Why a High- Speed Rail Skeptic Likes All Aboard Florida
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POLICY BRIEF Photo: All Aboard Florida - designs by Rockwell Group o many Americans who are both Why a High- Tlife-long rail fans and technology consumers, the idea of high-speed Robert W. Poole, Jr. rail (HSR) is incredibly attractive. But Director of Transportation, the Reason Foundation Speed Rail for market-oriented proponents of Senior Fellow, The James Madison Institute limited government, there is also a Skeptic Likes All natural opposition to projects that require large-scale taxpayer subsidies to even exist. Therefore, many have Aboard Florida strong objections to the struggling It’s a Promising Niche Market, California High-Speed Rail project and were proud when Gov. Rick Scott and the Private Sector Will Bear the Risks cited a critical Reason Foundation report in cancelling the proposed Robert W. Poole, Jr. Tampa-Orlando HSR project in 2011. Director of Transportation, the Reason Foundation Nevertheless, there exists a strong Senior Fellow, The James Madison Institute market-based case for the private- sector Miami to Orlando project called All Aboard Florida. www.jamesmadison.org | 1 To begin with, why does high-speed rail (HSR) the country could be summed up as a solution looking “work” in Europe and Japan? Partly because those for a problem. It’s not as if there aren’t good alternatives governments are willing to spend billions of dollars in for most intercity travel. For family travel, driving puts taxpayers’ money to heavily subsidize the construction as many as half a dozen people in a single vehicle, rather costs, and hundreds of millions more to subsidize their than paying for six train tickets and then renting a car at operations. Admittedly, HSR is a better fit for those the other end. Intercity bus is enjoying a rapid rebirth, countries than it is in the U.S. because: and handles twice the annual number of passengers as Amtrak, while serving five times as many cities and • European and Japanese cities are closer together, towns. Coach airfares are still historically inexpensive, on average, than large U.S. cities; as they have been since the 1978 deregulation act that • Their cities also have dense urban transit led to the democratization of air travel. networks on which travelers can connect with The real question for HSR in the United States is HSR; and, whether there are niche markets where a passenger • Driving and flying are far more expensive in rail business can be self-supporting. The All Aboard Europe and Japan than they are here, so rail is Florida (AAF) project proponents believe they more competitive. have found a market linking the cities of Miami and Orlando (a distance of 235 miles), and another private group called Texas Central Railway believes it has found another market in a Houston to Dallas route (a distance of 240 miles). The Texas project is still in the design and permitting stage, while AAF is already under construction. Both companies have maintained from the outset that they do not need and will not seek taxpayer subsidies—neither construction grants nor operating subsidies. Both companies are approaching their passenger rail projects as business enterprises, not as politically driven public works projects. In both cases that means selecting the lowest-cost right of way. In Florida, that’s the existing north-south line owned and operated by parent company Florida East Coast Railway (plus 35 miles of east-west right of way alongside the Beachline Expressway, which AAF will lease). In Texas, that A Japanese Tokaido line train passes in front of Mt. Fuji. company has selected an electric utility corridor for most of the route from Dallas, then entering Houston In fact, every serious transportation researcher agrees alongside US 290. that only two HSR lines in the world may be covering A second difference between these projects and both their capital costs and their operating costs from government-sponsored HSR is selecting the metro passenger fares: the original Tokaido line from Tokyo areas to be served. To deliver significant time savings, to Osaka in Japan and the original TGV line in France these must be “express” services connecting regions from Paris to Lyon. Every other HSR line has required with large populations. The Texas route will have just large taxpayer subsidies for construction. Most also one intermediate stop between Dallas and Houston, need operating subsidies to maintain fares low enough and the Florida route has just two (Ft. Lauderdale and that people will pay them. Experts also agree that HSR West Palm Beach). By contrast, the Tampa-Orlando is the best fit for routes of between 200 and 400 miles— project would have had two intermediate stops in its where the train is significantly faster than driving and short 84-mile route. Additionally, the boondoggle less