high speed rail

Chinese Cancel Treasure Island Investment as Brown Seeks High Speed Rail Funds

Wendell Cox — Mon, 15 Apr 2013 14:34:56 -0400

California's Governor Jerry Brown and an entourage of public officials and corporate executives has spent much of the last week traveling around China trying to drum up business for the state. One of his principal objectives is to entice Chinese investors to take a stake in the California high-speed rail project. From the Governor's perspective, this makes all sense in the world.

California's high-speed rail program may be the current holder of the largest projected funding deficit of any infrastructure in the world, at approximately $50 billion. (That's after shaving $30 billion off the project and losing the support of former California High Speed Rail Authority Chairman, former state Senator Quentin Kopp, who charges that the line is no longer "genuine high speed rail").

As Governor Brown concludes his trip to the Orient, word comes from The San Francisco Chronicle that "A $1.7 billion deal with China Development Corp., the Chinese national railway and Lennar Corp. to construct 12,500 homes on the former Hunters Point Naval Shipyard in San Francisco and a string of high-rises on Treasure Island has collapsed." The project was to be built over up to three decades and would have housed 20,000 people. The deal is said to have fallen apart over not allowing the Chinese investors sufficient control and "unresolved tax issues."

The now defunct deal may have been the largest serious Chinese investment proposal in California.

There are important lessons for proponents of the high-speed rail system, who sometimes fantasize about China as the bailout investor of last resort. The Chinese, like the other investors who have found better things to do with their money are not likely to be swayed by the line's excessively high cost or its modest ridership potential. Nor will the Chinese bear gifts to California.

These issues are described in detail in the new Reason Foundation Updated Due Diligence report by Joseph Vranich and me.

Top GOP Budget Officials Call for Investigation of Xpress West High Speed Train from Victorville to Los Angeles

Wendell Cox — Fri, 08 Mar 2013 14:56:21 -0500

Congressman Paul Ryan, chairman of the House of Representatives Budget Committee and Sen. Jeff Sessions, Ranking Member of the Senate Budget Committee have expressed serious reservations on the proposed taxpayer loan to the Xpress West high-speed rail line that would operate two thirds of the way between Los Angeles and Las Vegas (from Victorville).

A joint letter dated March 7 to United States Secretary of Transportation Ray LaHood called the taxpayer risks untenable. They asked for a Government Accounting Office investigation of the project and asked Secretary LaHood to suspend final determination on the taxpayer loan until the GAO investigation is completed.

The Future of Passenger Rail in America

Ken Orski — Thu, 25 Oct 2012 12:13:15 -0400

On October 19, an Amtrak passenger train hit 111 mph in a test run on a 15-mile stretch of track between Dwight and Pontiac, Illinois. It was the first tangible return from a three-year $1.5 billion program of improvements funded under the Administration's high-speed rail initiative. The program hopes to shave about an hour off the 5 ½ hour rail trip between Chicago and St. Louis. Transportation Secretary Ray LaHood and Illinois Gov. Pat Quinn who were aboard, called it a "historic" event. They were perhaps unaware, as Chicago SunTimes respected columnist Mark Brown pointed out, that "ten years ago, also on the eve of an election, the same Illinois Department of Transportation offered another demonstration along nearly the same stretch of track, also reaching 110 mph."

Setting this pre-election rhetoric aside, of President Obama’s vaunted HSR initiative that promised to connect 80 percent of Americans with high-speed rail, only two true high-speed rail projects remain. They are the California SF-to-LA Bullet Train and the "Amtrak Vision for the Northeast Corridor." The future of these two projects is discussed below. A condensed version of this commentary appeared in the Wall Street Journal on September 24, 2012.

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High speed trains are hardly new --- they have been crisscrossing France and Japan for over 40 years. But building a nationwide high-speed rail network in America is quite a novel idea. It originated with President Obama who, on April 16, 2009, announced a plan "to give 80 percent of Americans access to high-speed rail within the next 25 years." The program was seeded with an $8 billion grant from the American Recovery and Reinvestment Act of 2009 (ARRA), later supplemented with an additional $2.1 billion in general funds.

