Randal O’Toole Gets High-Speed Rail Wrong

Now that there’s decent chance of US investment in rail, Randal O’Toole is resurrecting his takes from the early Obama era, warning that high-speed rail is a multi-trillion dollar money sink. It’s not a good analysis, and in particular it gets the reality of European and Asian high-speed rail systems wrong. It displays lack of familiarity with rail practice and rail politics, to the point that most nontrivial assertions about rail in Europe and Asia are incorrect.

More broadly, the way O’Toole gets rail investment here wrong comes from making unexamined American assumptions and substituting them for a European or Japanese reality regarding rail as well as rail politics. If the US can’t do it, he thinks other countries can’t. Unfortunately, he’s even unfamiliar with recent work done on American costs, when he compares the Interstate system positively with recent high-speed rail lines.

High-Speed Rail Profitability: France

I’m currently working on building a database similar to our urban rail costs for high-speed rail. Between this and previous iterations of analyzing the TGV, I’ve been reading a lot of internal French reports about its system. Thankfully, France makes available very good public information about the costs and technical specifications of its system. It helps that I read French, but the gap between what’s available for France and Belgium (see for example line schemas) is vast. This provides crucial background that O’Toole is missing.

The most important thing to understand is that the TGV network is profitable. The Spinetta report on the fiscal losses of SNCF makes it clear, starting on p. 60, that the TGV network is profitable, and recommends favoring its development over the money-losing legacy networks, especially the branch lines. The report even calls for closing weak branch lines with only a few trains a day, which I called the Spinetta Axe at the time, in analogy with the Beeching Axe. Due to public outcry the state rejected the cuts and only implemented the organizational changes promoted by the report.

Moreover, all lines are very profitable excluding the cost of fixed capital. The Spinetta report’s TGV section says that operating costs average €0.06/seat-km, which is around 0.085€/p-km, despite overstaffing of conductors (8 per conventional 400-car TGV) and extensive travel on legacy track at low speed and higher per-km labor costs. Average TGV fare revenue per an ARAFER report from 2016 is 0.10€/p-km – compare p-km on p. 15 and revenue on p. 26. This is typical for Europe – RENFE and DB charge similar fares, and the nominal fares seem to have been flat over the last decade.

What’s dicier is cost of capital. In all other European countries for which I’m aware of the process, all of which are Northern rather than Southern, this is done with benefit-cost analysis with a fixed behind-the-scenes discount rate. France, in my view wisely, rates lines by their financial and social rates of return instead. A 2014 report about the Bordeaux-Toulouse LGV, recently given the go-ahead for 7.5 billion €, warns that the profitability of LGVs decreases as the system is built out: the LGV Sud-Est returned 15% to SNCF’s finances and 30% to French society (including rider consumer surplus), but subsequent lines only returned 4-7% to SNCF’s finances, and Bordeaux-Toulouse is likely to return less, 6% including social benefits per the study and at this point slightly less since the study assumed it would cost slightly less than the current budget.

The general theme in the French discourse on trains is that the TGV network is an obvious success. There absolutely is criticism, which focuses on the following issues:

  • Regional rail, that is not intercity rail, is underdeveloped in France outside Paris. The ridership of TER networks is pitiful in comparison with German-speaking and Nordic metropolitan areas of comparable size. For example, sourced to a dead link, Wikipedia claims 64,300 TER PACA trips per day, comprising the metropolitan areas of Marseille (1.8 million), Nice (1), Toulon (0.6), and Avignon (0.5); in Helsinki (1.5) alone, there are 200,000 daily commuter rail trips. But this isn’t really about high-speed rail, since TER planning and subsidies are devolved to regional governments, and not to SNCF.
  • SNCF has contentious labor relations. In the early 2010s, the unions went on a wave of strikes and got wage concessions that led to the evaporation of SNCF’s 600 million €/year primary surplus. The railway unions in France (“cheminots”) are unpopular, and Macron has been able to pass reforms to SNCF’s governance over their strikes and objections.
  • Future LGVs are not as strong as past ones. Real costs in France are rising, and the network already links Paris with all major secondary cities in airplane-competitive time save Nice. Interprovincial links on the network are weak, despite the construction of the LGV Rhin-Rhône, and nothing like the Deutschlandtakt is on the horizon enabling everywhere-to-everywhere travel.
  • SNCF thinks like an airline and not like a railroad. It separates passengers into different buckets as airlines do, has many executives with airline background (and Spinetta is ex-Air France), thinks passengers do not ride trains for longer than 3 hours even though at 4 hours the modal split with air is still better than 50-50, and has poor integration between the TGV and legacy rail.
  • SNCF still has a lot of accumulated debt from past operating losses, some predating the TGV and the start of regional subsidies for regional rail. It was hoped that TGV profits could cover them, but they can’t. This mirrors the controversy in Japan in the 1980s, where, in the breakup of JNR into the JRs and their privatization, debt from past operating losses was wiped but not debt from Shinkansen construction (see Privatization Best Practices, PDF-p. 106).

However, saying that the existing network is a failure is the domain of cranks and populists. It is unrecognizable from the discussion of transportation investments in France.

What O’Toole says about high-speed rail

O’Toole’s understanding of internal French (or Spanish, or Japanese) issues is weak. This isn’t surprising – Americans to a good approximation never have good insights on the internal issues of any other country, even when it speaks English. The American political sphere, which includes political thinktanks like Cato, is remarkably ignorant globally, and rather incurious. As a result, what he says about the TGV is based on an Americanized understanding. To wit:

Bus-rail competition

The Northeastern United States has a weak rail network: Amtrak averages vintage 1960s speeds and charges 2-4 times the per-km fare of the TGV. As a result, an ecosystem of private intercity buses has developed, starting with unregulated ones like Fung Wah and, as they were shut down, corporate systems like Megabus and Bolt. O’Toole is fond of these buses, with their lower fares and road-like lack of integration between infrastructure and operations.

And thus, he claims, falsely, that European high-speed rail cannibalized profitable buses. This is unrecognizable from within Europe, where intercity buses were underdeveloped until recently. In France, US-style intercity buses are called Macron buses, because the deregulation that brought them into existence passed in the mid-2010s, when Macron was the economy minister. They complement high-speed rail but do not replace it, because trains get me from Paris to the German border in 1:45 and buses don’t.

To be fair, TGV ridership has been stagnant in the last few years. But this stagnation goes back to the financial crisis, and if anything ridership picked up starting 2017 with the opening of the LGV Sud-Europe-Atlantique. So the buses are not even outcompeting the trains – they thrive in the gaps between them, just as historically they did on international routes, where rail fares are considerably higher and ridership lower.

High-speed rail construction costs

O’Toole looks at the most expensive few lines possible:

Britain’s 345‐​mile London–Scotland HS2 high‐​speed rail line was originally projected to cost £32.7 billion (about $123 million per mile) and is currently expected to cost £106 billion ($400 million per mile).

International comparisons of high-speed rail costs exist, and Britain’s costs are by far the worst. For example, a 2013 Australian comparison looking at the prospects for such a system in Australia finds that High-Speed 1/CTRL, the line linking the Channel Tunnel with London, cost A$134 million/km, and the second costliest line in the dataset was thee 94% tunneled Bologna-Florence line, at A$95 million/km.

French costs up until the LGV Bordeaux-Toulouse stood around $25-30 million per km in 2021 dollars, net of tunnels. German costs are similar, but German lines have far heavier tunneling than France, a range of 26-51% in tunnel compared with 0-6% in France. One reason is topography. But another is that Germany prefers mixed-use passenger-freight lines, which forces higher construction costs as freight requires gentler grades and, since superelevation must be lower, wider curves; France, like Japan and China, builds dedicated passenger lines, and, unlike Japan or China, keeps them largely at-grade to reduce costs.

O’Toole says, without more references, that it would cost $3-4 trillion to build a US-wide high-speed rail network. But the official Obama-era crayon, at 20,000 km, would be $500 billion at tunnel-free European costs, or maybe $600 billion with 5% tunneling, mostly in difficult places like California and across the Appalachians.

Freeway costs

O’Toole proposes more freeways, and says that to build the Interstate system today would cost $530 billion so it’s better than high-speed rail. Here is where his lack of knowledge of the most recent literature on infrastructure costs is a serious drag on his analysis: Brooks-Liscow establish that there was a large real increase in Interstate cost throughout the life of the program, so a budget that’s really a mixture of cheaper early-1960s construction and more expensive construction in the 1970s is not applicable today.

The same issue affects rail costs: the LGV Sud-Est cost, in today’s money, around $8 million/km, which cost would never recur. Brooks-Liscow explain this by greater surplus extraction from citizen voice groups, which demanded detours and route compromises raising costs. This appears true not just diachronically within the US but also synchronically across countries: so far, the low-cost subways we have investigated are all in states with bureaucratic rather than adversarial legalism, while medium-cost Germany is more mixed. Politicized demands leading to more tunneling are well-documented within Germany – the Berlin-Munich line was built through a topographically harder alignment in order to serve Erfurt, at Thuringia’s behest.

So no, today costs from the 1960s are not relevant. Today, urban motorway extensions cost double-digit millions of dollars per lane-km, sometimes more. The I-5 improvement project in Los Angeles is $1.9 billion for I-5 South, a distance of 11 km, adding two lanes (one HOV, one mixed traffic) in each direction. It’s possible to go lower than this – in Madrid this budget would buy a longer 6-lane tunnel – but then in Madrid the construction costs of rail are even lower, for both metros and high-speed lines.

The discourse on profits

In contrast with the basic picture I outlined for the TGV, French media and researchers often point out threats to rail profitability. This can easily be taken to mean that the TGV is unprofitable, and if one has an American mindset, then it’s especially easy to think this. If SNCF officials say that 20% of TGVs lose money, then surely they must be hiding something and the figure is much higher, right? Likewise, if Spinetta says that the TGV network is profitable but not all trains are, then surely the situation is even worse, right?

But no. This is an Americanized interpretation of the debate. In the US, Amtrak is under constant pressure to show book profits, and its very existence is threatened, often by people who cite O’Toole and other libertarians. Thus, as a survival strategy, Amtrak pretends it is more profitable than it really is.

This has no bearing on the behavior of railroads elsewhere, though. SNCF is not so threatened. The biggest threat from the perspective of SNCF management is union demands for higher wages, and therefore, its incentive is to cry poverty. Nobody in France takes out yardsticks of farebox recovery ratios, and therefore, nobody needs to orient their communications around what would satisfy American libertarians.

Energy

Within the European high-speed rail research community, the energy efficiency of high-speed rail is well-understood, and many studies look at real-world examples, for example the metastudy of Hasegawa-Nicholson-Roberts-Schmid. In fact, it’s understood that high-speed rail has lower energy consumption than conventional rail. For example, here is García Álvarez’s paper on the subject. This is counterintuitive, because higher speeds should surely lead to higher energy consumption, as Hasegawa et al demonstrate – but high-speed lines run at a uniform speed of 200 or 250 or 300 or 350 km/h, whereas legacy rail has many cycles of acceleration and deceleration. At speeds of up to about 200 km/h, nearly all electricity consumption is in acceleration and not maintaining constant speed, and even at 300 km/h, a late-model high-speed train consumes only above one third of its maximum power maintaining speed.

Instead of this literature, O’Toole picks out the fact that all else being equal energy consumption rises in speed, which it is not equal. Garcia in fact points out that higher speeds are better for the environment due to better competition with air, in line with environmental consensus that trains are far superior on well-to-wheels emissions to cars and planes. Worse, O’Toole is citing Chester-Horvath’s lifecycle analysis, which is not favorable to California High-Speed Rail’s energy efficiency. The only problem is that this paper’s analysis relies on a unit conversion error between BTUs and kWh, pointed out by Clem Tillier. The paper was eventually corrected, and with the correct figures, high-speed rail looks healthy.

Competition with cars and planes

Where high-speed rail exists, and the distance is within a well-understood range of around 300-800 km, it dominates travel. A 2004 report by Steer Davies Gleave has some profiles of what were then the world’s main networks. For Japan, it includes a graphic from 1998 on PDF-p. 120 of modal splits by distance. In the 500-700 km bucket, a slight majority of trips all over Japan are made by rail; this is because Tokyo-Osaka is within that range, and due to those cities’ size this city pair dominates pairs where rail is weaker, especially inter-island ones. In the 300-500 km bucket more people drive, but the Shinkansen is stronger than this on the Tokyo-Nagoya pair, it’s just that 300-500 includes many more peripheral links with no high-speed rail service. It goes without saying that high-speed rail does not get any ridership where it does not exist.

In France, this was also studied for the LGV PACA. On p. 14, the presentation lists modal splits as of 2009. Paris-Toulon, a city pair where the TGV takes around 4 hours, has an outright majority for the TGV, with 54% of the market, compared with 12% for air and 34% for driving. Paris-Cannes is 34% and Paris-Nice is 30%, both figures on the high side for their 5:00-5:30 train trips. Lyon-Nice, a 3:30 trip with awful frequency thanks to SNCF’s poor interprovincial service, still has a 25% market share for the TGV.

In general, competition with cars is understudied. Competition with planes is much more prominent in the literature, with plenty of reports on air-rail modal splits by train trip length. JR East, Central (PDF-p. 4), and West all report such market shares, omitting road transport. Many European analyses appeared in the 2000s, for example by Steer Davies Gleave again in 2006, but the links have rotted and Eurostat’s link is corrupt.

O’Toole misunderstands this literature. He lumps all air and road links, even on markets where rail is weak, sometimes for geographical factors such as mountains or islands, sometimes for fixable institutional ones like European borders. In fact, at least measured in greenhouse gas emission and not ridership, all air travel growth in Europe since 1990 has been international. International high-speed rail exists in Europe but charges higher fares and the infrastructure for it is often not built, with slowdowns in border zones. This is a good argument for completing the international network in Europe and a terrible one against building any network at all.

Topography

Even at the level of basic topography, O’Toole makes elementary errors. He discusses the Tokaido Shinkansen, pointing out its factor-of-2 cost overrun. But its absolute costs were not high, which he characterizes as,

The Tokyo–Osaka high‐​speed rail line supposedly made money, but it was built across fairly flat territory

So, first of all, the “supposedly” bit is painful given how much JR Central prints money. But “fairly flat territory” is equally bad. Japan’s mountainous topography is not an obscure fact. It’s visible from satellite image. Per Japanese Wikipedia, 13% of the route is in tunnel, more than California High-Speed Rail.

The United States can and should do better

The report is on stronger grounds when criticizing specifics of Amtrak and California High-Speed Rail. American rail construction is just bad. However, this is not because rail is bad; it’s because the United States is bad.

And there’s the rub. Americans in politics can’t tell themselves that another country does something better than the US does. If it’s in other countries and the US can’t do it, it must be, as O’Toole calls rail, obsolete. This is especially endemic to libertarians, who are intellectually detached from their European right-liberal counterparts (Dutch VVD, German FDP, etc.) even more than the American center-left is from social democrats here and the right is from the mainline and extreme right here.

So here, faced with not too hard to find evidence that high-speed rail is profitable in Europe and Asia, and in fact intercity rail is profitable here in general (direct subsidies are forbidden by EU law unless the line is classified as regional), unlike in the United States, O’Toole makes up reasons why trains here are unprofitable or unsuccessful. He says things that are not so much wrong as unrecognizable, regarding topography, buses, construction costs, debt, the state of the TGV debate, or greenhouse gas emissions.

O’Toole is aware of our transit costs comparison. I imagine he’s also aware of high-speed rail cost comparisons, which exist in the literature – if he’s not, it’s because he doesn’t want to be so aware. And yet, no matter how loudly the evidence screams “the United States needs to become more like France, Germany, Japan, Spain, etc.,” American libertarians always find excuses why this is bad or unnecessary. And then, when it comes to expanding freeways, suddenly the cost concerns go out the door and they use unrealistically low cost figures.

But figuring out why the US is bad requires way deeper dives. It requires delving into the field and understanding how procurement is done differently, what is wrong with Amtrak, what is wrong with the California High-Speed Rail Authority, how engineering is done in low- and medium-cost countries, various tradeoffs for planning lead time, and so on. It requires turning into the kind of expert that libertarians have spent the last 60 years theorizing why they need not listen to (“public choice”). And it requires a lot of knowledge of internal affairs of successful examples, none of which is in an English-speaking country. So it’s easier to call this obsolete just because incurious Americans can’t do it.

171 comments

  1. Henry Miller

    I don’t get why so many libertarians in the US say “who will build the roads is a dumb question because toll roads will make money for whoever builds them”, and then won’t make the connection that rail roads will make money for someone who builds them too – unless of course they have to compete with free roads.

    As a libertarian leaning American I’m always confused. Then again, the only reason I even consider supporting government rail is after what NYC did to the private subways systems no sane entrepreneur will ever invest in private rail anywhere near there.

    • Alon Levy

      Yeah, part of the issue is that it’s harder to guarantee security of property to a private investor in rail than in roads. In either case there are nasty non-compete clauses, but rail needs to be so integrated that the same clause would cover more stuff. For example, it’s straightforward for a city to extract surplus through levying impact fees on new development, and because rail encourages more intense development in a narrower radius, it’s harder to flee to the next suburb over, so you have to engage in top-down discipline to prevent this kind of behavior (ideally, through elimination of subnational or subprovincial government).

    • Karl

      “I don’t get why so many libertarians in the US say “who will build the roads is a dumb question because toll roads will make money for whoever builds them”, and then won’t make the connection that rail roads will make money for someone who builds them too – unless of course they have to compete with free roads.

      I don’t get why so many foamers claim that road subsidies are the ONLY reason why people don’t take rail.

      a) rail technology is incredibly expensive. It requires ginormous resources up front + enormous resource to operate. With any short of beyond ginormous volumes, it ain’t sustainable.

      b) Autos area a direct, point to point service. Rail is indirect. That makes a huge difference for how a trip _feels_ to people. And how it feels largely determines if they’ll do it again.

