Virgin California?

The Times is reporting Richard Branson wants a piece of California HSR:

Virgin Trains, which operates the West Coast Main Line in Britain, is bidding for a slice of President Obama's multibillion-dollar upgrade of the American rail network, The Times has learnt.

Virgin is understood to be the only British company involved in the President's plan to build high-speed rail links between key cities on the East and West coasts of the United States. Virgin has been asked to submit a proposal for developing this infrastructure and has held meetings with the new Administration in Washington.

They may be overstating this case dramatically - Obama doesn't really have a "plan" to build HSR, at least not in any great detail. It would be interesting to know what they mean by "has held meetings with the new Administration" - it could be a basic "get to know you" fact-finding meeting or something more. But our own LA-SF route features in whatever it is Virgin is planning:

Virgin and other high-speed operators, such as SNCF, of France, are expected to work with the US Department of Transportation to develop its rail plans and then bid to operate individual services.

Virgin is keen on the Los Angeles to San Francisco route and also the East Coast line linking Boston, New York, Philadelphia and Washington. There are 30 return airline flights a day between Los Angeles and San Francisco and a high-speed train service could replace many of those, cutting carbon emissions. The journey would take less than three hours and voters in California have already agreed to raise $10 billion to start work on a line that would run from Sacramento, the state capital, to San Francisco, Los Angeles and San Diego.

I've always figured that SNCF and Virgin would be among the companies showing interest in operating our HSR line, so this is an expected development. That being said, I'm not sure that private operators are either necessary or desirable and have expressed my skepticism on this point ever since the first few posts on this blog. Public operators in France and Spain have done a good job running the system, as has Amtrak here in the US, and I'd prefer that any "profits" be given to expansion of the system and not to Richard Branson's wallet.

Tuesday Open Thread

I'm headed to Arizona for the holidays and will be back on December 29. So in the meantime we'll have a few open threads every other day to tide us over.

I wish I had more time to write about this, but Yonah has an excellent post on HSR privatization over at The Transport Politic. He looks over the two kinds of privatization - of infrastructure and of management - and concludes, rightly, that both are unworkable and unnecessary. With John Mica aggressively pushing privatization it is worth taking a close look at this and pushing back against ideologically-driven efforts to fix something that isn't broken. Public entities have had great success operating HSR around the world and the US should emulate that model.

One of the very first posts on this blog reached similar conclusions about HSR privatization. Worth a look.

The US Senate Ready to Step Up on HSR

Although this blog is primarily focused on Proposition 1A through November 4, we do need to pay attention to the federal government when necessary. We've had strong indications of support from leading national politicians on high speed rail over the course of the year. Once Prop 1A passes our focus will shift toward ensuring those strong indications become firm realities. In that light it's worth spending a moment to consider a John Kerry/Johnny Isakson funding concept that the two Senators are kicking around. Kerry is of course a Massachusetts Democrat, Isakson a Georgia Republican, but together they are sounding like strong HSR supporters, as demonstrated in an Atlanta Journal-Constitution interview of Isakson on HSR:

Kerry’s office wouldn’t answer questions about the measure, dubbed the High Speed Rail for America Act, but a letter he sent to colleagues talks big: “$200 million per year in grants, $8 billion in tax-exempt bonds, $10 billion in tax-credit bonds for high-speed intercity rail facilities, and $5.4 billion in tax-credit bonds for rail infrastructure.”

Kerry and Isakson are focusing on Birmingham, Alabama to Washington, DC but this concept can apply to our own HSR project, which after November will be the closest by far to reality. Senator Isakson shows a very astute understanding of the need not just for HSR but for government involvement in getting it off the ground:

Q: Why should government be involved in this at all? If it’s really worth doing, won’t market forces lead private enterprise to make it happen?

A: Sometimes you have to make the investment in the hub if you will, like aviation, or in the spine, like in the line from Boston to New York, to then make the rest of the system viable. And, again, I don’t think general taxpayer subsidies make sense in transportation … it’s a user investment in the system they are using in turn to make an income.

This formulation may be key in bringing Senate Republicans on board - government needs to "prime the pump" and build basic infrastructure to spur private enterprise. Isakson is talking in systemic terms here, understanding the value that an HSR spine - like SF to LA - provides for the entire passenger rail system.

