Here’s a SUPERB 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.
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http://www.utsandiego.com/news/2012/aug/30/train-seeks-taxpayer-money-in-hopes-of-private/
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.
. . .
To read the full article, go to the link:
http://www.utsandiego.com/news/2012/aug/30/train-seeks-taxpayer-money-in-hopes-of-private/
Comments 5
Why, oh why, am I not surprised? I really hope this stops with new governing.
Author
Ms Right, IF this Vegas train is built, it will be entirely with a federal loan (which, I can guarantee, WILL default). CA will not have a role, except perhaps to complain about the environmental damage.
So, as long as you don’t pay federal taxes, you have nothing to worry about!
Uh oh.
Richard – I thought that piece was flawed and it is the same problems that Reason has whenever they take up HSR discussions – they ignore the real and serious issues of airport congestion and limited options to expand whenever they try to score points.
Now I don’t have time to do this with any rigor but 10 minutes of travelocity and iflyswa.com I found 70 (SEVENTY) non-stops this Friday out of the Southern California Airports (checked LAX, Burbank, San Diego, and OC. Didn’t get to Long Beach and Ontario) to Vegas. SEVENTY – suggesting at a minimum about 10,000 seats on a Friday night. I think LAX had at least 40.
Now we can quibble and argue as to why but there is really only one intellectually honest conclusion about Southern California airports – THEY WILL NEVER EXPAND RUNWAY CAPACITY. NEVER. If we couldn’t get El Toro done, we don’t stand a ghost of a chance of ever adding a runway at SAN or expanding OC.
Reason would advance the ball further in their arguments if they would think about airports. Trains will require subsidies. Probably big ones. But in an era in which our more valuable resource (airports) are constrained I am not sure that is a bad thing
BTW – I would wish for a market solution (bidding on landing slots) but that has about 0% chance of happening because of how the industry has captured the FAA.
So Erik, your assumption is that all 10,000 people now flying to Vegas on Friday will opt for this Victorville HSR? Really??
Do the math — drive to Victorville, board the train and see which gets you to Vegas faster. And cheaper. And without taxpayer subsidies. Don’t forget the total car costs to and from Victorville. Especially from San Diego!
And who rides the train the other 5 days a week (after the Sunday Vegas penniless return)? MAYBE 3,000 people a day? And for this we taxpayers should guaranteed BILLIONS and BILLIONS of loan dollars for this HSR madness? And billions more in operating subsidies?
Invest YOUR money in that train if you like — encourage others to do the same. Just don’t come after mine — and indeed the money of everyone in the COUNTRY.
I chose Friday because it was easy. Surprisingly Vegas is pretty popular the entire week. You can run the flight analysis for a Wednesday.
I wasn’t clear. I don’t expect all 10,000 to use the train (but I do think a big bunch will). Vegas is surprisingly “non-car” focused. The resorts DO NOT WANT you driving – they want you gambling.
But what I do know is that these Vegas flights are “ineffective” for our economies. FAR better for those landing slots to go to long haul flights, for example, to the East Coast. Absent doing SOMETHING to help So Cals get to Vegas start to imagine that EVERY Friday afternoon/evening landing slot will go to such a flight at Lindbergh. Remember, from an airline point of view they LOVE it – since it is a high yield/low cost haul. But pity the person that needs to fly back to Boston at the end of a day of meeting with our biotech firms. They will be SOL unless they want to transfer through LAS.
IF the train can punch through to Palmdale the folks in the San Fernando Valley would likely be CLOSER to the train station than they would to LAX (in traffic). Starts to become a more compelling option.
Again, the point about HSR that Reason just refuses to think about is that So Cal airports are HIGHLY constrained. Now since I love the smell of asphalt I don’t have a problem with widening more freeways. But if you are not going to do that (and you can’t expand airports) you better think of SOMEWAY to move people because the region is going to get bigger and we are going to need transportation infrastructure.