Saturday, April 27, 2013

A High-speed Fiscal Train Wreck

Governor Brown, frantic to secure a lasting political legacy, is intent on building a bridge to the nineteenth century—even if it takes Chinese financing to do it.

On his recent trip to the communist country, Brown gushed with enthusiasm about all the building that other one-party state had done—especially the 5000-plus miles of high-speed rail it has laid in the last five years. Said the governor, “When I get back to California, the bulldozers are going to roll.”

What really ought to roll are political heads that pushed this hundred-billion dollar (or more) high-speed choo-choo. The governor, however, ignored China’s infamous find-a-scapegoat political tradition along with the 2011 Wenzhou train wreck that cost 40 passengers their lives and caused the commies to dial back rail speeds to 190 mph.

A recent analysis of California’s bullet boondoggle by the Reason Foundation reaffirms the group’s 2008 findings about the project’s costs, financing, and ridership—findings that show the California High-Speed Rail Authority’s business plans have been “inaccurate, misleading and in violation of the laws guiding the project.”

One such violation is the statute that requires the train to link L.A. to San Francisco in 2 hours and 40 minutes or less. Reason’s study, which takes into account reduced speeds due to tracks shared with other trains, including freight trains, puts the time at around four hours or longer.

Slower speeds mean fewer riders and higher costs. Even CHSRA’s ridership estimate has been dramatically reduced from a minimum of 65.5 million in 2035 to a maximum of 31.8 million and a minimum of 19.6 million. (Decimal points are obviously added to give the false impression of precision.)

Reason’s study, however, notes that even if the train reaches ridership levels in Europe, the number of passengers would only hit 7.6 million. Thus, ticket prices that were first projected at $50 in 2008 and are now put at $81 will go even higher. As prices increase, ridership will decline further.

Given these scenarios, the Reason Foundation estimates the annual subsidy for this white elephant on wheels will be anywhere from 124 to 373 million dollars.

Perhaps the governor can use his political charm to persuade the Chinese to cover some of the exploding costs for his bullet dream by giving them naming rights. CHSRA would doubtless love to market an exotic ride from Merced to Bakersfield on the Orient Express.

Or maybe Brown plans to import non-union Chinese workers to construct and ride his high-speed legacy.

Failing those fanciful options, what California taxpayers will be facing for decades to come is a high-speed fiscal train wreck.

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