Mag-Lev May Be Dead; TX HSR on Life Support

A Maryland circuit court judge ruled last week that the Baltimore-Washington Rapid Rail Company did not have the power of eminent domain and could not stop a development on land that the maglev promoter needed to use for its proposed line. The judge rejected the company’s argument that its purchase of a franchise previously granted to the long-defunct Washington, Baltimore and Annapolis Electric Railway gave it the power to condemn other people’s land.

The maglev promoter didn’t actually have the money to buy the land in question, but it wanted to halt a developer from building a mixed-use development on the property, which would have made condemnation a lot more expensive when and if it has the power and money to do so. The judge said that the company’s argument contained “a lot of factual inaccuracies.”

The prospects for building a maglev in the corridor have been further hurt by announcements from local officials such as Baltimore Mayor Brandon Scott and Prince George’s County executive Angela Alsobrooks that they oppose the project. The mayor’s office suggested that, since the Senate just authorized $2.4 billion to improve the Northeast Corridor, it would be foolish to back a project that threatened to take customers away from Amtrak.

Meanwhile, 1,200 miles away, the Texas Central — which has been granted power of eminent domain by Texas courts — has admitted that it will not be able to build its proposed Dallas-Houston high-speed rail line unless Congress passes an infrastructure bill that give the Federal Railroad Administration the authority to loan the high-speed rail promoter $12 billion. The railroad had previously claimed that it would be able to finance the project solely with private money.

That $12 billion loan would only cover half the $24 billion cost of the project, but with a federally backed loan, promoters apparently presume they could raise the other half privately. However, where the $24 billion came from is anybody’s guess. Back in 2016, the company was saying it would cost only $10 billion, but by 2020 estimates rose to as high as $30 billion. Given the cost overruns experienced after construction began on the California high-speed rail line, $30 billion sounds more likely.

The company projects that the train will attract 6 million riders a year in 2029, rising to 13 million by 2050. Based on that, it believes it can cover its costs by selling tickets for three-fourths of the cost of airfare. A Texas news station notes that “Southwest Airlines charges $205 to fly between Dallas and Houston on an ‘Anytime’ fare with a week’s notice,” which would put the high-speed rail fare at $153.

The problem with that is that the rail promoters are assuming that air fares won’t change when it starts selling tickets. American and Southwest have some fares for less than $50, and they could easily decide to put the Texas Central out of business by selling all of their tickets for that rate. Given that the airlines can make money on other routes, while Texas Central would be a one-route railroad with at least $24 billion in debt, there is no way Texas Central could win such a competition. This suggests the airlines will practice predatory pricing, but the simple fact is that air travel requires minimal infrastructure compared with rail travel, and that makes it cost a lot less.

Speaking of California high-speed rail, which I did three paragraphs ago, that line is running out of money and the legislature has failed to agree to bail it out. When California voters agreed to spend $9 billion on the project in 2008, the ballot measure explicitly made the spending conditional on getting matching funds from the federal government, local governments, or private sources. Only about $5 billion in matching funds have been raised, leaving $4 billion on the table.

No government agency wants to see $4 billion go to waste by being left in taxpayers’ pockets, so the California High-Speed Rail Authority, with the backing of Governor Gavin Newsom, has pressured the legislature to release the $4 billion without any matching funds. The legislature has resisted, not because doing so would break its explicit promise to voters, but because many members want to see more money spent in the Los Angeles and San Francisco Bay areas, while the authority wants to use the money to finish the work it has begun in the state’s relatively sparsely populated Central Valley.

If the authority gets its way, the state will end up with a $14 billion white elephant in the Central Valley. If the legislators get their way, the state will end up with a $10 billion white elephant in the Central Valley and perhaps two $2 billion white elephants, one each in the Bay Area and southern California. Especially considering that even the Biden administration has lost interest in high-speed rail, no one can possibly imagine that throwing another $4 billion at the California project will do much to finish a line that most believe will end up costing more than $100 billion.

At least some people have begun to figure out the three big flaws with high-speed rail: It costs a lot more money than advocates admit; it takes a long time to build; and if it is ever completed, transportation patterns and technologies are likely to have changed so much that it will probably attract few riders. Unfortunately, too many people want to play with trains at 12-inches-to-the-foot scale and they simply assume these problems away.