High-speed rail: The Risks of California HSR

Published on 9/3/2010 in Transportation . 0 Comments Tags: , .

Following are some excerpts from Randal O’Toole’s essay on the proposed California HSR — the risks from innovations, which by-definition cannot be anticipated. Nevertheless, Randal speculates on some (obviously likely?) innovations:

(…) Such costs are not so much a risk as a certainty. But there are many other risks involved with high-speed rail, some of which could unexpectedly drive up construction costs even more, and others affecting operations.

Some of these risks were identified in the senate oversight report on high-speed rail, including right-of-way, safety, and ridership risks. One important rish that was not brought out by the senate report is the risk that competing technologies will render high-speed rail obsolete.

(…)  it is not clear that the railroads will cooperate. In May, 2008, the Union Pacific Railroad told the Authority that it was not interested in sharing its right-of-way with high-speed trains. “Union Pacific has carefully evaluated CHSAs project,” says a letter from the railroad, and “does not feel it is in Union Pacific’s best interest to have any proposed alignment located on Union Pacific rights-of-way. Therefore, as your project moves forward with its final design, it is our request that you do so in such a way as to not require the use of Union Pacific operating rights-of-way or interfere with Union Pacific operations.”

(…) Competing technologies: One of the examples of optimism bias in the California rail plans is a presumption that there will be virtually no improvements in competing technologies — highways, autos, buses, and air — over the live of the high-speed rail network. Autos are expected to travel just as slowly (if not slower due to increased congestion), airport security will continue to delay air travelers, and both autos and airplanes will continue to use just as much energy as they do today.

As I will discuss tomorrow, the energy assumption is certainly wrong. But the other assumptions can easily be wrong as well. There are many improvements in both technology and systems management on the horizon that will keep high-speed rail from being the grand success its planners claim.

Computer-controlled autos: UC Berkeley has developed a bus that steers itself. On city streets, the bus still needs a driver to start and stop, but on freeways any vehicles using this low-cost technology could safely travel at high speeds, thus greatly increasing the capacities of existing highways.

If you can take your own car from, say, Sacramento to Bakersfield or San Francisco to Fresno on an uncongested highway at 90 miles per hour — and let the car do the driving most of the way, freeing you to read or work — then high-speed rail loses most of its advantage. Sure, the train goes faster, but first you have to get to the train station, wait until the train is scheduled to leave, then when you arrive you are dependent on local transport instead of enjoying the convenience of your own car

(…) Streamlined airport security: Even at 220 mph, high-speed rail can’t compete with 400-mph turboprops, much less 500-mph regional jets. The Authority’s plans count on airport security delays forcing people to arrive at airports an hour or two in advance of their plane’s departure. But if security is streamlined — perhaps by vetting frequent flyers in advance so they can by-pass airport checkpoints — high-speed rail loses this advantage. Since (according to page 19 of the senate report) the Authority is counting on business travelers for 91 percent of its profits, losing frequent travelers means losing the whole ball game.

(…) Improved bus service: So-called Chinatown buses are offering increased competition to Amtrak’s Northeast corridor. Aided by Internet ticket sales, these buses offer very low-cost travel and often provide city-to-suburb or suburb-to-suburb service (thus going people actually live). Even confined to highway speeds, they can be competitive because different buses serve different city pairs, thus avoiding the delays of intermediate stops. Such buses can provide transport to today’s decentralized cities in ways that fixed rail cannot.

These are just a few of the ways that changes in technology and other systems can be foreseen to make high-speed rail a risky investment. No doubt there are many unforeseeable changes as well. California voters who support high-speed rail are betting that none of these changes will take place.

High-speed rail: Marginal Revolution/ A cost-benefit analysis

Published on 9/3/2010 in Transportation . 0 Comments Tags: .

