Thursday, June 12, 2008

Answering the Sac Bee's HSR Questions

NOTE: We've moved! Visit us at the California High Speed Rail Blog.

Yesterday the Sacramento Bee said "answers are needed before November" on high speed rail. Let's see what we can do, shall we?

But the authority's preferred route for high-speed rail between the Central Valley and the Bay Area has always been the Pacheco Pass. To win over environmentalist opponents who worry that a new rail corridor through sparsely populated Pacheco Pass will induce sprawl, the authority wants to add Altamont as a potential recipient for funding. Thus the Galgiani bill. Because it's closer to Sacramento, Altamont has the added advantage that it would likely bring high-speed rail to the capital city earlier.


The sprawl opponents' main concern was addressed when a station at Los Banos was deleted. I've not encountered any environmentalist or enviro group that believes Altamont would be better from a sprawl perspective. If that belief is out there it's not driving the effort to revisit Altamont - that instead is being done by Central Valley lobbying organizations and of course, Cathleen Galgiani herself, whose district lies along the Altamont corridor.

While the Galgiani bill may improve high-speed rail bonds' chances at the polls, it does not resolve all the issues surrounding it. As Sen. Alan Lowenthal, the chairman of the Senate Transportation and Housing Committee recently observed, the high-speed bond act is not "a conventional public works project" – a dam or road, for example, built with borrowed money to be repaid with taxes or fees on the users or beneficiaries. Voters are being offered a "business proposition" – and a highly speculative one.


Alan Lowenthal is wrong. There is not much difference between a dam, a new freeway, and high speed rail. HSR is a commonplace public works project. It's only "not conventional" if you deny the existence of the rest of the world. Yes, it's new for California, but that does not make it some sort of totally crazy and unpredictable new idea. It's been perfected over the decades into a rather humdrum and normal project.

The High Speed Rail Authority assumes that the $9.95 billion in state bond money when combined with an unknown and uncertain amount of federal and local funding will attract enough private investors to finance the full $33 billion cost of the first phase of the project, between San Francisco, Los Angeles and Anaheim.


The private investment issue is uncertain, that I will grant. But who really believes federal funding is uncertain? Veto-proof majorities just supported $14 billion for Amtrak in the US Congress including some for HSR. Yes, it would be smart of Barbara Boxer, Dianne Feinstein, Nancy Pelosi, or some other California leader in Washington DC would direct some funds to the CA HSR project as a down payment on federal support, but given the broad support for passenger rail in the Congress, and Barack Obama's outspoken support for high speed rail the chances look very good for federal funding.

And as the Sac Bee editorial board surely knows, the feds aren't going to commit funding until California does. Someone has to make the first move here, otherwise we all just stare at each other.

The authority also assumes that high-speed rail operated by a private consortium will generate enough revenue to repay investors, cover annual costs and provide a profit. And, the authority says, high-speed rail won't need operating subsidies from the state.


That assumes operating subsidies are a bad thing. But even if we said they were, HSR lines around the world show operating profits. None require subsidies. SNCF, the French government train operator, is going to pay the government a €131 million dividend. As ridership is soaring on all rail lines in California surely there is cause to believe California HSR will be as successful as lines around the world.

Those are a lot of questionable assumptions. While there are obvious benefits to a modern high-speed rail network, particularly with fuel prices soaring, the Senate Transportation and Housing Committee outlined a number of potential risks and unknowns associated with this project. It raised doubts about the authority's ability to gain access to rights-of-way necessary to build a new rail corridor, especially through parts of Southern California already heavily congested with conventional passenger and freight rail networks. It noted that the financing plan relies on outdated estimates of construction costs.


But as a commenter explained a few days back these concerns are overblown:

It is quite surprising and upsetting that the media and nay-sayers are portraying this right-of-way issue as a deal killer when the CHSRA is already aware of these obstacles and trying to address them.

The CHSRA is not as of yet absolutely counting on using the freight rights of way. They acknowledge that doing so will minimize impacts and probably reduce, but according to the Bay Area to Central Valley EIR/EIS, they are not planning to try to seek agreements until the high-speed rail project has been given a go ahead by the state and the voters.

