Why Northeast Corridor Privatization is Doomed to Failure

Alex Armlovich asked me whether it’s possible to design a public-private partnership on the Northeast Corridor (NEC) to build high-speed rail. I took it to a Patreon poll, in which it prevailed over three other options (why land value taxation is overrated, why community groups oppose upzoning, and what examples of transit success there are in autocracies). On social media I gave a brief explanation for why such a privatization scheme would fail: the NEC has many users sharing tracks, requiring coordination of schedules and infrastructure, and privatizing one component would create incentives for rent-seeking rather than good work. In this post I am going to explain this more carefully.

Conceptually, the impetus for privatization is that the public sector cannot provide certain things successfully because it is politically controlled. For example, political control of infrastructure tends to lead to spreading investment around across a number of regions rather than where it is most needed; when Japan National Railways was broken up and privatized, the new companies let go of many lightly-used rural lines and focused on the urban commuter rail networks and the Shinkansen. Political control may also make it harder to keep down headcounts or wages. A competent government that recognizes that it will always be subject to political decisionmaking about services that should not be political will aim to devolve control of these services to the private sector.

The problem with this story is that privatization itself is a public program. This means that the government needs to be in good enough shape to write a PPP that encourages good service and discourages rent-seeking. Such a government entity does not exist in the realm of American public transportation. This doesn’t mean that all privatization deals are bad, but it means that only the simplest deals have any chance of success, and those deals in turn have the least impact.

When it comes to HSR, private operations work provided there is no or almost no need to coordinate schedules and fares with anyone else. One example is Texas, which has no commuter rail between Dallas and Houston nor any good reason to ever run such service. In California, this is also more or less the case: Caltrain-HSR compatibility is needed, but that’s a small portion of the line and could be resolved relatively easily.

In the Northeast, where there is extensive commuter rail, such coordination is indispensable. Without it, any operator has an incentive to make life miserable for the commuter rail operators and then demand state subsidies to allow regional trains on the track. Amtrak is already screwing other NEC users by charging high rates for electricity (which is supposedly the reason Conrail deelectrified, having previously run freight service on the NEC with electric locomotives) and by coming up with infrastructure plans that make regional rail modernization harder and demanding state money for them. If anything, the political control makes things less bad, because congressional representatives can yell at Amtrak; they will have less leverage over a private operator. In the other direction, Metro-North is slowing down Amtrak between New Rochelle and New Haven for the convenience of its own dispatching, and is likely to keep doing so under any PPP deal.

I have written many posts about what it would take to institute HSR on the NEC at the lowest possible cost. All of these make the same point, from many angles: organization – that is, improving timetabling – is vastly cheaper than pouring concrete and building bypass tracks. In chronological order, I’ve written,

Privatization is supposed to solve the problems of an incompetent public sector. But Amtrak’s incompetence is not really about wages or staffing; NEC trains are overstaffed relative to Shinkansen trains, but not relative to TGVs. Nor is it about unprofitable branch lines, not when the proposal is to privatize the NEC alone, rather than the entirety of Amtrak so that the private operator could shut down the long-distance trains. Some of the incompetence involves politicized procurement, but this is not the dominant source of high NEC costs. No: the incompetence manifests itself first of all in poor coordination between the various users of the NEC. Given better coordination, Amtrak could shave a substantial portion of its New York-New Haven runtime, perhaps by 10-20 minutes without any bridge replacements, and reduce schedule padding elsewhere.

To fix this situation, some organization would need to determine the timetables up and down the line and handle dispatching and train priority. In the presence of such an organization (which could well be Amtrak itself given top-to-bottom changes in management), a PPP is of limited benefit, because the private operator would be running on a schedule set publicly. Absent such an organization, privatization would make the agency turf battles that plague the entire NEC even worse than they are today.

In 2009, SNCF proposed to develop HSR in four places in the US: California, Texas, Florida, and the Midwest. The NEC, with its existing public intercity and regional rail operations, was not on its map. More recently, Texas Central is a private Japanese initiative to build HSR between Dallas and Houston. On the NEC the only Japanese initiative involved maglev between Washington and Baltimore, a mode of transportation that doesn’t fit the NEC’s context but is guaranteed to not share tracks with any state-owned commuter rail operation.

The invention of HSR itself was not privatized, and the European privatization paradigm involves public control of track infrastructure. Competing operators (some public, some private) can access tracks by paying a track charge, set equally across all operators. But even then, the track infrastructure owner has some decisions to make about design speed – mixing slower and faster trains reduces capacity, so if there’s a mixture of both, does the infrastructure owner assume the design speed is high and charge slower trains extra for taking high-speed slots or does it assume the design speed is low and charge faster trains extra? So far the public rail infrastructure operators have swept this question under the rug, relying on the fact that on high-speed tracks all trains go fast and on low-speed ones few HSR services go faster than an express regional train.

Unfortunately, the NEC requires large speed differences on the same route to avoid excessive tunneling. This complicates the EU’s attempts at a relatively hands-off approach to rail competition in two ways. First, it’s no longer possible to ignore the design speed question, not when regional trains should be connecting Boston and Providence in 51 minutes and high-speed trains in 20 minutes, on shared tracks with strategic overtakes. And second, the overtakes must be timed more precisely, which means whoever controls the tracks needs to also take an active hand in planning the schedules.