Tyler Cowen has some smart commentary on another set of dubious HSR claims. One of the helpful commenters “kurt9″ offered this info on Japan’s HSR. This caught my eye because I am searching for solid facts on any truly profitable HSR links anywhere in the world. If this is correct only one of Japan’s HSR links is profitable (no source given), so this is unverified info:

There are 5 shinkansen lines in Japan:

Tokaido-sen – Tokyo to Osaka

Sanyo-sen – Osaka to Fukuoka

Joshinetsu – Tokyo to Nigata (to the Japan Sea side)

Tohoku-sen – Tokyo to up north towards Hokkaido

Hokuritsu-sen – Along the Japan Sea side from Nigata down through Komatsu (Ishikawa-ken) to Nagoya

Of these shinkansen lines, only the Tokaido-sen is profitable. The others are subsidized by the national government. Having ridden it many times, I can tell you why the Tokaido-sen is profitable. A train runs every 3-5 minutes from 8AM until 5PM every work day and everyone of these trains are full up. Each train has 15 carriages, with each carriage with the seating capacity of a 737. That is, each train carries the equivalent of 3 747’s worth of passengers, every 3 to 5 minutes.

Outside the NYC to Washington DC corridor, there is no traffic corridor anywhere in the U.S. that comes close to the kind of traffic density on the Tokaido-sen.

This is the reason why high speed rail cannot be profitable in the U.S.

High-speed rail: GAO Report March 2009

Published on 9/3/2010 in Transportation . 0 Comments Tags: , .

One of the studies referencing the Danish Aalborg University study “Inaccuracy in Traffic Forecasts” is the 2009 GAO report “High Speed Rail: Future development will depend on addressing financial and other challeges…“

I think it is fair to say that the GAO supports my conclusion that the cost/benefit of high-speed rail is entirely dependent on the particulars of the city-pair under discussion. In turn, the economics of that link depend not just on population densities, distances, intermediate stops, but upon how the link fits into the regional transit web. It is clear (to me) that there are very few US links that would qualify under any reasonable economic benchmarks. There are certainly no Australian links that make sense. The often-cited Shinkasen Tokyo – Osaka link has about 63 million people along its route. I have used that link — it is OK, but one reason it works is trains every 3-5 minutes work days.

The GAO does not consider at all the risk of obsolescence — which I personally think is very real. A huge capital investment becomes a huge white elephant.

The GAO report section on uncertainty touches on incentive design – the first hint I have seen towards leveraging market incentives to avoid bad projects and to optimize results from viable projects.

Uncertainty and Inaccuracy in Forecasts of Riders and Costs

Forecasts of riders and costs are two key components of evaluating the economic viability of high speed rail projects, and rider forecasts are the anchor for the array of public benefits that a new line might bring. However, as we have discussed, these forecasts are often optimistic, calling into possible question the credibility of information being used by decision makers to pursue high speed rail. Development of stronger policies, procedures, and tools could enhance the accuracy and credibility of the forecasts and contribute to better decision making. There are a variety of means that have been discussed in the transportation literature and could potentially be employed to strengthen the accuracy of forecasting.75 These means include the following:

• obligating state and local governments to share some of the risks of underestimated costs for those projects seeking federal financial support;

• obtaining forecasts and estimates from independent sources, such as a state auditor or a federal agency, rather than sources contracted to construct projects for a high speed rail project sponsor;

• subjecting forecasts to peer review with possible public disclosure of all relevant data and public hearings; and

• conducting horizontal comparisons of projects—that is, using data from different projects reported using a standardized accounting system to prepare probability distributions of the accuracy of project estimates of cost and demand—to evaluate new high speed rail projects.

Another potential means to improving the accuracy of these estimates is to align the incentives of public and private interests. For example, in Japan, for a new line to be built, the private operator must be able to make a reasonable profit over and above operating costs, maintenance costs, and lease payments made to the government for use of the track. The private operator then has an incentive to maximize riders, but also to minimize the lease payments, to increase its profit potential. Therefore, the private operator wants to be conservative regarding rider forecasting and wants the government to build the infrastructure in order to allow for the lowest cost operation and maintenance. The central government has an incentive to keep costs low in constructing the line and to extract the highest lease payment it can negotiate from the private operator. The private rail operator and the central government negotiate and agree upon a lease payment, which remains set over a 30-year period. These negotiations are based on forecasts of riders over the ensuing 30 years and the existing cost estimates. According to officials and academics in Japan, this structure has resulted in a discipline that has vastly improved the accuracy of rider forecasting and cost estimation. For one newly constructed line, actual riders were within 90 percent of forecasted riders, and the construction of the line was within budget and ontime.

