Tag: "high speed rail"

Obama Announces $98.1 Billion More Transportation Spending Waste

A major portion of the Administration’s proposed new transportation spending21st Century Clean Transportation Plan — is a series of proposals to expand transit systems (31 rail, bus and streetcar systems in 18 states costing $3.5 billion), revive the failed high speed rail initiative, modernize freight systems and provide grants to regional authorities to implement innovative “clean” technologies and “green” transportation programs. This new transportation spending is expected to cost $98.1 billion in just FY 2017.

The President just recently signed a groundbreaking transportation bill — the Fixing America’s Surface Transportation Act or FAST Act — that gave a longer temporary partial solution for the nation’s transportation infrastructure. However, the Fast Act and the new transportation proposal both fail to address several key problems with the Highway Trust Fund and the federal gas tax.

The new administration budget for transportation is a 60% increase over the current annual spending level. To partly pay for the new spending, the Administration is calling for a $10 per barrel tax on oil or a 25 cent/gallon increase in the price of gasoline at the pump which is estimated to bring in $650 billion over a decade.

Despite this, the administration’s budget request was declared dead even before its arrival on Capitol Hill, just like most of Obama’s previous transportation budget proposals.


The Bargain Mass Transit Option

SkyTran is an aerial mass transit system with small cars that magnetically glides on elevated tracks 20 to 30 feet above the ground. The cars can hold up to four people and travel at 60mph.

SkyTran has been in development over the past five years and is just beginning to run a pilot program in Tel Aviv. Compared with most mass transit options, SkyTran is a bargain for cities planning mass transit or expanding their existing systems.

For instance, the city of Dallas has a large light rail system (DART) that was recently expanded to double in size to over 90 miles of track. The $2.5 billion expansion cost $56 million per mile ($35 million per kilometer). In addition, the $7.3 million cost for each rail car that holds 209 passengers gives a cost of $35,000 per passenger.

SkyTran, however, costs only $13 million per mile ($8 million per kilometer). The small cars only cost $30,000 at a price of $7,500 per passenger.

The city of Dallas could have saved almost $2 billion in light rail mass transit expansion if SkyTran had been an available choice in mass transit.


Addressing Texas High Speed Rail Concerns

The proposed new high-speed rail (HSR) project in Texas has become a lightning rod for criticism. While the project is different from the now cancelled publicly funded HSR projects in Florida, Michigan, and Ohio and the ongoing project in California, critics remain concerned.

The Texas project supported by Texas Central Railway (TCR) is fundamentally different from the U.S. public government approach in several ways. First, it focuses on one specific corridor (TCR chose one out of 97 it had identified). HSR succeeded in France and Japan because both countries build their first HSR lines on the most optimal corridor, not the most shovel-ready. Contrast that with the Obama Administration’s plans to give money to nearly 40 states. The TCR project is focused on true 200 mile-per-hour high-speed rail while the government program has a multitude of aims:

  • build HSR
  • improve existing rail
  • build political bridges
  • develop passenger rail

Second, the Texas developers are seeking advice and parts from the Japanese, who operate the most successful HSR line in the world. TCR plans to use higher-speed Japanese Shinkansen trains which will travel fast enough to offer 90-minute trip times. Many of the government-funded rail lines are upgrades of existing lines with top speeds of 110 miles per hour.

Third, TCR’s line will link two of the quickest growing metro areas in the country. The metro area populations of Dallas and Houston are expected to double. Contrast that with Los Angeles and San Francisco that are seeing little if any growth in population.

Fourth, both are privately funded. While TCR will not accept grants or subsidies, it will consider existing federal credit assistance such as Railroad Reinvestment and Financing (RRIF) or Transportation Infrastructure Finance and Innovation (TIFIA) loans. TIFIA financing requires an investment-grade rating while RRIF is being strengthened to include similar provisions. TCR might also seek DOT approval to issue tax-exempt private activity bonds (PABs), which are widely used on highway P3 concession projects. Such bonds are backed solely by project revenue. Taxpayers are not on the hook in case the project defaults; only the bond-buyers are.

Project opponents have raised legitimate concerns but none of them should delay the project. Some farmers and ranchers are concerned that their properties will be acquired through eminent domain. However, TRC only needs about 100 feet of eminent domain. Additionally, the agency plans to use eminent domain (as other private parties including pipelines companies and electric companies do) as a last resort and only after making market-value offers. Further, if there are abuses of the system, Texas has a detailed appeal system already used for the Keystone Pipeline.

