$21 Billion for Not-Particularly-High-Speed Trains

Last week, the Rocky Mountain Rail Authority — a grandiose name for something that is little more than a state-funded study committee — proposed to spend close to $22 billion building new high-speed rail lines in Colorado. (Actually, $21.1 billion; the media rounded up to $22 billion.) Based on several highly questionable assumptions, these rail lines are expected to attract more than twice as many passengers as Amtrak’s Boston-to-Washington corridor and generate enough fares to cover their operating costs.

The $21.1 billion is only the initial cost estimate, of course. The real cost is likely to be close to twice that much if only because of political pressures to extend the rail lines to communities not on the proposed routes.

A $1.5 million feasibility study (scroll to the bottom to download the executive summary and the study itself) compared alternative rail technologies with top speeds of 79, 110, 125, 150, 220, and 250 mph. The 150 and 250 alternatives used maglev; the rest were conventional steel wheels on steel rails. The low-speed alternatives were rejected as not attracting enough passengers, while the maglev alternatives were rejected for having capital costs that were nearly three times as much as conventional rail. Two basic routes were considered, one north-south from Cheyenne to Trinidad and one east-west from Denver Airport to Grand Junction with branches to Aspen and Steamboat Springs.

The study found that only the Ft. Collins-Pueblo and Denver Airport-Eagle portions of the studied routes were feasible (i.e., generated sufficient fares to cover their operating costs). For those routes, the study concluded that the 220-mph technology was the most feasible and recommends going forward with that. Considering costs of around $35 million a mile on the flat and more than $100 million a mile in the mountains, the consultants had to make some extraordinary assumptions to find anything “feasible.”

First, they assumed capital costs don’t count. The consultants claim that fares will cover operating costs, but they will never cover the $21 billion in capital costs. This is well over $4,000 for every resident of Colorado, yet most Coloradans will rarely, if ever, ride the trains.

Second, they assumed people would be so dazzled by the 220-mph top speed that they would never notice the much-lower average speeds of the trains. Those speeds are projected to range from a mere 50 mph on the mountainous east-west route (taking two hours to go 98 miles from Denver to Vail) to little more than 90 mph on the flat north-south route (taking an hour and a quarter to go the 115 miles from Denver to Pueblo). See page 18 of the executive summary for samples of other trip times.

Third, they assumed people would pay 38 cents a passenger mile to ride these less-than-high-speed trains. Americans pay an average of just 13 or 14 cents a passenger mile to fly. They pay about 35 cents a vehicle mile to drive, and since intercity cars have an average of 2.4 people, that’s just 15 cents a passenger mile. Greyhound fares in Colorado are about 25 cents a passenger mile. So why would large numbers of people be willing to pay 38 cents a passenger mile to take a not-particularly-high-speed train?
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Fourth, they assumed somewhat close is close enough for rail travelers. The proposed route will not go to Colorado Springs or Eagle, for example, but to the Colorado Springs and Eagle airports (9.0 and 5.5 miles away, respectively). The trains also “miss” Boulder, Longmont, Loveland, and Ft. Collins. Although the trains will stop in downtown Denver and Golden, most of the jobs or residences in the Denver metro area are miles away from those and other Denver-area stops. For most people, just getting to and from the train stations will erase all of the slight time advantages from taking a 90-mph train.

Fifth, they assumed high-speed rail would attract riders for short trips. High-speed rail advocates often say the optimal length for trips in a high-speed rail corridor is 100 to 600 miles (see figure 1 on page 1), and the average trip length in Amtrak’s Boston-to-Washington corridor is more than 160 miles. Yet the projected average length of trip in the Colorado corridor is only about 60 miles long. Just why would anyone spend more than it costs to drive to take a train that is not much faster than driving to go such a short distance to somewhere that is not very convenient to your final destination?

