high speed rail

The Moonbeam Express

Ken Orski — Fri, 03 Feb 2012 11:55:59 -0500

Seldom has public opinion and expert judgment been more unified than in its opposition to the California high-speed rail project. The project has been criticized by its own Peer Review Group, the Legislative Analyst's Office (LAO), the California State Auditor, the State Treasurer and a group of independent experts (Enthoven, Grindley, Warren et al.). In addition, the bullet train has come under severe criticism by influential state legislators and by members of the state's congressional delegation. Equally damaging to the project's future prospects have been two public opinion surveys showing that California voters have turned solidly against the project, and the opposition of virtually all of California's newspapers, including The Orange County Register, whose latest editorial we reprint below.

Editorial: Bullet train becoming "Moonbeam Express" (OC Register, Feb 1, 2012)
Gov. Jerry Brown wants to use anti-global-warming carbon taxes to fund California's much-maligned high-speed rail project.

In a brazen denial of the obvious, Gov. Jerry Brown now insists the proposed California high-speed rail can be built for much less than its own business plan stipulates, and wants to use anti-global-warming carbon taxes to underwrite the proposal, whose price tag has nearly tripled in the three years since voters approved it.

The governor seems intent on demonstrating how California's state government has burdened taxpayers with mounting debt, while overspending to create consecutive years of budget deficits. The rail project has been dubbed "the train to nowhere" because the only portion close to being built would link relatively sparsely populated Central Valley towns and no metropolitan areas. Perhaps with Mr. Brown's new foolish insistence, it should be christened the Moonbeam Express.

Since the rail proposal appeared on the 2008 ballot, it has been widely and legitimately criticized in detailed analyses by the rail project's own Peer Review Group, the state auditor, treasurer, Legislative Analyst's Office, local governments including Tulare, Madera and Kings counties and the city of Palo Alto, numerous state and federal lawmakers from both parties and studies by UC Berkeley Institute of Transportation and the Reason Foundation. These highly unfavorable critiques reflect many of the criticisms the Register Editorial Board has raised since the project was proposed.

In only three years, the train's estimated cost has increased from $33 billion to $98.5 billion in the latest version of its own ever-changing business plan.

Voters approved only $9.9 billion in bonds based on the rest coming from Washington and local governments along the route, and private investors. Washington has provided about $3 billion and not another dime has materialized or been pledged. Meanwhile, the estimated completion of the original phase of the project, from San Francisco to Anaheim, has been extended 14 years beyond the original estimate of 2020.

Ridership estimates are unrealistic, meaning trains can't operate solely on ticket revenue as required by the initiative. Costs, even at their current highest level, are certain to increase, and the needed additional funding sources are not forthcoming. Given hostility in Congress to the project, more money from Washington, which is grappling with its own massive deficits and debts, won't be seen in the foreseeable future.

State Sen. Doug LaMalfa, R-Richvale, introduced a bill Monday to put the high-speed rail proposal back on the November ballot so voters can de-authorize selling the $9.9 billion in bonds.

The Register has urged this ill-conceived and increasingly untenable project be resubmitted to voters. Thankfully, for the most part, bonds remain unsold. There is no reason taxpayers should assume billions more debt --- with annual interest payments of up to $1 billion --- when the likelihood is remote the train ever will be built, despite the governor's strained assurance.

Moreover, state Sen. Diane Harkey, R-Dana Point, notes that the governor's proposed new revenue stream --- carbon taxes created by the 2006 Global Warming Solutions Act--- is another hoped-for, rather than assured, solution. "The state's cap-and-trade program is not yet in operation, and revenue estimates of $1 billion per year are unreliable and unsubstantiated," Ms. Harkey said. "Relying on projected revenues that fall short is the key reason why our state deficit continues to explode year after year. To rush this project forward, just using up the $3.5 billion of federal funds, with the hope of an additional funding mechanism based on guesswork, is irresponsible."