Handwaving the problems of the public sector using privatization works in some circumstances, such as those of Japan National Railways, but could never work on the NEC. The problems a PPP could fix, including labor and rolling stock procurement, are peripheral; the problems it would exacerbate, i.e. integrating infrastructure and schedule planning, are the central issues facing the NEC. There is no alternative to a better-run, better-managed state-owned rail planning apparatus.


  1. Mark E. Singer

    As the status quo will not hold much longer for Amtrak, let alone the Northeast Corridor (NEC), a new paradigm is desperately required. Having no transparency on data and finances provided by Amtrak plays into its “shell game” that prevents a logical paper trail to audit how the long distance routes funding is bled off to cover the widening fiscal hole of the NEC. Concomitantly, how much, if not every dollar paid by the non-NEC states is turned around to support the NEC? For how long has Amtrak manipulated such finances to dump the NEC’s overhead and infrastructure costs into the long distance and state-supported sectors?

    Just as California wised up to bring in DB for the LA-SF HSR infrastructure and operations, so must we now acknowledge that Amtrak has failed to maintain, let alone, improve the NEC infrastructure. As neither the USDOT nor FRA have the requisite sources, it is definitely time for the FRA/USDOT to commence a process to open-up the NEC infrastructure for a competent, experienced, and successful owner, or, owner/operator for the NEC.

    This must be a better alternative to the present situation, where currently Amtrak does not even charge the NEC states for their trolley-like schedules. As well, despite the requirement of PRIIA 2008 for Amtrak to finally start charging the commuter users for operating and infrastructure depreciation costs, because Amtrak is an appendage so beholden to the power brokers in the Northeast, it never bothered to charge. As this neglect was apparently approved by Amtrak’s Board of Directors, this issue did not change until mandated by Congress in December, 2015. As Amtrak has willfully evolved into a subservient tool to its Northeast political patrons, it has neglected its mission for a national system.

    A privately-owned and operated NEC infrastructure should serve the following purpose:
    1) Identify market rates to charge–and collect– for NEC operating and infrastructure depreciation costs from all users–commuter, freight, and Amtrak.
    2) Consider fuller utilization and revenues of the NEC by enabling all parcel or mail trains to operate at night.
    3) Appropriately prioritize infrastructure maintenance, repairs, and replacement for all parties to contribute, including states and federal, just as the states pay now for repairs to the interstate highways serving them.
    4) Rather than continuing the solo operation of intercity trains by Amtrak, this operator should offer opportunities to properly vetted experienced operators to bid on franchise, or, even just offer open access.
    5) With the infrastructure freed from the current political machinations favoring just current status quo commuter or Amtrak services, major improvements in the NEC could be contemplated to facilitate increased services and frequencies by improving the design of the current infrastructure.

    We have to remove the “flash in the pan” politics that had the feds underwrite new Acelas to be built in NY state, when the NEC infrastructure begs for major renovation and cannot currently accommodate any significant increase in speed or frequencies. By ignoring the continuous degrading of the NEC infrastructure, the governors of NY and NJ, and their congressional delegations, have forfeited their voices and control over the NEC. The only way to save the NEC is to place it in the hands of a competent operator.Indeed, the nation’s taxpayers west and south of the Hudson River do not appreciate the muscle game recently played by the senators from NY and NJ to withhold the approval of Mr. Batory to the FRA. If their continues to be this persistent obstinance to neglect the rest of the nation’s rail needs in favor of just the NEC, Hornblower ferries may become the best option for crossing the Hudson

    • adirondacker12800

      The state agencies that use the NEC pay through the nose. And finance most the improvements.

      • Mark E. Singer

        They may be paying thru the nose now, but for how many years were they absent and relieved from making such payments? Frankly, just like Metra in Chicago and the west coast commuter lines, the states should pay for the improvements that more than benefit their commuters than the few Amtrak runs. Remember, Amtrak typically operates but 2 trains per hour in each direction.

        • adirondacker12800

          The sttates do. And people using the commuter trains pay Federal taxes. Lots and lots and lots of Federal taxes.

  2. Benjamin Turon

    I would agree with the above. Privatization is something thrown around because politicians and media pundits can’t knowledgeably think in depth about the issue. The see “privatization” as the “cure-all” (see Trump’s infrastructure plan) but don’t seem to understand its mixed and nuance record both at home (failed toll highways) and overseas. The think that the “private railway” would bring in many billions of dollars that the public sector is unwilling to spend, and that they would improve management, even thou if there is political will and leadership, you can obviously have a well run public corporation. A better run public railway is the solution.

    From my study of high speed rail overseas, what you really do see is “mixed-enterprise” railways, and that is what I think is missing in the US. The mantra “no public money for private HSR” is commonplace despite the fact that public dollars in the many billions are offered up to private enterprise, from sporting stadiums (Las Vegas Raiders) to TV factories (Wisconsin-Foxxcom)… why is HSR, which is of clear very long-term public benefit, different? I would have a lot more faith in the Texas Central project if it had the active support of the state government, and if it was structured as a private-public partnership with some public capital subsidy, perhaps free right-of-way or America’s favorite subsidy… tax breaks. I’m unaware of a completely private successful high-speed rail project elsewhere in the world.