Doesn't this make sense? Why would we have this state agency make agreements that it can't back up? Hopefully there will be a successful negotiation between UPRR and CHSRA, but if not there is nowhere in the studies that indicated this will irrevocably hamper the project.


Well said. The Bee continues:

In the face of the state's big deficit, Lowenthal asks the key question: "What assurance can the authority provide that California taxpayers will not be stuck with a massive bill in the future if they approve the bond measure on the November ballot?"

It's a question high-speed rail advocates must answer for this measure to have a chance of passage.


Here the SacBee has shown it does not understand this issue at all. The key question is NOT what the financial cost of HSR will be - but instead what is the cost of not building HSR? The Bee's implicit assumption is that either we take a supposed risk on HSR or we save money by not building it.

Nothing could be further from the truth. Not building HSR consigns Californians and their economy to reliance on methods of travel that are undergoing major stress from high fuel prices - prices that are not expected to come down anytime soon, if ever. The SacBee should answer that question: what are they prepared to pay if we do not build HSR? Have they considered that not building HSR might in fact be the more costly and risky option?

Probably not. But then that's why we're here. To ask the questions our state's media won't. And to provide the leadership few else seem interested in providing. California's high speed rail project won't just be a boost for sustainable, affordable transit here, but will open the doors to high speed rail across the country. It's time for Californians to act like leaders again - and not fall prey to obsolete and disproved assumptions phrased in the form of a question.

16 comments:

bikerider said...

The sprawl opponents' main concern was addressed when a station at Los Banos was deleted.

Hardly. Coyote Valley, Holister, etc. are all fair game for the speculators. Even Los Banos too, because you know the legislature will remove any restrictions once the system is built.

I've not encountered any environmentalist or enviro group that believes Altamont would be better from a sprawl perspective.

Here is the short list:
Sierra Club
Planning and Conservation League,
California Rail Foundation,
Defenders of Wildlife, the
Transportation Solution Defense and Education Fund,
Grassland Water District,
Grassland Legal Defense Fund
TRAC.

mike said...

A few very telling facts:

Total annual SNCF profit was 1.042 billion Euros, or $1.6 billion. That means that TGV operating profit was much, much higher than $1.6 billion since SNCF operates a wide array of money-losing regional/commuter (non-HSR) lines.

Let's compare to the most recent earnings for the 8 largest US airlines (American, United, Delta, Continental, Northwest, Southwest, US Air, Jet Blue). These airlines lost money at an annual rate of $46.7 billion (with a b). In fairness, however, most of that is due to the costly Delta/Northwest merger. Excluding Delta/Northwest, the 6 remaining airlines lost money to the tune of a "mere" $4.6 billion per year. Every single one lost money except Southwest, and even Southwest only managed a razor-thin 1% profit margin in the recent quarter, which is a horrible showing given that they have a huge, huge competitive advantage in that most of their fuel is purchased at 60% below the market price (using hedges that are soon to expire).

But yes, I'm sure our main concern is that HSR will have trouble making an operating profit when competing against all those "strong" airline competitors... ;-)

Luis D. said...

@ bikerider

Actually Altamont was the prefereed route, against Pacheco Pass mostly because of the Protected Wetlands issue not so much the sprawl. Sprawlwise, the Los Banos area was the main concern because it is so close to that habitat. Your list is of Habitat and wildlife groups and their main concern is of that.

I'm sure they hated the idea that it was the prefered route but they had to decide to deal with it or take on the CHSRA in court and block them wich would defeat their cause (being an enviornmentalist), I'm of course refering specifically to the Sierra Club.

I'm sure their are also other sites and cities wich may see an impact from the stations being their, but we must seperate Sprawl from actual state growth and be able to tell them apart.

Ponto Verde said...

At Portugal they are distroying old train stations:

see in:

http://www.youtube.com/watch?v=zD7TW4KwO4s&eurl=http://a-sul.blogspot.com/

and at:


www.a-sul.blogspot.com

Anonymous said...