Now I strongly disagree with his claim that taxpayer subsidies don't make sense in transportation - they most certainly do, for without them we wouldn't have a transportation system at all. Airports and freeways require continuous subsidies to maintain operations. But let's game this out for a moment. If Isakson is willing to support federal government funding for tracks...that's pretty much all we need them for anyway. HSR generates an operating surplus "above the rail" - meaning that subsidies are either not going to be necessary for ongoing operations or they'll be costs California can handle. If Isakson doesn't want the federal government to pay for ongoing CA HSR operations, but is willing to help pay for construction costs - which is how I read his statement - then that's a deal I might be willing to take.

Isakson also understands the economic value of HSR - especially during hard economic times like these:

Q: The U.S. economy hasn’t been in such bad shape for years. Is it a little strange to be talking such an ambitious project that would cost so much at this moment?

A: The economy’s struggling now in part because of the high cost of fuel, because of the high cost of commodities, and that rolls right back into the whole transportation issue. I mean if you can reduce your dependence on oil, then the demand goes down so the price goes down.

From your lips to other Republicans' ears, Johnny. He clearly understands the connection between HSR and economic recovery. Namely, the first leads to the second.

Logan Nash at Trains for America is reserving his judgment for now:

A high-speed rail initiative in this county would be great if executed well, but we don’t want any nascent project to siphon funds and support away from our already functioning Amtrak system....The way Isakson talks seems to point to a European-style system where a public entity owns the infrastructure, which private-ish operators then rent.

In other words, the role of private enterprise in HSR is going to be a key battleground for us after November 4. I'm on record as favoring a limited role for private enterprise and am strongly opposed to giving them a place in system operations. But if Isakson is willing to agree to federal assistance for track construction and then letting the states determine the role of private enterprise, well, that would be workable.

And of course all this demonstrates that federal support for HSR is quite strong - despite what the HSR deniers would have you believe.

Arnold Embraces Prop 1

So reports NBC11:

Gov. Arnold Schwarzenegger has placed his support behind a costly high-speed rail system in California.

Schwarzenegger told NBC11 he wants California to lead the way in transporting commuters across the state at near-record speeds while reducing global warming at the same time....

On the very spot where the Transcontinental Railroad was established nearly 140 years ago, Schwarzenegger told Luery that a less-than-three-hour trip from San Francisco to Los Angeles represents the type of progress that can take place in the Golden State.

"I think we need high speed rail," Schwarzenegger said. "If you think right now our trains in America are running the same speed as 100 years ago. That's not progress. I think we can do much better than that."

Arnold has been playing footsie with high speed rail for a while now. He tried to gut the funding for the Authority last year, only to then publish an op-ed in the Fresno Bee expressing support for the project. His support appeared to be dependent on HSR providing public-private partnerships, which AB 3034 would help produce.

His approval rating has been dropping, but he still remains the dominant political figure in the state, and his support for Prop 1 is certainly more welcome than opposition. Whether Arnold will campaign for Prop 1 around the state remains to be seen, and it would certainly do much to both prove the depth of his commitment to the project and to build a stronger consensus for Prop 1 across party lines.

Of course, Arnold's longtime Republican rival and dedicated train hater Tom McClintock was quick to attack high speed rail:

"It just doesn't pencil out," said state Sen. Tom McClintock, R-Thousand Oaks. "It's $40 billion just in construction. That's more than $1,000 for every man, woman and child in this state -- all for a train that will go from L.A. to San Francisco in about two hours longer than it takes to fly there."

McClintock called the system a boondoggle and said that the money would be better spent improving California's highways.

$1,000, perhaps, but that is spread out over 30 years - which is $33 a year, or 64¢ per week. I might be able to dig that out of my couch cushions. In the life of the HSR project most Californians will recognize well beyond $1000 in savings at the pump and at the ticket counter.

It's also no surprise McClintock raises the old "airplanes are faster" claim. In fact, if you include travel time to the airport, and the wait in the terminal (including security) a flight from LA to SF will take roughly the same amount of time as the high speed train - just over two and a half hours. What's more, HSR offers a far more convenient form of travel - business travelers can conduct cell phone conversations, perhaps use WiFi or even videoconferencing, instead of being crammed into a plane where cell phones and WiFi are verboten.

