High-Speed Rail is Too Costly

With current budget challenges, High-Speed Rail is a luxury that the U.S. cannot afford

Discussions are resuming in the Southeast about a high-speed rail corridor. Unfortunately, the evidence suggests that high-speed rail’s limited success in Europe and Asia is not transferable to the U.S.

From a financial standpoint, things don’t look good. The majority of high-speed rail lines require large government subsidies from both general taxpayers and drivers. Even with generous subsidies, traveling by high-speed rail is still more expensive than flying for 12 of the 23 most popular high-speed rail routes in the world. Evidence suggests it can only be competitive on routes that are 200 to 500 miles in length.

High-speed rail is also very expensive to build. Most new routes cost at least $10 million per mile to construct. The cheapest European rail line costs more than $50,000 per seat to operate annually. A U.S. high-speed rail line would need ridership of 6 million to 9 million people per year to break even. The high-speed Acela service, despite operating in the busy Northeast Corridor, averages only 3.4 million passengers per year.

Advocates cite other advantages for high-speed rail, but most fall apart under close examination:

Environment: High-speed rail creates more pollution than it prevents because building a high-speed rail line is very energy-intensive.

Economic development: High-speed rail does not create much new development; it merely redirects development from one area to another.

Mobility: High-speed rail is unlikely to improve mobility since most of its potential passengers already travel by air.

Choice: Customers can already choose between a low-cost bus, a fast plane or a personalized car trip.

Most countries have built high-speed rail to relieve passenger overcrowding on their existing lines. The U.S. lacks this overcrowding, which suggests consumer demand for high-speed rail may not be there. Furthermore, freight rail dominates track usage, and railroad companies are reluctant to relinquish capacity, as is evident in the discussions surrounding the proposed multimodal passenger terminal in downtown Atlanta.

Any U.S. rail operator will have to compete on the same terms that cause Amtrak to lose large amounts of money each year. Railways are subject to outdated labor laws that were enacted when railroads did not face competition. Operating a passenger railroad in the existing regulatory environment is not a profitable proposition.

Our core cities, where people are most likely to board high-speed trains, are much less dense than European or Asian cities, which also limits the potential market.

The U.S. has far higher rates of car ownership than most other countries. Gas taxes are lower, road tolls are less common, and many cities – especially in the South and West – have grown up around the automobile.

As a result, high-speed rail is best regarded as a luxury this country cannot afford. For far less money, we could create a world-class highway and aviation system with first-rate bus and airplane service and far more flexibility.

Baruch Feigenbaum is transportation policy analyst at Reason Foundation and a senior fellow at the Georgia Public Policy Foundation. This article originally appeared in the Atlanta Journal-Constitution.