Others are concerned that taxpayer subsidies will be required. Whether TCR can build its project within the budget estimated is an open question. Given the challenges of breaking even on HSR in a low-density state such as Texas, skepticism is appropriate. However, as long as taxpayer funds are not used, project sponsors should be allowed to try to build the train. If the project later requires taxpayer subsidies, Texas taxpayers should kill it. While the financial realities are a legitimate concern for those who invest equity in the program or buy bonds, the program should receive the same level of legal and regulatory scrutiny as any other private railroad project.

Lawmakers Should not Speed-Up Positive Train Control Deadline

Trains are among the safest form of transportation but on rare occasions when crashes occur, the death toll is often high. The crash earlier this week of a Northeast Regional train en route from Washington D.C. to New York City has brought Positive Train Control (PTC) back into the news.

First mandated in the resultant Railroad Safety Improvement Act of 2008 (RSIA 2008) as a result of a tragic train crash in California in 2008 that killed 25 people, PTC remains an expensive, unnecessary government mandate. Cheaper technology that is just as effective is a better way to increase safety. Legislators cannot let the emotion of the moment sway them into adding unnecessary mandates or spending more taxpayer funds on passenger rail.

Railroads are one of the safest forms of transportation. The National Safety Council compared four modes of transport: airlines, passenger trains, buses, and light duty vehicles (includes passenger cars, light trucks, vans, and sports utility vehicles). In 2009 the passenger death rate in light duty vehicles was 0.53 per 100 million passenger-miles. The bus fatality rate was 0.04; the rate for trains is 0.02. Only airlines were safer at 0.01.

In the California train crash, a Metrolink commuter train collided with a Union Pacific freight locomotive killing 25 people. The crash was the worst U.S. train accident in 15 years. Federal investigators revealed that the train driver was sending and receiving text messages just before his commute train skipped a red light and hit the freight locomotive. Even before the final safety report was released, Sen. Dianne Feinstein (D-Calif.) began pushing to mandate automated safety equipment for all large railway systems. According to Feinstein the accident occurred because of “resistance in the railroad community.” Kitty Higgins of the National Transportation Safety Board (NTSB) also began lobbying for positive train control less than 24 hours after the collision and before the full safety investigation began. Swept up in the emotion, Congress in 2008 failed to seriously consider any solution except PTC. The PTC bill passed October 16, 2008 with limited debate only a month after the crash.

Positive train control is one of several methods to improve railroad safety. While PTC can prevent accidents by using GPS, sensors, and other technology to stop trains remotely, the costs are astronomical. The Federal Railroad Administration (FRA) places the cost at more than $13 billion to install and maintain a nationwide class I PTC system. Consulting firm Oliver Wyden estimated that PTC has a 20 year benefit of $0-$400 million. Even if all $400 million in benefits are realized, the cost/benefit ratio range is $1 in benefits for every $20 spent on the system.

Although Congress failed to consider an alternative, there are several technologies that could prevent the most serious train crashes. The most obvious solution would be to expand Amtrak’s existing automatic train control system that regulates speed. Automatic train control systems can be programmed to send information to a train about the speed limit for a section of track. Equipment inside the locomotive senses when a train is exceeding the limit and sets off an alarm. If the engineer fails to slow the train, the system triggers the train’s emergency brakes. Amtrak installed this technology on the southbound track but not the northbound track, because among other trains it slows trains too much. If the technology was installed on the northbound track, the train likely would have gone around the curve at 80 miles per hour and not come off the track.

Other options include rerouting freight trains, reducing the speeds of trains to minimize the impact of collisions or implementing schedule changes to increase headways between trains. These solutions can be implemented with no direct costs and only the indirect time costs of slower trains and longer commutes.

There are several other PTC complications that leaders have not taken into account. Immediate implementation of PTC could impair safety. PTC is forecast to prevent only 4 percent of railway accidents and the $13 billion spent enacting the technology is money that cannot be spent on infrastructure upgrades and other safety improvements. Further, despite claims to the contrary PTC by itself will not improve track efficiency. Increasing the train frequency requires precision dispatching. While precision dispatching can be implemented, it is a separate technology and different issue than positive train control. Additionally, Current PTC systems will make train tracks less efficient. Today’s systems do not estimate braking times accurately. As a result, these systems slow a train prematurely when compared with human control, reducing the number of trains that can fit on a section of track.

The Federal Railroad Administration (FRA) has studied PTC repeatedly. In 2005 the agency noted that a regulatory mandate for PTC system implementation [can] not be justified based on cost-benefit principals and direct safety benefits.

Why despite FRA’s advice is positive train control mandatory? Advocates who had been pushing for the technology for 20 years saw an opening. At the same time, many members of the House and Senate were swept up in the emotion of the situation and failed to consider the cost/benefit ratio or alternative technologies.

