Friday, June 12, 2015

Honolulu's train fiasco: A cautionary tale

John Pritchard

Randal O'Toole tried to warn Honolulu. So did Wendell Cox, but they and other opponents of that rail project were ignored. Turns out that the costs of maintaining and operating the system after it's built were significantly underestimated. And the estimated number of future passengers and future ticket prices are in dispute, adding more layers of financial uncertainty.

Sound familiar? To those of us in California following the ongoing high-speed rail fiasco, it sounds very familiar, since those are the same questions asked for years about that project. 

But, unlike California's high-speed rail project, apparently Honolulu at least has enough money lined up to build their project. California has, at most, only $9 billion of the $68 billion cost of the project, which itself is an under-estimate.

All of the problems that California's project still has---and the risk it poses for the state's taxpayers---were clearly anticipated in this report five years ago: The Financial Risks of California‚Äôs Proposed High-Speed Rail Project. Here and there the numbers have changed over the years, but the realities haven't.

The state's annual payment alone on the $9 billion in bonds authorized by the voters for HSR in 2008 will be $647 million! Ticket prices have always been in dispute, as are passenger estimates.

But proponents of these projects count on deceiving the public about costs to get the projects going and then making them politically difficult to stop, when pouring good money after bad seems like the only option (See Megaprojects and Risk) and they are supposedly too big to stop.

Thanks to the Antiplanner.

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