Infrastructurist Compares HSR Projects Around the World

Yonah Freemark, who runs the excellent The Transport Politic, also writes for Infrastructurist where earlier this week he posted a a great chart comparing HSR projects around the world, including our own:


(Click for full size image)

The chart compares our project to the Beijing-Shanghai HSR route, Argentina's TAVe, Israel's Tel Aviv-Jerusalem route, HSL Zuid from the Netherlands to Belgium and Paris, Lyon-Torino, and Saudi Arabia's HSR plan. Our cost per mile is third highest, but does much better than the shorter HSL Zuid line and is comparable with the Lyon-Torino line (whose high costs are likely due to Alpine tunneling).

It also shows a wide difference in what is actually considered as "high speed rail" - only our project, Argentina's, and China's will provide average speeds above 150 mph.

Ultimately this shows that California is actually getting a lot of bang for our buck. We're getting a much longer route than the higher cost trains in Europe. Sure, we're not looking at Chinese levels of cost, but then I don't think we will either want or would accept the labor standards and wages of China either.

HSR as Strategic Value

There's a fascinating op-ed in the Yomiuri Shimbun by Yoshiyuki Kasai, chairman of the Central Japan Railway Company, focusing on the strategic importance of HSR. Kasai makes a point I've been trying to push out here on the blog - that in the 21st century, a global economy is simply not competitive without something like high speed rail. Dependence on oil is the mounted cavalry of our time.

I don't agree with all that Kasai writes - he supports maglev, for example - but it's a useful read on how the global perspective is changing. Non-oil based infrastructure projects aren't just a way to move people. They're a sign of modernity, of a society that has both feet firmly planted in the 21st century, of a society that looks ahead to the strategic challenges of a new era and chooses to meet them sensibly, instead of choosing to foolishly cling to the delusional belief that the 20th century can continue.

Railway services are regaining importance in the 21st century as a high-speed means of transit amid the global recognition of energy security and environmental protection as the most pressing priorities for mankind in the new century

In the 19th century, European states regarded railway construction as a synonym for industrialization and expansion of imperial rule. In the United States, private companies, spearheading transcontinental railway construction, played the strategic role in opening up the frontier and, with state-sanctioned privileges, developed vast areas at their discretion. For its part, Japan joined the railway development race half a century later. By the end of the 19th century, 750,000 kilometers of railroad tracks had been laid around the world.

It may be hard for us to imagine, but the Trans-Siberian Railway and the Transcontinental Railroad were the moon shot and ICBM of their time. Before the cheap oil boom temporarily revolutionized transportation, nations understood that a vibrant rail infrastructure was essential for economic development. Today most nations now understand that HSR is similarly necessary for strategic advancement - witness the massive HSR program in Spain, or the continuing expansion of the French syste, or the project in places as diverse as Argentina, Morocco, Iran, and Vietnam. If California thinks they can remain globally competitive without a reliable method of moving people around the state that isn't dependent on sky-high oil prices they're insane.

Today, a short while after the beginning of the 21st century, high-speed railways are gaining a new dimension of strategic importance. Needless to say, high-speed railway operations that ensure safe, punctual and rapid mass transit have tremendous advantages in meeting 21st-century requirements, such as advanced energy consumption efficiency and the use of nuclear electric power and other clean energy sources.

Notice what Kasai points out as having "strategic importance" - safe, punctual, rapid mass transit. Advanced consumption efficiency, the use of clean energy sources. Nuclear is surely controversial, but California's wind and solar potential is among the most promising in the world. The CHSRA is expected to release its own study on renewable and carbon-neutral energy sources anytime now, and BART has embraced solar power. The strategic challenge of the 21st century is no longer to build enough aircraft carriers or freeways - it's whether we can build infrastructure that can keep a modern society functioning without being dependent on fossil fuels.

Many countries, including the United States, which has so far been less enthusiastic about high-speed railways, are showing interest in rapid transit development. Such a situation effectively means that Japan, which boasts a decisive edge over other countries in the fields of high-speed transit technology, expertise, installation and operations, now has a strategic card in its hand.

Japan has a right to brag here. A nation that is famously dependent on imported resources can boast a transportation system that is largely, if not totally, self-sustaining. France can make the same boast, as its power comes mostly from nuclear sources. Does California really believe it can keep up with just Southwest Airlines and Interstate 5?

Kasai argues that the US should follow the European model and use public funds to build the infrastructure while using HSR fare revenues to pay for the operating expenses. It would be an investment on par with those we made in the middle of the 20th century, when we built bridges, freeways and aqueducts with public money that were essential to California's dramatic late 20th century economic prosperity. If we wish our prosperity to continue we need to make a similar investment in our time - and HSR is that investment, as Kasai argues:

If a maglev train plan is adopted by the United States, Japan should consider exporting the best of its high-speed railway system to its ally. Now that high-speed railway transit is considered essential for the strategic needs of the 21st century, it is significant that Japanese technology could contribute to such a U.S. initiative as a key step to consolidating the alliance between the two countries.

How secure an alliance is can be determined not only by military cooperation, but also by multifaceted and collaborative relationships through the sharing of roles and interdependence in industrial fields.

That's how Kasai ends his article, and though we can substitute HSR for maglev, I really like how he closes. Global relationships in the 21st century will not be sustained by military cooperation, but by the "multifaceted and collaborative relationships" described here. America's longtime allies in Japan, France, and Germany have an enormous amount of technical skill and innovation to share with us - as well as capital. Perhaps it is time for an American Marshall Plan, where those nations we helped in the late 1940s can come and return the favor in the 2010s by providing the technical knowhow to help California join the 21st century and build high speed rail.