      • adirondacker12800

        Driving is work. I don’t want to work for hours to get someplace. Then have to find someplace to park. Especially if my door-to-door trip is shorter doing it some other way.

        • Lee Ratner

          This is a distinctly minority way of looking at this in the United States. The way most people see this is that cars solve the last mile problem and allow you to carry a lot more stuff with you than a train would. Let’s say that you live in Brooklyn and were invited to spend the weekend in the Hamptons or the Jersey Shore. You would be limited to what you could carry in a suit case or back pack, trek up to Penn Station, go to your station on the LIRR or NJ Transit and then to where ever you were staying. A car would allow you to carry more and could get you direct from Brooklyn to your destination. If you wanted to travel around at your destination, a car could allow you to do that.

          Even for ordinary stuff, many people would see a car as more important. Like if you had to go to the dentist before work and they weren’t in the same place or on the same transit line, a car is much more convenient. Go from your home to the dentist and then to wherever work is. Or if you had chores to do and kids to take places, etc.

          • adirondacker12800

            Car ownership in Brooklyn in low. The LIRR goes to Brooklyn. People don’t take very many month long vacations. Trips to the nearby seaside resorts tend to be for the weekend and they can travel light. Summer weekend traffic is notoriously bad. Combined, New York City to seaside resorts isn’t a very good example. Where there is good mass transit the kids can get there by themselves.

      • michaelrjames

        @Karl:

        I don’t get why so many foamers claim that road subsidies are the ONLY reason why people don’t take rail.
        a) rail technology is incredibly expensive…..

        You are the audience O’Toole/Cato write these reports for. You have fallen for the false argument that ‘foamers’ are totally anti-road. O’Toole’s arguments using China as an example are a case in point because he simultaneously describes how their expressway system is much bigger than the US’s, and still growing, and its HSR network, likewise, is by far the biggest in the world, and its domestic aviation is huge too (Beijing is the second busiest airport in the world after Atlanta, and by the time I finish posting this comment, probably bigger). What China is doing is just the same, if amplified, strategy of most of Europe and Japan: building a varied complex set of transport options. Incidentally I would say that Europe (let’s say original EU, avoiding ‘new’ EU with those underdeveloped easterners) has more extensive and better expressway networks than the US; this is true for Germany, France, Netherlands … but they also have vastly better fast rail networks too.

        Oh, and by the way, France’s autoroutes were quasi-privately built and are tolled! Not exactly consistent with the true foamers’ ill-informed views of things. That is, O’Toole ignores, as you do, that the IHS was a fully government-funded project and the vast majority of it is untolled (only exceptions are grandfathered bit of pre-existing tollways that were incorporated into it). Not just the capital cost but the operational cost to the point today that the fuel & license taxes don’t cover $60bn of cost every single year which is covered by general government (mostly state and local) funds, ie. out of general taxation. While complaining about a few billions “wasted” on rail, he ignores just one of the big costs of roads. He sneers at France’s SNCF carrying $50bn of debt yet that is a result of building thousands of km of HSR which in fact is profitable (and pays the interest on that debt which is the second highest ‘operational’ cost); compare to that massive road subsidy in the US which is more in a single year and furthermore excludes any of the massive capital cost of building those roads. (For those of room temperature IQ let me be explicit: France is making SNCF responsibly carry the cost of its construction, something a libertarian should laud, not sneer at. American roads do nothing like that, though neither does Amtrak.) He also sneers at the ≈$500bn of debts the Japanese government assumed rather than transfer to the privatised national rail companies; this is really no different to the fact that the IHS was government funded (today some calculate it to be $550bn in today’s money but in reality if it had to be built today it would cost trillions; as it is it already costs $1 trillion in a decade of maintenance). Please note that these are facts not opinion, and it does not imply that I think the IHS should never have been built or that it still doesn’t make economic sense to keep subsidising it at even $60bn per year (but fuel taxes should never have lost their inflation indexing, and in retrospect the IHS should be tolled which wouldn’t actually add hugely to the cost of using it).
        Here’s another big cost he explains:

        The Texas A&M Transportation Institute estimates that congestion in America’s 494 urban areas wasted 8.8 billion hours of travelers’ time and 3.3 billion gallons of fuel and cost $179 billion in 2017.

        His, and I suppose your, ‘solution’ to this is to build more roads, as it always has been for the past century in the US, with the very clear solution of the problem! Err, no. True sophisticated societies that aren’t fully entrapped by a few single industries (eg. Koch Bros who created the Cato Institute) choose to spread the load–ie. including rail which today means HSR, not excluding any other mode, especially roads. Though it is true that France has just adopted official policy of closing down domestic aviation–and shifting it to HSR; but note in one year the TGV-HSR network had ≈60 billion passenger kilometers which was four times the domestic air pax-km so the trend is long-established and is steadily expanding across its borders too. The 460km London-Paris Eurostar carries ≈12m pax pa and air travel between cities served by Eurostar has shrunk to under 15%.

        Anyway, the point is that HSR is a part of solution to relieving that road congestion problem. No one thinks it is the only or complete solution, and in fact roads have the unfortunate property of becoming as congested as they are regardless of capacity improvements etc. but that doesn’t mean a rail option doesn’t relieve the problem for millions of travellers. In China 1.4 billion used their “loss making” HSR in 2019; is O’Toole seriously implying that it should be closed down so they use the roads instead? Is he really implying that somehow those roads aren’t “loss making” in the same way? Only in some fantastically narrow sense are any of these things loss making, as he, and I hope you, know that the modern economy would collapse without them. It’s just different ways of doing the accounting. But O’Toole is just being devious and deceptive, relying upon the poorly informed and lazy of intellect who don’t probe beyond this illusory surface.

        Alon clearly answered your point (a) but you chose to totally ignore it.

        • adirondacker12800

          today some calculate it to be $550bn
          Their calculators are seriously defective.
          To keep the arithmetic simple it costs 25 million dollars a lane mile to build Interstate grade highway. That nice round number is from years ago but lets call it 25 million. Each route has at least four lanes, two in each direction. And there are more than 40,000 miles of Interstate.
          25,000,000 times 4 times is 100,000.000.
          100,000,000 times 40,000 is 4 trillion.
          Lots of the routes have more than two lanes in each direction and quite a few of the route miles were very difficult to build. 4 trillion is quite low. . . . cook the books…

        • adirondacker12800

          HSR is a part of solution to relieving that road congestion problem.
          Very unlikely. Take a few cars off the existing roads other people appear, just like building new roads doesn’t help. It does allow people to avoid roads or planes.

          • Benjamin Turon

            Rail, be it transit or intercity, should always be described as an alternative to highway congestion, not a solution, at least not in reducing it, since so long as there is high latent travel demand, roads will always fill to capacity, when congestion reaches the point were it discourages further trips by road. Conservative highway touters seem to miss this very old and widely recognized “induced demand” feature of transport, that eventually you can’t build yourself out of traffic jams by adding more lanes of highway, hence the move to higher capacity railway transport on separate right-of-ways as an alternative to streets and highways.

          • Henry Miller

            @Benjamin Turon

            induced demand is a STUPID concept that should NEVER be brought up. Everyone who brings it up is admitting that their city could be better if only it would build more so people can do what they want.

            You absolutely can out build induced demand. Rural areas have no problem doing it with a 2 lane highway. In cities we can out build it too. Remember Boston’s “big dig” – they can do “Even Bigger Dig” if they need to. Or follow Austin’s lead and build more levels above the ground.

            the real problem is cost. Building on the ground is cheap for both highways and railroads. However eventually you run out of space on the ground and have to go 3d at a much greater costs. A city that runs into this problem will find it much more cost effective to build rail than more roads. It can build more roads – at tremendous costs (which it probably can’t afford), it that is what it prefers, but it needs to find a way to get ahead of congestion so that people can get from their personal point A to their personal point B as quickly, cheaply, and safely as possible (these 3 are an optimization problem – we do compromise.

            Once again, quit saying induced demand like it is a bad thing: it is a good thing if people can get where they want to go. We need to embrace it and get people there.

          • Herbert

            Having to go five miles to the grocery store by motorcar instead of walking there is no virtue.

          • adirondacker12800

            If the grocery store is five miles away walking there and back would take hours.

          • Herbert

            The grocery store is so far away because everybody drives. In the Netherlands, everybody cycles and stuff is much closer together because of that.

          • adirondacker12800

            Except for the people who use parkeergarage or the parkeerterrein that I can see in Google street view of a few supermarkets I checked, Amsterdam.

          • Henry Miller

            @Herbert I haven’t been to the Netherlands (I assume you don’t count a connection in the airport – I don’t), but I’ve seen what passes for supermarkets in other parts of Europe. They are much smaller than the supermarkets in the US with much less selection due to the lack of space. Want the same thing as everyone else and you are okay, otherwise you need to find a specialty market that is even farther away than our supermarkets. Though I will admit to being jealous at the quality of some of the produce in Europe.

        • Herbert

          I think Spain has the longest highway network in Europe and of course the second longest hsr network in the world.

          As for aviation, 2020 numbers actually make some random Chinese airport the busiest for that weird asterisk of a year. And the opening of Beijing Daxing airport (a “relief airport” intended for 100 million pax – a figure only surpassed in 2018 by two airports on the planet – Beijing Capital and Atlanta) means that for the foreseeable future neither Beijing airport will be the biggest in the world but all Beijing airports combined might overtake all NYC airports combined…

      • Henry Miller

        > a) rail technology is incredibly expensive. It requires ginormous resources up front + enormous resource to operate. With any short of beyond ginormous volumes, it ain’t sustainable.

        The same applies to roads. rural areas have gravel roads, eventually you hit multi-level highways in big cities. Long before you reach enough traffic to need a multi-level highway rail is cheaper than road.

        > b) Autos area a direct, point to point service. Rail is indirect. That makes a huge difference for how a trip _feels_ to people. And how it feels largely determines if they’ll do it again.

        You forget to account for time. Cars are limited to around 70mph for safety reasons (and really should be much slower, but we compromise safety in the name of time). HSR requires some form of transfers to local systems (which can be a rental car if you want point to point), but in return they are a lot faster for a lot of point to point trips overall, and you can do something other than stare at the road which makes them _feel_ better for a lot of people.

        Now if you are thinking about HSR for a 5 mile trip in no traffic, of course a car feels better. However that isn’t what HSR is good at. Try a 300 mile trip with some traffic on the way – suddenly HSR feels a lot nicer.

  2. Phake Nick

    – If TGV is profitable then why they have made comments in the past to some US HSR projects with private operators and investors saying it is impossible?
    – In Japan there are pretty big intercity bus network, although market share is still insignificant outside specific markets compares to the overall market size
    – For tunneling, I don’t think the 80%+ tunneling ratio of Hokkaido Shinkansen Sapporo extension or Chuo Shinkansen Tokyo Nagoya section are result of politics (Could it be cheaper via Muroran?), although the Hokuriku Shinkansen upcoming Tsuruga to Shin Osaka extension can probably be said as such with detour via Obama City

    • Alon Levy

      SNCF wants government subsidies if it can get them, hence crying poverty. It doesn’t help that in the US it was bidding on weaker lines and not the NEC and tie-ins.

      And I don’t think in general tunneling is evidence of politics. I only claim this in the specific case of France vs. Germany and the Netherlands, and even then it’s not the only reason.

    • Herbert

      A government can usually borrow at the lowest rates available in the country. Even in countries where one deems investment very risky due to instability, most people are willing to lend to the government at lower rates than to private corporations. Part of the reason is simple: governments can always raise taxes to cover revenue shortfalls.

      If something is profitable at 2% interest, that doesn’t mean it’ll be profitable at 4% interest

  3. Benjamin Turon

    Ha! I actually got into a online fight with Mister Randal O’Toole when I responded in a letter-to-the-editor to a review of his book “Romance of the Rails: Why the Passenger Trains We Love Are Not the Transportation We Need” by the Wall Street Journal — he actually personally responded back at my published letter in a blog post on the Cato Institute website…

    No, Passenger Trains Don’t Work in Europe & Asia Either
    https://www.cato.org/blog/no-passenger-trains-dont-work-europe-asia-either

    I also gave a lovely review of his book on Amazon.com that I’m sure he appreciated…

    My favorite Randal O’Toole “fact” was when he was quoted in the Christian Science Monitor in 2012 stating that…
    …………….
    “The problem with Obama’s high-speed rail is that it’s an obsolete technology that doesn’t make sense today,” says Randal O’Toole, a senior fellow at the Cato Institute, a libertarian think tank that, along with the Heritage Foundation and the Reason Foundation, led the fight to nix the rail plan. And just because it works in other countries does not mean the United States should automatically climb on board. High-speed rail was successful in Japan because at the time it was developed only 12 percent of Japanese were driving,” he says. “It makes no sense today when cars go where you want to go when you want to go. Just because other countries built this and are driving themselves into bankruptcy doesn’t mean we should.”
    …………..
    Of course a quite Google search shows that by the time the Tōkaidō Shinkansen open in 1964 Japan had already built its first expressway and was not just exporting cars, but building (in Australia) its first overseas auto plants — so the Japanese certainly had the tech to build cars and highways, but did and continue to invest in passenger rail too. Like many conservative critics of passenger rail, O’Toole goes beyond slight-of-hand of statistics (like that most French people don’t use the TGV on a daily basis) to stating outright canards.

    • Benjamin Turon

      Alon Levy,

      I found the hyperlinks very useful, especially on the modal split for travel time and distance, which is very useful for making the argument that if New York State is going to invest billions in the Empire Corridor, it should go with electrified 186-220-mph high-speed rail NYC-Niagara Falls. I no longer support adding a dedicated 90-mph passenger track within the existing ROW of the CSX mainline which only cuts an hour off the existing 8-hour travel time by Amtrak, I feel even with electrifying and upgrading the existing Metro-North ad Amtrak Hudson Line to Hoffmans west of Schenectady, that a new line on new right-of-way Amsterdam-Buffalo could bring NYC and Buffalo to within 4 to 5 hours, which would be very competitive and create the desired economic, social, and environmental effects that is attributed to modern passenger rail in the United States.

      The Empire Corridor is actual at 460 miles the longest multi-frequency corridor in the Amtrak system (beats the BosWash NEC by a few miles) and “higher speed” is not good enough (unlike the Boston-Portland Downeaster for example), you need the very high speeds to get the travel times that will make passenger rail the mode of choice along the NYC-Niagara corridor. The Empire Corridor HSR DEIS rejected “very high speed rail” for being “too expensive”, but they idiotically proposed a new rail line NYC-Albany that was 39 miles longer than the existing Hudson Line and crossed the Hudson River twice! If you make use of the existing passenger railroad owned track and start your new HSR line where it ends west of Schenectady, then costs would be in the $15 billion range of ALT 125 which in the EIS included a new Albay-Buffalo dedicated passenger railway instead of improving the existing CSX mainline. The mistake in ALT 125, was failure to electrify the Hudson Line so you could run at 160, 186, or 220-mph on the new tracks, instead they proposed 125-mph NJTransit dual-mode locomotives. The consultants for the EIS also work for the California High Speed Rail Authority… 😦

      Thank you!

      • adirondacker12800

        There are long stretches west of Little Falls that could bring the freight along for the grade separation ride, cheaply. New York City airports aren’t infinitely expandable either. Less trucks beating the Thruway back into gravel and less airplanes clogging airports are worth something. Which is outside of the scope of the studies they do.

    • adirondacker12800

      It makes no sense today when cars go where you want to go when you want to go.
      He lives in a Futurama fantasy world where there is no traffic and it’s always easy to park or he doesn’t want to go places where there is traffic. Vaguely in the same place of the other one who recently said, this is a paraphrase, no one wants to use Penn Station New York, it’s too crowded. If the conclusion is that Real Americans(tm) drive everywhere they are going to contort umpteen different ways to support that conclusion.

      • Henry Miller

        A large fraction of the people don’t live or work in downtown whatever city they live closest to. They have adjusted their schedule and route to work so that traffic isn’t big problem for them. They sometimes hit a traffic jam, but typically they only see a small part of the whole because they have already figured out how to route around it. It might take a couple hours to get across the city, but they are not doing that so they don’t care. In short, traffic is only annoying, and parking is everywhere – because they don’t go anywhere that it isn’t.

        What he doesn’t see is HSR, unlike standard public transit is fast. Sure you can drive there, but HSR is 3x faster than driving. This makes it more compelling for drivers.

        Though I still contend we need to do something about the bad local transit – enough drivers are actually doing things that good local transit would do cheaper and just as well as driving as to get 20-30% mode share in any city. Incompetent local transport administration (bad routes, and poor frequency) means driving is better than it should be.

        • adirondacker12800

          They don’t commute far yet there are still transcontinental flights and intercontinental flights. One of the things the studies that resulted in the High Speed Ground Transportation Act of 1965 noted was that people didn’t want to drive to Manhattan and airports sucked. Even back then when you could arrive moments before your flight and still get on it. Traffic hasn’t gotten any better in places along the NEC or in places between them. Or in other places like California or Texas.

        • michaelrjames

          @Henry Miller: “They have adjusted their schedule and route to work so that traffic isn’t big problem for them.”

          Not a problem? It’s literally killing them. That is, causing chronic health problems and premature death. Not to mention shockingly awful quality of life.
          I don’t have experience of commuting in the US but I have met plenty of my peer group in the SF Bay area and it sounds grim. Many who work in Silicon Valley choose to live in the east bay, partly due to cost and availability of housing (=”drive until you qualify”), partly due to partner job opportunity and partly due to children issues (schools, childcare ….). The “adjustment” you speak of can mean starting their day at 4am to beat the traffic and getting very nervous as 3pm approaches because there can be a very tight 15 minute window before the roads start jamming up in the mid-afternoon. And these are the ones who are permitted to flexi-work, which itself only exists because the road congestion is so bad.
          Most people can only do this for a limited period before something gives. After about 3 years there wasn’t a single person left in the UCSF lab I guest-worked in, and not a single one left in the Bay Area.

