High-Speed Rail Burns Money Fast

President Barack Obama was correct last week when he said, “There is no reason why other countries can build high-speed rail lines and we can’t.”

We can do what other countries have done to build high-speed rail. And like those other countries, we would lose huge piles of money doing it.

Obama made the statement while announcing $1.2 billion in government funding for a high-speed rail line between Tampa and Orlando, part of $8 billion in federal money being doled out for various passenger rail projects around the country. He said such projects could be an “economic engine.”

Nowhere in the world does high-speed rail make a profit. The director of high-speed rail at the International Union of Railways in Paris last year told The New York Times [NYT] only two high-speed rail lines - in France and Japan - manage to break even.

Transportation expert Wendell Cox noted in a September 2009 Budget & Tax News article, “Rail promoters have never produced financial statements prepared in accordance with generally accepted accounting standards to show any high-speed rail systems are profitable. Invariably, services are provided by government-owned railways or other large companies that do not report fully allocated costs and revenues for high-speed rail.”

High-speed rail performs best in densely populated corridors, which the Tampa to Orlando run is not. That line would cover 84 miles of track, with train speeds topping out at 168 mph. But the trip by car takes only 90 minutes. Under the rosy forecasts of the high-speed line backers, the train trip would save barely 30 minutes.

And once at the train station, most travelers would still need other transportation to their final destination. How many people are likely to give up the convenience of their car for that?

Meanwhile, deficit-burdened California has already committed $9 billion for a high-speed rail line with costs projected around $50 billion. Obama last week announced $2.25 billion in federal funding for it.

But the cost estimates keep soaring. Cox noted if even half the $8 billion in rail funding the Obama administration is doling out went to the California project, it would cover little more than the cost escalation that has occurred since the last formal estimates in 2006.

Even if high-speed rail projects could be built on time and within budget, a March 2009 U.S. Government Accountability Office report concluded high-speed passenger rail would have little impact on the congestion, environmental, energy and other issues that face U.S. transportation.

Draining billions of dollars from private businesses and individuals to subsidize projects that almost never come close to paying for themselves and will have little impact on the nation’s transportation system will not speed the engine of economic growth. It will help grind the engine to a halt.

Steve Stanek is a research fellow at The Heartland Institute in Chicago.