greyhoundsHarveyK400 5. Also not discussed is the taxation policy on fuel whereby the high price of fuel diverts travel to rail and public transport in order to reduce consumption and emissions. All oil is imported and a detriment to the internal economy. The money is used to pay fully for road improvements and other needs (some may go to public transport). Compare that attitude to this past Evanston, IL Fourth of July Parade that featured classic 60's muscle cars revving along the route. First I want to start out by saying that I don't believe this man to be dishonest. He really believes what he's saying here and he's honestly stating what he believes. But he's obviously wrong. He should look up the new development of the Bakken Field in North Dakota which is projected to soon make North Dakota a larger oil producer than Alaska. Obviously, not all oil is imported. As far as imported oil being a detriment to the internal economy, it's not true. If you think it is truly a detriment just change one word in the sentence and see if it still works for you. Try "All coffee is imported and a detriment to the internal economy." (I know, they grow some coffee in Hawaii. Not enough to matter.) Does it still make sense to you? When we buy imported coffee, and I bought some Maxwell House French Roast tonight, we only do so because the value of what we get exceeds the cost we pay. That's basically the reason anyone buys anything. They get more in value than the cost. The $6.00 or so that I paid for the coffee wouldn't be of much use to me at 6:00 AM tomorrow, but that coffee will hit the spot. It certainly won't be a "detriment". Imported oil is the same way. We buy it because it's value to us exceeds our cost. That's not a detriment. It's a benefit. Imported oil allows us to move around as we want to and need to in air conditioned comfort listening to the radio or a CD. That's a life quality thingy. The poster seems to think that it's a good idea to take quality of life away from people and deny them mobility by increasing the price of petroleum through taxation. He cites "benefits" from such taxation. But those benefits are not what folks want. They want an air conditioned car with with a CD player. And since this is a Land of Liberty there ain't no government policy that should decide for people what benefits they may enjoy. I do not for one moment fail to realize that American Soldiers have died because of our dependence on foriegn eneergy sources and I fully support efforts to achieve less dependence on those sources. Nuclear power would be a great thing. But simply forcing Americans into a lifestyle they don't want through taxation so that we can have these really neat high speed trains (AKA high speed financial disasters) would be a betrayal of those Americans.
HarveyK400 5. Also not discussed is the taxation policy on fuel whereby the high price of fuel diverts travel to rail and public transport in order to reduce consumption and emissions. All oil is imported and a detriment to the internal economy. The money is used to pay fully for road improvements and other needs (some may go to public transport). Compare that attitude to this past Evanston, IL Fourth of July Parade that featured classic 60's muscle cars revving along the route.
5. Also not discussed is the taxation policy on fuel whereby the high price of fuel diverts travel to rail and public transport in order to reduce consumption and emissions. All oil is imported and a detriment to the internal economy. The money is used to pay fully for road improvements and other needs (some may go to public transport). Compare that attitude to this past Evanston, IL Fourth of July Parade that featured classic 60's muscle cars revving along the route.
First I want to start out by saying that I don't believe this man to be dishonest. He really believes what he's saying here and he's honestly stating what he believes. But he's obviously wrong. He should look up the new development of the Bakken Field in North Dakota which is projected to soon make North Dakota a larger oil producer than Alaska. Obviously, not all oil is imported.
As far as imported oil being a detriment to the internal economy, it's not true. If you think it is truly a detriment just change one word in the sentence and see if it still works for you. Try "All coffee is imported and a detriment to the internal economy." (I know, they grow some coffee in Hawaii. Not enough to matter.) Does it still make sense to you?
When we buy imported coffee, and I bought some Maxwell House French Roast tonight, we only do so because the value of what we get exceeds the cost we pay. That's basically the reason anyone buys anything. They get more in value than the cost. The $6.00 or so that I paid for the coffee wouldn't be of much use to me at 6:00 AM tomorrow, but that coffee will hit the spot. It certainly won't be a "detriment".
Imported oil is the same way. We buy it because it's value to us exceeds our cost. That's not a detriment. It's a benefit. Imported oil allows us to move around as we want to and need to in air conditioned comfort listening to the radio or a CD. That's a life quality thingy.
The poster seems to think that it's a good idea to take quality of life away from people and deny them mobility by increasing the price of petroleum through taxation. He cites "benefits" from such taxation. But those benefits are not what folks want. They want an air conditioned car with with a CD player. And since this is a Land of Liberty there ain't no government policy that should decide for people what benefits they may enjoy.
I do not for one moment fail to realize that American Soldiers have died because of our dependence on foriegn eneergy sources and I fully support efforts to achieve less dependence on those sources. Nuclear power would be a great thing. But simply forcing Americans into a lifestyle they don't want through taxation so that we can have these really neat high speed trains (AKA high speed financial disasters) would be a betrayal of those Americans.
