Just days after voters approved the California high-speed rail plan, the rail authority posted a new business plan to its web site. They also posted a summary, but frankly the “business plan” is so superficial that the summary isn’t really necessary.
“It’s very pretty and has nice photographs,” says Jon Coupal of the Howard Jarvis Taxpayers Association. “But as a business plan to present to venture capitalists to convince them to invest, it falls far short.”
“It’s a careful, candid plan that pulls no punches and contains scrupulous analysis,” replies Quentin Kopp, who chairs the California High-Speed Rail Authority. “high-speed trains will alleviate the need to spend nearly $100 billion to build about 3,000 miles of new freeway plus five airport runways and 90 departure gates over the next two decades,” Kopp says in the plan’s press release.
Really? As the Antiplanner has pointed out, the rail authority’s environmental impact report says that the $100-billion (actually, only $82 billion) highway-and-air alternative Kopp is referring to would reduce congestion by more than five times as much as the entire high-speed rail network. In fact, high-speed rail will only take about two years’ worth of traffic growth off of major highways. Even if high-speed rail is built, the state will have to build just as many more freeways.
But the business plan isn’t for the entire network: it only covers the line from San Francisco to Anaheim. The plan projects the cost of building this line will be $32.8 to $33.8 billion (p. 19). Promised branches to Oakland, Irvine, Sacramento, and San Diego (via Riverside) are not included in this cost or in various other projections made in the plan.
Nor, despite Kopp’s claims of “scrupulous analysis,” does the plan discuss the many risks, including the risk that they won’t get federal funds, the risk that they can’t get private funds, and the risk that costs will go higher than projected.
Voters approved $9 billion. The plan calls for the rest to come from the federal government ($12 to $16 billion), private partners ($6.5 to $7.5 billion), and local governments ($2 to $3 billion). While many of the documents presented to voters implied that private partners would put up a third of the capital, the new business plan asks them for only 19 to 22 percent.
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The business plan projects that operations and maintenance of the line will cost around $1.3 billion a year, and that revenues will be $2.3 to $2.6 billion a year. The authority hopes that the prospects of getting to keep the $1.0 to $1.3 billion in annual profits will attract the $6.5 to $7.5 billion in private funds. If private investors don’t share the authority’s optimistic ridership and fare projections, however, no private funds will be available.
Getting $12 to $16 billion out of the federal government seems equally optimistic. I am sure the California congressional delegation will try to get the money, but it just isn’t there. Gas taxes and other highway user fees bring in about $55 billion a year, about a fifth of which goes for transit. Should the $12 to $16 billion be paid out of transit’s share? Highway’s share? The only really solution is to increase the gas tax, but that will be pretty controversial in a recession.
And, as the Antiplanner has pointed out before, it’s not just $12 to $16 billion we are talking about, because if California gets high-speed rail money, then Florida, Texas, Illinois, and every other state that has talked about high-speed rail will want its share. That’s at least 30 states under the Federal Railroad Administration’s high-speed rail plan, and that doesn’t count such secondary proposals as the Rocky Mountain Rail line.
The FRA proposals are mostly for 110-mph trains, which cost a lot less than California’s proposed 220-mph line. But do you think Illinois and Florida will be satisfied with 110- to 125-mph trains when the feds are funding half the cost of California’s 220-mph line?
Someone emailed me recently asking how I could justify the cost of four-lane interstate freeways across the North and South Dakota prairies. Of course, in 1956, I could not (truck traffic today probably justifies it), but such is the result of central planning. The Bureau of Public Roads initially proposed that the Interstate Highway System include two-lane roads across the least-populated states. But Congress insisted that, if New Jersey got four lane interstates, so should North Dakota. In the same way, if California gets 220-mph trains, so should Wyoming.