McClintock also shows his total ignorance of the airline crisis which will make air travel within this state more expensive and less frequent. For most Californians, HSR and feeder rail lines will become the primary method they use to get around the state.

Instead McClintock wants to shackle Californians to soaring oil prices. I mean really, $40 billion in highway expansion? Not only will that not buy you very many new freeway lanes, but it would be doubling down on California's reliance on oil. The McClintock solution to high gas prices simply doesn't exist - he thinks we should just pay it and continue driving as if everything's normal.

Thankfully not all Republicans agree - Curt Pringle, Arnold Schwarzenegger, and others recognize the value of HSR. With their support voters will too.

Fantastic AB 3034 News

The Senate Transportation Committee today approved AB 3034 by an 8-4 vote. But as our friend Erik Nelson reports it included some great amendments, including Sen. Leland Yee's plan to restore the primacy of LA-SF:

The committee, at the urging of Sen. Leland Yee, D-San Francisco, restored language that restricted use of the $9.95 billion in bond proceeds to the "spine" of the 800-mile system, which is now slated to run from Anaheim to Los Angeles to San Jose and San Francisco through the Antelope and San Joaquin valleys.

Cathleen Galgiani was not aware of that change before entering the hearing room, which may cause some problems in reconciling the bills between the Senate and the Assembly. But the Senate's version is superior. LA-SF is necessary to be the spine of the project and the notion of building it in pieces was always a poor approach to the project's politics and efficiency. The original plan was sound: LA-SF first, then the extensions to SD and Sacto as a guaranteed Phase II. Rome wasn't built in a day, neither will HSR.

Nelson also reports that a rule change giving project design work to Caltrans is causing controversy:

One change that caused Republicans to bristle along with representatives of private contractors was one that says the High-Speed Rail Authority "shall utilize" the engineering and project design services of Caltrans, the state's transportation department.

Republicans, of course, are bent on privatizing all aspects of state government, even the good ones, regardless of whether it's actually cost-effective to do so - see a earlier post of mine on Calitics about the matter. Caltrans' record is excellent (the issues with the east span of the Bay Bridge were due to external political meddling), but there are apparently Constitutional questions surrounding this aspect of the amended bill, and the committee has not committed itself to that language.

Other aspects of the Senate Transportation Committee's amended AB 3034:

Among the bill's 33 provisions are limiting bond money from paying more than half of any track or station construction cost so that federal, private or local funds would have to pay for the remainder, and allowing only 10 percent of that money for planning and engineering costs.

The bill also would establish an eight-member independent review committee appointed by state financial and legislative leaders.

Both changes should help address the concerns with financial risk of the system, although the HSR deniers will surely not be appeased. The committee also directed the CHSRA to come up with a revised business plan by October.

Republicans opposed the proposal, unsurprisingly. Although some Republicans like Curt Pringle strongly support HSR others remain opposed to any action that will help the state address its energy and environmental crisis. Senate Republicans want to shackle the state to oil and cars and eliminate alternative transportation. Thankfully Senate Democrats have come around and understood the value of high speed rail and provided some necessary fixes to AB 3034.

We will now work to ensure the bill passes the Senate and that these changes are accepted by the Assembly, so that we can move forward with the Yes on Prop 1 campaign for November. High speed rail's time has come, and the California legislature is showing some welcome if overdue leadership on this.

Veto-Proof Majorities Support Amtrak/HSR Bill in Congress

Congress threw down on rail today in a big way:

A nearly $15 billion Amtrak bill passed the House Wednesday as lawmakers rallied around an alternative for travelers saddled with soaring gas prices.

The bipartisan bill, which passed by a veto-proof margin of 311-104, would authorize funding for the national passenger railroad over the next five years. Some of the money would go to a program of matching grants to help states set up or expand rail service.

Besides the $14.9 billion provided for Amtrak and intercity rail, an amendment to the bill would authorize $1.5 billion for Washington's Metro transit system over the next 10 years.

The US Senate also passed an Amtrak reauthorization by a veto-proof majority. But there are some big differences between the House and Senate versions, and as Congressional Quarterly reports it might not find an easy resolution:

The $14.4 billion reauthorization measure passed 311-104, but future prospects for the legislation are less certain. An expected conference committee with the Senate could be tough...

