June 1, 2011

WAITING ON A TRAIN:

High-Speed Rail Can Cover Its Operating Costs: While paying for its hefty infrastructure costs may be ambitious, many high-speed rail systems cover their operating costs and even turn a small operating profit. (Michael Scott Moore, 6/01/11, Miller McCune)

Just three weeks after Florida Gov. Rick Scott made a point of thumbing his nose at $2.4 billion in Washington subsidies for a short high-speed rail line, saying it would be a money hole, his own state’s Department of Transportation released a study claiming quite the opposite.

The Florida DOT had commissioned an independent study on ridership and profitability for the proposed high-speed link between Orlando and Tampa. The research groups, Wilbur Smith Associates and Steer Davies Gleave, projected healthy ridership for the train and a $10.2 million operating surplus for 2015, the line’s first operating year.

The study flew in the face of conventional wisdom about high-speed rail, which is that it’s a nice idea but prone to expensive boondoggles. According to this conventional wisdom only the main Shinkansen line in Japan (Tokyo-Osaka) and the main TGV line in France (Paris-Lyon) — of all high-speed lines everywhere in the world — have turned a profit.

So how could a little train in Florida be so immediately and lavishly profitable?

The truth is that plenty of high-speed lines turn a profit in the sense of earning more every year than their annual operating costs. Their operational profits make them the flashy flagship attractions on trundling, heavily-subsidized, workhorse national railroads.

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Posted by at June 1, 2011 6:34 AM
  

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