          Americans only do, or “tolerate”, this shit because–like Randal O’Toole–they close their minds to alternatives.

          • michaelrjames

            @adirondacker: “Most people don’t live in places like that.”

            While I am a bit distrustful of these league tables, apparently it’s not true. SF (and I assume they mean the Bay Area) is only number 7, and in fact almost exactly the US cities’ average:

            Rank City Hrs lost to congestion p.a.
            1 Boston, MS 149
            2 Chicago, IL 145
            3 Philadelphia, PA 142
            4 New York City, NY 140
            5 Washington, D.C. 124
            6 Los Angeles, CA 103
            7 San Francisco, CA 97
            8 Portland, Oregon 89
            9 Baltimore, MD 84
            10 Atlanta, GA 82

            This is an IRIX study using 2019 data, in which they say: “In the U.S. specifically, drivers lost an average of 99 hours in traffic, equivalent to $1,377, in 2019. On a national level, drivers lost more than $88 billion in time due to traffic congestion.”

          • adirondacker12800

            99 hours a year includes non-work trips. Keep the arithmetic simple 100 hours over a 250 day work-year is 24 minutes a day or 12 minutes on the way to work and 12 minutes on the way home.

          • Herbert

            The time people spend commuting is remarkably constant. All a new faster mode of commuting does is allow them to move farther away from work

          • Eric2

            But this is more due to zoning policy than transportation policy.

          • tompw

            “hours lost to congestion” means “extra travel time on road compared with free-flow (zero traffic) travel times”…. but a road network that operates at free flow in its busiest time is substantially below capacity. So any road network that operates near capacity (or “efficiently” will have congestion delays.

      • Benjamin Turon

        Futurama actually had High Speed Rail in it!

        Um… looks like Albany…lol 🙂

      • Bobson Dugnutt

        Futurama also had pneumatic tubes as public transportation, suicide booths, vending machines serving crack, and your pets could be brought back to life through reverse fossilization. It’s not all good, though. Richard Nixon’s head in a jar is elected president again.

        Oh, wrong Futurama. Sorry. 🙂

      • Lee Ratner

        I use my car and transit to get around the Bay Area. Big and slow moving traffic jams are much less frequent in the Bay Area than they were back in New York City, where I had always encounter them if I was going back to my apartment from either LGA or JFK. Without fail. In the bay area, nearly every big long traffic jam I was in was because of an accident or bad weather.

        • michaelrjames

          @Lee Ratner:

          Big and slow moving traffic jams are much less frequent in the Bay Area than they were back in New York City, where I had always encounter them if I was going back to my apartment from either LGA or JFK

          That points up the problem with the kind of league tables I reproduced. One big difference between NYC and the Bay Area is that in the former you have the option of using transit, and it will get you much closer to your final destination. Notwithstanding that BART is now an option at SFO, the transit network of the Bay Area is vastly weaker than NYC (off the top of my head the transit mode share of NYC is about 3x of SFBA). It means that far fewer people in NYC suffer from the road congestion than in SFBA where it is unavoidable. One does wonder what times pertain to your two airport arrivals, daytime or nighttime?
          I have, at least once, used either taxi or shuttles from both those airports (in fact most on the list) and would never again bother. In fact my preferences end up expressing themselves by avoiding places where there is no good public transit option. Of course this does mean one has to be disciplined in applying MRJ’s second rule of travel: only travel with as much luggage as you can handle (by yourself, under most conditions … etc).

          I’d bet that Randal O’Toole never uses public transit from airports … (and to be fair–if he lives/works at Cato’s DC HQ–Dulles for most of its life was one of the worst, at 50 km or 50 miles in the distant hinterland with a very long slog. The last time I did it, during one of those snowstorm aftermaths, the taxi who allowed me to escape DC abused my credit card–which I detected and got reimbursed later but just another of those deelites laying in wait when using private transport.)

          • Lee Ratner

            @michaeljames, I used airports to my apartments as an example because that was pretty much the only time I was on the road when I lived in New York. Otherwise, I took the subway or walked everywhere. Maybe I’d use a taxi or ride share if the weather sucked and I didn’t want to sludge back to my apartment from the subway. I think there is much less traffic in the Bay Area than New York.

          • michaelrjames

            @Lee Ratner

            Right, but airports are a terrible example … even in the US the biggest airports (even Dulles these days) have public transit options that are acceptable.

            LR: “I think there is much less traffic in the Bay Area than New York.”

            But what does that mean? The NY metro traffic area is about 3x that of the Bay Area. Then again, there are fewer expressways in the Bay Area so they must be more intensively used. And NYC is much more compact than the Bay Area, most of which is American sprawl so the VMT has to be higher. The fact is that if you rely upon those few peninsula expressways to get to work, it’s a nightmare for a much higher proportion of workers than NYC workers … who, like you, mostly use transit. When visiting or talking with Bay Area residents it is always a major topic of conversation with much bitching about it amid mumblings of leaving; in my experience this is not a major topic with New Yorkers (but this is clearly ascertainment bias on my part …). You may remember terrible NYC traffic but that’s because you rarely use it. As a typical New Yorker though, your total ‘pain quotient’ due to the roads is less than the typical Bay Area commuter. It’s why I say those league tables are misleading: if you could normalise for these factors would the total road pain per capita be worse in NYC or SF-BA? (And why are Houston and Dallas not on that list? Normally they are top 5, and again, they have almost no choice but to grit their teeth and use their cars.)

    • borners

      There is something telling that among the major advanced economies that those who have pushed cartopia urbanism have seen their domestic car industries struggle and their car traditional industrial cities decay. Detroit has that silly people mover and in England Birmingham can’t even finish electrification. Munich has S-bahn and U-bahn, Nagoya has JR Central/Meitetsu/Subway, exburban Seoul is the centre of the Korean car industry, Wuhan has a metro while being an HSR hub, and even Rennes has a metro line despite being tiny!

      Its not a perfect alignment, those cities within their own countries tend to do worse than service-sector oriented primate cities on mass-transit mode share. Though I do wonder if there is some causal relationship, as service value-added has become a bigger part of manufacturing, disinvestment in the downtown of your car city comes back to bite you. Services and Industry are actually complements when done right.

        • borners

          The Ruhr isn’t strictly one of Germany’s car towns (it has a bunch…and whatever Lower Saxony is). Its an old 19th century coal-iron-textiles poly-centric urban region, like Ohio-Pennsylvania, England’s North Industrial belt, Wallonia, Northern France, Silesia, Manchuria, Don Bas etc. Its struggled to generate new industries compared to Southern Germany and will eventually fall behind Greater Berlin and Saxony. But viewed compared to those others I’ve mentioned its done much better, close to national average Gdp per capita and relatively high quality of life. Alas pretty good mass transit will not solve your region’s skills and specialization problems.

          That’s not just a problem for the Rhineland, the world’s richest and largest vintage polycentric “rustbelt” the Keihanshin area has probably the best rail transport in the world after Seoul and Tokyo, but its been losing ground to Tokyo and Nagoya for decades because its too reliant on skilled artisanal manuficiers and doesn’t have enough high-valued added services for its size. It also hasn’t lucked out the way Nagoya has with Toyota (for now). Its not a problem of downtown disinvestment or transport failure so much as other things (universities universities universities).

        • Alon Levy

          I don’t think Essen and Dortmund are especially rusty, but then again I live in Berlin and socialize with people from exciting places like Brandenburg, Thuringia, and Saxony.

          And I also don’t think these places are even that auto-oriented? The Kreise are, but the main cities really aren’t, the ridership on the Leipzig trams and the S-Bahn, or on the Stadtbahns in Dortmund and Essen, is very healthy.

          • borners

            The Rhineland urban complex is the healthiest by far of the coal-iron-textiles regions in the world. Its a model that the Midwest and the North of England should have looked to but didn’t because they thought they were so awesome (Northern English people make Londoners look modest). They did almost everything right except universities, no craft-unions, pro-competition commercial policy, a region-wide gubernational authority interested urban transport integration etc etc.

            I was thinking more the contrast of Munich/Nagoya vs Detroit/Birmingham the latter two wrecking their inner cities during their fat years and ignoring transit. Meanwhile Munich/Nagoya invested in their inner cities and transport systems, and have seen their car industries prosper to present. I’m talking domestic car producers not car mode share.

      • Sassy

        > those cities within their own countries tend to do worse than service-sector oriented primate cities on mass-transit mode share.

        Car factories are massive even compared to most factories which are already much larger than human scale, and are just inherently low density employment centers. Auto R&D also has a lot of space intensive facilities, from prototyping garages to test tracks.

        It’s harder to places these buildings in anything resembling an urban environment, so you end with big employment centers on big suburban industrial campuses. This drives decentralization and encourages car use.

        Despite the home cities of a lot of companies underperforming the nation as a whole, I think the companies still benefit from the better-than-US mass transit, and from being able to locate some of the jobs that don’t take up a ton of space in service oriented transit oriented cities.

        • Herbert

          Funnily enough the proposed extension of Braunschweig’s tram network to Wolfsburg which ultimately failed for political reasons was endorsed by VW and they were very interested in a stop right at the factory gate. VW also has internal bus shuttles in their Wolfsburg headquarters and factory to get people around the sprawling complex

        • borners

          Yeah that’s what I was implying although its not perfectly so, Toyota gave some investement towards the Aichi Loop Line which runs a bunch of their factories and suppliers. Honda is very supportive of the Utsunomiya LRT project to its campus in Hara. Ditto Suzuki Hamamatsu, its nice when you can make it work.

          • anonymouse observer

            Could you elaborate on Suzuki making any investments or putting any effort to public transit, Hamamatsu CBD, or even roadway network in Hamamatsu because I haven’t seen anything supporting your point on this?

            Based on what happened to public transit and Hamamatsu CBD in a last few decades, I don’t think they are doing any good thing to their home town in terms of CBD revitalization and public transit. Osamu Suzuki got heavily involved in local politics there, but his comments on the public transit and CBD sounds largely negative. Hamamatsu CBD has been in steep decline since 1990s, and never came back after the Great Recession unlike Nagoya did, even though Entetsu and some local real estate interests has been working hard to save it.

            Roadways are also still bad compared to those in Aichi Prefecture. It is so bad that locals have been saying for years that streets in Hamamatsu are kept narrow and winding intentionally for Suzuki so that they can sell more K-cars.

          • Tonami Playman

            Mercedes Benz HQ in Stuttgart is 24 mins from Stuttgart Hbf on the S-Bahn either at Neckarpark or Untertürkheim and 38mins on U7 or U13, while the Main factory and R&D center at Sindelfingen is 38 mins away by S-bahn a distance of ~28km.

            BMW’s 450,000m² Campus HQ in Munich is about 23 mins away from Munich Hbf by various combinations of U-bahn and S-bahn.

            Audi’s Sprawling 4km² Ingolstadt factory and R&D campus is reachable from Ingolstadt Hbf in 7 mins and also from Munich Hbf in 50 mins on ICE a distance of ~78km.

            Newer plants like Porsche’s and BMW’s plants in Leipzig built in 2000 and 2005 respectively are less accessible by transit despite both being roughly 13km away from Leipzig Hbf but are still some what reachable by S-bahn/tram plus bus transfer in 37 mins for Porsche and 47 mins for BMW.

            VW’s Bratislava plant built in 1991 is of similar 13km distance from Bratislava hlavná stanica but can be reached by bus in 34 mins on a 20 min frequency.

            Toyota’s Factory complex in Aichi is served by by multiple stations on both the Aichi loop railway, Meitetsu Mikawa line, and Meitetsu Toyota line and Toyotashi station is within commuting distance from Nagoya station. 31.2km on the Toyota line from the Northern approach and 40.6km on the Mikawa line from the southern approach. Reachable in 53 mins on both lines.
            In the Western suburbs of Nagoya, Honda’s Suzuka plant can be reached by the 56.5km Kintetsu Nagoya line from Nagoya station in 1:05 with 10 min Peak frequency and 20 min off-peak.

            Elsewhere, Honda’s Saitama factory can be reached by the Tobu Tojo line at Minami-Yorii station which Honda paid for. It’s 69km from Ikebukuro and takes 1:11, but is only 10 mins away from Yorii Station.

            Despite the low density nature of automotive plants, German and Japanese automakers do benefit from transit connections to their factories at home. The same cannot be said of their transplant factories in the US which are sited outside small cities and farther away from major cities and only accessible by driving. Toyota’s Plant in Princeton, Indiana is 40km(25miles) from Evansville, IN and 182km(113miles) from Louisville, KY. While their Georgetown, KY plant is 39km (24miles) from Lexington, KY and 120km(75 miles) from Louisville, KY.

            Honda’s Marysville, OH plant is 69km (43miles) from Columbus, OH. Mercedes’ Alabama plant is 35km(22miles) from Tuscaloosa and 63km(39miles) from Birmingham. BMW’s Spartanburg, SC plant is ~25km(16miles)halfway between Greenville, SC and Spartanburg.

            This is in contrast to the US Domestic auto plants in Detroit, Toledo, and Windsor, ON which are located fairly close to city center, but in a very low density manner. In Detroit for example there’s a 20km stretch of Factories hosting GM and Chrysler plants all within 30km from downtown Detroit. Also Ford’s Dearborn plant and Chrysler’s Jefferson plant are within 10km of downtown with Ford and Chrysler’s Windsor, ON plants right smack in the middle of Windsor.

  4. adirondacker12800

    O’Toole misunderstands this literature.
    He understands it well enough to cook the books after cherry picking examples.
    The right wing think tanks aren’t in the business of collecting facts and explaining conclusions. They are in the business of collecting conclusions and desperately trying to find something somewhere that supports it. Even if they have to cook the books.

  5. Herbert

    The problem with this writeup is similar to the problems of much of the stuff written about SCOTUS. It implicitly assumes O’Toole is acting in good faith and his methods just “happen to” lead to certain conclusions. No. The end point is the starting point. The process is not “where do I get by dispassionately starting from xyz” but rather “my conclusion is abc, which way can I finagle an argument that sounds at least half way plausible”

  6. Mark N.

    That anyone takes seriously (let alone publishes) a “policy analysis” that begins with “High‐​speed trains were rendered obsolete in 1958…” is the real story.

    • Henry Miller

      If your idea of HSR is 1958 trains that do 90mph at best, then that would be correct. For most rail fans in the US that seems to be the case – the miss the days of steam engines, and think that is fast enough. By 1958 you could buy a car that did 100 mph (faster than the train), and there were highways that allowed getting up to those speeds. Since then we have slowed cars because we have learned humans are not safe at those speeds (also fuel economy), but even at today’s speeds (70 mph) 1958 trains are not enough enough faster than cars as to be worth it vs just driving for any trip that you are not flying.

      Trains have got faster in ways cars cannot of the years. Nobody in the US knows that, the Amtrak trains we have in the US were obsoleted by the car in 1958.

      • Phake Nick

        That remind me, a number of long Amtrak routes, like the one between Minneapolis and Seattle, still run along lines that have no parallel highway, and is thus probably the reason why the service is maintained instead of service through larger towns in North Dakota and Montana

      • michaelrjames

        O’Toole uses 1958 as his transition point because it is when the Boeing 707 began commercial service. Of course, he’s giving his Americanised version of history and so ignores the de Havilland Comet flying in 1949, pax service in 1952 and the first to fly trans-Atlantic. In fact the American plane was third because the Tupolev Tu-104 had hundreds flying in the mid 50s showing the improved performance for a very large country.

        • Alon Levy

          I don’t know what rock Americans live under that they aren’t aware Ryanair and EasyJet are cheaper (and crappier) than Southwest and JetBlue.

          • Herbert

            Even if you give them tons of evidence for that, they won’t believe you.

        • Onux

          The Comet had to be withdrawn from service because of how frequently it crashed.

          The Tu-104 had its first flight in 1955 and only 201 were built in total, so to say it “ had hundreds flying in the mid 50s” is not accurate. The Tu-104 was also a medium range jet that was not intercontinental (with a full load it could not do NY-Houston, its max range with reduced passengers was still short of Chi-LA.)

          The 707 by contrast spanned continents and oceans (its shortest range was longer than the Comets longest) and almost three times as many were built as the Comet and Tu-104 combined (civilian variants only). Virtually every airliner in the world looks like the 707 (thin wing, engines in pods below), none look like the other two (thick wing, engines in the roots). I think it is fair to say the introduction of the 707 was a watershed event in air transportation, even if it wasn’t the first.

  7. Peter L

    I usually read every post here, but in my experience Mr O’Toole is never right and is, mostly, an internet-type troll who has managed to get some traction elsewhere. I don’t need to read rebuttal of his fantasies because … why?

    Otherwise, keep up the good work. Like the scathing review of the recent Amtrak’s corporate ignorance.

    • Alon Levy

      Because I have an entire section, conveniently located at the beginning of the post, that goes over the situation of the TGV network, with links to construction costs and planning practices that I found while constructing an HSR cost database.

    • plaws0

      I did and you are right – the cost info is interesting. And to the surprise of no one, and I mean *no one*, Mr Tool is off his rocker …

      The recent experience in the USA has, I think, caused a good number of people to re-assess the nation’s claim to be the best in the world. Any serious shift, even maybe to the point of a plurality no longer believing the brochure, will be generational, though, and will take a good 30 years to happen.

  8. Kevin

    I think “globally ignorant US libertarians” has more to do with a bias against rail, not incuriosity per se. For example, for air reform Reason seems to do a good job summarizing different ATC funding and government mechanisms worldwide, and discussing successes and failures of airport privatization worldwide. I’m not a subject matter expert so perhaps their discussing is inaccurate, but at least they attempt. Further, Cato is about the only significant US policy group that points out how economists interpretation of financial regulation/history is typically drawing only on the highly idiosyncratic US experience.

    • Herbert

      Airports are almost impossible to run at a loss above ~ 5 million pax, certainly above 10 million.

      Conversely, airports are almost impossible to run at black figures at pax numbers below 2 million.

