oltmannd Sam1In fact, there is a scant probability that the operators will even recover their operating expenses. No, in your opinion "there is a scant probability that the operators will even recover their operating expenses". There is no hard evidence that this is a fact. There are, in fact, some estimates in existence that say otherwise that you chose to disagree with by labeling them "promoters". They are based on at least a modicum of science, although, admittedly, they are an extrapolation. So, reality is that no one knows with much certainty what the results of any HSR project might be.
Sam1In fact, there is a scant probability that the operators will even recover their operating expenses.
No, in your opinion "there is a scant probability that the operators will even recover their operating expenses". There is no hard evidence that this is a fact.
There are, in fact, some estimates in existence that say otherwise that you chose to disagree with by labeling them "promoters". They are based on at least a modicum of science, although, admittedly, they are an extrapolation. So, reality is that no one knows with much certainty what the results of any HSR project might be.
The average fare on the NEC between New York and Washington is $105.80 or 46.8 cents per mile. The average fare between Boston and Washington is $137.90 or 30 cents per mile. The average fare between New York and Philadelphia is $84.55 or 92.5 cents per mile. Of course, the complete fare structure for the NEC would produce different results between any two fare points, but these are reasonably representative.
The average stated fare on the California High Speed Rail Line, according to the report on NPR by the Chairman of the California High Speed Rail Board, will be $55 or approximately 13.1 cents per mile. Unless the California HSR draws an enormous crowd, how it will cover its operating costs when Amtrak barely covers its operating costs on the NEC, except for the New York to Washington segment, mystifies me. This is why I think that high speed rail, as currently proposed, has scant chance of covering its operating cost. And it has practically no chance of covering the capital costs.
The investment in the NEC is in the neighborhood of $9.6 billion or an average of $21 million per mile. The proposed investment in the California High Speed Rail Project (HSR), which appears to be the poster child for high speed rail in America, will be north of $40 billion, if the project comes in on time and within budget, which is problematic. The estimated rail mileage is 420 miles. The cost to construct the system will be approximately $95.2 million per mile.
Scant means not quite coming up to a stated measure. It does not mean that high speed rail could not cover its operating expenses; it means that the probability of doing so, given the performance of high speed rail in other environments, is unlikely.
Business people invest in projects that have a reasonable chance of success. They don't know the future, but they have an array of tools to paint reasonable scenarios of whether the project is likely to succeed. In my company we demanded a lot more than just a modicum of science.
I am, however, open to new evidence. Please direct me to the authoritative references you claim but have not cited for the independently audited studies showing that high speed rail, as proposed, will cover its operating costs and contribute something to the capital investment. By independent audit I mean the numbers have been audited by a large, independent accounting firm, e.g. PricewaterhouseCoopers, KPMG, Deloitte, etc. that does not have a stake in the outcome.
Most perspectives are a function of opinions. Whether an investment in high speed rail is a good idea or a bad idea; whether it will cover its costs or won't, is an opinion. Opinions that are backed-up with verifiable, independently audit data carry more weight with me than those that lack the support.
OK, suppose intercity highways are for the most part maintenance-free were it not for the pounding from large vehicles, i.e. trucks. That would suggest that passenger cars are heavily cross-subsidizing trucks, which further suggests that passenger cars are more than paying their own way and then some, in contrast with the 20+ cents/passenger mile Amtrak subsidy.
Would not a more effective use of railroads be to free them of passenger trains so they could more effectively carry volumes of freight and remove truck traffic from the highways?
Are not passenger trains only marginally more fuel efficient than cars (current Amtrak) whereas freight railroads are multiples of the fuel efficiency of trucks, especially for the heavier commodities carried at lower speeds? Would not a more effective use of advocacy resources in solving problems of highway congestions, carbon emissions, energy independence to promote the use of railroads as freight carriers?
There are advantages in safety and traffic flow to segregating passenger from freight transport. Perhaps the emphasis is all wrong on building an entirely new network of passenger-only rail lines (i.e. HSR). Perhaps the emphasis should be on rubber tires on pavement as the primary ground passenger mode and on doing what it takes to get the freight traffic back on rails.
Would not a more effective use of railroads be to concentrate on removing the mass of trucks from the roads instead of making a marginal contribution of removing a slim fraction of the cars?
As to the impact of buses, buses carry 10 times the intercity traffic as Amtrak in the U.S., but I hardly ever see a bus on the Interstate, but I see truck after truck after truck. Perhaps the advocacy community is "barking up the wrong tree" as it were.
There are strong institutional reasons why getting trucks off the highways is a difficult proposition. Many men and women derive their livelihood from trucks. Railroad freight operations are so heavily "batched" that trucks offer the kind of "just-in-time" delivery and inventory control that may be impossible with the way railroads are structured.
On the other hand, freight has well-known intermodal solutions to solving the "last mile" problem apart from putting a freight siding at every last business concern. Containerization. Autos do not have as effective of an intermodal answer. AutoTrain? Mass parking at Amtrak terminals as at airports combined with a catch-as-catch-can as car rental, taxis, the thin network of local transit in many cities, or getting rides from friends? In other words, the freight intermodal problem has been "solved" by the Hyster Corporation container side-transfer gear -- Hyster is the company that introduced the world to the "Dumpster" (not a generic term but a trade name) of a ubiquitous transferable container material handling system for garbage.
Getting much of the intercity truck traffic off the Interstates has a technological solution in terms of containerization, if transportation policy were to embrace it. Getting more than a fraction of a percent of intercity autos off the highways has a much more expensive solution -- I guess it is HSR, that the speed of HSR would induce people to put up with the inconvenience of the intermodal interface to it, much as we put up with that inconvenience with air travel.
If GM "killed the electric car", what am I doing standing next to an EV-1, a half a block from the WSOR tracks?
