In the last few years New York’s MTA has gone through multiple cycles in which a new head talks of far-reaching reform, while only small incremental steps are taken. The latest is the MTA Transportation Reinvention Commission, which has just released a report detailing all the way the MTA could move forward. Capital New York has covered it and hosts the report in three parts. Despite the florid rhetoric of reinvention, the proposals contained in the report are small-scale, such as reducing waste heat in the tunnels and at the stations on PDF-pp. 43-44 of the first part. At first glance they seem interesting; they are also very far from the reinvention the MTA both needs and claims to be engaging in.
Construction costs are not addressed in the report. On PDF-p. 53 of the first part, it talks about the far-reaching suburban Grand Paris Express project for providing suburb-to-suburb rapid transit. It says nothing of the fact that this 200-km project is scheduled to cost about 27 billion euros in what appears to be today’s money, which is not much more than $150 million per km, about a tenth as much as New York’s subway construction. (Grand Paris Express is either mostly or fully underground, I am not sure.) The worst problem for transit in the New York area is that its construction costs are an order of magnitude too high, but this is not addressed in the report.
Instead of tackling this question, the report prefers to dwell on how to raise money. As is increasingly common in American cities, it proposes creative funding streams, on the last page of the first part and the first six pages of the second part: congestion pricing, cap-and-trade, parking fees, a development fund, value capture. With the exception of congestion pricing, an externality tax for which it makes sense for revenues to go to mitigation of congestion via alternative transportation, all of these suffer from the same problem: they are opaque and narrowly targeted, which turns them into slush funds for power brokers. It’s the same problem as the use of cap-and-trade in California.
One of the most fundamental inventions of modern government is the broad-based tax, on income or consumption. Premodern governments funded themselves out of tariffs and dedicated taxes on specific activities (as do third-world governments today), and this created a lot of economic distortion, since not all activities were equally taxed, and politically powerful actors could influence the system to not tax them. The transparent broad-based tax, deeded to general revenue through a democratic process, has to be spent efficiently, because there are many government departments that are looking for more money and have to argue why they should get it. Moreover, the tax affects nearly all voters, so that cutting the tax is another option the spending programs must compete with. The dedicated fund does neither. If the broad-based tax is the equivalent of market competition, a system of dedicated funds for various government programs is the equivalent of a cartel that divides the market into zones, with each cartel member enjoying a local monopoly. In this way there’s a difference between the hodgepodge of taxes the MTA levies and wants to levy and Ile-de-France’s dedicated 1.4-2.6% payroll tax: the payroll tax directly affects all Francilien workers and employers, and were it wasted, a right-wing liberal politician could win accolades by proposing to cut it, the way New York Republicans are attacking the smaller payroll tax used to fund the MTA.
The proposals of where to spend the money to be raised so opaquely are problematic as well. There is a set of reforms, based on best practices in Continental Europe and Japan, that every urban transit system in the first world should pursue, including in their original countries, where often only some of those aspects happen. These include proof-of-payment fare collection on buses, commuter trains, and all but the busiest subway systems; all-door boarding on buses; mode-neutral fares with free transfers; signal priority and bus lanes on all major bus routes, with physically separated lanes in the most congested parts; a coherent frequent bus network, and high off-peak frequency on all trains; and through-service on commuter rail lines that can be joined to create a coherent S-Bahn or RER system. As far as I can tell, the report ignores all of these, with the exception of the vague sentence, “outfitting local bus routes with SBS features,” which features are unspecified. Instead, new buzzwords like resiliency and redundancy appear throughout the report. Redundancy in particular is a substitute for reliability: the world’s busiest train lines are generally not redundant: if they have parallel alternatives those are relief lines or slower options, and a shutdown would result in a major disruption. Amtrak, too, looks for redundancy, even as the busiest intercity rail line in the world, the Tokaido Shinkansen, has no redundancy, and is only about to get some in the next few decades as JR Central builds the Chuo Shinkansen for relief and for higher speeds.
The only foreigners on the Commission are British, Canadian, and Colombian, which may have something to do with the indifference to best industry practices. Bogota is famous for its BRT system, leveraging its wide roads and low labor costs, and Canada and to a lesser extent the UK have the same problems as the US in terms of best industry practices. Swiss, French, German, Japanese, Spanish, and Korean members might have known better, and might also have been useful in understanding where exactly the cost problems of the US in general and New York in particular come from.
The final major problem with the report, in addition to the indifference to cost, the proposal for reactionary funding sources, and the ignorance of best industry practices, is the continued emphasis on a state of good repair. While a logical goal in the 1980s and 90s, when the MTA was coming off of decades of deferred maintenance, the continued pursuit of the maintenance backlog today raises questions of whether maintenance has been deferred more recently, and whether it is still deferred. More oversight of the MTA is needed, for which the best idea I can think of is changing the cycles of maintenance capital funding from five years, like the rest of the capital plan, to one year. Long-term investment should still be funded over the long term, but maintenance should be funded more regularly, and the backlog should be clarified each year, so that the public can see how each year the backlog is steadily filled while normal replacement continues. This makes it more difficult for MTA chiefs to propose a bold program, fund it by skimping on maintenance, and leave for their next job before the ruse is discovered.
I tag this post under both good categories (“good transit” and “good/interesting studies”) and bad ones (“incompetence” and “shoddy studies”) because there are a lot of good ideas in the report. But none of them rises to the level of reinvention, and even collectively, they represent incremental improvement, of the sort I’d expect of a city with a vigorous capital investment program and industry practices near the world’s cutting edge. New York has neither, and right now it needs to imitate the best performers first.
At the beginning of the month, New York State released its draft environmental impact statement for high-speed rail from New York to the Upstate cities. The costs of HSR as proposed by the state are excessive, and as a result the state has eliminated the high-speed option. It is only considering medium-speed options – the fastest is 125 mph, for the cost of full-fat high-speed rail; it sandbagged the full-speed options. Consider the following passage, from the main document, section 3.2.2:
The dedicated right-of-way of the very high speed (VHS) alternatives would result in significant travel time savings (5:17 and 4:23 respectively for 160 mph MAS and 220 mph MAS), and commensurately higher estimated ridership (4.06 and 5.12 million respectively for 160 mph MAS and 220 mph MAS).
The length of New York-Buffalo is about 690 km. At 4:23, it is an average speed of 157 km/h. To put things in perspective, the Hikari express trains in the 1960s achieved an average of 162 km/h (515 km in 3:10) in 1965, with a maximum speed of 210 km/h.
In section 3.3.5, the 125 mph alternative, which involves greenfield dedicated track from Albany to Buffalo, is said to have an average speed of 77 mph, or 124 km/h. Considering that British express trains on the legacy East Coast and West Coast Main Lines restricted to the same top speed average about 130-140 km/h, this is unimpressive.
Likewise, the cost estimates seem too high. The cost proposed for 125 mph is $14.71 billion. That’s on existing track south of Albany with minor improvements; as per exhibits 3-19 and 3-21, 83% of the cost is said to be Albany-Buffalo, a distance of 380 km on new track plus 76 on existing track. This makes sense for a full-speed, 350 km/h line. But the cost of the full-speed 220 mph option is $39 billion, around $55 million per km from New York to Buffalo in an area with a topography that justifies at most half that.
The study also sandbags the higher-speed options, from 125 mph up, by overplaying the importance of skipped small cities. A greenfield line cannot reasonably serve Schenectady, Amsterdam, and Rome. It could serve Utica, but with some takings because the sharp curve from the tracks at the downtown station to the I-90 right-of-way to the west. Lack of service to Utica would be a drawback, but the study for some reason thinks that those four stations would need their own dedicated intercity line to New York, using a connection to Metro-North, which is said on PDF-p. 37 to have capacity problems on the Hudson Line (the Hudson Line runs 12 trains per hour at the peak today, and is four-tracked). I am told that people drive all the way from Watertown to Syracuse to take Amtrak; none of the skipped four stations is that far from Albany or Syracuse. If a regional train is needed, it can connect at Albany.