Actually, in habitat terms the Altamont route is considered worse than the Pacheco, thanks to the west end where it crosses the Bay. The Sierra Club has gone nuts and basically opposes transportation at this point....

TRAC preferred the Altamont route because of greater ridership, which does make some sense.

Matthieu Desiderio said...

Thanks for linking to our article.
We will soon release a paper about HSR in France (scheduled for June 30, 2008). If interested, just make a request through our website.
Kind regards,

Matthieu DESIDERIO
Transport Expertise Founder and Editor

Visit Transport Expertise:
http://www.transport-expertise.org
Subscribe to the Newsletter:
transport-expertise-subscribe@googlegroups.com

bikerider said...

Actually, in habitat terms the Altamont route is considered worse than the Pacheco, thanks to the west end where it crosses the Bay.

Not true. Even the various Save-the-Bay groups prefer Altamont.

Rafael said...

Please let's get the terminology straight so we don't talk past each other:

sprawl = area growth of a single city or agglomeration, typically by adding low-rise residential subdivisions connected primarily or exclusively by roads for motor vehicles

exurbanization = long-distance commuting from near the center of one city to near the center of another by high speed train. Riders are typically dropped off and picked up from the station in their city of residence by their spouses or else, they use bicycles or public transport. In the city they work in, they usually rely on a combination of public transport and walking. Some take a folding (electric) bicycle along on the train.

---

HSR does not induce sprawl.

However, exurbanization has happened in France, where it has become fashionable to live in scenic historic towns like Reims (Champagne) or Tours (Loire Valley) now that the TGV has reduced travel times to 45-60 minutes, for far less than the total cost of owning an additional car. Property values in these bedroom communities have risen sharply. Of course, the French don't really have a problem with this because local communities their get their funding from the central government, which also collects all taxes. Plus, many of Paris' suburbs are populated by immigrants who riot at the drop of Sarkozy's hat.

The situation is very different in California, where individual cities and counties depend heavily on locally collected property and sales taxes. Therefore, local politicians in rich areas like Silicon Valley perceive exurbanization as a serious threat to both their tax base and their electability: an exodus of worker bees would put downward pressure on local realty values.

I strongly suspect that all of the environmental arguments put forth against both Altamont and Pacheco are basically smoke and mirrors, proxies to avoid an honest discussion.

Over a century after the end of the Gold Rush, tailings that cinnabar miners in San Jose dumped into local creeks are still leaching 200lbs of mercury directly into the Don Edwards National Wildlife Refuge every year. Similarly, a large cement kiln in Cupertino still isn't scrubbing its flue gases, releasing around 500lbs of mercury each year from impurities in the coal used to fuel the process. Some of that no doubt ends up in the Wildlife Refuge as well.

Conversely, Los Banos would have had a strong incentive to develop a growth plan to protected the nearby wildlife habitat - it would be a reason for people to move there rather than to some other exurb. The Sierra Club could have demanded that the threatened area be designated a state park. Instead, they insisted on an outright and permanent prohibition against the construction of an HSR station. The SF-LA express line haul time would be unaffected by such a station.

From the state's perspective, Altamont HSR via the Southern Pacific Milpitas Line (owned by UPRR but embargoed for freight use) would appear make the most sense:

- no Dumbarton rail bridge, no threatened grasslands

- many communities served: southern East Bay (via BART feeder), Livermore Valley (via feeder bus), Central Valley (Tracy, Modesto, Merced).

- all trains would stop in both SF and Silicon Valley.

- regardless of alignment, 25% of all trains will provide express service, i.e. not stop between Silicon Valley and Los Angeles. It might take a little longer to get there than via Pacheco, but then again the choice of Palmdale over I-5 also added 10 minutes to total line haul time.

- the other 75% of trains will be semi-express or local trains that would stop at some or all of the stations along the Altamont corridor.

- according to the Authority's own estimates, construction would cost no more than Pacheco. However, the cost of a future spur to Sacramento would be sharply lower. Until then, a reformulated ACE service could connect Sacramento to HSR in Tracy and Modesto - boardings and alightings in downtown Stockton were minimal in 2006 (slide 4).