      General aviation airfields of course have their own rules and cost structures.

  9. Gregg

    I live in Tokyo, Japan and I absolutely love the train system. I can decide on a whim I’d like to visit my friends in Kyoto (~450km, ~300miles) and just take a local train to the high speed station and get on a high speed train within 10-20 minutes. No reservations needed (except during 1, 2 crowded weeks).

    That said, while I 1000% wish we had ubiquitous high speed rail in the USA it will fail without a corresponding massive local rail in each city. In Europe I take high speed rail From/To Berlin, Amsterdam, Brussels, Paris, London, Barcelona, others and at each stop I transfer to local trains and subways and easily get where I want to go. Same in Japan, Tokyo, Osaka, Kyoto, and all the other major cities have excellent public transportation which makes taking the high speed rail so convenient. The same is not true in the USA. Most major US cities have pretty poor public transportation, especially compared to their European and Asian counterparts.

    Let me also add, Japanese trains are privately owned. Tokyo for example has at least 10 different train companies covering different parts of the city (JR, Eiden, Tokyu, Keio, Odakyu, Tobu, Keikyu, …). Osaka and Kyoto also have many different companies running many different lines. Often there are multiple ways to get somewhere via different companies lines. AFAIK part of the way they make money is they own or buy the land near the stations and build up buildings to which they can then rent out store fronts. Since people exit at the stations it’s prime real estate. I have no knowledge of the details or ultimate repercussions but it certainly appears to be working here.

    • Alon Levy

      Sure.

      But, two things:

      1. O’Toole is not saying “the Shinkansen and TGV are great, but it’s difficult to replicate them in the US without connecting transit.” I would be sympathetic to such an argument, which Richard Mlynarik would make in comments circa 2009-10 attacking California HSR ridership projections.

      2. In Japan, a gravity model looking only at metro area populations and distance and nothing else is very accurate at predicting rail traffic volumes between everywhere in Honshu and Tokyo; it overpredicts inter-island rail traffic, where the air/rail modal split is atypically favorable to air by Honshu or European standards, and through-Tokyo rail traffic (Osaka-Sendai, etc.). The upshot: there is similar propensity to take the Shinkansen to and from Tokyo in Osaka, with excellent rail transit; Sendai, with meh rail transit; and Aomori, with barely any rail transit.

      This suggests to me that to the extent connecting transit matters, it only needs to be good at one end, not both. I take it into account in my modeling and do not recommend the construction of lines that rely on connections between two no-transit cities, like St. Louis and Dallas. I do recommend high-speed rail between a no-transit city and a transit city, for example New York-Cleveland, and if you believe my model, then 70% of Eastern US HSR ridership would be to or from New York, Chicago, Washington, Philadelphia, Boston, Toronto, or Montreal.

      • adirondacker12800

        Cleveland has transit that runs most of the day. Even with the lousy frequency on the trains and buses people still fly to Cleveland.
        I would have to be extremely motivated to drive to Cleveland. There are no non-stops to Cleveland from Albany at the moment but there are to Detroit. And hour and half-ish. Three hours airport curb to airport curb. Connecting flights are three and half-ish which is longer than changing trains in Schenectady would be. Either way, plane or train, my car is still in New York. All the methods I could use at an airport will work at a train station.

      • Herbert

        Beetroot stations wouldn’t work if people only used train stations that have high quality public transit access…

      • Benjamin Turon

        “This suggests to me that to the extent connecting transit matters, it only needs to be good at one end, not both. I take it into account in my modeling and do not recommend the construction of lines that rely on connections between two no-transit cities, like St. Louis and Dallas. I do recommend high-speed rail between a no-transit city and a transit city, for example New York-Cleveland, and if you believe my model, then 70% of Eastern US HSR ridership would be to or from New York, Chicago, Washington, Philadelphia, Boston, Toronto, or Montreal.” — Alon Levy

        The reason why you only need one city pair with good transit is because if a city has good transit its likely a nightmare to drive into with a car, you clearly see this with the Empire Corridor and New York City, few in the suburban Capital District (Albany-Schenectady-Troy-Saratoga) are mad enough to drive their motor cars into Manhattan or even the rest of New York City. I imagine the same goes for Paris, London, or Tokyo. Hell, I don’t even like driving into Downtown Albany, not only are the streets narrow, but there is very little and very expensive parking for the general public. Much rather park n’ ride and take a train, if there was one!

        • adirondacker12800

          I never have problems finding parking in Albany. My idea of difficultly finding parking might be somewhat different.

          • Benjamin Turon

            A few years ago they eliminated a lot of the public parking garage in the Empire State Plaza, since then even the State Museum parking lot is full when I have arrived, and street side parking meters are only good for two hours. I admit that I haven’t tried the parking garages along the river, I wish they build that gondola across the Hudson so I could just park in Rensselaer at the train station! 🙂

      • Eric2

        This is a valuable comment. I don’t remember seeing its content in any of the previous HSR planning posts – I think it deserves to be there, not just buried in a comment here.

      • barbarian2000

        “No transit” or “No rail”? Even if any given city has zero bus service today, it can build out a comprehensive bus service within a very short timeframe, which would instantly make the argument of ”no HSR between St. Louis and Dallas” obsolete.

        • Alon Levy

          No transit. They have rail, but the ridership is a footnote. I never remember the modal splits except that Atlanta is around 3%, Detroit is around 1%, and Dallas and Houston are in between. Horrifically auto-oriented European metro areas like the Riviera are 10-15%. Here are the modal splits by prefecture in Japan, sourced to a comment on a previous post I can no longer find; the numbers to add are the columns whose Japan-wide figure at the top is 16.1 (train only), 2.5 (bus only), 3.8 (train+bus), and 3.4 (train+bike/motorcycle). For example, Miyagi is 8.5+4.1+2.7+1.9 = 17.2%, and only 56.9% car, both of which figures are comparable to metro San Francisco. But again, Aomori is much less than this, the prefecture is 5.5% transit (similar to LA or Portland) and a model trained on Tokyo-Sendai nails Tokyo-Aomori ridership.

          Technically, this is about CBD strength – Dallas, metro population 8 million, has a similar job count in its central 100 km^2 as Vancouver, metro population 2.5 million. The residential reach of DART is not that bad, but it requires driving to a park-and-ride, and the secondary business districts are all auto-oriented office parks, rather than TOD like Metrotown. In previous comments (or on Discord, I forget) there were complaints about the lack of through-running in Sendai and Niigata, but, well, if all you care about is Shinkansen access then it doesn’t matter.

          • barbarian2000

            But what stops Dallas or Houston from implementing good bus service in the future? It’s not like building bus garages takes 10 years

          • michaelrjames

            @barbarian

            Buses aren’t any kind of stand-alone solution to a city as big as Houston. It is too big and sprawled for buses to serve it adequately. Then there’s the problem that buses only serve the poor and disadvantaged while the problem involves everyone, or will as the city continues to grow and sprawl. The planners know it, the politicians know it and it’s a question of when they are willing to spend the money on a rail-based system and to convince enough voters to allow it, or not get out their guns to fight it.

          • Onux

            @michaelrjames:

            “ Then there’s the problem that buses only serve the poor and disadvantaged”

            According to who/what? There was a blog or Twitter a while back where people would submit pictures of (large) diamond engagement rings worn by riders on a particular SF route (it was a bus connecting a young and wealthy area to downtown). The whole tech shuttle dust up in SF involved people who were very much not poor or disadvantaged (tech workers at companies like Google) riding busses to work. Vancouver’s busiest bus line (99-B) is that because of students going to UBC, and people able to attend university represent the upper part of society, not the lower.

            People use a transportation mode when it is frequent, fast, low cost, and direct (with variable weight on those factors for different people/places/times). Make the bus (or any transit mode) that way and people will ride it, as they do in SF and Vancouver. The only issue between bus and rail is that rail can generally handle higher volumes.

          • michaelrjames

            @Onux

            Obviously I was speaking of the general perception (and generally correct) of bus use in the US. Your citing of Vancouver’s BRT verifies this.
            Those tech buses in SF are private luxury coaches run by some tech companies for their workers who prefer to live in SF. Joe Sixpack cannot hop on for a quick luxury ride down the peninsula (unless you’re going to tell me they can?). It also reflects a failure (of Caltrain) in providing a good public transit option.
            Yes, most of us used buses during our university days but a lot of people will also tell you that it shaped their intention to never have to be in such a dependency ever again! American and Australian (even some UK redbrick) campuses have huge amount of real estate devoted to surface car parking and even multi-storey car parks. As it happens my alma mater got the city to build a beautiful cable-stayed bridge across the river so as to serve the BRT (and fought successfully to exclude regular traffic which would have meant a highway thru the campus in its giant loop of the river) which meant those who lived on the southside of the river could avoid a approx. 10km trip via the CBD and other bank … This was decades after I was long gone. In my day you either did that very long loop trip–by multi-seat bus–or took a little ferry which of course stopped service early evening, another awful habit that buses have (ie. poor out-of-peak frequency).

            Onux: “The only issue between bus and rail is that rail can generally handle higher volumes.”

            I think you know that is not the only issue, and from p.o.v. of users probably the least of issues. It is reliability of something that has to compete (mostly, BRTs are rare in the rich world and not always with their exclusive ROWs) with other road traffic. Plus that out-of-peak problem.

            (Re the Boeing 707, of course I wasn’t contesting that, just that the American version of history omits the background. For conspiracists there is also the story that the US actively worked to eliminate the Comet (which was the first trans-Atlantic jet service), in some ways prefiguring how they removed most of their territory from Concorde access, ie. for competition reasons not the stuff about noise etc.)

          • adirondacker12800

            Fast is the most important. For riders who have a choice. It has to be safe too. People who don’t have a choice either put up with slow or don’t go.

      • Herbert

        But it’s one of Japan’s least bombed cities and contains the old imperial palace from way back when. Is its urban fabric therefore denser than the Japanese mean?

        • Phake Nick

          Comparing with other Japanese cities which have taken down their city wide tram network and only have two or so subway line constructed instead only serving limited area, like Sendai, Fukuoka, I think Kyoto indeed feel like more compact? Maybe the restrictive geography around the city core helps?

        • Andrew in Ezo

          Kyoto being an old imperial city (rather than a castle town) was purposely planned on a grid (based on the Chinese model). Wide, and evenly spaced streets and avenues. Ideal for a bus system with routes intersecting at major intersections. There was once an extensive streetcar network but that was torn up in the seventies. Rail lines are purposed and used more for intercity travel and suburban commutes. However overtourism (pre-covid) has strained the bus system (as well as the few rail lines serving the central gridded core of the city), so the city has been considering building a streetcar line again.

          • borners

            Kyoto’s lack of anything substantial settlement to its North but mountains (no don’t say the Kuruma line it proves the point) means no legacy rail lines coming from its North between Arashiyama and Kyoto station’s mainlines. And I wouldn’t undersell too much how well the two tunnel private rail lines Keihan and Hankyu plus the two subway lines serve the CBD. Those mountains also mean Alon’s normal critique of grids for heavy rail doesn’t bite so much. The problem with the system is that Kitayama proper and Higashiyama are poorly served, and they are No.4 and No.1 tourist hotspots and have residents and universities too. That’s why Japanese crayonista’s like to give Kyoto an orbital 3rd subway line which joins the dots and crosses existing lines.

    • Paul

      Connecting local transit is certainly helpful but I don’t see it as an absolute requirement. Intercity travel by HSR is comparable to flying. Some US airports have decent connections to local transit, but others rely on parking, rides from friends/relatives, plus Uber, Lyft, taxis, and shuttles. If HSR ties into a legacy train station downtown, then most of these connections should be easier because legacy train stations are more centrally located than airports. Parking and rental cars would be more constrained in a city-center location, but these options do exist at European train stations.

  10. Ted

    Can anyone link me to a summary of Alon’s issues with public choice theory? It seems to get used as shorthand on this blog for “systematically distrust government workers’ domain expertise” (1), when I generally understood it to mean “make sure people’s actual incentives line up with the stated goal of the larger organization”. (2)

    As a New Yorker, a painfully salient example of where I would have loved to see public choice theory applied (as I understand it) would have been in the employment contract of Andy Byford. One would expect that Byford, as NYC Transit Authority head, would be rewarded for improving transit in NYC. And he did improve transit in NYC! It was great! Why did he end up resigning? Because it turns out, regardless of his job title, his actual incentive structure wasn’t “improve NYC transit”, but rather “make Governor Cuomo happy”. A plausible interpretation of public choice theory could have suggested that maximizing NYCTA effectiveness would necessitate placing _greater_ trust in Byford the domain-expert bureaucrat; specifically, remove Byford’s perverse incentives by insulating him from the whims of a capricious and vindictive governor.

    I generally think that public choice theory makes a lot of sense, but Alon’s a sharp guy who does his homework, and I tend to broadly agree with him, so maybe I’ve missed a beat here. Perhaps this is the sort of motte-and-bailey (3) argument where your Cato Institute types commonly advocate actual arguments like “distrust the lazy workers”, but when challenged they retreat to the more defensible position of “be careful to align incentives”, and then Alon and I end up talking past each other because we use the same term to describe two basically different things?

    1) https://pedestrianobservations.com/2020/06/11/managerialism-and-civil-service/
    2) https://www.econlib.org/library/Enc1/PublicChoiceTheory.html
    3) https://en.wikipedia.org/wiki/Motte-and-bailey_fallacy

    • Eric2

      (2) is the optimistic version of public choice theory, (1) is the pessimistic version. (2) says it is possible to align personal and institutional incentives, (1) says this is nearly impossible, so government will always be corrupt, and we’re better off abolishing it than letting it continue its parasitism.

      Obviously libertarians like O’Toole lean more towards (1).

      • Richard Gadsden

        The problem with (1) is that it should also apply to private corporations – indeed, it does, as public choice theory is just an example of the principal-agent problem. CEO overpay is a private-sector example. As is a lot of private sector short-termism.

    • Alon Levy

      I probably need to write about this more? But I think even the weaker version regarding incentives is wrong. Incentives and metrics are tools for managers who don’t have sufficient understanding of the topic to be able to make their own judgment.

      In the case of Byford, you may note that despite having the wrong incentives, his sense of professionalism prevailed and he did good work. Cuomo’s situation was the opposite: his political incentives were to let Byford work, and be secure that Byford’s popularity and success would reflect well on Cuomo for having hired him. Byford was an immigrant with no ability to challenge Cuomo and no connections with any politician who could. Instead, Cuomo sidelined him and stripped him of authority (technically he resigned but Cuomo was showing him the door already). This was bad for Cuomo, politically – the metro reporters in the state liked Byford, and Feinberg’s subsequent mismanagement of the pandemic was a factor behind their looking more closely at his performance, to the point that now he is weak and is propped only by venal state legislators who figure that a weak Cuomo is more controllable than a strong Hochul. The incentives were that Cuomo should keep Byford, but Cuomo’s sense of pettiness superseded his best political interest.

      • michaelrjames

        @Alon

        So, why did Cuomo get rid of Byford? Was it because Cuomo had no intention of supporting (financially, politically?) Byford’s ambitious plan? Or was it pressure from other political players who Byford was either rubbing up against in trying to bring change or who saw their own ambitions would be thwarted by having someone competent in charge (for a change) and who couldn’t be politically bullied or bribed?
        Sheesh.

        • Alon Levy

          Because autocrats are morons. More specifically, they listen to advisors who are selected for bootlicking rather than for competence, and those advisors in turn make bad decisions.

  11. Lee Ratner

    The Anti-Transit ideology is one of the weirder features of American conservatism.

    • SB

      No. It fits perfectly with tenets of American conservatism. Rare exceptions do exist.

      • michaelrjames

        @SB: “No. It fits perfectly with tenets of American conservatism.”

        Yes. And no one should forget, despite the name changes, that the Cato Institute was founded by the Koch Brothers. Their investment interests make their anti-transit stance perfectly logical. It is the outsized, anti-democratic influence of privately funded lobby outfits like the Cato in the Anglosphere that subvert the public interest.
        The true significance of O’Toole’s report is not exactly what it says but that its target is the politicians and ‘conservatives’ (actually reactionaries) who will use it as ‘proof’ of their anti-transit stance. It provides them (their staffers looking for easy research) with pseudo-authoritative snappy sound bites. The report is deliberately big and filled with false and misleading statements (that Alon barely touched) that makes any refutation quite difficult and tedious so no one other than another expert will be bothered.

        Why do conservatives hate trains so much?

        • adirondacker12800

          You link is bad. It’s because trains sap and impurify the precious bodily fluids of Real Americans(tm). Who might have to encounter an Unreal American or perhaps it’s Real Unamerican if they got out of their automobile.

          • Phake Nick

            This level of politics is really not necessary to explain why some in America would be so against high speed rail. It’s no different from some in Japan around 1970s, back then there were movement across the political spectrum against expansion of high speed rail network, even with the Tokaido Shinkansen already constructed and completed.

        • Benjamin Turon

          Evidence of CATO/O’Toole “effect” was the recent US Congressional hearing on “High Speed Rail were a Texas county judge (county executive in Texas parlance) testified (over Zoom) against the Texas Central Railway, utilizing talking points from O’Toole and his ilk.

          Hearing on “When Unlimited Potential Meets Limited Resources: The Benefits and Challenges of…”

          • Alon Levy

            Yes, and when said county exec said Texas Central was insufficiently deferential toward farmers, it was hilarious. It’s being built elevated just to avoid splitting farms, splitting that is routine in France (with land swap deals) and saves a ton of money.

