Heroic Assumptions

Previously, I have criticized the proposed California high speed rail line (from San Diego to San Francisco) as grossly underestimating potential costs.  Brian Doherty has an article this week reality-checking its projected ridership, after the California legislative analysts' office questioned the contingency analysis in the high-speed rail plan.

Eric Thronson, a fiscal and policy analyst for the office, called a risk assessment in the business plan "incomplete and inappropriate for a project of this magnitude.''

Thronson warned that there is no backup plan to keep the rail system solvent if it fails to draw 41 million people yearly. A bond measure approved by voters to help pay for the train network prohibits public funds from being spent on operating costs.

Doherty provides this reality check:

The future: where all of California's fiscal messes wait to be addressed! By the way, that ridership figure of 41 million averages to over 112,000 train riders every single day of the year. The average daily usage of I-5--the entire road--is around 71,000, according to the Federal Highway Administration.

Here are a couple of other reality checks

  • The entire passenger traffic from LAX to and from every other city in the country is 44 million a year (excludes international passengers)
  • The current air passenger traffic between LAX and SFO is 2.7 million a year
  • The passenger traffic of Amtrak in its entire national network is 28.7 million (including local commuter operations)
  • Cardin Drake

    I seriously doubt the thing has the capacity to carry 112,000 passengers a day.
    Another transparent government lie, along the lines of health care.

  • NormD

    I find it amusing that the local liberals who love the idea of high speed trains are suddenly discovering that having a 200 MPH elevated train running through their neighborhood may not comport with their lifestyle.

  • Danny

    Overestimated revenues and underestimated costs? Nah...the government could never be that irresponsible.

    I'm assuming you haven't read this one yet:
    http://reason.org/files/9633e4725acf8bc75c1c4929c43e4ac1.pdf

    Its well full of doozies just like this post.

  • Danny

    Sorry here is the full report

  • Danny
  • Another guy named Dan

    Ridership and cost concerns aside, I wonder over how much of it's planed route it will be allowed to operate at "cruising speed". You can't move anything that big that fast without displacing a lot of air, and that means noise, even if the motors themselves are quiet. So I can see them speed limited in the entire SD-LA portion of the route for abatement issues alone.

    Then there's the issue of the number of stops along the line, each adding a minimum of 10 minites to the trip length. How many local politicians are going to be able to lobby that a stop in their community is essential to local economic development? Of course that gets compounded by the fact that each stop would be in a populated area, adding to the potential of further noise abatement speed reductions.

    So I think in the end you will get a transportation method that combines the inconveniences of air travel with the speed of driving yourself.

  • K

    When government officials - elected or career - promote these plans they can say anything they wish. They suffer no consequences for being utterly mistaken.

    So - with apoligies to Herman Wouk - the plans are always said to proved with geometric logic. They are without flaws.

    Who loses the next election because he/she wanted great rail service someday?

    Answer: No one does.

    Any rail service promoted today won't be operating for at least a decade. By then the phony costs and figures will be ten to twenty years old. Accountability will not exist.

    But the rewards, the bribes, the nepotism, and the favors to and from your friends are immediate. They start they moment you even consider the project. And when it is approved the underwriters get their year-end bonus and the contractors are assured of a decade of work.

    Whether the system ever works or is even completed doesn't matter.

  • Not Sure

    "Ridership and cost concerns aside, I wonder over how much of it’s planed route it will be allowed to operate at “cruising speed”." - Another guy named Dan

    Ridership and cost concerns aside, I wonder how much of it’s planned route will be over the habitat of some endangered bug or bird.

    If a private business wanted to build anything that expansive, progressives would be going apeshit. But if the government's doing it, everything will turn out just fine.

  • Rolo Tomasi

    In light if these numbers, it is obvious that CA will need to promise to have painted flames on the side of the train.

  • Don Lloyd

    One big advantage of over-estimating the ridership by orders of magnitude is that, if the system ever goes into operation, reducing the fares to zero will not significantly increase the operating losses. Therefore, from the beginning, the fare-collecting mechanisms and system can be made out of cardboard cutouts. In fact, the same thing applies to ridership, if it drops to zero, it won't much impact the losses either. So the trains themselves can be cardboard cutouts capable of displaying political advertising.

    Regards, Don

  • spiro

    This all reminds me of the Simpsons "monorail" episode.

  • roger the shrubber

    in an entirely unrelated development, the multi-zillion dollar las vegas monorail - which was sold to the public, "simpsons" style, as 'the safest bet in town!' - declared itself bankrupt yesterday. this one week after its head had angrily written the local paper a letter denying they were in any financial straits. you see them occasionally, when you drive behind the strip, tootling along up there, every car maybe 5% filled.

    clearly, what we needed was *high-speed* monorail. by god, we'd have lotsa riders THEN!!

  • http://www.zerohedge.com Marla Singer

    Stories like this (along with Climate[whatever] and Gruber) make me think it might be a good idea to attach perjury liability to the authors of studies created to support cost or revenue assumptions in legislation. (Not that I believe this would ever happen).

  • MJ

    Adam Summers over at Reason's Out of Control blog had a blog post about this a couple of days ago. He pointed out that the ridership forecasts for this project have gone from 23 million annual riders a decade ago to 117 million just before the Prop 1 bond referendum, to 90 million just days after the bond referendum passed, and back down to 41 million now. The forecasts are all over the place, but CHSRA still cannot seem to put confidence intervals on their forecasts (ridership or cost), as pointed out by the CA Legislative Analyst's Office. Also, Summers points out that interestingly the revenue forecasts have not changed, even with the wild swings in forecast demand. Figure that one out.

    You bought it, California.

  • tomw

    Marla: how about they get put on the hook for the deficit? That'd slow down proponents of exaggerated ridership, no? Perjury liability is not enough.
    tomw

  • MJ

    Perjury liability is an inappropriate response, as the authors of the studies (either government employees or consulting firms) are not under oath when they produce their findings.

    The core problem is that the people working on these studies, especially the consultants, have no incentive the get their forecasts right because they bear none of the consequences of an inaccurate (usually high) forecast. The public agencies that hire them often insinuate (or simply tell them outright) that what they want is a doctored forecast that makes the project look viable. The only real cure for this is putting more risk on the backs of private investors who will have to put their money where their mouth is when it comes to optimistic demand forecasts.

    This is not a perfect solution (see what has happened recently with the privately-funded Las Vegas Monorail), but would be a step in the right direction.

  • markm

    MJ: It may not be perjury, but selling stock to private investors with a prospectus like that is fraud.