Railway Man No one other than the trucking industry claims that trucks pay their own way. AASHTO does not. No reputable highway engineer claims this. Pavement damage varies as the 4th power of the axle loading. Axle loadings are measured using the ESAL, or Equivalent Single Axle Load, an empirically determined formula. An axle carrying 18,000 lbs. creates 3,000 times as much pavement wear as an axle carrying 2,000 lbs. See http://pavementinteractive.org/index.php?title=ESAL Now, if you want to make an economic argument that the fees, taxes, and economic activity created by trucks, subtracting the air emissions, congestion cost, delays to other vehicles, accident cost (heavy trucks are involved in one of every eight fatal accidents in the U.S.), are a net positive, and that no costs are externalized, be my guest. RWM
No one other than the trucking industry claims that trucks pay their own way. AASHTO does not. No reputable highway engineer claims this. Pavement damage varies as the 4th power of the axle loading. Axle loadings are measured using the ESAL, or Equivalent Single Axle Load, an empirically determined formula. An axle carrying 18,000 lbs. creates 3,000 times as much pavement wear as an axle carrying 2,000 lbs.
See http://pavementinteractive.org/index.php?title=ESAL
Now, if you want to make an economic argument that the fees, taxes, and economic activity created by trucks, subtracting the air emissions, congestion cost, delays to other vehicles, accident cost (heavy trucks are involved in one of every eight fatal accidents in the U.S.), are a net positive, and that no costs are externalized, be my guest.
RWM
You misread my posting. I said that trucks cause more damage to roads than passenger cars. So do most others with a knowledgable interest in transportation. The question is whether they pay their fair share of the incremental costs. There are studies that say they don't; there are also studies that say they do. And not all of them were produced by the trucking industry.
Your reference does not say anything about costs. It is basically an engineering discussion, which I appreciate more than you might imagine.
This is not even relevant to my original position, which is that the investment in most forms of transport infrastructure in the U.S. have been paid for by the users. The one exception is passenger rail, especially since 1971. And this is the basis of my skeptism regarding high speed rail.
I did?
Could you cite me the studies that say that trucking pays its fair share of the incremental costs that aren't produced by or paid for by the trucking industry, please. AASHTO says otherwise. Also, why do you want it to be incremental instead of fully allocated?
The statement "the investment in most forms of transport infrastructure have been paid for by the users" strikes me as broad. Are you referring only to the U.S.? What about water transportation? If I recall correctly, riverine transportation does not pay for but a fraction of its infrastructure. What about seaports? Are they all self-funded? That leaves what else ... buses, probably not; trucks, probably not; light rail and heavy rail, probably not; personal autos, probably yes; freight railways, probably yes; airlines, who knows. I can't add that up to "most" if we assign each mode a value of 1, but if we add up the total infrastructure investment made to date in discounted dollars, maybe it's a plurality. Would you be considering the lands withdrawn from the tax rolls for the streets in the accounting?
Railway Man I did? Could you cite me the studies that say that trucking pays its fair share of the incremental costs that aren't produced by or paid for by the trucking industry, please. AASHTO says otherwise. Also, why do you want it to be incremental instead of fully allocated? The statement "the investment in most forms of transport infrastructure have been paid for by the users" strikes me as broad. Are you referring only to the U.S.? What about water transportation? If I recall correctly, riverine transportation does not pay for but a fraction of its infrastructure. What about seaports? Are they all self-funded? That leaves what else ... buses, probably not; trucks, probably not; light rail and heavy rail, probably not; personal autos, probably yes; freight railways, probably yes; airlines, who knows. I can't add that up to "most" if we assign each mode a value of 1, but if we add up the total infrastructure investment made to date in discounted dollars, maybe it's a plurality. Would you be considering the lands withdrawn from the tax rolls for the streets in the accounting? RWM
This issue is whether investment in high speed rail is the best way to spend the stimulus grant. I don't think that it is. I would use it to improve regional rail in short, high density corridors where there is a good chance of recovering the operating costs and contributing something to the capital costs.
Citing investments in other transport infrastructure was meant to show that the costs could be recovered and, in fact, especially with respect to air and highway, have been. Given the poor financial performance of passenger trains, I don't think that they can recover their capital costs, especially high speed rail, although that is not the only criteria I would use for investment.
A discussion of trucks, in retrospect, is off topic. I said simply that there are studies pro and con with respect to whether they cover their fair costs. If your concerned about the veracity of the studies, I am sure that you can find them.
John Kneiling had long reasoned in Trains Magazine that railroads, properly run, would run trucks off the interstates and would run the barges and lake boats off the waterways. They would also see precious little in the way of passenger traffic apart from passenger trains operated as forms of entertainment. Not such a silly prophesy -- ocean going ships have effectively ceased being a means of transportation for anyone, but the cruise industry, essentially entertainment, is big business.
I agree with you that intercity trucking, from the government side, is a boondogle as is inland shipping. So keep those boondogles and raise you an HSR system?
The other piece of reasoning is that the government has a hand in running, regulating, or subsidizing near everything -- your self made man or woman may have gone to a public school or benefited from a government-built road or had one's life saved by government-funded medical research. As a result of this, there is no such thing as capitalism, individual initiative, profit motive (apart from profits enabled by government as a first mover or enabler), and we may as well subsidize something that a group of people want without any regard to economic efficiency. The government wastes so much money on the military, so what is a little bit more waste on HSR?
The one thing I have to say in defense of Sam, who hails from the electric power utility industry, and as an engineering educator, and electrical engineering educator I may add, the general view has always been is that the power company is where we place our graduates who cannot get work anywhere else. Sort of like the traditional role for railroads for my mechanical engineering and civil engineering colleagues. The power companies were (mostly) privately-own and highly regulated natural monopolies, and that the power companies had their rate base and their traditional ways of doing things and kind of clunked along was just the way all of the Econ 101 textbooks explained it had to be. Then came power deregulation. It had some spectacular stinkers (think Enron), but Sam tell us there has been a sea change in the efficiency, cost effectiveness, and dynamism of the power companies and the people working there.
Sam has essentially one idea -- that if the power companies can be transformed from a quasi-governmental system of guaranteed profits and guaranteed employement and all of the personal and institutional sluggishness that goes with that, maybe some policy changes can work the same kind of magic on railroads and on Amtrak.
There are a bunch of other people who claim that passenger trains are going to solve the congestion crisis, the oil imports crisis, the road rage crisis, and who knows, the social isolation crisis by having strangers chat in lounge cars. I suspect that a lot of the impetus is that for a lot of people, trains are a form of entertainment (so are cruise ships, but there is nothing frivolous about them, they are a large, profit-making business sector), but if they were simply entertainment, they would not justify the large infusions of money people want for them.
