Here’s a superb SAN DIEGO U-T op-ed on California HSR — especially the “outing” of the generally ignored “private” HSR boondoggle from Victorville to Las Vegas. The piece is authored by my friends at the REASON Foundation.
I had not previously seen this expose’ of the Vegas HSR scheme. Turns out it’s a gigantic taxpayer loan subsidy. More crony capitalism.
Subsidized HSR (there is no other kind) is a pet peeve of mine. One of hundreds, actually. But the madness surrounding HSR moves it easily into the top five.
Train seeks taxpayer money in hopes of private profits
By Wendell Cox & Adrian T. Moore
Thursday, August 30, 2012
San Diegans are being asked to pay for a couple of costly trains they likely won’t ride very often. State and federal taxpayers are picking up the bill for California’s high-speed rail line from Bakersfield to Madera in the Central Valley. With no funding source identified and ridership between two Central Valley locations likely to disappoint, the train’s chances of ever extending all the way to San Diego seem iffy at best.
A little bit closer to home, a private company is trying to build a rail line from Victorville to Las Vegas. But to build this “private” train, the company needs a taxpayer-backed loan from the federal government of $5.5 billion or more. In simple terms, it’s similar to the loan that solar panel company Solyndra received before going bankrupt, costing taxpayers over $500 million. Only the train’s loan would be 10 times bigger.
XpressWest believes it will be able to pay back the loan from its profits. The problem: There will be no profits. Our new Reason Foundation study demonstrates that XpressWest, if built, would be likely to lose between $4 billion and $10 billion over its first 24 years, making it impossible to pay back taxpayers.
XpressWest, of course, argues otherwise. The company curiously believes travelers from the Los Angeles area will drive one-third of the way to Las Vegas and then get on the train to finish the trip. They point to the train’s proposed 150 mile per hour speed and claim Interstate 15 between Victorville and Las Vegas will soon look like Interstate 8 just before a Chargers game.
Of course, the reality is that virtually all of the traffic congestion between Los Angeles to Las Vegas happens between Los Angeles and Victorville, not Victorville and Las Vegas. And anyone choosing to ride the train after having already gotten out of LA traffic will have to park, unload their bags, walk to the station, check in, ride the train, and then find a taxi or shuttle bus to get to their hotel in Las Vegas. As a result, XpressWest’s door-to-door travel time is likely to be longer than the time it takes to drive in most cases.
The train won’t save you money either. If two or more people are driving to Las Vegas, they can split the gas costs. If they drive to Victorville to ride the train, each person will have to buy their own train ticket, which is estimated to cost each traveler $50 each way.
XpressWest is being falsely sold to taxpayers as a private project. If it is private, why won’t commercial banks finance the project? Perhaps it’s the limited, but disastrous experience with private high-speed rail investments. In Taiwan, promoters have lost two-thirds of their capital because ridership has been nowhere near projections. The United Kingdom has had to bail out its Eurostar high-speed rail line because ridership between London and Paris is 60 percent below the levels projected for five years ago.
. . .
To read the full article, go to the link: