Ballooning Costs Quickly Deflating High-Speed Enthusiasm

a dysfunctional crony capitalist system and we also suck pretty bad now at public works projects.
Sad that we can’t figure out how to do this correctly

Current market cap of Southwest Airlines is $6.6 billion, so why doesn’t the State just buy it? And United-Continental is $5.87 billion, so we could buy that too, and just dedicate all the airplanes to SFO-LAX route. Departures every five minutes…
At some point soon this ridiculous project will die…especially with projected tax receipts headed down.

Been to Anaheim airport lately? I have — and it’s quiet, roomy, and slow. Ontario. Oakland. Santa Rosa. Glendale. Long Beach. There’s plenty of unused capacity in regional airports. And the costs for expanding this capacity is a trifle compared to HSR costs. The ability to expand/contract service to these airports is also a trifle, compared to building physical infrastructure.
Add this to the other sad fact: even once you get to LA or Fresno, HSR riders will likely still switch to rental cars to GET to points like Ventura, Petaluma, Tracy, Venice, Lomita, etc. You don’t solve much by just offering point-to-point rail and then having crappy local transit infrastructure. It’s cart before horse with HSR.
Of course HSR sounds great to *me*, as a San Franciscan, because it serves me so well. I sit on top of a key railhead. But I’m not blind to see how HSR is no transportation dream for outlying residents. And HSR is bankrolled by generalized public monies, to a much smaller degree than air transport (ticketing) and road (gas taxes). In those modalities, actual users bear a high proportion of actual costs. HSR ticket fees, given railroad history and ticket price realities, will never come close to covering even the maintenance cost for the system.
The huge amount capital spent on a single thread of HSR should be spent on greatly expanding and improving local transit infrastructure — where every single day, hundreds of thousands of people are driving 50 miles or so because their local system is so crapped out. Building a shiny, expensive rail shuttle that will see only big ridership LA -> SF is rather shortsighted. It’s cart before horse.
No surprise SF people, me included, are jonesing for HSR. But I’m under no illusion that it’s a *selfish perspective*. And not one that offers credible benefits over regional airports until we have a greatly improved intra-regional transit options that keep people from jumping into cars once they get off the HSR at LA (or Sacramento… or anywhere).
And I guarantee you, we’ll all be shocked at how few people actually take the HSR compared to $49-$79 one hour flights to LBC or LAX. It’s a huge cost boondoggle, albeit one that I’ll personally benefit from. If I was a resident of Modesto or Santa Rosa or Dana Point, not so much.

Have you heard the story of the Trojan Horse?
Do not build this.
If ever gets built, taxpayers will be on the hook for generations.

More tired arguments from the naysayers who don’t want any tax dollars used for anything (except roads and wars).
I usually step up in the defense of HSR but I’ll sit this one out. I’ll let successes of other countries speak for themselves. China, Germany, France, South Korean, Spain, Italy, England, Belgium, etc… HSR changed their countries in ways they could never had imagined and they’re not discussing how much it has cost. The tunnel under the Channel was the only financial disaster but an incredible game changer benefiting everyone.
They succeeded but somehow it would fail? Grow a spine, people.

A ton of HSR rails were laid in the 70s and 80s in Europe. Refusing to invest in the future is a self-inflicted disability.

Absolutely missing the point. What was the cost of putting someone on the moon?
How much would the taxpayer have paid in 1970 to “build the internet?” What’s the “internet” worth to the world economy these days? Who saw that coming?
Will high speed rail pencil by predicting people’s anticipated tolerance for the cost of a ticket? Is this what people are arguing about? It’s not the cost of the ticket that High Speed Rail brings us, it’s what a trip on High Speed rail brings us.
We can’t afford NOT to do High Speed Rail.
We can’t afford NOT to send a man to Mars.
We can’t afford NOT to think big and great and have the confidence that by thinking big and great we become big and great.
The stuff politicians argue about now is ridiculous to a point that I lack the literary skills to describe it. Symbolic of the decline of an empire. So much wasted energy.
Do you know that there are engineers (in their spare time) that are trying to design an elevator to space?
http://en.wikipedia.org/wiki/Space_elevator
Does this not blow you away and inspire you to pay more taxes to get these guys going?
I don’t know, call me crazy but I’m pretty convinced this country has irrevocable lost its way.