But this lofty and extravagant vision soon yielded to practical realities. One such reality is America’s demography. Unlike Western Europe and Japan, the United States, lacks an urban pattern that favors high-speed rail connections. This pattern requires large traffic generating city-pairs that are neither close enough to each other to favor travel by car nor far enough apart to favor travel by air. In Europe and Japan those distances happen to fall in the range of 200-400 miles (Think Paris-Lyon, 290 miles; or Tokyo-Nagoya, 220 miles). The only corridor in the United States that fits this description is the Northeast Corridor. No wonder, the Boston-to-Washington rail line has lately become a focus of high-speed rail planning.

Another reality is that true high-speed rail service requires a dedicated alignment reserved exclusively for passenger trains. Such is the case with the French TGV, the German ICE and the Japanese Shinkansen trains— as indeed, with any train that runs at top speeds of 150 miles per hour or higher. Having high-speed trains share a common track with lumbering freight trains as the Obama Administration has proposed to do, is to invite serious operational conflicts and safety problems. But dedicated rights-of-way for high speed trains require relatively straight and level alignments with minimal curvature. To assemble such rights-of-way in densely populated corridors where land holdings are highly fragmented, would be extremely costly and disruptive if not totally impossible.

Yet another reality is the uncertain prospect for further federal support. Such support is deemed essential for the future of the Administration’s HSR program (but not for the future of privately funded ventures such as the proposed Lone Star HSR line between Dallas and Houston). Congress, by denying White House requests for high-speed rail funds three years in a row, has sent a clear bipartisan signal that states should not count on continued congressional appropriations for high-speed rail. The lawmakers reaffirmed this intention by eliminating Title V of the Senate transportation bill (the National Rail System Preservation, Expansion and Development Act of 2012) from the final version of the surface transportation reauthorization (MAP-21). In the meantime, the $10.1 billion earmarked for high-speed rail has been fully committed.

In sum, high-speed rail advocates, promoters and dreamers need a triple reality check.

Improving Existing Rail Service

But this is not to say that nothing should be done to improve and expand existing passenger rail services, especially commuter rail lines serving major metropolitan areas. Even though such improvements will not result in significant travel time savings, they could lead to more efficient, frequent and reliable transportation service benefitting millions of daily commuters. In 2010, commuter rail systems across the country provided service to nearly 460 million riders.

Improving commuter rail services is indeed, the approach embraced by the California High Speed Rail Authority. Despite its avowed goal to link LA and San Francisco with high-speed trains, almost half of its initial $10 billion first stage of the project will be devoted to upgrading conventional transit and commuter rail services in Los Angeles and the Bay Area, the "bookends" of the high-speed rail line, e.g. through electrification of the SF-to-San Jose Caltrain and "connectivity" improvements in LA’s Metrolink.

The dollars spent on commuter rail improvements will have "an immediate and dramatic effect" according to the Authority’s chairman, Dan Richard. Will Kempton, chief executive of the Orange County Transportation Authority (OCTA) and chairman of the Independent Peer Review Group advising the High Speed Rail Authority concurs. It will be a good investment, he said, whether or not the overall $68 billion high-speed rail project ever gets completed.

Similarly, in the Northeast Corridor where Amtrak has proposed a 30-year $151 billion capital investment program to bring true high-speed rail service between Boston and Washington DC, the initial efforts will be focused on "meaningful incremental improvements" in track, catenary and signals in the New York-to-Philadelphia corridor (the "NEC Upgrade Program"). This stretch of the line was chosen for the initial upgrade because it carries a heavy volume of local commuter traffic in addition to serving long distance trains. As in the case of California’s "bookend" improvements, the upgrades of the 90-mile NY-Philadelphia rail line will not only benefit large numbers of travelers – they also will be far more cost-effective in dollars-per-passenger terms than any eventual improvements raising line speeds over the entire Boston-to-Washington corridor.

Thus, fiscal, economic and political constraints have caused both the California Bullet Train and the Amtrak vision for the Northeast Corridor — the only two projects that have survived on the Obama Administration’s vaunted high-speed rail agenda --- to morph largely into a program of modest near-term improvements in existing commuter rail services. Lack of funds may prevent either project from achieving its avowed goal of providing true high-speed rail service--- in the case of California, reducing travel time between LA and San Francisco to two hours and forty minutes (see Note below). To achieve it, the California project will require $68 billion; the NEC program will need $151 billion.