The problem is that the alignments studied are uninspiring. I don’t just mean it as a synonym for bad. I mean they avoid locations that look difficult at first glance but are actually reasonably easy. CSX bypasses Albany already; it is not a problem to run high-speed trains at low speed on the existing line between Rensselaer and a spot west of Albany where the line could transition to the Thruway, and yet exhibit 3-20 shows a passenger rail bypass of Albany.
For the full-speed option, I do not know how much tunneling and bridging the state thinks is necessary for its west-of-Hudson I-87 alignment from New York to Albany, but there’s an alignment east of the Hudson with only about 7 km of tunnel, all through the Hudson Highlands. Briefly, such a line would go east of the built-up area in Dutchess County and points north, with a possible station at the eastern edge of the Poughkeepsie urban area and another near Rhinebeck, closer to the city and to the bridge to Kingston than the present Rhinecliff station. In Putnam and northern Westchester Counties, it would utilize the fact that the ridge lines go northeast to southwest to swing to the southwest, to hook up to the Hudson Line slightly north of Croton-Harmon. With a curve radius of 4 km, and a maximum grade of 3.5%, only two tunnels are needed, one under Peekskill of about 2 km and one under the crest in Putnam County of about 5 km. Some additional viaducts are needed through the valleys in the Hudson Highlands, but from Dutchess County north the line would be almost entirely at-grade.
There is generally a tunnel vision in American high-speed rail documents like this, consisting of any of the following features:
– Excessive avoidance of greenfield alignments, even in relatively flat areas. The flip side is excessive usage of freeway rights-of-way. The Syracuse-Rochester segment is actually greenfield in the study, which is good, but there is no thought given to greenfield New York-Albany alignments, which are frankly much easier east of the Hudson than west of the Hudson.
– Questionable assumptions about the abilities of existing track in urban areas to have higher capacity, which often leads to excessive multi-tracking (as in California); there is never any effort to construct an integrated timetable to limit the construction of new tracks.
– No rail-on-rail grade separations. The study talks about Spuyten Duyvil capacity problems, which are very real if traffic grows, but says nothing about the possibility of grade-separating the junction from the Empire Connection to the Metro-North mainline to Grand Central.
– With the exception of California, which erred in the other direction, uninspiring speeds. It’s actually hard to construct a 350 km/h line that only averages 157; actual high-speed lines around the world in the 270+ range average about 180 or higher.
It’s not surprising New York is sandbagging HSR. A year and a half ago, the Cuomo administration killed an HSR study on the grounds that in a recession, the state can’t afford to build such an expensive project. Given how long it takes from the initial study to the beginning of construction, the argument is so transparently wrong that it raises the question of what the real motivation was. But whatever the real reason was, the state is not interested in HSR, and wrote a lengthy environmental impact study to justify its disinterest.
The Regional Plan Association has a new study warning that Metro-North’s infrastructure is falling apart, and demands $3.6 billion in immediate spending on state of good repair. In general, my line on deferred maintenance is “you mean the agency deferred maintenance all those years and didn’t tell us?”. But in this case, despite the language, most of the proposed spending is improvements, namely rehabilitation or replacement of old movable bridges with low speed limits, rather than ongoing maintenance folded into long-term capital spending.
$2.8 billion of the proposed program is for replacing five bridges: Pelham Bay, Cos Cob (over the Mianus), Walk (over the Norwalk River), Saga (over the Saugatuck), and Devon (over the Housatonic). I believe all five should be replaced in the medium term, but the cost proposed is much higher than it should be. $560 million per bridge is quite high, and out of line with Amtrak found on PDF-pp. 29 and 56 of the Northeast Corridor Master Plan. Amtrak cites the cost of replacing the Pelham Bay Bridge alone at $100 million, and the cost of both replacing it and modifying curves on the Hell Gate Line at $500 million. It cites the cost of replacing both the Saga and Walk Bridges at $600 million.
Now, the RPA lists Saga as the easiest bridge to replace since it’s two two-track bridges, so work can be done one bridge at a time with less disruption to ongoing service, but conversely Pelham Bay is also quite cheap according to Amtrak.
But there’s a more serious problem, which is the avoidance of talking about service plans for commuter and intercity rail. If there is serious effort at adding Metro-North service to Penn Station or at raising intercity rail speeds, then the worst speed and capacity restrictions should get priority, and the infrastructure construction should be based on what promotes the desired service plans. It is very expensive and probably cost-ineffective to six-track everything from New Rochelle to Stamford, to allow three speed regimes: local, express, and intercity. I have argued before that it’s better to leave it at four tracks and bypass bad curves, around Port Chester, and make this the six-track segment. This is of course independent of maintenance issues, but suggests which bridge replacements are necessary to support these bypasses (Cos Cob) and which aren’t (the rest are less critical, especially Walk, which intercity trains should bypass on a straighter I-95 segment).
Likewise, there’s a capacity crunch west of Stamford but not one east of Stamford, and this again suggests Cos Cob as the most important priority. Finally, the slowest segment of the NEC away from immediate station areas is the western corner of Connecticut, from the state line to Stamford; Stamford’s curves are mild, while those heading out of Port Chester all the way across the Mianus are quite bad, and straightening the segment would also require straightening the bridge, which can be done easily if it’s replaced. Despite all this, the RPA and Amtrak are saying Cos Cob needs rehabilitation and not replacement, which misses opportunities to both improve reliability and speed up a slow segment.
Moreover, there is no mention of grade-separating Shell Interlocking, just south of New Rochelle. While not a state of good repair issue even in theory, the interlocking’s tight curves impose a limit of either 30 or 45 mph (so, 50-70 km/h), depending on source, in an area that could otherwise support 200 km/h or more. It is very difficult to straighten New Rochelle to sufficient curve radius for that, but 150 requires only minor takings. This may be necessary, independent of speed issues, to raise capacity enough to allow Metro-North service to both Grand Central and Penn Station. It’s possible to schedule trains through the flat junction, but this imposes an additional constraint on the schedule, on top of track-sharing with Amtrak and, in the East River Tunnels, the LIRR.
In response to the forthcoming FRA loan application by XpressWest (the rebranded Desert Xpress) for its high-speed rail line from the edge of the Los Angeles metro area to Las Vegas, Reason published a report claiming the project would fail. Coauthors Wendell Cox, who cowrote a fraudulent report about Florida HSR, and Adrian Moore, argue that costs will be higher and ridership lower than expected, leading to operating losses and bankruptcy. I still have some doubts about XpressWest’s business plan, but Cox and Moore skirt or ignore the real problems, and instead choose to attack it using numbers that are distorted and at times completely made up.
The smoking gun that something nefarious is going on is the attempt to remodel ridership in terms of competition with cars and planes. In table 2 on PDF-page 20, the report shows door-to-door travel times by the different modes to Las Vegas from various origins in Southern California, including Victorville itself, Riverside (80 km and a mountain pass away), and Los Angeles (130 km away). The assumption, which is for the most part correct, is that passengers drive to the airport or train station and need to factor in congestion, and the explicit assumptions on access time are spelled out in table A-1. The zinger is that while station and airport access times are computed by taking the free-flow Google Maps travel time and adding a congestion cushion, the assumed door-to-door travel times for people driving assume free-flow travel – and even this required me to pick a particular (albeit reasonable) location on the Strip that is closer in than the Google Maps point labeled Las Vegas.
For examples, the travel times by car given from Victorville, Riverside, and Los Angeles are 2:56, 3:47, and 4:20. Those are approximately equal to the free-flow travel times to the Palazzo on the Strip. Needless to say, traffic is not free-flow in Southern California. As of this writing, on Friday at 4:15 pm Pacific Time, Google Maps gives me a travel time of 4:23 from Los Angeles to the Palazzo free-flow but 5:13 in current traffic; figure the extra 50 minutes make it 5:10 over the 4:20 given in the study. The door-to-door travel time for a train from Los Angeles is given as 5:04 to Vegas and 4:04 from Vegas, the difference coming from not needing to budget as much time for the possibility of traffic and arrive extra-early. In other words, including realistic rush-hour conditions, driving is not 14 minutes faster than the train on average in each direction, but 36 minutes slower.
