Edit post

Edit your reply below.

Post Body
Enter your post below.
[quote user="schlimm"] Re: sam1's postings on this thread and on the Russian HSR thread. Your post 10/29/2010:  “For example, the backers of the California High Speed Rail Project estimate the project will cost between $40 and $45 billion.  However, when the financial costs are factored into the cost structure, the cost of the project is likely to be in the neighborhood of $73.2 billion to $82.3 billion.”  Your quote from Samuelson 11/3/2010:  “California wants about $19 billion for an 800-mile track from Anaheim to San Francisco. Constructing all 13 corridors could easily approach $200 billion.”  [In fact, the total mileage for all 13 corridors is more than 800 miles] Your post 11/4/2010: “The projected cost of the California High Speed Rail Project (CHSRP), including weighted average financing charges, is approximately $206 million per mile.  This is the average construction cost per mile.  Clearly, construction costs in the metro areas to be served would be much greater than in the country.  These numbers assume the project comes in on time and within budget.  If it does, it will be a rare happening.”  Your post 11/5/2010:  "For simplicity purposes I assumed the project managers would borrow all the money on day one and would pay it back in 30 years.  Moreover, I assumed that it would make monthly payments on the debt, either to the bond holders or to a sinking fund.  Accordingly, the monthly payment on $42.6 billion would be approximately $215.8 million.  Multiplying this by 360 months (30 years) shows a cost of $77.7 billion.  And dividing this by 378 miles, which is the estimated project distance from Anaheim to San Francisco, shows an average cost of approximately $205.5 million per mile or rounded up to $206 million per mile." These posts are confusing and even contradictory, in terms of the figures and how they are calculated. <div style="clear:both;"></div> [/quote] You have mixed Samuelson's comments with mine.  I was not attesting to the validity of Samuelson's argument; I simply posted it to generate discussion.  Obviously, it has.  Frankly, I love to stir the pot.  <o:p></o:p> Embedding the financing costs into the estimated cost of a capital project is a straight forward financial calculation.  There is nothing magical about it if one understands the methodology.    <o:p></o:p> My point is straight forward.  The estimated cost of the project, based on the assumptions that I rolled into the calculations, is approximately $77.7 billion, which is considerably more than the CHSRP Authority’s estimate of $42.6 billion.  As I stated, the outcomes of the calculations could be off by as much as 25 per cent, given that the estimates require certain assumptions that may or may not hold true.  <o:p></o:p> Samuelson and I agree on one point.  The cost of high speed rail is very high, especially if it has to be built from scratch.  Moreover, as I said, I don’t know how much it would cost to expand the highway capacity in <st1:state w:st="on">California</st1:state>, but I did offer comparative numbers for <st1:place w:st="on"><st1:state w:st="on">Texas</st1:state></st1:place>.  And I offered supportable numbers for NextGen.  Frankly, there is nothing confusing about these numbers.
Tags (Optional)
Tags are keywords that get attached to your post. They are used to categorize your submission and make it easier to search for. To add tags to your post type a tag into the box below and click the "Add Tag" button.
Add Tag