First, I was referring to French policy, not ours; but it is a more sustainable alternative to continue to drive some of the time that needs more objective discussion.
Imports are a negative to a government's economy; and the trick is to at least balance those with exports and tourism. Imports, oil is one, are an issue separate from why consumers may value and pay dearly for imports such as for coffee and for gas.
I am perfectly aware of the sentiment out there that the government will have to take cars out of the owners' cold, dead hands. Denying peak oil as being an alarmist myth is consistent with such sentiment to resist change one's lifestyle, one's pursuit of happiness, without having to pay for it. North Slope, Bakken, and off-shore drilling, if proven, will only put off the reality of a finite limit to recoverable domestic oil. People with sentiments for cheap gas and driving are not being betrayed; the more enlightened are giving fair warning if they choose to listen.
As for the [MP-3], and air-conditioning benefits with driving, these and wi-fi are available on Acela already and coming soon to all intercity and suburban trains.
As for being forced to do things by the government, that happens all around. We may grumble; but usually we comply with the law.
HarveyK400I could be around long enough to see suburban development along highways in a metropolitan region so intense in reaction to downtown congestion that it strangles itself.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
HarveyK400Denying peak oil as being an alarmist myth is consistent with such sentiment to resist change one's lifestyle, one's pursuit of happiness, without having to pay for it. North Slope, Bakken, and off-shore drilling, if proven, will only put off the reality of a finite limit to recoverable domestic oil. People with sentiments for cheap gas and driving are not being betrayed; the more enlightened are giving fair warning if they choose to listen.
Now, you seem to say that we are doomed for peak oil. Peak oil, it seems as the media says, that one day, the last of our oil will vanish, and we will hardly have known it the day before, right? Well, some oil is cheaper to retrieve than others, wouldn't you say? This seems to be why we use a fair amount of Saudi oil. Its cheap. Now think, when the Saudi oil runs out, what will happen? We'll turn to other, slightly more expensive oil sources, like the North Slope, the Oil Shale in the Rockies, the oil sands in Canada, and so on, right? Those will eventually begin to get more expensive as they run out, right? Its called the law of supply and demand. There is a lot of oil out there, a lot more than is economically viable to retrieve right not, don't you agree? Now, these will become more and more expensive until someone comes up with a cheaper (than the price of oil then) alternative to oil, right? Its called the free market. Now, think about this, the price just went up and then stabilized with an alternative. The media scenario seems to me to be rather far from the truth. This, at least, is the conclusion I have reached after debating a year of environmental policy, which overlapped into this area a lot.
/rant. I find that HSR and politics overlap a lot. Too much for many people.
When the subject of passenger rail comes up people always focus on the endpoints. That oversimplification distorts the perception. How many people on the NEC get on in Boston and off in DC? I bet it is very few. You should not dismiss the people traveling among the cities along the way.
A person traveling from NYC to Chicago would be better served by the airlines. Rail traffic would be pretty much made up of tourists, people who are afraid to fly, and people like me who are offended by the security play being performed at the airport.
HOWEVER when you consider the people traveling among the cities of NYC, Philadelphia, Harrisburg, Pittsburgh, Cleveland, Toledo, Fort Wayne, and Chicago in various combinations it is a different equation. All of those cities could be served by ONE train route. The airlines would require several airplanes to serve all those cities, and in air travel every stop adds about an hour to the flight.
Passenger rail cannot compete with the airlines by providing long trips to major cities a thousand miles apart. Passenger rail cannot compete with automobiles for short trips running around the suburbs on errands. However carefully chosen corridors where several stops at medium density cities are provided is what passenger rail is good at. That is where the effort should be concentrated.
Dave
Lackawanna Route of the Phoebe Snow
CrazyTigerNow, you seem to say that we are doomed for peak oil. Peak oil, it seems as the media says, that one day, the last of our oil will vanish, and we will hardly have known it the day before, right? Well, some oil is cheaper to retrieve than others, wouldn't you say? This seems to be why we use a fair amount of Saudi oil. Its cheap. Now think, when the Saudi oil runs out, what will happen? We'll turn to other, slightly more expensive oil sources, like the North Slope, the Oil Shale in the Rockies, the oil sands in Canada, and so on, right? Those will eventually begin to get more expensive as they run out, right? Its called the law of supply and demand. There is a lot of oil out there, a lot more than is economically viable to retrieve right not, don't you agree? Now, these will become more and more expensive until someone comes up with a cheaper (than the price of oil then) alternative to oil, right? Its called the free market. Now, think about this, the price just went up and then stabilized with an alternative. The media scenario seems to me to be rather far from the truth. This, at least, is the conclusion I have reached after debating a year of environmental policy, which overlapped into this area a lot. /rant. I find that HSR and politics overlap a lot. Too much for many people.