    I think California in its planning of its CaHSR project would have benefited greatly if from the start the state had partnered at the start with a established overseas vertically integrated high-speed rail from Japan, South Korea, or Europe, by creating a company with mixed public and private ownership. The authority lacked the in house institutional knowledge to design a entirely new high speed railway, and I think is shows. The over reliance on consultants is a big issue in the states, I read many of the reports they prepare, and they don’t actually seem to know much about modern intercity rail services. If I was a governor of a state that wanted to build a new HSR line, I would call up JR East or the SNCF and has if they wanted to make a deal to design-build-operate-and con-own a new HSR service in my state. Now that DB is taking a big role in the CaHSR project, I hope that it becomes more successful.

    One big issue in the USA is that the Northeast Corridor I think may be one of the most complex high speed railways in the world, even compare to the East Coast, West Coast, and Great Western mainline in the UK. You have massive amount of traffic on very old infrastructure, including many lift-bridges and several tunnels. On the other side of the nation you have the CaHSR project I think may be the most difficult “first” high speed railway ever built by any country in terms of length and terrain being crossed. Its 450 miles long, crosses three mountain ranges, and has to enter two densely built up urban regions. As a result, both are super expensive build or rebuild. The result is that HSR always looks like a project that will take forever to build and cost an enormous amount of money.

    Perhaps the new “Brightline” service and if Texas Central gets built, it will change the perception of HSR in the USA, by showing that for a few billion you can actually get a lot.

      • Fluffy Bunny Slippers

        I think the passes would be Pacheco pass, Tahachapi Pass and Soledad Pass as it will go up to the antelope valley like most of the other trains and not up Tejon Pass like the 5

    • Alon Levy

      SNCF did actually offer such a design-build-operate deal. The state didn’t take it, for two reasons:

      1. SNCF wanted a cost-plus model guaranteeing it a rate of profit, which the state would not agree to.

      2. SNCF wanted to change the alignment to avoid going through Downtown Bakersfield and Fresno, instead serving them peripherally the way the LGVs don’t enter cities (except Lille, which is a 200 km/h zone for nonstop trains and not a 300 km/h zone). I forget if it also wanted to go via Tejon and Altamont rather than the Tehachapis and Pacheco, but if it did then that would be a nonstarter for the HSR Authority, too.

  3. Ian Mitchell

    “does the infrastructure owner assume the design speed is high and charge slower trains extra for taking high-speed slots”

    Forgive me if I’m wrong, but isn’t this just the answer right here?
    State-run or not, agencies piddling away valuable infrastructure should pay dearly for doing so, shouldn’t they?

  4. Michael James

    Benjamin Turon 2018/02/24 – 20:50

    From my study of high speed rail overseas, what you really do see is “mixed-enterprise” railways, and that is what I think is missing in the US. The mantra “no public money for private HSR” is commonplace despite the fact that public dollars in the many billions are offered up to private enterprise, from sporting stadiums (Las Vegas Raiders) to TV factories (Wisconsin-Foxxcom)… why is HSR, which is of clear very long-term public benefit, different?

    I genuinely don’t know what you mean by “mixed-enterprise” railways. Is there a single true HSR in the world that wasn’t built by government? (Of course I don’t mean the private building contractors etc that do the work. And let’s exclude vaporware … ) None in Europe, Japan or China AFAIK, so that leaves Korea? Thatcher refused to allow government to fund or even help fund HS1 (Dover to London section of Eurostar line) and that is why it languished for 12 long years after Eurostar first began operations. It required her political demise and then heroic efforts by a few renegade Tories (notably Heseltine) to get the thing built.

    Of course private interests will be happy to build HSR as a PPP conditional on majority funding and risk being taken by government, ie. their favourite model (communalise costs/losses/risks, privatise profits). Those stadia are a perfect example; ie. perfectly bad example.

    The authority lacked the in house institutional knowledge to design a entirely new high speed railway, and I think is shows.

    It’s the Anglosphere disease. Governments have deliberately dismantled it over the past 4 decades. It’s why the Anglosphere is, without exception, without HSR. (I grudgingly might admit HS1 but it owes more to the French than the Brits, another reason why Thatcher opposed it so viciously.) But this sad fact should not lead to resignation to, and full surrender to, vested private interests. Instead it implies the only solution is to revitalize institutional expertise, for which there are plenty of highly-successful models, needless to say outside the Anglosphere.

    • Alon Levy

      The UK doesn’t have HSR (unless you count HS1, which you shouldn’t), but it has the fastest legacy intercity rail in the world that I know of. The WCML and ECML average 140 km/h on city pairs like London-Birmingham, London-Manchester, and London-Leeds, and if I remember correctly London-York approaches 160 km/h, comparable to some of the slower HSR lines in the world, like those of Germany. Another such place is Sweden, which has no HSR (and shouldn’t build any) but has 200 km/h tilting trains averaging about 140 km/h between Stockholm and Gothenburg or Malmö.

