U.S. high-speed rail: Good for the environment, good for the pocketbook

On Tues. Jan. 6th on an industrial patch of downtown Fresno property before an assemblage of around 700 celebrants, a jubilant bunch, joined by a cohort of radio, television and newspaper reporters, local, state and federal luminaries, spoke highly optimistically of California’s fast train system, the event’s keynote speaker being none other than Jerry Brown, California’s visionary governor. The momentous ceremony was capped off with a symbolic “rail-signing” groundbreaking marking the official start of America’s first true high-speed rail endeavor.

Spanning much of the state – from San Francisco to Los Angeles initially and with later extensions to both San Diego and Sacramento – in all an 800-mile passenger train transportation corridor, building, operating and maintaining this railroad won’t be cheap. The cost to construct? An eleven-figure sum: $68.4 billion. Payments will extend over a 14-year period, that amount taking inflation into account.

Meanwhile, off to one side and within ear- and eye-shot of the attendant throng, protesters gathered, and in unison, no less, sounded a familiar rallying cry: “Water, not high-speed trains!” or something along these lines.

As for all who stand in opposition, many being fervent and steadfast critics, whose claims run the gamut: everything from Californians can ill-afford the train to it needing to be subsidized if it comes to fruition, I can assure you, that opposition could not be more wrong.

You all remember Amtrak, the nation’s passenger rail carrier. In “Trains as an effective emissions-calming mechanism: There is strength in numbers,” I wrote: “… on Amtrak’s 457-mile Northeast Corridor connecting Boston and Washington, D.C., between Boston and the Big Apple (New York City), Amtrak enjoys 55 percent of the air vs. rail market and on the section between the latter and D.C., Amtrak’s air-rail market share is 75 percent.” Meanwhile, in “Making the grade – Part 1: American infrastructure report card: Rails,” I mentioned an annual Amtrak operating budget of $1.3 billion. Moreover, in “Tiffs: Sidelined ‘n’ singin’ the single-track blues,” pointed out was the national rail carrier’s strong ridership and ridership growth – 31.2 million boardings in 2012; in 2013, 1.3 percent more added to this for 31.6 million riders in all. But, in the 2013-’14 fiscal year (which, for Amtrak, began Oct. 1, 2013), a goodly proportion of its trains had experienced considerable delay – the carrier achieving an overall on-time performance rating of just 74 percent. (See: “Tiffs: Freight train interference on shared-use trackage and what can be done about it”). All of which makes a strong case for American high-speed trains.

Not only do I contend the California project is worth it, it will operate without subsidy. By extension, there is ample justification for high-speed-train-networks on a national scale. Though the most compelling reason for their being, I feel, besides bringing benefits like reduced emissions and decreased wear-and-tear compared to their gasoline-powered, road-based vehicle counterparts, is economics-based: such rail systems very often pencil out. In fact, some are known to be profit-makers.

To help lend credence, I have performed a cost analysis however simplistic it may be.

Using the California high-speed train’s own ridership projections, the current number, according to the California High-Speed Rail Authority, being 29.6 million yearly – the bare minimum and considering its estimated cost to construct (which also covers employees’ salaries, the cost for the infrastructure for the entire Los Angeles-to-San Francisco section, and rolling stock – the sets of trains including the prototypes – on top of that), all over a 14-year time frame, easily in a hundred years’ time the system pays for itself.

With a one-way ticket fare of $86 L.A. to S.F. and $50 from say Fresno to L.A., even if the average one-way ticket price turns out to cost the average of the L.A.-S.F. and Fresno-L.A. tickets which, in this case, is $68, and even if no round-trip tickets are purchased, at 29.6 million annual riders, the revenue generated from those ticket sales is $2,012,800,000. Multiply that times 100 years, and what is earned over that long a haul is $201.28 billion.

Of course there are an estimated 3,000 permanent-workers’ salaries to consider. I estimate an average yearly employee salary of $40,000. Multiplying those two together the product is $120 million. Extend that out over a 100-year time span, and what we’re talking about is an operating budget just for salaries alone at $12 billion. Factor in additional costs for electricity purchases and on-board food and concessions, say, $20 million per year or over a century $2 billion, if you add all that up what you end up with is expenses to the tune of $14 billion. Add another $6 billion for “above-and-beyond” expenses and all told, this works out to $20 billion. Unless I have miscalculated, what this means is a $181.28 billion profit margin.