If trains are to be more than entertainment and to make meaningful contributions to the listed social problems, there needs to be some sea change in the railroad industry and especially the passenger train industry (Amtrak). It appears to be working for the power company, and you all should not rule out the same thing happening in the passenger train industry.
Sam1Railway Man I did? Could you cite me the studies that say that trucking pays its fair share of the incremental costs that aren't produced by or paid for by the trucking industry, please. AASHTO says otherwise. Also, why do you want it to be incremental instead of fully allocated? The statement "the investment in most forms of transport infrastructure have been paid for by the users" strikes me as broad. Are you referring only to the U.S.? What about water transportation? If I recall correctly, riverine transportation does not pay for but a fraction of its infrastructure. What about seaports? Are they all self-funded? That leaves what else ... buses, probably not; trucks, probably not; light rail and heavy rail, probably not; personal autos, probably yes; freight railways, probably yes; airlines, who knows. I can't add that up to "most" if we assign each mode a value of 1, but if we add up the total infrastructure investment made to date in discounted dollars, maybe it's a plurality. Would you be considering the lands withdrawn from the tax rolls for the streets in the accounting? RWM This issue is whether investment in high speed rail is the best way to spend the stimulus grant. I don't think that it is. I would use it to improve regional rail in short, high density corridors where there is a good chance of recovering the operating costs and contributing something to the capital costs. Citing investments in other transport infrastructure was meant to show that the costs could be recovered and, in fact, especially with respect to air and highway, have been. Given the poor financial performance of passenger trains, I don't think that they can recover their capital costs, especially high speed rail, although that is not the only criteria I would use for investment. A discussion of trucks, in retrospect, is off topic. I said simply that there are studies pro and con with respect to whether they cover their fair costs. If your concerned about the veracity of the studies, I am sure that you can find them.
OK, let's strike all that from the record and circle back to your point:
"This issue is whether investment in high speed rail is the best way to spend the stimulus grant. I don't think that it is. I would use it to improve regional rail in short, high density corridors where there is a good chance of recovering the operating costs and contributing something to the capital costs."
Behind that point I think there's a premise, which appears to me to be "recovery of operating cost and contribution to the capital cost is important [to the public]." My addition in brackets, since we need to have an agent of action.
Is it important? Value to the public often has nothing to do with tangible measures such as farebox recovery. I spend a great deal of my time over on the economic valuation side of the railway, on all sorts of projects ranging from public-private partnerships to alternative financing to simple value deals, and I'm continually intrigued (or perplexed, or confounded, or bemused) by what the public decides to value. The public frequently confirms the expenditure of billions on initiatives that have no economic rationale at all, and just as frequently walks away from deals that provide quanitifed, obvious, public cash benefits, for reasons that I can only ascribe to ideology or taste.
(Note: I'm not coming at this as an advocate of high-speed rail. Or an opponent. I have no partisan bones in this game. Whether the $8 billion is spent on high-speed or corridors, I personally, professionally, and as a citizen am pretty happy. In fact professionally I'll be much more in demand on the corridor side.)
In other words, I'm not sure your point is even worth arguing, because I'm not sure the premise is valid. It would seem a majority of the public didn't fall over in apoplexy over the $8 billion in stimulus funding. And I don't think the public expects this will somehow pay for itself someday either. So if the public likes the idea, and is aware of the basic economic outcomes and is not expecting some other outcome, is there even a problem? Perhaps the more interesting discussion is why the public would prefer $8 billion on HSR rather than on short high-density corridors.
Paul MilenkovicJohn Kneiling had long reasoned in Trains Magazine that railroads, properly run, would run trucks off the interstates and would run the barges and lake boats off the waterways. They would also see precious little in the way of passenger traffic apart from passenger trains operated as forms of entertainment. Not such a silly prophesy -- ocean going ships have effectively ceased being a means of transportation for anyone, but the cruise industry, essentially entertainment, is big business. I agree with you that intercity trucking, from the government side, is a boondogle as is inland shipping. So keep those boondogles and raise you an HSR system? The other piece of reasoning is that the government has a hand in running, regulating, or subsidizing near everything -- your self made man or woman may have gone to a public school or benefited from a government-built road or had one's life saved by government-funded medical research. As a result of this, there is no such thing as capitalism, individual initiative, profit motive (apart from profits enabled by government as a first mover or enabler), and we may as well subsidize something that a group of people want without any regard to economic efficiency. The government wastes so much money on the military, so what is a little bit more waste on HSR? The one thing I have to say in defense of Sam, who hails from the electric power utility industry, and as an engineering educator, and electrical engineering educator I may add, the general view has always been is that the power company is where we place our graduates who cannot get work anywhere else. Sort of like the traditional role for railroads for my mechanical engineering and civil engineering colleagues. The power companies were (mostly) privately-own and highly regulated natural monopolies, and that the power companies had their rate base and their traditional ways of doing things and kind of clunked along was just the way all of the Econ 101 textbooks explained it had to be. Then came power deregulation. It had some spectacular stinkers (think Enron), but Sam tell us there has been a sea change in the efficiency, cost effectiveness, and dynamism of the power companies and the people working there. Sam has essentially one idea -- that if the power companies can be transformed from a quasi-governmental system of guaranteed profits and guaranteed employement and all of the personal and institutional sluggishness that goes with that, maybe some policy changes can work the same kind of magic on railroads and on Amtrak. There are a bunch of other people who claim that passenger trains are going to solve the congestion crisis, the oil imports crisis, the road rage crisis, and who knows, the social isolation crisis by having strangers chat in lounge cars. I suspect that a lot of the impetus is that for a lot of people, trains are a form of entertainment (so are cruise ships, but there is nothing frivolous about them, they are a large, profit-making business sector), but if they were simply entertainment, they would not justify the large infusions of money people want for them. If trains are to be more than entertainment and to make meaningful contributions to the listed social problems, there needs to be some sea change in the railroad industry and especially the passenger train industry (Amtrak). It appears to be working for the power company, and you all should not rule out the same thing happening in the passenger train industry.
I think John Kneiling's predictions were contingent upon a few pesky details such as changes in things like labor law and a rather selective set of values not shared by the majority of the public, and I think that crippled his arguments into uselessness. In a democracy, the only thing that matters is the majority of the vote. It's entertaining to fume that a society is voting itself into the poorhouse, but they do have the right to do so. Plenty of societies have gone up against the wall.