"Jaw-Droppingly Shameless:" Mother Jones on California High Speed Rail Projection

Wendell Cox — Mon, 23 Jan 2012 10:57:42 -0500

Kevin Drum of Mother Jones reports on the highly questionable "cost of alternatives" that has been routinely repeated by proponents of the California high speed rail project, in an article entitled "California High Speed Rail Even More Ridiculous than Before."

The mantra goes something like, "yes high speed rail is expensive, but it would cost even more to not build it." Yes, indeed, it is expensive, starting at the low estimate of $98.5 billion the press and proponents usually cite to the nearly $118 billion that the California High Speed Rail Authority itself indicates. Advocates then cite a $171 billion figure as what Californian's would have to pay if they didn't build the line.

Joseph Vranich and I detailed the flaws in this "alternatives estimate" in a Wall Street Journal commentary on January 10 ("California's High Speed Rail Fibs"). We noted that the claim "sets a new low for planning projections in a field that has been rife with abuse." This was a reference to "strategic misrepresentation” ("lying") that has characterized rail project forecasts, according to top European academics.

Drum goes further, calling the claim "jaw-droppingly shameless," an appropriate characterization based upon the method and documentation. He goes on to suggest that "A high school sophomore who turned in work like this would get an F."

Regardless of the views that officials or the public may have on high speed rail, they are entitled to a standard of professional (and taxpayer financed) analysis above "jaw-droppingly shameless."

A Devastating Verdict for California HSR

Ken Orski — Thu, 05 Jan 2012 17:21:43 -0500

Like many other observers, we have found the California High-Speed Rail Peer Review Group to have made a convincing case for a fresh look at the feasibility of the California high-speed rail project. The group's report was issued as eleven House Democrats – eight from California – joined an earlier request from twelve Republican House members for an independent GAO investigation of the embattled project.

That is why we find Governor Brown’s reaction – that the peer reviewers' report "does not appear to add any arguments that are new or compelling enough to suggest a change of course” – to be incomprehensible. Either the governor issued the statement without the benefit of having read the report, or else he is so ideologically committed to the project that he refuses to look the facts in the face.

Precisely which conclusions of the report are not compelling enough, the governor’s spokesman has not made clear. Is it the statement that "the Funding Plan fails to identify any long term funding commitments" and therefore "the project as it is currently planned is not financially feasible"?

Is it the reviewers' assertion that "the [travel] forecasts have not been subject to external and public review" and, absent such an open examination, “they are simply unverifiable from our point of view"?

Could it be their statement that "the ICS [Initial Construction Section] has no independent utility other than as a possible temporary re-routing of the Amtrak-operated San Joaquin service...before an IOS [Initial Operating Segment] is opened"?

Or, is it the Panel's conclusion that "...moving ahead on the HSR project without credible sources of funding, without a definitive business model, without a strategy to maximize the independent utility and value to the State, and without the appropriate management resources, represents an immense financial risk on the part of the State of California?"

To us, the findings seem at least deserving of a respectful consideration.

But the California High-Speed Rail Authority (CHSRA) is not ready to concede anything. Here is the opening paragraph of its response:

"While some of the recommendations in the Peer Review Group report merit consideration, by and large this report is deeply flawed, in some areas misleading and its conclusions are unfounded. ...Although some high-speed rail experience exists among Peer Review Panel members, this report suffers from a lack of appreciation of how high-speed rail systems have been constructed throughout the world, makes unrealistic and unsubstantiated assumptions about private sector involvement in such systems and ignores or misconstrues the legal requirements that govern construction of the high speed rail program in California."

It is not our intention to delve in detail into the Authority's response and judge the soundness of its arguments. No doubt, the CHSRA response will come under a detailed examination by the Authority’s critics in the days ahead. Suffice it to say that, having carefully and with an open mind examined the Authority’s rambling nine-page response, we find that it did not satisfactorily rebut the peer group’s central point: that it is not prudent, nor "financially feasible," to proceed with the $6 billion dollar rail project in the Central Valley (including $2.7 billion in Proposition 1A bonds) in the absence of any identifiable source of funding with which to complete even the Initial Operating Segment. To do so, would be to expose the state to the risk of being stuck, perhaps for many years, with a rail segment unconnected to major urban areas and unable to generate sufficient ridership to operate without a significant state subsidy.