In addition, the report slightly overstates the train’s travel time, as 1:40. The environmental impact statement claims, on PDF-page 39 of FEIS chapter 2, that 150 mph electric trains (the alternative that has since been selected) will take 1:24. While this is an ambitious average speed for this top speed, it is achievable for a nonstop train. Subtract 16 minutes from train time and now driving all the way from Los Angeles is 52 minutes slower than the train. As an additional check on the model, Cox and Moore assume travelers must arrive at the train station 20 minutes before departure, in addition to the congestion cushion. This is not observed in HSR systems in such countries as France and Germany, where open station design means people can arrive a few minutes before departure. Figure 5 minutes and now driving is 1:07 slower than the train.
Let us now step back and examine the general argument of the report. Cox and Moore argue the following: there is a tendency for costs to escalate (as examined by Bent Flyvbjerg) and for ridership to fall short of predictions (they call it the International Average Error Forecast but supply no reference and give no indication of the computation involved, and given the above zinger regarding travel time nobody should trust this). The ridership model has flaws, and a series of sanity checks argue that ridership will fall far short while costs will escalate. It is therefore better, they claim, to expand I-15 instead to deal with rush hour capacity.
At every step of the way, the report makes substantial errors. Cox seems aggressively uninterested in the actual causes of cost escalation and ridership shortfalls, following Flyvbjerg’s note in his original paper that cost escalation can come from many sources but it is fairly certain that there will be some cost escalation in a megaproject.
We can do better, and examine recent HSR projects. In Spain, some meet projections and some do not. For example, the Madrid-Barcelona corridor was 25% below projections in 2010, and appears to have fallen farther behind in 2011 – but in 2008 the line was only 4% behind projections, and with a deep recession and 20% unemployment, Spain can be excused for having less economic activity than projected at the height of its bubble. Likewise, in Taiwan and South Korea the HSR lines have fallen far below projections made in the 1990s, when their economic growth was extremely fast – but even those projections failed a sanity check: Korea thought it would get more HSR riders than the Sanyo Shinkansen, which looks reasonable based on city sizes until one remembers that the Sanyo Shinkansen also connects to Tokyo at one end and the KTX does not; Taiwan had estimated similar ridership, even though its largest city, Taipei, had not many more people than the Sanyo Shinkansen’s distant-second largest city and only one third as many as Sanyo’s largest, Osaka. In contrast, French lines tend to overshoot projections, as can be seen in the above link for Taiwan.
In all cases it can take a few years for ridership to build up: Taiwan took 2 years to achieve profitability after depreciation but before interest (and is now profitable even after interest after a refinancing at a lower interest rate), which Cox and Moore spin as “The project suffered an accumulated loss of two-thirds of its private investment in the first 2.5 years of operation.”
Las Vegas did have a bubble, and is slowing down now, although it is nowhere near the level of depression Spain is in. The report in fact mentions that growth in hotel rooms and travel to Las Vegas has stalled (although part of it is due to the national recession, rather than a Nevada-specific crash). It comes close to mark, but even here it fails to note possible similarities and differences with case studies of shortfalls. However, since the report attacks not just projected 2035 growth but also base-case ridership for 2012, it does not deserve this charity, even as here it skirted a real problem rather than completely missing it.
To criticize the actual model, on PDF-page 34 Cox and Moore attack it for surveying a sample of 400 people and asking them if they would ride the train. They attack the general approach of stated-preference, without giving any reference for why it is bad (they include one sentence of criticism), and then offer the following platitude: “It would seem that a prediction of ridership using a ‘less than trainload’ sample would be insufficient on which to make multibillion dollar decisions.” This is not serious analysis; this is the same criticism that led people to disbelieve that George Gallup could forecast elections by polling just a few thousand voters. The relevant paragraph from the ridership model that they could does mention that 400 riders means they results are “less precise than the reported analysis indicates,” but the same passage says later, which they do not quote, that the problem comes from having polled only 51 air travelers, where they would like 150-200 people per mode. Fortunately they polled 300 drivers, and it is auto/rail mode split forecast that is hard, while air/rail is a fairly straightforward function of travel time – see figure 1 of an EU air/rail report.
Now, in lieu of the ridership model that the report criticizes, it offers sanity checks. These are normally a useful check on wildly inaccurate estimates, and if done in the 1990s would have made it clear Taiwan was not going to have 180,000 riders a day, and even its present-day traffic of 110,000 is a miracle. Cox and Moore offer two sanity checks. First is the aforementioned comparison to car and airplane travel time; that one can be disposed of due to fraudulent numbers. Another is a comparison to the Acela between New York and Washington. If the Acela only gets 2 million riders per year, they argue on page 35, how can Victorville-Las Vegas get 9 million?
Of course, people who have taken Amtrak know that the Acela is only about one-third of the ridership on the Northeast Corridor, and the time travel difference between Acela and Regional trains is small enough that the distinction is one of branding and service class. Amtrak claims on PDF-page 41 of its Northeast Corridor Master Plan that 70% of the corridor’s riders (of whom there are 11 million) are on the New York-Washington segment, so that’s already nearly 8 million, not 2 million. Further, the Acela is a slow train – its average speed, 130 km/h south of New York, is not much better than that of the legacy express trains that the TGV replaced; the average speed of the Regional is worse. To argue that XpressWest is just like Acela, Cox and Moore do not offer a serious model of the effect of access and egress times on ridership, but instead issue platitudes about a train that stops 40 miles outside the city.
To see how professionals model ridership, see for example Reinhard Clever’s thesis (the relevant pages are 26-33) as well as a short note of his regarding last-mile connectivity. Transfers, he argues, are less onerous at the origin end of the trip than at the destination end: if they must transfer, 55% of riders prefer to do so at the origin end, 22% in the middle, and 22% at the end. Likewise, commuters in auto-oriented suburbs of transit cities (the example given is Toronto) drive long distances to park-and-rides, but balk at transferring from the city-center station to the subway. Normally the origin end is likely to be the smaller city, but in the case of XpressWest, Las Vegas is the destination rather than the origin. As a result, it is unrealistic to expect significant ridership from Las Vegas residents traveling to Los Angeles (and XpressWest is not assuming any), but quite realistic to expect riders to go in the opposite direction.
Finally, the cost overrun projection is fraudulent. As Cox did in the report about Florida, on PDF-page 40 he is comparing a simple line in a freeway median to the Central Valley segment of California HSR, a line with substantial viaducts and grade separations. To his credit, he no longer includes the 11-point rubric of his Florida report, which overemphasized relatively small components of the cost like electrification and underemphasized civil infrastructure. Instead, the report just says it’s unrealistic to expect cost to be lower than in the Central Valley, without further explanation except that the Central Valley is flat; the need for plenty of grade separations and viaducts is not mentioned.
This could be attributed to a simple mistake, but in fact footnote 76 argues based on the simplicity of the terrain and the ample space in the median that widening I-15 will be cheap, only $1.6-2.5 million per lane-km ($2.6-3.9 million per lane-mile)
in both directions. No connection is made with the fact that a grade-separated median is not available to California HSR. In fact California is planning to widen Route 99 from 4 lanes to 6 at $6 billion (PDF p. 22); it is unclear to me how long of a stretch of 99 is under consideration, but the full length including segments north of Sacramento is 640 km, of which about 240 appears to be already 6-lane, which would make the cost $15 $7.5 million (it would include freeway conversion, but the same issue with grade separations is true of California HSR and has been the primary driver of cost overruns in the Central Valley). The construction cost difference between the Central Valley and XpressWest is a factor of 2; perhaps it’s Cox and Moore who, in assuming one ninth to one sixth one fifth to one third the per-km cost of CA 99’s Interstate conversion, are lowballing costs for their own favored project, and not XpressWest. (Update: I misread the footnote, and the cost contained therein is $1.6-2.5 million per unidirectional lane-km.)