Republicans acquiesced in the price tag exchange for language prompting privatization of a high-speed rail line in the Northeast Corridor.

The line between Washington and New York would move passengers between the metropolitan cities in less than two hours. Private companies would bid on the construction of the line, which lead proponent John L. Mica , R-Fla., says is a gold mine....

The Senate version does not have privatization language and Amtrak supporters in that chamber, such as Frank R. Lautenberg , D-N.J., are unlikely to accept it easily.

Let's be clear: the Acela, and any HSR line between DC and NY, should not be privatized. Amtrak runs that line quite efficiently. It has grabbed 40% of the market share on the Northeast Corridor and its ridership is rising dramatically. Acela could be improved, but not by privatization - instead by upgrading the overhead catenaries and the tracks so that the system can provide even faster service.

Still, the votes are a significant vote of confidence in passenger rail. It should suggest to Californians that Congress is very interested in supporting our own high speed rail project - and that as Democrats will gain much larger majorities in Congress this November, and with a President Obama (we hope), passenger and high speed rail will get enormous federal subsidies.

It would be nice if California's Senators - Barbara Boxer and Dianne Feinstein - would step up and direct some of this money to our own HSR project, even if it's just a few million dollars, as a sign of support and to help shore up political support ahead of the November vote. But let there be no mistake - the feds are ready to invest in high speed rail. It's now California's turn to step up and do the same.

Fresno Bee Slams Union Pacific

In their Saturday editions the Fresno Bee ran an editorial criticizing Union Pacific's efforts to block high speed rail. They didn't pull any punches:

There are several possible explanations for the railroad's move:

Union Pacific is positioning itself for negotiations on any future sale of right of way to the California High Speed Rail Authority.

Union Pacific, in the historically civic-minded nature of railroads in California, is genuinely concerned about the safety of rail passengers.

Union Pacific doesn't know what it's talking about.

The high-speed rail authority has never considered buying existing Union Pacific right of way. Instead, the proposed route would carry trains near the existing tracks in some areas -- not on them. High-speed rail requires dedicated tracks, with grade separations and barriers that keep the trains away from all other trains, as well as other vehicles and pedestrians.

Ouch. Personally I doubt the UP is being civic-minded - it's not really in their nature - but I understand where the Bee is going with this formulation. The editorial also makes a crucial point - we're not talking about putting HSR right next to freight trains, at least not on the sections UP owns.

Union Pacific is correct to preserve its ability to expand. Increased rail freight capacity is as important to California and the nation as building high-speed passenger lines. With the cost of diesel fuel soaring even higher than gasoline, and considering the tremendous pollution that diesel engines cause, we're all better off when freight moves by rail rather than by truck.

But Union Pacific's "safety concerns" might be more usefully focused on the dangers its trains and tracks pose in the neighborhoods they travel through, here in Fresno and elsewhere.

The Bee is right to point to freight rail's importance to our economy. I agree that UP ought to be able to expand - and the Bee is right that HSR doesn't impede that ability.

I also think we should keep in mind the relationship of the UP and the public. They were the original public-private partnership - we gave them huge land grant subsidies in exchange for building the transcontinental rail infrastructure that we realized was needed for the economic growth of the West Coast. Since then government has given them numerous subsidies and perks, such as protection from certain kind of state regulation, their own police force, deregulation of labor rules in recent years, and massive publicly-funded construction projects like the Alameda Corridor.

We need to keep in mind that UP isn't any random private company, but a company created specifically to serve the public interest. There is nothing wrong with insisting they not impede the public, and reminding them of that obligation is a good idea right about now. Political leadership, especially from our Congressional delegation, would help UP understand this - and that if they want to expand their freight operations, they should help us expand our passenger rail services.

Arnold Schwarzenegger Says "Travel the World, Support High Speed Rail!"

I've occasionally mentioned that the origin of my support for high speed rail was a trip on Spain's AVE line from Madrid to Sevilla in 2001, in the context of a broader argument that a surefire way to generate support for rail travel is to put people on a train and show them how useful it is, and how good it could be at a high speed.