      The WCML is good enough at places, to the point that Network Rail should have considered what I’m proposing for the NEC: no brand new line, but rather strategic bypasses to allow high speed. The question is whether there’s enough capacity on the fast lines into London, and my understanding is that the real capacity bottleneck is in South London, particularly the South West Main Line, rather than anything feeding the main intercity terminals north of the Thames.

      • Michael James

        The problem is that Glasgow and Edinburgh are a long way (700+km) from London, so HSR makes a lot of sense, especially as (unlike France but like Japan) some 90% of the UK population lives in a quite narrow corridor making it very efficient (almost the same as the NEC on distance and population).
        As I understand it, the main reason for building HS2 is that modifying the existing East and West Coast Mainlines would be horrific, especially as they are such heavily used routes. In fact they are already subject to lots of disruption for maintenance which creates a lot of complaints. The concept is that (at least for the WCML) the HS2 will allow much more effective repair and improvements of the old lines without any disruption (as pax will be able to use the HSR), plus it is planned for the old WCML to serve more smaller city destinations en route (which can’t happen when its major job is connecting the major cities). It should be win-win for everyone, including all the habitual complainers in those smaller cities.
        But then, I reckon they should have built it as maglev … like NEC should.

        Re Sweden: I guess your rationale of not building HSR is entirely econocratic but 320km/h versus 140km/h is a big difference. And an approx. 3h link to Malmö, versus the current 6h, would really shrink the country and of course it would be an international route, continuing across the Øresund Bridge to Copenhagen and the rest of Europe (thus leveraging that high cost infrastructure even more). These things usually repay their capital cost many fold over (not in train fares of course). On those grounds I guess you wouldn’t have recommended building the Madrid to Barcelona HSR line (almost identical distance). Well ok, much bigger populations & economies etc, though the international connection to the rest of Europe was another common factor.

        • Michael James

          Re Sweden to Malmö, if you built it going west you would have covered about half the distance to Oslo so only a teensy ≈200 km spur and you’d have a genuine Scandi-HSR network linking all the major nordic cities! Now linking Helsinki might be a tad of a stretch … (Probably provoke some Scandi-Noir; I noticed that the third season of The Bridge is starting next week here.)

          • Untangled

            Wow, only the third season, we really are getting shafted when it comes to overseas TVs and movies. Never mind that the forth begun 2 months ago.

            BTW, isn’t Stockholm to Malmo 4 hours now, not 6? You would want new HSR line to do better than 3 hours if it’s to be worthwhile.

            Also, with Denmark building a new tunnel to Germany, a new high-speed link from Stockholm to Copenhagen will mean much shorter travel times onwards to Hamburg and maybe even beyond. Connecting it to Hamburg and Germany is more realistic than Helsinki.

          • Alon Levy

            It’s not even that good of a TV show. I bailed after the first episode of season 2. In season 1, the interactions between the two leads are precious, but the plot is weak and the resolution is really weak. It’s one of those rare shows that would be made better if it were more episodic, because the escalating murders of season 1 don’t really work given who the murderer turns out to be.

        • Alon Levy

          A lot hangs on “much bigger populations and economies.” Stockholm County has 2.5 million people and the Malmö metro area has 700,000 (and Copenhagen has another 2.5 million). Madrid has 6 million and Barcelona 4.5 million, and Zaragoza in between has another 800,000. Sweden just has really poor population distribution for HSR, unlike Japan, or for that matter the UK, which as you note is fairly linear.

          • Michael James

            A lot hangs on “much bigger populations and economies.

            Yes, yes. I used the Seville-Madrid-Barcelona HSR as an argument for the Melbourne-Canberra-Sydney HSR case: roughly comparable in distances and population catchment; not to mention Syd-Melb is the second or third busiest city-pair air-route in the world. I am sure I gave you the reference for my article in The Age (almost a decade ago).

            The Øresund Bridge cost about $3bn which is rather a lot for such small populations, as you point out, don’t you think?

            Untangled, it may well be the fourth season of The Bridge (though I am talking about its broadcast on SBS, ie. free-to-air, which is sometimes a season behind if it is also broadcast on pay-tv in Oz). I only watched the later seasons sporadically–partly because it was late at night and partly because it wasn’t so good. (I’m also ten years beyond being a bit bored with autistic or whatever main characters in tv shows. I preferred the all-too-human fat philandering cop but he was written out … )
            Stockholm to Malmö is ≈620km so yes, I should have said closer to 2 hours than 3h. I agree with your other comments about the other links to Europe. My remark about Helsinki was a joke (about half the distance–of ≈500km–is over water, currently a 12h ferry trip) … but it would be nice … and then logically a link to St Petersburg (which is already HSR linked to Moscow).
            BTW, my first trip to Copenhagen, coming from Hamburg I guess (this was about 37y ago), was an overnight sleeper train that actually was rolled on to a ferry for the journey across the straits (now replaced by the StoreBaelt bridges & tunnels). Those were the final years of the grand age of European (wagonlits) train travel. HSR is the new grand European age of train travel. (if Alon and his ilk don’t kill it with economic rationalist nitpicking … 🙂

          • Eric

            “The Øresund Bridge cost about $3bn which is rather a lot for such small populations, as you point out, don’t you think?”