          • Benjamin Turon

            I love the webcam’s low angle on the Texas judge looking up at him like he was a large stone giant in some dark temple… hahaha 🙂

      • bruce hain

        Texas Central is not the correct approach. The correct approach is ten miles shorter, but nevertheless serves the main transportation nodes in the two terminal cities, one of them located six miles past their as-planned remotely located terminal on the outskirts of Houston. Also, Texas Central FAILS to serve any of the numerous and sizeable railroad towns that were dumped by the freight carriers ages ago, that could benefit beautifully and recover their raison de’tre and economic vitality – real estate investment – again, given the correct alignment. (They have some beautiful old architecture too, trying to attract the motoring tourist set locally, which aren’t too numerous of course.) These are SIMPLE, BASIC EXIGENCIES that Texas Central, in a progression of faulty logic, led on by the Freight Carrier Railroad Engineering FRA Revolving Door Cabal – of which Aquilar is a dues-paying member – has gotten them to this idiotic and potentially very destructive pass.

        Here’s something approaching quite closely the correct approach, from my 2018 EIS Comment. Four years hence the only thing lacking is a tunnel segment through Arlington that I was too pressed to work out at the time. It’s scalable, and far less expensive as it doesn’t rely on interminable bridges everywhere: https://www.rail-nyc-access.com/rail-texas

        • Herbert

          Why build a rail line thru built up areas when you can build new development on a green field?

        • Austin Papageorge

          Uh why is reviving ghost towns the reason for existence of high speed rail?

      • Herbert

        In Dresden the municipal FDP a few years ago ran posters saying “your car would vote FDP”

  12. Bobson Dugnutt

    Not related to this post, but not unrelated, either. Strike one against O’Toole’s belief that the market is the best and wisest arbiter of transportation choice.

    In Canada, Greyhound is being euthanized.

    https://www.cbc.ca/news/business/greyhound-canada-1.6025276?fbclid=IwAR1HMXF1sqtDbodjkVkIglK3VaK3tlujiAK67bPl9dZ9S6LI0JiWpwAyWV8

    Canada has one fewer transportation choice and mobility is reduced. Or, the responsibility of intercity mobility must now be put on the public ledger. Whose liberty gets advanced, anyway?

    • Herbert

      Flixbus might jump in. Is there a Canadian tradition of small and mid sized private bus companies who hire out their services for Flixbus to exploit?

      In Germany Flixbus’ success would be utterly impossible without “Müller, Meyer & Sohn” style bus operators at a rate of five per Landkreis

      • Brendan

        Yes, there are lots of regional charter bus operators. There’s also a fairly large universe of ambitious regional intercity bus operators.

        The Greyhound in Canada was to some extent it’s own worst enemy, and it’s operating model certainly didn’t help. For the most part, it operated as a regulated monopoly, which obliged it to run loss-making services in exchange for the right to operate busy routes free of competition. And so intercity bus service that most people might actually use was over priced and of horrific service quality, in order to generate sufficient producer surplus to fund the money-losing routes.

        That’s not to say that such money-losing routes should be abandoned, but it should be paid for by the taxpayer, rather than people-too-poor-to-afford-cars-or-airfare-in-major-cities-and-had-to-ride-the-greyhound.

        I expect that the end of the Greyhound in the long term will lead to increased intercity bus ridership (relative to to the alternative trend), though provision needs to be made for accommodation services

      • Bobson Dugnutt

        @Herbert, certainly there are private charter and school bus operators in Canada. It depends on whether Flixbus wants to lend out its name. Flixbus seems to operate on the Trailways territory franchise model.

        I’m seeing several entries when I type in major cities and “charter bus” in Google. I don’t know how large of a fleet they have. They might just have one bus or cutaway party bus rentals. Flixbus might require the franchisee to have or buy new a large fleet of over-the-road motorcoaches. Prevost is native to Canada. MCI is American but is a subsidiary of New Flyer and NAFTA II shouldn’t make importation an issue. The US has also been importing Temsa coaches from Turkey and Irizar coaches from Spain.

        The one company I can think of that is capable of running intercity service is Tokmajian. I know of it from its operation of York Region Transit’s Viva BRT and some local lines as TOK Transit.

  13. bruce hain

    As an at-least-Libertarian and probably more likeIy categorized as right-wing extremist (mostly I keep it to myself) I yet see these things very differently from O’Tool. Although a word-search for koch gives zero results at O’Tool’s Wikipedia page, the Cato Institute is a Koch-run propaganda arm, and their barely disguised purpose – at least on initiation in the distant past – was to encourage consumption of petroleum products.

    It’s always good to make people aware that these self destructive design flaws – which, according to this extremist, are INTENDED to discourage ridership, and to make US rail projects initiated with the intention of benefiting passengers and the public a guaranteed failure – do exist. Not including BART and the Washington Metro, Norristown and PATCO – this can be said of developments in US passenger rail almost without exception since 1945, as initiatives for passenger rail were – given no choice in the matter – moving into the public sector. The stories of discouraging passengers by the legacy railroads – going against their own interests as was done with the Northeast Corridor for a long time, with its propaganda kinks in the ’60s which were truly frightening, and lousy, unreliable service – were legion. The “world’s largest post office” sits half-boarded up with smashed windows in Chicago – really an international disgrace – like the results of so many of these counterproductive gambits – always to DISCOURAGE business, both postal and passengers.

    Jump ahead to today and you have now the SECOND big round of overpriced studies about the Princeton Dinky, and whereas the first one succeeded in getting it truncated 400′ – with the charming station hard by the big-ticket venue and giant passenger draw McCarter Theater, ABANDONED, repurposed and sold off – just to add that little additional incentive, not to walk up the hill to the town and main campus – about the most enjoyable experience possible for any normal person arriving back from NY in the evening – THIS NEW STUDY IS EXPECTED TO SEE THE LINE SHUT DOWN. (Very discouraging to hear the quotes of the woke Princeton “intelligentsia” in the Princetonian about this – they are stupid and delusional and this is a pattern with US colleges – mine closed after 75 years last August, for that very reason. ((whereupon Seth Andrew immediately bought up the 500-acre campus! LOL)) They will believe anything – led by the most reprehensible types, and completely unawares.)

    Destructo is having their way. And I do not see any way of stopping it. Back to O’Tool we find the badmouthing is turning out to be prophesy with projects like CAHSR and HS2. Both are cut from the same cloth, in the American tradition of inexplicable railroad engineering foibles used to cut efficiency and usefulness to passengers to less-than-half – and at EXORBITANT cost. Really Alon Levy you must say something about this North-South line with the two 3% grades. I’M SORRY THAT CAN’T BE RIGHT. Not in the 21st Century, with the relative ease and safety of construction and design where you push a button and get a perfect spiral or parabolic curve. Take it from the world’s preeminent Google Earth Fudge Master – that’s not possible. (not that I would be able to operate one of those things) My suspicion is they want to block any tunnel running north from a westward expansion of South Station, which is of crucial importance for regional/high speed rail – to Portland, Montreal – connected direct to the B&A. They did that to Penn Station with the 7-Line Extension when they put it UNDER all three Lincoln tunnels and the North River tubes, again at HUGE additional cost. (And without a station at the fucking Javits Center!) And their goal is to box it in completely with super-scrapers otherwise – see Empire Station Complex. (…who just mysteriously cancelled yet another public hearing yesterday.) Don’t let them do it! …is all I can say. I don’t have the particular knowledge of it and even if I did it would take months to become familiar with exigencies and options. But I’m telling you, that’s wrong. See East Side Access where you couldn’t get any remotely definitive drawing of the setup in Queens – where they dithered year-after-year over the Amtrak Bypass Tunnel about whether cut-and-cover or TBM. (It was finally TBM, and unnecessarily I’d say but given the absurdly and needlessly congested and slow layout… maybe not. So they can say it’s justified.) But the thing that was most surprising when the Queens vomitoriums west of Harold were finally revealed in actuality? – There’s ANOTHER THREE PERCENT GRADE – I Knows one when I Sees One! – from point of daylight to point of the bridge over the three-track Sunnyside loop is apparently not long enough – probably owing to a low profile coming from under all those tracks – where it was bored with numerous TBMs starting in Long Island City – because they wanted to minimize disturbances at ground level and having to shore up/underpin any of the tracks – which I believe they were largely successful at doing.

    BUT WHAT FOR? We need an ESA Mitigation Project if they’re going to build another tunnel from Manhattan. It’s all clogged up and slowed down so you can’t have it there. (And that explains the Queens Crayon Drawing of NEC Future, for confirmation of intractableness of this ESA destruction.) We will have this symbol of decadent-age planning machinations underfoot for possibly centuries to come. Re. N-S you must try and divine the correct alternative and stop them. I’m willing to help any way I can.

  14. Aaron Moser

    As a big fan of both Alon Levy and O’Toole I’m sure I will be loved commenting on this thread. Hahahahaha!

    O’Toole has never claimed that European trains are not unprofitable in operations, it’s capital costs were they are not profitable and I am sure he is using these numbers(a) when he claims this.

    CR Central prints money because they were given the tracks for free. Had they had to absorb a proportionate share of the old JR’S debts well I doubt they would be doing as good.

      • Herbert

        The long distance divisions (who publish their own profit or loss figures) do not receive subsidies. Not to a degree that would matter in the grand scheme of things, anyway

    • Alon Levy

      JR Central was not given the tracks for free. I provided a reference on this – the privatization best practices writeup. In the privatization of JNR, the JRs were made to pay interest on Shinkansen construction debt; the debt that was wiped out was from operating losses in the 1971-1987 era.

      And as for European trains’ capital costs, full accounting here includes track access charges. I focus on the analysis of ROIs just because it cleanly compared the one-time cost of construction with the operating profits.

    • michaelrjames

      @Aaron Moser

      O’Toole has never claimed that European trains are not unprofitable in operations, it’s capital costs were they are not profitable and I am sure he is using these numbers(a) when he claims this.
      C[J]R Central prints money because they were given the tracks for free. Had they had to absorb a proportionate share of the old JR’S debts well I doubt they would be doing as good.

      First, you do indeed have some kind of problem as those two things are incompatible*.
      I have made the same arguments on JNR ‘privatisation’:
      https://pedestrianobservations.wordpress.com/2015/10/04/public-rapid-transit-and-private-taxis/#comment-18683
      [summary]
      The Settlement Corporation was set up to handle the assets and debts of JNR prior to attempts to sell off the 5 operating rail companies.

      In 1987, when the privatization of Japanese National Railways took place, JNR debt totaled over ¥37 trillion [US$301bn]. Upon passage of the 1987 Railway Reform Law, the debt of JNR was split, with 60% of the responsibility falling directly on the JNR Settlement Corporation, and 40% falling on three of the JR Group railway companies, JR East, JR Central, and JR West. While the smaller portion was expected to be repaid, the three JR Group railway companies were not held liable for failed earnings, and only made significant profit through sale of stock. JNR dignitaries staggered interest payments on the large existing debt to keep the JNRSC from paying back the debts that it was expected to. During its tenure, the debt increased, leaving taxpayers to pay off nearly ¥24 trillion [US$195bn] as of 2009.

      ……………..
      I don’t accept Alon’s handwaving away these facts. OTOH, I have no problem with what actually happened–at least with the giant caveat that it is Japanese where in general the massive ‘gift’ from public to nominal private won’t be abused the way it would be in the West. What I have a problem with is the people who use the various quasi-private JRs and including their Metro operations in Tokyo as exemplars of private transit operators. That’s silly and seriously misleading. BUT, it is no concession to the likes of O’Toole who is typically hugely hypocritical when discussing these things. Handing those companies all those assets and cancelling lots of debt is no different to the funding of the US IHS. Not just the huge capital cost (either half a trillion in inflation-adjusted money or trillions in replacement cost) but the annual operating costs. The point is that the users never paid a dime of the capital cost (anymore than non-users) and pay less than half of the operational costs (via fuel taxes, license fees etc) and the rest is from general taxation, mostly state + local gov. There is only one term for this: subsidy. But the road lobby refuse to either admit it or to call it for what it is. It is absurd: Public spending on highways totaled $177 billion in 2017 ($544 per capita), while rail received $5 billion ($15 per capita), according to the CBO.
      As I’ve said elsewhere on this thread (and before), there’s nothing necessarily wrong or inappropriate about a nation choosing to do these things which is a separate argument about the best use of resources, but clearly the pretence that the puny expenditures on rail and transit in general is outrageous ‘subsidy’ that we American Capitalists never do, without acknowledging the exact same tenfold higher subsidy of roads has led the public to erroneous conclusions with awful outcomes. And actually awful roads and associated infrastructure too–go figure. O’Toole is as awful as his name; he is obviously a pure tool of the road lobby. Not for a second do I think he is stupid, but actually fully aware of what he is doing. Those private thinktanks pay an awful lot better than any other alternative; Alon could fund a much more salubrious lifestyle if only he was willing to sell his soul to them. OTOH, O’Toole’s audience who lap it up …
      ………………
      *Called cognitive dissonance, but I suppose one could find comfort in the quote attributable to F. Scott Fitzgerald: The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function.

      • anonymouse observer

        You are wrong.

        First, JR companies are still responsible for their share on JNR debt and still paying back. In addition, 3 JR passenger companies in Honshu Island actually bought the Shinkansen infrastructure and paying back for the cost. You can see how they are doing in repayment on Page 18 of the Fact Sheet:

        Click to access factsheets2020.pdf

        Also, JNR Settlement Corporation recovers some transferred debt from IPO of JR companies (4 so far):

        Click to access f26_Jap.pdf

        If your logic holds, Big 3 and all financial institutions bailed out during the Great Recession are not private corporation because
        “These “private” entities were only possible by being given huge assets paid for by the public over decades”.

        If “true private passenger railways don’t really exist; these newish entities are only possible because of decades or a century of previous public investment building the networks” as you said in your comment for other entry, then what about the big 16 (Tobu, Seibu, Tokyu, Keisei, Keio, Odakyu, Tokyu, Keikyu, Sotetsu, Meitetsu, Kintetsu, Hankyu, Hanshin, Keihan, Nankai, and Nishitetsu) and other non-JR private railways in Japan? Are you saying those are not also private passenger railways just because you think it doesn’t exist?

        • michaelrjames

          What?

          Anonymouse: “First, JR companies are still responsible for their share on JNR debt and still paying back.”

          This is explicitly not the case as summarized in plain English in the summary Table of that document you presented:
          [note, I had to transcribe this because couldn’t cut & paste the text from the pdf; might be some minor errors of my inadvertent commission; also: JRCC: Japanese Construction Public Corporation]

          Table 1. Main provision of Law for Disposal of Debts and Liabilities of JNR Settlement Corporation
          • The government’s general account assumed the interest-bearing debts of JNRSH
          • The government wrote off the interest-free debts of JNRSH
          • Retirement benefits and additional pension expenses, which had been shouldered by JNRSC at JNR privatization, were taken over by JRCC. The cost associated with merging the JR Group Mutual Aid Association into the Employee’s Pension System, which had been the responsibility of the JNR Settlement Corporation, was shared between the JR companies and the JRCC for individuals who became employees of the JRs as a result of the JNR privatization.
          • As special work, JRCC would pay additional pension expenses previously assured by JNRCC and would take over disposal of assets carried out by JNRSC to pay such expenses.
          • JNRSC was dissolved.

          I am not at all sure to what you are referring. How have I got this wrong? If there is something clear in that document, please put it into a comment like I have above (not so I have to guess at what amongst thousands of words you may or may not be referencing; please).
          The difficulties of coping with historic debts is common. Most privatizations of public entities cancel those debts (or do complex transfers etc with promises of clawing it back if/when the entity becomes profitable etc) and sometimes even add in (publicly funded) sweeteners, which I remember included land and/or land development rights for some JRs. Note that the first attempt to deal with the massive debt hangover was in 1998, eleven years after the privatization when repayment of even nominal parts of the debt were seen to be not viable. The above report (of 15 years ago) creates a new entity, JRCC, which attempts to pay down some debt via the original land assets which is fair enough (but it is not the private entities doing that and even if it were, it was always a public asset!)

          Retirement benefits are often a problem and has brought down many a company; I think it was a major part of GM’s bankruptcy at the GFC–the US government rescued (ie. nationalized) GM at that time with about $50bn and years later when a new GM was created and had its new stock listing, the government had finally sold down its last share it was estimated it had cost the US taxpayer about $10bn (and I recall that did not include the cost of the money itself). Which brings me to:

          Anonymouse: “If your logic holds, Big 3 and all financial institutions bailed out during the Great Recession are not private corporation because ….”

          Well, it is a big problem with privatizations and only ideologues think differently (of the “public expense, private gain” type), of which I didn’t think you were one. Even, or especially, Libertarians and Free-Marketeers thought those fin companies should have been allowed to fail and extract pain & treasure from their stockholders. My position is that if governments do these things they should always retain equity. Of course the government did retain some shares in the JRs and selling those did help in debt repayment, though seriously trivial. An awful example here was the privatization of Australia’s Commonwealth Bank which was one of ‘the big Four’, part of long-standing government policy to maintain four strong independent banks. The bank was founded much earlier when private banks couldn’t fulfil adequate bank functions in the young nation. It has been the biggest bank ever since and maintained its leading position post-privatization. It was sold for a few billions but today is worth about $150bn and pays its CEO ten million or so. Is it really due to the wonders of private sector genius and competition? Sure. In fact, the widely acknowledged failure of the Big 4 to fund SMEs, provide rural banking services (part of the reason for establishing the CommBank), fund farmers debts in a non-punitive way (ditto) and generally fund innovation in industry etc. there has been talk about how to fill the deficit, for example by giving a general banking license to the still-government-owned Australia Post (but the bankers hate this idea). BTW, Australian banks are among the most profitable in the world with absurd ROIs that clearly deserve a Super-Profits Tax regime … again, sporadically proposed and then killed by the usual suspects. Another egregious example is Telstra which was privatized retaining both retail and wholesale (poles & wires etc) in the one entity thus creating a monster gorilla of near-monopoly in telcomms to this day. The last Labor government attempted to undue this by creating a NBN (National Broadband Network) which would both build a fibre-optic network to serve ≈90% (rural would be served by subsidized satellite) and retake all “poles & wires” from Telstra (for which Telstra was compensated $12bn). The incoming conservatives killed the plan and Telstra retained its vice grip on the physical infrastructure (and the billions it had pocketed from the NBN deal; perfectly cakeist!). The cons new “mixed media” (ie. using ancient copper wires to the premises) has ended up costing every bit as much as the “unaffordable” fully optic NBN plan. All the Telcos comlain about the high cost of access charged by the new NBN but the government won’t do anything about it because it is critical to make the NBN look good for privatization …. And of course it’s another gorilla in the making that will only be ‘controlled’ by the government by regulation which, you know, works so well in the Anglosphere.

          So look, the point is not whether JRs repay those debts (they haven’t and they won’t, except an entirely nominal fraction; you haven’t shown me anything to indicate otherwise) but in this particular case one wonders what was achieved by the so-called privatization? Someone will claim they operate much more efficiently to which I reply: b.s. and unprovable. And in Japan, the JRs won’t be free to do anything they want, which is only proper just like Amtrak isn’t, nor SNCF etc; and the contrary examples are the privatized British Rail entities all of which are now renationalized after milking the public purse of a couple of decades (and costing the government more in subsidies than when owned by the government! And don’t ask any Brit train users what they think of the service.) Seriously, there are some things that are not amenable to full private operation and control. IMO passenger rail networks are in that category and my objection is to people using the JRs to claim the opposite.

          (You’re lucky, my laptop is out of power so this rant hath cometh to an end:-)

          • anonymouse observer

            “[JRs] haven’t and they won’t, except an entirely nominal fraction; you haven’t shown me anything to indicate otherwise.”

            Do you have the source of this? If you are right on this somehow, could you tell me why JR East, West, and Central have been paying back the debt for last 30 years or so as you see on Page 18 of the 2020 JR Central Fact Sheet? Are you saying this is just a poorly written propaganda material, and one of the most profitable passenger rail operators of the world which stocks are publicly traded at the Tokyo Stock Exchange for a couple of decades is telling a lie (If that’s the case, it’s a shame that I must’ve missed one of the biggest scams happened in the history in Japan)?

            You haven’t counter anything on what non-JR private passenger railways in Japan are if “true private passenger railways don’t really exist; these newish entities are only possible because of decades or a century of previous public investment building the networks”, especially when many of them are 100+ year old private passenger rail owner-operators established as private corporations? Is one century not long enough to be called “not new” in your universe or something?

          • michaelrjames

            @anonymouse

            It is one of those fudges like I have said happens with these privatization deals: they (the various gov entities charged with the debt, currently JRCC?) have tried to get some debt repaid but it hasn’t really worked as originally hoped–though the premise that private entities would be able to repay a debt the JNR couldn’t, was faulty like most privatizations of public service entities. I remember that even the minor portion of the debt that they put on JR Central and JR East (the most likely to be profitable) wasn’t dented in those first 11 years (in fact, as in that citation from my first reply, it apparently increased–are you sure the debt in those reports isn’t just this new debt which the government was less willing to forgive because they were desperate to stop the persistent accrual of debt; ie. the raison d’etre for the privatizations) and the reason for its restructuring in 1998. Having said that, it doesn’t mean that no debt was repaid, just little of the original and perhaps even new debt incurred by new works etc; just how much I don’t know and I can’t read the lo-rez type in the graph in that document to even get an idea of the scale, nor know what that debt refers to.
            I mean why do you ignore the Table I presented from your second document which incontrovertibly concerns the original government debt and how it was managed–and essentially “assumed” (ie. taken over) by government? Is there some other interpretation other than what it says in plain English and “my” interpretation of it?
            Another way to look at it: if your claim is correct why the need for that document with the Table I cited, and for the government to re-assume that debt–20 years after privatization? (It would be nice if you replied to this because I cannot actually imagine what you are trying to say. As to company reports, especially financial reports, it is true I have a deep distrust of what they actually say and mean.)

            Re your last query about 100-year-old private rail companies, the reality in Japan is that the lions share of mainline rail and city Metro is state or former-state (ie. funded & built by the state). So I admit I don’t really consider them in any such arguments. It’s like Swiss rail; yes there are many private railroads but they’re really a minor thing (<10% IIRC) and it's not private entities that built the Gotthard Base Tunnel but long-term planning and funding by the state (incidentally, of something that will probably be quite profitable). Further, like the minor players in Tokyo Metro they wouldn't even be what they are (minor players in a huge market) without the majority of the network provided by the majority state or former-state players, ie. the network effect. I'm not trolling. I just don't believe an argument about 'private' rail that cite such things is a valid argument.
            In this I suppose that I agree with O'Toole because his argument re JR is essentially correct. The problem is that it is exactly the same way his precious IHS was built, in fact worse because there has never been any attempts at capital cost recovery or operational cost recovery or user-pays which surely should be part of any Libertarian's philosophy. Perversely, the country the self-proclaimed Libertarians and free-marketeers like to pour scorn on, France is the one that built its autoroute system by the private sector and covers (I presume …) both capital repayment and maintenance via tolls. (Japan's expressways are tolled but I believe their construction was funded by the government though they are talking about privatizing them too.)

            Let me repeat that I have no problem with the debt per se. It costs big money to build big national infrastructure and there's no doubt that, value quibbles aside, it has hugely benefited the nation and of course its economy. To me, it is not a big issue if the capital cost of building it is a sunk cost because the infrastructure is clearly hugely valuable and functional.
            ………………………

          • Andrew in Ezo

            Wow, then I suppose the 9 major private railway operators in the Tokyo Metropolitan area are just to be disregarded as “minor players” (in your own version of handwaving), in spite of their annual ridership of 8 billion (close to 5 times the annual ridership of the NY subway, more than 4x that of the Paris RER).

          • michaelrjames

            JR-East, Tokyo Metro and Toel together carried 8.75 billion of the 13.5 billion in the year I see data for. Those are the state or former-state entities and they amount to 65%, a clear majority of the network, which was my claim. JR-East by itself carries 35% and a single one of its lines, the Yamanote Line which ties a lot of it together, carries 8% by itself. The biggest purely private operator, Tokyu, has a 7.7% share of pax; and incidentally two thirds of its profits come from its real estate operation. All the private operators together carry 4.7 bn (not 8 bn; though I am sure my table is out of date so using the same proportion and Alexander’s 2020 total ridership it would be 5.25 bn).

            My point, other than the majority not being strictly private, was what would happen to those minor companies if the part of the network that handles 65% of passengers no longer fed those to their lines …

            Re your numbers, of course the transit share in Tokyo is bigger than almost anywhere else but again your figures aren’t quite right. First, the 5.25 bn is 1.68 times the Paris Metro+RER (3.11 bn according to Alexander 2020), but only 54% after normalising to population. But yes, still a lot of passengers.

          • Alon Levy

            Tokyo Metro and Toei are both profitable after depreciation and interest, though, and if anything suffer from underinvestment as the state imposes a higher ROI on new subways (30-year payback, so 3.3%) than is available in the general Japanese economy.

            And okay, JR East doesn’t have to pay interest on commuter rail construction from the early 20th century (which was most likely cheap, knowing what subways cost as late as the 1950s), only on Shinkansen construction from shortly before privatization. So what? At the time of the breakup of JNR, those commuter lines weren’t operationally profitable; they only became profitable later, after mass layoffs, with placement of workers at private-sector firms because LDP’s Japan is not Maggie’s Britain.

          • michaelrjames

            Alon: “And okay, JR East doesn’t have to pay interest on commuter rail construction from the early 20th century …”

            You mean all of the 20th century except the last decade … (and as I explained–those Japanese documents said–debt continued to increase in their first decade post-privatization).

            Alon: ” because LDP’s Japan is not Maggie’s Britain.”

            I agree, and it is yet another reason why people shouldn’t use Japan as a positive case of privatisation for the west to follow. You won’t find many westerners happy to adopt Japanese work practices. (Not to mention that one would be kidding oneself if one thought these giant privatized rail entities truly had freedom of action.) Oh, and you are assuming cause & effect but it would need very careful study to prove that, and maybe it is unprovable. After all publicly-owned entities also go thru changes, often the same type that happen in the private sector. Look at Paris Metro who first built a driverless line 22 years ago on M14, and upgraded M1, the busiest line, almost 10 years ago. Tokyo only just introduced their first 2 years ago*. And actually the Paris system never appeared over-manned to me.

            *Curiously the Yurikamone trains are suspiciously like the Parisian ones, rubber tyres …(actually more like the VAL system rather than designed for full Metro function). Interestingly this line was unprofitable for years. Its majority shareholder is Tokyo Metro Government… and the line became profitable when the dockland area it serves was dezoned into effectively a TOD which took off like a rocket (becoming the only seaside zone in Tokyo not 100% industrial) so you know … let’s not ascribe its current success to brilliant private sector initiative blah, blah.

          • Alon Levy

            Japanese metro operating costs are lower than most European ones, inc. Paris’s, though not all, e.g. Oslo’s are lower. I do not know why – as you mention Paris is ahead on automation, and in fact Tokyo still has some lines with conductors, it’s the non-crew work that is very efficient.

            And no, I don’t mean all of the 20th century, only the early parts of it. There was very little high-cost investment in commuter rail capacity that was not part of the subway – there’s the construction of the Yokosuka-Sobu tunnel, but I think that is it as far as regional rail tunnels go, as opposed to at-grade branches, or reuse of old tracks (like the Yamanote Freight Line). There’s the Saikyo Line but I think that was costed as part of the Shinkansen construction, which it was bundled with.

          • michaelrjames

            @Alon” Japanese metro operating costs are lower than most European ones, inc. Paris’s”

            OK, it is not difficult to believe. But for interest, is that after normalisation to, say, pax-km? Or is it also valid per track km? Obviously I am just making the point that many things look cheaper or better due to the sheer volume of pax in Tokyo. As you know from past discussions, I am not necessarily so impressed with some claims of Japanese efficiency when I see about 20 scientists in the lab I worked in, in Otsuka, fall asleep at their desks while waiting for the boss to leave before they can leave for the day (and I should add, some with hours of Tokyo Metro commuting ahead of them!) The Japanese can be formidable at achieving a goal, but efficiency is sometimes a different matter.

          • anonymouse observer

            @michaelrjames

            You are just as bad as O’Toole. Probably you should just keep your laptop unplugged for good so that you don’t have to worry about getting offended by people with actual knowledges like Alon, Andrew, and other good commenters of this blog.

            Here is the reality:
            – Non-JR private passenger railways carried 49.7 percent of passengers and 26.9 percent of passenger kilometers of ALL TRIPS occured in Japan in 2017;
            – In three largest metropolitan areas, large portion of the rail passengers are for non-JR private passenger railways (53.9% in Shutoken, 45.9% in Keihanshin, 40.9% in Chukyo).
            – Only about 1/9 of all passengers counted as non-JR private passenger railways (10 million out of 81 million) are transported by Tokyo Metro. This means that non-JR private passenger railways carried 47 to 48 percent of all rail passengers.
            – Municipal Subways are not included in this number because they are not part of “Mintetsu”.

            Now, could you tell us why covering a half of all trips or 40+ percent of all passenger rail trips in three largest metropolitan areas are not “significant”?

            Click to access 20databook_p08-09.pdf


            Click to access urxXnDlDBqXJ.pdf

            Also, do you mind sharing the evidence that any of at least 15 of big 16 non-JR private railways are heavily subsidized by the government? You haven’t share it, and it sounds like something coming out of an alternative universe.

          • michaelrjames

            @anonymouse

            I think it is telling when one has to resort to appeals to self-proclaimed ‘authority’ to try to win an argument (“Alon, Andrew, and other good commenters of this blog”). In any case I freely accede to the superior ‘knowledge’ of some commenters, but it is interpretation I am contesting.

            OTOH, seriously it looks like you are doing simple cherry-picking in that last post. Excluding Municipal Subways because … ?

            You are also ascribing things to me which I never said and never implied. I have no idea why you claim I wrote “at least 15 of big 16 non-JR private railways are heavily subsidized by the government”. Is it something O’Toole wrote? It really should be clear that I don’t agree with him on almost anything so it’s not an honest strategy to try that argument … if you can’t disprove my argument using honest means and simple non-exclusionary data. The 65% figure is not wrong.

            Further, the Tokyo story is complicated as you know more than I. The thing I object to is reducing it to the simplistic “private rail can be profitable like in Japan/Tokyo”. Not only are most private lines in Tokyo profitable entirely due to their property interests but 65% of the Tokyo system (and its most important interlinks like Yamanote) was funded and built by the state, and indeed the so-called privatized entities do not repay the accrued debt/capital cost to any meaningful degree (you have declined to address my request to clarify so I am taking that as a concession by default:-). Yet another immeasurable factor is that this is the largest city in the world with an exceptionally captive travelling public–given the roads even buses aren’t a viable alternative.

            There is another issue. It is often argued that private companies will encourage competition but the reality for rail is that it is very difficult to achieve competitive situations. Almost all those private Tokyo Metro companies have just one or a few lines that serve their property interests in suburban areas (other than those giant shopping centres above the inner Tokyo stations), ie. no real competition. In fact I would say that without those property profits most if not all those private companies would have gone bankrupt or dissolved and nationalised like in every other city around the world in the early part of last century (well, except Paris which was never private). Not to mention incompatible ticketing systems within Tokyo. And most would say that rail transit is not inexpensive in Japan/Tokyo One could say that is close to a “user pays” model for funding transit (ahem, neglecting that $400bn of capital costs incurred in building the public system…) so fair enough. But it is not the only model which works. HK-MTR is a mixed model that works extremely well (government funded and built most of the system and today still funds 50% of new construction capital costs, co-funded by HK-MTRC property development income). Paris has relatively cheap tickets and has some direct govt subsidy combined with the VT (versement transport, a payroll tax across the entire Ile de France) that covers 40% of all transit operational costs in Ile de France; which strikes me as a good way to spread the load fairly (in some ways it can be thought of as a version of value-capture; the Brits are finally doing something similar to help fund London CrossRail/Elizabeth Line).

            Finally, while I agree that the Tokyo transit system is a remarkable achievement but nevertheless I am not really willing to agree that it is the best. Biggest, yes. (Even after normalisation to population, or pax-km etc.) As it happens two of my fave cities, Paris and HK, are better IMO. In fact Tokyo/Japan suffers from so much laissez-faire in ownership and (non)planning. Without going thru all the complex arguments (sprawl v compact urbanisation etc), I don’t see it as any compelling case for private operation to be adopted by any other city. That’s what drives my arguments here and I think some people are losing sight of the forest for the trees.

          • Richard Mlynarik

            “Oh, I’m sorry. I shouldn’t have posted endless logorrheic drivel on subjects of which it is obvious I have no knowledge, but thank you for referring me to sources from which I could educate myself. Site owner, please delete my comments to avoid wasting other people’s time”.

          • anonymouse observer

            @michaelrjames
            Municipal subway boarding is not counted as a part of Mintetsu’s share (again, municipal operators are not Mintetsu), but it is actually shown as a separate category (“municipal operators”) in the pie graphs on the second page (7.8% of all rail trips made in Shutoken). Still, non-JR private passenger railways carried 47 to 48 percent of all rail passengers in Tokyo region. So, could you tell me why this is not significant amount?

            You said “true private passenger railways don’t really exist; these newish entities are only possible because of decades or a century of previous public investment building the networks” at 05:39 on 2015/10/16, which you referred in your comment you left at 19:27 on 2021/05/14, and I pointed out about non-JR private passenger railways, which are grouped as “Shitetsu” or “Mintetsu”, which most of them has no affiliations or financial relationship to JNR or JR companies.

            Majority of Shitetsu companies existed before privatization of JNR in 1987 or even before formation of JNR in 1949, or formation of Ministry of Railways in 1920, and they have been private railways all the time. Do you understand not all private passenger railways in Japan are JR-group companies? Reading your comment, you are pretending as if all private passenger railways in Japan are created by JNR privatization, which doesn’t line up with the fact. Non-JR private railways you see today have been existed as private railways for the entire time when JNR existed.

            Also, did you know that large portion of JR East’s conventional rail network in Tokyo were actually built by private railways, nationalized in the first part of the 20th Century (to remove foreign investors from the railway business and for national security reasons; not to bail out unprofitable railways), and ended up with JR companies’ asset? For instance, Tohoku, Takasaki, Joban, and majority of Yamanote Lines were built by a private railway called Nippon Railway, Chuo Line is built by Kobu Railway, and Sobu Railway built Sobu Line. What government built in Tokyo region were limited to Tokaido and Yokosuka Lines and track connection in eastern part of Tokyo CBD to connect these lines built by the now-defunct-by-nationalization private railways and quad-tracking projects occurred within JNR territory (profitable non-JR private railways need to finance themselves for infrastructure improvements except for a few exceptions).

            By the way, key rail corridors like Tohoku Main Line, Sanyo Main Line, and Kagoshima Main Line were also built by private railways. Japanese government utilized private business interests to build key rail corridors because the government was broke from Seinan War and could not build rail lines when they desperately needed (I guess this could be similar to the transcontinental railroads in the U.S.).

            Could you tell me where your 65% figure is coming from? I would like to take a look at the source because I am having a hard time the number would not get up to 65% even if all municipally-operated services in Greater Tokyo Region are included given a lot of current JR East network is built by private railways.

            As Andrew previously pointed out using the news release from Japan Private Railway Associations, larger Shitetsu do make profit just from passenger railway business. Here are financial performance of big 16 Shitetsu companies in FY2019 (the year before COVID-19 pandemic) broken down by segment, the same data Andrew presented on the other day:

            Click to access 9029adf32006e0521b516d2b5735806f0d1d682e.pdf

            Even with this data, do you still think “most private lines in Tokyo profitable entirely due to their property interests”, which is incorrect? Could you kindly point out which part of this table indicate those big 16 need to rely on auxiliary and affiliate businesses to make profit as a corporation and something supporting your statement saying “without those property profits most if not all those private companies would have gone bankrupt or dissolved and nationalised” because I cannot interpret this data that way. At all.