High-speed rail: Booze Allen carbon impact study

Published on 9/2/2010 in Energy Policy and Transportation . 0 Comments Tags: , .

London to Manchester carbon emission parity

London to Scotland carbon emission parity can barely be achieved

Note to reader: this study is exclusively focused upon carbon emissions relative to policy options. There is no consideration of economics — in particular no LCA of the rail, air, road options.

The UK Department of Transport engaged Booz Allen Hamilton (BAH) to assess the carbon impact of a possible new North-South rail line (referred to as the ‘new line’). Two indicative point to point routes for the new line have been analysed, London to Manchester and London to Glasgow/Edinburgh.

The July 2007 report [PDF] makes it clear why high-speed rail advocates may not wish to see spreadsheets or data on the table that would challenge the received wisdom that the planet will die if we don’t get those pesky humans out of their cars and into high-speed rail cars (HSR).

Regular Seekerblog readers know that I have concluded that any useful carbon policy proposal must begin with the Kaya Identity (if you aren’t familiar, start with Prins, Rayner et al “How to Get Climate Policy Back on Course“. Grasping the Kaya Identity, an engineer or scientist immediately realizes that effective carbon policy will focus on the BIG PROBLEMS, namely the big emissions sources that must be rapidly replaced. As the BAH study states right in the summary:

[The] pursuit of direct efficiency gains prioritises the heavy energy using sectors first and only concerns itself with lower impact sectors much later on. So, on this logic, world-wide there should be a sectoral focus on electricity generation first of all and then on other heavy user industries, such as iron and steel or aluminium production.

I would paraphrase as “this is not a government expenditure we should be discussing“. Suppose that we could build and operate the high-speed rail links London to Manchester and London to Glasgow/Edinburgh for zero carbon cost, and every competing airline was shut down (100% modal shift from air to rail). In that magical future, the total impact on UK CO2 emissions would be only 1%. I.e., the impossibly perfect result is completely unworthy of political attention today — yet another “Wrong Trousers” approach.

it should be made clear that the current emissions from rail and domestic aviation together account for only around 1% of total UK CO2 emissions,

The BAH study examines what is achievable in the real world. I recommend a careful read of the study as an example of good methodology. To avoid drowning in the murky waters of forecasting traffic and the modal shift from air to rail, the study normalizes to carbon parity. Over 60 years, estimate the total carbon emissions resulting from construction and operation of the three rail variants (conventional, high-speed, maglev). Then determine the rail traffic share required to achieve carbon parity with the “Do Nothing” policy.

The first figure summarizes the results for the London to Manchester line. That line never achieves carbon parity within the 60 year study period. The London Scotland line does achieve parity, but the actual payback is small and distant, requiring not-credible traffic share. High-speed rail would have to garner about 60% of traffic to simply breakeven with all the carbon emitted during construction (average traffic over the full 60 years, not reach 60% by the end of 60 years). So we are talking about a small fraction of 1% of UK emissions that might be slightly reduced 60 years in the future — under optimistic assumptions.

Why do high-speed rail advocates keep trying to get taxpayer funding? Not for sound energy policy, not for sound climate policy. If that were their goal they would be campaigning for the most rapid feasible replacement of hydrocarbon-based electrical generation by nuclear power. That goal could realistically cut 40% of UK emissions to zero in 30 years. Similarly they would be advocating for zero or low-carbon options for production of steel, concrete and aluminium.

Given confidence in a zero-carbon electrical generation future, the true earth-climate-activists would also focus upon electrifying the amenable segments of road transportation. Success in that arena could cut another 10-20% of emissions near to zero in 50 years (two fleet replacement generations).

Lastly, to emphasize just how little milk is in this high-speed rail cow, consider the following graphic Emissions by mode London to Manchester over 60 years.