Is this goal even worth pursuing? Some people think so---in fact they passionately believe in it. They contend that in order to make our cities less auto-dependent we need to invest in high-speed trains. Minor upgrades in existing rail services, they argue, will not make a significant dent in auto use. But many planners beg to differ. They believe that the best chance of persuading current auto users to leave their cars at home is to improve the daily suburban rail commute. Business travelers will continue flying because they look for the fastest way to get to their destination. Families on vacation trips will not abandon their cars in favor of trains because cars offer the least costly and most convenient way to travel to holiday destinations. The only sector of the traveling public that can be influenced to shift to trains in large numbers are suburban commuters.

What of the argument that a great nation like ours---a nation that built the Erie Canal, the transcontinental railroad, the Panama Canal and the Interstate Highway System --- should continue the tradition of visionary grandiose public works.

Regretfully, both ventures have come at a most inopportune time. The nation is recovering from a serious recession and is trying to rein in the deficit and reduce the 16 trillion dollar national debt. At a more distant moment in time, when the economy is growing again and the deficit has come under control, the nation might be able to resume its tradition of pursuing "bold endeavors"---ambitious programs of federally financed public works that benefit the whole nation. When that time comes, perhaps toward the end of this decade, it might be appropriate to revive the idea of high-speed rail--- at least in the context of the densely populated Northeast Corridor where road and air traffic congestion may eventually threaten its continued growth and productivity. For now, prudence, good sense and the nation’s fiscal well-being require that we lower our sights and focus on improving commuter rail connections.

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Note on the Status of the California HSR Project

There is a high likelihood that the LA-SF bullet train project will never get completed. Law suits are pending to stop construction of the first stage of the project---the Central Valley segment from Madera to Bakersfield. A motion for a preliminary injunction has been filed by Madera County, the Madera and Merced County farm bureaus and other opponents. The motion seeks to prevent the rail Authority from moving forward on the initial Madera-to-Fresno section until a trial on the lawsuit is completed. Hearing on the preliminary injunction is set for November 16.

Even if the preliminary injunction is denied, construction on the rail section will not begin until the fall of 2013 according to a legal declaration filed by the Authority in the Sacramento Superior Court. What’s more, the Madera-to-Fresno section will not be electrified before 2022 according to the rail Authority---and then only if more funds become available. Additional legal challenges are expected over the Fresno-to-Bakersfield section of the line. The City of Bakersfield has already announced plans to file a lawsuit contending that the Authority’s environmental impact report doesn’t meet CEQA standards. The cumulative effect of these delays has led to speculations that the Authority may not be able to complete work on the Central Valley segment by September 2017 when the federal $3 billion grant expires. And if the federal money stops flowing, who will step in to fill the gap?

Chicago Tribune Joins the Ranks of High-speed Rail Critics

Ken Orski — Mon, 01 Oct 2012 00:26:52 -0400

Last year, in congressional testimony before the House Transportation and Infrastructure Committee hearing on high speed rail, we cited the Chicago-to-St.Louis "high-speed rail" project as an example of the Administration's wasteful use of its economic stimulus money. We pointed out that the $1.4 billion program of track upgrades will allow top speed of 110 mph but will raise average speeds of Amtrak trains between Chicago and St. Louis by only 10 miles per hour, from 53 to 63 mph. The four-and-a-half hour trip time will be cut by a mere 48 minutes, to three hours and fourty minutes. In France, TGV trains between Paris and Lyon cover approximately the same ditance (290 miles) in a little under two hours, at an average speed of 150 mph. Yet, federal officials did not hesitate proclaiming the Chicago-St. Louis project as "historic" and hailing it as "one giant step closer to achieving high-speed rail passenger service."

Now, a Chicago Tribune story, linked here and excerpted below, confirms just how "ridiculously expensive" and "uneconomical" this project is turning out to be. As the editorial points out, the project stands to "drain funding from mundane projects that could make a much bigger difference." Something that the California High Speed Rail Authority has belatedly recognized in diverting almost half of the initial $10 billion stage of its bullet train project to upgrading "mundane" commuter rail services in Los Angeles and the Bay Area.