A lot of research has gone into the finding that the World is approaching the point of peak oil where demand overtakes production. This is not some general media fiction. Peak oil has been reported in some media and pooh-poohed in others with a more political or sponsor bias. Some renewable alternatives are blended with gas or diesel, and reserves have been found or are more recoverable at higher prices that will extend supply, but not forever. With conservation and alternative fuels, oil should last a while; but demand, including plastics, will drive up the price to where an increase in the fuel tax for road infrastructure alone would be only a small part of the cost at the pump. Acela fares would not seem so high compared to the rising costs of driving or flying.
Furthermore, the US in particular has been sold an image of what life should be in order to sell products, especially suburban detached homes and automobiles. Of course, roads would be needed to connect them. At the time it seemed innocuous enough (other than what took place in back seats) to allow the market to drive government rather than for the government to exercise leadership for the welfare of all. The weakness of a popular government is the lack of representation for the people.
A new detached house in some far-flung suburb? How many people really enjoy gardening and lawn maintenance; and how many would rather employ landscaping services? Is the drive for suburban living fueled by the search for good schools for one's children; and would good urban schools eliminate that concern and meet the obligation for this right for all? Flight also was driven by the desire to get away from crime; but gangs and crime have followed the people out to the suburbs.
A new image of a good life through urbanism can be offered. Apartments and condos don't have to be small and can be closer together in town homes and stacked above one another. Urban communities are more compact; and amenities such as shopping, theaters and restaurants are closer and even walkable. Good examples can be found both around the Loop, Hyde Park, and up Clark Street and Lincoln Avenue in Chicago. Much of the latter are connected by the Red and Brown Lines that get a traveler close enough to Union Station for Amtrak to be a practical choice where fares to Illinois points are affordable.
Phoebe VetWhen the subject of passenger rail comes up people always focus on the endpoints. That oversimplification distorts the perception. How many people on the NEC get on in Boston and off in DC? I bet it is very few. You should not dismiss the people traveling among the cities along the way. A person traveling from NYC to Chicago would be better served by the airlines. Rail traffic would be pretty much made up of tourists, people who are afraid to fly, and people like me who are offended by the security play being performed at the airport. HOWEVER when you consider the people traveling among the cities of NYC, Philadelphia, Harrisburg, Pittsburgh, Cleveland, Toledo, Fort Wayne, and Chicago in various combinations it is a different equation. All of those cities could be served by ONE train route. The airlines would require several airplanes to serve all those cities, and in air travel every stop adds about an hour to the flight. Passenger rail cannot compete with the airlines by providing long trips to major cities a thousand miles apart. Passenger rail cannot compete with automobiles for short trips running around the suburbs on errands. However carefully chosen corridors where several stops at medium density cities are provided is what passenger rail is good at. That is where the effort should be concentrated.
I almost totally agree; and so would the French. However, a 3-4 hour trip by rail in competition or alliance with air may be significantly less than a 1,000 miles.
HarveyK400CrazyTigerNow, you seem to say that we are doomed for peak oil. Peak oil, it seems as the media says, that one day, the last of our oil will vanish, and we will hardly have known it the day before, right? Well, some oil is cheaper to retrieve than others, wouldn't you say? This seems to be why we use a fair amount of Saudi oil. Its cheap. Now think, when the Saudi oil runs out, what will happen? We'll turn to other, slightly more expensive oil sources, like the North Slope, the Oil Shale in the Rockies, the oil sands in Canada, and so on, right? Those will eventually begin to get more expensive as they run out, right? Its called the law of supply and demand. There is a lot of oil out there, a lot more than is economically viable to retrieve right not, don't you agree? Now, these will become more and more expensive until someone comes up with a cheaper (than the price of oil then) alternative to oil, right? Its called the free market. Now, think about this, the price just went up and then stabilized with an alternative. The media scenario seems to me to be rather far from the truth. This, at least, is the conclusion I have reached after debating a year of environmental policy, which overlapped into this area a lot. /rant. I find that HSR and politics overlap a lot. Too much for many people. A lot of research has gone into the finding that the World is approaching the point of peak oil where demand overtakes production. This is not some general media fiction. Peak oil has been reported in some media and pooh-poohed in others with a more political or sponsor bias. Some renewable alternatives are blended with gas or diesel, and reserves have been found or are more recoverable at higher prices that will extend supply, but not forever. With conservation and alternative fuels, oil should last a while; but demand, including plastics, will drive up the price to where an increase in the fuel tax for road infrastructure alone would be only a small part of the cost at the pump. Acela fares would not seem so high compared to the rising costs of driving or flying.