            It’s for cars and road freight as well as rail.

          • Michael James

            Eric, I was being facetious. I generally believe in building, indeed overbuilding, infrastructure. But I was making a dig at Alon who likes to make fine econocratic modelling to see if population and economic issues “justify” such infrastructure. Thus: would the “Malmö metro area of 700,000” really justify a $3bn car/rail bridge?
            Of course it connects to Stockholm (and Oslo) but that is a 8h+ trip by car and still 5h+ by train … So, actually I reckon they could run a car+truck-train like on the Channel Tunnel. And upgrade the rail so it is only 2h+ …

            In the Anglosphere we spend 10x more time and political capital in arguing whether we should build infrastructure. HSR to link our east coast cities (where 70%+ of all Australia’s population lives) was first mooted in the early 1980s when the (either French or Japanese) offered to build it for a few billion dollars … today, still arguing about it and the last enquiry (which cost $20m to the consultancy that did it) came up with a figure of $120bn (partly because in all this time a ROW was never reserved so a lot of tunnels etc and expensive land requisition is now required). It turns out that the single biggest cost, in the Anglosphere, of building infrastructure, is the absurd delays in deciding to build it. The reason we didn’t build that HSR 40 years ago is that the Federal Treasury demanded it be cost-neutral over 4-year Budget forward-estimates; I kid you not.

          • Eric

            I don’t see why tunnels or ROW would be needed. Just go north from Melbourne, then northeast when the land gets flat, then east along M31 to Sydney. This route is basically all rural farmland.

          • Michael James

            Eric: “I don’t see why tunnels or ROW would be needed.”

            That is what a lot of people, including some engineers, think. It has become a political imperative that the route through cities be in tunnels because politicians are too gutless to propose resumption of private homes & land in cities. Thus the “official” plan (by AECOM) includes 67 km tunnels in Sydney alone. There is a total of 144 km of tunnels or 8% of the total length and 29% ($33bn) of total cost ($114 bn). The problem is that Sydney is a vast sprawling mess that is geographically hemmed in by the sea and mountains, and not enough rail ROW to anywhere to be able to squeeze in a HSR in addition to suburban trains.

          • Alon Levy

            In the UK, the same issue of refusing to widen suburban rail ROW is driving up the cost of Crossrail 2. Crossrail 2 is three separate projects: the cross-city tunnel from Victoria to Kings Cross, the tunnel from the Lea Valley Lines to Kings Cross, and the tunnel paralleling the South West Main Line. The South West Main Line has four tracks and is near capacity, so it’s not possible to just dedicate the slow lines to Crossrail and let the fast lines handle everything else – it really needs four slow tracks and two fast tracks. There’s room in the ROW for six tracks, but it requires replacing the earthen berm with brick retaining walls; keeping the berm means there’s only room for five tracks. So instead of doing above-ground improvements TfL wants to build a new tunnel with a bunch of stations inside.

          • adirondacker12800

            Suburbanites will airly say “just put it in a tunnel”. So someone has to do the study that tells everyone that tearing out the berm will cost a gazillion and building the tunnel will cost ten gazillion. The suburbanites will be unimpressed. Then complain that it costs too much. When it’s built, they will complain that the new stations are in an icky tunnel. Why wasn’t it just across the platform?
            It’s 2018, the wall would be reinforced concrete with a thin veneer of brick to make it look pretty. If it’s even brick. The people applying synthetic stucco can do all sorts of things these days. They could make it look like Victorian navies wrestled granite into place.

  5. andrewla

    “Such a government entity does not exist in the realm of American public transportation. ”

    But this is true for all topics. The most productive thing that could be done for American transportation is relocate all the people to France and Japan.

    • adirondacker12800

      That would make it difficult to eat in places like Japan and France when the when the corn, soy and wheat belts in North America go back to forest and prairie.

  6. Benjamin Turon

    By “mixed-enterprise” I’m thinking of how the new Shinkansen lines and other railway projects have been planned, financed, built, and operated in Japan since the 1980s “privatization”. There other examples around the world, Britain’s rail system today for example. I think that Chiltern Railways could be a good example of what could be achieved in the US, especially the Northeast. The Taiwan Shinkansen is another example, although it also is an example of how you really got to get the finances right and be very conservative in estimates.

    How would “mix-enterprise” work in the USA? Let’s say for example that Nevada decides that a high-speed railway to Southern California is needed to secure the economic future for Las Vegas, the state could create a new cooperation, of which the state would be an equal shareholder with a private partner/consortium (like an overseas state railway). The state would contribute public funding and other resources like land or right-of-way, while the private partners would bring private financing and expertise in railway construction and operations. If Texas Central was working like the above, I would have more faith in it, right now I don’t know how it can succeed with out strong state and federal support, including some sort of capital subsidy or other financial aid.

