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Reason Foundation

Orange County Register

California Focus: High-Speed Rail Measure on Wrong Track

Voters asked to OK bonds based on overly optimistic projections

Adrian Moore
September 18, 2008

In November, Californians will vote on Proposition 1A, which would mean almost $10 billion in new bonds to make a down payment on a statewide high-speed rail system. Many people are excited at the idea. High-speed rail could provide a new means to travel up and down the state and put California ahead of the rest of the nation. Unfortunately, the proposed system is deeply flawed.

The California High Speed Rail Authority (CHRSA) is essentially saying 'we are going to build a train that is faster, will carry more people, will be more efficient, and will have lower fares than any existing high-speed rail system in the world.'

None of those things are likely to be true.

Reason Foundation has just published a report providing a "due diligence" analysis of the rail project and the claims the Rail Authority makes. Let's just say "pig in a poke" doesn't begin to cover it. The rail plan is a financial boondoggle. Between 1999 and 2008 the official estimated cost of just part of the system (Los Angeles to San Francisco) rose from $30.3 billion to $45.4 billion (in 2006 dollars). Remember, the big price increases come when construction actually starts, so our estimate suggests the final price tag could top $75 or $80 billion.

The idea is for Proposition 1A funds to be joined by other state money, federal funds and private investment to bring together the total needed. Then, fares paid by riders will be enough to pay for operation of the system, maintenance, and pay back the private investors with interest.

This is remarkable because the CHSRA projects astonishingly low fares. They plan for San Francisco–Los Angeles unrestricted business class fares to be $70 in 2030 (in 2006 dollars). For comparison, business class fares from New York to Washington, D.C., on the high-speed Amtrak ACELA train are $172, while on the Tokyo-Osaka bullet train they are $135. France's TGV train running from Paris-Marseille costs $140.

The Rail Authority claims it will be able to keep fares so low for a couple of reasons. First, extraordinary efficiency. The Rail Authority predicts its operating costs will be 40 percent -to-70 percent less than high-speed rail lines in other countries (has California government ever kept costs down?). Then it predicts amazing ridership that far exceeds anything in France, Spain, Germany, and Japan – even though those countries have shorter distances, higher density, and more people who already travel by train.

CHSRA predicts between 65.5 million and 96.5 million intercity high-speed rail riders by 2030. But their ridership estimates depend on getting riders out of their cars. To do this, the trip has to be fast and short. So the Rail Authority claims it will hit average speeds that are not being achieved by any other high-speed rail system in the world. A trip from San Francisco to Los Angeles would allegedly take 2 hours and 40 minutes, averaging 197 mph. France's TGV-Est train averages 174 mph, the TGV Paris–Avignon averages 159 mph, Japan's bullet train averages 159 mph, and Taiwan's high-speed rail averages 152 mph. And those are the fastest ones out there. And they can use light, fast trains, because they run on their own tracks. California will have to use heavier, slower trains because the plan is run on the same tracks as freight trains, and federal safety rules require heavier passenger trains in the event of a collision.

Reality check: Reason Foundation's analysis indicates that the high-speed rail sytem's operating costs will be 30-to-50 percent higher than predicted; average speeds will be well below 170 mph, so a trip from San Francisco to Los Angeles will take about an hour longer than advertised, 3 hours and 40 minutes; and 2030 intercity ridership of between 23 million and 31 million – not 65 to 96 million. All of which means either fares have to go way up – which drives down ridership – or the taxpayers will have to subsidize the train system to cover its red ink. This as the state's budget deficit sits at $15 billion.

The train is an especially bad deal for Orange County taxpayers. The system is planned in chunks and Orange County isn't part of the first portion. The County will eventually be connected to LA by "stub" lines – only if there's still money around to pay for it.

A high-speed train system might be good for the state. But if taxpayers are going to foot the bill, let's wait until a sensible, realistic plan comes along.


Adrian Moore is Vice President, Policy


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