Finally, they assumed that three things — lower fares, higher fuel prices, and higher personal incomes — would allow the Colorado trains to attract well over twice as many riders as Amtrak carries in the Boston-to-Washington corridor (which has more than 7 times as many people as the entire state of Colorado). In 2008 (when gas prices were close to $4 a gallon), Amtrak carried less than 11 million trips in the Northeast Corridor (which the study “rounded up” to 13 million), while the study projects 220-mph Colorado trains will carry 26 million trips in 2025 (see p. 6-26 of the actual study).

Amtrak charges an average of 54 cents a passenger mile in the Boston-Washington corridor; the study hopes that fares of “only” 38 cents a mile will nearly double ridership. Higher gas prices are supposed to nearly double ridership again (even though large variations in gas prices result in only small variations in Amtrak ridership), while increased incomes between now and 2025 will double it yet again (see p. 6-39).

These optimistic assumptions make Colorado high-speed rail an extremely high-risk proposition. What if gas prices don’t increase as fast as the consultants project? What if gas prices do increase but people respond by buying more fuel-efficient cars? What if personal incomes don’t rise as fast as they hope? What if they do rise and people respond by driving more, not taking an expensive train? What if Megabus enters the Colorado market and charges only 15 cents a passenger mile (about what it charges in the Boston-Washington corridor) for buses that are nearly as fast as the trains?

The Antiplanner would be thrilled if someone would put up $21 billion of their own money to build high-speed rail in anticipation of earning enough fares to recover that cost. But the rail authority wants Colorado taxpayers to put up $21 billion on the questionable claim that the trains will be so successful that they won’t require any operating subsidies. That is a high-cost, high-risk bet taxpayers should not make.

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About The Antiplanner

The Antiplanner is a forester and economist with more than fifty years of experience critiquing government land-use and transportation plans.

24 Responses to $21 Billion for Not-Particularly-High-Speed Trains

  1. C. P. Zilliacus says:

    The Antiplanner wrote:

    > The Antiplanner would be thrilled if someone would put up
    > $21 billion of their own money to build high-speed rail
    > in anticipation of earning enough fares to recover that
    > cost. But the rail authority wants Colorado taxpayers to
    > put up $21 billion on the questionable claim that the
    > trains will be so successful that they won’t require any
    > operating subsidies. That is a high-cost, high-risk bet
    > taxpayers should not make.

    Two thoughts:

    (1) It seems reasonable to assume that the promoters of this project will (eventually) turn to federal taxpayers, citing some vital federal interest in building intrastate passenger railroad lines in Colorado.

    (2) The promoters of this large network proposed did so knowing that once some small part of the system is built and opened (and the construction costs inevitably escalate), there will be intense pressure to complete the system regardless of cost overruns, since people living on or near the planned but un-built segments will want their portion finished, regardless of merit.

  2. Scott says:

    Another terrible, wasteful project. It’s even more than the CA HSR, which is almost $2,000/resident.

    Imagine how much more effective that other uses of that money would be.
    First off would be to just not borrow it & not eventually tax people.

    The US will in really horrible shape soon, the way things are going, with public debt surpassing the GDP.
    This class warfare & expanded redistribution will squelch desire to be productive, and move money & successful people out of the US.

  3. bennett says:

    “Those speeds are projected to range from a mere 50 mph on the mountainous east-west route (taking two hours to go 98 miles from Denver to Vail)… Just why would anyone spend more than it costs to drive to take a train that is not much faster than driving to go such a short distance to somewhere that is not very convenient to your final destination?”

    But that’s a hell of a lot faster than I will take you on a Saturday morning by car. Leave Denver at 6:30am on a snowy winter day and you’ll be lucky to get to Vail by 10:00am.

    This part of the line has been talked about for years in CO. The draw back was always that trains would have a hard time with this type of terrain. I suppose those fears are justified by this report. I notice that Idaho Springs has a stop now too. The leadership in that town, as I remember, were staunch opponents to this rail line, not because of its cost but because it would take too many people past their town. I wonder if they’ve come around.

