Tax Payer Funded High Speed Rail Does Not Seem To Work

See Subsidy Trains to Nowhere: Can we sell you a ticket to Borden? It only costs $4.15 billion. From the WSJ, 12-11/12-10, page A14.

"The problem is that high-speed rail systems almost always run over budget and end up heavily subsidized. Only two segments of two such railways in the world, in France and Japan, have broken even, and they are in high-density areas—not running across sprawling California."

"The Golden State rail authority's failure to disclose the project's significant risks are troubling. Five months before the initiative passed, the consulting firm Infrastructure Management Group told the authority that companies wouldn't operate the railway without a revenue guarantee—a subsidy—because the ridership projections were too risky. The authority failed to produce an investment-grade business plan before the initiative was put to voters, and it still hasn't produced a credible economic plan. Maybe they don't have one."

"It now projects that ridership will reach 39 million passengers a year by its 10th year, down from that projection two years ago of 94 million. The experience of other high-speed rail systems suggests they'll be lucky if they get a quarter of that, and five million riders is more likely."

"The authority estimates a project cost of $42.6 billion, but a more realistic price tag would put the cost between $62 billion and $213 billion. It also predicts that one-way tickets for the two and a half hour ride from L.A. to San Francisco would cost $105 (up from $55), but the cost-per-mile in Europe and Japan suggests a ticket price closer to $190. Many would choose to fly."

"The authority also predicted 450,000 permanent jobs; that's twice the size of the state government's active work force."

"Unless the federal government provides $19 billion in seed money, the railway will never achieve a positive cash flow."