In recent years, under the banner of economic stimulus, the federal government has spent a ton of money getting the tracks ready for those speedy locomotives. In the Chicago-St. Louis corridor, for instance, Uncle Sam has poured at least $1.4 billion into crossing improvements and other upgrades. Between Chicago and Detroit, more than $400 million has been spent.

How would you feel, taxpayer, if we told you that some of the work might need to be torn up and redone?

Angry? You bet.

A debate over just how fast high-speed trains should operate could turn very costly very soon.

The issue comes down to 15 miles per hour.

High Speed Rail in Brazil: The Need for Guarantees

Wendell Cox — Fri, 24 Aug 2012 23:24:42 -0400

In an article entitled Fourth Time Unlucky, The Economist wonders why Brazil, with "a long list of more worthwhile infrastructure projects", does not dismiss high speed rail "out of hand."

After three unsuccessful attempts to attract international bidders to build its Rio de Janeiro to Sao Paulo and Campinas line for a bargain basement price, the nation has decided that taxpayers will foot some (probably all) of the bill.

The Economist continues:

"Everywhere, new-build rail projects are horribly likely to come in way over budget and to be used much less than expected. A 2009 paper by Bent Flyvbjerg of Oxford’s Saïd Business School, ominously entitled "Survival of the Unfittest: Why the worst infrastructure gets built—and what we can do about it."

As Flyvbjerg and others have noted, promoters, whether private or public, often seem to have a simple goal: to get the line under construction. That positions the projects for taxpayer bailouts when they run into problems.

With bidders able to call upon other people's money (taxpayer's money) this time, it seems likely there will be takers. And, based upon the experience with major infrastructure projects around the world, that will be just the start of the taking.

If elsewhere provides any guidance, the winning bidder can be confident that, down the road, the captive customer (the taxpayers) will pay any cost overruns. At the same time, the routine could be repeated in which a government kicks and screams, claiming it had no warning.

They did. In this day and age, a link to the Economist's warning is forever. A wise government will obtain the unlimited guarantees any company involved in the winning joint venture. Only then will Brazil's taxpayers be protected.

Texas High Speed Rail: On the Right Track?

Wendell Cox — Thu, 23 Aug 2012 17:09:06 -0400

The Central Japan Railway (Note 1), which operates one of only two high-speed rail segments (Tokyo Station to Osaka Station) in the world that has been fully profitable (including the cost of building), proposes to build a line from Dallas to Houston, with top speeds of 205 miles per hour. This is slightly faster than the fastest speeds now operated. This line is radically different from others proposed around the nation and most that have been proposed around the world. The promoters intend to build and operate the route from commercial revenues.

There is the understandable concern that eventually, the promoters will approach the state or the federal government for support. Not so, say Texas Central High Speed Railway officials. According to President Robert Eckels, not only is there no plan for subsidies, but "investors would likely walk away from a project that couldn’t stand on its own." He also told the Texas Tribune “If we start taking the federal money, it takes twice as long, costs twice as much,” Eckels said. “My guess is we’d end up pulling the plug on it.”

Eckels is a former Harris County Judge (Houston), a position the equivalent of a county commission or county board of supervisors chair in other parts of the nation. Eckels developed a reputation for fiscal responsibility during his tenure at the county courthouse.

The Texas project is in considerable contrast the California High Speed Rail project, which if built, is likely to require a 100 percent capital subsidy and perhaps subsidies for operations. It is also different from the Tampa to Orlando high speed rail project, which would have required a 100 percent capital subsidy and was cancelled by Florida Governor Rick Scott. The Texas project can also be contrasted with the Vegas to Victorville, California XpressWest high speed rail line that would require at least a $5.5 billion federal loan and a subsidized interest rate. Our recent Reason Foundation report predicted that XpressWest would not be able to repay its federal loan from commercial revenues and could impose a loss on federal taxpayers of up to 10 times the Solyndra loan guarantee loss (see The Washington Post, "Solyndra Scandal Timeline").