The Authority's lashing out at the peer reviewers and the dismissive tone of its response suggest that it has already made up its mind to stay the course and circle the wagons. That is not a wise posture to assume in the face of an already skeptical state legislature.

What Lies Ahead for Transportation in 2012?

Ken Orski — Mon, 02 Jan 2012 17:47:17 -0500

As befits this time of year, our thoughts turn to the events that await us in the days ahead. Putting aside the major imponderable — the outcome of the presidential and congressional elections that inevitably will impact the federal transportation program —what can the transportation community expect in 2012? Will Congress muster the will to enact a multi-year surface transportation reauthorization? Or will the legislation fall victim to election year paralysis? What other significant transportation-related developments lie ahead in the new year? Here are our speculations as we gaze into our somewhat clouded crystal ball.

Will Congress enact a multi-year transportation bill?

In 2011, the Senate Environment and Public Works (EPW) Committee passed a bipartisan two-year surface transportation bill (MAP-21) and the Senate Commerce Committee approved the measure’s safety, freight and research components. But at the end of the year, the bill’s titles dealing with public transportation, intercity passenger rail and financing were still tied up in their respective committees (Banking, Commerce and Finance). What’s more, the Senate bill ended up $12 billion short of meeting the $109 billion mark set by the EPW Committee as necessary to maintain the current level of funding plus inflation.

Finance Committee Chairman Max Baucus (D-MT) has yet to publicly identify the offsets needed to cover the final $12 billion of the bill’s cost. Repeated assurances by EPW committee chairman Sen. Barbara Boxer (D-CA) that the necessary "pay fors" have been found, has met with widespread skepticism. "I’ll believe it when I see it" has been a typical reaction among congressional watchers. With the Republicans opposed to using "gimmicks" (Sen. Orrin Hatch’s words) to come up with the needed money, it’s not entirely clear that the bill, as approved on the Senate floor, will contain the full $109 billion in funding.

On the House side, the fate of a multi-year bill remains equally clouded. In November, Speaker Boehner announced that he would soon unveil a combined transportation and energy bill, dubbed the "American Energy & Infrastructure Jobs Act" (HR 7). The bill would authorize expanded offshore gas and oil exploration and dedicate royalties from such exploration to "infrastructure repair and improvement" focused on roads and bridges.

However, questions have been raised about this approach. Critics, including Sen. Barbara Boxer and Sen. James Inhofe (R-OK) EPW committee's ranking member, judge the approach as problematical. They allege, along with many other critics, that the royalties the House is counting upon would fall billions of dollars short of filling the gap in the needed revenue (the gap is estimated at approximately $75-80 billion over five years). They further contend that the revenue stream from the royalties would not be available in time to fund the multi-year transportation program. What’s more, using oil royalties to pay for transportation would essentially destroy the principle of a trust fund supported by highway user fees. In sum, the House bill, if unveiled in its currently proposed form, will meet with a highly skeptical reception in the Senate.

Assuming that both reauthorization bills in some form will gain approval in February, will the two Houses be able to reconcile their widely different versions by March 31 when the current program extension is set to expire? Or will the negotiations bog down in an impasse reminiscent of the current payroll tax stalemate? Given the importance that both sides attach to enacting transportation legislation and given the desire of both sides to avoid the blame of causing an impasse, we think the odds are in favor of reaching an accommodation — probably more along the lines of the Senate two-year bill than the still vague and unfunded House five-year version. If this simply kicks the can down the road a couple of years, that may be OK with Senate Republicans. As one senior Senate Republican confidently told us, by the bill’s expiration date the Senate will be in Republican hands and "the true long-term bill will be ours to shape."

Will California lawmakers pull the plug on the high-speed train?

