Cox: Make Builders Responsible

The builders of any Florida high-speed rail project should be responsible for cost overruns and all operating losses, suggests a new report from the Reason Foundation. Written by the Antiplanner’s faithful ally, Wendell Cox, the report suggests that rail construction is likely to go at least 40 percent over projected costs and that rail fares are not likely to cover operating costs.

The report notes that California has decided to build the first segment of its high-speed rail line in the flat Central Valley, where costs should be not significantly greater than those in Florida. Yet California is projecting costs of $64 million per mile, while Florida’s costs are projected to be only $32 million per mile.

The report is timely, as Florida’s incoming governor, Rick Scott, is seriously considering canceling the rail project even though the federal government has agreed to fund 90 percent of the projected $3 billion cost and project proponents claim fares will cover operating costs. Cox argues that going ahead with the project poses high risks for Florida taxpayers as the state will likely be responsible for cost overruns that are almost certain to happen, and Cox is also skeptical about fares covering operating costs.

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These sound good, but realistically, after spending $3 billion building the line, would rail supporters be content to shut it down if it failed to cover operating costs? Not likely; instead, the pressure would be intense for the state to keep it running no matter what the cost. Thus, even following Cox’s recommendations would pose a high risk for state taxpayers.

Moreover, as soon as construction begins on the Tampa-to-Orlando line, rail nuts will start pushing to extend the line to Miami–which proponents say will cost $8 billion but which Cox estimates will cost closer to $10 to $16 billion. This will add significantly to the state’s financial burden.

Cox doesn’t mention it, but the state’s grant application for the high-speed rail line projects that 96 percent of its riders will be diverted from automobiles; only 4 percent will be “induced” by the rail line. If every single one of those induced travelers goes to Walt Disney World, it would increase Disney World’s annual attendance by just 0.7 percent (about 125,000 new travelers out of 17 million who attend Disney World each year). Those who claim high-speed rail will lead to some kind of economic boom will have to explain how that boom could result from such a small increase in visitors.

Governor Scott can save Florida and U.S. taxpayers a huge amount of money by canceling this boondoggle. Even if Secretary of Immobility LaHood gives all of the Florida money to California, California will still have less than 20 percent of the amount it needs to build a Los Angeles-to-San Francisco line. Since that state is running huge deficits, that line is likely to die even if the state is foolish enough to begin construction on the railroad-to-nowhere.