From the horrific record of private investment in startup high speed rail lines and the huge losses that have been typical, I am certainly skeptical. The Taiwan high speed rail private investors have lost two-thirds of their capital investment and debts are guaranteed by the government. The Channel Tunnel rail line to St. Pancras station has been bailed out by British taxpayers. However, if any company can make money at high speed rail in the United States, it would be the Central Japan Railway.

So far the Texas Central High Speed Railway seems to be doing it right. Like the other intercity modes, the airlines system and the intercity highway system (Note 2), this project would be paid for by people who use it.

Without government subsidies or loans, the Texas Central High Speed Railway will certainly have an incentive to get the sums right. If they are not, it sounds like the plug will be pulled. If they are, high speed rail could be on the right track in the United States for the first time. More power to them.

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Note 1: Central Japan Railway, and other companies purchased the assets of the Japanese National Railway in the late 1980s. The nationalized railway had run up a debt of nearly $300 billion, which was eventually transferred to taxpayers.

Note 2: There is a small subsidy to the airline system from the Federal Aviation Administration. Intercity highways have been financed by users until contributions from the federal general fund in recent years. However these contributions have been far less than diversions over the past 30 years from highway user fees, principally to mass transit a major transfer of highway trust fund interest to the general fund and now ongoing interest transfers.

Photograph: Central Japan Railway corporate headquarters at Nagoya Station (by author)

Could a Las Vegas Train Produce Losses 10 Times More Than Solyndra? (Report Announcement)

Wendell Cox — Thu, 16 Aug 2012 10:38:25 -0400

The Reason Foundation has released our "Xpress West" (formerly "DesertXpress") analysis. This high speed rail train would run from Victorville (90 miles from downtown Los Angeles) to Las Vegas. Promoters predict high ridership and profits. They are seeking a subsidized federal loan of more than $5.5 billion, which is within the discretionary authority of the US Department of Transportation to fund.

Our analysis concludes the following:

1. There is serious question whether there is a market for Las Vegas travel that would require driving one-third of the way and transferring to the train. If there is no such market, as seems likely from the international experience, ridership could be as low as 97 percent below projections. The reality can be known only after the line is running.

The balance of the report is based upon the assumption that there is a market for driving to Victorville and boarding a train to Las Vegas.

2. The ridership and revenue projections (by URS Corporation) are based upon data that is more than 7 years old and predates the Great Financial Crisis. There have been significant downward demand trends in the travel market and Las Vegas tourist market since that time, especially in the share of the market from the Los Angeles Basin. It is inappropriate to use such old data in projecting system performance (Certainly no private company would rely on such old data in a due diligence analysis).

3. Even after adjusting the obsolete data (which our report does), the ridership projections are implausibly high --- at four times the Amtrak Acela ridership between Washington, Baltimore, Philadelphia and New York.

4. Over 24 years (the forecast period in the project document), we project that expenditures will exceed revenues by between $4 billion and $10 billion. This would mean that there would be insufficient revenues to pay the federal loan. This could result in a taxpayer loss approximately 10 times that of the Solyndra federal loan guarantee.

5. The free use by the private Xpress West project of the Interstate 15 median could preclude cost effective expansion of this roadway. Even assuming the implausible Xpress West assumptions about the diversion of drivers to the train, the overwhelming majority of growth in the corridor would be on the highway, not on the train. This includes not only the heavy truck traffic, but also car traffic.

Related: The Las Vegas Monorail

Wendell Cox was also author of "Analysis of the Proposed Las Vegas LLC Monorail," which indicated that ridership and revenue projections were extremely optimistic and that the project was likely to fail financially. Subsequently the project filed bankruptcy and defaulted on bonds. The actual ridership on the Monorail was within the range predicted in "Analysis of the proposed Las Vegas LLC Monorail," and far below the level forecast by project consultant URS Greiner Woodward Clyde.

Also see this letter from other consultants reviewing the project (Thomas A. Rubin, Jon Twichell Associates, Professor Bernard Malamud and Wendell Cox).

The Las Vegas Monorail case is described in the Reason Foundation report.

