United States Government Accountability Office Report to Congressional Requesters GAO March 2009 HIGH SPEED PASSENGER RAIL Future Development Will Depend on Addressing Financial and Other Challenges and Establishing a Clear Federal Role GAO-09-317 March 2009 HIGH SPEED PASSENGER RAIL Accountability Integrity Reliability Future Development Will Depend on Addressing Highlights Financial and Other Challenges and Establishing a Highlights of GAO-09-317, a report to Clear Federal Role congressional requesters Why GAO Did This Study What GAO Found Federal and other decision makers Factors affecting the economic viability of high speed rail lines include the have had a renewed interest in how level of expected riders, costs, and public benefits (i.e., benefits to non-riders high speed rail might fit into the and the nation as a whole from such things as reduced congestion), which are national transportation system and influenced by a line’s corridor and service characteristics. High speed rail address increasing mobility tends to attract riders in dense, highly populated corridors, especially where constraints on highways and at there is congestion on existing transportation modes. Costs largely hinge on airports due to congestion. GAO was asked to review (1) the factors the availability of rail right-of-way and on a corridor’s terrain. To stay within affecting the economic viability— financial or other constraints, project sponsors typically make trade-offs meaning whether total social between cost and service characteristics. While some U.S. corridors have benefits offset or justify total social characteristics that suggest economic viability, uncertainty associated with costs—of high speed rail projects, rider and cost estimates and the valuation of public benefits makes it difficult including difficulties in determining to make such determinations on individual proposals. Research on rider and the economic viability of proposed cost forecasts has shown they are often optimistic, and the extent that U.S. projects; (2) the challenges in sponsors quantify and value public benefits varies. developing and financing high speed rail systems; and (3) the Once projects are deemed economically viable, project sponsors face the federal role in the potential challenging tasks of securing the up-front investment for construction costs development of U.S. high speed rail and sustaining public and political support and stakeholder consensus. In the systems. GAO reviewed federal legislation; interviewed federal, three countries GAO visited, the central government generally funded the state, local, and private sector majority of the up-front costs of high speed rail lines. By contrast, federal officials, as well as U.S. project funding for high speed rail has been derived from general revenues, not from sponsors; and reviewed high speed trust funds or other dedicated funding sources. Consequently, high speed rail rail development in France, Japan, projects must compete with other nontransportation demands on federal and Spain. funds (e.g., national defense or health care) as opposed to being compared with other alternative transportation investments in a corridor. Available What GAO Recommends federal loan programs can support only a fraction of potential high speed rail project costs. Without substantial public sector commitment, private sector GAO recommends that the Secretary of Transportation participation is difficult to secure. The challenge of sustaining public support develop a strategic vision of how and stakeholder consensus is compounded by long project lead times, by high speed passenger rail systems numerous stakeholders, and by the absence of an established institutional fit into the national transportation framework. system, and develop guidance and tools to improve the reliability and The recently enacted Passenger Rail Investment and Improvement Act of 2008 accuracy of ridership, cost, and will likely increase the federal role in the development of high speed rail, as other forecasts for these systems. will the newly enacted American Recovery and Reinvestment Act of 2009. In The Department of Transportation the United States, federal involvement with high speed rail to date has been (DOT) said it generally agreed with limited. The national rail plan required by the Passenger Rail Investment and the information presented but did Improvement Act of 2008 is an opportunity to identify the vision and goals for not take a position on GAO’s recommendations. DOT said the U.S. high speed rail and how it fits into the national transportation system, an