Friday, April 15, 2011

California high-speed rail: Outlook is "bleak"

Yesterday in the Chronicle, Andrew Ross called the outlook "bleak" for California's high-speed rail after the budget deal cut all funding for the rest of the fiscal year. But his comments showed that he apparently doesn't understand how bad the outlook was even before those cuts. Ross invokes the official $43 billion price tag to build the system, but a more realistic assessment puts the price between $66 and $115 billion.

And the "private sector"? There will be no private investors in the California HSR system without state guarantees of profitability, which is prohibited by Prop. 1A. That was one of the big selling points for California voters in 2008, that the system would be self-sustaining and not subsidized by the state's taxpayers. The whole project was always a fantasy based on inflating future ridership numbers and minimizing both the construction costs and the operating expenses after the system was built.
It's time for California---Governor Brown should take the lead---to let this boondoggle die a dignified death rather than go through all of the five stages of grief. We're in denial now, but let's skip anger, bargaining, and depression and go directly to acceptance. The high-speed rail project is dead, and, in retrospect, it never should have been born.

See also yesterday's editorial in the Contra Costa Times. Thanks to Streetsblog for the link.



At 11:45 AM, Anonymous Anonymous said...

Maybe we can cut all funding for SFO and LAX while we are at it. Maybe state funding for Caltrans can go away too.

At 1:02 PM, Blogger Rob Anderson said...

Nope. We're just talking about high-speed rail here. We could better use all that money for Muni and Caltrain.

At 2:50 PM, Anonymous Anonymous said...

So simple minded. SFO and LAX get huge gov't subsidies. Why wouldn't HSR get subsides?

At 3:26 PM, Blogger Rob Anderson said...

Could you be more specific on the airports? Of course the Feds run the FAA, but what else is there?

Whatever they're getting it's nowhere near the $66-115 billion just to build the HSR system, which doesn't include the cost of operating it once it's built. And HSR will never carry enough passengers to justify that kind of investment. The CHSR authority's wildly inflated passenger estimates are for 39 million passengers a year by 2030, whereas more than 2.5 million passengers a month now go through SFO.

At 3:55 PM, Anonymous Anonymous said...

I support fully the HSR in CA. and don't care if it cost $200b.

Do you even realize that so far the Iraq war has cost us $784b..and counting?

At 3:59 PM, Anonymous Anonymous said...

Because a huge number of people and businesses actually USE SFO and LAX. Both accept traffic from places where people are and send traffic to where people want to go.

At 1:47 AM, Anonymous JJ said...

Airports get subsidy after subsidy after subsidy. Landing fees pretty much pay for maintenance of the airport. The $10b expansion costs? Subsidized. Air traffic control? Subsidized. Repaving? Subsidized. TSA security theater? Subsidized.

And sometimes airlines don't even pay for the gate fees that are supposed to pay for the bathroom to get cleaned. In fact, they get paid to fly into cities...and Im not talking about essential air service

"The city offered financial incentives for the two Mexican airlines, including waiving landing and gate fees and terminal rents, as well as reimbursing each airline up to $150,000 a year to advertise and promote the routes for the first two years of operation."

Amazing isn't it? The tax payer is paying these private companies to do business.

Oh, and that comes after paying customs agents for 6 months in which no international flights used the airport. They got paid to do nothing, and now that the airlines are in, it's the taxpayer that still pays the bill.

If you want trains to pay for themselves, lets put ALL transportation on even footing.

At 9:23 AM, Blogger Rob Anderson said...

You offer no evidence for the $10 billion number. Of course the FAA and security is paid for by the federal government, just like it pays for the FDA to regulate the drug market.

And a city only offers "financial incentives" because it assumes it will get value in return, e.g., the Twitter tax break by SF. Twitter gets a tax deal, and the city keeps a growing company in the mid-Market Street area with a lot of well-paid workers spending money in the city.

The problem with the California HSR project is that there is no comparable upside for state taxpayers after billions of their money is spent. It will just be a system for the rich and some tourists.

At 3:20 PM, Anonymous Anonymous said...

Preventing the need to build another airport in the Bay Area is pretty substantial upside...

At 3:30 PM, Anonymous Anonymous said...

Preventing the need to open additional terminals or even another airport in the Bay Area is pretty damn big upside. We probably couldn't even put in another active runway.

Terminal 2 was a "mere $383 Million"

At 4:31 PM, Blogger Rob Anderson said...

The CHSR authority is now spending a million dollars a day doing nothing but planning and PR. $383 million isn't much compared to a project that will cost between $66 billion and $115 billion.

At 10:19 AM, Anonymous Anonymous said...

Terminal 2 is a dinky afterthought and was only a renovation. The main international terminal was several billion.

At 10:45 AM, Blogger Rob Anderson said...

It would help if you provided some evidence for the "several billion" claim. Even so we're talking about $66 billion at a minimum to build a system that won't carry enough people to justify the expense.

At 2:22 PM, Anonymous Anonymous said...

Your source is someone who is trying to kill the project making vague projections.

At 2:56 PM, Blogger Rob Anderson said...

I refer to more than one "source" for a critique of CHSR. Click on "High-Speed Rail" at the bottom of the post and you'll find a number of links to sources. The best analysis of the money issues is this study.

The high-speed rail project overall in the US is typical of what are called "megaprojects" by the authors of "Megaprojects and Risk," a book-length study of big projects around the world, including the channel tunnel from England to France.

It's a common practice of megaproject boosters---especially on rail projects---to sell a project based on inflated ridership predictions and minimized construction costs and operating expenses. The history of the California high-speed rail project follows that scenario exactly, though the authors of the book don't include the project in their analysis.


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