The paper in which we find this article, below, is the London Evening Standard. It's about their struggles regarding the HS2, the second high-speed rail line they intend to build in Great Britain. It has gained a huge amount of opposition, but it does look like the government will plow over all objections and build it anyhow. It's one of those articles I wish I had written about our California rail project with which the one in the UK bears close comparison.
Differences between train riding UK and Europe and us.
Europeans have been railroad users for over two centuries. Until after WW II, cars were rare and for the well to do only. Most people who had to go somewhere took public transit, like trolleys, operated by every city of any size.
In the US, there were also trolleys in the larger cities, but still, automobiles became very inexpensive and therefore became the default mode of going to work or shopping.
Furthermore, cars, better than anything since horses, expressed our sense of independence and autonomy. Even today, we prize our freedom and individuality to be able to go where and when we please, and not be dependent upon a publc mass conveyance. We resent being scheduled by others or by an anonymous system. We thrive on being self-assertive. It is nothing less than an integral part of who we are; our culture.
In Europe, high-speed rail became the next transit layer on an already multi-layered rail network that incorporated urban, regional and inter-city rail. Even as automobiles became more affordable in Europe than they once were, they continue to be very expensive to own and operate. This continues to put the transit burden on public mass transit, including inter-city transit.
But, since the US relinquished its massive passenger rail network, HSR exploded on the landscape in the last five years or so, and is now intended to lead the charge in bringing rail back, but instead of from the bottom up, it will be from the top down. That's why, in the US, it will fail.
Glamorous investments
Governments, local, state and federal, mount infrastructure projects all the time. Many are modest upgrades to existing structures, or the replacement of a decaying bridge, or adding miles to a highway.
Very few are grandiose, "mega-infrastructure" projects, especially on the order of magnitude of proposed high-speed rail. Partly, that comes from our obsession with beating the Chinese in the HSR competition in our race for the future.
Needless the say, projects that provide photo-ops and ribbon cutting are preferred by the politicians who get brownie points for having extracted the funding from some budget or other. Which is to say that glamour and romance emanating from a government project will always win the day. And, what could be more glamorous and romantic than a flashy, phallic HSR locomotive to pose in front of at a dedication ceremony?
These HSR trains may not be practical, efficient (greatest good for the greatest number), or beneficial, but that matters far less than the "atmospherics" that surround such a "futuristic" vision. So, the choice between fixing potholes or building a vision of the future of all travel is not difficult for politicians, who live by their public image. High-speed rail is a bumper sticker; a sound-bite; a headline. It's "Content-lite" and no extra calories, but guaranteed to bring a luxurious life style to all its affluent and influential passengers.
Well, we know the realities behind that vision by now, don't we?
ROI
We have been witness to the ever rising cost forecasts for the California high-speed rail. It was several years ago when the costs projection was around $25 billion. Then it went to $33 billion. And more recently it has been hovering around $43 billion, although, using the rail authority's own numbers, the CARRD group calculated a cost around $66 billion. And, it is also the case that more people are now taking cost elements into account that had heretofore been ignored, like interest payments and insurance that will raise the actual costs to well above $100 billion.
And that raises the question of what the economic returns will be if this train is ever built and operating. It should also be added that there are "out-year" costs such as operating, maintenance, upgrades and replacements since things wear out quickly in a high-speed world. It will be the most expensive thing to build and operate in the world of travel.
It is therefore quite reasonable and fair to ask what the consequences will be? Will the labor market improve significantly? Will the state economy benefit proportionate to the size of the investment? What will be the ROI, the return on investment?
The article raises this question and suggests that any answer will be, how shall we say, underwhelming. The British government, defending the HS2 project, argues that for every pound invested, two will be returned. However, the article author, Emma Duncan, states otherwise:
There are three big problems with them. First, the calculation of benefits depends on a crucial assumption: that time spent on the train is wasted. That is clearly nonsense. I work far better on trains than in the office, because there's nobody to gossip or nip out for coffee with. Most fast trains these days have wi-fi so there's nothing to stop people toiling as they travel.
Second, there's a problem with the distribution of benefits from HS2. Most of them accrue to business users, who are assumed to earn an average of £70,000. The Government is therefore subsidising the well-off. Surely the country's flagship public investment programme should benefit the poor at least as much as the prosperous? Funding this scheme is a bit like spending the housing budget on subsidising five-bedroom mock-Tudor mansions in the stockbroker belt.
The third, and largest, problem with the Government's analysis is that there are many better ways of spending £17 billion to improve our transport infrastructure. Sir Rod Eddington, a former chief executive of British Airways, produced a huge report in 2006 on how and where Britain should invest. He trawled through all the different types of projects that the department might think of looking at - road, railways, ports, cycle tracks - and concluded that the best returns came not from the big, glamorous schemes but from small ones. All the schemes that cost over £1 billion had returns of less than £5 for each £1 invested. Many smaller schemes, costing between £10 million and £100 million, had benefits of up to £8 for £1 invested. Some were higher still.
Instead of one big project, do lots of little ones that improve things
This point returns us to the issue of what to invest in to improve the unemployment picture and re-stimulate the economy to grow. There is no shortage of work opportunities, already defined and shovel ready. Neither of these is true of high-speed rail.