Right you are, lots of studies have been done on the subject. However, we must not plunge into this head long with too many assumptions. Michael Lynch, an energy economist, has said that many of the authors supporting Peak Oil have actually no expertise in that area. He goes on to say that these have been proven wrong repeatedly and have been abandoned by some of the original primary proponents.
http://www.gasresources.net/LynchM%2006%20%28Crop%20Circles%29.pdf
HarveyK400 Imports are a negative to a government's economy; and the trick is to at least balance those with exports and tourism. Imports, oil is one, are an issue separate from why consumers may value and pay dearly for imports such as for coffee and for gas. I am perfectly aware of the sentiment out there that the government will have to take cars out of the owners' cold, dead hands. Denying peak oil as being an alarmist myth is consistent with such sentiment to resist change one's lifestyle, one's pursuit of happiness, without having to pay for it. North Slope, Bakken, and off-shore drilling, if proven, will only put off the reality of a finite limit to recoverable domestic oil. People with sentiments for cheap gas and driving are not being betrayed; the more enlightened are giving fair warning if they choose to listen. As for the [MP-3], and air-conditioning benefits with driving, these and wi-fi are available on Acela already and coming soon to all intercity and suburban trains. As for being forced to do things by the government, that happens all around. We may grumble; but usually we comply with the law.
Well get on the stick man. Write a letter. Go right to the top. President Obama himself. Those government economist think allowing more imports through lower trade barriers would increase the well being of the American people. If you know better than they do you just gotta' speak up. Don't dally now. Time's a wastin'. Here's what them dang fool economist think:
http://www.usitc.gov/publications/332/pub4094.pdf
Now you just know that to be just foolish. You're gosh darn smarter than those fools. You seem to know better'n them economist fellas. You go set 'em straight.
As far as accepting being forced to do things by the government, the grumble is about to become a roar. You may think it's OK for the government to take away our liberty and our money, but a lot of us don't feel that'a way.
The post about intermediate traveling is a good one. The NEC is great if you are traveling NY-Providence-New London-New Haven-NY-Newark-Philly-Wilmington-Ballimar-DC, but there is a lot of Towson-New Brunswick, Westerly-Pawtucket kind of automobile driving the existing NEC schedules don't attempt to reach. The old NYN&H (The Clamdigger) and PRR did it better. I know because I used those local trains as a youngster. Today ticketing itself would be a problem for such rail trips, never mind poor connections.
There is track capacity. Some of the off-peak all-stops local trains of the myriad commuter authorities along the way (MBTA-Shore Line-ConnDot\MTA-NJT-MD) could be replaced by all-stops end-to-end non-reserved locals. Then these specific trains would also offer reduced-frills (not no-frills, just reduced-frills, some food and beverage service, decent air-conditioning, and clean restrooms) could also address the long distance college student and vacation traveler who cannot afford the most reasonable of the existing Amtrak fares and uses very-low-fare buses. So they would address two markets.
New high-speed corredors might also address this market.
greyhoundsDoes anyone have a clue as to what this sentence from the article means? "Nearly 30 years after the original Paris-Lyon LGV opened, Azema says that the line has paid for itself (with a retun on investment of 15 percent after nearly 20 years of cumulative profits), but only governments can wait that long for project liks this to pay back." (p35)
Does anyone have a clue as to what this sentence from the article means?
"Nearly 30 years after the original Paris-Lyon LGV opened, Azema says that the line has paid for itself (with a retun on investment of 15 percent after nearly 20 years of cumulative profits), but only governments can wait that long for project liks this to pay back." (p35)
I can answer this part, the French fell victim to the same "Build it and they will come" thinking as many others have. The project had negative amortization for the first 10 years or so. Then SNCF after several leadership changes figured out how to operate and market the services. The 15% ROI is a current figure from just before the recent downturn. Prior years saw lower rates of return. Obviously they picked the corridor with the greatest potential first. Paris - Lyon is served hourly by TGV Duplex with 528 seats (greater capacity than a 747), Friday and Sunday trains frequently have double Duplex (1056 seats) to cope with travelers. The route also sees hourly service to various Cote de Azur resort areas like Nice, Monaco, Perpignan, etc. Also hourly service to Marseilles. Eight trains per day to Geneve also ply part of the route. The routes to Brussels and London are a little less busy relatively, The LGV Est towards Germany has potential and should generate a positive return once the downturn eases more. The rest of the French HSR network is more problematic.