Today Governor Arnold Schwarzenegger made much the same argument, but in a rather odd way:

Speaking at a forum on global economics held by the nonprofit Milken Institute, the governor suggested lawmakers would be more willing to embrace his plans to privatize the building of roads, schools, high-speed rail systems and other public works if they could see how effectively it has worked in other countries.

"Some of them come from those little towns, you know what I am saying, they come from those little towns and they don't have that vision yet of an airport or of a highway that maybe has 10 lanes or of putting a highway on top of a highway," Schwarzenegger said. "They look at you and say, 'We don't have that in my town. What are you talking about?'

"So they are kind of shocked when you say certain things. So I like them to travel around."

It's a pretty strange way to frame the argument for a number of reasons. The overall context is Arnold's effort to defend travel junkets paid for by his corporate allies, and using high speed rail trips as an example. A closely related context is Arnold's effort to privatize everything in sight despite the poor track record of privatized government. In fact, if legislators traveled to France or Spain, they'd see a government-run high speed rail system that turns enough of a profit to seed the construction of new lines. Somehow I doubt Arnold's corporate buddies are interested in showing off the positive benefits of European socialism.

Nor am I convinced that telling legislators from small California towns that their horizons are narrow is going to accomplish much. It had a mixed effect on a Republican assemblyman from Hesperia:

Assemblyman Anthony Adams, a Republican from the mid-size city of Hesperia (population 83,000), said Schwarzenegger's comments, "while I'm sure well-intentioned, reek of a certain elitism that doesn't help foster a cooperative working relationship."

Last month, Adams toured Japan's high-speed rail system on a trip organized by the Senate Office of International Relations. He said he paid for the week of travel with campaign money and personal funds, and was impressed that Japan's system is efficient and well-managed.

"I'm awful grateful I did it," said Adams. "It will help me make the case for why high-speed rail is right for California."

I do believe that Arnold is right that Californians should embrace technologies and systems used successfully around the world. We've done this many, many times before, and in a global economy California has to keep up with Europe and Asia or fall permanently behind. And while a surefire way to create a lifelong HSR supporter is to put them on the TGV or the AVE or the Shinkansen, it's not necessary to leave the continent or even the state to see the value of HSR.

Many Californians instinctively understand why HSR is necessary when we explain the need to replace air travel for financial, environmental, and practical reasons; or when we explain the economic and climate benefits of the system. But if we want to go a step further, Arnold should be encouraging Californians to take trips on the state's extensive train network. Ride Metrorail, or Caltrain. Take a trip to Santa Barbara on the Pacific Surfliner, or a trip from Sacramento to the Bay Area on the Capitol Corridor. That would show Californians the value of rail travel as well as get them to see why high speed rail would be so much better than what we already have.

Of course, that would all require Arnold to stop trying to destroy public transportation in California. We welcome his support on HSR, but he also needs to understand HSR works best when there is a strong feeder network of mass transit.

Harry Reid Moves on Maglev to Vegas

Nevada Senator and Majority Leader Harry Reid is pushing the maglev from LA to Vegas plan, proposing a $45 million appropriation to conduct additional studies and planning for the project. Reid was down on the Desert Xpress plan and believes maglev is the solution to Southern Nevada's traffic woes:

“If it’s going to be really done in a big way, a Las Vegas way, the magnetic levitation would be the way to do it,” Reid said. “We could bring someone from L.A. to Las Vegas, and vice-versa, in less than an hour,” he said. “If we can get this done, it will be the showboat of the world.”

Reid scoffed at DeMint’s advocacy of a competing, private company’s plans for a regular train between Las Vegas and the Antelope Valley, in the desert some 85 miles northeast of downtown Los Angeles. Reid questioned whether tourists would drive through the traffic of Los Angeles to Victorville to take a train the last 200 miles.

Unfortunately even $45 million is raising right-wing hackles - apparently it's perfectly legitimate to spend limitless amounts of money on an endless war, but god forbid we attempt to address our infrastructure needs. The current argument in the Senate is that the maglev money is "pork":

As the bill came to the Senate this week, Republican anti-earmark crusader Sen. Jim DeMint of South Carolina cried foul. DeMint said that the train was a speculative venture. “If we were asking members of the Senate to invest their own personal money in this project… none would reach for their wallet.”