No other argument is presented that costs will run over, except that according to Flyvbjerg they might. Since the projected costs are well within California’s per-km cost if one omits the viaducts, tunnels, and grade separations, we can assume that costs are likely to stay under control. In fact the cost escalations on international HSR lines have typically come from heavy tunneling, which is less predictable than at-grade construction. The at-grade lines in France have stayed within budget. In Norway the 50% cost overrun of the airport train was centered on a difficult tunnel. German lines run over too, but have significant tunneling as well, and the recent overruns in Korea (subtracting the first phase, comparing cost projections from 2010 and 2000 shows a 40% overrun) were in the nearly-50%-in-tunnel second phase. But in Japan, as far as I can tell recent Shinkansen construction is on-budget despite heavy tunneling, and the same is true of AVE construction in Spain. Tunnels, we can conclude, are riskier than at-grade construction; in fact the biggest risk for at-grade construction, as seen in the California HSR project, is that viaducts or tunnels will be needed due to further engineering or environmental work, and running alongside a freeway minimizes the chance.
Because the study’s attempts to model cost and ridership are so weak, it should not be considered a serious challenge to XpressWest. Cox has had a troubled relationship with the truth in the past, and there is no argument he won’t make, no matter how ridiculous, to argue for the superiority of car travel over rail and mass transit. It’s actually the strong arguments that he fails to make – for example, regarding a possible comparison between Las Vegas and overheated East Asian Tiger economies. (For the record, I think Las Vegas is going to come out solid in such comparison.)
It is in reality quite easy for HSR to make enough money to cover above-the-rail expenses, and even track maintenance is quite cheap at about $125,000 per double track-km, but covering interest expenses is harder. Despite the canard that only the LGV Sud-Est and the Tokaido Shinkansen have paid back their interest, sourced to as far as I can tell just one person and reproduced by Cox and Moore on PDF-page 43, in reality multiple intercity railroads are profitable even including interests. This includes all three main island Shinkansen operators in Japan, SNCF, and DB. The belief that they are not comes from two sources: in Europe, conflation of subsidized commuter lines with profitable intercity lines, which are usually run by the same national railroads, and in Japan, the fact that the government wiped the accumulated operating deficit debt of Japan National Railways after splitting and privatizing it, but not Shinkansen construction debt (see references here).
So if Reason is so wrong, and XpressWest will likely meet both ridership and cost projections, what are my problems? In one word: uncertainty. Projected XpressWest revenue, on PDF-page 54 of the ridership model, is about $500 million per year in today’s money. Long-term inflation-protected federal debt is unusually cheap right now and this could make XpressWest a prudent investment – as of the time of this writing, the US can sell 30-year inflation-protected bonds at an interest rate of 0.5%, or $32 million on a $6.5 billion loan. HSR margins in Europe are low, but in Taiwan the margin in 2009, excluding interest, was 25%, which is enough (that said, despite falling far short of expectations, Taiwan HSR has very high ridership for what it is, and of course lower ridership means lower margins independently of interest rates).
But 0.5% interest is for safe investments, and infrastructure is not a safe investment. The claims that costs would run over and ridership would fall short are probably going to be proven wrong if construction goes through, making the project a success, though not a smashing success. But if the reduction in Las Vegas’s growth proves permanent and not just one recession, or if casino gambling declines, or if station access time proves more important than previously assumed in the model, or one of many other things that could go wrong, operating profits will decline.
This is what Cox fails to understand when quoting Flyvbjerg. Flyvbjerg talks about an average cost overrun – but more than that, he is concerned with risk. Many projects stay within budget or run over just a little, but a few cost several times as much as the original estimate. Telling the Big Digs and East Side Accesses apart from the Madrid Metro extensions is hard, and this is why it’s not appropriate to compute interest rates based on the borrowing costs available to the federal government.
At a riskier rate of return, things are troubling, as Paul Druce notes: he compared revenue estimates to the 30-year T-bill interest rates as of last year (3.75%), and found that operating margins would need to be above 25% until 2031 to maintain profitability. XpressWest is now looking for a larger loan than Paul assumed, but at a real rate of return of 2 or 3%, interest would indeed bite into the cost. If the project is that risky, it should therefore not be funded. That said, European transit projects tend to go ahead with a benefit-cost ratio higher than 1.2, which is certainly true of this project.
So the question is twofold. First, whether it’s sensible to lock in low interest rates and fund projects that would not be able to pay back their loans at the interest rates of a fast-growing economy. Second, how risky the project is. The first question is easier: on a pure cost-benefit analysis, the federal government can afford to lose a few billion dollars on a small number of bad investments, as long as it makes it up with enough successes, and this makes the net financial cost of the project to the government low (but positive, since it bears downside risk but does not benefit from the upside except indirectly through taxes); on top of this, precisely because the High Desert and Nevada are in deep recession, this project has additional economic benefit. The recession won’t last forever, but it exists now and will probably continue for the duration of construction.
I believe the answer to the second question is that it’s of moderate to high risk. The risk of cost escalations is low because the right-of-way is already secured and there is no difficult civil infrastructure. The risk of ridership shortfalls is more substantial – ridership estimates, especially of road/rail mode shares, have an inherent uncertainty, and on top of that the recession could cause permanent damage to Las Vegas. In addition, the strong Friday peak of travel to Las Vegas means that more rolling stock and station infrastructure will be needed relative to ridership than elsewhere, driving down operating margins.
The most troubling part of the project is that growing ridership will require a connection to Los Angeles, and because it requires a difficult mountain crossing, XpressWest is not interested in paying for it. Its current plan is to wait until California HSR opens to the LA Basin, and then link up with a line from Victorville to Palmdale. This is the real cost risk, and not the notion that at-grade rail construction is going to present the same difficulties as urban viaducts and mountain tunnels. In particular, California HSR will need to reconsider how to get from the Central Valley to Los Angeles, and the alternative that links with XpressWest goes through Palmdale, which appears to be more expensive by a few billion dollars than a straighter route through the Grapevine and Tejon Pass.
Since there is no hope for fast enough recovery that interest rates will rise, forcing early investment, it’s fine to wait. I would seriously suggest that the FRA delay decision until after the election, and if the Democrats win control of both the White House and Congress, wait a few more months until there is or is not a federal bill to fund HSR. The important thing to do is avoid biasing California toward an alternative that costs it several billion more dollars for the benefits of the XpressWest operation. Although California seems set on Palmdale, it is feasible that the amount of money Congress will make available for it in six months is enough for an initial operating segment if and only if it switches to the cheaper Grapevine alignment, and then the plan should be to try connecting XpressWest to the LA Basin much later, through tunnels through Cajon Pass. (In fact, if there is any way to get a cost estimate quickly, I would propose that, to see if it’s a reasonable alternative to Palmdale.)
If it’s a yes or no decision then I’m leaning toward yes, but not at any cost. If there is serious competition for other rail projects with higher or less risky benefits, then they should be funded ahead of XpressWest. If the decision biases California against the Grapevine, and the amount of funding available to it (from a separate pot of money, as it’s not asking for an FRA loan) is such that Palmdale would force unconscionable compromises elsewhere, then to protect the more important California HSR project XpressWest should be delayed even at the cost of potentially missing the window in which it can be funded.
But despite my doubts, it’s not a high-speed train to nowhere. It’s a high-speed train from the edge of a large metro area to a major leisure travel destination, and the cost of borrowing is so low that the federal government can expect to make its money back in ordinary circumstances. There is enough cushion against a ridership shortfall that the ordinary uncertainties expected are a small deal, and although a very large shortfall is likelier than for, say, the Northeast Corridor, it’s not probable enough to warrant denying a loan application. If Reason succeeds in canceling the line, it will join Florida HSR as a line that could have had great promise but succumbed to lobbying and fraud.