Furthermore, there are funds in far smaller amounts, more carefully regulated and made accountable, available to fix many aspects of the infrastructure of the US in many domains, transit and transportation being merely one of them. Power, water, and the various service sectors like health and education, all have deteriorating infrastructure demands upon resources and offer work opportunities. Even urban and regional transit are in deplorable, if not dangerous, conditions and should receive funding to restore them to their intended capacities.
As a nation, we can no longer be trusted to entrust so much money into the hands of so few. Not one shovel of dirt has yet been lifted and the California state auditor has already identified a number of inexplicable expenditures made by the rail authority. That's not a good sign, especially since the lead contractor is Parsons Brinckerhoff which thrives on mega projects where billions can quietly disappear with little oversight.
Emma Duncan has it right. Whether in the UK or the US, billions will be wasted if we continue, each with our respective, but not respectable, high-speed rail programs.
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High-speed rail is the fastest way to waste billions
Emma Duncan
3 Aug 2011
The British are romantic about railways. A train delivers a victim of injustice in The Railway Children; they glamorise homicide in Murder on the Orient Express and bring doomed lovers together in Brief Encounter. It's not like that in the US.
America's love-songs to transport are On the Road, Thelma and Louise and Easy Rider. Wheels spinning free on the desert highway do it for them; wheels singing on tracks for us.
The difference, I think, lies partly in how we see our relations with society and with each other.
For Americans, the car is the ultimate expression of liberty and independence, the values that lie deep in the nation's soul. For us, the train says something about our belief that we're all in it together - though obviously second-class passengers had better not loiter in first-class carriages. And railways, of course, hark back to our golden age, when the great engine of the British industrial revolution pulled not just our country but the whole of the empire towards modernity and prosperity.
Whatever the source of our passion, our views about railways are not entirely rational. That is, in part, why I suspect the motives behind the plan to build a high-speed railway from London to the Midlands and the North.
The consultation period for High-Speed Two (HS2 - HS1 is the Channel Tunnel Rail Link) finished last week. The plan is for a line to run from London to Birmingham and then on to Manchester and Leeds.
But the Government has already announced that it is in favour, and since it inherited the scheme from Labour, the Opposition can't complain too much.
The Lib-Dems are delighted. The only politicians against it are a few Tory MPs through whose constituencies it is due to slice, and Boris. The Fair One's opposition is being characterised by the scheme's proponents as an "in my backyard, please" attempt to grab more funds for London.
Why such an unusual consensus? Partly because HS2 combines the romance of rail with high-tech. Never mind the crash in China last week that killed 39 people: high-speed rail feels exciting and forward-looking, at a time when we could do with a bit of optimism. Labour and the Lib-Dems tend to like large lumps of public spending; and, at a time when so many projects are being slashed, the Government wants to be able to point to a big, glamorous investment that it is making. And Philip Hammond, the Transport Secretary, says that the scheme will help to close the North-South economic gap.
I suspect the Government has its eye on a slightly different North-South gap - the one between the Tories' share of votes in the South and the North. A big project designed to benefit the north might help win the Conservatives some popularity in an area that has been an electoral wasteland for them for decades. Still, if the figures suggested HS2 would be a good investment, I'd be in favour. But they don't.
According to the Government, the total cost of the railway will be £44?billion. Because the ticket prices won't cover the cost it will have to be heavily subsidised, to the tune of £17?billion. That's about £500 per taxpayer. But this will be worth it, according to the Government, because the benefits of the scheme are so great. "For every £1 spent by the Government, the scheme would deliver £2 in benefits," says the consultation paper.
Sounds impressive, doesn't it? You'd fork out £1 if somebody was going to return you £2, wouldn't you? But those sums, like all Government figures, reward closer examination.
There are three big problems with them. First, the calculation of benefits depends on a crucial assumption: that time spent on the train is wasted. That is clearly nonsense. I work far better on trains than in the office, because there's nobody to gossip or nip out for coffee with. Most fast trains these days have wi-fi so there's nothing to stop people toiling as they travel.
Second, there's a problem with the distribution of benefits from HS2. Most of them accrue to business users, who are assumed to earn an average of £70,000. The Government is therefore subsidising the well-off. Surely the country's flagship public investment programme should benefit the poor at least as much as the prosperous? Funding this scheme is a bit like spending the housing budget on subsidising five-bedroom mock-Tudor mansions in the stockbroker belt.
The third, and largest, problem with the Government's analysis is that there are many better ways of spending £17?billion to improve our transport infrastructure. Sir Rod Eddington, a former chief executive of British Airways, produced a huge report in 2006 on how and where Britain should invest. He trawled through all the different types of projects that the department might think of looking at - road, railways, ports, cycle tracks - and concluded that the best returns came not from the big, glamorous schemes but from small ones. All the schemes that cost over £1?billion had returns of less than £5 for each £1 invested. Many smaller schemes, costing between £10?million and £100?million, had benefits of up to £8 for £1 invested. Some were higher still.
Sir Rod favoured modest road-improvement programmes to relieve the traffic jams that waste so much of our time, raise our blood pressure and pollute our air; as far as rail investment goes, he liked the idea of longer platforms and longer trains in congested places. The trouble with those schemes, of course, is that they are local, boring and will never win a government a single headline.
Romance and glamour are wonderful, but they are better suited to movies and candlelit dinners than to transport policy. Infrastructure planning should be governed by cost-benefit analysis, which may be dull but tends to be a better way of ensuring that our money isn't wasted. Which I fear, in the case of HS2, it will be.
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