Monday, April 2, 2012

Why Didn't California Propose a Faster, Cheaper and Better High Speed Rail Project in the First Place?

California's High Speed Rail Authority has come up with yet another business plan, and this one really is faster, cheaper and better. Or so they say. U.S. Secretary of Transportation Ray LaHood says this plan will:
"deliver the economic benefits of high-speed rail faster and more affordably."
Saying that this project, now at $68 billion for a blended approach, is "more affordable" is similar to saying that a slightly used Ferrari is "more affordable" than a new one. Sure, it is. But it's still awfully expensive.

More to the point, however, is that to me it seems that cutting the price of the project by a third ($30 billion reduction) and claiming that it is now a better project makes it seem like the Authority doesn't have any idea what it is doing. (I know the new head of the Authority is well respected and this is his new business plan. One of the things he is trying to do is establish credibility with the Authority, and perhaps this plan will help. We'll see.)Any proposal that reduces costs by one-third and promises greater benefits makes me suspicious as to why it wasn't the original proposal. With California High Speed Rail it is especially weird because lots of people have been thinking about and planning this project for over forty years. Over the past year this project has tripled in cost, seen the size reduced, added an additional decade of construction time, had the cost reduced by a third, time for construction reduced and benefits increased. It just seems that no one has been minding the store since Proposition 8 passed. Here are the new benefits touted by the California High Speed Rail Association in their new business plan (Page ES-6):

    • Accelerated delivery of advantageous investments
    • Expanded early benefits for rail passengers
    • Reduced costs
    • Greater cost-effectiveness
    • Fewer construction and operating impacts on communities
    • Coordinated planning and investments among state, regional, and local agencies
    • Improved transportation and reduced congestion in metropolitan areas
    • Reduced air pollution, including greenhouse gas emission
    Without being snarky, I will point out that "reduced costs," "greater cost-effectiveness" and "coordinated planning" are not benefits in the absolute sense, and most of these are what should be reasonably expected for any project. Claiming as benefits that a publicly funded project will cost less than $100 billion and will be managed professionally should not be reassuring to anyone, regardless of their support for this project. Also keep in mind that jobs are a cost, not a benefit, so a $30 billion reduction in costs dramatically reduces any plausible employment gains.

    Ultimately, all of the business plans, wild swings in price and size, and dubious claims of benefits leave me with the feeling that no one knows what, exactly, this train is supposed to accomplish. We can optimize transportation networks for various purposes, but I don't see any evidence that the California HSR project is being optimized for any reason other than to prove that it can be built, at any cost.

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