High-Speed Rail: Stop, Look, and Listen

Commentary, Transportation, Wendell Cox

To listen to the promoters, the Vancouver to Seattle and Portland high-speed rail proposal may look like a great idea. For many, high-speed rail is a panacea that promises to solve all of our transportation and environmental problems.

It behooves governments and taxpayers to look more closely at the experience, both in transportation, impact, and costs.

High-speed rail has been expensive. Moreover, it has been exceedingly more expensive than promised. This is illustrated by the leading world research, led by Professor Bent Flyvbjerg of Oxford University. In an exhaustive review of infrastructure megastructure development, they found that passenger rail projects experience cost escalation averaging 45%, with 80% cost escalation not being uncommon. This would place the likely price of the route, now estimated at $32 to $56 billion (US$24 to US$42 billion) to between $46 and $100 billion.

But recent experience suggests that even these figures may be conservative. Take, for example, “HS2,” the proposed high-speed rail line from London to Birmingham, Manchester and Leeds. The announced cost of the project in 2012 was £33 billion. By 2015, it had escalated to £56 billion. Recently, the Financial Times reported an internal HS2 review that found the project may have escalated even more, to between £70 billion and £85 billion. Either figure would put the route above the 80 percent high figure cited in the Oxford University research. All of this has led to debate so contentious that the new government of Prime Minister Boris Johnson has undertaken a review into “whether the scheme should be approved, amended or scrapped entirely,” according to The Guardian. The scrapping option is virtually unprecedented, since the project is already under construction.

Closer to home, an even more sobering story is developing. With great fanfare, the state of California set about to build a high speed rail system that would connect Los Angeles, San Francisco, San Diego, and Sacramento. Voters were told in a 2008 bond referendum that the entire project would cost $45 billion, approximately $30 billion of which would be needed for “Phase 1” from San Francisco to Los Angeles (Anaheim).

By 2011, costs had about doubled, forcing the California Plan High-Speed Rail Authority to significantly scale back on the high-speed rail infrastructure, sharing tracks with existing, much slower, commuter rail operations in the San Francisco Bay and Los Angeles areas. More recently, the 190 kilometer initial segment, being constructed on comparatively unchallenging flat agricultural land in California’s Central Valley had escalated in cost from approximately $8 billion to $16 billion. 

More recently, members of the state legislature have called for diverting funding from the high-speed rail project to transportation improvements in the Los Angeles and San Francisco urban areas. A fast train between Los Angeles and San Francisco will do virtually nothing to relieve traffic congestion in these, the two most congested urban areas in the United States. The California project could also face cancellation, and in the end only provide an expedited Amtrak trip almost between Bakersfield and Madera (just north of Fresno). 

The projects in the United Kingdom and California suggest that cost projections for high-speed rail are becoming even less reliable than they have been in the past.

The Oxford research also considered ridership projections, which are crucial to minimizing the subsidies the taxpayers must pay for high-speed rail, even after they have paid all of the construction costs. The researchers found that ridership projections tended to exceed actual performance by 65%. Even with the traffic levels between the major urban areas, most people will still find driving the fastest way to get door-to-door between Vancouver and Seattle (not to mention Seattle and Portland). Lower Mainlanders are far more likely to encounter serious traffic congestion north of the US border than between Bellingham and Mount Vernon.

Recently some Metro Vancouver area mayors have questioned the wisdom of such a heavy investment. Like their California counterparts, they point to more pressing mobility needs, not only in the Vancouver census metropolitan area (CMA), but also in the Abbotsford and Chilliwack CMAs. There are other public needs as well. The area has extreme housing needs, ranking second most unaffordable, after only to Hong Kong in our recent Demographia International Housing Affordability Survey. Homelessness is intensifying. Finally, there seems little rationality in gambling taxpayer money for a project that no-one really has any idea will cost in the end and which will make little difference.