The article about New York State’s decision to discontinue studying high-speed rail between New York and Buffalo is by itself not terribly surprising. Although Andrew Cuomo likes flashy public works projects, of which HSR is one, he is consistently pro-road and anti-rail.
The study released by the state sandbagged actual HSR on cost grounds – it did not provide any further analysis, and in two ways (lower average speed than most HSR lines, and a requirement for tilting) stacked the deck against it – but instead looked into medium-speed rail, with top speed of 110-125 mph, which is frequently misnamed HSR in the US. This, too, is not surprising. State DOTs have no idea how HSR works, and tend to make mistakes, not know how to do cost control, and so on.
What’s most surprising is the explanation for why not to do anything substantial: as one of the HSR proponents quoted in the article complains, “The State of New York is worried about making ends meet; the economy is not doing so great. That’s the reason in the short term.” Taking his argument at face value, the state is refusing to advance study of an HSR line because economic conditions are bad now, a decade or more before such line could even open.
The recession won’t last forever; if it does, there are bigger things to worry about than transportation. Other than immediate reconstruction projects, for which the environmental reviews are fast-tracked, major projects take years to do all the design and environmental studies. California has been planning HSR since the late 1990s. It intended to go to ballot in 2004, and after delays did so in 2008. HSR is scheduled to break ground later this year, assuming the state does not cancel the project. An HSR project for which planning starts now will start construction after the economy recovers not from this recession, but from the next one.
The recurrent theme in the article is the state’s preference for mundane over flashy projects, but rejecting HSR shows the exact opposite.Starting planning now costs very little. In fact, the best thing any state agency can do is keep planning multiple big-ticket project contingencies pending an infusion of money; this way, it can dust off plans and execute them faster if there’s a stimulus bill in the next recession. That’s long-term planning. Refusing to advance construction because it won’t start until long after Cuomo’s Presidential run in
2006 2016 isn’t.
Of course, the same goes in the other direction. Too many people, building on Keynesian stimulus ideas, want massive infrastructure spending now as a public works program. For example, Robert Cruickshank (and in comments, Bruce McF) argues for long-term benefits coming from the stimulus effect. Although construction in 2012-3 would have an impact, a multi-decade project spanning periods of both growth and recession should not rely on estimates of job creation solely from periods of recession. On the contrary, economic costs and benefits should be based on a long-term multi-business cycle trend.
I propose the following principles for interaction between business cycles and very long-term investment:
1. Assume your project will be undertaken in a period of close to (but not quite) full employment, in terms of both funding sources and economic effects, unless you specifically intend to advance construction in a recession.
2. If you want to use a recession to lock in lower interest rates, higher job impacts, or lower construction costs, make sure you have a shovel-ready project, or else try to advocate for better staffing at the requisite regulatory agencies well ahead of time so that they can fast-track it.
3. Treat fiscal surpluses coming from an economy at full employment as one-time shots rather than an ongoing situation that can be used for regular spending or tax cuts. Growth doesn’t last forever, either.
Rep. Kevin McCarthy (R-Bakersfield) penned an op-ed defending his attempt to strip California high-speed rail of all funding. In the usual litany of complaints about the deficit, he referenced a 2008 study by Amtrak’s Office of Inspector General claiming that European passenger railroads lose money but keep those losses off-books. The study is fraudulent. It does not specify a methodology, which means it’s hard to pinpoint where exactly the numbers don’t match actual reality; however, some hints are provided by the following claim:
1. Public Funding to the Train Operating Companies may be accounted for as revenue, and
2. Public Funding to the Infrastructure Managers enables them to charge “user fees” to the Train Operating Companies that may be significantly lower than the actual infrastructure maintenance expenses.
Ad 1, it is not difficult to separate transport income from public funding. The balance sheets often state the source of income clearly. Most public funding comes from operating regional trains under contract, which SNCF and DB keep separate from their core intercity business, which is profitable. A minority of public funding is subsidies for social services, for example state-mandated discounts to active-duty troops, the elderly, and the unemployed; a libertarian would instantly recognize such mandates as taxes and deduct them from the subsidies. See for example page 30 of SNCF’s books, which clearly shows the majority of public funding (not counting RFF, which is nominally private) is from local sources, for operating commuter rail.
It is true that regional rail is heavily subsidized in Europe, but the same is true in the US. But in the US there’s far less national railroad involvement in commuter rail than in Europe, so comparing Amtrak to every train that has an SNCF logo is disingenuous. Worse, the study picks and chooses which Amtrak trains to compare European trains to: it ignores the long-distance trains, and in one figure (p. 13) only compares the Northeast Corridor to European networks and ignores the state-supported corridors, organizationally the closest thing to the TER or DB Regio in the US.
Ad 2, the choice of how to set the track access fees is a political one, and often the political choice is to set the access fees high. In France, in anticipation of open access RFF has recently raised tolls to far above track maintenance costs, effectively moving all French rail profits from SNCF to RFF and preventing competing companies from making a profit on the popular Paris-Lyon segment. Even in 2006, the toll on Paris-Lyon was €14.60 per train-km, the highest of all European lines although, because it has the most traffic, its maintenance cost should be the lowest per train-km.
A 2008 study of the costs and benefits of HSR in Europe published by the OECD and International Transport Forum finds that the maintenance costs per single-track-km in Europe average €30,000. This is €82 per single-track-km per day; to find the appropriate cost per train-km, divide by the number of daily trains in each direction. The LGV Sud-Est’s 2006 tolls would cover that average maintenance cost in just six daily runs; maximum frequency on the line is ten trains per direction per hour. Of the five or six lines on the list of rail links and their tolls that are HSR, the average toll is €10 per train-km. Of course this excludes depreciation and interest, but at least on the LGV Sud-Est, depreciation is quite low since the line was cheap to construct, and the construction bonds have already been paid. SNCF’s complaint that it’s being milked by tolls far above maintenance costs seems correct.
Of course, RFF’s books are more than just maintenance costs. They’re also debt accumulated by SNCF when it was run far less efficiently than today. Much like with JNR, this debt may have to be absorbed by the state, leading to predictable claims of subsidies. In reality, all this would do would be retroactively subsidize losses from decades ago. This is exactly what happened with JNR: the state absorbed the debt coming from operating losses, but required the JR companies to take over the Shinkansen construction debt, see pp. 46 and 88 of this document on privatization.
That this study has been picked up by Heritage, Reason (p. 7), and others as evidence that high-speed rail will lose money is not surprising – those organizations are paid by industry groups including the Koch Brothers and Reason spreads disinformation about trains – but for Amtrak to mislead the people who are footing its bill is inexcusable. It is probably not a matter of incompetence. Amtrak’s claim that every railroad in the world receives public funds is very unlikely to be an honest mistake. Claiming that Japan absorbed Shinkansen debt could be an honest mistake – I only found the aforementioned privatization document while looking for sources for my privatization post. But claiming that SNCF keeps public funding hidden from view when in fact it clearly states it receives regional funding for regional rail requires actively searching for reasons to tar SNCF. The alternative possibility that Amtrak included commuter rail in the calculation merely turns Amtrak’s claim from an outright lie to intentional misleading.
Amtrak’s Office of the Inspector General most likely knows what it’s doing. Nominally it’s independent of Amtrak, but if Amtrak dies, it will have nobody to supervise. Amtrak is losing money when its peer first-world railroads make money, it’s under siege by Republicans who point to those losses as a reason to private and dismember it, and it has no intention of reforming. The only way out of this conundrum is to defraud the public about peer first-world railroad practices, and I believe that this is exactly what the OIG did here. Amtrak’s existing services are sufficiently well-patronized that they have special interests behind them; therefore, feeding Reason’s propaganda is not an existential threat. But House Transportation Committee Chair John Mica’s calls for fundamental change could resonate with Republicans and moderate Democrats, and this could mean the end of Amtrak. It’s rational to lie to the public that it’s impossible to do better.
