Sunday, March 24, 2013

The Californian high-speed rail project

The Californian high-speed rail project 

A prestige investment

by Szilard Peredi

The construction of the high-speed rail in California started with big expectations, but now it seems that the efficiency of the project is strongly questionable.

The High-speed rails are probably the most amazing transport systems of the world. These rails are the symbols of the future’s technologies in some way. Maybe that’s the reason, why it becomes to a prestige investment instead of an efficient movement of the governments.

Of course, it’s very hard to compute the costs and the benefits before the construction. The engineers have to take into account the demography and macroeconomic changes, the intertemporal trade-offs, and a lot of stochastic variables. But after the construction, they also need to find all of the externalities, to be able to rate the project. So you can never have an ultimate opinion about the success of a HSR development.

However, if a project lost the support of the majority before the first segment of the implementing, probably something went wrong. This happened in the case of the Californian high-speed rail project. The project biggest purpose is to connect Los Angeles and San Francisco with high-speed rail service by about 2028. 

The project wasn’t the only in the USA, but all of the other HSR programs was canceled because of the local politics. It can be said generally, the US government with Barack Obama supported the projects, while the local politicians were against them because of the nuisances. And in this fight the only survival was California with its strong democratic background.

It’s hard to believe that with this history this could be an efficient program, and the happenings justify our opinion. The California High-Speed Rail Authority, which is managing the project, announced a delay, which reduced the supporter basis of the construction. And this basis wasn’t so strong before the notification either.

In The USA the property rights are strong, and this is hardly compatible with big infrastructural developments. The planned track traverses a lot of farmer’s land, and they doesn’t see any of the advantages of the project. But this also could be said about churches, schools, businesses and homeowners near the track.

If we suppose that the government is the arm of the citizens, the project wouldn’t be finished at all. In 2008 people voted $9 billion bond issue to funding the early stages of the project. And this is just a small part of the whole needed finance support. The whole cost of the bullet train project is $68 billion.

After 4 years, in 2012, a USC Dornsife/Los Angeles Times poll found changes in people’s opinion. The 55% of the answerers want back the $9 billion bond issue, which was voting with majority in 2008, and 59% said that, if they could vote again in this case, they would vote against it.

The plans also changed a lot during the 4 years. According the new calculations, the cost of the project will be the double of the original amount. Moreover, now the constructors plan the sharing of the track with slower commuter and freight trains in some areas.

According to the coalition of bullet train backers this investment is needed in long term, because the other forms of transport, like cars and airplanes, will reach their limit.

But we can say that these problems come with democracy, and don’t affect the long term efficiency. But the poll saddest part is the results, which said that the most of the people don’t think that, they will use the HSR in more than once in a week.

Of course, none of the arguments above guarantee the failure of the Californian high-speed rail project. The bias of the poll could be big, and the opinions maybe temporary. But I think that this project shows a good example, that a mainly political prestige investment how becomes a not supporting money wasting.


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