            By the way, 7 of these big 16s are railways basing outside of Tokyo as you know. 2 of them are in much smaller urban area (Fukuoka) and/or urban area with ridiculously high automobile mode share for commuting trip for the size and population density (Nagoya). Moreover, smaller non-JR private railways, including some “third-sector” railways in Japan also post profit from passenger railway business only.

            Lastly, I would like to tell you that there is “連絡運輸” system in railways including operators in Tokyo, and smart card, and magnetic data coding on the paper tickets are all standardized. I can buy one-way, round-trip, or monthly passes for station pairs which requires transfer between multiple railway territories. Thanks to these measures, I don’t have to buy tickets each time I make transfer between different railways or traveling over multiple JR territories (I can buy the ticket at the origin station or simply use the smart card). Railways gives discount on the base fare for multi-territorial “連絡運輸” fare (or continuously calculated in case of inter-JR trips). Fare pricing categories are also unified so that there is no difference in qualification for age-based or status-based discounts (i.e. kids, adults, students, etc.) between railways. I don’t get why you think there is “incompatible ticketing systems within Tokyo”.

            @Richard Mlynarik
            Thank you for summarizing. I’m sorry I also speak too much, and most of things I say are not a lot of relevant information.

          • michaelrjames

            This is the data I have been using. Alas, I haven’t got a specific source. It looks like Wiki but I can’t find it again; they list by line rather than company and it would be a pain to compile. It is consistent with Alexander (https://alexander.co.tz/ridership.txt) and his source, the Japanese website (https://www.train-media.net/report/2010/2010.html ). This data is somewhat out of date; Alexander gives the total ridership as almost 15bn. (Just to be clear, I don’t think this changes anything materially.)
            [I see that your “private carriers had 50% pax” is of all Japan whereas clearly I was only speaking of Tokyo.]

            Operator Daily ridership Annual ridership
            JR-East 15,286,392 5.579,533,080
            Tokyo Metro 6,307,390 2,302,197,350
            Tökyu Corp 2,855,974 1,042,430,510
            Töbu 2,364,626 863,088,490
            Toei Subway 2,325,117 848,667,705
            Odakyu 1,946,313 710,404,245
            Keio Corp 1,727,355 630,484,575
            Seibu 1,692,523 617,770,895
            Keihin EER 1,207,565 440,761,225
            Keisei …712,426 260,035,490
            Sagami …623,500 227,577,500
            Total 37,049,181 13,522,951,065

            I’ll try to answer your questions, one per post to keep it simple and short …

          • michaelrjames

            anonymouse: ” ..do you still think “most private lines in Tokyo profitable entirely due to their property interests” ”

            Obviously it comes from Robert Cervero in his The Transit Metropolis. While it’s true that it is now more than 20 years old, but actually it describes the system during its expansion phase. I hope we can agree that it has been relatively stable for quite a while now. That early phase is the critical time for a transit company because it has to deal with the big capital costs of constructing the system while betting on building ridership from the growing suburbs they are simultaneously building/selling.
            Now, it is plausible that decades on, those companies have put most capital cost repayments behind them and of course have big ridership (and highish fares cf world) that they manage profits without further dependence on those property investments. (That’s as close to an admission as you are gonna get, so savour it:-) However, many of them also run highly profitable retail precincts around their stations eg. Tobu and Seibu with a billion plus passenger traffic at Ikeburo station. Cervero is correct that this is a smart way to do things, using linked property development that both makes money and builds traffic, plus the exploitation of the huge traffic thru interchange stations. I have been proselytyzing about it for ages; it’s value capture. HK-MTR is another example of it working very well (though there it is more dependent on government who choose and promote the developments, like the Tung Chung newtown opposite the airport and served by the same metro line). But in the Anglosphere Value Capture version is twisted to mean something quite different: where the usual property developers/speculators are the ones to make the serious money with derisory crumbs to the transit operator, and no recurrent income like those retail & residential developments above stations.
            At any rate, I am not resiling from the basic premise (Cervero’s) that property development drove most of these private companies to be profitable. Here are some excerpts:

            (p190)
            Today, railway operations account for about 35 percent of the Tokyu Corporation’s revenues and real estate accounts for about 25 percent; however, the company’s real estate operations generate nearly two-thirds of the firm’s net profits.

            Next page is the crux (and of the whole book really):

            Although rail operations have historically been the main business of railway consortia, they have hardly been the most profitable ventures. From 1980 to 1993, Tokyo’s private railway sector averaged financial rates of return on railway businesses of 1.16 to 1.21 (Table 7.4). Profit margins increased slightly during the 1980s, though these were considered modest returns during this period of rapid economic expansion. Still, every private railway made a profit, something few passenger carriers worldwide can claim. ..The major sideline business of most Japanese railway companies has been real estate. Table 7.5 shows that all companies earned at least a 30 percent return on real estate investments in 1993, though profits have recently fallen somewhat with the crash in Tokyo’s land markets in the early 1990s. Still, in 1993, real estate generated more than half of all profits for the Tokyu, Seibu, and Sagami railway corporations. … All except Keisei and Tobu earned more from real estate transactions than any other business activity … Interestingly, the two companies with the least successful real estate ventures, Keisei and Tobu*, also have among the least intensively used suburban railway services, as reflected in the low annual patronage per track kilometer shown earlier in Table 7.2. This lends support to the proposition that integrated rail and property development are vital to attaining efficient rail passenger services. …. Private railway companies accept losing money operating feeder buses as long as their railway and real estate operations benefit. … These statistics make clear that Tokyo’s railway companies practice a form of internal cross-subsidization–they compensate for the low profitability of their railway and bus enterprises with profits from real estate development. Because rail and bus fares are regulated, property development has become the chief means of increasing profit margins above those possible through rail operations It has also increased the liquidity and creditworthiness of rail companies to the point that loans they need to finance rail expansion are usually available at very favourable terms (and often from within the consortia themselves, if necessary).

            Incidentally the Yurikamone line I mentioned earlier, is similar in that it was loss-making until the government changed zoning laws that had a dramatic uplift on pax numbers which finally drove it into profit.

          • michaelrjames

            anonymouse: “I don’t get why you think there is “incompatible ticketing systems within Tokyo”.”

            I have to accept you must be correct. It did seem a bit odd that there wouldn’t be some e-solution these days. It must have been worse back in the day … But does that mean all the stuff on online travel sites is wrong? I suppose the explanation is locals versus tourists who are likely to be buying single tickets and this process is a bit tedious (long queues at times, need to use currency not plastic) and those tickets are, it seems, mutually exclusive of the other of the two main systems?
            It also does mean you are spending more if you are using multiple lines/companies, even if an e-travel card takes your money with the great ease.

            Since corporations own, fund, promote, and operate their own networks, this tends to result in high fragmentation and company stations. The end user may need to pass through multiple company gates to get to their destination, racking up extra costs in the process (generally the longer the trip, the less charge per kilometer). This is in contrast to other nations where fares are calculated in a more integrated way. For tourists, transferring between multiple operators and paying several times to get to a single destination within the metro area can be quite confusing and expensive. Locals tend to patronize a particular company for a particular destination and walk/bike to and from that company’s stations, avoiding the need to transfer and pay another fare to a different company that may have a station closer to the desired destination.

          • Alon Levy

            Do I need to open up more threading levels?

            Anyway:

            1. Real estate has higher margins, but the transport itself is profitable, it’s not cross-subsidized the way historic American streetcars were (lose money on trains, make money on selling houses).

            2. I measure operating costs per car-km, following CoMET. Japanese subways’ opex are around $5/car-km; the major European metros’ are around $6/car-km, often with smaller cars (15 m in Paris, vs. 20 in Tokyo). New York is $10/car-km but we in Euroland do not compare ourselves with the nuke throwers. References: https://openjicareport.jica.go.jp/pdf/12246898.pdf, tables in appendix A; http://content.tfl.gov.uk/rup-20160224-part-1-item07-international-benchmarking-report.pdf, in theory anonymized but the $10/car-km system in the Americas is NY and the European systems below it are London, Paris, Berlin, Madrid.

          • michaelrjames

            @Alon: Do I need to open up more threading levels?

            Maybe but it does make things messy so maybe not. The problem is that WP doesn’t make it clear, in the thread itself, to what comment another is responding. Each comment has its precise time-of-posting shown and ideally this would be displayed as something like “reply to …[name + time-of-posting]” in reply posts …. Each comment should have its own reply button even if it doesn’t create a new level because people are forced to reply to the wrong post (there’s a way around it but it’s tedious and error prone). It’s a design flaw in WP and I don’t suppose anything can fix it at this stage.

          • Sassy

            @michaelrjames

            > But does that mean all the stuff on online travel sites is wrong? I suppose the explanation is locals versus tourists who are likely to be buying single tickets

            It’s a decade-ish outdated for the Tokyo area. Tourists should be getting a contactless transit card, either from the vending machine when they enter the country, or through their smartphone (if it’s compatible, all iPhones for the past several years are, Android phones sold outside of Japan generally aren’t).

            That said, you could still see tourists buying single tickets though, despite various advertising and information campaigns, and unlimited travel pass promotions. Then again, you could sometimes see tourists using paper tickets in London despite being like twice the price, so maybe some tourists are beyond help.

            > It also does mean you are spending more if you are using multiple lines/companies, even if an e-travel card takes your money with the great ease.

            You do spend more money, but the fares are pretty low. A lot of central Tokyo (central 5 wards + anything enclosed by or close to the Yamanote Line ~100km^2 area) trips that include a transfer between companies comes out as less than a London Zone 1 fare, and trips that don’t have the disintegrated fare penalty are usually cheaper than a Paris t+ ticket.

          • anonymouse observer

            @michaelrjames
            “I see that your “private carriers had 50% pax” is of all Japan whereas clearly I was only speaking of Tokyo.”

            No, I have been talking about Greater Tokyo as well as in other parts of the nation from the beginning. The PDF document I cited earlier from Mintetsu includes the share in all 3 largest urban areas in Japan separately on Page 2. Here below is another document showing non-JR private railways have been a critical part of the passenger rail based on the share of rail passengers carried by them in all of these 3 largest urban areas individually between 1970 and early 1990s as well:

            Click to access f18_smi.pdf

            Regarding the profitability of passenger rail business in Japan, this document includes a table summarizing profitability of passenger railway business by passenger density in 1995, 26 years ago, middle of the era when railways were adding capacity with infrastructure improvements (almost all of major Shitetsu companies were applying limited-term base fare surcharge allowed under “特定都市鉄道整備積立金制度” for capacity increase at that time), or just a few year after the Bubble economy busted (had a devastating impact to economy and noticeable impact in rail passenger volume over there). It looks like even during the recession, railways with higher density are mostly making profit just from passenger rail division:

            Click to access f12_sho.pdf

            Cevero’s piece you quoted doesn’t say profitability of passenger rail business/division at all. What it says is real estate has higher profit margin than other business segments as Alon says. If I am reading it wrong, please let me know.

            Regarding purchase of multi-territorial tickets:
            – “連絡運輸” are established between any railways and transit operators when these operators are mutually agreed. Most of railways in Tokyo has “連絡運輸” with Tokyo Metro, Toei Subway, and JR East. Because the way it is set up, one could buy continuous ticket from one railway to another railway using JR East or subways to connect the gap.
            – All ticket vending machines (TVMs) for the railways offering “連絡運輸” tells you how much the fare would be for multi-territorial trips just like it tells you how much the fare cost for intra-territorial trips. The only thing you need to do is the customer need to press “Transfer Ticket” button on the TVM screen:
            https://www.keio.co.jp/english/howto/ride.html

            Because all TVMs can sell multi-territorial tickets, one doesn’t have to queue up or stay on queue for a while unless one is making a trip going outside of the region.

            Also, I don’t see any issue with going through extra fare gates for inter-territorial transfers. When one transfer between different trains, it is very highly likely that one need to get off the train and change platforms. They just put transfer fare gate somewhere on the concourse and make passengers go through just to make sure all passengers pay a fair share for the service received while all railways collect their fair share for service actually provided. Customers can do a simple multitasking: just reach out to the pocket or wallet and pull the ticket out while walking to the stairs or concourse. Through-running trains are just through-running train; unlike the border control for the inter-county Amtrak train, passengers stay on the same train or making cross-platform transfer between trains at the origin/terminal of the subway line (no fare gate).

            Transfer gates typically consist of only one set of gates which can process exit from one territory and entry to another territory in one transaction. Japanese fare gates accepts multiple tickets to be inserted all at once and process tickets very fast unlike the fare gates in other parts of the world if you haven’t used one; one can just insert the ticket or tap the smart card without slowing down (typically fare gates finish processing tickets before one reached to the processed ticket even if the gate needs to process multiple tickets).

            European-style fare integration is great when it works for both passengers and operators, but I don’t think it works well in some cases: when there are multiple rail/transit operators operating for profit like it has been in Japan unless operators can accept that not all fare revenues can be captured/claimed. I don’t know how each for-profit operators could make sure they collect their fair share of revenue without actually tracking exact route each passenger traveled. I think fare gate has been one of the easiest solution to do it without forcing everyone to be really tracked electronically using smartphone or other devices. Seoul installed transfer fare gate to Line 9 (later removed, I believe) and DX Line also supports that transfer fare gate is probably the easiest way.

            And lastly, do you really think that there is no competition between railways, even in Tokyo, as you said in your comment at 20:01 on 2021/05/15? If you think so, could you elaborate why there are so many TV commercials by railways emphasizing their advantages (lower fare, speed, frequency, service span, station access, confort, etc.) over other railways’ service (not developments), or even NHK, the public broadcasting system, aired episodes explaining railroads are trying to get larger market shares sorely through passenger rail service improvements (again, not redevelopments)?

            https://pedestrianobservations.com/2021/03/17/marketing-public-transport-is-unlike-marketing-cars/#comment-99234

            A Guide to Tokyo’s Airport Access Lines
            https://www3.nhk.or.jp/nhkworld/en/tv/japanrailway/20210219/2049083/

            Kintetsu Railway’s Hinotori: Challenging the Shinkansen with Comfort
            https://www3.nhk.or.jp/nhkworld/en/tv/japanrailway/20210226/2049084/

            I should note that there are many other examples like this all over Japan like these if you don’t believe there is competitions between railways all over Japan:
            – In most cases, railways set “区間特定運賃”, a special regular fare in particular station pairs where other railways runs parallel services;
            – Odakyu and Keio competing in Tama New Town by increasing number of express trains (Odakyu) or significantly lowering the surcharge (Keio), and;
            – Almost all non-JR railways in Keihanshin region adding stops on their fastest express trains to offer reasonably fast service at more stations after JR West reduced trip time of their fastest rapid trains while increasing rapid service level.

            @Alon
            I don’t think more thread level is needed. This is obviously because of me not being able to let things go because there are obviously wrong information. I’m concerned about someone else just browsing or searching things could find it, run with random wrong information, and end up with another crap based on wrong information like O’Toole has been doing.

            If this is going out of control to the level where you might have to do something with it (like adding the thread level), I can excuse myself and remain silent.

          • michaelrjames

            @anonymouse

            Thanks for those new papers. But I’m a bit surprised about the Ian Smith article because really it confirms almost everything I’ve said or assumed. So, in response to some of your points I am going to cite him (from: Japan Railway & Transport Review, March 1994. Railways in Japan—An Overseas Perspective by Ian Smith). I suppose you may say that I am selectively citing what I like, which is partly true, but his message seems unambiguous on most points.

            On monopolies and competition (lack of).
            I think you are being a bit churlish. Railways and public transit in general are like this everywhere and can hardly be anything but. The fact that they may advertise a lot doesn’t really prove much, except perhaps that they have a certain budget, as percent of turnover, to spend on promotion. Even governments do that these days. Corporate branding, blah, blah.

            that their quasi-monopoly in a market with very high localised population densities makes profitable operation less than difficult to achieve.
            For example, my travelling on the Keio Line was less a decision of choice than of necessity. Keio, like several other private groups in the Tokyo area, operates geographically distinct services facing little direct competition from peers in the private sector or from JR. While the quality of service is impressively high, customers of private railways like myself have no other realistic choice of transport. The carving up of major cities like Tokyo into commuter-transport monopolies has lent itself to make money for private investors in a way not readily open to railway operators in other countries at present.

            On other business interests versus capital investment in their railways.
            I hadn’t discussed this but the notorious crowding of the Tokyo metro system isn’t solely due to numbers of commuters. I can’t immediately lay my hands on the total track length of Tokyo but how does it compare, normalised to population, to Seoul’s 940km or Paris’ (Metro + RER) 801km?
            A relevant point is that anything approaching this level of crowding isn’t tolerated in the west and results in political action (notwithstanding the mess of NYC-MTA etc) or of course commuters usually have other choices. In my city the BRT became too popular and then started losing ridership as people got fed up with an especially awful habit of buses not stopping at stops because the bus was already at its rated capacity; sometimes at peak two or three buses were passing by before one stopped.

            However there is a contentious point with regard to private railways in Japan related to the virtue of their diversification. Critics point to the lack of capital investment particularly in the Tokyo area where the real demand for transport services has consistently out-stripped demand. Delays in investment have been compounded by the government’s policy of suppressing fare increases with the result that the railway groups have sought to assign resources to other business fields because they have doubt about the potential earnings rate of their railway business. Therefore, the overcrowding levels are not being alleviated to any extent through capital investment by the private companies themselves.

            … and it is to these private companies that the JRs are looking for models of future development. Japanese private railways have successfully blended highly-utilised rail services with associated activities in real estate, hotels, etc., to generate high levels of profitability—a compelling mix that the JR companies would like to emulate.

            Privatisation (and again, that debt issue):

            The positive financial results of the JRs in the 6 years since 1987 are seen as the ultimate expression of the benefits of the division and privatisation. However, this achievement owes much to the implementation of a number of crucial pre-conditions to the privatisation legislation established before the dissolution of JNR. In the stage management of the privatisation policies—a brilliant handling of the political process—a structure was established for the new JR companies with built-in safeguards against failure. These pre-conditions, which included substantial cuts in employment and the hiving off of the vast bulk of the JNR debts to a new public corporation set up for the purpose, facilitated the attainment of profits by the JRs giving an instantly favourable impression of the benefits of privatisation.