See that big gap in the FRA map between Kansas City and California? How long before Kansas, Utah, and Nevada senators propose that the gap be closed with a 220-mph rail line? That’s what happens when each state, no matter how thinly populated, gets two senators. Of course, those senators may support initial funding for California’s high-speed rail and then demand their share only after the funds are appropriated.
The final obstacle to California high-speed rail is rising costs. With construction costs rapidly rising, it seems unlikely that the San Francisco-to-Anaheim line can be completed for a mere $33.8 billion. Did the authority factor such cost escalations into its business plan? The plan is not detailed enough to tell us, which is why it is not really a business plan at all but a propaganda piece. So why did they wait until after the election to publish it?
Antiplanner wrote:
“Really? As the Antiplanner has pointed out, the rail authority’s environmental impact report says that the $100-billion (actually, only $82 billion) highway-and-air alternative Kopp is referring to would reduce congestion by more than five times as much as the entire high-speed rail network. In fact, high-speed rail will only take about two years’ worth of traffic growth off of major highways. Even if high-speed rail is built, the state will have to build just as many more freeways.”
The problem I have here, is that it is comparing chalk and cheese. The rail scheme costs $33bn, and the highway scheme costs $82bn. I would indeed expect the highway system to do more, at three times the price.
California Rail Authority wrote:
“When completed, California’s high-speed train will provide a new transportation option to more than 90% of the residents of the state. More than 230 weekday trains (115 in each direction) are planned to serve the statewide intercity travel market. A high-speed train system between Los Angeles/Anaheim and San Francisco with extensions to Sacramento and San Diego will carry more than 90 million passengers, generating $3.6 billion in gross revenues annually, with fare levels assumed in the EIR/EIS to be around half the cost of airfare”
That’s pretty much the definition of a can of worms. They assume that the cost of a ticket will be about half that of the airlines. In the UK, it’s the other way around. In the European market, they heavily subsidise rail, so what is the subsidy level here? I note that 90 million passengers per year includes the extensions which aren’t costed in the business plan. 90 million passengers annually, with 230 weekday trains is 1000 people per train on average, including trains with hardly anybody on them. Sharp elbows will be at a premium.
California Rail Authority wrote:
“The system will be built, wherever possible, along or adjacent to existing rail transportation facilities instead of creating new transportation corridors, reducing potential unplanned growth and sprawl problems”.
They put that bit in for Antiplanner.
California Rail Authority wrote:
“In the year 2030, the high-speed train will create $11 billion in direct benefits to its riders, to drivers and air passengers who experience less congestion, and to the state as a whole in pollution reduction and accident reduction.”
Although they don’t explain how they reached these figures. So we can’t tell if they make any sense.
California Rail Authority wrote:
“The high-speed train system will reduce California’s dependence on fossil fuels and foreign oil  a reduction of 12 billion pounds of CO2 and 12.7 million barrels of oil per year by 2030. Since it will use electric power, high-speed trains can be a key element in helping California meet AB 32 greenhouse gas reduction goals, and will have far less environmental impact than expanding highways and airports.”
The chief advantage of electricity is that enables any fuel source to provide energy. The USA has a lot of coal, but the USA oil production is falling away (that peak oil problem). I don’t see how burning natural gas or oil to power the trains will reduce foreign dependence, and burning coal will not reduce CO2 emissions. TGV in France uses a large chunk of nuclear power. California is certainly trying to get more renewable electricity – by helping themselves to renewables from other states.
http://www.windaction.org/news/17586
The problem I have here, is that it is comparing chalk and cheese. The rail scheme costs $33bn, and the highway scheme costs $82bn. I would indeed expect the highway system to do more, at three times the price.
Francis King, actually, you’re still comparing two different things here. One small portion of the rail scheme costs $33bn, but the savings listed are for the entire network:
AP: “Voters approved $9 billion. The plan calls for the rest to come from the federal government ($12 to $16 billion),…â€Â
So, Californians who are constantly reinforcing their new real estate development restrictions, in order to keep other Americans out of their state, are now going to force all those other Americans to pay for their high speed train. Gotta love them Californians!