---

IMHO, the fundamental problem is that Central Valley towns - the ones pushing hardest for Altamont - have not offered peninsula cities any measures designed to keep a lid on exurbanization. For example, they could propose legalese requiring the operator(s) to charge higher fares on trips from the Central Valley into the Bay Area during the weekday morning rush hour (and eastbound in the evening).

Don't get me wrong, personally I'm fine with either Pacheco or Altamont. However, the issue keeps cropping up. The proposed "overlay" fudge jeopardizes the passage of the entire bond measure, because it would add around $6 billion to the tab - money that just isn't there.

It's time to put the cards on the table and hammer out an equitable solution that satisfies both the transportation and the tax base needs of the whole state.

Rafael said...

Note also that the Authority studiously avoided study of any Altamont variation with the Silicon Valley station at Santa Clara/SJC.

Of the 11 Altamont variations, only one (#9) served both San Jose and an Francisco (plus Oakland) without a Bay crossing, but it would require trains to change direction at San Jose Diridon. The Authority asserts this variation would add an unacceptable delay to the line haul times of express trains.

Looking at their map of proposed speed limits, that is not immediately plausible. Indeed, look at their own analysis of express travel times:

Table 7.2-12 (Pacheco base case):
SJ-Gilroy=0.15
Gilroy-LA=1:57
SJ-LA=2:09
SF-LA=2:38

=> SF-SJ=0:29, consistent with the number currently advertised on the CHSRA web site

Table 7.2-9:
SJ–Tracy=0:25
Tracy-LA=1:59
SJ-LA=2:19
SF–LA=3:17 (!!!)

=> implies 29 minutes dwell time at SJ Diridon! Even if the engineer had to walk - hello folding bike/Segway!?! - a full quarter mile down the platform so the train could reverse direction, there is no justification for a delay this extreme. Either someone made an embarassing mistake or, the entire process was biased from the very outset.

The Altamont via SP Milpitas Line variation with the Silicon Valley station at Santa Clara/SJC would result in an SF-LA line haul time of ~2:46 - hardly a dealbreaker compared to 2:38. The variation was never even considered by CHSRA.

Note that AB 3034 now explicitly requires an SF-LA line haul time of 2:42. Coincidence?

Rafael said...

Speaking of embarrassing mistakes - here's the correct link to that map of Altamont HSR via SP Milpitas Line.

Sorry, my bad.

Anonymous said...

Pulling no punches the editorial in the Contra Costa Times 6/12/08 reads
Boondoggle express
MediaNews editorial
Article Launched: 06/12/2008 11:01:50 PM PDT

CALIFORNIA FACES A huge budget shortfall, a weakening economy, a home foreclosure mess, a drought and the need to expand its reservoir system. Tax increases loom even as businesses are downsizing and inflation threatens a comeback.

Amid all these challenges, California voters will be asked to approve $10 billion in bonds in November to open the way for the Boondoggle Express. It's a high-speed, high-hopes rail line from San Francisco to Los Angeles that is short on planning and long on fantasy.

Of course, $10 billion is only the beginning. Another $23 billion will be sought from a deficit-ridden federal government and private investors wary of a recession. The cost of the high-speed train is estimated at $33 billion for the main line, with an additional $7 billion for spur lines to Sacramento and San Diego.

Does anyone who has followed the saga of the Bay Bridge debacle really believe the high-speed rail system will cost less than $60 billion, $80 billion?

But even at $40 billion, this is a boondoggle that would dwarf the Big Dig in Boston and the Bay Bridge fleecing combined.

The fantasy of duplicating a 200-plus mph rail system like the one in Japan or France through the Central Valley has been around for awhile. But soon voters will be asked to approve real money to fulfil it.

One might think by now that the high-speed rail plans for construction, operation and investment have been worked out in great detail with considerable confidence in their success. Even after spending $58 million over a decade in planning, that is decidedly not the case.

A week ago, a California Senate panel blew what should be a warning whistle for voters. Its report questions the financial assumptions made by the California High-Speed Rail Authority and urges significant changes to its plan to develop a 700-mile bullet train system.