President Bush signaled he is not pleased in what he sees as extra spending in the bill.

What we're seeing is an attack on efforts to do something about our transportation, energy, and environmental crisis in the name of fiscal conservatism. HSR opponents realize they won't win by attacking the system's merits, so they trot out "pork" and "subsidy" in hopes they can scare voters and Senators into opposing HSR on those grounds. They would prefer we did nothing and saved a few bucks today instead of spending some money now to save us from greater costs and problems in the future.

The irony is that much of the transportation system we use on a daily basis is the product of earmarks and subsidies. And the desire to hold down government spending will accomplish little other than the worsening of the transportation/energy/environmental crisis. By not spending money now, we will face a far higher cost down the line of dealing with peak oil, global warming, and collapsed infrastructure. It is an inherently short-term view that puts immediate savings over long-term investment - sacrifice the future for the sake of the present. Is $45 million really too much for the US Senate to handle? We spend that much in one second in Iraq. Surely it can be spent on America's own economic future.

Looks Like Jim Battin Needs Our Help Too

It looks like high speed rail in California is starting to get more attention - especially from conservative op-ed writers. Last week I examined why Dan Walters' HSR ideas were so flawed. And now Republican legislators are getting in on the HSR-doubter act. Jim Battin is a Republican State Senator representing the 37th district (Riverside County), and last week published an op-ed in The Desert Sun titled "High-speed rail plan off-track". As Sen. Battin just returned from the Japan HSR trip, it's a more interesting piece than Walters', but it also repeats many of the same basic flaws - particularly a myopia about the continued availability of cheap oil-based travel. Below I deconstruct Sen. Battin's flawed arguments.

I know The Desert Sun disapproves, but I recently spent a week in Japan leading a bipartisan delegation that met government officials and studied the country's high-speed rail system. In November, Californians will be asked to approve our own high-speed rail project. From what I saw, firsthand, taxpayers need to approach the idea with great caution.
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High-speed rail works in Japan because of the country's geographical uniqueness and the smart government policy decisions. The country is roughly the size of California, but has four times the number of people, 80 percent of whom are located in major urban centers.

And according to the latest figures some 97.7% of Californians live in an urban setting. Not all of them live in the state's "major urban centers" but well above 50% do, living in close proximity to the proposed HSR line.

Japan's geography is not all that different from California. The two main differences are that Japan is an island nation, and does not have anything like our massive Central Valley. But like Japan, most California urban areas are located along coastal plains and valleys, hemmed in on several sides by mountain ranges. This actually creates fairly natural corridors for HSR.

In the 1980s, Japan National Railways was a public sector failure, running a yearly operating deficit, with a huge debt, declining ridership, high fares, and poor service. Japan broke up the public sector monopoly and created private, passenger-rail companies to serve different areas of the country and compete for the consumer's yen.

The three companies serving the most urban areas operate with no government assistance. One way they do this is by owning the key real estate around train stations, allowing the rail companies to operate retail centers that offset the cost of service.

This should be balanced out by noting that SNCF and RENFE, the French and Spanish public sector railways respectively, are both public sector successes. Ridership continues to climb on both countries' HSR systems. And they DO provide "competition" - not with each other, but with the airlines that serve the same corridors. In both countries they are competing with a great deal of success.

As to owning the real estate around the stations and building transit-oriented development (TOD), that appears to be a central part of the California HSR plan.

From my own experience, it is clear the Japanese "Shinkansen," or bullet train, model has been a success. Private-sector efficiencies reduced costs, while rail fares remained stable. The trains, operating at up to 186 mph, are clean, safe and service is readily available. Consumers responded by increasing ridership more than 20 percent.

Still, the service is not cheap. The line fare from Tokyo to Osaka, which at 251 miles is a little shorter then from Los Angeles to San Francisco, costs 13,200 yen, or about $130 one way. In contrast, Californians can find a flight from LAX to SFO on Southwest Airlines as low as $39 one way, and Southwest gets a traveler there in half the time.

It is good that he recognizes the success of Japanese HSR, but he then goes on to make probably the greatest possible error one can make while assessing HSR - assuming that present travel conditions will continue indefinitely into the future. They won't.