But sucker subsidies aside, I still do not see how the SF-LA high speed train will be that attractive compared to flying. The HST will take 2:40 (if the 220mph speed promises materialize) while flying takes 1:00 including taxiing. Ok, the ride to the train station will be a little shorter but not by a whole 1:40. And I would not count on the HST avoiding TSA like security screening. A malicious attack that ends up derailing the train is most likely going to result in more casualties than the downing of a jetliner.
Some other obvious questions are:
What will be the fare? What is a typical train fare in Europe for a 700km ride high speed or not? And how subsidized is this fare? Is the San Francisco-LA fare likely to be the same? How does it compare with Jet Blue/ Southwest fares for the same distance?
Ettinger, that’s the thing. You can have all the security you want at a rail station but you’ve got to secure the entire length of the line to prevent a derailment.
Well keep in mind that the interstate highways were built with 90:10 split between federal and local funding.
Even with the interstate highway system there are freaks like I-87, which is 100% within the state of New York or the freeways in Hawaii.
The only thing that ROT has proven, is that he has an anti-rail bias.
http://www.youtube.com/watch?v=FhjiM0qjX9k&feature=related
“The only thing that ROT has proven, is that he has an anti-rail bias. ”
And what do you think you have proven? As far as I can tell, you’ve shown you’ll take lots of time to post comments that only occasionally add too the discourse. In fact, you’ve gotten to the point Highwayman where it seems you post low-level puerile vulgar name calling more often than an interesting point that adds to the discourse. It’s unfortunate this blog hasn’t flat out blocked your comments.
prk166, of course, there wouldn’t even need to be a high level of threat to see lobbying for expansion of the TSA into HSR. It is natural that TSA managers and administrators will see the expansion as an opportunity to increase their clout (pay), so it is commonsense to expect that they will lobby for the expansion of TSA into HSR, even if the real risk of an attack were low. It is possible that, the HSR will first start operating without TSA (to facilitate selling it to the public who paid for it) followed by TSA takeover shortly afterwards.
HWM: “Well keep in mind that the interstate highways were built with 90:10 split between federal and local funding.â€Â
While it seems almost superfluous to anwser…
When a highway is built with a 10/90% local vs. federal funds, the federal funds come from motorists throughout the US which use another equivalent (for transportation purposes) highway. While, the federal funds to be used to build the SF to LA HSR will come overwhelmingly from people throughout the US who will never ride the HSR.
Ettinger, that means nothing, out of the aprox. 4,000,000 miles of road in the US, only 47,000 are freeways.
prk166 Says:
““The only thing that ROT has proven, is that he has an anti-rail bias. â€Â
And what do you think you have proven? As far as I can tell, you’ve shown you’ll take lots of time to post comments that only occasionally add too the discourse. In fact, you’ve gotten to the point Highwayman where it seems you post low-level puerile vulgar name calling more often than an interesting point that adds to the discourse. It’s unfortunate this blog hasn’t flat out blocked your comments. ”
Amendment I
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.
http://www.youtube.com/watch?v=nCPbL4yA7ik
Posting comments on this private blog is not a matter of freedom of speech.
It is a matter of freedom of speech, as this blog is freedom of the press.
ROT, even though most of what you say isn’t right, I will defend to the your right to say it.
This blog is not the government. It’s not a matter of speech. It’s a matter of a software feature that would allow individual accounts to screen out comments from other individuals. That’s what I wish this one had.
prk166 Says:
“This blog is not the government. It’s not a matter of speech. It’s a matter of a software feature that would allow individual accounts to screen out comments from other individuals. That’s what I wish this one had.”
Now that dosen’t sound very libertarian like?
Strange though, as that my interests are in life, liberty, and the pursuit of happiness!
Any ways to get back on topic a 4 lane freeway costs about the same as a two track HSR line per mile to build and that’s using ROT’s own figures.