What is not rational is public acceptance of this. Heads should have rolled about this document. All involved should have resigned or been fired. Mica should have suspected shenanigans and invited both the authors of the study and officials from SNCF and DB for a hearing. Amtrak proper of course embraces the results and continues along its merry way, but I expect no better from it anymore. What I do expect is that the public in general and rail advocates in particular will be as livid as I am about being defrauded.
The MTA produced an alternatives analysis for transit service on the North Shore of Staten Island. The study contains zingers and various factors making the cost many times higher than it should be, but the agency response to all comments is Decide, Announce, Defend. Commenter Ajedrez reports from a public meeting on the subject on Second Avenue Sagas:
I went for part of the meeting (from about 18:30 to 19:45), and this is a rundown of what happened:
* They discussed the updates from the last meeting. They eliminated the ferry option (that didn’t even make sense), and they eliminated the heavy rail option.
* The people were given the opportunity to ask questions and make comments. This one woman (the same woman from last time) ranted on and on about something historical at Richmond Terrace/Alaska Street that would be destroyed if they paved over it.
Then a few more people made some comments, and I asked why they eliminated the heavy rail option (for those of you who are wondering, I was the kid in the yellow jacket and blue/black striped shirt. Then again, I was the only kid in the room)
* Then we went to the back to talk with the people from the consulting firm. I discussed the heavy rail more in depth, and asked why it was needed if the West Shore Light Rail would supposedly cover the Teleport. I then made a couple of suggestions for the short-term (reverse-peak S98 service, my S93 extension, cutting back more S46s to Forest Avenue) and I gave them the name of a person at the MTA who they could contact.
To elaborate on my statement about heavy rail, they said that they took it completely off the table. It just amazed me that they originally had a ferry line as one of the options, but they didn’t even have heavy rail as an option south of Arlington.
Let me think, you have an abandoned rail line (and a heavy rail line at that), and you want to put a ferry line there. What sense does that make? I could understand maybe having the ferry supplement the rail line, but doing that would have the whole thing go to waste.
I said that the current SIR is heavy rail and the South Shore is more auto-oriented than the North Shore. And I said that it provides better integration with the current SIR (they said they could put light rail in the Clifton Yard, but it’s probably automatically cheaper if you don’t have to retrofit the yard). And I also said that there’s higher capacity than light rail, so in case there’s growth, it is better equipped to handle it
So they said “Well, it was too expensive (because one of the goals was to serve the Teleport) so we didn’t even consider it.” And then they said that SI doesn’t have Brooklyn-type density to support heavy rail (but somehow the South Shore does?). And if you limit it to light rail, you’re actually limiting SI’s growth potential. Think about it: before 1900, Brooklyn had some streetcar lines, but not a whole lot of ridership. When the subway was extended, the population exploded. But if they just extended some streetcar lines from Brooklyn to Manhattan, the population would be nowhere near the 2.5 million it has today.
And then they said “Oh, well during the last meetings (which I attended, so I know they’re not being completely truthful) people expressed a sentiment for light rail”. They didn’t. They expressed a sentiment against a busway, There’s a difference. They didn’t say “Oh, it shouldn’t be heavy rail”. They just said they want rail rather than buses.
I mean, the argument I should’ve made (besides the ones I already did) was the fact that there was heavy rail there before, and the population was smaller back then. I think it’s pretty obvious.
And when I made that statement, everybody was surprised at how young I was (16). One woman said “You should be the one studying this project”, and they actually tried to avoid responding to me (they were like “Thank you. Next question”, and then everybody said “But you didn’t answer his question”, and that’s when they made up the response about expenses)
Besides the wretched DAD attitude, the cost projections and the route choice doesn’t even make sense. The proposal is to use the abandoned B&O right-of-way along the North Shore, from St. George to Arlington, and then cut over to South Avenue and serve West Shore Plaza. Here is satellite imagery of South Avenue: observe that it is almost completely empty.
Here we have a line that consists of 8.5 kilometers of abandoned trackage, which can be restored for service remarkably cheaply, and 5.5 of an on-street segment, which tends to be much more expensive to construct. Compare the costs of regional rail restoration in Germany or Ottawa’s O-Train with those of French LRT lines (including Lyon’s cheaper line). In addition, the areas along the abandoned trackage are of moderate density by non-New York standards, while those along South Avenue aren’t even suburban. And yet, the MTA is convinced that the per-km cost of an option that terminates at Arlington is higher than that of an option that goes to West Shore Plaza ($56 million/km vs. $41/km).
While the cost range proposed is only moderately high for light rail – the French average is a little less than $40 million/km – this is misleading because of the nature of the lines. French tramways tend to be on-street, involving extensive street reconstruction. Sometimes they need a new right-of-way along a boulevard or a highway. In contrast, the North Shore Branch is a mostly intact rail right-of-way, which means that the land grading and the structures, the most expensive parts of any rail project, are already in place. It shouldn’t cost like a normal light rail project; it should cost a fraction.
On top of this, to inflate the cost, the MTA is talking about a train maintenance shop. It says a light rail option allows merely modifying the maintenance shop for the Staten Island Railway. Not mentioned is the fact that SIR-compatible heavy rail would allow the trains to be maintained in the same shops without modification, to say nothing of leveraging New York City Transit’s bulk buying to obtain cheaper rolling stock.
The O-Train’s cost – C$21 million for 8 km of route – included three three-car DMUs, piggybacking on a large Deutsche Bahn order; judging by the cost of a more recent expansion order from Alstom, a large majority of the original $21 million was rolling stock. New York should be able to obtain cheaper trains, using its pricing power and sharing spares with the SIR. The electrification costs would add just a little: electrification can be done for €1 million per route-km, and in high-cost Britain it can be done for £550,000-650,000 per track-km (p. 10).
For an order of magnitude estimate of the cost of a well-designed SIR-compatible North Shore Branch, we have, quoting my own comment on SAS:
For an order-of-magnitude estimate of what’s needed, figure $20 million for electrification, $5 million for high-platform stations, and $25 million for six two-car trains plus a single spare. Go much higher and it’s not a transportation project, but welfare for contractors.
In retrospect would add about $10-20 million for trackwork, since the line is abandoned. On the other hand, fewer trains could be used: I was assuming 10-minute headways and a 25-minute travel time to Port Ivory; with 15-minute headways and a travel time under 17.5 minutes to Arlington, which is realistic given subway speeds (the MTA study says 15), only three trains plus a spare would be required.
On a related note, the loading gauge excluding station platform edges should be rebuilt to mainline standards, to allow future regional rail service to replace the SIR. Eventually Staten Island is going to need a long tunnel to Manhattan or Brooklyn if it’s to look like an integral part of the city, and once such a tunnel is built, it might as well be used to provide RER-style service across the city.
In contrast, the MTA proposal has no concern for cost cutting, and looks like lip service to the community. It’ll be an especial tragedy if the line is permanently ripped up to make room for a busway, which will likely underperform and turn into a highway. The contractors are going to get well paid no matter what: the busway is cheaper, but not by an order of magnitude. It’s just the riders who will not have good transit on Staten Island’s North Shore.
The political transit bloggers are talking about the new RPA/America 2050 report on high-speed rail published by the Lincoln Institute, which recommends a focus on the Northeast and California. Unfortunately, this is not an accurate description of the report. Although it does indeed propose to start with the Northeast and California, that’s not the focus of the report; instead, the focus is to argue that HSR is everything its boosters claim it is and then some more, and demand more money for HSR, from whatever source.
Look more closely at the section proposing to focus on New York and California. Although the authors say the US should prioritize, minimal argument was offered for why these are the best options. The report shows the map from the RPA’s study on the subject, which proposes a few other priorities and isn’t that good to begin with (it grades cities on connecting transit based on which modes they have, not how much they’re used). But it says nothing more; I’d have been interested to hear about metro area distribution questions as discussed on pages 113-5 in Reinhard Clever’s thesis and pp. 10-11 of his presentation on the same topic, and alignment and regional rail integration questions such as those discussed by the much superior Siemens Midwest study, but nothing like that appears in this report.