I'm not saying I disagree with either you or Sam on your value systems. Nor in your objectives. I'm saying that an argument that posits that tangible ROI or economic efficiency of a public investment is the only objective worth measuring is probably not going to go anywhere useful. I don't think the public much cares about ROI or economic efficiency, and I think the public has a sophisticated method of ranking its choices that economists, pundits, and experts often don't get. Politicians usually get it very well, however. They're some of the smarter people I know.
I agree with your last paragraph. And, since I have no reason to think that Sam1's estimates of costs and ROIs are wrong, the question remains, "Why, then, have several other modern societies (nations) created and maintained HSRs, as well as excellent non-high-speed passenger rail systems?" They must be seeing value that we in North America don't see. I think we may come to look at our decisions differently if we try to understand the value that these other people have assigned to HSR.
Some other comments:
Please don't hold the "transformation of the electric power industry" up as a good example. Deregulation of electric power so far has had very mixed results. Power costs in Texas, for example, are a continuing controversy, as are the ways that the now deregulated power companies treat their customers. Furthermore, electric power has migrated to the dirtiest source of energy we have available, coal. The govt hasn't helped much by discouraging full exploitation of nuclear energy sources through nuclear fuel reprocessing and breeder reactors; our govt is paranoid about weapons grade nuclear materials. As a result, we leave more than half of our nuclear energy in the waste fuel, and, in addition, the waste fuel is much more hazardous than it otherwise would be.
Don't forget that the govt built the entire jet aircraft industry with military funding. Without that investment of trillions of dollars from about 1943 to about 1975, commercial jet aircraft literally would not have gotten off the ground.
If the purpose of stimulus funding is to stimulate, then it doesn't much matter how we spend it. I admit that it seems better to use it for something "useful" or "beneficial," but the money will go to wages and salaries regardless of what it's for. Of course, we don't want any of it to go outside the country, so we shouldn't be using it for products from Bombardier, Siemens, Kawasaki, and that Spanish company that Texas is hiring to build our toll roads.
Unfortunately, both freight and passenger rail transportation in North America seem to be stuck in a rut dated about the late 1950s. RRs let much of the technology evolution go by until the mid-nineties, and now they are catching up. Evolution is definitely required, more so with passenger rail than freight. What we really need is both high-speed passenger and high-speed freight rail service.
Maybe the California HSR planners think they can do it much less expensively with more modern equipment and processes.
Living in California I was a proponent of the HSR system and voted for it, I attended reginal meetings on the HSR proposal and realize now there were a lot of questions left unanswered at those meetings. Since that time I have been digging up all the information possible and some of the major unanswered questions are:
Where is the power coming from as the available power in California will not be enough.
The Windfarm lawsuit which will be heard this year or next could shut down the existing windfarms for six weeks each spring and six weeks each fall to protect the migratory birds that the suit says are being killed and maimed by the windmills.
Californians have always been in love with speed and the freeways were made for them until speed limits were imposed and they were no longer freeways.
Californians like Sam 1 mentioned in a much earlier thread on the subject will not be satisfied with the 220 mph proposed speed which I am beginning to believe will be like the NEC and only operate at that speed for the run down the San Joaquin Valley.
Already it is being said that the maximum speed between San Francisco and San Jose will be around 100 mph maximum as Caltrains and the HSR trains will share a four track electrified mainline.
Once leaving Gilroy the trains will encounter Pacheco Pass and I am sure the electrical draw for the climb over the pass will be something on the order of what it would take to light 25,000 homes if they are going to maintain any kind of speed on even 2% grades. The same will be true for the climb over Tehachapi Pass.
The only thing the HSR has going for it at the present time is the ROW can be obtained for about 8 Billion instead of the original 16 Billion due to the collapse of the California Real Estate market.
Personally I would much rather see them acquire the mainline and then instead of installing a HSR system install a Mag-Lev system capable of 350 mph speeds and that should satisfy Californians need for speed.
Why was Anahiem selected as the Southern Terminal of the system (Disney Enterprises), well let Disney pay for the costs from Los Angeles to Anahiem and if the Orange County residents think it is necessary for there well being then a special tax assessment should be imposed on them to pay for it. Los Angeles is still recognized as the hub of Southern California not Disneyland.
The land should be acquired for the entire system from Sacramento and San Francisco in the North to Los Angeles and San Diego in the south.
And lets begin talking about Nuclear power the chespest and cleanest form of electrical energy next to hydro electric. It's time for people to stand up to the enviromentalists on this issue and build a modern Nuclear power grid. These wind farms that are popping up everywhere personally are an eyesore but they do not take up much space. I don't know that they will impact farming, in fact the farmers in some cases are making more from the windfarms than they do from there crops.
And the proposed solar panel fields take up thousands of acres but keep lots of people working keeping the mirrors clean. There is one very large one in the Mojave Desert at the junction of Hwys 58 and 395. Sure that one is in the desert but what happens when they want to take valuable farmland out of farming to place a solar panel field in operation. We are eventually going to need all of the food we can grow.
So where is either proposal for HSR going to get its power from. I would much rather see the RRS install catenary on certain mainlines and the government issue them tax credits for doing so. I cant see HSR being finished for a least thirty years in California and I really don't care as I won't be around anyway.
Al - in - Stockton
Sam1 This issue is whether investment in high speed rail is the best way to spend the stimulus grant. I don't think that it is. I would use it to improve regional rail in short, high density corridors where there is a good chance of recovering the operating costs and contributing something to the capital costs.
The vast majority of the HSR projects on the table ARE short haul, high density corridors. The LA-SF piece of the Callifornia project may be the lone exception. That, and maybe a few small pieces of the midwest network.
You would spend Federal dollars on regional rail projects? That would be the best use of the stimulus in you opinion? Really? How so?
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
Railway ManPerhaps the more interesting discussion is why the public would prefer $8 billion on HSR rather than on short high-density corridors.
There's a distinction?
At the end of the day, I think these will turn out to be the same thing, as the definitions will have been blurred.
Most of the press already has pretty much blended the two togehter already.