In 2011 Congress effectively put an end to the Administration’s high-speed rail initiative by denying any funds to the program for a second year in a row. Does the same fate await the embattled $98 billion California high-speed rail project at the hands of the state legislature in 2012?

At a December 15 congressional oversight hearing, witnesses cited a litany of reasons why the projects is a "disaster" (Rep. John Mica’s words). Among them: unrealistic assumptions concerning future funding; quixotic choice of location for the initial line section ("in a cow patch," as several lawmakers remarked); lack of evidence of any private investor interest in the project; eroding public support (nearly two-thirds of Californians would now oppose the project if given the chance, according to a recent poll); a "devastating" impact of the proposed line on local communities and farm land; unrealistic and out-of-date ridership forecasts; and lack of proper management oversight.

More recently, the project came under additional criticism. The job estimates claimed by the project’s advocates ("over one million good-paying jobs" according to House Minority Leader Nancy Pelosi) have been challenged— and acknowledged by project officials— as grossly inflated. Four local governments in the Central Valley, including the City of Bakersfield, have formally voted to oppose the project, fearing harmful effect on their communities. And agricultural interests are gearing up for a major legal battle, according to the Los Angeles Times.

But most unsettling for the project’s future is the inability of its sponsors to come up with the needed funding. To complete the "Initial Operating Segment" to San Jose (or the San Fernando Valley) would require an additional $24.7 billion. To finance this construction, the California Rail Authority’s business plan calls for $4.9 billion in Proposition 1A bonds and assumes $19.8 billion in federal contributions – $7.4 billion in federal grants and $12.4 billion in the so-called Qualified Tax Credit Bonds (QTCB). But the latter assumptions came in for sharp congressional criticism as so much wishful thinking, given the bipartisan congressional refusal to appropriate funds for high-speed rail two years in a row.

Further challenges await the project early in 2012. A group of 12 congressmen led by House Majority Whip Kevin McCarthy (R-CA) has formally requested the Government Accountability Office (GAO) to review the project’s viability and "questionable ridership and cost projections." Also expected early in January are a critique of the Authority’s business plan by the Independent Peer Review Group and a follow-up report by the State Auditor.

Meanwhile, the governor and state legislature, are being asked by the Rail Authority to approve a $2.7 billion bond issue authorized by Proposition 1A to fund and begin construction of the initial Central Valley section of the rail line from Fresno to Bakersfield. Will they be swayed by the findings of the three respected reviewing bodies and by the increasingly negative editorial and public opinion? Or will they continue to hold on to the seductive vision of bullet trains zooming from northern to southern California in two and a half hours — however distant and uncertain that vision may be? At this point, we believe the decision could go either way. However, sharply critical reports by the Peer Review Group and the General Accountability Office could tip the scale against funding the Central Valley project.

Will tolling join the gas tax as a mainstream source of highway revenue?

With the possibility of a near-term gas tax increase "less than zero," attention has turned to alternative means of raising transportation revenue. The most prominent option appears to be tolling— and 2012 may be the year when tolling becomes accepted as a mainstream source of highway revenue.

Recent toll increases on the nation’s highways attest to their growing use (if not popularity) as revenue enhancers. In New Jersey, tolls are set to rise by 53% on the New Jersey Turnpike and by 50% on the Garden State Parkway. The Port Authority of New York and New Jersey also has approved substantial toll increases on bridges linking the two states. These moves have provoked Sen. Frank Lautenberg (D-NJ) to sponsor a "commuter protection act" that would transfer toll setting powers to the U.S. Secretary of Transportation. But the Senator’s initiative does not appear to have obtained much support in Congress. IBTTA, the toll industry association, has lodged strong objections, arguing that federalizing toll rate setting would encroach on the states’ jurisdiction and interfere with their ability to use tolls as a tool of infrastructure financing, and Congress appears to be listening.