I think the article was very clear on "What the U.S. should learn from France's high speed train." We should learn: "Don't Go There." We can't just put it on the credit card because we want it. These rail systems are HSFD's. (High Speed Financial Disasters.)
Th French made the choice for greater self-sufficiency, the US has made the choice towards building a military to maintain access to natural resources of other countries.
greyhoundsWell get on the stick man. Write a letter. Go right to the top. President Obama himself. Those government economist think allowing more imports through lower trade barriers would increase the well being of the American people. If you know better than they do you just gotta' speak up. Don't dally now. Time's a wastin'. Here's what them dang fool economist think: http://www.usitc.gov/publications/332/pub4094.pdf Now you just know that to be just foolish. You're gosh darn smarter than those fools. You seem to know better'n them economist fellas. You go set 'em straight. As far as accepting being forced to do things by the government, the grumble is about to become a roar. You may think it's OK for the government to take away our liberty and our money, but a lot of us don't feel that'a way.
I wonder how that level of pure political rhetoric, as well as nasty sarcasm got by our moderators?
C&NW, CA&E, MILW, CGW and IC fan
I'm not a big fan of ROI for passenger rail projects, because more often than not, all the alternatives have some aspect of government funding and benefits that don't accrue monetarily to the investor. HSR makes sense when it wins the cost/benefit battle with all the alternative, including the "do nothing" alternative.
From the article, it sounds like the French railway folk proposed the TGV, in part, to keep the French railways relevant. This is hardly a good reason to do something.
If a HSR line can avoid expensive highway or airport expansion, then it has a good chance of "winning" the cost/benefit battle. Other than that, I can't see any other justification for it.
Return on Assets (ROA) is calculated by dividing net income by average total assets. This is the simplest method and is satisfactory for illustrative purposes. Most analysts opt for a slightly more complex method. They take net income + net interest expense - interest tax savings and divide the result by average total assets. The DuPont methodology, which was introduced by DuPont, calculates ROI, which is similar to ROA, and is favored by some analysts because it measures the combined effects of profit margin and asset turnover.
If a company has net income after taxes of $50,000 and total average assets of $1,000,000, the ROA is 5 per cent. If the average assets are $500,000, without a change in net income, the ROA is 10 per cent. If the assets drop to $250,000, the ROA is 20 per cent, again assuming no change in net income.
Businesses increase ROA by increasing revenue, decreasing operating and capital expenses, or some combination thereof. But governments have another option. They can absorb all or part of the cost of the assets and thereby remove them from the books of the operating company.
I understand that the French Government absorbed most of the capital costs associated with the TGV, thereby setting the stage to generate a positive ROA. Or ROI if you like! The concept is the same. The government absorbs most of the capital costs or the denominator. If this is true, then the argument that the TGV has earned an ROA of 15 per cent is a bit dodgy. It has a 15 per cent ROA only because the French taxpayers are wearing the capital costs incurred to build the high speed rail infrastructure.
Amtrak could achieve a positive or better ROA for the NEC if the government would absorb the capital costs associated with its build-out.
oltmanndMeanwhile, back on the original topic.... I'm not a big fan of ROI for passenger rail projects, because more often than not, all the alternatives have some aspect of government funding and benefits that don't accrue monetarily to the investor. HSR makes sense when it wins the cost/benefit battle with all the alternative, including the "do nothing" alternative. From the article, it sounds like the French railway folk proposed the TGV, in part, to keep the French railways relevant. This is hardly a good reason to do something. If a HSR line can avoid expensive highway or airport expansion, then it has a good chance of "winning" the cost/benefit battle. Other than that, I can't see any other justification for it.
This has been my argument since the get go. I agree completely with your assessment.
I think lost in the discussion (deliberately, I suspect) is this simple statement:
Nearly 30 years after the original Paris-Lyon LGV opened, Azema says that the line has paid for itself.
"paid for itself" Period. Not paid for by the taxpayer by paying down the assets, as sam1 suggests (without evidence). It may have taken too long for quick return venture capitalist types, but it has paid for itself. So if the French model teaches us anything, it is that a HSR system, if done right, can not only cover current direct operating expenses, but also repay the original costs.
schlimmI think lost in the discussion (deliberately, I suspect) is this simple statement: Nearly 30 years after the original Paris-Lyon LGV opened, Azema says that the line has paid for itself."paid for itself" Period. Not paid for by the taxpayer by paying down the assets, as sam1 suggests (without evidence). It may have taken too long for quick return venture capitalist types, but it has paid for itself. So if the French model teaches us anything, it is that a HSR system, if done right, can not only cover current direct operating expenses, but also repay the original costs.
schlimm I think lost in the discussion (deliberately, I suspect) is this simple statement: Nearly 30 years after the original Paris-Lyon LGV opened, Azema says that the line has paid for itself. "paid for itself" Period. Not paid for by the taxpayer by paying down the assets, as sam1 suggests (without evidence). It may have taken too long for quick return venture capitalist types, but it has paid for itself. So if the French model teaches us anything, it is that a HSR system, if done right, can not only cover current direct operating expenses, but also repay the original costs.