The public generally doesn't get too worked up over Amtraks deficits, either. My concern over Amtrak is that should they ever get more funding, they would completely drop the ball. I'm still worried about it, but the sounds coming out of Amtrak's Boardman are encouraging - and the $8B isn't automatically going to Amtrak.
Sam1 I am, however, open to new evidence. Please direct me to the authoritative references you claim but have not cited for the independently audited studies showing that high speed rail, as proposed, will cover its operating costs and contribute something to the capital investment. By independent audit I mean the numbers have been audited by a large, independent accounting firm, e.g. PricewaterhouseCoopers, KPMG, Deloitte, etc. that does not have a stake in the outcome. Most perspectives are a function of opinions. Whether an investment in high speed rail is a good idea or a bad idea; whether it will cover its costs or won't, is an opinion. Opinions that are backed-up with verifiable, independently audit data carry more weight with me than those that lack the support.
The midwest governors that hired contractors to do the study of the midwest corridors have a direct stake in the outcome how? Similarly, the contractor's stake in the outcome?
Accounting firms don't still look after their buddies in their recently spun-off (by gov't mandate) consulting branches?
I'm also not sure exactly how one would audit a ridership model. The process of selecting a model? The input data? The arithmetic?
oltmanndRailway ManPerhaps the more interesting discussion is why the public would prefer $8 billion on HSR rather than on short high-density corridors. There's a distinction? At the end of the day, I think these will turn out to be the same thing, as the definitions will have been blurred. Most of the press already has pretty much blended the two togehter already. The public generally doesn't get too worked up over Amtraks deficits, either. My concern over Amtrak is that should they ever get more funding, they would completely drop the ball. I'm still worried about it, but the sounds coming out of Amtrak's Boardman are encouraging - and the $8B isn't automatically going to Amtrak.
A distinction only in this debating society!
And why would a midwest governor want a high speed rail line intersecting his turf when it would represent a majority of overhead traffic niether departing nor terminating in his state?
But to the question of return on investment....did the American public, the American economy, get anything out of land grants to railroads besides a cheap way for the government to sell off and develop lands, grow communities, mine ores and metals, and encourage agriculture and then allow for effecient transportation back east to the then population centers? Or the cheap contracts to carry U.S. Mail to all parts of the country which some consider as a tax on railroads for haveing been given land grants and other aid, were they not a benifet the public and the government received which could have meant higher postal rates long before the 1950's demise of the nickle letter?
Why can't we get it through out heads that the government and the population have prospered and developed through the aid and partnership of government and business and that such growth and development would never have happened if that partnership hadn't been in place. And that the future has to have that same partnership continue if the U.S. is to continue to be a strong and economically viable world leader.
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I think John Kneiling's predictions were contingent upon a few pesky details such as changes in things like labor law and a rather selective set of values not shared by the majority of the public, and I think that crippled his arguments into uselessness. In a democracy, the only thing that matters is the majority of the vote. It's entertaining to fume that a society is voting itself into the poorhouse, but they do have the right to do so. Plenty of societies have gone up against the wall. I'm not saying I disagree with either you or Sam on your value systems. Nor in your objectives. I'm saying that an argument that posits that tangible ROI or economic efficiency of a public investment is the only objective worth measuring is probably not going to go anywhere useful. I don't think the public much cares about ROI or economic efficiency, and I think the public has a sophisticated method of ranking its choices that economists, pundits, and experts often don't get. Politicians usually get it very well, however. They're some of the smarter people I know. RWM
It seems that the editorial emphasis of Trains Magazine has undergone a sea change.
Trains Magazine has always been serving the community of railfans and train advocates, along with the broader community of people who have some kind of interest in trains. Back in the day, the editors of Trains Magazine saw the railroad industry in decline: the passenger business was in rapid decline, but the freight business wasn't doing all that well either. The editors of Trains saw themselves as having a unique platform for advocating saving the industry, certainly unique from the trade rags such as Railway Age and others that pretty much hewed to the industry party line. In a number of editorials they pretty much came out and said that unlike Railway Age, Trains was pretty much in the entertainment industry and had latitude to print what it wanted provided it entertained its readership in some way, but that the railroad industry needed to be saved, if not for the sake of the industry but for the sake of railfans, that at the rate things were going, there would be very little in the way of trains left.
Trains saw itself as providing a forum for a broad range of analysis and prescriptions for the general problems of the industry, ranging from the Professional Iconoclast, John Kneiling, to their Man in Washington, Don Philips, all the way to the Turntable column closing out the magazine, hosting op-ed writing from a broad range of sources with differing opinions. In between, there were often long articles giving first-person accounts of what it was like to work for a railroad and serve customers.
The Trains editors stuck their necks out running John Kneiling for a long time, and it didn't seem to be all that popular judging by readers' letters. The editors said in so many words that John was an unpopular scold, but that they stuck with him because his ideas had merit, and unless there were major changes, there would not be any trains left to sell magazines about.
Maybe every reader didn't hate John's opinions. There were two scolds that I always looked forward to reading. One was Mike Royko's daily in the Chicago Sun Times. I was too cheap to buy the paper, but I would read it over the shoulder of someone when riding the C&NW to work. The other was the monthly colum of the Professional Iconoclast. I saw both of them as reformers, as lone voices in the wilderness as it were, and I somehow though they were twins somehow separated at birth.
I mean consider Mike Royko. When he wasn't spinning tales about his boyhood friend Slats Grobnik, it was endless knocks against this Chicago politician and this other Chicago politician. One would think it would get old after while, and besides, as you say, politicians are a lot smarter than generally credited. But think of it, there is this guy pounding out a daily column telling us how bad things are, but in general, garbage gets collected, police patrol the streets and arrest the most egregious law breakers, children get taught in some manner or other in schools, people on the bottom rungs of the ladder get some kind of assistance and don't starve, and life goes on. For all of the knocks on corruption and one-party rule, Chicago was (reputed to be) the City that Works. Or did it?
As to John Kneiling, I guess the Trains editors kept him around as long as they could, perhaps sacrificing some readership to do this, and it came to an end at some time. But what, tell me, about what John said was "crippled into .. uselessnes"?