The report then pivots to the need to come up with $40 billion for California and $100 billion for the Northeast Corridor, under either the RPA’s gold-plated plan or Amtrak’s equally stupid Vision. The RPA first came up with the idea of spending multiple billions on brand new tunnels under Philadelphia, which was then copied by the Vision, and wants trains to go through Long Island to New Haven through an undersea tunnel. Clearly, cost-effectiveness is not the goal. Since the methodology of finding the best routes is based on ridership per km, offering a gold-plated plan is the equivalent of trying to connect much longer distances without a corresponding increase in ridership, which goes against the original purpose of the RPA study.
Together with the neglect of corridors that scored high on the RPA’s study but have not had official high-speed rail proposals costing in the tens of billions (the SNCF proposal and the above-mentioned Siemens report are neither official nor affiliated with the RPA), the conclusion is not favorable. The most charitable explanation is that the RPA was looking for an official vehicle to peddle its own Northeast HSR plan but actually believes it has merit. The least charitable is that the RPA wants to see spending on HSR megaprojects regardless of cost-effectiveness.
The treatment of other issues surrounding HSR is in line with a booster mentality, in which more is always better. Discussing station placement, the report talks about the development benefits that come from downtown stations and the lack of benefit coming from exurban stations, as nearly all stations on LGVs are. It does not talk about the tradeoff in costs and benefits; others have done so, for example the chief engineer of Britain’s High Speed 2, who also talks about other interesting tradeoffs such as speed versus capacity versus reliability, but the report prefers to just boost the most expensive plan.
More specifically, the report contrasts CBD stations, suburban stations, and exurban stations. In reality, many stations are outside the CBD but still in the urban core with good transit connections, such as Shin-Osaka, Lyon Part-Dieu, and 30th Street Station, but those are implicitly lumped with beet field stations. This helps make spending billions on tunnels through Philadelphia, as both the RPA and Amtrak propose, look prudent, when in reality both Japan and France are happy to avoid urban tunneling and instead build major city stations in conveniently urban neighborhoods. In fact, Japan’s own boosters and lobbyists crow about the development around such stations.
In line with either view of the report’s purpose, the literature it studies is partial. Discussing the effect of HSR on development, it quotes a study about the positive effect of HSR on small towns in Germany on the Cologne-Frankfurt line, but not other studies done in other countries. For example, in Japan, the effect of the Shinkansen on the Tohoku and Joetsu regions was decidedly mixed. The report also quotes the positive story of Lille’s TGV-fueled redevelopment, which was not replicated anywhere else in France, where cities just passively waited for infrastructure to rescue them. But instead of talking about Lille’s program of redevelopment, the report contrasts it with failed development cases in cities with exurban stations, never mind that no city achieved what Lille did, even ones with downtown stations, like Marseille. It’s not quite a Reason-grade lie, but it’s still very misleading.
Finally, the section about how to fund the $100 billion Northeast system and California’s $43 billion starter line has suggestions that are so outlandish they defy all explanation. The authors propose the following:
1. Raise the gas tax by 15 cents a gallon or more. Several cents could be devoted to passenger rail.
2. Add a $1 surcharge on current passenger rail tickets to produce approximately $29 million annually.
3. Shift from a national gas tax to a percentage tax on crude oil and imported refined petroleum products. RAND estimated that an oil tax of 17 percent would generate approximately $83 billion a year. Five billion dollars of this amount could be dedicated to passenger rail.
Of these, proposal #2 is by far the stupidest. Amtrak receives subsidies; to tax tickets is to propose shifting some change from the left pocket to the right pocket. Why not go ahead and propose to reduce Amtrak’s subsidy by the same amount and require it to raise fares or improve efficiency?
But proposals #1 and 3 are equally bad. Wedding train funding to a steady stream of gas taxes has been the status quo for decades; the result is that APTA is so used to this unholy marriage that it opposed a climate change bill that would tax gas without diverting the funds back to transportation. (That by itself should be reason for good transit advocates to dismiss APTA as a hostile organization, just one degree less malevolent than Reason and Cato and one degree less obstructionist than the FRA.) And if it were a wise long-term choice, if it were politically feasible to add to the gas tax just to build competing trains, the US political climate would look dramatically different, and instead of talking about focus, we’d be talking about how to extend the under-construction Florida HSR line.
A report that was serious about a mode shift from cars to cleaner forms of transportation would not talk about 15 cents per gallon; it would talk in terms of multiple dollars per gallon, as gas is taxed in Europe and high-income Asia. The best explanation I can think of for the funding mechanisms is that the RPA has internalized the tax-as-user-fee model of ground transportation, one that has never worked for cars despite the AAA’s pretense otherwise and that won’t work for anything else.
The overall tone of the report slightly reminds me of Thomas MacDonald’s Highway Education Board, with its industry-sponsored “How Good Roads Help the Religious Life of My Community” essay contests. It reminds me of Thomas Friedman’s “win, win, win, win, win” columns even more – which is unsurprising since I think of Friedman as the archetypal booster – but when this boosterism applies not to a policy preference but to spending very large amounts of public money, I begin to suspect that it’s advertising rather than optimism. Friedman for all his faults crows about American and Indian entrepreneurs inventing new things rather than about extracting $100 billion from the Northeast to pay for unnecessary greenfield tunneling.
Therefore, good transit activists should dismiss this report, and avoid quoting it as evidence that prioritizing is necessary. This was not what the RPA was preaching back when it thought it could get away with proposing more, and the rest of the report is so shoddy it’s not a reliable source of analysis. There may be other reasons to focus on those corridors, but the RPA did not argue them much, instead preferring to literally go for big bucks.
Jarrett points us to a just-published paper in World Transit Research that contends that Paris’s new T3 light rail line caused traffic congestion on the adjacent freeway, the Boulevard Périphérique, to increase, thereby causing a net increase in environmental damage and a negative social rate of return. Reading it at its original source requires academic access; here is a mirror on this blog, and thanks to ant6n for sending it. The study does not produce much evidence that an increase in traffic congestion indeed happened. As Angus Grieve-Smith explains in the comments on Human Transit:
It’s important to note that the authors did not measure traffic on the Périph. They just observed that average speeds on the highway declined from 45.9 km/h to 43.5 km/h, and that “many witnesses of the public hearing on the extension of the tramway to Porte de la Chapelle testified their fears to see an analogous shift increasing the congestion on Eastern Périphérique.” In other words, bullshit.
The fact is that a large portion of the traffic on the Périph is going from one side of the city to the other. If some of the drivers on the Maréchaux transfered to the Périph, increasing congestion there, some of the drivers on the Périph would take commuter trains across town instead. Some of the drivers would find it more convenient to take the metro instead of the tramway, or to drive an alternate route that doesn´t involve the Périph, possibly one of the parallel boulevards closer to the center of the city.
The study spends very little time arguing that an increase in traffic happened. It almost takes it for granted. The evidence it provides is that the average speed on the entire Périphérique went down 5%, from 45.9 to 43.5 km/h, whereas the average speed on the southern segment, which parallels the T3 line, went down 10%, from 37.9 to 33.9 km/h.
Instead of arguing that the reduction in speed represents extra traffic coming from the lanes removed to make room for the T3, the study assumes that 100% of the reduction in traffic on the Maréchaux, the boulevard on which the T3 runs, was transferred to the Périphérique. This is unlikely: the phenomenon of reduced demand is attested in the literature – see references here. Traffic shifts to less congested times of day, and sometimes disappears entirely as drivers choose not to take the trip. For one example, when the West Side Highway collapsed, about half its traffic disappeared; this percentage is high, presumably because Manhattan has good transit options, just like Paris.
It’s in fact worse than Angus says. Although the paper provides traffic counts on the Maréchaux, it provides no such counts for the Périphérique, although such counts should be very easy to find. Its computation of the traffic increase on the Périphérique comes entirely from prior assumptions about the traffic that disappeared from the Maréchaux. Another, more minor sleight of hand is the choice of years. For the Maréchaux, the paper argues for comparing present traffic to traffic in 2003, just before the tram’s construction began; for the Périphérique, the numbers provided use 2000 as a baseline.