    Most modern economies are “Mixed-Economies” including that of the USA and there are a lot of examples public-private cooperation, partnerships, and interdependence including highways, waterways, and aviation. Historically in the US a lot of public aid was given to the railroads, including local, state, and federal capital subsidies. I just read a history of the New York Central Railroad, a lot of public money and other support was given to the early railroads that were eventually merged into the New York Central. Look how the first transcontinental railways were built in the US and Canada. My question is, why can we do the same with high speed rail?

    On the definition of “High Speed Rail” … I think many of Britain’s Intercity services due qualify even by the UIC which includes services running at 200-km/h on pre-existing upgrade lines like the West Coast Mainline or the Northeast Corridor. Certainly, decades ago the Intercity 125 and Swedish X2000 were considered “High Speed Rail”. Why HS1 is not HSR is beyond me, it’s a brand-new line with trains running up to 186-mph connecting London with Paris and several other European cities… but it’s not HSR???

    What is High Speed Rail?

    • Benjamin Turon

      I have been watching the closing ceremonies for the Winter Olympics, and I noticed how in the “Welcome to Beijing 2022” video how China’s HSR services were prominently featured. Of course for the PyeongChang Games the South Koreans built an entirely new high speed railway. It really puts the USA to shame. Our “welcome” video would I suppose feature a school shooting or maybe a crashed Amtrak train. SAD!

      • Benjamin Turon

        Concerning the NEC, what might could be a solution (other than just improving existing Amtrak management and increasing its capital funding) is “regionalization” and a “dedicated trust-fund”, like in Japan. This would mean spinning the NEC and the connecting state corridors in Virginia, Pennsylvania, Upstate NY, and New England off from Amtrak to a new federal corporation in the model of the Tennessee Valley Authority (TVA). Since passenger rail is not self-supporting, a dedicated regional funding source could be created, perhaps a small dedicated sales tax in the counties served by passenger rail service. With better management and a stable predicable source of funding, perhaps real progress could be made to fully realize the potential of the NEC.

        • adirondacker12800

          Sounds like a fabulous idea. We get our Federal highways too. North Dakota gets theirs. Then we can have a little chat about when there is a round of military base realignment things move to red states. OOOOwwh rural cell phone subsidies. OOOO yeah. They can get satellite phones. And be 90 miles from a hospital because those gooey Federal subsidies to rural health care ended.
          A sixth of the population lives in the Northeast, generates a quarter of the GDP and third of the Federal budget. Northeasterners should have nice long discussions about who pays for what and that the local yokels should finance it locally.

          • Michael James

            But ‘dacker, you’re looking at this as a glass half-empty. The other approach is to do exactly the Eisenhower thing: to avoid all that red-v-blue, rich-v-poor, populous-v-sparse etc malarkey, just do it nationwide. Can it really cost more than another little war (he sez as the USS Carl Vinson and the Third Fleet today is preparing to challenge those sand islands in the South China Sea).

    • Michael James

      First, HS1 is not what takes you to Paris. HS1 is about 20% of Eurostar’s route to Paris.
      Second, HS1 is a mere 108km, from London-StPancras to Dover. It only does its top speed (300 kmph) on the 74km of section 1 (the part in Kent) whereas it does a max of 230 kmph on the rest (partly because a lot of it is tunnel; note that the Chunnel itself has a max speed of (160 kmph?), which in retrospect was a bit of false economy–if we looked at the history we could probably blame that on Thatcher too*). Both are a lot better than when Eurostar first began operation in November 1994 and the trains crawled from Dover to Waterloo at 160 kmph. HS1 opened in November 2007 exactly 13 years after Eurostar began operation.
      Thus, technically only part of HS1 is HS (definition of 250 kmph), thus perhaps “HS2/3”.

      *Joking, kinda. The reason for the speed limit in the chunnel is to not run pax HST mismatched to freight trains. HS1 in Kent has long passing loops to allow freight trains a separate route so as to not impede Eurostar. However, having said all that I think if they were building it today, they would do it differently (not least because the cost of tunneling is lower, and doing a bigger tunnel is not proportionately more expensive, a topic covered by Alon). You’d probably have twin two-track tunnels to separate freight and pax, while also a bigger tunnel might allow doubled-stacked containers?–maybe not, as too much of UK rail loading gauge won’t allow it.) There is perennial talk of building another tunnel(s) for exactly these reasons.

      • Joey

        Nitpick: there was an intermediate period between 2003 and 2007 when HS1 was open as far as Fawkham Junction so between there and Dover was fast but the approach to Waterloo through the London suburbs was still slow.

  7. Aaron M. Renn

    Alon, I don’t know if you’ve written about this before, but what about the idea of separating infrastructure ownership and maintenance from operations? Don’t many European countries do that these days? Right now the NEC isn’t even owned and operated by a single entity, has multiple power standards, etc. And the various owners don’t necessarily play nice with each other as you know.

    • Benjamin Turon

      That sounds like a “Network Rail” for the NEC. From what I read in ‘Modern Railways’ the UK’s rail infrastructure state-owned company as a mixed record, specifically thinking of the issues with the electrification of the Great Western Mainline. It is a int resting idea thou, but the biggest issue is funding. I wonder if things would be different if like the PRIIA Section 209 state-supported corridors, the cost of the NEC was charged to the state governments. I think looking to Washington is a bad idea, given the political mess the national government has been for more than a decade.

