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Is All Aboard Florida a Scam?

By | | Transportation
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All Aboard Florida is a plan by the Florida East Coast Railway (FEC) to run moderate-speed passenger trains from Miami to Orlando. Where a highway trip over the route takes about four hours, FEC promises train times of just three hours. While an airline trip is just an hour, when an hour is added for going through airport security, FEC thinks their route will be competitive.

The railway’s ridership study estimates the operation will attract 4 million riders per year by 2019 and that the fares these riders will pay will be enough to operate the line as well as cover the capital cost of building 40 miles of new rail between the FEC’s current tracks in Cocoa and Orlando Airport. However, a counter-study by Brown University economist John Friedman and funded by Citizens Against Rail Expansion, which opposes the train, disagrees.

Friedman estimates the line will only attract 1.5 to 2.0 million passengers a year and the fares they will be willing to pay will come nowhere near covering the railroad’s costs. As a result, it will have losses of more than $100 million per year and will soon default on the debt it plans to incur to build the new line.

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Not Much of a Comeback

By | | Transportation
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CNN breathlessly reports that, in a “surprising comeback” over the past 10 to 15 years, “passenger rail has seen a resurgence in ridership.” The article is accompanied by 14 beautiful photographs of passenger trains, nearly all either tourist trains or trains in other countries and none of Amtrak, the near-monopoly provider of intercity passenger rail in the country (rectified with the photo below).


In September, 2010, Amtrak’s Empire Builder crosses Two Medicine Bridge near Glacier National Park in Montana. Photo by the Antiplanner; click image for a larger view.

Among the few hard facts contained in the CNN article is that, in its 2013 fiscal year, Amtrak carried a record number of passengers, nearly 31.6 million. Let’s see what that really means.

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Is MagLev a Game Changer?

By | | News commentary, Transportation
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Much like the proposed Florida passenger trains that can be run without government subsidies (but can we have some anyway?), train supporters are gushing over Japan’s tentative decision to build a magnetically levitated (maglev) line from Tokyo to Osaka. Japan apparently sees this as a way to revitalize its economy, especially if it can sell the trains to the United States and other countries.


Maglev train being tested in Japan. Wikimedia commons photo by Yosemite.

The Antiplanner has maintained that transportation improvements are economic game changers only if they make travel faster, cheaper, and/or more convenient. Maglev meets only one of those criteria: at projected speeds of a little more than 300 mph, maglev would be at least 50 percent faster than existing high-speed trains and possibly even faster than flying over short distances. Flights from Tokyo to Osaka, the route of the proposed maglev, take about 80 minutes, and the maglev promises to reduce times to little more than an hour.

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Premature Celebration

By | | Transportation
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The Atlantic may be a bit premature in heralding “the triumphant return” of private passenger trains. This claim is based on the Florida East Coast (FEC) Railway’s All Aboard Florida plan to build and operate for-profit passenger trains from Miami to Orlando.

The success of this supposedly unsubsidized train depends on, among other things, the willingness of the federal government to loan the company $1.6 billion to start the service. The plan is to improve 195 miles of existing track and build 40 miles of new track, plus passenger stations, all of which is expected to cost around $2.5 billion.

To partly fund the project, FEC recently stunned the bond market by selling $405 million worth of bonds promising to pay an incredible 12 percent return. Of course, at rates like that the bonds sold quickly, but at a time when comparable bonds are offering to pay just 6 percent, this raises questions about why the railway is offering to pay twice as much.

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Pre-emptive Cancellation

By | | Transportation
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The polar vortex that supposedly was caused by global warming should have been a great opportunity for Amtrak to prove the worth of intercity trains, which advocates often claim are “all-weather transportation.” Instead, Amtrak preemptively cancelled trains in both the Midwest and Northeast Corridor.

Trains between Chicago and the Twin Cities and between Chicago and St. Louis were all cancelled. The Empire Builder between the Twin Cities and Spokane was also cancelled. Then it cancelled Chicago-Detroit trains. Finally, it reduced service in the Northeast Corridor.
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Admittedly, three trains were stuck in the snow in Illinois in the middle of the night. Fortunately, Amtrak was able to rescue the passengers–with buses.

Is Branson Stealing from U.K. Taxpayers?

By | | News commentary, Transportation
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In recent weeks, readers of The Guardian who weren’t distracted by the Snowden story have been entertained by a debate between lefty economist Aditya Chakrabortty and entrepreneur Richard Branson, the CEO of Virgin Airlines, Virgin Rail, and various other companies. The debate actually started a couple of years ago, when Chakrabortty called Branson a “carpetbagger” because, among other things, he bought a failed bank from the British government for less than the government had spent rescuing the bank.

Virgin Pendolino tilting train in London. Wikipedia commons photo by Andrew Butcher.

Branson replied a few days later saying that “99% of our businesses have nothing to do with government at all and have been built in the face of ferocious competition.” Where his companies do work with the government, he added, their goal–as in the case of the bank–has been to turn loss-making enterprises into profitable ones.

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The Best for the Most Ridiculous

By | | Transportation
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The lyrics to what some people claim is the best rock-and-roll song in history were the inspiration for what some say is the best newspaper headline in history. The article is about one of the most ridiculous ideas in history, which is spending more than $150 million rebuilding a former rail line from Armagh (population under 15,000) to Portadown (population 22,000), in Northern Ireland.

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The Antiplanner is not Irish enough to have ever actually visited Armagh or Portadown, and I don’t have data about Northern Ireland that is separate from Great Britain. But it seems likely that transport habits are not much different in Northern Ireland than in the rest of Ireland, and Eurostat says that trains carry less than 3 percent of passenger travel in Ireland, while cars move 84 percent and buses do the rest (click on “Modal split of passenger transport”; Eurostat doesn’t separate out air travel). Building a rail line between two small cities is not going to change that, and even if it did, there any no reason to think that taxpayers will get any benefits from funding it. Of course, reason usually has nothing to do with these rail proposals, so naturally some people want to do it anyway.

Renationalization or True Privatization?

By | | Transportation
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United Kingdom’s Department for Transportation is in trouble over a plan to transfer the franchise to run passenger trains over the London-Glasgow West Coast route from Virgin Trains (which is 49 percent owned by Stagecoach) to rival First Group. After fifteen years, Virgin Trains’ franchise is set to expire in December, and when the government put a new franchise up for bid, First Group had the low bid (meaning it asked for the least subsidies).

A Virgin Train. Photo by Andrew Butcher.

Virgin argued that having the low bid should not be the only factor in selecting a winner, and hired Europa Partners to evaluate the bidding process. The consultant’s report (a full version of which doesn’t seem to be available on line) argued that selecting the low bidder carried a high risk that the operator would go bankrupt, thus disrupting rail service.

The government awarded the contract to First Group anyway, leading Virgin to sue. Thanks in part to a timely appeal from Virgin’s Richard Branson to Prime Minister David Cameron, the government withdrew its award the night before it was supposed to defend it in court, saying that it had found irregularities in the bidding process, just as Europa had indicated. Now the government may be on the hook for millions of pounds to First Group, which says the reversal injured it and that its share value fell by 240 million pounds after the government withdrew the contract.

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