The evidence can be found in the company's financial reports, as well as those of the French Government, which are available in English. It takes quite a long time to wade through them and, perhaps most importantly, one needs to know how to read and understand government financial statements.
In addition, the GAO has looked at the TGV, amongst other high speed rail systems, and concluded that all of them depend on the hoist country government to pay for the infrastructure. That is to say, the capital costs. They have not paid for themselves, if by that term one means from the user's fares, and it is highly improbably that they ever will.
We gotta crawl before we can walk or run. In the U.S., we are so far from TGV capability, this whole discussion, including the Trains issue, is idle.
Mr. Azema says "the line (Paris-Lyon) has paid for itself." The statement stands on its own merits, unless you are now claiming to know that he is lying.
"Paid for itself" can mean many things, and not necessarily a good six percent return on an investment dollar or franc.
It may have avoided expensive land-taking to allow a vast increase in long-distance and internaitonal aircraft traffic.
It may have cut highway driving times substantially by reducing congestion and at the same time allowed for a massive increase in total travel.
It may have made certain French non-hardware industries more competitive in the world market by making internal communicaton far easier.
It may have improved tourism.
And there are others that you can think of.
The Germans may not have the speed crown but they beat the French in one aspect:
There are regularly schedules German Frederal Railways high-speed passenger trains that are NOT shown in the railway public timetable. They are Lufthansa "flights" feeding airport hubs like Frankfurt with high-speech medium-distance service doing a better job than airplanes could.
The USA does have something similar with USAir (and possibly now Continental?) thhrough ticketing with Amtrak via Baltimore-Washington and Newark.
I've observed in "American Way" magazine that certain SNCF trips can be applied to one's AAdvantage miles, I'm not absolutely sure of the particulars.
schlimm Mr. Azema says "the line (Paris-Lyon) has paid for itself." The statement stands on its own merits, unless you are now claiming to know that he is lying.
I don't recall claiming anyone is lying.
daveklepper "Paid for itself" can mean many things, and not necessarily a good six percent return on an investment dollar or franc. It may have avoided expensive land-taking to allow a vast increase in long-distance and internaitonal aircraft traffic. It may have cut highway driving times substantially by reducing congestion and at the same time allowed for a massive increase in total travel. It may have made certain French non-hardware industries more competitive in the world market by making internal communicaton far easier. It may have improved tourism. And there are others that you can think of. The Germans may not have the speed crown but they beat the French in one aspect: There are regularly schedules German Frederal Railways high-speed passenger trains that are NOT shown in the railway public timetable. They are Lufthansa "flights" feeding airport hubs like Frankfurt with high-speech medium-distance service doing a better job than airplanes could. The USA does have something similar with USAir (and possibly now Continental?) thhrough ticketing with Amtrak via Baltimore-Washington and Newark.
Paid for itself in accounting terms is simple. It means that the project generated sufficient revenues to cover its costs. Getting there requires proper accounting, which means it will pass the audit muster.
Some nuclear power plants in the U.S. are able to generate market competitive power only because they were permitted to securitize some of the capital costs of the plant. They were allowed to transfer some of the cost to their transmission and distribution systems. Market competition, which did not exist when the plants were built, was the justification for allowing the transfers. Accordingly, if one asked the managers of these plants whether they are paying for themselves, they could say yes. But in doing so they would be responding in the present without taking into consideration the transfers. The answer depends on how the question is asked and who is responding.
The other benefits that you claim may be worthy of consideration. However, if the users don't pay for the costs of the project, the taxpayers have to pick up the difference. As the GAO has pointed out in its audit of high speed rail projects, not a single system has truly covered its fully allocated costs without significant government support.
This country has a serious debt problem, as is the case in many European countries. Most of these countries, as well as the U.S., have developed these debt problems because of fuzzy economic and financial premises.
Sam1schlimm Mr. Azema says "the line (Paris-Lyon) has paid for itself." The statement stands on its own merits, unless you are now claiming to know that he is lying. I don't recall claiming anyone is lying.
Your statement: "In addition, the GAO has looked at the TGV, amongst other high speed rail systems, and concluded that all of them depend on the hoist [sic!] country government to pay for the infrastructure. That is to say, the capital costs. They have not paid for themselves, if by that term one means from the user's fares, and it is highly improbably that they ever will."