hassle than flying. California HSR’s route zigzags from San Francisco to For many years, market-oriented assessments of Los Angeles so it can serve such politically required grand federal government plans for HSR lines around stops as Bakersfield, Gilroy, Sylmar, and Visalia. POLICY BRIEF | All Aboard Florida OPPONENTS’ CONCERNS ARE REAL, BUT NOT DECISIVE Citizen groups and local governments in the Treasure being in the “down” position for trains to cross over navigable Coast region have filed suit and are spending local tax money waterways. trying to derail the All Aboard Florida project. They argue that Local objections about longer delays at grade crossings it will increase noise, interfere with boat traffic to and from the are misleading, because the improvements AAF is making in Intracoastal Waterway, and harm public safety by holding up track and signaling will mean higher average speeds and less police, paramedics, and fire trucks at grade crossings. They gates-down time than today for a given train. Remember, the also allege that the plan cannot possibly succeed without AAF passenger trains will operate on the same tracks as FEC taxpayer subsidy. freight trains. According to the environmental report, the av- These are genuine concerns, however upon further exam- erage gates-down time for AAF’s short passenger trains will ination, these concerns appear to be exaggerated and imbal- be 1.7 minutes per hour. Even with the projected increase in anced. First, there is no acknowledgement that the Florida freight trains due to more containers being hauled from the East Coast Railway was already present, with passenger as ports in Miami and Fort Lauderdale, thanks to faster freight well as freight trains running every day, long before any of the train speeds the average gates-down time for freight trains current residents lived there (or were even born). Railroads will be 2.5 minutes per hour. have every right to increase service on their rights of way— Finally, after opponents raised serious concerns about AAF that’s what successful railroads do. having applied for a large loan from the Federal Railroad Ad- The company is working with local governments to help ministration’s RRIF loan program, the company switched from them implement “quiet zones” through residential areas, that approach to issuing tax-exempt private activity bonds. where federal regulations allow them to not blow diesel horns Congress authorized those bonds for privately financed in- when approaching grade crossings that have been equipped frastructure back in 2005, and the bonds have been used with more elaborate crossing gates and signals. However, for dozens of highway and transit projects, including several under current law, those expenses are the responsibility of here in Florida. Those bonds are secured by a dedicated rev- state and local roadway providers, not railroads. AAF is also enue stream from the project, and are not in any way backed working on plans to reduce the duration of railroad bridges by federal or state taxpayers. Altogether, its $68 billion (before cost overruns) first track and right of way. phase has nine intermediate stops. It’s hard to be “high- Another key difference between AAF and most HSR speed” with all of that stop-and-go. projects is its planned top speed. AAF is using passenger Another major difference is the projected cost. rail equipment similar to Amtrak’s Acela, with a 125- One of the reasons Florida’s Governor cancelled the mph top speed. With just two brief intermediate Tampa-Orlando project was its high budgeted cost stops, it can take passengers from Miami to Orlando plus the very significant likelihood of cost overruns (a in three hours—significantly faster than driving and Reason Foundation report cited a book-length study comparable with flying, once in-airport times are from Oxford University Press finding that the average included in trip times. AAF decided that this higher- cost overrun worldwide for passenger rail projects is speed (not HIGH speed) is sufficient to be competitive. 45 percent.) Even if that project had somehow been That nuance reduces capital and operating costs. Track built for the planned $2.7 billion, it would have cost that can handle 200 mph (as on overseas HSR lines) $32.1 million per mile. Compare that with All Aboard is significantly more costly. Additionally, much higher Florida’s lean $10.6 million per mile. That lower cost is air drag at 200 mph would mean significantly higher due in part to the use of mostly (83 percent) existing energy costs. www.jamesmadison.org | 3 Yet another difference in AAF’s HSR projects and AAF. Investors are the ones on the business plan is associated real hook for the success of the project – not the taxpayer. estate development. The company If there are cost overruns on AAF’s project, they will be is constructing major station borne by AAF and its investors.