A recent Reason Foundation poll has found that people are more willing to pay tolls than increased fuel taxes (by a margin of 58 to 28 percent.) Moreover, the formation of a new "U.S. Tolling Coalition" suggests a growing interest in tolling on the part of the states. Under a pilot program that allows up to three Interstate highways to be reconstructed with tolls, Virginia will add tolls along the I-95 corridor and Missouri will toll its stretch of I-70. Arizona and North Carolina have applied for the remaining slot in the pilot program. Other states are embracing tolling to finance new capacity. Washington State, for example, has begun tolling the SR-520 floating bridge over Lake Washington to help pay for its replacement. Nor is the practice of tolling confined just to a few states. All told, 35 states already depend on toll revenue to some extent.

The Tolling Coalition wants to expand the pilot program and give the states the flexibility to toll any portions of their Interstate and other federal highways, "whether for new capacity, system preservation, or reconstruction." So far, neither the Senate nor the House have agreed to relax existing prohibitions, but they are prepared to retain the current pilot program.

However, the need to reconstruct and modernize the existing Interstates which are reaching the end of their 50-year design life, combined with the necessity to expand capacity of the Interstate highway system to meet the needs of an expanding population, may soften congressional opposition to relaxing the current Interstate tolling restrictions. With the gas tax no longer able to meet the nation’s transportation investment needs, and with the concept of a VMT (vehicle-miles travel) fee still a distant vision, the year 2012 could mark a turning point in the acceptance of tolling as a serious highway revenue enhancer.

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Note: the NewsBriefs can also be accessed at www.infrastructureUSA.org
A listing of all recent NewsBriefs can be found at www.innobriefs.com

The Troubled Future of the California High-Speed Rail Project

Ken Orski — Fri, 23 Dec 2011 10:43:20 -0500

A congressional oversight hearing, focused on the concerns surrounding the troubled California high-speed rail project, cast new doubts on the likelihood of the project’s political survival.

The December 15 hearing was the second of two hearings called by the House Transportation and Infrastructure Committee to examine the Administration’s "missteps" in handling the high-speed rail program. Before a largely skeptical groups of committee members — Reps Mica (R-FL), Shuster (R-PA), Denham (R-CA), Miller (R-CA), Napolitano (D-CA), and Harris (R-MD)— two panels of witnesses offered a mixture of support and criticism concerning the project’s impact, financial feasibility and prospects for the future. The first panel comprised six California congressmen — three testifying against the project (Reps. Nunes (R), McCarthy (R) and Rohrabacher (R)), three in support of it (Reps. Cardoza (D), Costa (D) and Sanchez (D).) The second panel consisted of FRA Administrator Joseph Szabo, California Rail Authority CEO, Roelof Van Ark, local elected officials and representatives of citizen groups.

A Brief Project Overview

The proposed high-speed line, from Sacramento and San Francisco to Los Angeles and San Diego, was originally estimated to cost $43 billion in 2008 when the state’s voters approved a $9.95 billion bond measure (Proposition 1A) to help finance the project. Since then, the total cost estimate for the project has more than doubled to $98.5 billion and the completion date has been pushed back by 13 years to 2033.

The "initial construction section" of 140 miles is proposed to be built in the sparsely populated Central Valley from south of Merced to north of Bakersfield. The $6 billion project is to be financed with a $3.3 billion federal contribution and $2.7 billion worth of state Proposition 1A bonds. Construction is to begin in 2012. However, to qualify as an "Initial Operating Segment" as required by the authorizing bond measure and capable of running high-speed trains, the line has to be extended by another 290 miles to San Jose (or 300 miles to the San Fernando Valley), at an additional cost of $24.7 billion.