            Smith’s analysis seems fair to me and his message is to be careful about interpreting Japanese success especially in extending it to the west. Exactly my position (and in no way to be confused with whatever O’Toole may be saying). He wrote his piece as a caution of the then conservative government’s plans to privatise BR, and well … nothing else needs saying, except that they didn’t heed.
            Maybe Anonymouse is Japanese and is getting a bit defensive? But they shouldn’t because I, and most, greatly admire it. While my focus may be a bit biased towards some of these issues (of debt repayment; property investments etc) Anonymouse (and Alon and some other commenters here) goes to the other extreme of trying to pretend it has nothing to do with the successes when it so clearly does. I also claim that even with purely private operators, in Japan there is functioning always some aspect of “Japan Inc.” Unlike some, I think that that is crucial. It’s true too for France. The Anglosphere obsession with pure capitalism or unattainable Libertarianism has so clearly not worked (with transit and many other things).
            Of course there is no denying–as Smith says–of the benefits of huge populations, in the Tokyo region and the Tokaido corridor for inter-city rail. Very few if any situations in the west can hope to mimic that. Not to mention that private car use is so expensive and inconvenient in most situations, something that is so much more difficult politically in the west. Japan and Singapore can do it but the entitled western voters & democracies? (eg. Congestion Charge for Manhattan, or even Paris, ha!).
            So I suppose we haven’t convinced each other of the other’s position. But at least I found it informative.

          • Sassy

            @Alon Levy

            Measuring by car-km is sensible, but since Tokyo generally has longer trains, any costs that are mostly per train (e.g., a driver and conductor), get spread across more cars. A 10 car train in Tokyo with a driver and conductor has comparable per car staffing as a 5 car train with just a driver. Ultimately Tokyo urban rail operations have to be more cost efficient at other non-staffing stuff to be so cheap per car-km, but the longer train probably closes the staffing efficiency gap a lot.

    • Nilo

      The TGV Sud Est reocvered its capital costs within 12 years of construction. This has been known since the 90s. O’Toole is just a liar.

  15. OaktownPRE

    Randal O’Toole the fool. I read this drivel when it first came out and was shocked by the amateurish level of writing and so-called arguments being put forth. The freeway cost comparison was laughable on its face, but all of it was twaddle. I don’t actually think he, or anyone at CATO believes any of it, but it’s useful for consumption by the rubes and turnip truck crowd.

  16. michaelrjames

    @Alon: ” it’s not cross-subsidized ”

    Cervero explicitly says it is (was) so you are saying he is wrong? The thing is that company financial reports etc are usually opaque as to how these things work. In one of those docs A-mouse posted it says how “fare box recovery ratios” are often not comparable for these reasons. Also, the difference between profitability and loss can be a fine balance and clearly non-transit income can make a big difference in that balance. That is the major lesson from Cervero in that famous book and in everything he and other commentators write. Assuredly it is a major thing for HK-MTR; in fact you even consider it ‘unfair’ and ‘corrupt’. As I have said over and over, I don’t have a problem with transit companies (esp. public ones like HK-MTR) running these mixed businesses, especially exploiting what they create, ie. high volume ped traffic in and around their stations, if it keeps public transit more viable and fares fair. I’ll comment elsewhere but this central message of Cervero has been ignored in the Anglosphere (other than some value capture via special levies like with London CrossRail); you know it is my contention it is entirely due to the inordinate political influence of the property sector who consider all the profits from such developments belong to them alone. About $4bn was spent by various public bodies to rebuild the WTC subway stations but it will be private property interests who keep all those rents from retail etc for themselves.

    • Alon Levy

      What Anonymouse Observer said. I don’t know what Cervero says exactly, but the profit and loss statements are out there and transport is highly profitable on its own, if with lower margins than real estate.

      And what do you mean, ignored in the Anglosphere? The Grauniad writes paeans to the Hong Kong model of forced overcrowding while saying nothing about transport + development models that do not involve state handouts to big business, like Japan, South Korea, Sweden, France… (Paris is emerging as one of Europe’s YIMBY capitals, and even though Parisian transport is highly subsidized, it’s a political choice to subsidize the banlieues and I’m 90% sure that the Métro is operationally profitable.)

      • michaelrjames

        Alon: “And what do you mean, ignored in the Anglosphere?”

        You’re being disingenuous (again). The Anglosphere won’t allow Value Capture the way HK-MTRC does so successfully. The US even has a law that prevents them, and so too apparently Japan did with the original JNR but not the privatized JRs (ie. act as property developers, hoteliers, retailers etc). Also, I think you are abusing the term “subsidy”. Wiping huge debts at the point of privatization is subsidy. Removing the burden of unprofitable rural lines at the point of privatization is subsidy. So too is allowing these entities to commercially exploit the massive pedestrian traffic they generate. I’m perfectly ok with the likes of 70%-government-owned HK-MTRC doing that, but not happy if it eventually becomes majority private (which I don’t think will happen; I suspect the public listing was a sop to the developer lobby to get their slice both sides of the cake which may have worth doing to set MTRC up sustainably, though let’s not sweep under the carpet that 50% of capital funding still comes from government). Paris’ VT payroll tax is a pretty fair means to “subsidize” public transit, and helps to keep fares very reasonable (cheaper than Tokyo and about one third of London).

        • Alon Levy

          The US uses value capture to fund subways, like the 7 extension in New York. It’s based on expected tax receipts without having the state directly involved with development, but so what, the private developers aren’t making extractable windfall profits in these areas, and in neighborhoods where they could, like Midtown East, city zoning specifically prohibits them from building more skyscrapers.

          The proceeds of value capture in New York get wasted on high costs and bullshit community board benefits, but that’s equally true of Hong Kong, the world’s #2 city in subway construction costs, just search-and-replace “unelected community board members” into “CCP-collaborationist MTR execs.”

          Paris in contrast doesn’t do this. Paris engages in extensive TOD, but infrastructure is paid out of the general budget, and operating subsidies to the suburbs are paid out of the payroll tax, i.e. broad taxation of the general public for public-interest projects. This helps keep a lid on waste, even with present-day cost increases. Macron and Castex can’t hide the cost of (say) the Bordeaux-Toulouse LGV, or GPE, through creative targeted taxes on unpopular industries, so they have to justify the cost to the public on the tangible benefits of the project. It forces agencies to engage in cost control, which is how Paris is building 200 km of mostly-underground driverless metro for 42B€, where Hong Kong on the same budget would be building around 50 km and New York even less.

          • michaelrjames

            Alon: “Paris engages in extensive TOD, but infrastructure is paid out of the general budget, and operating subsidies to the suburbs are paid out of the payroll tax, i.e. broad taxation of the general public for public-interest projects. ”

            Ahem, didn’t I say exactly that? I am glad you agree.

            As I have said many times it is HK’s aversion to taxes that shapes their strategy to build infrastructure etc. Given that limitation they do a creditable job of funding big infrastructure while also keeping transit fares reasonably low-cost and a highly functional system. And high-tax regimes like NYC (or UK for that matter) doesn’t save them, so it is much more a cultural issue.
            HK is going to hell due to CCP influence (earlier indirectly and now very directly, especially subverting the previously excellent HK civil service) but, that is recent and hasn’t shaped the history of MTRC etc. Indeed the communists, leading up to 1997, were obstructionist when HK went ahead with the new airport and associated massive transport links to serve it and the newtowns (Tung Chung etc).

            Which is a lot more than can be said for NY. None of the crap has anything directly or indirectly to do with value capture. I get the impression that the cost explosion in HK has happened in the last 2 decades like Australia and perhaps many places that adopted certain managerial practices including the outsourcing curse and the politician-lobby-industry revolving doors.

  17. anonymouse observer

    The issue is that you are probably understanding Cervero’s piece wrong and use a wrong term to describe the situation because it doesn’t say it’s cross-subsidized anywhere in the part of his piece you quoted in comment #103436 (2021/05/16 at 06:25) except for a part saying bus segment’s loss, which is very small compared to railway segment in terms of revenue and passenger volumes.

    Also, cross-subsidy is a situation when loss of one thing need to be covered by a surplus from other thing. Looking at numbers, there is nothing showing railway business by non-JR private railways is losing money. Thus, the railway business by non-JR private railways aren’t cross-subsidized. Amount of profit from railway business is so big that I don’t think all other extra line items subtracted in the financial reporting would change the situation.

    There is a paper with a convenient table showing the share of profit from railway segment, bus segment, and other segments for 15 of the big 16 non-JR private railways in Japan from 1997. It shows all of these 15 railways made money from railway segment, and only 3 of them had low share (< 1/3) of profits from the railway segment. It also shows that loss from bus segment are all so small that it could be covered without profits from other segments (profits from railway business could cover all losses from bus segments and still post the profit, again, without the profits from other segments).

    Click to access 7C-Coleman.pdf

    • michaelrjames

      @Anonymouse & Alon,

      I thought that last post was going to be my last ….

      Who is misinterpreting Cervero:

      This lends support to the proposition that integrated rail and property development are vital to attaining efficient rail passenger services. ….

      and immediately after the mention of those loss-making feeder buses:

      These statistics make clear that Tokyo’s railway companies practice a form of internal cross-subsidization–they compensate for the low profitability of their railway and bus enterprises with profits from real estate development.

      The thing is that you may be taking a too literal approach to what cross-subsidy means. As also pointed out somewhere (by Smith or Cervero, I forget): finance for major capital (rail) projects by those companies is much cheaper and more readily available than it would be for a pure transit company. The fact that a company has an independent and bigger profit source in addition to its transit side means it is much freer in how it operates.

      In that Coleman article, in context of why in the west this kind of thing is difficult or less successful:

      One possible reason is that [US] transit agencies are not allowed by law to own commercial pieces of property.

      Doh! That’s the property-developer protection law! Exactly what I was talking about. (Are there ways around this law, like the Port Authority of NJNY?) Hong Kong is often described as the closest ideal to a pure capitalist environment (low taxes, low regulation, small government, free trade etc) yet it has no such absurd restriction. In fact as I have said previously to Alon, this arrangement for HK-MTRC to act as a developer using land grants from HK government is in reality in lieu of taxes to fund the Metro. Coleman reports that 62% of HK-MTRCs income is from its property development etc activities versus 28% from tickets. In the west we prefer to favour the likes of Trump and other greedy developers and let transit rot. I’ll give Coleman the last word:

      The history and range of proactive actions that private railway companies in Japan and Hong Kong take in order to boost their incomes and increase patronage are impressive. By engaging in a number of activities, such as property development, property management, and retail operations, these companies are able to diversify their revenue streams and reduce the transaction costs of planning the different components that are involved in transit-oriented developments near their stations.

      ………………….
      Final comment on debt.
      I eventually downloaded that document that I couldn’t previously read the relevant graph.

      Click to access factsheets2020.pdf


      Central Japan Railway Company Fact Sheets 2020

      So, as usual, it is all a bit opaque as to what is what, and there are quantum changes in some debt which may be merely renaming (but there were debt restructurings by the state entities holding the debt, eg. in 1998 and 2007). But my interpretation is that in 1987 the debt attributable to JNR (labelled “Latent Liabilities Born by the Shinkansen Leasing System”) was ¥4,995bn. This category disappears by 1991 replaced with the slightly larger category of “Long-term Accounts Payable-railway Facilities” which by 2015 had reduced to ¥631bn. Things change a lot after 2015 mostly due to Chuo Chinkansen, though actually the Accounts Payable category of debt barely changes (but this is why I use 2015).
      This amounts to a reduction of the [probably relevant] debt by ¥4,364bn which is about US$40.00bn. Depending on which baseline JNR debt one uses (it had increased to ¥30 trillion, $310 billion in 2009 dollars). I am too tired to try to do the same thing for JR-East (the other 3 passenger JRs were considered too weak to carry their share of debt) but let’s assume it did the same. Thus a total of about $80bn debt repaid which is either 28% (1987 $280bn @2009 dollars) or 25.8% (of $310bn in 2009).
      So yes, the privatized JRs repaid some debt but only a relatively small fraction, approximately one quarter. (How exactly the state entity that held the debt–JNRSC or JRCC–actually had increased debt on its books is somewhat in conflict with this … but nevermind. I suppose accrued interest etc. It does make one a bit suspicious about what exactly was being repaid [was it just the state selling down their JR shares?) and …. nevermind, I’ll give the benefit of the doubt that this bit in the company accounts was actually repaid debt.)
      I think this is the basis of the very different perspectives on this issue: they repaid some debt but not the original huge debt accrued to the point of privatization.
      Note too, that other than general operations and efficiency etc two big things which affected their bottom lines were huge staff reductions (≈30%) and the right (not held by JNR) to invest in property etc which they did successfully. In fact the staff reduction (≈90,000) was at government insistence and in the privatization legal contracts because there had been long-standing frustration about JNR’s unwieldy structure and difficulty in managing its huge workforce; but it was the state who took over responsibility for these surplus workers, redeploying some, retraining some, and some early-retirement etc. In addition many unprofitable–and never to be profitable–rural branch lines were not included in the privatized JRs to unburden them as much as possible, so again that liability was assumed by the state (or their proxies like the JNRSC for the debt; btw all of this was to keep it all off the government books). All fair enough but let’s recognise the reality.
      ………………………

  18. Aaron Moser

    From an “anonymous” source hahahahahaahha !!!

    “It’s amazing how many errors can be found in just one blog post such as the one you cited. Just to name a few,
    • French high-speed rail only appears to make money because (as documented by Amtrak’s Inspector General in a report I cite in tomorrow’s [REDACTED]) a lot of the costs paid by the government are off the books of SNCF.
    • New freeway costs today average around $20 million a mile for four lanes compared with $100 million to $200 million a mile for double-track high-speed rail.
    • High-speed rail hardly dominates in 300-800KM markets; in most of them, auto traffic vastly outnumbers rail passengers and in many air travel still outweighs rail travel.
    • The big advantage of airlines, which the writer fails to acknowledge, is they don’t require huge infrastructure investments and can start new services practically overnight.”

    • Alon Levy

      All of those four points are incorrect. Amtrak’s IG report is complete bullshit, based on a misunderstanding of how Europe counts cost of capital – it’s in track access charges; the off-books line is about profit shifting between SNCF Réseau/RFF and SNCF Voyageurs/SNCF, but the overall financial ROI is well above cost of capital. HSR does not cost $100-200m/mile unless you’re in Britain or a mostly tunneled line. HSR dominates 300-800 km markets where it exists. And airports require plenty of investment themselves (BER!), it’s just city-level investment and not line-level investment.

    • jcranmer

      “The big advantage of airlines, which the writer fails to acknowledge, is they don’t require huge infrastructure investments and can start new services practically overnight.”

      So what are airports then, if not “huge infrastructure investments”? Have you looked up how much airport expansion projects cost?

      • Henry Miller

        The gates are almost never used to full capacity so there is opportunity to fly in at a time the existing airport doesn’t have anyone using a gate. As such the cost to add a flight someplace is only the cost of an airplane, and if the route doesn’t pay off you can find a different route to use the airplane. Yes airports are expensive, but they are rarely used to such capacity that you can’t fit another flight it. Major airlines can for the most part ignore the cost of the airport when planning new flights.

        Airlines buy their gate, and a landing slot. In general they are not paying for the full cost of the airport The cost of the airport is payed by the city which hopes to get the size right so as to pay off the cost to build it.

  19. adirondacker12800

    The capacity isn’t infinite. Recent and proposed upgrades for metro New York airports are 25 billion-ish.

  20. FredD

    This has nothing to do with East Coast trains…a little to do with FRESH water and who has it.
    We will never have TGV 300kph HSR here. Honestly we don’t need it. Just getting to 200 kph here and there would be a good start. Don’t let the perfect of FIFTY years from now be the enemy of the could be a lot better in a year or two.

    We are landing on asteroids, flying drones on Mars. Here in the midwest and Chicago (the largest AMERICAN city IE can’t be blamed on the Dutch, British, France or Spain), we had faster passenger trains 50 years ago.

    The TCMC plan for a second Empire Builder train needs a clean sheet serious study. A plan “B” that has been needed since way before WI Gov. Walker was elected, in large part due to an ill-conceived Milwaukee-Madison 88-mile rail concept. Nobody was going to wait to get whisked by a fast train to either end, and then take a bus? or rent a car to their final destination.

    The existing EB takes a scheduled EIGHT hours to meander the 411 route miles. That’s 51mph. Through Red Wing, Winona…… Four hours to the midway point at WI Dells. Eastbound from MSP can be several hours late departing at 8am because its waiting for a cross country train. So it’s not reliable. I just don’t see the reason to duplicate this when there are bigger, faster fish to fry. Why not terminate and originate the cross country train in MSP as has been suggested here and there?

    And consider a new train from MSP. On a shorter, straighter route of about 350 miles. Through Eau Claire (who have been begging to get off the bus), WI Dells, Portage, Dane Airport, Madison, Janesville, Arlington Heights, Ohare, Chicago. In FIVE hours with existing equipment and technology. At a minimum it would require WI rebuild a railcar storage track between Wyeville and Camp Douglas and IL build a crossover at Deval between UPNW and Soo Line. Pythagoras smiles.

    It’s not about “tourism”. Its about business. At present, flying to/from MSP, MSN, EAU or ORD is a several hundred dollar proposition with a scheduled flight time of an hour or so, but obviously an hour or two of “airport” time or weather and travel added to that. A faster train with fewer stops on a straighter route that stops at airports would be a win for all travelers in this region. And put places that used to be on passenger rail maps ie Madison, Eau Claire etc back on them and OFF the bus. Connecting three major cities and two state capitals MSP Madison and Chicago should be the priority.

    I doubt the existing EB will change, but could continue to connect and transfer. The midwest is in a global fight for jobs. Faster, reliable train service is a necessity, not an option.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.