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High Speed Rail May Have Hidden Costs

Posted by: Nate Berg

2 November 2007 - 2:00pm

With nearly $10 billion in bonds going up for a vote in 2008 to fund high speed rail in California, residents should consider the history of public works projects that have greatly exceeded their initial low cost estimates, writes Adam B. Summers.

"In November 2008, voters will be asked to consider a $9.95 billion bond to pay for a 700-mile high-speed rail system that would run from San Diego to Sacramento and the San Francisco Bay Area. But wait. The bonds would cover only about one-quarter of the estimated $40 billion total cost. Officials have yet to identify where the other $30 billion will come from."

"If the high-speed rail system is anything like other major infrastructure projects, we can expect actual costs to be two or three times the estimated costs and ridership to be half that of the projections. Boston's "Big Dig" project and Los Angeles County's Blue Line light rail from downtown L.A. to Long Beach both ended up costing three times more than promised. Will taxpayers be fooled again with low cost estimates and inflated promised benefits?"

"A high-speed rail system might be a cool thing to have, but is it really wise? The state's fiscal condition is steadily deteriorating. According to State Treasurer Bill Lockyer, California currently has more than $135 billion of general debt authorized, including over $42 billion in bonds approved by voters just last year. Now we are being asked for $10 billion more, which is merely a down payment on the tens of billions the high-speed train system will actually cost."

Full Story: California's High-Speed Train Project Should Be Derailed
Source: Reason, November 1, 2007
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Yeah Right.

Submitted by djaco on Sat, 11/03/2007 - 09:39.

This guy is pretty much full of it. First, he compares CAHSR to the Acela train, when in reality the two systems are completely different. Acela runs on mostly existing rights of way and can only travel a maximum speed of 125 mph, whereas CAHSR will be on mostly new rights of way and will travel up to 225 mph. Considering that CAHSR will travel almost twice as fast as Acela in many cases, it will attract many more riders (remember, California’s population will grow from 36 million today to around 55-60 million by 2030, so the market will likely be larger than that on the East Coast). Next, he makes a completely erroneous statement when he says Southwest tickets will be cheaper. The CAHSR authority has said time and time again that ticket prices will be approximately half the price of flying. If you take into account the time it takes to arrive at the airport early, possibly be delayed, and wind up in the middle of nowhere at SFO or LAX, HSR travel times are comparable and the trips are not as much of a hassel. Lastly, automobile traffic has increased so much over the past 30 years because of the massive investment by the government (NOT the free market) in automobile infrastructure. The cost of CAHSR is nothing in comparison to the cost of the interstate system in California. If Californians do not want the same sprawling, polluted cities and congested highways in the future, then HSR is the way to go.

High Speed Rail's Long Range v Short Range Costs and Benefits

Submitted by marcotico on Fri, 11/02/2007 - 16:47.

I've been studying the reasons behind cost overruns lately, and in many instances I wouldn't argue with this article. But the question I ask myself is whether the long term benefits outweigh the short term costs of these type of mega projects. Its easy to say that the money would be better spent elsewhere or that in the short term (even medium term 10-25 yrs) these types of infrastructure investments will be heavily subsidized, and therefore unwise and irrational. But what will these investments seem like in the long term (50+ years)? I don't suppose to know the answer to that question, but I do see that libertarian thought does not even seem to attempt to address it.

There is also a counter argument to these types of arguments which is that even though mega-projects have huge cost overruns, what are the costs of delaying projects. Take the "Subway to the Sea" in LA (the redline extension to Santa Monica) as much as the initial redline cost overruns where (400%!) what is the increased cost of not building it in 1996, and instead just getting around to re-studying it now, as the cost of material has sky rocketed? Those of us in the build-it-and-they-will-come camp always think wistfully what if this would have gotten off the ground when it was cheaper and easier to build?

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