High Speed Rail a Profitable Enterprise for California?

We hear from the high-speed rail authority and many politicians that high-speed rail in California will be profitable. After all, the Train à Grande Vitesse (TGV) in France and the Shinkansen in Japan are profitable - or so they say.

If you take a closer look, the French high-speed rail, the TGV is operated by SNCF, Société Nationale des Chemins de Fer Français, a public company that operates the trains in France and which, indeed, is profitable. The train infrastructure in France – the tracks and all control systems are owned by Réseau Ferré de France (RFF), a state run company which maintains the infrastructure and services the debt. RFF is heavily subsidized by the French government and loses money. Combining the losses and subsidies of RFF with the profits of SNCF, the French taxpayers are footing the bills of around one billion euros per year (exact numbers are published for 2006 and 2007).

In Japan, the huge debt accumulated by the Japan National Railroad of more than $300 billion was transferred to the national debt after the re-structuring of the train system in 1987. Three of the eight companies formed after the 1987 re-structuring are operating the major train lines, including the Shinkansen trains, and have been privatized since then. These three Japan Railroad companies are profitable; the remaining five are government owned and are not profitable. The enormous debt of the entire rail system is paid back by the Japanese taxpayers.

For countries like Japan and France it still makes sense to subsidize an overall train system that includes high-speed rail connection between metropolitan centers. In these countries, where automobile and airplane travel are very expensive, the fast trains connecting these metropolitan areas provide an excellent alternative to airplanes and cars. TGV, for example, is fully integrated with the two major airports in the country, offering tickets for shared train-plane travel. More than 90 million people in France use the high-speed rail between Paris and most major cities in France and Europe, including London. More than 150 million use it in Japan.

These numbers, however, are dwarfed by the use of the metropolitan transit systems – close to 30 billion riders in Tokyo and three billion riders in Paris per year.

It’s fairly easy to see the attraction of high-speed rail if you do not need a car at the beginning and end of the trip because there is a great transit system in place. Conversely, without an efficient metropolitan transportation system available in the Bay Area and Southern California, it’s hard to imagine how HSR will succeed here. San Francisco, with a population of 800,000, has an annual ridership of about 310 million using the public transit system, the bulk of which use Muni. How can we expect to attract 50 million high-speed rail travelers per year between the Bay Area and Southern California without any efficient high-capacity local transit system? Should we expect millions of visitors to get off the train in San Francisco and take Muni to their final destinations or walk to the nearest BART?

 It seems we are planning to put the cart before the horse; we need a good metropolitan mass-transit system first and high-speed rail second.

Comments

[Russ]

One of the realities of this forthcoming project is that real estate agents will now be required to disclose that the project is moving forward to potential buyers of homes near the rail corridor. Obviously when a disclosure like this is made, property values are affected. With this mandatory disclosure, the negative impacts of HSR have already begun.

Below is the official language of the disclosure:

The approval by California voters of Proposition 1A in 2008 authorized the funding of a high-speed rail system ("Rail System") in California and the creation of the California High-Speed Rail Authority ("Authority"), the entity responsible for planning, constructing and operating this Rail System, intended to link various cities up and down the state. The exact route that the proposed Rail System would take and how its construction and operation might affect surrounding communities have been the subject of considerable concern and debate.

Along with its benefits, possible negative impacts of the Rail System could include, without limitation, noise, dust, traffic interruption, street closures and/or econfigurations, visual impacts, possible diminution of property values and other consequences on a particular neighborhood. Precisely what impact, if any, the Rail System would
have on any particular piece of real property either before, during or after construction and placement in operation is unknown; certainly it will affect people and properties differently.

Real estate agents are not experts regarding the Rail System, and prospective buyers are advised to investigate and satisfy themselves in regard thereto during property inspection contingency periods. Important information about the Rail System may be obtained by contacting the Authority directly or by visiting the website http://www.cahighspeedrail.ca.gov.

[Kevin]

Why would anyone regularly take the HSR from SF to LA? Worse, the HSR is going to induce sprawl. Look at the history of rail lines and transportation corridors. That is what they do. This HSR will make developers near the mid-stops filthy rich, as well as the engineering firms. This will be the be biggest boondoggle of all time at a time when our schools are being drained of funds.

[potter]

Another HSR nightmare. The promise is that one gets on the train and arrives, refreshed, 2 hours later in LA.

All it takes is one guy with wires sticking out of his shoe and you've got a new HSR-TSA 2-hour wait in security before boarding your 2 hour train ride.

Now it's 4 hours to LA- why not fly?

[commuter]

"Now it's 4 hours to LA- why not fly?"

So why not train it if it is a more pleasant trip?

[rationale]

Why must HSR be profitable? Are our highways profitable? If HSR simply lost less than our "boondoggle" highways, wouldn't that be a net gain?

[Boogeyman]

Pleasant trip on HSR? Just wait until the soon-to-unionized TSA gets it's tickley hands on security. Add another 2 hours on the trip. Carry-on baggage? Hah!

Add two more lanes to I-5 if you want to get to LA so badly.

HSR is the Great Wall of California: keeps a lotmof people busy for a long time, never will do what is is suppossed to do, and will only look good from space.