To finance the latter construction, the California Rail Authority’s business plan calls for $4.9 billion in Proposition 1A bonds and assumes a $19.8 billion federal contribution – $7.4 billion in federal grants and $12.4 billion in the yet to be created Qualified Tax Credit Bonds (QTCB). The latter assumption came in for sharp committee criticism as wishful thinking. The bill authorizing QTCB (or TRIP) bonds, proposed by Sen. Wyden (D-OR), is not given much chance of passing in the House. Even if passed, it would only offer $1 billion for the California HSR project rather than $12.4 billion as claimed in the Authority’s business plan. Further federal high-speed rail grants are equally uncertain given the bipartisan congressional refusal to appropriate funds for high-speed rail two years in a row. In other words, the funding for the Initial Operating Segment hinges on highly questionable assumptions as to continuing federal aid.

Even more conjectural are the Authority’s funding assumptions for the subsequent phases of the project— a line extension from San Jose to the San Fernando Valley and a southern connection, to Los Angeles and Anaheim. That phase of construction according to the Authority’s business plan, would require a further federal contribution of $42.5 billion between 2021 and 2033 (plus $11 billion in private investment).

Left unstated in the Authority’s business plan, one informed observer speculated, is the secretly entertained hope that by 2015 (when the additional federal funding will be needed), the economic circumstances — and perhaps political circumstances as well — will have changed, allowing a resumption of generous federal support.

A "Boondoggle" or a "Compelling Opportunity for Our State"?

Witnesses testifying before the committee aligned along predictable fault lines. Critics of the rail project (mostly, but not all, Republicans) tended to focus on the specific weaknesses of the project: its unrealistic assumptions concerning future funding; the quixotic choice of location for the initial line section ("in a cow patch," as several lawmakers remarked); a lack of evidence of any private investor interest in the project; the eroding public support for the project (nearly two-thirds of Californians would now oppose the project if given the chance, according to a recent poll); the "devastating" impact of the proposed line on local communities and farmers; and the unrealistic and out-of-date ridership forecasts (with more passengers in 2030 predicted to board trains in Merced, a small farming community in Central Valley, than in New York’s Penn Station). Other witnesses asserted that the current project is vastly different from the one Californian voters approved in 2008; and that it is lacking proper management oversight (it is a project "of the consultants, by the consultants and for the consultants" one witness remarked).

Defenders of the project (mostly, but not all, Democrats) resorted largely to abstract arguments about the merits of building a high-speed rail system in California. They saw the project as a compelling long-term vision, as a travel alternative to congested highways and air lanes, as a way to reduce greenhouse gas emissions, and as a means of creating thousands of jobs. They argued about the difficulty and prohibitive costs of the alternative of building more highways and airports to accommodate future population growth.

Federal officials are fond of reminding us that construction of the interstate highway system also began "in a cow patch " — in that particular case, a wheat field in the middle of Kansas. But they ignore a fundamental difference between the two decisions: the interstate highway system was backed from the very start by a dedicated source of funds, thus ensuring that construction of the system would continue beyond the initial highway segment "in the middle of nowhere."

The California project has no such financial assurance. Should money for the rest of the system never materialize— as is likely to happen— the state will be stuck with a rail segment unconnected to major urban areas and unable to generate sufficient ridership to operate without a significant state subsidy. The Central Valley rail line would literally become a "Train to Nowhere" — a white elephant and a monument to wasteful government spending.

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Note: the NewsBriefs can also be accessed at www.infrastructureUSA.org

A listing of all recent NewsBriefs can be found at www.innobriefs.com

California's Bullet Train in the Court of Public Opinion

Ken Orski — Mon, 14 Nov 2011 15:23:15 -0500

A business plan released on November 1 by the the California High-Speed Rail Authority (CHSRA), has placed the price tag for the LA-SF bullet train project at $98 billion--- trippling the $33 billion estimate provided in 2008 in the voter-approved Proposition 1A. At the same time, the date of project completion has been pushed back by 13 years -- from 2020 to 2033.

California state legislators who must soon decide whether to proceed with the high-speed rail project are facing an increasingly skeptical climate of opinion. A growing body of their colleagues who formerly supported the rail authority, including state Senators Alan Lowenthal, Joe Simitian and Mark DeSaulnier, have been shocked by the new estimate and have begun to question the wisdom of proceeding with the project. Other legislators intend to go further. State Sen. Doug LaMalfa said he will sponsor a bill to put the voter-approved rail project back on the ballot. House Majority Whip Kevin McCarthy announced that he will introduce legislation that would freeze federal funding for the project for one year so that congressional auditors can review its viability.

