California as HSR Model?

While we are debating the role of passenger rail in the economic stimulus, our neighbors to the north (Canada, not Oregon) are looking to us in California for direction on their high speed rail concepts. An article in Monday's Globe and Mail explores what we have to offer, and concludes the key point is private partnerships:

The success of Proposition 1a should come as welcome news to Canadian high-speed rail advocates, who have long dreamed of such service between Windsor and Quebec City, and connecting Calgary, Red Deer and Edmonton...

The implications for Canada are clear: If we want to drag Canadian passenger rail service out of the 1960s, Ottawa must include private partners, a development that could mean selling the moribund Via Rail to a transportation consortium that understands the technology, the market opportunities and is willing to invest.

I am not convinced VIA Rail's problems stem from any innate "moribund" problems but from a persistent lack of support from both Liberal and Conservative governments, but the author seems to believe that the great lesson of California is that private partnerships are necessary to building HSR.

I don't think that's entirely accurate. Private investment has been seen as a way to round out the final financing numbers and in particular a way to earn the backing of Governor Arnold Schwarzenegger. The key to California HSR's success is public support - from Proposition 1A to the all-important federal contribution. I have always argued private investors will be interested in participating, but that their role should be limited. John Lorinc, author of the Globe and Mail article, doesn't agree and seems to bring an agenda primarily driven by free market ideology and not evidence:

What's clear is that pure private plays don't work, while publicly owned passenger service tends to suffer from a lack of investment. (An exception is Spain, where the state has moved aggressively to build high-speed rail since 1994.)

Earlier attempts to privately develop such networks in Texas and Florida failed because of inadequate financing.

Publicly owned passenger service has not suffered from a lack of investment in China, France, Germany, or Italy (I'm sure there are other examples out there; those are just the first four that come to mind). And of course HSR in Texas and Florida wasn't failed by financing problems but was killed by the Bush brothers.

Not surprisingly, it is Alberta where talk of privately operated HSR has been centered:

In Alberta, meanwhile, a consortium led by retired banker Bill Cruickshank [no relation] has lobbied Alberta to consider a privately operated high-speed rail link between Edmonton and Calgary, to be financed through a proposed partnership between the consortium and public backers. Alberta Premier Ed Stelmach made positive noises about the plan, but has refused to release the results of a market assessment conducted in 2007. As Mr. Cruickshank notes, "If the government said it wouldn't work, I'm sure they would have told us."

High-speed rail, as Mr. Cruickshank argues, is tailor-made for public-private partnerships. Such train networks are extremely capital intensive and therefore depend on public financing to get going. But as a transportation service that competes vigorously with airlines, private operators will bring the necessary marketing savvy, as well as the ability of amortizing capital costs over a long period.

I can't disagree that HSR and PPP are a good match - given the logic of PPP. Whether that logic is the best possible method of building and operating HSR is another matter entirely. I am pleased that Bill Cruickshank understands the transportation and environmental benefits of HSR and has been a strong advocate for passenger trains in Alberta. And, given the political realities in that province, PPP is probably the only way an Alberta HSR will ever become real.

But that would be a conclusion Alberta draws on its own. That is not the California lesson. No, what California shows is that if you give voters the choice, they WILL commit public funds to high speed rail, and that private investment may have a place but is neither necessary nor sufficient to HSR success. HSR deniers spilled a lot of ink arguing that Prop 1A was a stealth tax increase on Californians but voters approved it anyway - and approved outright tax increases for trains in San José, Marin-Sonoma, and Los Angeles. The Canadian Liberal Party's Green Shift may have been ill-conceived and poorly sold by the inept Stéphane Dion, but given the choice, it is likely that Canadians too would vote to spend public money on high speed rail, even if it cost them more in taxes.

What California shows is that the key is generating public support for high speed rail as a concept. The specific mechanism of funding, from the role of private financing to the generation of public monies, are important but not determinative. Canadian HSR supporters, whether they are in Alberta or the Windsor-Québec City corridor, should focus their efforts on making the case for HSR to the public and in the halls of Parliament and provincial assemblies. Public funding can either bring private supplements or, if the groundswell is strong enough, be itself sufficient for HSR projects.

Now to convince DC Democrats of that fact...