John was forever critical of labor unions and labor union rules, yes, and his knock on organized labor was that labor unions are not exempt from the laws of economics and that unions were driving not only businesses but also their workers out of a job. But setting this aside, where John placed responsibility for the problems of the industry firmly on the shoulders of management. None of his advocated proposals such as Integral Trains depended on changing labor agreements. He argued that his Integral Trains could out compete the truck, the barge, and the Great Lakes ship with the full crew and crew mileage agreements of the day.
But guess what, the big changes in railroad labor came much later after John exited the scene -- two man locomotive crews and the whole lot, and John had perhaps little or nothing to do with this happening. In fact, railroads got more efficient through rather drastic changes in labor without having to adopt much of anything John had advocated on the tech side -- fully distributed power, fuel tenders, two-pipe brakes, large diameter wheels, semi-permanently coupled consists of the freight cars, side-transfer container gear, containers and rubber tires in place of boxcars and hump yards, and so on.
I also want to know what John's selective values are not shared by the rest of us. Honest day's pay for an honest day's work? That management, for whatever the faults of unions, is ultimately responsible for the success of a business and in turn and industry? That technology can be applied to even the most tradition-bound mature industry to bring about gains in productivity and profits? That working smart rather than sitting around whining for a government check makes good business sense, and in the long run, benefits workers and the general public as well?
The other thing about how in democracy that economic or efficiency arguments don't matter, the only thing that matters is the majority vote. That reasoning cuts both ways. If the voters in California, 8 billion in the hole (in the short term) think that spending 40 billion (over a longer term) can make themselves happier in some way, so be it. On the other hand, this tyranny of the majority vote doesn't seem to want to get off dead center on HSR, and 8 billion out of a trillion dollar Simulus is chump change as they say, and a lot of people around here are fuming about "lack of political will" and "how come they have this in France and we can't have this here?"
Fine, if you want to take trains out of the economic arena, where trains are judged by people voting with their spending money, and place trains in the political arena, where trains are judged by people voting in November, then accept the consequences of this alternate system. If people want HSR in California, fine, let that be a laboratory of one state among many and see how it turns out. If people are relatively indifferent to trains, fine, accept the wisdom of the electorate and stop fuming about "Concrete Lobby" conspiracies thwarting democracy and about "national shame" that voters in France decide to have things that we don't have here.
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Railway Man A distinction only in this debating society!
This debating society only meets on Groundhog Day....
oltmannd Sam1 I am, however, open to new evidence. Please direct me to the authoritative references you claim but have not cited for the independently audited studies showing that high speed rail, as proposed, will cover its operating costs and contribute something to the capital investment. By independent audit I mean the numbers have been audited by a large, independent accounting firm, e.g. PricewaterhouseCoopers, KPMG, Deloitte, etc. that does not have a stake in the outcome. Most perspectives are a function of opinions. Whether an investment in high speed rail is a good idea or a bad idea; whether it will cover its costs or won't, is an opinion. Opinions that are backed-up with verifiable, independently audit data carry more weight with me than those that lack the support. The midwest governors that hired contractors to do the study of the midwest corridors have a direct stake in the outcome how? Similarly, the contractor's stake in the outcome? Accounting firms don't still look after their buddies in their recently spun-off (by gov't mandate) consulting branches? I'm also not sure exactly how one would audit a ridership model. The process of selecting a model? The input data? The arithmetic?
They would audit the assumptions, estimates, formulas, engineering design, etc. Yes, they have engineers on staff to look at the designs. They would look hard at the controls associated with the predictions for ridership, revenues, costs, etc. Most importantly, they would look at the controls associated with the predictors to verify that the planners and promoters did not change the inputs to produce the desired outcomes.
The auditors, for example, would look hard at the claim that it will cost an average of $55 to go from San Francisco to LAX. They would be suspicious of this number. They know that a range of probabilities is more realistic than a hard number in predicting fares, revenues, costs, etc.
Every major project in my employer's operations was audited independently to verify that it had a high probability of achieving what the sponsors said it would achieve. In many instances we found that they have sugar coated the projections. Once people have invested a lot of time and interest in a project, they tend to put on rose colored glasses about it. They assume the best outcomes rather than negative or more realistic outcomes. Auditors lift these problems up to management.
The audit function of the big accounting firms is independent of the consulting function. Since the Enron debacle, auditors have been constrained significantly in what they can discuss with employees in the consulting side of the business. The American Society of Certified Public Accountants, which has a robust code of ethics, comes down very hard on firms that violate the separation of auditing and consulting.
I would disagree with US rail technology being stuck in a rut. We have the test center in Pueblo since the late 1970's that has done a ton of work. Examples are things like wheel-rail dynamics and metallurgy that facilitated raising car load limits to 286,000 pounds, turnout design, and crash-worthiness. This has served as a test platform for both freight and passenger equipment from here and abroad.
I don't think some revolutionary development is needed to save railroads. We have the knowledge we need. One problem is implementation with a privatized rail transportation sector operating in a strict direct cost and revenue environment irrespective of public benefits and needs. Another is that, while the number of players has dramatically fallen, each railroad wields significant economic influence over the direction and choice of technologies that must be brought into consensus such as with Positive Train Control.
The Turbo Train was a US refinement of the Xplorer after learning from the Talgo and Aerotrain almost forty years ago. The Turbo Train also failed in part because of the small scale of the program being unable to support the maitenance infrastructure.
Sam1The auditors, for example, would look hard at the claim that it will cost an average of $55 to go from San Francisco to LAX. They would be suspicious of this number. They know that a range of probabilities is more realistic than a hard number in predicting fares, revenues, costs, etc
This type of work is typically done in studies tho' often does not make final reports. Auditors, internal and external are very useful, but no panacea. I've seen them in action around here. They get some stuff right, but sometimes miss the big stuff.
Bunches of them apparently missed the same risk assessment as everyone else at Bear Stearns, AIG, etc.
Codes of ethics, et. al. aside, VP Larry and VP Bob may now be in separate ventures, auditing and consulting, but they are buddies from way back, and each knows what sauce is good for the other's goose! (they don't even have to whisper it at the country club...)
About all a RR consultant will get from "cooking" a study, is another study to do.
You can follow the genesis of studies to support a commuter rail line here; http://www.garail.com/Pages/Rprts.html
None of the corridor/HSR projects (except VA/NC) are as far along as these, but these are typical.