At the federal level, chances of further funding for the California project are judged to be negligible, with Congress having virtually zeroed out high-speed rail funds in the FY 2012 federal budget.

At the same time, the bullet train is rapidly losing public support. Nearly two-thirds of California's likely voters would, if given a chance, stop the project according to a recent opinion survey. Organized opposition within the state is widespread. Public interest groups and watchdog coalitions such as Californians Advocating Responsible Rail Design (CARRD), the Community Coalition on High-Speed Rail, the California Rail Foundation, and the Planning and Conservation League have repeatedly challenged the Authority's cost estimates, ridership projections and rail alignments. They have testified against the project in public hearings and taken the Authority to court. Recently, they scored a legal victory when a state judge ruled that the Authority has to reopen and revise its environmental analysis of a controversial alignment.

A team of respected independent experts, comprising Stanford economist Alain Enthoven, former World Bank analyst William Grindley and financial consultant William Warren, have reinforced the growing feeling of doubt about the project's viability by challenging the rail authority's assumptions and pointing out the flaws in its business plan.

Finally, at both the national and state levels, the bullet train project is receiving an increasingly skeptical press scrutiny. Nearly every newspaper in the state (with the exception of the LA Times and SF Chronicle) has turned critical. News services, notably California Watch (founded by the Center for Investigative Reporting) and investigative reporters, such as SF Examiner's Kathy Hamilton, Mercury News' Mike Rosenberg and OC Register's Steve Greenhut are providing incisive critical analysis to counter the steady flow of publicity generated by the Authority and its supporters.

Critical commentaries in mainstream press vastly outnumber favorable stories. Here are three examples:

The Train to Neverland
The Wall Street Journal , November 12, 2011

California's high-speed rail system is going nowhere fast
The Washington Post, November 13, 2011

High-Speed rail depends on $55B in federal funds
California Watch, November 12, 2011 (by Ron Campbell and Lance Williams)

Ken Orski has worked professionally in the field of transportation for over 30 years.

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Note: the NewsBriefs can also be accessed at www.infrastructureUSA.org
A listing of all recent NewsBriefs can be found at www.innobriefs.com

The Economist: The Great High Speed Train Robbery

Wendell Cox — Mon, 05 Sep 2011 14:57:33 -0400

The Economist magazine has called on the British government to c ancel plans for the HS-2 high-speed rail line that would run from London to Birmingham and Manchester. The Economist said:

...these days politicians across the developed world hope new rapid trains, which barrel along at over 250mph (400kph), can do the same. But high-speed rail rarely delivers the widespread economic benefits its boosters predict. The British government—the latest to be beguiled by this vision of modernity—should think again

The government claims the line will cost £32 billion line, however the international experiences suggests a figure more on the order of £32 and the experience in this corridor itself suggests costs could rise even more (see The High Speed Rail Battle of Britain).

A principal purpose for the line is to bridge the economic gap between the economic dynamo of Southeast England (including London) and the Midlands and North of the country. This does not convince The Economist:

China suspended new projects after a fatal collision of two high-speed trains in July; Brazil delayed plans for a rapid Rio de Janeiro-São Paulo link, after lack of interest from construction firms. Yet governments remain susceptible to the idea that such projects can help to diminish regional inequalities and promote growth.

The Economist doubts this will happen:

In fact, in most developed economies high-speed railways fail to bridge regional divides and sometimes exacerbate them. Better connections strengthen the advantages of a rich city at the network’s hub: firms in wealthy regions can reach a bigger area, harming the prospects of poorer places. Even in Japan, home to the most commercially successful line, Tokyo continues to grow faster than Osaka. New Spanish rail lines have swelled Madrid’s business population to Seville’s loss. The trend in France has been for headquarters to move up the line to Paris and for fewer overnight stays elsewhere.