Most of the paper’s effort is spent not on trying to prove that traffic increased, but on computing the social costs and benefits under questionable assumptions. Doing that is difficult to say the least without knowing more about the nature of traffic on the Périphérique, and the study makes even more questionable assumptions there. To be fair, the biggest smoking guns do not concern the social cost that according to the study is by far the highest, slower traffic speeds; those follow from the assumptions. Instead, they serve to showcase a careless and even biased thought process.
First, the difference in carbon emissions between free-flowing traffic at 38 km/h and 34 km/h is small; what causes fuel consumption to rise in traffic jams is not lower average speed but rather stop-and-go traffic. Thus, even a first-order estimate of extra fuel consumption is impossible given the study’s numbers and assumptions. Fortunately for the study, the carbon cost it uses is so low (€25/ton) and the overall effect posited not large enough that the overall magnitude posited is negligible.
Second, in its computation of economic costs, the study makes the following observation about the project’s cost:
Available information on the monetary costs associated with the project is scarce. One has only the ex ante costs envisioned in the official preliminary Public Inquiry: 341.8M€ for the initial investment and 43.9M€ for the exploitation of the tramway. Experience suggests that ex post costs are likely to be appreciably higher (Flyvbjerg et al. 2002).
For the record, it took me all of three minutes to search on Railway Gazette and Google and find ex post costs amounting to €311.5 million. Worse, the paper says it chooses to use the original cost estimate for lack of other numbers, but then multiplies the original budget by 1.3, the standard factor for public projects in France. As far as I can tell, the reason for multiplying budgets by 1.3 is to cushion against small budget overruns, which could turn slightly beneficial projects into net liabilities; it’s a more honest way of including a contingency budget. In other words, the paper claims that costs probably ran over but its cost estimate for net benefit purposes assumes they didn’t, while in reality they didn’t run over while the paper assumes they did.
Aaron Renn has a post on New Geography pronouncing American high-speed rail dead. His reasoning: the stimulus spread the money around too much, Republican Governors rejected the HSR stimulus money, rail advocates have called 110 mph legacy lines high-speed rail, the FRA hobbles good passenger rail. All of those factors are true – though some cancel out, e.g. the 110 mph pretend-HSR lines in Wisconsin and Ohio were the first on the chopping block – but California HSR marches on.
Reading California HSR Blog gives an impression that the project is controversial, but in no real risk of disappearing. While some of the money from the canceled lines went to chaff, a lot went to California, which already has enough money to build a demonstration line in the Central Valley and is already looking at leveraging other money it will get to reach either Los Angeles or the Bay Area. Moreover, although the authority still carries over a lot of past incompetence, the current administration of Roelof van Ark is looking at alternatives to reduce costs, such as reducing the number and length of viaducts and even revisiting past alignment decisions. The adults are more firmly in charge today than a year and a half ago.
There’s still NIMBYism, particularly from Central Valley farmers and from suburbs on the San Francisco Peninsula, but the former is no big deal by the standards of what TGV construction has to go through, and the latter has simply led the authority to focus on connecting HSR track to Los Angeles first and use legacy track at slightly lower speed with much less local impact to get to San Francisco. Whether the project will ultimately have a useful starter line or remain a Bakersfield-Fresno-Merced shuttle depends on how much private funding it can attract, but Japan promised to fund 50% of the line, and the authority has had meetings with Spain and China. It’d be enough to do at least LA-Fresno, which is quite useful, if not as good as LA-Fresno-San Francisco.
Moreover, calling HSR dead on New Geography and saying it’s because Republican Governors rejected the money is ironic, in light of who owns the site. Aaron is interested in reform and efficiency; the same can’t be said of New Geography executive editor Joel Kotkin, an anti-urbanist so uninformed and desperate he blamed megacities for AIDS.
Kotkin may be just uninformed, but contributing editor Wendell Cox goes further: he and fellow Reason transportation hack Robert Poole wrote a report claiming, on flimsy evidence, that Florida’s high-speed rail line would have huge cost overruns and ridership shortfalls (a later report released by professional consultants said in fact the line would have been more profitable than expected). The report is a lie, and Rick Scott’s cancellation of the Florida HSR line, based on the report, involved additional lying to the court.
My explanation, hoisted from a comment I wrote on the subject on the Infrastructurist, responding to commenter Colin Prime:
1. The executive summary – i.e. what most people would read – says, “This report estimates that the cost to Florida taxpayers could be $3 billion more than currently projected.” As it turns out, in the body of the report in the section on Flyvbjerg the report says $0.54-2.7 billion, with $1.2 billion as the likeliest. None of these lower figures appears in the executive summary. That alone suggests massive deception.
2. In fact, Flyvbjerg either talks about megaprojects in general or focuses on urban rail. HSR projects don’t run over budget frequently, and when they do, it’s not by 100%. In Norway, a 50% cost overrun on the HSR line to the airport (coming from geological problems) was considered so unusual it triggered a government investigation.
3. Here’s the report on California [the projected per-km cost of the Central Valley segment is much higher than that of the Florida line]: “The California segment is not being built to full high-speed rail standards, because of a legal requirement that the line be usable by conventional Amtrak services if the Los Angeles to San Francisco project is not completed. The line would be upgraded to full high-speed rail standards when and if the much longer route is completed.”
This is technically known as “a lie.” Making the line Amtrak-usable is actually a cost raiser rather than a cost saver, because Amtrak trains are heavier and therefore elevated structures would have to be beefed up. Otherwise the line is built to HSR standards in terms of the expensive bits, i.e. track geometry and physical infrastructure; the only component that may not be included in California in this round is electrification, which is a fraction of the total cost of HSR ($3 million per
milekilometer at Acela costs).
4. In general, of the 11 factors cited for California-Florida differences, the ones on which Florida would be more expensive than California are all small things like stations and electricity; the big items involve physical infrastructure, and there Florida would be cheaper.
5. To support the assertion that HSR can suffer from a ridership shortfall, the report mentions Eurostar and THSR. Unmentioned are the many TGV lines that exceeded projections. The report also makes a spurious comparison to the Acela; it even doubles-down on the Acela comparison, and uses a false comparison to make the Florida line look slow. Florida’s travel time is compared not with end-to-end travel time on the average fast train (an average of 80 mph on the Acela NY-DC, and 140 mph on the Sanyo Shinkansen) but with the fastest intermediate segment on the fastest train of the day, connecting two small cities (100 and 170, respectively). On top of it, the Acela is priced for premium travel, with coach travel provided by the 66 mph Regional.
6. To add insult to injury, Cox and Poole dismiss Florida’s tourism as such: “The metropolitan areas in both markets [NEC and Florida] have substantial tourist volumes.” In reality, the tourist volumes in Florida relative to the metro area size are much larger than in the Northeast, and the Florida line directly serves tourist attractions (airport to Disneyland) whereas the Acela does not (minimal airport service, premium brand).
Given the above issues the study, I’d say calling it a lie is fair.
High-speed rail has challenges, many correctly identified by Aaron. The FRA is an obstacle (though the people most interested in changing it tend to be good transit activists); spreading the money around was a problem. But right-wing populists who can’t govern soon become unpopular, and are thus an ephemeral phenomenon. Rick Scott’s approval rate is 27%, John Kasich‘s is 35%, Scott Walker‘s is 37%. And it’s deeply troubling to go on a website and say that high-speed rail is dead when one of the reasons it’s dead is shoddy or dishonest work done by another contributor to the same website.
Fortunately, in California, the real obstacle is so far not a huge deal (California is planning to run on dedicated tracks, or at least on tracks shared only with commuter trains), and the ephemeral obstacle lost the gubernatorial election. Money is a problem and so is incompetence, but the incompetence seems to be waning, albeit slowly, and the money is likely to materialize. Don’t count HSR out yet.