More Unwelcome News for the California High Speed Rail Project

Ken Orski — Fri, 15 Jun 2012 00:15:39 -0400

Decidedly, early June has not been the best of times for the California high-speed rail project.

On June 2, came a new poll showing that fifty-nine percent of voters would now oppose building high-speed rail if the measure were placed on the ballot again. Sixty-nine percent said that they would "never or hardly ever" ride the bullet train if it were built. (USC Dornsife/LA Times survey). The poll made news throughout the state, and indeed nationally. The public was treated to headlines such as "Voters have turned against California bullet train" (LA Times); "California high speed rail losing support" (Bloomberg); "California high speed rail doesn’t have the support of majority of Californians" (Huffington Post); "Voters don’t trust state to build high speed rail" (CalWatchdog) and "Poll finds California voters are experiencing buyers' remorse" (Associated Press).

Then, on the heels of the poll, came news that Central Valley farm groups have filed a major environmental lawsuit asking for preliminary injunction to block rail construction slated to begin later this year. Plaintiffs include the Madera and Merced county farm bureaus and Madera County. Still more agricultural interests in the Central Valley are reportedly threatening to sue.

The Sierra Club, traditionally a loyal supporter of Gov. Brown, announced it was "strongly opposed" to Brown’s proposal to eliminate California environmental (CEQA) requirements for the high speed rail program and its Central Valley construction project. The Brown administration has made its proposal despite a solemn promise to the legislature by the Authority’s Chairman, Dan Richard, that they would never try to bypass CEQA ("We have never and we will never come to you and ask you to mess with the CEQA requirements for the project level").

The multi-billion dollar HSR program is exactly the sort of large scale public works project that CEQA was designed to address, wrote Kathryn Phillips, Sierra Club’s Director in a June 5 letter to the Governor. "By removing a large-scale project such as high-speed rail from full CEQA coverage, the proposal grants the state a status that suggests it does not have to fully and seriously consider and mitigate environmental impacts. ... In the interests of the environment and in the interest of rebuilding public support for rail in this state, we urge you in the strongest possible terms to abandon the proposal to weaken environmental review for the high-speed rail system," the letter concludes.

Nor was this the end to unwelcome news for the Brown administration. A series of editorials and opinion pieces by some of California’s most influential columnists has reinforced the public’s growing disenchantment with the bullet train project and with the Governor’s stubborn determination to defy public opinion.

In a June 3 commentary, the Sacramento Bee columnist Dan Walters, a longtime observer of the legislative scene, refuted the Governor’s attempt to compare the high speed rail project with the iconic Golden Gate Bridge. Both projects, the Governor had said in a ceremony marking the 75th anniversary of the bridge, took much political courage and foresight, and both will go down in history as remarkable gifts to posterity.

"Nice try, Governor," wrote Walters, but the comparison is misleading. The need for the Golden Gate crossing was clearly demonstrable and the bridge used revenue bonds to be repaid with bridge tolls. The need for a bullet train, on the other hand, "exists only in the minds of its ardent backers" and the Governor assumes that the federal government will finance nearly two-thirds of the project’s cost—an assumption that is nothing more than wishful thinking. Asked Walters, if the train is as financially viable as Brown and the Authority insist it is, why wouldn’t they do what the bridge builders did — float revenue bonds to be repaid from the train’s supposed operating profits. "Public works projects make sense when they fit well-documented needs. When they don’t, they are just political ego trips," Walters concluded.

Daniel Borenstein, columnist and editorial writer for the Contra Costa Times, came to a similar conclusion. In pushing for the bullet train, he wrote, Gov. Brown is motivated by a quest for a legacy. But, the columnist warned, while the Governor strives to be remembered like his late father for the capital projects he leaves behind, he could derail the November tax measure by his "reckless exuberance for spending billions on high speed rail." "Does he really want to anger [the voters] when he needs them the most?" Borenstein asked.

Perhaps the most devastating criticism of the Governor’s high speed rail initiative came in a June 8 editorial in the San Jose Mercury News, one of the Bay Area’s most influential newspapers. Entitled "High Speed Rail Plan is Delusional" the editorial has been syndicated in a number of Bay Area and Los Angeles Sunday papers. Follow this link to read it at the Mercury News website.