The Economist reminds the government that:

Britain still has time to ditch this grand infrastructure project—and should. Other countries should also reconsider plans to expand or introduce such lines. A good infrastructure scheme has a long life. But a bad one can derail both the public finances and a country’s development ambitions.

Finally, The Economist says that there is better use for the money.

The £32 billion at its disposal might well yield a higher return if it were spent on less glitzy schemes, such as road improvements and intra-city transport initiatives. If the aim is to regenerate “the north”, the current plan might prove a high-speed route in the wrong direction.

Iowa Getting Off Bus Speed Rail?

Wendell Cox — Mon, 22 Aug 2011 18:34:25 -0400

Iowa Governor Terry Branstad has refused to pay $15,000 in annual dues to the Midwest High-Speed Rail Association. This comes after the state legislature declined to fund intercity rail programs in the 2012 budget. Various public agencies had offered to pay the $15,000 on behalf of the state, however Branstad declined the money, with a spokesperson saying that the Legislature had "made their will crystal-clear" about funding membership in the organization.

The Midwest High-Speed Rail Association has been promoting an intercity rail system that would serve Chicago from other major metropolitan areas, operating at substantially below international high-speed rail standards. In the case of the Iowa route, travel to Chicago would be slower than the present bus service, which does not require public subsidy and which provides free high-speed Internet. This issue is described in greater detail in an earlier article.

The proposed national high-speed rail system has run into considerable difficulty at the state level. In addition to the reluctance of Iowa to participate, the states of Florida, Wisconsin and Ohio have refused federal funding. In the case of Florida, the genuine high-speed rail system was canceled by Governor Scott out of fear that the cost overruns, which have occurred in 90 percent of cases, would be the responsibility of state taxpayers. The California system could be nearly $60 billion short of its funding requirements for the first phase and is running into serious difficulties from citizens along the route. The Missouri legislature declined to include funding for part of the Midwest system earlier this year. Finally, the North Carolina legislature has placed requirements for its own review of any future federal grants for high-speed rail.

Report: China to Suspend High Speed Rail Development

Wendell Cox — Wed, 10 Aug 2011 15:54:57 -0400

Railway Age reports that Premier Wen of China "has told the state media that the government will suspend approvals of new rail while it conducts safety checks to address concerns rising from the high speed train collision last month that killed 40 people."

The Premier also indicated that high speed rail trains should operate at slower speeds "at their earlier stage of operation." Earlier this year, the Ministry of Railways slowed all trains to a maximum speed of 300 kilometers per hour (186 miles per hour) and many trains that were to operate at that speed were slowed to 250 kilometers per hour (155 miles per hour). At the time, reports indicated that the slower speeds were to lower operating costs so that fares could be reduced. Concerns had been raised about the much higher fares on the new trains and the cancellation of many conventional trains, which had much lower fares. Railway Minister In addition, Sheng Guangzu told the press that the slower operating speeds would "offer more safety."

Photo: Suzhou to Nanjing at 300 kph (by author)

Another Congressional Cut for High Speed Rail

Wendell Cox — Sun, 17 Jul 2011 16:43:21 -0400

July 15: Today there was another indication that the newly constituted House of Representatives understands the “litmus test” imperative of zeroing out high speed rail appropriations, in light of potentially required cuts in essential programs like Medicare, Social Security and others. $1 billion was switched to Midwest flood relief in an approval today of the Energy and Water Appropriations bill for the 2012 budget.

The bill may or may not pass the Senate and lobbying is underway to “obligate” the money before the rescission becomes law. Either way, this action and the previous action to reduce high speed rail funding by $2.5 billion in a previous budget deal with the White House indicates a very tough road ahead for the Administration’s high speed rail program, most of which is not genuine high speed rail.

The rescission would block funding that has been promised by the US Department of Transportation to a number of projects around the nation, such in California, North Carolina, Michigan, Missouri and Illinois.