Why the California High-Speed Rail plan is fundamentally flawed

[Note from Eric Eldon: I wrote a rather positive article this week on the proposed $10 billion California High-Speed Rail bond measure. If approved by the state’s voters this November, the bond will lead to high-speed trains stretching from Sacramento and the Bay Area all the way down to San Diego. Martin Engel, a transportation commissioner for the City of Menlo Park, Calif. (a city that the train would run through), thinks its a terrible idea because it’s so expensive and because it’s solving the wrong problems. Here’s his response.]

If I may, I would like to respond, more or less point by point to your article, Eric. Actually, the train ticket price that is most frequently quoted is $55 one way for the SF to LA route. That will be in 2030, according to the CHSRA [Ed. My source on fares is here]. What do you suppose that $55 will have risen to in twenty years, when these trains are finally running?

Train ticket sales today, for regular as well as high-speed trains worldwide, begin at twice the $55 amount for similar distances. Even not-so-zippy Acela (the Washington D.C. to Boston commuter train) is more costly. Many bloggers who’ve visited Europe or Japan will convey that information; that is, it’s expensive to ride those trains. And you doubtless know, all passenger rail systems are massively subsidized; so their expectations of profits are highly hypothetical.

You talk about the “value” of this project. A better way would be to talk about the “cost/benefit” ratio. You have to acknowledge that the costs will be staggering, regardless of where the money comes from. There are many examples of under-pricing (lowballing) infrastructure projects (Bay Bridge; Boston Big Dig; the Eurotunnel, for example). A Danish researcher, Bent Flyvbjerg, has published findings about this practice. My point is this: Is there a cost point for this project that makes it no longer worthwhile? Say, like the Iraq war. And, if so, what would that be?

If you become a student of this practice, you will discover that you cannot disagree with a cost projection of $100 billion (not the currently projected $42 billion). It will be all borrowed money, both from public state and federal treasuries and private ones. These debts require not only interest payments, but also a return on principle, like a mortgage. When you say that it will not all come from California, you are probably right. However, it is California that will have to repay these loans. Some say that it will help our economy. What if many of the investors are from overseas? Is being in hock to overseas investors such a good thing for the state’s economy?

Given the fare cost and the limited connections, the likelihood of lower income workers using this train as a mode of commuting is actually rather slim. Those people would prefer slower and lower cost modes of transit. Let us be clear here, whatever this train is, it is not mass transit. In large high-density areas such as the LA basin, it could serve commuters, but that is not the rhetoric or the intention of the developers.

Yes, they claim that it will create 450,000 new jobs and will require 300 thousand man-years to construct. The fact is, there is no way of predicting this. Half a million jobs will be created in the next fifty years — or not — based on large, macro-economic forces, the nature of the global and national economy, the well-being of California’s industrial and agricultural capacity and similar basic sea-changes. Were such job growth to take place, it would be presumptuous to give credit for such expansion to the creation of a north-south railroad system.

Speed of travel, the CHSRA claims, will be faster by train than plane. No matter what the obstacles are, that’s nonsense. Indeed, airports are becoming more efficient at moving people through the terminal obstacle course. At the same time, it is naive to believe that this train, and others, will not require far greater security measures than are now in place. We have been blessed by not having a post 9/11 terror attack. I suggest that with the next one, there will be a major clampdown, trains included.

Back to the $42 billion cost. Construction, which won’t begin for another several years, will take 10 years, more or less, to complete. Do you want to predict the construction costs 10 to 15 years out? You already know about sinking dollars, rising inflation world wide, fierce competition for construction materials, decline in credit availability, etc. The $42 billion is a number like the $55 train ticket. Even if it were true today, which it isn’t, these numbers will skyrocket. I say again, $100 billion total costs are not unreasonable.

A word about environmental benefits of the train. I suggest that they will not be anywhere near as great as claimed. Comparing “the train of the future” with the automobiles of the present is unfair. Planes and cars in the future will be more ecologically friendly. Electricity, on the other hand, may become dirtier (fossil-fuel powered plants) as our demands increase exponentially. This is a domain where it is almost too easy to overstate benefits in politically correct language.

Eric, you mention the increase in riders on other rail carriers. The CHRSA frequently predicts 117,000,000 passengers annually. They even paid a consulting firm to come up with those numbers. 117 million people is over a third of the entire U.S. population. How rational is that?

There are many more issues that need to be seen through lenses other than those provided by the train developers. Amazingly, very few people have been willing to seek out alternative perspectives or to challenge the rail authority’s assumptions.

Martin Engel was born in Germany, received an M.A. from Harvard, and a PhD from Syracuse. He served in the US Air Force. He has held faculty positions at Wayne State University, Carnegie-Mellon University and most recently at Stanford University. He was also a senior program officer at the US Department of Education, and a program director at Apple.

[Train route map via CHSRA]