Thoughts on High-speed Rail and Buses

Tory Gattis — Thu, 31 May 2012 22:58:09 -0400

I’m back from a California trip – beautiful state, beautiful weather, completely dysfunctional government. For example, even with massive fiscal problems it’s still trying to build a vastly expensive high-speed rail line from San Francisco to San Diego. On a related note, a private group is exploring building a Houston-Dallas HSR line with no subsidies of any kind. I’m totally okay with private efforts. I’m probably even okay with a little eminent domain to get the right of way at a fair price. I hope they can make it work.

Here’s a great alternate perspective on HSR: a TED talk on the value of perception and psychology vs. economics and technology. Go to the 6:12 point to see a great example of the Eurostar train, where they spend a vast amount of money to reduce travel times by 40 mins, when for 90% or 99% less money they could have improved the experience instead and actually gotten higher rider satisfaction. I believe the absolute same principle applies to bus vs. rail, whether intra- or inter-city: spend 1% or 10% of the same money improving the bus service and get higher customer satisfaction than the rail line would generate. (hat tip to Karl)

And Greyhound is doing just that, learning from Megabus and upgrading their service with wifi, power plugs, and nicer seats with more leg room. With that kind of service option available at say $30 one-way within the Texas Triangle, how many people do you think would pay $150+ to go on HSR? On second thought, maybe nobody should mention this possibility to the Texas HSR group… ;-)

California's Bullet Train --- A Fresh Start and a Change in Direction

Ken Orski — Tue, 06 Mar 2012 16:26:35 -0500

A new strategy is beginning to emerge toward California’s embattled high-speed rail venture. The strategy is designed to rescue the project from a possible defeat at the hands of the state legislature, gain friends and supporters among local transportation agencies, win converts among independent analysts and turn around a largely skeptical public.

The plan combines the existing commitment to proceed with construction of the first rail segment in the Central Valley with near-term actions aimed at upgrading rail facilities at both ends of the proposed LA-to-SF high-speed line. Specifically, the so-called "bookend" strategy will involve "blending" high-speed rail service with commuter rail service in existing Bay Area and Southern California rail corridors.

At the northern end of the line, between San Francisco and San Jose, bullet trains would share track with Caltrain commuter trains. Both would benefit from new investments in electrification, signaling systems, bridge replacements, passing tracks and grade crossings elimination. Similar type of improvements would be introduced at the Los Angeles/Orange County/San Diego ends of the line, benefitting LA’s Metrolink and other Southern California commuter rail and transit systems.

Improving the urban "bookends" of the system will make it possible to increase the speed of local commuter trains and thus bring immediate benefits to large segments of California’s urban population. It will be a good investment whether or not the overall $98 billion high-speed rail project ever goes forward, said Will Kempton, chief executive of the Orange County Transportation Authority (OCTA) and Chairman of the independent Peer Review Group advising the High Speed Rail Authority.

The investments will be funded with a portion of Proposition 1A funds, supplemented by matching funds from local government agencies. Up to $2.3 billion in bond money and its $950 million "interconnectivity" fund would be committed to these near term improvements according to well-informed sources. This would provide approximately $1.4 billion for Southern California and $900 million for the Bay Area, assuming a 60/40 split. Another $2.7 billion has been already set aside for the 130-mile Central Valley segment, leaving roughly $4 billion of Proposition 1A money for future HSR construction.

The new strategy has evolved from discussions held by the High Speed Rail Authority’s new chairman, Dan Richard with the Governor and his fellow board members. In a conversation we had with Chairman Richard several weeks ago, he was frank to admit that significant changes must be made in the Authority’s way of doing business if the bullet train project is to retain the support of the state legislature, overcome the skepticism of independent critics and turn around public opinion. The Authority must find ways, in the Governor’s words, to do things "better, faster and cheaper."

While supportive of the Governor’s vision, Richard saw a need to show signs of near-term progress and not have to wait until 2033 to demonstrate the benefits of the investment. The dollars spent on the "bookends" could have "an immediate and dramatic effect," he told us.