    The problem as I see it is that baring some mega scale trains there is no way this train will be able to serve the demand on winter weekends. Anybody who has driven I-70 on the weekends to go skiing knows what I’m talking about. That, and this is really expensive.

  4. Dan says:

    The private train going up 70 to the resorts is no longer feeding the demand. This loss has many reasons, but the fact is there is not a lot of room up there (and the rockslide recently by Glenwood is another issue) and there are no good solutions. But I’m sure there are many who would pay to take the train rather than sit in traffic going nowhere.

    DS

  5. bennett says:

    BTW,

    As a kid I took the ski train every Saturday to Winter Park during the season. It was awesome. I would pay. Fact is, these days driving to the I-70 resorts isn’t very convenient. Often you have to pay for parking which is miles away from the slopes and take a bus to the base area. After sitting in traffic for 3+ hours, parking, waiting for the bus, riding the bus, maybe waiting in the line for a lift ticket, your day is shot. Back in the day you bought you lift ticket at Union Station with your train ticket, got off the train and went skiing, got off the mountain at 3:30-4 and went home. Sick Byrd as we say. Best way to shred the Gnar fo sho.

  6. mattb02 says:

    Slam dunk. Great post.

  7. PlanesnotTrains says:

    $22 billion base cost (without overruns) for a bunch of skiers? Thats rich!

    On March 29th, 2010, bennett said:

    But that’s a hell of a lot faster than I will take you on a Saturday morning by car. Leave Denver at 6:30am on a snowy winter day and you’ll be lucky to get to Vail by 10:00am.

    *********

    Because trains are immune to snow?

    Signed,

    Washington Metro Area Transit Authority

  8. Hugh Jardonn says:

    So, basically the problem is that a bunch of rich yuppies are upset at the amount of time that they have to sit in traffic when they want to go play in the snow. Boo Hoo. Why should the rest of Colorado’s taxpayers pay for this? Let the ski industry pay the money if this is such a good idea.

  9. Borealis says:

    Taxpayers paying $22 billion to subsidize wealthy skiers — what a country!

    The private sector sees tons of proposals that assume that customers will double or quadruple customers based on assumptions that the economy will change a different way. If they have a very high pay-off, they might be considered. But who would invest on a highly speculative project that, if everything goes as expected, might break even?

    Does anyone remember how every expert in the 1970s was sure that gasoline would quadruple in the next decade?

  10. Spokker says:

    Connecting San Francisco and Los Angeles via high speed rail is a good idea. Building high speed rail in Colorado? Not so much.

  11. Dan says:

    So, basically the problem is that a bunch of rich yuppies are upset at the amount of time that they have to sit in traffic when they want to go play in the snow. Boo Hoo. Why should the rest of Colorado’s taxpayers pay for this? Let the ski industry pay the money if this is such a good idea.

    Ah. So the ski business and tourism isn’t multibillion dollar and doesn’t ripple through the economy. Who knew? And who knew that tourism is a bad industry and shouldn’t be a part of the economy? One learns so much here!

    ———————-

    Building high speed rail in Colorado? Not so much.

    This is an interesting issue. There will not be too much more growth in this state, as the water constraints will prevent that.

    But $6.00-7.00 gas will change the way people travel and where they live in that same time period. Do we force people to use expensive POVs or do we give them freedom of choice?

    DS

  12. bennett says:

    “Does anyone remember how every expert in the 1970s was sure that gasoline would quadruple in the next decade?”

    Average price of gas in 1970, $0.36 per gallon. In 2007 we were at $4+ in some states. Give or take a decade, those experts were not too far off.

  13. bennett says:

    “$22 billion base cost (without overruns) for a bunch of skiers?”

    “So, basically the problem is that a bunch of rich yuppies are upset at the amount of time that they have to sit in traffic when they want to go play in the snow?”