Emissions by mode London to Manchester over 60 years

Assumptions to check: I believe that the cost of constructing the road infrastructure is excluded in the bus, car cases. BAH did find in their sensitivity analysis that the cost of expanding any required air facilities was negligible. So they are modeling new rail options vs existing air, road options. Secondly, I believe that maintenance and replacement cycle costs are included in the source report estimates for each transport mode. E.g., bus maintenance and replacement.

There are 26 references cited at the end of BAH. Here are a couple of key studies used for the carbon/mode assumptions:

Source: http://www.defra.gov.uk/environment/statistics/globatmos/alltables.htm, 2005 figures for UK greenhouse gas inventory by IPCC source categories: 2005 from DEFRA.

Source: “High Speed Rail and Greenhouse Gas Emissions in the U.S.” January 2006, a paper produced jointly by the Center for Neighbourhood Technology and the Center for Clean Air Policy, available at http://www.cnt.org/repository/HighSpeedRailEmissions.pdf. It summarises a number of worldwide HSL operations and 1 Maglev operation. Results for Danish IC3 and Maglev TR07 are quoted (see page 10).

Advance Bad Universe reviews are in

Published on 9/1/2010 in Science . 2 Comments Tags: .

Astronomer Phil Plait hosts a new Discovery Channel science program, Bad Universe. Phil is a longtime, hard-working skeptic and proprietor of one of the godfather skeptic blogs Bad Astronomy. Which was selected by Time as one of the 25 Best Blogs 2009.

baduniverse_bikinigaugeTonight is the premiere of “Bad Universe”! If you’re looking for a reason to watch it, reviews are starting to come in from press folks who got advance copies. So far they’re pretty positive!

- Discovery Channel’s own Space News blog:

Bad Universe: Asteroid Apocalypse is definitely worth the watch, there’s great depth behind the science, plus a really nice Mythbusters-esque feel to the high energy experiments carried out to test Phil’s theories.

Ian O’Neill, who wrote that article, interviewed me for it as well. There are also a few clips from the show online on Discovery’s site, too.

- Watch Play Read:

The show does a great job of incorporating a learning factor without making it seem lecturing to the viewer. Honestly, you don’t have to be a SCIENCE! geek to watch this show, heck sit your kids (and/or unlearned significant other) down with you and enjoy. It was entertaining, informative, and the experiments were downright cool. Phil has an excitement in his voice that when he is explaining about a topic you can’t help but listen and absorb the knowledge.

(…)

Read more » and tell us what you think. We live in a TV-free zone, so can’t watch the new program ourselves.

Portland’s light-rail mafia: the Neil Goldschmidt machine

Published on 8/31/2010 in Transportation . 2 Comments

I’ve been researching Portland’s light-rail system. I want to know what the real financial statements are — what did it cost, what are the annual operating profits/losses including capital costs? How much money has been diverted from schools and other public services by the tax-increment financing (TIF) financing scheme? If you know a source for the answers, please comment with a link.

One persistent story I’ve come across is that the LRS and downtown high-density development was old-fashioned crony-capitalism, where property developers make a speculative profit on land and later buildings, which projects are sister-brother with the to be built light-rail service. I still don’t know how much of that story is true. This June 22, 2006 Thoreau Institute article gives more of the details Portland: A Model for How Not to Run a City, but again I don’t know how much of it is true:

Portland, Oregon likes to call itself “the city that works,” a slogan it ironically appropriated from the first Mayor Daley’s Chicago. Under Daley’s twenty-one-year reign, Chicago was known for cronyism and authoritarian rule, a tradition that continues today under his son.

Like Chicago, Portland had its own authoritarian ruler who maintained power by passing favors and contracts to powerful allies and building selected constituencies at the expense of others who were less wealthy and less powerful. But most Portlanders did not realize who this ruler was until 2004, when a scandal rocked the very foundations of the city.

(…) Though Goldschmidt became famous for “saving” Portland, all he really did — even when he was mayor — was save downtown Portland and its immediate surroundings. Which is to say that he saved and boosted the property values in those areas at the expense of both property values and taxes paid by people in the rest of the city. Goldschmidt exploited a zero-sum game: Portland was growing, but by directing growth to certain places he made a few people very rich and they, in turn, made him rich and powerful.

