High-Speed Rail
Does the U.S. Really Need It?
The three currently designated “true” HSR corridors are in California, Florida and Texas. Two additional corridors are seeking designation as true HSR segments. The Boston to Washington Acela corridor, mentioned previously, may be proposed by Amtrak to the Secretary of Transportation for formal HSR designation. The other would emanate from Chicago and be upgraded, via the completion of a Program-level Environmental Clearance, from an incremental upgraded corridor (120 mph) to a true HSR (200+ mph) segment if the study proves that to be viable. Each of those five corridors has significant population growth and implementation strategies that seem ideal for HSR.
The other seven federally designated elements are currently incremental upgrade corridors. These corridors will operate on the same tracks as the standard freight rail service. The Midwest Regional Rail, an 11-state rail system branching from Chicago, is one example. Those systems operate above standard speeds at up to 120 mph and offer a faster alternative and more throughput than is currently available.
California: a model for HSR funding
Of the three (possibly five) true HSR corridors, California is considered to have a model HSR funding and implementation strategy. The California legislature created the California High Speed Rail Authority (CHSRA) board in 1996 and tasked it to design, build, operate and maintain a 220-mph rail system to tie together the state’s metropolitan areas through a 790-mile basic system. This would connect the San Diego, Inland Empire, Los Angeles, Central Valley, San Francisco Bay and Sacramento areas. The CHSRA board, with five gubernatorial, two senate and two assembly appointees, has expended more than $70 million to complete the federally required environmental and engineering studies and bond-worthy business and implementation plans. That level of preliminary investment was required to assure that the $40+ billion needed for this largest single constructing project in the nation’s history is built in the correct corridors with stations in the best locations and using the most effective technology.
The result is a final Program Environmental Clearance now approved by the federal EPA, Corps of Engineers and FRA and certified by the CHSRA board on July 9, 2008. That plan provided the detailed background information for both the technicians and the voters to review. On Nov. 4, 2008, California voters approved $9.95 billion in HSR bonds. Of that amount, $9 billion is designated exclusively for the CHSRA project and $950 million will be expended to upgrade and integrate the rail feeder lines throughout the state. The $9 billion provides California’s share of the CHSRA project. Approximately $12 to $16 billion will be needed in federal funds, which seems quite feasible with the advent of ARRA and the STAA draft. An additional $6.5 to $7.5 billion is expected to be provided by private investors, of which 28 have signed non-binding letters of interest to invest. The 24 cities in which HSR stops are to be located have agreed to fund the construction and maintenance of the stations, which will save the project $2 to $3 billion.
Completion estimates have been made
California’s first element is expected to begin construction in 2012 from Anaheim north via Los Angeles and the Central Valley to Merced then in tunnels to Gilroy and via San Jose to San Francisco. It is expected to be completed by 2018-20. That starter-line is projected to cost more than $30 billion (2008 dollars) and carry 55 million annual riders with gross revenue of $2.4 billion and a net, after operating and maintenance costs, of approximately $1.1 billion. The state’s full 790-mile HSR basic system is expected to be completed between 2020-30, depending on funding variability, with an annual ridership of 93 million passengers and gross revenue of $3.6 billion per year. The net, after operating and maintenance costs, is projected at $2.0 billion annually. HSR also has the capacity to carry high-value, low-bulk cargo, such as computer components and mail, thus adding another revenue stream that has not yet been estimated.
Business plans developed by two top bond-worthy financial consulting firms (Charles River Associates and Cambridge Systematics) estimate that the completed CHSRA system will have the significant positive cash flow after all operating and maintenance costs as described. That net will amortize a significant amount of private investment to help build and later expand the basic system.