      • ethanfinlan1028

        One crucial difference with the UK model is that this would not include the franchising scheme, which is the source of much of the controversy around British rail privatisation.

        • Michael James

          To draw lessons from the sorry British story you really need to understand it. Here is my summary:

          Network Rail covers 20,000 miles of track, signaling and 40,000 bridges and tunnels. NR retains ownership of all stations but almost all are leased to the TOCs (Train Operating Companies).

          1994-1997: Privatised as Railtrack under John Major government (replaced Thatcher as PM, before Blair elected PM in 1997).
          2000: disasters mount as maintenance and status decline.
          Oct-2002: Pending collapse causes it to be re-nationalized as Network Rail. (Despite both pending physical collapse and financial collapse, in the months before this, Railtrack paid its management multi-million bonuses and paid a dividend to its shareholders!)
          Oct-2003: Network Rail announced that it would take over all infrastructure maintenance work from private contractors, following concerns about the quality of work carried out by certain private firms, and spiralling costs.
          Since 2003 Network Rail has been building up significant in-house engineering skills, including funding of apprenticeship and foundation degree schemes. Network Rail reports significant savings resulting from the initial transfers of work away from contracting companies. Additional contracts were taken back by Network Rail after the serious accident at Potters Bar and other accidents at Rotherham and King’s Cross led Jarvis to pull out of the track repair business. Shortly after this, and due to other failures by maintenance companies, Network Rail took control of many more maintenance duties.

          Then there are the TOCs and their sorry history. Despite the raison d’etre being that private industry will run the trains more efficiently, and stop bleeding public money, it turns out they run it less efficiently, while–get this–still costing central government more than pre-privatisation via convoluted subsidies, and the fact that Network Rail is not allowed to pass on all its costs (including the cost of its £35bn debt) to the TOCs. If the TOCs are making a “profit” it is entirely false accounting and at the public’s expense, both as direct and indirect subsidy plus the deterioration of its services. Just google Southern Rail for a taste of the public rage at what neo-liberalism has done to BR. Of course this massive failure had a 50 year preceding period of gross under-investment in the system. But it was always a fantasy (nightmare) that privatising was going to magically cure this problem.

          Comments on this blog continue to mention JNR (which actually is the name of the pre-privatisation entity) as if it were a success. While some of the various “private” entities such as JREast are operationally competent, it is false to paint a rosy picture of ‘privatisation’ in Japan. The original concept was that a JNR entity (ie. a continuing government body) would hold about US$300bn in debt while about $200bn would be held by the privatised entities and they would progressively pay back this debt out of profits. But this failed and JNR (the wholly-government owned JNR Settlement Corporation) had to resume the debt (and meanwhile over the period the debt increased, leaving taxpayers to pay off nearly ¥24 trillion/US$195bn as of 2009). The only reason the privatised entities like JREast show positive balance sheets is from the capital gained by their stock offerings (and the fact that they were literally gifted about $1 trillion in very good infrastructure for which they didn’t even have to pay interest on.)
          While all this may not be an entirely undesirable outcome (the debt was going to be paid by the Japanese public one way or another; meanwhile they maintained an excellent rail network) how many reading this (especially Brits or anyone in the Anglosphere) think it could work in their country? The UK is a particularly bad (ie. good) example of how disastrous it can get but is still a learning experience for everyone else (outside Asian societies like Japan, China, Hong Kong, S. Korea, Singapore).

          • Alon Levy

            The JRs have to pay interest on Shinkansen debt. The debt that was wiped was operating debt from JNR’s losses in the 1970s, like SNCF’s debt today.

    • adirondacker12800

      Sounds like a great plan. New Jersey can say “110 is good enough”. New York can say “90 is good enough”. Connecticut can say “80 is good enough” Massachusetts can say “wires? we don’t want wires” Rhode Island, Delaware and Maryland can say “we ain’t paying for that stuff we don’t use, buses will do” Fabulous!
      Or they can get together and say “Fine you don’t want to spend billions on icky railroad, here’s our plan for widening I-95 to provide the capacity” And the new airport for New York City is going to be difficult to place. I’m seeing artificial island in Long Island sound with rail connections to the Port Washington Branch and New Haven line. And a widened I-287 continued through to Long Island. that cockamamie plan to have the containers get off the slow boat from China in Port Newark and use railroad to get to distribution centers in New England, let ’em truck it across the third span of the Tappan Zee.

      • Benjamin Turon

        Multi-State authorities can work, yes sometimes with hic-ups, the Port Authority of NY & NJ for example, or you can go for a federal corporation like TVA with a multi-state jurisdiction . The key is funding, you need a reliable and dedicated source of annual funding, like a dedicated sales tax, which is how a lot of regional rail transit systems are now being partially funded, for example Denver. As a rail advocate in Upstate NY the biggest issue I see with improving and expanding intercity rail service is the lack of institutional knowledge and of secure multi-year funding. Perhaps a public corporation with an independent stream of dedicated funding could solve there two problems. For regional rail transit, the creation of authorities and dedicated sales taxes (quarter or half-penny) is well established in the US, so why not for intercity rail?

