Wednesday, September 28, 2011

How will HSR be built without money? Is that a foolish question?

Article after article surfaces with the same basic argument.  There's no money to build this train.  And, there's not going to be any in the immediate future. Chumley, the author of the article, below, is apparently on the politically Right side of the argument, advocating the 'free market' as the appropriate measure and guide for creating such a train as this. And that's what makes this article so interesting.

If the private sector takes no interest, she says, there must be basic problems.  Well, she's right; there are.  A. it costs too much, B. it will carry too few people, C. it will require permanent subsidies to operate, D. there will be no further federal funds or any of the other anticipated sources.

When Chumley quotes Gabriel Roth, who opposes this HSR project, the point being made is that pitting one modality (HSR) against the others, driving and flying, is "ridiculous."

The rail advocates will, of course, disagree with her premises.  They will tell you that commercial aviation is massively subsidized, as are the highways and therefore automobile use.   Their standard claim is that if funds aren't spent on HSR, they will be required in far larger amounts for the expansion of those other modalities.  

However, transit is not a zero-sum game.  If the state population expands, as is frequently claimed as a justification for HSR development, all transit modalities must be expanded, including rail.  If it doesn't, there certainly is no reason for building the most expensive per mile rail system ever conceived.

By the way, it's already quite clear that transit modalities have different consumer cost points.  Therefore, lower income people select lower cost transit, such as buses, while the affluent select the most expensive modes, such as air travel and high-speed rail.  Needless to say, the latter population is far smaller than the former.  

So, this raises the question of equitability.  If high-speed rail, the most expensive rail travel available, self-selects high income customers, is that the most fair use of tax dollars? One could argue that this is an example of government-imposed income redistribution flowing upward.

Those who do the arithmetic on such matters will tell us that subsidies for HSR, per passenger-mile, are far greater than the other alternative transit modalities. Furthermore, we can't simply abandon the maintenance and upgrading of other transit modes as if HSR were somehow to take all transit riders out of planes and cars.  That is, indeed, "ridiculous."  

Let's just say that all transit modes will have to be, a. repaired after years of neglect, b. maintained, and c. upgraded.  That includes the existing rail system for Amtrak and the few other passenger rail service providers.  And, it certainly includes urban and regional public mass transit in all modalities.

In this article, as in all the others, we need to rid ourselves of that obsolete and incorrect $43 billion cost forecast number. The anticipated new business plan from the rail authority will indicate considerably higher construction costs and predictably, even those will continue to be "low-ball" numbers.

Yet again, the issue comes down to cost/benefits and here, HSR fails miserably.  As the ridership number forecast continues to go down, and the construction cost forecast continues to rise, the cost/benefit equation clearly points to the undesirability of building this project.

California Struggling to Find High-Speed Rail Funds
September 26, 2011

Cheryl K. Chumley writes from Northern Virginia. (read full bio)

California’s plans for high-speed rail, which envision tracks connecting Southern California to the Bay Area with riders traveling at speeds of 220 miles per hour, suffered a setback in mid-September as Congress cut billions of dollars from the Federal Railroad Administration’s budget.

Federal Funding Cut

President Obama, who is pushing high-speed rail projects in select states, sought $8 billion in funding for fiscal 2012. House Appropriations subcommittee members, however, cut nearly $7 billion from that request. The bulk of the remaining $1 billion is already allocated for Amtrak operations.

The cuts did not come as a surprise to political analysts. Republicans have been stating for months they would not support spending for high-speed rail in this economic downturn.

Transportation analyst Gabriel Roth, a research fellow with the Independent Institute and a former civil engineer and transportation, sees the denial of federal funding as a welcome advance in the debate over high-speed rail.

Competing Against Popular Services

“I think high-speed rail in California is a terrible idea,” Roth said. “There are good air services in California that are self-sustaining. I think it’s just ridiculous to provide competition for ongoing services that are already proven to be self-sustaining.”

Government Underestimated Costs

The reluctance of Congress to fund high-speed rail has left California in a financial lurch. The high-speed rail project is estimated to cost upwards of $43 billion for just its first phase. The California High Speed Rail Authority, the group that is actually in charge of building the transit system, has at its disposal $6.3 billion in federal grants and proceeds from an initial bond offering that was approved by referendum in 2008. But the governor must first consent to the bond issue and then allocate funds for the state treasurer to use. 

Making matters worse, project analyses show the projected costs of the system have been substantially underestimated. Some put the price of the first phase at $65 billion, $22 billion more than government officials projected.

Few Travelers Would Benefit

How taxpayers in California might respond to this additional demand for tax dollars is an uncertainty. But to Roth this turn of events is just one more reason why high-speed rail programs typically are bureaucratic boondoggles that should be avoided.

“Both the federal government and the state of California are bankrupt. It’s completely ridiculous to spend money on this sort of thing, which is really built for the benefit of the people who build it. They’re not building it for travelers,” Roth said. “There’s no way a family with children could use this service, for example, because it’s much cheaper to travel by car.”

Roth said the true test of determining whether a planned transportation system is sound or not is rooted in one simple question: Who’s paying?

“If a transportation project is good, it should stand on its own feet,” Roth said. “It’s quite wrong for taxpayers to pay for this at all. If there was any merit to this proposal, the people who proposed the project would put their own money into it.”

Cheryl Chumley ( writes from northern Virginia.

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