Does Sen. Battin really want us to believe that Southwest will be able to offer $39 flights for much longer? As one of our commenters explained, those super-cheap fares are not the usual price a traveler pays for a one-way trip. And even the more accurate $65 figure is not long for this world. As oil prices continue to soar and peak oil puts the squeeze on fuel supplies, airlines will have no other choice but to raise fares. Last week rising fuel costs put three airlines out of business - Aloha, ATA, and Skybus. And the remaining carriers are feeling pinched too, as they increase fares, fees, and fuel surcharges while passenger numbers continue to decline.

We cannot use "cheap, fast Southwest airlines" as a reason to not build HSR because there is a very good chance that neither they nor any other carrier will be able to offer cheap fares for much longer. And it only takes "half the time" to fly as opposed to take HSR if you don't count the actual travel time involved with flying, including travel time to the airport, check-in, security, etc. When all that is factored in, HSR is about even with flying.

The plan itself has been a boondoggle even before voters have their say. The Legislature initially placed the bond on the 2004 ballot, but then moved it from one election to the other trying to "time" when both the state budget and economy were healthy. While waiting for that electoral magic, taxpayers have spent millions to fund a California High Speed Rail Authority that has had no rail to build.

That isn't a "boondoggle." The CHSRA has had very modest funding, which they have used to develop a solid plan that voters will evaluate this fall. The only person responsible for the two delays of the HSR vote has been Arnold, who didn't want it on the ballot in 2004 or in 2006, when his other infrastructure bonds were facing voters. To call this a "boondoggle" is to misuse the term.

The $9 billion bond gets the rail line started, but the authority estimates the total capital cost for the project at a staggering $25 billion, a figure definitely lowballed. To put this in perspective, each Californian will spend about $715 dollars, almost $3,000 per family of four, to subsidize high-speed rail. That's before they even get a chance to buy a ticket.

And the 9/11 airline bailout was $15 billion alone, which doesn't include over $5 billion in other annual subsidies to the US airline industry. Yet Sen. Battin never discusses those kind of subsidies, nor the tens of billions in annual road subsidies spent here in California. For Sen. Battin, like most conservatives, somehow only passenger trains are seen as getting subsidies; all other forms of transportation somehow magically prosper all on their own.

The fact is that transportation has always been subsidized in America, ever since New York spent $25 million to dig the Erie Canal in 1825. Given the size of this country it cannot be any other way. Instead of unfairly and unrealistically attacking the existence of subsidies, Sen. Battin should be asking whether these subsidies will reap value for Californians. In the case of HSR, they will.

Of course there is no guarantee the rail service will be profitable. The proposal anticipates one-way fares set at only $55 in the year 2018 - a ridiculous presumption by a bureaucrat trying to "sell" the bond. Given Amtrak's sorry pattern of taxpayer bailouts, and Japan's own history with high-speed rail, government is bad at operating rail lines best run by the private sector.

This $3,000 subsidy will be the beginning of what California families will pay and pay and pay.

Of course, Sen. Battin gives us no reason why the $55 fare is "ridiculous." Nor does he explain the rather important point that the "$3,000 subsidy" wouldn't come all at once, but would instead be spread out over many decades. And there's no guarantee any of us would have to pay it. European HSR systems - which he routinely ignores - repeatedly turn an operating surplus, which can be used to pay off the bonds.

Nor does Sen. Battin provide this with any context. Even if every Californian would have to pay a $3,000 subsidy for HSR over 30 years, that pales in comparison to what Californians would have to pay over that time in plane fares, gallons of gas, airport expansion costs, and freeway widening and maintenance costs. Sen. Battin makes one of the common errors of HSR critics - assuming the project exists outside of any real-world context.

Of course, only government subsidies kept the major carriers in business the last 7 years, which suggests a rather major flaw in Sen. Battin's anti-public sector subsidy argument. Amtrak is routinely made to do much more with much less than their airline counterparts get - and still they've taken nearly half the market share from the airlines on the Northeast Corridor.

Battin closes his article claiming to welcome the greater use of public-private partnerships (P3) in HSR but says that isn't enough to back the plan: "Right now, this proposal is not a rail we should be riding."