Which means that even old Mayor Daley was more ethical than Goldschmidt. As Mike Royko noted in his biography of Chicago’s major, all Daley wanted was power, while Goldschmidt, the former reformer, wanted both power and money. Now that he has lost his power, the schemes by which he and his cronies gained their money are revealed for everyone to see. This may help bring down the entire planning hierarchy that Portland has touted to the world for so many years.

The above article does not have an author citation, so I will assume it is by Randal O’Toole, author of Gridlock, a researcher who has evolved to be an anti-planning advocate. Another related O’Toole article is Debunking Portland The City That Doesn’t Work.

(…) For Goldschmidt, the big advantage of light rail was that it was expensive, easily costing enough to absorb most of the federal funds that had been allocated to the Mt. Hood Freeway and (as it turned out) much more. Rail construction also provided lots of jobs and profits for local contractors. At the time, few observers noted the irony that an urban transit technology was selected precisely because of its high cost.

I don’t know if Goldschmidt “invented” this popular strategy — it has certainly been widely exploited: transit systems are VERY expensive and thus quickly soak up the federal transportation subsidies (mostly diverted from gasoline taxes that were supposed to fund road maintenance and construction).

(…) Portland planning did not start out as a real estate scheme aimed at enriching Neil Goldschmidt and his friends and clients, but it ended up that way. Portland’s planning process was conceived by ideologues who dis- liked the automobile and wanted to preserve all of Oregon’s abundant open space no matter what the cost. It was endorsed by politicians who refused to believe, or simply ignored, pre- dictions that it would hugely increase conges- tion and housing costs. And it was manipulat- ed by a cabal of politically connected business- es seeking to divert the flow of tax dollars into their own pockets. The opportunities for such manipulation were so obvious that, if Neil Goldschmidt had not started the light-rail mafia, it would have been someone else; and if it were not for Goldschmidt’s statutory rape, many Portland-area residents never would have learned about this cabal.

The results have been a disaster for the average Portland-area resident. The light-rail and streetcar lines, vibrant downtown streets, and scenic vistas outside the urban-growth boundary may seem attractive to visitors. But residents have to live in unaffordable housing, creep along in traffic congestion, and pay higher taxes or suffer reduced urban services so that the region’s political leaders can fund their rail transit and transit-oriented development schemes.

High-speed rail: Inaccuracy in Traffic Forecasts

Published on 8/31/2010 in Transportation . 1 Comment Tags: , , .

Advocates of HSR projects need to read this 2006 Danish study by the Department of Development and Planning, Aalborg University, Aalborg. Authors: Bent Flyvbjerga; Mette K. Skamris Holma; Sren L. Buhla. Published in: Transport Reviews, Volume 26, Issue 1 January 2006 , pages 1 – 24

Abstract: This paper presents results from the first statistically significant study of traffic forecasts in transportation infrastructure projects. The sample used is the largest of its kind, covering 210 projects in 14 nations worth US$58 billion. The study shows with very high statistical significance that forecasters generally do a poor job of estimating the demand for transportation infrastructure projects. The result is substantial downside financial and economic risk. Forecasts have not become more accurate over the 30-year period studied. If techniques and skills for arriving at accurate demand forecasts have improved over time, as often claimed by forecasters, this does not show in the data. For nine out of ten rail projects, passenger forecasts are overestimated; average overestimation is 106%. For 72% of rail projects, forecasts are overestimated by more than two-thirds. For 50% of road projects, the difference between actual and forecasted traffic is more than ±20%; for 25% of road projects, the difference is larger than ±40%. Forecasts for roads are more accurate and more balanced than for rail, with no significant difference between the frequency of inflated versus deflated forecasts. But for both rail and road projects, the risk is substantial that demand forecasts are incorrect by a large margin. The causes of inaccuracy in forecasts are different for rail and road projects, with political causes playing a larger role for rail than for road. The cure is more accountability and reference class forecasting. Highly inaccurate traffic forecasts combined with large standard deviations translate into large financial and economic risks. But such risks are typically ignored or downplayed by planners and decision-makers, to the detriment of social and economic welfare. The paper presents the data and approach with which planners may begin valid and reliable risk assessment.