        I could imagine a the NEC being spun off to the rail equivalent of a TVA, with a board with members appointed from the states served, and a chairman nominated by the US President and approved by the US Senate. This brings up the question about what happens to the rest of Amtrak, but with PRIIA Section 209 the non-Northeastern corridors would continue to be funded by the states they served. That leaves the long-distance trains, but several of those serve the Northeast, so there would remain the same incentive for the Congressional delegations there to support the rest of Amtrak. Some assets between Amtrak and the new NEC Authority would likely work best if shared, including the Bear and Wilmington shops.

        There is strong political support for commuter and HSR in the Northeast, so its unlikely a state would convert their portion of the NEC to a bike trail. The main point I think would to make rail infrastructure and service in the Northeast less vulnerable to politics. That was the one big purpose of the “privatization” of JNR in the 1980s. Ironically from what I have read about privatization in the UK, the opposite as occurred, the politicians and civil servants in Westminster are more involved than other in running the nation’s railways.

        • adirondacker12800

          Hmmm A regional transit authority with a dedicated tax base… They can call the New York City one the Metropolitan Transportation Authority. If Connecticut decided that they would rather contract stuff out they could hire the MTA. And when the MTA decides they would rather contract out stuff on the New Jersey side of the river out perhaps they could come to arrangement with whatever gets formed in New Jersey! Perhaps whack the bridge and tunnel users to generate extra revenue! A small payroll tax!
          The one for Boston could be called something like the Massachusetts Bay Transporttion Authority. Philadelphia’s let see, something like the South East Pennsylvania Transportation Authority. That sorta leaves New Jersey out. How about Transport of New Jersey? Or New Jersey Transit? Hmmm. The interegional/interregional one could be called something like the National Railroad Passenger Corporation. NerrrPuch isn’t very melodious. Something catchy for every day use instead? Hmmmm.

          • Alon Levy

            I’d be in favor of this, but this entity could not possibly be privatized, because it would have a monopoly over transportation at the regional and intercity scale.

  8. Benjamin Turon

    I don’t think you could do in politically. Yet merging all the commuter railroads and Amtrak’s Northeast operations and infrastucture into one multi-state TVA/PANYNJ like entity, with a steady independent stream of revenue from a dedicated trust fund, like the smaller non-Honshu JRs are supported by the “Management Stability Fund”; could create overall a better, more efficiently run, seamless passenger rail system in the Northeast. But I think states would not want to give up their direct control of MARC, NJT, LIRR, MNR, or the MBTA. It would seemingly solve some management/operational issues with Penn Station! There be one railway instead of three! Hopefully there would be the “Red Team” vs. “Green Team” of Penn Central in JR NEC! LOL…

    • Alon Levy

      I think this structure works iff the regional trains can break even operationally. As soon as they need subsidies, state politics come into play; even if they can be supported purely out of intercity rail cross-subsidy, the combined entity would end up prioritizing intercity rail and neglecting regional rail, as is happening under SNCF and as happened under British Rail. Given a lot of sustained effort into cost control, it’s possible to keep operating costs down to $3-4/car-km, with very high all-day frequency, i.e. mostly empty off-peak trains; you can get away with an average fare of $0.10-0.15/p-km, so you need to average 30 passengers per car to break even, which is a little less than the LIRR, Metro-North, NJ Transit, and the MBTA average today with almost exclusively peak trains. It’s plausible given TOD (the subway in New York averages 31.5 per smaller car), but it’s nontrivial.

  9. johndmuller

    With the toxic politics now in effect in the US, whether or not things make sense economically is apparently of little import – try making a cost benefit analysis of The Wall, for example. Unfortunately, the question of whether ANY rationality at all is in play is more the issue. Even the logic of politics is being twisted beyond self-defeating. Sometimes I wonder how the 3rd Reich got started; perhaps the kind of crazy behavior we are seeing here/now is part of the answer to that question.

    On a slightly brighter note, I’ve also wondered for a long time how the people in the so-called Religious Right can live with themselves in this unHoly alliance they are in. I think is is mostly single issue politics over birth control and abortion; they seemingly just hold their noses over the rest of the package. Lately, I’ve heard that there are church groups in internal disarray where some feel thay would be better holding their noses over choice/right-to-life in exchange for the sweeter smell of the rest of the package on the other side. Despite the lack of a really overwhelming repudiation, that sort of thing did seem to happen in the Mississippi Senate special election – possible good sign.

    I hate to say it, but until the Democrats get back some sort of real electoral clout in DC, it seems that the money is going toward xenophobic, war-mongering and oligarchic interests rather than transit or progressive social policies.

    Meanwhile, if we think that the crunch is bad now, wait until the impact of the tax cuts starts to be felt in the Northeast – where taxes may really be going up for many – and the states start having to pay for more stuff that Uncle Sam had been buying.

  10. Pingback: News Roundup: Harmful Obsessions

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