You are unwilling to back up your statement with actual contradictory information. You claim that Mr. Azema's statement is incorrect, so by that logic he is either ignorant of accounting facts, delusional or lying. Take your choice, but disputing a competent official's statement requires more than just saying it is wrong.
Here is a link to the GAO report:
http://www.gao.gov/new.items/d09317.pdf
Among other things, it calls for a dedicated ticket tax for rail funding, much like the dedicated tax funding for highways and airports, instead of unreliable funding from general revenue.
schlimm greyhounds Well get on the stick man. Write a letter. Go right to the top. President Obama himself. Those government economist think allowing more imports through lower trade barriers would increase the well being of the American people. If you know better than they do you just gotta' speak up. Don't dally now. Time's a wastin'. Here's what them dang fool economist think: http://www.usitc.gov/publications/332/pub4094.pdf Now you just know that to be just foolish. You're gosh darn smarter than those fools. You seem to know better'n them economist fellas. You go set 'em straight. As far as accepting being forced to do things by the government, the grumble is about to become a roar. You may think it's OK for the government to take away our liberty and our money, but a lot of us don't feel that'a way. I wonder how that level of pure political rhetoric, as well as nasty sarcasm got by our moderators?
greyhounds Well get on the stick man. Write a letter. Go right to the top. President Obama himself. Those government economist think allowing more imports through lower trade barriers would increase the well being of the American people. If you know better than they do you just gotta' speak up. Don't dally now. Time's a wastin'. Here's what them dang fool economist think: http://www.usitc.gov/publications/332/pub4094.pdf Now you just know that to be just foolish. You're gosh darn smarter than those fools. You seem to know better'n them economist fellas. You go set 'em straight. As far as accepting being forced to do things by the government, the grumble is about to become a roar. You may think it's OK for the government to take away our liberty and our money, but a lot of us don't feel that'a way.
OK, the Train Forums are all about the movement of people/goods/commodities and our interest in the machines/systems/people that do that movement.
This movement occurs basically for one reason only. It creates value. A TGV example would be when a person is in Paris and values being in Lyon. The TGV creates that value for him/her. The question is whether the value created exceeds the cost of creating the value. If the value exceeds the cost then wealth is created and people are better off. Aparently, on the TGV line between Paris and Lyon the value exceeds the cost and the French are better off with the TGV on that line.
It's the same with an imported good. The movement happens because it adds value to the good being imported. The person buying the imported good makes a decision as to whether the value he/she receives from the good exceeds his/her cost. When the good is purchased that decision has been made in the affirmative and wealth is created because the purchaser has more value than before.
When I see someone out here maintaining that imports are detrimental I know he's simply making up an economic theory to support a position. I tried reasoning but his response was to simply chant "Imports are Detrimental." At that point I unloaded on him.
Was I a little too blunt? Maybe. But I wasn't dealing with a child. Would I word it differently if I were to do it again? Probably.
But my understanding is that he really, really, really wants these trains and that he is willing to force people to pay for them so he can get what he really, really, really wants. If that makes those folks poorer he doesn't care. I don't like that. It's what he wants that counts and hang the cost other people must bear.
The TGV, on one line, seems to be covering its cost and making people better off. If that can be done in the US I'm all for it. But I have yet to see an indication that such a market exist here. And taxing people so they do what you want is not acceptable.
beaulieu I can answer this part, the French fell victim to the same "Build it and they will come" thinking as many others have. The project had negative amortization for the first 10 years or so. Then SNCF after several leadership changes figured out how to operate and market the services. The 15% ROI is a current figure from just before the recent downturn. Prior years saw lower rates of return. Obviously they picked the corridor with the greatest potential first. Paris - Lyon is served hourly by TGV Duplex with 528 seats (greater capacity than a 747), Friday and Sunday trains frequently have double Duplex (1056 seats) to cope with travelers. The route also sees hourly service to various Cote de Azur resort areas like Nice, Monaco, Perpignan, etc. Also hourly service to Marseilles. Eight trains per day to Geneve also ply part of the route. The routes to Brussels and London are a little less busy relatively, The LGV Est towards Germany has potential and should generate a positive return once the downturn eases more. The rest of the French HSR network is more problematic.
Thank you. That makes sense.
I just wish Trains would have included that information. I particularly wish they had included information on what operating and marketing changes the SNFC made to make the route successful.
As it is, Trains seems to be little more than an unthinking cheerleader for HSR. As the Paris-Lyon TGV has demonstrated, you can't just esablish a HSR route and expect enough passengers to show up to make it successful. What has made the route a success? They don't say.