Download PDF. In the study you will learn why rail forecast errors are largely overestimates of traffic, while road forecasts are more balanced about the mean.

Again, the results are highly different for rail and road. For rail projects, the two most important stated causes are ‘uncertainty about trip distribution’ and ‘deliberately slanted forecasts’. Trip distribution in rail passenger forecasts is often adapted to fit national or urban policies aimed at boosting rail traffic. But such policies frequently fail and the result is the type of overestimated passenger forecast which has been documented above as typical for rail passenger forecasting. As regards deliberately slanted forecasts, such forecasts are fabricated by rail promoters to increase the likelihood that rail projects are built (Wachs, 1990). Such forecasts exaggerate passenger traffic and thus revenues. The present authors have shown elsewhere that the massive overestimation of traffic and revenues documented above for rail goes hand in hand with an equally massive underestimation of costs (Flyvbjerg et al., 2002, 2004). The result is cost-benefit analyses of rail projects that are highly inflated, with benefit-cost ratios that are contrived with a view to getting projects accepted and built.

For road projects, the two most often stated causes for inaccurate traffic forecasts are uncertainties about ‘trip generation’ and ‘land-use development’. Trip generation is based on traffic counts and demographic and geographical data. Such data are often dated and incomplete and forecasters quote this as a main source of uncertainty in road traffic forecasting. Forecasts of land-use development are based on land-use plans. What is actually implemented is often quite different from what is planned, however. This, again, is a source of uncertainty in forecasting.

The different patterns in stated causes for rail and road, respectively, fit well with the figures for actual forecast inaccuracies documented above. Rail forecasts are systematically and significantly overestimated to a degree that indicates foul play on the part of rail forecasters and promoters. The stated causes, with ‘deliberately slanted forecasts’ as the second to largest category, corroborate this interpretation, which corresponds with findings by Wachs (1986) and Flyvbjerg et al. (2002). Road forecasts are also often inaccurate, but they are substantially more balanced than rail forecasts, which indicate a higher degree of fair play in road forecasting. This interpretation is corroborated by the fact that deliberately slanted forecasts are not quoted as a main cause of inaccuracy for road traffic forecasts, whereas more technical factors such as trip generation and land-use development are quoted. This is not to say that road traffic forecasts are never politically manipulated. It is to say, however, that this appears to happen less often and less systematically for road than for rail projects. It is also not to say that road projects generally have a stronger justification than rail projects; just that they have less biased forecasts than rail projects.

High-speed rail: Ed Glaeser runs the numbers

Published on 8/30/2010 in Transportation . 0 Comments Tags: , , , .

Above: The AMF Monorail ride at the New York Word’s Fair, 1964.

Harvard Economist Edward Glaeser wrote a series of NYT Econmix posts in 2009 on the costs and benefits of high speed rail (HSR). For his example case of the city-pair Dallas-Houston Ed estimated that costs exceed benefits by a ratio between four and six. Which is similar to the ratios that other studies find comparing cost per passenger mile between rail and flying/driving.

I can’t fault Ed’s estimates — if I wanted to nitpick I would say he gave rail the best possible numbers. But it doesn’t follow that no high-speed rail link can every make a profit. It depends on the city-pair, on the competition, and of course on what people are willing to pay for a specific service. I like riding the TGV on the Paris – Lyon link, especially compared to the dismal domestic Air Inter, one of the most uncomfortable airlines of my experience. I won’t pay 5x to ride the TGV, but I will pay more than an Air Inter ticket + associated connecting friction.

If anyone knows of objective LCA research that shows any HSR links that are profitable please comment with the link(s).

High-speed rail: Money maker or money loser?

Published on 8/29/2010 in Transportation . 3 Comments Tags: , .

The captioned question is harder to answer than you might think, although it is obvious that governments in general do not like to reveal how much taxpayer money they are squandering. So off-balance sheet finagles are common — to hide the real costs. The American’s are a bit more fortunate in this arena, at least where they have a public oversight function such as the office of the Inspector General — whose function is to uncover what is really going on.

