Tampa-Orlando High-Speed Rail Could Cost $3 Billion More Than Expected

Published January 23, 2011

If the proposed Tampa to Orlando high-speed rail line goes over budget or fails to meet ridership expectations, Florida taxpayers could get stuck with a bill of up to $3 billion, according to a new report from the Reason Foundation.

Longstanding research shows costs are underestimated on nine out of every 10 large passenger rail transportation projects, with cost overruns averaging 45 percent higher than anticipated. If the Tampa-Orlando rail line were to go over budget by 45 percent, Florida taxpayers would be on the hook for $1.2 billion more than the $280 million currently forecast.

Could Be Even More
The Reason Foundation warns Florida may be miscalculating the costs of high-speed rail by even more than that. The expected cost of building the first segment of California’s high-speed rail line is 111 percent higher than Florida’s, $67.8 million per mile compared with $32.1 million per mile in Florida. Using California’s estimated cost per mile, the costs of the Tampa to Orlando system would be $3 billion more than advertised.

The Reason study also flags concerns about ridership numbers.

The Florida project is predicted to carry 2.4 million riders annually, two-thirds the ridership on the existing Amtrak Acela Express service. The Acela trains serve several big metropolitan areas, including New York, Washington, DC, Boston, Philadelphia, and Baltimore. The population of those cities is approximately eight times that of the Tampa and Orlando metropolitan areas.

Much Greater Risk
“The risk to Florida taxpayers is likely to be many times greater than current projections for this high-speed rail proposal,” said Wendell Cox, author of the report and head of Wendell Cox Consultancy. “History tells us that cost overruns could run into the billions and ridership shortfalls will likely leave taxpayers with an open-ended bill for operating subsidies.”

“It’s understandable that some are dreaming of flashy high-speed rail trains carrying tourists and residents between the two cities,” said Robert Poole, director of transportation at Reason Foundation and a transportation advisor to Florida Gov. Rick Scott’s (R) administration. “Unfortunately, the numbers just don’t add up. When you look at realistic construction costs and operating expenses, you see these trains are likely to turn into a very expensive nightmare for taxpayers.”

The study says Florida should consider cancelling the high-speed rail project, as Wisconsin and Ohio have recently done. Or, if the rail plan moves forward, the state should ensure the builder and operator will be financially responsible for all cost overruns and revenue shortages.

Chris Mitchell ([email protected]) is director of communications for Reason Foundation.

Internet Info

“The Tampa to Orland High-Speed Rail Project: Florida Taxpayer Risk Assessment”: http://www.budgetandtax-new.org/article/29162