Turning to the Central Valley project, Richard freely admitted the ham-handed way in which the Authority dealt with the affected property owners and local governments. He made plain his resolve to restore trust and rebuild the agency’s credibility with the Valley constituencies. We also were struck by his refreshing willingness to reach out to the program’s critics, in contrast to the Authority’s often arrogant and dismissive posture of the past.

Richard’s new strategy is beginning to bear fruit. Six Southern California planning and transportation agencies, including the Southern California Regional Rail Authority (Metrolink) voted as a group on March 1 to support the development of high-speed rail "while providing funding for local early investment projects in

Southern California that will improve rail service immediately." The Authority hopes to stimulate similar expressions of support in Northern California by working closely with the Bay Area’s Caltrain and San Francisco’s Municipal Transportation Agency. The Peer Review Group, which has long supported the "bookends" approach, can be expected to provide an additional boost to Richard’s strategy.

As for the initial Central Valley segment, its construction, initially planned to begin in September, has been pushed back. The slowdown is due to the need to revisit the environmental report whose initial version has run into a storm of objections concerning the proposed route. The revised draft report will be subject to another round of public hearings before the route through the valley is finalized. Assuming the state legislature authorizes the bond funding, construction in the Central Valley is now expected to begin in early 2013, although court challenges may cause further delays. Critics are expected to continue questioning the value of that investment, fueling continued controversy and increasing the project’s vulnerability.

A New Perception

Regardless of what ultimately becomes of the Central Valley project, the new urban "bookends" strategy is bound to profoundly modify the public perception of the bullet train venture. While the Governor and Chairman Richard maintain that the ultimate year 2033 goal of a 2 hour 40 minute train trip from LA to San Francisco has not changed, the practical effect of the new strategy will be to shift the focus from achieving that distant vision to effecting concrete near-term improvements— investments designed to benefit millions of present-day commuters in California’s two largest metropolitan rail corridors.

Given California’s budget deficit, given the uncertainty of further federal support for high-speed rail in general and for California’s HSR project in particular (see below), and given a lack of any evidence of private investor interest, the"bookend" program of investments may indeed end up as the key accomplishment of the Proposition 1A initiative. While bullet train visionaries will regret this shift in the focus, pragmatists will welcome it as a prudent and realistic response to the growing skepticism. From an economist standpoint, the bookend strategy will be viewed as the best use of scarce financial resources. The public will see it as a victory for common sense: a decision that wisely places greater value on satisfying present-day needs than on the promise of distant-in-time benefits.

Could Washington come to the rescue?

Meanwhile, in Washington, the Administration continues pursuing its fantasy-land rhetoric. "We envision an America in which 80 percent of people have access to high-speed rail," Transportation Secretary Ray LaHood reiterated in a recent blog. "We’re committed to this program... there’s no going back... we will keep the momentum going" he stated at a February 29 high-speed rail conference sponsored by the U.S. High Speed Rail Association.

Except that this momentum, if there ever was one, has long since vanished. No funds for high-speed rail have been provided two years in a row, including the current (FY 2012) year. Nor are any HSR funds likely to be appropriated in the next year’s budget. Congressional reaction to the Administration’s $2.5 billion HSR request in its FY 2013 budget submission has ranged from cool to dismissive. The President’s high-speed rail program is "a vision disconnected from reality" members of the Senate Budget Committee told Sec. LaHood at a recent hearing on the Administration’s transportation budget.

Rep. John Mica (R-FL), chairman of the House Transportation and Infrastructure Committee was even more blunt. "If the president thinks his proposal for high-speed rail is going to fly, he’s pipe-dreaming," he told participants at the February 29 rail conference. In short, all signs point to continued congressional unwillingness to support a federal high-speed rail program. This sentiment seems to cross party lines: neither the Republican-controlled House nor the Democratic-led Senate have included HSR funds in their reauthorization bills. Rep. Jeff Denham’s (R-CA) bill would specifically prohibit new federal funds from going to California’s bullet train project during the entire life of the bill.

For California, the implications are grave. Without further federal funds, the State of California will be obliged to seek a fresh infusion of public and private funds by 2015 if it is to continue pursuing its $98 billion bullet train vision. Will a new bond initiative or a public-private partnership succeed? Time alone will tell.