The Difference Engine: Fast track to nowhere

OF ALL the high-speed train services around the world, only one really makes economic sense—the 550km (340-mile) Shinkansen route that connects the 35m people in greater Tokyo to the 20m residents of the Kansai cluster of cities comprising Osaka, Kobe, Kyoto and Nara. At peak times, up to 16 bullet trains an hour travel each way along the densely populated coastal plain that is home to over half of Japan’s 128m people.

Having worked for many years in Tokyo, with family in Osaka, your correspondent has made the two-and-a-half hour journey on the Tokaido bullet-train many times. It is clean, fast and highly civilised, though far from cheap. It beats flying, which is unbearably cramped by comparison, just as pricey, and dumps you an hour from downtown at either end.

The sole reason why Shinkansen plying the Tokaido route make money is the sheer density—and affluence—of the customers they serve. All the other Shinkansen routes in Japan lose cart-loads of cash, as high-speed trains do elsewhere in the world. Only indirect subsidies, creative accounting, political patronage and national chest-thumping keep them rolling.

California wants a share of that bullet-train hubris. Where Florida, Ohio and Wisconsin have turned down billions of federal dollars for high-speed rail, the Golden State has been pressing on with its $43-billion scheme to build a high-speed rail service from Los Angeles to the San Francisco Bay Area, with spurs eventually to San Diego, Sacramento and San Luis Obispo.

The irony is that California has the highest rate of car-ownership in the country, if not the world. It also, despite years of neglect, has one of the best road networks anywhere—certainly leagues ahead of Japan’s. On top of that, it enjoys a highly competitive network of budget airlines serving its main cities. The Los Angeles Times got it about right when it editorialised on May 16th that “California’s much-vaunted high-speed rail project is, to put it bluntly, a train wreck”.

And an expensive one at that. Between them, the federal government, municipals along the proposed route and an assortment of private investors are being asked to chip in some $30 billion. A further $10 billion is to be raised by a bond issue that Californian voters approved in 2008. Anything left unfunded will have to be met by taxpayers. They could be dunned for a lot. A study carried out in 2008 by the Reason Foundation, the Howard Jarvis Taxpayers Association and Citizens Against Government Waste put the final cost of the complete 800-mile network at $81 billion.

That is probably not far off the mark. Last week, the state's Legislative Analyst’s Office came out with a damning indictment of the project’s unrealistic cost estimates and poor management. The bill this legislative watchdog put on the first phase of the high-speed rail project alone is $67 billion—and higher still if the project runs into trouble gaining route approval in urban areas.
The report warns lawmakers in Sacramento not to appropriate any money for the project until big changes are made in the way it is managed. The biggest such change is to transfer day-to-day operations from the High-Speed Rail Authority (HSRA), set up to oversee the project, to the California Department of Transportation. Caltrans, which designs and manages the state’s major roadworks, is widely respected around the world for its engineering prowess and professionalism.

That has not stopped the HSRA from racing to get construction started by 2012. To be fair to the authority, $3.6 billion of the funding from the federal government is stimulus money earmarked for use before the presidential election in 2012. While it would make more sense to use this cash to make a start on the link between San Francisco and San Jose, the only part of the proposed route not plagued with political infighting is the sparsely populated Central Valley. Besides, the White House has insisted that the stimulus money be used to create jobs within the Central Valley, where unemployment in many farming communities exceeds 20%.

As a result, the first section of California’s high-speed railway, estimated to cost $5.5 billion, will run 65 miles between the tiny towns of Bordon and Corcoran in the midst of the Central Valley’s farmland. When it was announced last December, critics promptly labelled it “the line to nowhere”.

In defending its decision to lay track in the middle of nowhere, the HSRA argues that there is plenty of space there, little resistance from local residents, and that the line from Los Angeles to the Bay Area will eventually have to go through that part of California anyway. The small section of high-speed track will be connected at both ends to existing lines used by Amtrak, the government-owned passenger railway. Conventional trains will run over the new section until the rest of the high-speed route is completed.

Some are beginning to wonder when, if ever, that might be. The eleventh-hour compromise on the federal budget last month stripped out $400m for high-speed rail in the present fiscal year (2010), and eliminated all federal funding for high-speed rail for the forthcoming fiscal year (2011). That puts the $19 billion in grants that the HSRA was counting on receiving by 2016 in doubt. The congressional action could even put the kibosh on the Central Valley track. And because the bond vote in 2008 required the issue to be matched, dollar for dollar, by money from the federal government, the future of California’s bullet train has begun to look decidedly hazy.

The problem in making the case for high-speed rail in California is that, though it is the most populous state in the union, there are simply not enough people packed into the 50-mile wide coastal strip that wends its way 350 miles from Los Angeles to San Francisco. Put it this way: the Shinkansen plying the Tokaido route have access to some 180,000 potential passengers per mile of high-speed track. Even by 2025, when California’s population is likely to have grown from today’s 38m to 46m or so, the number of people within the coastal strip is unlikely to exceed 85,000 per mile of track.

To put it yet another way, coastal Californians would have to live cheek-by-jowl—as  Japanese people in the megalopolis that stretches from Tokyo to Osaka do—to have any chance of a high-speed rail service that offered at least half a dozen trains an hour and did not require huge tax-payer subsidies. Few would be prepared to make such a sacrifice. With petrol costing half the price paid in Japan and Europe, they will doubtless continue to use their cars for two-to-three-hour journeys and fly for anything longer.
Source http://www.economist.com/