"Neither the authority's 2000 business plan nor any of the agency's subsequent documents discuss the risks that might be associated with the project," charges the 27-page report by the Senate Transportation and Housing Committee.

The report says the rail authority needs to demonstrate greater financial transparency and accountability. In addition, the report urges CHSRA to present an updated business plan prior to the November election so that voters are fully aware of financial risks before they vote on the $10 billion bond measure.

These risks go to the heart of the system, including construction cost increases, less-than expected ridership or revenue, difficulty attracting private financial backers or acquiring land and the possibility that the state might have to subsidize the service.

If the Senate panel that studied the high-speed rail system is uncertain of its costs, investors, federal aid and income, certainly voters should be.

We have long been wary of high-speed rail in California. It would make more sense in a more densely populated area like the Boston-to-Washington, D.C., corridor than in California.

Besides, this state has a poor record of completing huge construction projects anywhere near budget or estimated date of completion.

We also have no confidence in claims that the train could carry passengers at a lower price than the airlines without subsidies, nor nearly as quickly. Then there is the major problem with the route, which serves the 1.3 million people in San Francisco and the Peninsula far better than the 2.5 million residents of the East Bay.

Adding to the uncertainty about the bullet train project is Union Pacific Railroad's unwillingness to sell its right of way for high-speed rail routes. That could delay construction and be a major financial setback.

This report is a loud and clear warning to all California voters not to be too eager to get aboard the Boondoggle Express.

Robert Cruickshank said...

I'll slam that ridiculous and idiotic editorial from the CC Times later today. It's something I keep hearing - folks think that because the state is in deficit we can't do this. That's fundamentally wrong, but whoever said the media understands reality?

And of course it says nothing about the cost of NOT building HSR - the best way to ensure further deficits is to shackle the state to soaring oil prices.

mike said...

This passage is particularly funny given that airlines are losing money hand-over-fist right now just trying to compete with super-slow, super-expensive cars, let alone a fast, efficient HSR system:

"We also have no confidence in claims that the train could carry passengers at a lower price than the airlines without subsidies, nor nearly as quickly."

Rafael said...

@ anonymous @ 8:59am -

you're not even prepared to state your name. All you did is copy-paste verbatim an "editorial" from someone who is too scared - or arrogant - to publish it in his own newspaper with a byline. You added nothing to the discussion yourself.

---

IMHO, the State Senate report does deserve a well-considered response from CHSRA. For all I know it is already busy drafting one.

However, the report did not in fact shoot down the idea of high speed rail at all, much less call it a "boondoggle". Rather, it recommended a substantially different approach to getting high speed rail off the drawing board:

a) put in place strong state supervision procedures for CHSRA before it exercises any part of the California bond authorization to award contracts.

b) give priority to land/ROW acquisition, grade separations, new track etc. in urban/suburban bottleneck sections at either end of the HSR starter line that already carry both freight and commuter rail traffic.

c) implement (a) even before matching funds are secured, in order to avoid delays and associated cost inflation.

d) shift the marketing effort from project advocacy aimed at voters to raising funds from the federal government and especially, from private investors. This should be based on a business prospectus that is based on updated cost estimates and full disclosure of the known financial risks.

e) give an explicit guarantee that California voters will not be asked to approve any additional bond if sufficient federal and/or private investment fails to materialize.

By contrast, AB 3034 as passed by the Assembly insisted on securing at least 50% matching funds from non-state sources on a section-by-section basis before any of the bond money could be spent. This mostly reflected the continuing political tensions over Altamont vs. Pacheco and a punt on implementation priority - not a solid basis for disciplined project management.

The HSR bond measure has been certified for the November ballot. However, my understanding is that Gov. Schwarzenegger has the legal right to pull it, e.g. if AB3034 is not passed by the Senate - quite possibly after further amendments.

Morris Brown said...

@Rafael

You wrote

"The HSR bond measure has been certified for the November ballot. However, my understanding is that Gov. Schwarzenegger has the legal right to pull it, e.g. if AB3034 is not passed by the Senate - quite possibly after further amendments."

My understanding is that only a 2/3 vote of the legislature can pull the measure off the fall 2008 ballot.

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