a train.

Therefore, it behooves those who are so eager to get their hands on all those billions to build this train (and help their croneys) to propose as large a ridership number as we are willing to digest.

The fight between the people of California and the rail authority exemplifies the importance of these numbers.  The rail authority is withholding data, stalling, procrastinating and doing everything it can to put off as long as possible any truths leaking out.  Which can mean only one thing.  They already know the truth, and don't want us to.  Anyhow, this contest is far from over.

In October, the rail authority is obliged to produce another "business plan."  It has to contain more reliable (whatever that means) forecasts of riderships.  What are the chances?

One related factor to ridership will be ticket costs.  The more that tickets cost, the fewer riders can afford the train.  With fewer riders, the requirements for train subsidies (which are not allowed) goes up.  We have interlocking dilemmas and the rail authority is desperate not to let its fabric of lies be torn apart. 

The bottom line here is this.  The more the rail authority tells the truth, the less justification exists for building this monstrosity in the first place.  The more we learn the actual costs of development, the actual ridership projections, the real revenue surpluses or necessity for subsidies, the more it will be apparent that this train project should never, ever leave the drawing boards.

Report casts doubt on forecasts for California high speed rail
In a review of California's high speed rail project, a panel of experts determines that ridership and revenue projections need to be more conservative.

By Dan Weikel, Los Angeles Times
July 29, 2011

Fresh questions about the ridership and revenue projections that underpin the state's $43-billion bullet train project have been raised in a new internal report by the agency charged with building the system.

Among the key conclusions of a California High Speed Rail Authority panel of experts is that forecasts of up to 117 million annual riders by 2030 — which have helped support predictions that the system would generate billions in profits — need to be recalibrated to be more conservative and better reflect important factors that could affect ridership.

The new critique comes as the authority is racing to complete a business plan for the Legislature and break ground next year on an initial segment in the Central Valley.

The analysis echoes some of the concerns of transportation experts at UC Berkeley. They concluded last July that the patronage models were so unreliable that they could not accurately predict whether the train would be profitable or run severe deficits.

Within days of the Berkeley report, rail officials and their consultants went before the authority's board to defend the forecasts as realistic and state-of-the art.

The agency's five-member peer review panel has found that projections prepared by consultant Cambridge Systematics Inc. are well-founded in many respects but suffer from "important technical deficiencies."

Additional peer review reports are planned in the months ahead as part of an ongoing effort to reexamine the project's patronage and financial forecasts. Panelists said they cannot draw more definitive conclusions about the agency's forecasts until issues they have raised are resolved.

Ridership forecasts are crucial for the project's 500-mile first phase, which would link Los Angeles and San Francisco. They form the basis of calculating ticket income, the amount of public funding required, stations needed, as well as the size and number of trains to be purchased.

Rail officials said Thursday that the new study is no cause for alarm and that the forecasts would be revised in time to complete the business plan by October.

"The purpose of peer review is to identify issues," said Tom Umberg, a former Orange County legislator who chairs the high speed rail authority board. "If the peer review group is raising issues that we need to address, that is helpful. Do we need to refine our ridership figures? Yes, and we are doing that."

Critics of the project said the peer review report is another indication that the authority's forecasts are unreliable.

"Not only is it bad; there is so much missing information that the review panel can't fully give their opinion on the original study," said Elizabeth Goldstein Alexis of Californians Advocating Responsible Rail Design. "You should not rely on these numbers."

Among other things, the panel stated that Cambridge used a now-obsolete survey method, made unrealistic assumptions, failed to properly analyze what would happen to ridership for varying levels of train service, and did not consider the impact of airline competition.

"Generally, Cambridge is well thought of," said David Brownstone, a UC Irvine economics professor who worked on the Berkeley study. "But the bigger take away from all this is that there are now two independent reviews that show things are lacking here."

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