Wow, quite the sales pitch for HSR! As evidenced by Amtrak, it is critical for us as a nation.
I think this State has so many other more effective ways to stimulate the economy…by promoting private industry basically.
These shovel ready Obama-bucks investments have just added to our debt pile and continue the long, long legacy of extreme government wastefulness.
Rick Perry is eating CA’s lunch simply by giving tax breaks to companies and keeping the enviro-mentals at bay. No HSR in that huge state.
But build now or forever be lost! (I think I heard that in 2006)
I think we’re missing the point with the cheap airfare reference. The State could seriously buy two major airlines for the ‘preliminary’ cost estimate of HSR (actual cost is 4x higher), manage the businesses to breakeven, and charge $30 each way.
I do agree that we can’t afford not to send all realtors to Mars though.

badlydrawnbear wrote:
> Look there are plenty of studies out there that
> show the coast of building rail vs roads is
> basically equal.
I’m sure there are studies that show this just like there are studies that show that the Iraq war is a great idea. The first thing I would do if I wanted my heavy construction company to make tons of money from the government is join up with the union guys that work for me and produce a “study” that says building a high speed rail line is a great idea…

Karl Rove and I will ride the rails together as hobos, given the rate of our demise.
But seriously, I just see government trying to spend its way out of recession with their bloated projects as repulsive. Not really a GOP thing as I don’t vote on that platform, more just a case of spending within one’s means. I don’t see how bond financing for something of this nature is prudent and an absolutely necessary expenditure at this juncture, but I might be very shortsighted. Too many other basic things we already can’t afford.

lol wrote:
> Amtrak, just like USPS is typical of the
> GOP message. Break it beyond repair then
> show the ugly wreck as an example of why
> we should not support them.
I am no fan of the GOP, but it is not their fault that people (GOP, Dem & Independent) are not taking the train as often as they once did and mailing a lot less letters. Southwest and UPS has figured out how to move people and packages without my tax dollars. Like many people (not just Republicans) I don’t want to pay a ton of taxes every year for a HSR system that never covers its cost with ticket sales.

“I don’t see how bond financing for something of this nature is prudent …”
Then you should look at this …
http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield
Considering the US government can currently borrow at NEGATIVE real interest rates, financing the project is actually cheaper than spending cash.
http://thinkprogress.org/yglesias/2011/08/10/293197/negative-real-yields/

“UPS has figured out how to move people and packages without my tax dollars”
FYI – The postal service receives ZERO tax dollars and is funded by stamps and other user fees. The only people paying for USPS are the individuals who use the USPS to mail letters and packages.

Union representing workers who support work that will provide jobs to workers. Geez, these people are really corrupt for wanting investments that provide jobs.
Plus this work would have a great use and ROI for everyone.
Not like bankers where successive $1T bailouts provide 10s of Bs in kick ass banker bonuses and no extra jobs. That’s a good use of taxpayer money.

Ratings are more political than everything.
France has a high deficit and debt but yet they retained their AAA rating. S&P’s justification: France pension reform will help lower the deficit and this is what they want to see in the US.

lol — S&P seems to have only very recently moved into the political advocacy business. As far as I know Moody’s does not do this.
As far as I am concerned, S&P now has about as much credibility as the WSJ editorial page. Not that S&P had much anyways after their repeated multi-level years-long failures to accurately assess and rate mortgage backed securities and their derivatives.

“Even if the government could get the money to build the system for free we will still need to pay to keep it going …”
And we don’t have to keep bridges, roads, airports, dam, sewers in good repair?
By that logic we should never fund a new infrastructure project because it will require on going maintance.