Sam: I've never not seen a back-check on a railway feasibility study or public-benefits study, before one cent of public money was awarded. If it's an industry initiative that spends state money, typically a competitor to the consultant that prepared the study is engaged by the state. If it's a state initiative that spends federal money, typically the feds do their own back-check or hire a sharpshooter to poke holes in it. If it's a federal initiative that spends federal money, then the nature of the back-check depends on the specific law that grants the money, but I've never seen a funding mechanism that didn't have a built-in back-check.
One of the greatest days in my career was the day I dismantled a state's consultant over the course of a four-hour hearing, piece by piece. He didn't understand a thing about rail traffic patterns, markets, rates, or shippers. My boss was practically dancing around in the conference room in glee.
RWM: I am wondering if state and federal politicals conducted any feasibility studies [and back check] on the building of an interstate highway system back in the 50's.
I hate to have to keep going back to the development of the IHS in the 1950's (hind sight is always 20/20!), but the development of an Interstate Railway System will probibly develope along the same fromat. Where did the railroad industry stand with regards to spending federal tax money on a IHS system? Is there any historical data?
I recall recently that a comment was made with regards to there being a military or strategic value to the building of the IHS. Suppose, between now and 2016 there is a military/strategic/economic value for a nation wide rail network? What, in your opinion, would have to change in Washington, or in the overall economy, to get businesses and the traveling public behind the creation of an HSR/IRSA network?
P.A.TalbotRWM: I am wondering if state and federal politicals conducted any feasibility studies [and back check] on the building of an interstate highway system back in the 50's. I hate to have to keep going back to the development of the IHS in the 1950's (hind sight is always 20/20!), but the development of an Interstate Railway System will probibly develope along the same fromat. Where did the railroad industry stand with regards to spending federal tax money on a IHS system? Is there any historical data? I recall recently that a comment was made with regards to there being a military or strategic value to the building of the IHS. Suppose, between now and 2016 there is a military/strategic/economic value for a nation wide rail network? What, in your opinion, would have to change in Washington, or in the overall economy, to get businesses and the traveling public behind the creation of an HSR/IRSA network?
Cost-benefit studies are not required for most highway projects funded with federal dollars. They are for rail projects, however, as I noted above.
The rail industry was in favor of the Interstate Highway bill so long as trucks paid for their fully allocated costs. There's a good write-up of the history of the bill on the FHWA website.
I have no idea what would have to change in Washington to create any sort of new agency or authority.
P.A.Talbot RWM: I am wondering if state and federal politicals conducted any feasibility studies [and back check] on the building of an interstate highway system back in the 50's. I hate to have to keep going back to the development of the IHS in the 1950's (hind sight is always 20/20!), but the development of an Interstate Railway System will probibly develope along the same fromat. Where did the railroad industry stand with regards to spending federal tax money on a IHS system? Is there any historical data? I recall recently that a comment was made with regards to there being a military or strategic value to the building of the IHS. Suppose, between now and 2016 there is a military/strategic/economic value for a nation wide rail network? What, in your opinion, would have to change in Washington, or in the overall economy, to get businesses and the traveling public behind the creation of an HSR/IRSA network?
The Interstate Highway System was a 1950s solution to a transportation problem. Those who claim that we should develop a similar passenger rail system in this century, i.e. NARP, have adopted a solution chasing a problem perspective.
The key question is what type of passenger rail system, if any, should taxpayers help fund in 2009? And how much can they afford? What is the real problem? This is how a viable business would approach the problem.
My vote is for short, relatively high density corridors where the cost to build additional airway and highway capacity is cost prohibitive. The corridors should be capable of speeds that make taking the train more attractive than driving, but I don't see the need for high speed rail. It is too bloody expensive for the results.
I cannot think of a scenario where railroads might play any more significant role with some interstate rail system. The only real sea-lift capacity is with container shipping which is on par with current railroad capacity; and the Air Force has some capacity, but well below what railroads could deliver.
For emergency reponse to natural disasters, it's unlikely that an interstate system would go somewhere not served by the existing primary mainline rail network or be significantly closer.
Don't even think of railroads in the event of a war or rebellion on US territory. Railroads are too susceptible to sabotage and mobile attack from the ground and air beginning with Andrew's Raid/The Great Locomotive Chase to Allied bombing of railroads and bridges crippling the European railways and Nazi logistics.
Railway Man Sam: I've never not seen a back-check on a railway feasibility study or public-benefits study, before one cent of public money was awarded. If it's an industry initiative that spends state money, typically a competitor to the consultant that prepared the study is engaged by the state. If it's a state initiative that spends federal money, typically the feds do their own back-check or hire a sharpshooter to poke holes in it. If it's a federal initiative that spends federal money, then the nature of the back-check depends on the specific law that grants the money, but I've never seen a funding mechanism that didn't have a built-in back-check. One of the greatest days in my career was the day I dismantled a state's consultant over the course of a four-hour hearing, piece by piece. He didn't understand a thing about rail traffic patterns, markets, rates, or shippers. My boss was practically dancing around in the conference room in glee. RWM
My question pertained to an independent audit of the claims for the various high speed rail projects, whatever that really means, that are on the table. I am particularly interested in the California High Speed Rail project, since it appears to be the poster child for high speed rail projects.
I presume by back check that you mean an independent audit of the project. Clearly, if the audit is performed by someone who does not understand the subject matter, the audit is worthless. This is the reason that the big accounting firms either use the engineers on their staffs or engage independent consulting engineers, like my brother, when auditing an engineering project.
In the case of the California High Speed Rail project, or any of the others, I would like to see an audit of the claimed ridership, revenues, fares, etc., which would show whether the government had any chance of recovering its investment. Waiting until the project is completed or the government has invested heavily in it is a bit late.
Sam1My question pertained to an independent audit of the claims for the various high speed rail projects, whatever that really means, that are on the table. I am particularly interested in the California High Speed Rail project, since it appears to be the poster child for high speed rail projects. I presume by back check that you mean an independent audit of the project. Clearly, if the audit is performed by someone who does not understand the subject matter, the audit is worthless. This is the reason that the big accounting firms either use the engineers on their staffs or engage independent consulting engineers, like my brother, when auditing an engineering project. In the case of the California High Speed Rail project, or any of the others, I would like to see an audit of the claimed ridership, revenues, fares, etc., which would show whether the government had any chance of recovering its investment. Waiting until the project is completed or the government has invested heavily in it is a bit late.
