Business

Unstoppable? Economists Nix High-Speed Train

Low ridership projections and sketchy financials cloud Obama's transportation vision
By: Kenric Ward | Posted: November 23, 2010 4:05 AM
High Speed Rail Moving at High Speed
Shades of the cinematic thriller "Unstoppable," critics are determined to derail President Barack Obama's vision for high-speed rail in Florida.

And these skeptics are picking up support from some unlikely places.

In a Nov. 1 column in Newsweek, business writer Robert Samuelson, not exactly a tea-party type, railed against the administration's $10.5 billion investment in U.S. high-speed lines.

"That's just a token down payment," writes Samuelson, who figures that the cost to build out the country's 13 planned high-speed corridors "would easily approach $200 billion."

Citing California's 33 percent increase in cost projections before the first shovel of dirt was turned there, CNN went even higher. It pegged the initial national price tag at $500 billion.

As the numbers soar, transportation analysts remain downbeat on ridership.

"Even assuming 250,000 high-speed rail passengers, there would be no visible effect on routine commuting, let alone personal driving," Samuelson says. "In the Northeast Corridor, with about 45 million people, Amtrak's daily ridership is 28,500. If its trains shut down tomorrow, no one except the affected passengers would notice."

UCLA economists Leah Platt Boustan and Allison Shertzer say America's sprawling growth patterns -- especially in post World War II boom states like Florida -- are a bad fit for fixed transit systems.

"Only in places with greater population densities, such as Europe and Asia, is high-speed rail potentially attractive," Samuelson notes.

But even there, most of the existing high-speed trains don't earn "enough revenue to cover both their construction and operating costs," according to a Congressional Research Service report.

Pointing to the clogged Interstate-4 corridor in Central Florida, proponents of Florida's Tampa-Orlando venture believe it will attract heavy ridership. That's the bet of a European consortium and others that plan to bid on the project.

As reported by Sunshine State News, the Florida Department of Transportation will seek "concession"-style proposals from contractors who will bring their own financing.

But with a $2 billion kick-start from the federal government, skeptical Floridians see a financial black hole for the state's taxpayers. 

In the meantime, transportation analyses say much of that I-4 traffic is essentially intra-city, not inter-city. And without efficient ground transportation infrastructure at each end stop, the supposed time savings of high-speed rail would disappear.

"High-speed rail would subsidize a tiny group of travelers and do little else," Samuelson says.

"President Obama calls high-speed rail essential 'infrastructure' when it's actually old-fashioned 'pork barrel.' The interesting question is why it retains its intellectual respectability. The answer, it seems, is willful ignorance. People prefer fashionable make-believe to distasteful realities. They imagine public benefits that don't exist and ignore costs that do."

The Reason Foundation, a conservative/libertarian think tank in California, reports that even high-speed trains in Europe and Asia struggle financially.

"Only two lines -- Paris-Lyon in France and Tokyo-Osaka in Japan -- have recovered their capital costs. And every system still requires massive ongoing subsidies," Reason states.

Such arguments will surely resonate with incoming Gov. Rick Scott, who has bridled at any suggestion that the state should pay for any portion of the Tampa-Orlando line, or any other rail venture.

Tea party activists, who helped fuel Scott's insurgent campaign against government spending, have turned up the heat on the rail project since he was elected. Many suggest that job-creation estimates for the train venture are overblown and temporary.

With hard-nosed allies like Samuelson, tea partiers may find that Florida's high-speed train may not be "unstoppable" after all.

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Contact Kenric Ward at kward@sunshinestatenews.com or at (772) 801-5341.

Comments (8)

Bob Bartley
8:55PM DEC 20TH 2010
Are these people kidding? Remember when the Long Island Rail Road had strikes and 250,000 people were set loose on the highways. Grid lock to the max. Even if these goobers never use the train and drive do they realize taking thousands of cars off the roads will actually let them use the highways like they were intended?
Owen Whitman
5:48PM NOV 29TH 2010
A recent Amtrak study (Amtrak Evaluation Report E-08-02) reports that passenger rail subsidies alone, in six European countries, totaled $42 billions per year, proportionately similar to what the U.S. federal government spends annually on all forms of surface transportation. In those six European countries (Germany, France, United Kingdom, Spain, Denmark and Austria), despite massive government subsidies, a piddling 7.9 percent of all surface passengers currently use rail, while only 6.1 percent of surface passengers in all of Europe use rail. Despite massive government subsidies for European rail, passenger rail's share of the market has declined over the past decade.
texark66
11:58AM NOV 24TH 2010
If Florida does not want the money for high speed rail send it to the following states: California, North Carolina, Illinois, and even Texas. They will gladly take it off the Sunshine States hands.

Good luck with the traffic congestion in the future Florida. I support rail. All the body searches going on in the USA today are yet another reason to have more trains to more paces. I hope Florida is not left behind.

All Aboard !
Nope
8:12PM NOV 24TH 2010
Why would you think the assults government imposed searches) would not extend to trains?

Janet Napolitano:
“I think the tighter we get on aviation, we have to also be thinking now about going on to mass transit or to trains or maritime. So, what do we need to be doing to strengthen our protections there?”
Christopher Robbins
3:39PM NOV 23RD 2010
Hmmm, I doubt your claims are true considering that rail has a higher market share of the DC-Boston corridor than airplanes do, and travellers would be devastated if the NE Corridor services were shut down.

If train travel won't work and people won't use it, why is Amtrak breaking ridership records and selling out the seats on their trains? We need more and faster rail travel, it is more cost and energy efficient than adding lanes to our already ridiculously huge and wasteful highway system.
Willie Green
12:36PM NOV 23RD 2010
Robert Samuelson is NOT an economist.
He is merely a business journalist.

Of course, nobody has ever accused Kenric Ward of striving to maintain his journalistic credibility, so there's no reason to expect that he'll correct this glaringly incompetent description of Mr. Samuelson's background.
RP10
10:18AM NOV 23RD 2010
"But even there, most of the existing high-speed trains don't earn "enough revenue to cover both their construction and operating costs," according to a Congressional Research Service report."

And how much revenue do roads and highways bring in? Zero. They are completely subsidized by tax dollars. So why are you and all of the ideolog "think tanks" not comparing apples to apples? Sure you can toll roads and make a revenue stream to pay for maintanence, but it is not enough to pay for the capital costs and generate true profit.

"In the Northeast Corridor, with about 45 million people, Amtrak's daily ridership is 28,500. If its trains shut down tomorrow, no one except the affected passengers would notice."

Are you telling us that if all of a sudden 28,500 people were forced to drive themselves to work or where ever they commute to each day that there would be no impact to the roads, highways and interstate? And how much more gas would be consumed and CO2 emitted?

I have ridden the European high speed rail and it is fast, efficient and jam packed with riders.
While I agree that there are places in the US where it does not make sense to build high speed rail because the population is very dispersed, there are areas like in California, the Northeast and (someday) Central Florida that are dense enough for it to be a viable option. Central Florida's tourism creates a unique opportunity.

Your article is narrow-minded, one-sided foolishness.
Jim Smithson
8:24AM NOV 23RD 2010
Join the revolution to de-rail rail at www.axthetax.org.
The time has come to stop the boondoggle.

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