In 2008 Amtrak’s Inspector General retained BSL Management Consultants (a European urban transport strategy consulting firm) to prepare a study on the European train companies. That study was the basis for the Inspector General’s Evaluation Report E-08-02 Public Funding Levels of European Passenger Railroads [PDF]. The main finding of the report is this:

Finding No. 3 – Although some European Train Operating Companies may report a “profit”, this profit is generated through a large amount of public funding provided by the European countries.

BSL developed the following chart that illustrates the operating profits of several European Train Operating Companies and the total public funding provided for European Passenger Train Operations in each country on a dollar per train mile basis. This financial presentation identifies the financial profit reported by the train operating companies in 2006 and the average annual public funding, including both on- and off- balance sheet funding, provided to railroads during 1996 to 2006.

The following chart is from the Inspector General’s report, showing e.g., that in 2006 SNCF (France) lost US$ 28 per train mile, while the reporting to their public that they made a “profit” of $1.94 per train mile. I recommend a careful read of the complete IG report (15 pages). I have archived the report so I can show it to anyone who argues “everybody knows that France makes a big profit on its rail system“.

Footnote: as I continue researching the transit-financial issue I noticed that Lloyd’s Register decided to terminate the BSL Management Consultants GmbH operation a couple of months ago in June 2010. Lloyd’s bought BSL in 2006. The transit consulting group still has a Lloyd’s Register website. Interesting… Finally, there is another 2006 Amtrak Office of Inspector General report “Infrastructure Labor Costs to European Railroad Averages” from which I extracted the following chart showing why Amtrak labor costs are double the average EU cost. That can only be the railroad union benefit deals – haven’t had time to digest the details yet.

Amtrak labor costs about double EU average cost per employee

High-speed rail: who will pay for California’s system?

Published on 8/29/2010 in Transportation . 0 Comments Tags: , .

Not the potential riders, that’s for sure. It looks like Peninsula taxpayers may be starting to smell the rat:

For the next minute, imagine yourself at a car dealership. You’re strapped for cash but find a sleek new ride and ask the salesman for a deal.

He quotes you a number that’s four times what you have in the bank. And, he warns, even that price isn’t fixed — there’s no guarantee you won’t pay more in the end.

What do you do?

For California, the lure of its new ride — a bullet train system capable of whisking passengers between the Bay Area and Los Angeles — has proved so enticing that the state jumped at the deal, even though it has only a quarter of the money needed.

That’s leading some critics to ask whether the state’s largest project ever could also prove to be its most financially disastrous.

California is less than two years from the planned start of construction on the nation’s first high-speed rail line, which would open in 2020. The trains will zip along the Caltrain corridor from San Francisco to San Jose and then on to Anaheim, a three-hour journey end to end.

It has the potential to create jobs while offering a cheaper, greener and faster form of travel. It could also be another nail in the state’s financial coffin.

The California High-Speed Rail Authority, created to carry out the project, told voters in 2008 that the rail line would cost $33.6 billion. The price has since jumped 27 percent, to $42.6 billion.

That much cash could pay to build a new Bay Bridge, extend BART to San Jose and Livermore, and repair California’s water system — with enough left over to erase the state’s budget deficit.

And historical data shows the undertaking will almost certainly get more expensive.

How much will it cost?

(…) “The state of California does not do anything cheaper than the rest of the world,” said Adrian Moore, vice president of the libertarian Reason Foundation. “There is no way it will be close to $45 billion.”

(…) ‘Optimism bias’

A read through the history books shows it would be extremely rare for a project of this magnitude to meet initial cost projections.

(…) “Most high-speed rail systems do not pay for their capital investment,” said Genevieve Giuliano, director of the METRANS Transportation Center at the University of Southern California.

The only sure answer is “more than you can even imagine today”. I recommend a read through the comments to the captioned Mercury News article. They are educational to say the least.

The lovely graph above left was developed from downloaded BEA data and a bit of Excel by commenter “edbarbar” who insists on presenting facts instead of airhead unsupported assertions (like “seer” who thinks corporations make 40-60% profits).

See also in the Mercury News John Horgan: Rail advocates are in damage-control mode.

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