strategic plan required by the exercise that has largely remained incomplete. Accountability can be American Recovery and enhanced by tying the specific, measurable goals required by the act to Reinvestment Act of 2009 may performance and accountability measures. In developing analytical tools to include a vision for high speed rail. apply to the act’s project selection criteria, it will be important to address optimistic rider and cost forecasts and varied public benefits analyses. To view the full product, including the scope and methodology, click on GAO-09-317. For more information, contact Susan Fleming at (202) 512-2834 or [email protected]. United States Government Accountability Office Contents Letter 1 Results in Brief 4 Background 8 Economic Viability of High Speed Rail Is Affected by Many Corridor and Service Characteristics, but Uncertainties About Ridership and Other Estimates Make Viability Determinations Difficult 12 High Up-front Costs Are the Main Challenge to High Speed Rail Development, and Challenges Also Exist in Sustaining Support and Building Consensus 29 Federal Leadership Has Been Limited, but Following Reexamination Principles Can Ensure That the Federal Role Is Focused on Yielding Maximum Benefits 42 Conclusions 54 Recommendations for Executive Action 55 Agency Comments and Our Evaluation 55 Appendix I Scope and Methodology 59 Appendix II Description of U.S. Rail Corridors Operating at Speeds Greater Than 79 Miles per Hour 64 Appendix III Description of Current U.S. High Speed Rail Proposals in the Environmental Review Phase 69 Appendix IV Description of Past Projects Florida Overland Express and Texas TGV Projects 80 Appendix V Description of High Speed Rail Systems in France, Japan, and Spain 84 Page i GAO-09-317 High Speed Passenger Rail Appendix VI Description of Travel Demand Forecasting 89 Appendix VII Description of the Proposed Los Angeles, California, to Las Vegas, Nevada, High Speed Rail Corridor 94 Appendix VIII GAO Contact and Staff Acknowledgments 102 Tables Table 1: High Speed Rail Projects in the United States 8 Table 2: Estimated Construction Costs for Selected High Speed Rail Projects in France, Japan, and Spain, by Construction Cost Per Mile 23 Table 3: Estimated Construction Costs for Dedicated Right-of-Way High Speed Rail Projects in the United States, by Construction Cost Per Mile 24 Table 4: State Funding for California High Speed Rail Authority 40 Table 5: Timeline of High Speed Rail Development in Florida 81 Table 6: Timeline of High Speed Rail Development in Texas 83 Table 7: Summary of Three High Speed Passenger Rail Proposals in the Los Angeles to Las Vegas Corridor 95 Figures Figure 1: Population of Cities Along Selected Foreign High Speed Rail Lines 13 Figure 2: Population of Cities Along Selected Current and Proposed High Speed Rail Lines in the United States 14 Figure 3: Transportation Mode Share in Japan, by Distance Traveled 16 Figure 4: Future Airport Capacity, by 2025, and Selected High Speed Rail Proposals in the United States 18 Figure 5: Public and Private Sector Roles in High Speed Rail Development and Operation in Japan 36 Figure 6: Proposed French Public-Private Partnership Contract Model 38 Page ii GAO-09-317 High Speed Passenger Rail Figure 7: High Speed Rail Project Proposals from Los Angeles to Las Vegas 99 Abbreviations Amtrak National Railroad Passenger Rail Corporation ARRA American Recovery and Reinvestment Act of 2009 DOT Department of Transportation FDOT Florida Department of Transportation FOX Florida Overland Express FRA Federal Railroad Administration FTA Federal Transit Administration I-15 Interstate 15 maglev magnetic levitation NEPA National Environmental Policy Act PRIIA Passenger Rail Investment and Improvement Act of 2008 RFF Réseau Ferré de France SAFETEA-LU Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users SNCF Société Nationale des Chemins de Fer Français TEA-21 Transportation Equity Act of the 21st Century TGV Train à Grande Vitesse THSRA Texas High Speed Rail Authority TIFIA Transportation Infrastructure Finance and Innovation Act of 1998 This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately. Page iii GAO-09-317 High Speed Passenger Rail United States Government Accountability Office Washington, DC 20548 March 19, 2009 Congressional Requesters Federal, state, and local decision makers have had a renewed interest in looking at how high speed rail might fit into our national transportation system and address increasing mobility constraints on the nation’s highways and at airports due to congestion. Although the current economic