High-Speed Rail: Going Nowhere Fast

David Freddeso has an excellent analysis of the pitfalls of high-speed rail at the National Review. As usual, the Obama administration is promoting the rail system with all the flair of high-minded rhetoric and viritually ignoring the costs of building the system. But, as Freddeso points out, any high-speed rail system is going to be very, very expensive while generating very little net social gain.

It sounds lovely, but before you go to sleep with visions of bullet trains dancing in your head, it’s worth examining the numbers more closely. Any real-life high-speed rail system on the scale Obama is promising would be vastly more expensive than the $13 billion he has committed; in fact, it would require close to half of the $787 billion contained in his recently passed stimulus package.

We know this because high-speed rail systems in other nations were not built, and are not operated, anywhere near so cheaply as Obama suggests. In the past decade, Taiwan built a single 215-mile high-speed passenger route for $15 billion. Germany, France, and Italy, often cited as advanced railroad nations, subsidize their rail systems heavily: Between 1995 and 2003, Germany spent $104 billion on subsidies, France spent $75 billion, and Italy spent $64 billion, according to a 2008 study by Amtrak’s inspector general. Rail ridership in Europe far outpaces that in the U.S., but in spite of these huge subsidies, trains have lost a significant portion of their market share to automobiles and planes since 1980.

High-speed rail in the U.S. really won’t be high-speed anyway. Top speeds are likely to reach just 110 mph, significantly below standards in Europe and Asia. This means most trains still won’t be competitive airlines. It also means we are substituting a highly subsidized form of transportation (rail) for a mode that has very low, if any, public subsidies (air).

Reason Foundation has published some of the most current analysis of high-speed rail, and the study can be found here.

Serious rail analysts should also take a thorough look at Randal O’Toole’s study for the Cato Institute. That policy study can be found here.

What makes high-speed rail attractive, at first, is the potential for a truly high-speed rail service to become self-supporting. Yet, it’s difficult to see this level of service ever being acheived. An analysis of the Ohio high-speed rail corridor found that a number of assumptions had to be made for the system to cover its just the operating costs, including,

  • All or nothing build out. The success of the system depended critically on interconnectedness among major cities in the Midwest–Chicago, Cleveland, Detroit, Columbus, Buffalo, etc. This interconnectedness accounted for more than a third of projected ridership.
  • Achieving speeds of at least 110 mph. Speeds lower than this would not attract ridership sufficient to make the rail corridor worthwhile.
  • Federal funding of all capital costs. Revenues from the use of the high speed system would not be sufficient to cover the costs under any circumstances.
  • Using public private partnerships to keep costs in check.

Notably, the Ohio study found that the economic impacts were in fact modest. The primary benefits would be felt by the users of the system, not the neighborhoods surrounding the train stations or the statewide economy.

Environmental benefits, particularly in terms of congestin relief and air quality, are barely even worth mentioning. Not enough travelers are diverted from roads and airplanes to make a difference.

Any way this project is sliced, it’s risky. You may not get that from the rhetoric, but it doesn’t take long to burrow down into the evaluations and analysis of these projects to find it.