But since his own arguments are so full of holes, flaws, and inconsistencies, I don't think Californians should feel any hesitation about HSR based on Sen. Battin's ideas. It's a shame more California Republicans don't grasp the actual issues and realities of HSR. But as the polls continue to suggest, neither are California voters buying what the Republicans are selling on HSR.

HSR and P3: A Shotgun Wedding?

As those of you who have been reading me at Calitics for the last year know, I love high speed rail. And you'd also know that I am deeply skeptical - to put it mildly - of public private partnerships (P3). So what am I to do when they are joined together in a shotgun wedding? From a press release put out by the California High Speed Rail Authority:

California High-Speed Rail Authority Executive Director Mehdi Morshed, joined Governor Schwarzenegger Tuesday in participating in a roundtable discussion at the State Capitol regarding the importance of investing in California's infrastructure and maintaining the state's economic growth through public private partnerships.

Mr. Morshed noted the California proposed system of high-speed trains offers a unique opportunity to develop a new model for “P3” or public private partnership financing....

Mr. Morshed noted that high-speed trains are attractive to private investors because California’s proposed system will bring a $1 billion annual profit or surplus, once built.

Now it's not as if this is totally new. The 2002 Implementation Plan always envisioned that private financing would play some sort of role in the HSR project, although at the time it was expected to be limited to the bonds.

But what exactly is meant by "private financing" - and how bad might this really be for HSR?

The Authority’s finance team anticipates public-private partnership opportunities will include project debt financing, vendor financing, system operations and private ownership.

I can live with private involvement in debt and vendor financing, even though government can always borrow more cheaply. System operations is iffy at best - government runs the French, Spanish, German, and Japanese lines quite well, and when system operations were privatized in Britain, the results were deadly. Private ownership, however, is a line we must not cross - public ownership of infrastructure is key to an effective, safe, and affordable transportation system for Californians. High speed rail is an economic catalyst and an environmental and sustainablity necessity. It needs to be held in public hands for public uses, and not hollowed out for private profit.

And that $1 billion is a very, very enticing figure, especially for private companies and investors, who likely see in public infrastructure the kind of profit opportunities that they are now being denied in real estate and financial speculation. But that $1 billion would also be incredibly useful in building out the full HSR network envisioned in the 2002 Implementation Plan - or extending the service beyond its current routing (building an Altamont Pass alignment, for example).

In Europe, those operating surpluses are regularly plowed back into expansion of the HSR network. Spain's first HSR line, the AVE train from Madrid to Córdoba and Sevilla, proved so profitable that RENFE (Spain's government-owned rail network) was able to plow that money into recent extensions to Malaga, Valladolid, and Barcelona. France's state-owned rail network, SNCF has been able to do the same with expansion of its TGV lines as well. The operating surplus alone does not pay for these projects, but it helps reduce the added bond or tax monies needed to construct the new lines. Or, the surplus could be used to pay the bonds off ahead of schedule.

So there is a strong incentive to use those operating surpluses for HSR upgrades and extensions or bond repayment, instead of handing it over to private investors. But it seems clear that P3 is the price of obtaining Governor Arnold Schwarzenegger's support for the plan. From the press release:

The bond measure, which is within the Schwarzenegger Administration’s current debt capacity guidelines, will also provide nearly $1 billion for improvements to local and regional passenger trains projects that complement and connect with the high-speed train system. The bond is also a significant component of the Governor’s Strategic Growth Plan as described in his proposed 2008-09 budget.

That section, especially the language about "debt capacity guidelines," seems a very clear signal to me that Arnold is going to throw his weight behind the November HSR bond - but only because it promotes his goal of P3 for public works.

It's a shotgun wedding, and the question is, how should we react? Is HSR worth the price of P3? Already we're having to accept a lot of tough things to get this project moving. The Pacheco Pass alignment seems less ideal from a ridership and environmental perspective. And the plan floated by Fiona Ma and Cathleen Galgani to drop the insistence that LA-SF be the first line to open risks building a system that contains a missing link.

But neither are these poison pills. As I noted above, the Implementation Plan always called for private investment, to leverage the state, local, and federal funding. What seems more worrisome here is that Arnold is using HSR to advance a privatization agenda that is already being implemented in our state. HSR is too important a project to force into a shotgun wedding with Arnold's privatization push.