Subtract from that $68.4 billion (the cost of construction) and at the end of the day that means being $112.88 billion in the black.

The actual results will vary. Nevertheless, the economics are there.

Even better is that these 220-mile-per-hour trains will be affordable, comfortable, convenient, efficient, environmentally friendly, reliable, highly competitive with aviation services (and a far improvement over roadway travel), punctual to a fault with the kind of regularity one could set their watch by, a system that could quite possibly pay itself off in a century’s time (and, presumably, in less time than that), and on top of this nary a need for a government subsidy, and you know what?! Much as the trains will one day themselves wheel through super-elevated curves, the hardware that will carry them, it, too, is something that can be banked on.

With regard to all of the above, high-speed rail just might be one of America’s best “investments” going.

– Alan Kandel

2 thoughts on “U.S. high-speed rail: Good for the environment, good for the pocketbook”

  1. Perhaps you didn’t hear that the trains won’t be going 200mph for large portions of the track, or that the employees will Union with benefits that double your estimated salary costs, or that US Berkeley projects ridership to be at least 30 percent below estimates and the cost to be built to be double current estimates.

    The government subsidies have already begun, with money taken from cap and trade and the federal government. So far no private money has indicated it will touch this project, which is strange given your calculations, don’t you think?

    • I’ve made a calculation of what the per-mile cost would be if the overall cost is doubled: roughly $263 million. In comparison to a freeway, a line of railroad, capacity-wise, is equivalent to 16 freeway lanes. Assuming a per-mile freeway construction cost of $25 million, building 16 lanes over a total 520-mile distance works out to $13 billion. Doubling that to 32 lanes (capacity required to match that of a double-track railroad) raises freeway construction cost to $26 billion. Building a 32 lane freeway over a 520 mile distance is unrealistic. That said, existing roadways, railways and airways would need to pick up the passenger loads that the high-speed rail line could attract if built and operational. California population alone is projected (using a percentage growth rate of 1.05) to be 45 million by 2030, roughly the year California high-speed rail, L.A. to S.F. is expected to be up and running. I estimate 70 percent of ridership will be by Californians, the remaining 30 percent coming from elsewhere.

      Amtrak in the article above was mentioned to bring to light that even with a paltry yearly subsidy, year-over-year ridership growth has been tremendous. Japan’s Shinkansen network of bullet train lines sees 151 million passenger boardings yearly. Not all Amtrak trains run on lines exclusively dedicated to passenger trains. Even the higher-speed Northeast Corridor between Boston and Washington, D.C. Amtrak shares track space with commuter and freight trains which, no doubt, partly accounts for the 74 percent on-time performance rating.

      I believe private participation will surface in time. But first, significant forward progress must be evident. Moreover, downtown train stations will prompt private development around them as has been the case concerning light rail transit and other types of passenger rail stations – such is otherwise known as transit-oriented development. Moreover, second-tier cities such as what Fresno and Bakersfield will become will see advantages in being rail-connected with the Southern and Northern California coastal communities of Los Angeles and San Francisco, especially with the southland as Amtrak train service is non-existent between Bakersfield and Los Angeles. Instead, in its place, Amtrak Thruway buses are provided to bridge the Bakersfield-Southern California gap.

      220 mph speeds will be attained in the San Joaquin Valley between Kern and Madera and Merced counties initially. Of course there will be places where speeds will drop. Fresno is roughly 200 miles from Los Angeles. A non-stop train would be able to complete the trip in a little over an hour’s time. This makes high-speed train traveling highly competitive with air travel.

      My salary estimations may be low or they may be high. But there is no direct comparison. But, I figured the figure was a reasonable amount. When I worked for a railroad in 1989, my wage was $14.13 per hour for railroad construction work. That works out to $29,390.40 per year, absent overtime pay. Like I said, for comparable work in 2015 dollars, I figured the $40K yearly salary to be reasonable.

      Since, for my money, it is meeting travelers needs and at the same time to do this in the most environmentally sustainable way going, the high-speed train paradigm yields the biggest bang for the buck and it will be this way until something better technologically speaking comes along.

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