I’m sure I’ll get flamed or called a pessimist for this, so let me start by saying that I really wish it were possible for this idea to work as planned – I totally share Patrick’s view above and love the concept. That said, here’s my admittedly cynical view of how this would probably unfold in real life:
1) NIMBYs who oppose airport expansion also don’t want a bullet train zipping through/near their town. So the route would need to get renegotiated or slowed. Add a few years to the timeline and double the cost.
2) Ditto for environmentalists who demand studies on the effects of HSR on the habitat of the spotted turdworm et al. Add a few years and double the cost again.
3) America has no experience building these, so we would probably have much of the design & brain work done by the Japanese or Germans, and the trains would likely be built in China and shipped over here. So much for creating American jobs.
4) Because of 1 and 2, that 2:40 trip to LA would now take closer to 4 hours, so ridership would be way below projections. In any event, business travelers will continue to fly since they’re relatively insensitive to airfares but their time is important. Regular people will still drive since you need a car when you get to LA anyway.
5) The program would incur huge losses that would need to be subsidized endlessly by taxpayers, just like in Spain. No, not “instead of” but “in addition to” the bridges, roads, and airports that we already subsidize. Because those aren’t going away.
The final denoument would be a gigantic circle-jerk of finger pointing and blame-storming, with everyone involved trying to demonstrate why they weren’t the reason HSR failed in California.
I would love to be wrong about this, but I just don’t think California has the political will or density to do this correctly. And it’s not worth doing unless it’s done correctly. Flame away.

Legacy Dude…you are right on, finally some clear thinking on this subject.
Interesting/baffling how many on SS feel that the government would actually complete this project sucessfully, given their horrendous track record.
Think of the Bay Bridge debacle x 400 miles + right-of-way issues…it never happens.

The newly available draft environmental impact report for Merced to Fresno shows how many of the issues raised can be handled.
Regarding the spotted turdworm, that really isn’t going to be an issue because essentially all the land involved is either already right of way, adjacent to existing right of way, or intensively farmed. Any spotted turdworms would have been wiped out long ago by brake dust, methyl bromide, or some other such.
Speaking of rights of way, objectors have pretty much nothing to go on. That is even more true now that CalTrain is negotiating to share track for combined service.
Because of increasing crowding at airports and on roads the a four hour time would still be competitive, and less than three hours is still projected. Compared to the ongoing losses and costs of roads and air corridors even an unsuccessful project would be relatively cheap and worthwhile because of the road and air capacity that would be freed up. Control of air traffic corridors has been getting increasingly complex and expensive over time, just to point out one problem with existing services.
The trains will probably be imported from overseas, but there is a lot of shovel ready work to do right now. There is risk of failure, but this is so basic. I, for one, refuse to believe that this nation has degenerated so thoroughly that it can’t build a train.

I agree with the pro-HSR crowd. HSR is an important project, it will create jobs here, and it is good for the future of Cali and the U.S. Not building it means we will have to build more roads and expand and build airports, these are big projects, and suffer from the same cost overrun problems as any HSR project. Remember Boston’s Big Dig project?
I’m fiscally conservative, but I still strongly support HSR because it’s a project that will pay off in the medium and long terms. I’d be fine with extending the duration of the project and spending less each year (although that has it’s own problems and I’m not in favor of it), but killing the project would be plain stupid.
There are plenty of other bad projects that honestly deserve to be canceled, HSR is a good project and should be completed.

“… business travelers will continue to fly since they’re relatively insensitive to airfares but their time is important.”
You are right that airfare matters less (but probably more than you might think)
However, the idea that a business traveler would rather spend time in security, a crowded gate area and then crammed on a plane instead of using the same amount of time to continue working on the trains wifi network, taking cell phone calls, practicing their sales pitch and/or taking meetings with other customers is simply untrue. Business travelers with clients in Sac, SF, LA and SD and frequently travel within the region would greatly prefer HSR over flying or driving.

I’d be fine with this compromise, how about the rest of the folks here?
Instead of the state running the building of the project, the state simply allows an independent contractor or group of contractors to pick the route, then provides the $9 billion (plus however much in federal funds) that has been allocated. The rest must be found in the private sector.
This is EXACTLY what several contractors have proposed to do (Virgin, SNCF, JR, even Bechtel).
The catch? The state must hand over a lawsuit-free and ready to construct routing, meaning that the state must be ready to use eminent domain and/or other force to remove liability and time delays from the routing. This is the ONLY reason why private dollars are not flooding in – UNCERTAINTY over routing and/or timing of construction.
Everyone KNOWS that HSR between LA and SF will make buckets of cash, but if and only if NIMBYs don’t drive the cost of construction through the roof, as is happening now.
The government needs the power to pick the route, everyone who wants to stand in the way be damned. How do you think the interstate highways and airports built in the 40s-70s didn’t come in billions over budget? Government power to snuff out the protesters standing in the way.