Ken: Nice to hear your comment minus the dripping sarcasm. You have a valid point. Imported goods are often the only goods available - period. They are often the best quality goods. And they are frequently the cheapest goods and offer the best value to consumers. But there is another valid point that cannot simply be dismissed by citing one camp of economists vs another camp. At some point, the number of decently paying jobs left in this country for people not really suited for college-educated and high tech jobs may decline to a level that leads to a long-term declining economy. It is a discussion that should be occurring but gets lost, unfortunately in an overly partisan and politicized climate.
schlimm Sam1 schlimm Mr. Azema says "the line (Paris-Lyon) has paid for itself." The statement stands on its own merits, unless you are now claiming to know that he is lying. I don't recall claiming anyone is lying. Your statement: "In addition, the GAO has looked at the TGV, amongst other high speed rail systems, and concluded that all of them depend on the hoist [sic!] country government to pay for the infrastructure. That is to say, the capital costs. They have not paid for themselves, if by that term one means from the user's fares, and it is highly improbably that they ever will." You are unwilling to back up your statement with actual contradictory information. You claim that Mr. Azema's statement is incorrect, so by that logic he is either ignorant of accounting facts, delusional or lying. Take your choice, but disputing a competent official's statement requires more than just saying it is wrong. Here is a link to the GAO report: http://www.gao.gov/new.items/d09317.pdf Among other things, it calls for a dedicated ticket tax for rail funding, much like the dedicated tax funding for highways and airports, instead of unreliable funding from general revenue.
Sam1 schlimm Mr. Azema says "the line (Paris-Lyon) has paid for itself." The statement stands on its own merits, unless you are now claiming to know that he is lying. I don't recall claiming anyone is lying.
As I pointed out about a year ago, in another discussion on high speed rail, I read the five year financial statements for the French, German, Spanish, and Japanese high speed rail projects, as well as the financials for their supporting government sponsored corporations. Moreover, I read the corresponding government financials for the same period. In addition, I read the GAO report.
My readings were made about 12 to 15 months ago. I noted the key findings. One of the key findings was the absorption by the sponsoring governments of some or all of the capital costs. I have directed anyone who is interested in learning about the accounting and financing associated with these projects to the authoritative accounting and financial sources, which you might have seen if you had read my initial post carefully. I have neither the time or desire to school you in the intricacies of government accounting and finance.
Calling for a dedicated ticket tax does not obviate the key conclusions of the audit report. High speed rail projects require significant government intervention. Clearly, a ticket tax to pay for the infrastructure is a significant infusion of government money. The sentence is just one of thousands of sentences in the report. Determining how the government money is capitalized and subsequently adjusted, if at all, forms the basis for determing whether passenger rail projects are profitable, which is to say, whether they have paid for themselves.
A ticket tax to pay for the capitalized cost of the project would, in all probability, raise the fares to the point where the railroad would be unable to compete. This would be the case in the NEC. The primary reason high speed rail is able to compete is because the sponsoring governments have under written the capital costs and then, in effect, in many instances written off some or all of the capital costs. It is similar to restructuring a mortgage. The bank eats part of the principal, thereby making the monthly payments affordable for the borrower.
I did not say anything about Mr. Azema. There is no logical or other conclusion that can be taken from a statement that was not made. Such a conclusion is absurd. He did not give us any detailed accounting and financial information on which he formed the basis for his assertion.
Highlighting comments in color or bold is a form of shouting in a forum and email. If you want to quote me, the proper way to do so is with quotation marks "....."
Quotations were used for your remarks along with a color to distinguish from what I said. You have indicated that you do not accept the statement, which was made by Monsieur Azema, by your words. You tout your expertise, yet characteristically, you never choose to share any of the data which you claim indicates that capital infrastructure was not paid back by any of the three HSR systems studied in the GAO report.
Mr Azema's remarks need to be taken at face value with an asterisk. "Trains" did not delve into the details or basis for TGV-Sud being paid for; and there is some evidence Sam1 is familiar with that raises questions about what constitutes the 15% return. We are arguing on postulations and possible interpretations without asking for clarification from Mr Azuma ("Trains" source). It is one thing to pose a question; and quite another to attack the question as if it were a statement.
I would just like to point out that the Paris-Lyon TGV section is both the most heavily used and has been around the longest, giving time to pay off the investment. The former represents a bias in relative success given by the greater than average revenue. In addition, one might legitimately ask whether the cost of money was properly taken into account (maybe one post raised this earlier).
I and others have pointed out that certain social and economic benefits resulting from the TGV beyond fare revenue might also be included in achieving a "payback." This would take the question beyond a simple financial accounting.
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