    “Taxpayers paying $22 billion to subsidize wealthy skiers — what a country!”

    Yup, pretty much. Just remember people in CO have voted to build football stadiums, a light rail network, and all sorts of communist parks and amenities. They may just tax themselves again.

    I don’t know about this HSR thing in the mountains, but as a person who has, during the peak hours, driven I-70, taken a bus, and a train to the ski hill, driving is the least convenient, to me.

    I’m saying that I would pay good money for some sort of ski, bike, hike, day trip, etc. transit service. $22bil for HSR? I don’t know.

  14. Dan says:

    bennett brings up an excellent point:

    why do the small minority annieplannurz never rag on the highly planned sports stadia, few of which – if any – are privately funded and serve the elite for only a fraction of the year? Surely their BCE is in the same…erm…ballpark as transit any way you measure it.

    Is it because sainted architects who might have been inspired by the insipid Rand build the stadiums? But there are communists in there subsuming the all-important self for a communitarian goal!…very strange.

    DS

  15. t g says:

    Dan, Reason magazine regularly criticizes public funding of stadiums.

  16. Dan says:

    That’s a good point, but the site dedicated to th’ sunset of th’ gummint plannin’ is strangely silent on this multibillion dollar subsidy that benefits the elites and not the rugged individual non-communitarian patriots.

    DS

  17. Andy says:

    Congratulations, Dan, for finding a government boondoggle that you don’t support.

    It has been pretty well demonstrated that professional sports stadiums do not generate new spending, but just take expenditures from other entertainment options in a city. Not to mention that the lease agreements usually move the revenues from the stadiums to the sports team and leave the taxpayers with the bills. See http://brookings.nap.edu/books/0815761112/html/R1.html

  18. MJ says:

    I believe there is already a train serving Winter Park, Granby, Glenwood Springs and other central CO towns. If the skiers want to hop aboard, they’re more than welcome. I think it was Marie Antoinette who said “Let them eat Amtrak!”

  19. Scott says:

    More taxpayer money for entertainment & many destinations!
    Hiking takes too long. There should be escalators on mountains.
    All park facilities should be blind & non-limb-working accessible, like ADA wants.

    DUIs are bad, especially when caught, even worse when somebody gets in your way.
    There should be “free” shuttle transports home.
    Hey, it also gets drunk drivers off the road.
    That’s an argument for transit, that it gets riders out the way of drivers.

    The gov should force people to pay for lounge chairs in all theaters too & pay for more ticket agents at long lines, because that creates more comfort & less waiting.
    Hey, just tax businesses 125%, because they are bad.
    I’ll get my stuff elsewhere, like from the wonderful unions, whatever they can do, without business.

    More regulation, more bureaucrats, more handouts, Yeah!.

  20. bennett says:

    “There should be escalators on mountains.”

    Ever been to Beaver Creek?

  21. Dan says:

    Congratulations, Dan, for finding a government boondoggle that you don’t support.

    Congratulations for frequently showing that you can’t comment here without making sh– up. I’ll leave wondering whether you have a man crush to others.

    DS

  22. the highwayman says:

    Scott said: I’ll get my stuff elsewhere, like from the wonderful unions, whatever they can do, without business.

    THWM: Try starting a labor union in China and you won’t get very far.

  23. prk166 says:

    Does anyone know what sort of traffic they’re assuming a line like this would get? Number of trips (akak ridership) on a weekday? Weekend? What sort of traffic increases are they looking at for vehicles on I70?

  24. Scott says:

    hman, from my previous comment of I’ll get my stuff elsewhere, like from the wonderful unions, whatever they can do, without business.
    you resonded Try starting a labor union in China and you won’t get very far.

    Why would I start a union?
    Why would I even go to China?
    What does China have to do with it?
    Why do you think China is great for manufacturing & why we import so much from them?

    You low comprehension is evident with your question. You had no idea what my sarcasm was about.

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