The check is done on the original ridership, cost, revenue, technical feasibility studies. The studies are then revised, if required, to reflect the check. If the study says, for example, that farebox cost recovery of operating is 40% and capital is 0%, I am comfortable with that study being reasonably correct.
I am not aware of any of the big accounting firms doing transportation feasibility study analysis. I've never encountered them. There are a number of engineering and economics firms that do this regularly. Some of them are integrated engineering/economics firms. They may not be brand-name in your world but they are in mine. I have no idea if the big accounting firms would do better. The experience of the Class 1s with them has been negative, as I understand.
But this is just a piece of the larger study, which is the alternatives analysis -- if the decision is don't build the rail system, what will be required for investment in highways, airports, etc.? Or the economic, environmental, and social cost of doing nothing at all? Alternatives analysis is required on many rail studies prior to federal or state dollars being awarded. I can't summarize all the various rules because there are multiple agencies involved, and I'm by no means the expert on the regulatory environment. It is equally simplistic to say "high-speed rail can never pay for itself" as it is to say "high-speed rail is the only obviously good alternative." Neither is necessarily true. Alternatives analysis is required.
The motor fuel tax may be grossly unfair to autos compared to trucks with respect to road degradation. On that issue, technology is available for a solution.
Transponder technology was being considered as a means for measuring travel in cities, especially congested downtowns. Working in the rail industry at the time the tansponder tags were being applied to freight cars and locomotives, it seemed then to offer a way to track, record and tax road vehicle and trailer movement.
On the other hand, much auto travel in a city or metropolitan area is, or should be, a discretionary mode choice with the availability of public transit, so the fuel tax does serve as a disincentive. City population greatly exceeds rural, and much of the rural population travels to a city destination in the course of a year.
Railway Man Sam1 My question pertained to an independent audit of the claims for the various high speed rail projects, whatever that really means, that are on the table. I am particularly interested in the California High Speed Rail project, since it appears to be the poster child for high speed rail projects. I presume by back check that you mean an independent audit of the project. Clearly, if the audit is performed by someone who does not understand the subject matter, the audit is worthless. This is the reason that the big accounting firms either use the engineers on their staffs or engage independent consulting engineers, like my brother, when auditing an engineering project. In the case of the California High Speed Rail project, or any of the others, I would like to see an audit of the claimed ridership, revenues, fares, etc., which would show whether the government had any chance of recovering its investment. Waiting until the project is completed or the government has invested heavily in it is a bit late. The check is done on the original ridership, cost, revenue, technical feasibility studies. The studies are then revised, if required, to reflect the check. If the study says, for example, that farebox cost recovery of operating is 40% and capital is 0%, I am comfortable with that study being reasonably correct. I am not aware of any of the big accounting firms doing transportation feasibility study analysis. I've never encountered them. There are a number of engineering and economics firms that do this regularly. Some of them are integrated engineering/economics firms. They may not be brand-name in your world but they are in mine. I have no idea if the big accounting firms would do better. The experience of the Class 1s with them has been negative, as I understand. But this is just a piece of the larger study, which is the alternatives analysis -- if the decision is don't build the rail system, what will be required for investment in highways, airports, etc.? Or the economic, environmental, and social cost of doing nothing at all? Alternatives analysis is required on many rail studies prior to federal or state dollars being awarded. I can't summarize all the various rules because there are multiple agencies involved, and I'm by no means the expert on the regulatory environment. It is equally simplistic to say "high-speed rail can never pay for itself" as it is to say "high-speed rail is the only obviously good alternative." Neither is necessarily true. Alternatives analysis is required. RWM
Sam1 My question pertained to an independent audit of the claims for the various high speed rail projects, whatever that really means, that are on the table. I am particularly interested in the California High Speed Rail project, since it appears to be the poster child for high speed rail projects. I presume by back check that you mean an independent audit of the project. Clearly, if the audit is performed by someone who does not understand the subject matter, the audit is worthless. This is the reason that the big accounting firms either use the engineers on their staffs or engage independent consulting engineers, like my brother, when auditing an engineering project. In the case of the California High Speed Rail project, or any of the others, I would like to see an audit of the claimed ridership, revenues, fares, etc., which would show whether the government had any chance of recovering its investment. Waiting until the project is completed or the government has invested heavily in it is a bit late.
The key is an independent audit or check. It would not have to be done by a big accounting firm; this is just an example. The big accounting firms have the expertise to look at financial projections. They would not second guess the designers; they would verify the financial projections, which is what really concerns me.
Comparing alternative investments in transport infrastructure, including doing nothing, is a valid argument, although comparative studies would be difficult to coordinate. They would require so many estimates that the validity of the studies would be questionable.
I am not aware of any high speed railway project that has paid for itself through the fare box. In fact, in this country, outside of a few tourist operations, passenger rail does not cover its costs. Amtrak as an example has required more than $25 billion in federal taxpayer monies since its inception to stay afloat. Thus, the probability that a high speed rail project can recover its costs from the users, based on experience, is not great.
Again, I did not say that high speed rail could not recover its costs; I said that there is scant probability of its doing so. Experience is a reasonable predictor or at least starting point, although not absolute, of future outcomes.
Adding capacity for fast regional intercity rail service isn't cheap, if not prohibitive. Existing infrastructure is not totally written off; and new right of way does not have to be acquired displacing current residents and businesses. Crossing gates, train wayside signals, and platforms, shelters, and other accouterments need to be relocated, parking and landscaping modified, if not replaced after the reconstruction; overhead bridges need modification for a third track and undergrade bridges need additional spans and piers and often modification to existing abutments; and the additional track may require a retaining wall.
More and faster trains multiply the need for grade separation to eliminate excessive delays. Grade separation brings further costs and disruptions for new bridges, fortemporary trackage and crossing signals, and for station reconstruction.
Another reality about high speed rail is that it does not eliminate local rail services on existing lines that feed or are augmented by the high sped service for longer trips. Many potential Midwest, Texas, and Southeast routes have no service yet; and most are quite modest with only 1-3 round trips.
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