^You joke, but that’s exactly how we were able to get a gigantic freeway system built without massive cost overruns – by using a massive amount of government power to just get stuff done – farmers, city landowners, environmentalists, etc be damned.
We can either have stuff for a decent price or give everyone an effective veto. We can’t have both.

Guys, nobody here is arguing against the IDEA of HSR. We all support the concept. At least I do. We’re just highly skeptical that today’s California can do this correctly, and extremely skeptical that it can be built on budget or on time.
This is not like a highway that doesn’t get finished properly. If you try to build 50 miles of 6-lane highway, and unforeseen delays/cost overruns force you to scale down to 25 miles of 4-lane highway, then guess what? That highway is still useful. If HSR turns into RSR (regular speed rail) or the system is half-finished or not fully connected, it’s basically useless. This is my biggest concern – the binary nature of a project this large. It has to be finished exactly as designed to be a success, otherwise it’s a write-off. There’s no middle ground here.

FAB: “Back in 1933 my grandfather and the union guys he worked with started building the San Fancisco Bay Bridge. Three years later two entire bridges and a tunnel through an island were completed at a cost of about $60 million (About $900 million in current dollars adjusted for inflation).”
That’s great and all but we can’t really compare it too much because the goal wasn’t to just build another bridge that would fall apart in an ~7.0 earthquake that wasn’t that close to the bridge. They repaired the oakland side of the bridge pretty darn quick and not too expensively. Haven’t heard too many complaints about the retrofit of the western side. Further there is a large amount of additional cost involved in building a bridge around another bridge in active use rather then building on a fresh site or not having to worry about all those traffic reconfigs. Finally, 24 workers died building the original bay bridge. Part of the additional cost of bridges today are related to increased safety measures.

2:17 is with current technology, odds are it will be even faster when in operation.

Like many on here I’m pro-HSR, but I’m *also* pretty skeptical about our ability to execute, which makes me wonder if I shouldn’t be anti-. A failed project might sour people on HSR for a long time.
Would a more incremental project work? Upgrading a few existing regional lines, and especially connecting LA to the central valley, would cut down travel times a lot – not enough to compete with airlines, but possibly a boon for regional commuters.

Po Hill Jeff – though an incremental solution would be a lot easier to swallow you really need a quantum leap in performance to attract the ridership to fund a series of incremental projects. Amtrak already bridges the LA-Bakersfield gap with a bus and yet predictably not many people use it because it isn’t time-competitive with driving or flying.
We already have a direct Amtrak link from the bay area to LA but it is very slow: 12 hours. So that route isn’t really usable to normal travelers. It is really sort of a tourist route if anything. It is amazingly scenic (especially south of SLO) though and I recommend it to anyone who has the time.
The target journey times for HSR are designed to make taking the train a no brainer for these short regional hops. Anything slower becomes … um … “a brainer”.
Jimmy – Impressive I-5 run times though I’m sure you realize that isn’t practical for the masses.

“when I said conservative I meant it in the traditional sense of ‘moderation and caution’ not neo-conservative which means ‘don’t do anything unless it makes the rich richer'”
That’s not what I read. You claimed you were a “fiscal” conservative, which means limits to government waste and ineffectiveness and not just spending money on every problem out there, whether they are real or imagined.
From my perspective, HSR is the poster child for all that and more. We already know the ridership numbers are bogus, and now the price tag is getting higher (duh). I don’t think there’s any justified economic benefit from this white elephant.

“It would be cheaper and faster then flying or the train, not to mention much more convenient.”
I’m not actually convinced it would be cheaper or faster. You may have to stop for gas more than once at that speed. I seem to remember that many cars get something like 6-8 miles per gallon at those speeds. Even with a 20 gallon gas tank, you could be stopping more than twice.
And it would never work because too many Californians are road boulders.