As with the original Marshall Plan, though, the benefits weren't given - you had to ask for them. President Truman didn't ride around Europe throwing dollar bills from the back of a truck, and nobody will do so today. If Californians don't pass Proposition 1 this year, they will be consigning themselves to permanent and fatal dependence on an obsolete model of fueling our economy. Friends around the world like Yoshiyuki Kasai want to help us help ourselves. Why would we say no?

HSR Is An Attractive Investment

In the comments on the previous post there is an interesting discussion about private investment in high speed rail, including some understandable concerns about whether that money will materialize given the worsening credit crunch facing the global economy.

California HSR is actually very well positioned to benefit from this, and there is every reason to expect that private investors will line up around the block to be a part of it. To understand that point we must first look to France where SNCF has turned a profit by emphasizing high speed rail. (H/T to The Overhead Wire)

Guillaume Pepy, SNCF chairman and chief executive (PDG) since February, says that, unlike his predecessors who had to manage a railway recession, he is presiding over an accelerating boom. The state-owned SNCF delivered a net €1.1bn (£875m) profit last year and first-half figures, due next week, are said to be sparkling. Pepy envisages up to 80m extra passenger trips this year or an increase of around 8%.

"This change will speed up because we are facing a twin energy and environment crisis," he says, pointing to surging fuel costs and growing personal worries about carbon footprints. "People want sustainable mobility and, in France, more trains and more SNCF."

Rail travel is booming around the world as well as here in California, as the latest numbers prove. Given that oil prices are going to remain high for the foreseeable future, we can reasonably expect train ridership to continue rising.

In other words, ridership will grow. And what do private investors look for? Growth opportunities. Don't be fooled by the weakening economy - there remains an enormous amount of capital sloshing around global markets, looking for a good rate of return. Currently a lot of that capital is in oil, creating speculation that is partly responsible for the high level of oil prices (but only partly - the underlying fundamentals of insufficient supply to meet demand remain likely to keep prices high for a long time to come).

But even though oil prices are on a long-term upward trajectory, they are also volatile. Over the last week prices fell by $10/bbl before rising again. Private capital would prefer a much more stable and reliable investment. Something fixed, that won't be ephemeral, and something that offers the prospect of long-term growth.

Meaning infrastructure. It's no accident that the largest funds are looking to own physical things instead of worthless mortgage tranches or the declining dollar. Abu Dhabi's purchase of the iconic Chrysler building is but one example of the trend. More relevant is Argentina's high speed rail example, financed by a French bank.

High speed rail would be an extremely attractive investment even in a bad economy and during a credit crunch. It offers returns with very little risk. Every high speed rail system in the world has strong ridership levels and most generate operating surpluses. SNCF relied on it to return to profitability. Here in California the long-term airline crisis and oil crisis, as well as global warming rules, will help sustain high levels of demand.

The key is public funding. A presentation at the June 2008 CHSRA meeting explained the results of a survey of private investors who might be interested in our project. Many were supportive, but said that they needed a minimum of 60% public funding to be willing to invest, and would be most comfortable with 75%. In other words, the state of California needs to provide the first stake, and then the federal government.

Given that HSR is such an undisputed global success, it should not be difficult to attract private investment. Proposition 1 is the necessary first step to bringing that about. If we vote for it, we will build it - and they will come.

Argentina Launches High Speed Rail Project

Major news out of South America - this week the government of Argentina and a consortium led by the French high speed train builder Alstom signed the contracts to build a high speed rail link between Buenos Aires, Rosario, and Córdoba - some of Argentina's largest cities.

Patrick Kron, Alstom’s chairman and chief executive, said construction would start before the end of the year and last for four years. Alstom, which designed and built France’s TGV, Spain’s AVE and South Korea’s KTX, is providing the rolling stock, signalling and maintenance to the Veloxia consortium, which also includes Iecsa and Emepa of Argentina and Spain’s Isolux Corsan.

The total project, financed by French bank Natixis, will cost some $3.7bn and Argentina will issue 30-year debt. Alstom’s share of the project is worth around $1.7bn. The project is five to eight times cheaper than similar ones in France or Spain, Alstom says.

Eight double-decker trains, with a capacity to hold 509 passengers each, will travel at a maximum 320 kph (200 mph), linking Buenos Aires and the city of Rosario, a major port, and the city of Córdoba.

Alstom, which says Argentina’s flat pampas are ideal terrain for a high-speed train, is aiming for 1.5m passengers a year and is confident the total will be higher. President Cristina Fernández called the project – which has been criticised as an extravagance when Argentina’s local train network urgently needs revamping – as ”a leap into modernity”.

This is not just significant because Argentina is going to beat California to having the first true high speed rail line in the Western Hemisphere. It's also important because it shows economic and fiscal difficulties don't have to stand in the way of "a leap into modernity." In late 2001 Argentina's financial system experienced total collapse, and the economy soon followed. Banks shut down, mass unemployment emerged, and the nation's standard of living plummeted. The worst is over, but Argentina has still not yet made a full recovery from the crisis even after six years. High speed rail will be a major boost for their recovery, and will provide sustainable, stable transportation - and therefore solid economic growth - for many decades to come.

Latin America's rail networks aren't in great shape, and in some cases are worse off than even the US. It's a farsighted step for Argentina, which has learned from its economic crisis that dependence on the IMF and an oil-based economy are not good ways to promote sustainable economic growth. California would do well to emulate Argentina's model.