Fortunately, Congress has a chance to learn from its mistake. No action should be taken until a preliminary investigation is completed. FRA should study other technologies including Amtrak’s existing automatic train control to determine if there is a long-term solution that is just as effective at a more reasonable price. Safety policy is too important to be decided in the emotional aftermath of a tragic accident.

Special Interests Use Amtrak Accident to Push for Unneeded Solutions

After a tragedy, the knee-jerk reaction is to take some action. It does not matter if that action actually fixes the problem, as long as something is done. As a result of the Amtrak train derailment in Philadelphia, Amtrak boosters are screaming for more funding and Positive Train Control (PTC) advocates are beating the drum for mandatory installation of PTC. Yet facts reveal an older, cheaper technology with minimal costs could have prevented this accident.

While the National Transportation Safety Board is investigating the crash, several facts have been confirmed. The train accelerated from 70 miles per hour (its normal operating speed over this section of track) to 106 miles per hour in the last minute before the crash. When the train reached a curve the speed caused the train to derail. The train’s engineer, who suffered a concussion, cannot recall much information about the crash. But records show that that he engaged the train’s emergency braking section before the wreck.

The most likely scenario involves the engineer mistakenly accelerating the train (either because he fell asleep or because of error) and then realizing his mistake and applying the emergency brake too late to stop the derailment. However, there are other possibilities. One theory is that the train experienced some kind of mechanical failure preventing the brakes from working. Another theory is the track was warped, split or otherwise defective. Until we know the cause, we won’t know how to prevent it from happening again. Whatever the cause, the full investigation is likely to take a year.

Yet that lack of information has not stopped interest groups from releasing breathless press releases. According to the Amalgamated Transit Union:

While early reports say excessive speed was a factor in this tragic accident, the lack of positive train control that would have automatically slowed the engine down and the well-documented poor condition of our nation’s rail system is just the latest example of the way in which Congress refuses to adequately fund transportation.

According to the Midwest High Speed Rail Association:

The fact that the crash happened on a 50 mph turn on a high-speed line, shows how outdated our infrastructure is. On high-speed lines across the world, curves like this would have been straightened out to allow for continuous high-speed travel. Hazards like this curve need to be removed to prevent accidents of this nature and allow for much better service on the line.

Some groups are using this accident and the tragic loss of life to advance their agenda. Their statements suggest that if Amtrak had received more government funding, than this problem would not have happened. Yet the bigger problem is how Amtrak spends its revenue. Amtrak makes a profit on this line–the Northeast Regional Service. In contrast, Amtrak’s long-distance routes such as the California Zephyr that has just 376,000 riders, lost $600 million in 2012. If Amtrak had used the money it made on the northeast corridor to improve safety on the corridor, instead of diverting it to all its money-losing routes, this accident likely would not have occurred.

Other groups suggest that if only positive train control was implemented, this and most every accident would be prevented. Yet PTC is only forecast to prevent 4 percent of railway accidents. While the cost to install a nationwide class I PTC system is $13 billion, consulting firm Oliver Wyden estimates PTC has a 20-year benefit of between $0 and $400 million. Even if all $400 million in benefits are realized the cost/benefit ratio range is $1 in benefits for every $20 spent on the system. In 2005 the Federal Railroad Administration (FRA) noted that a regulatory mandate for PTC system implementation [can] not be justified based on cost-benefit principals and direct safety benefits.

Most analysts are ignoring a far simpler cheaper technology that could have prevented this crash, Amtrak’s existing automatic train control system that regulates speed. Automatic train control systems can be programmed to send information to a train about the speed limit for a section of track. Equipment inside the locomotive senses when a train is exceeding the limit and sets off an alarm. If the engineer fails to slow the train, the system triggers the train’s emergency brakes. Amtrak installed this technology on the southbound track but not the northbound track, because among other trains it slows trains too much. If the technology was installed on the northbound track, the train likely would have gone around the curve at 80 miles per hour and not come off the track.

So even though cheaper technologies are available, advocates appear to be taking advantage of an accident to lobby for more money or unnecessary safety systems. Pushing for unnecessary solutions is a disturbing way to commemorate those who lost their lives.


Take a Train – Buses are too Complicated?

Apparently, when it comes to making a mass transit choice between trains and buses when travelling around town, people should pick the train.

From the Congress for the New Urbanism blog:

Why Buses Are Inferior

Critics of rail often argue that buses are superior; they are cheaper, more flexible and (sometimes) run almost as fast.  But in a recent blog post, Houston planning student Maggie Colson explains why trains are better than buses, even if the train isn’t much faster:

The train system was much easier to maneuver than the bus system. I found the bus system to be more complicated because you had to find the correct bus stop with the bus number labeled on it. In addition, you could easily end up going in the wrong direction – the buses did not have the directions labeled like the trains. On the bus you also had to know where you needed to get off. Unlike the train system, the bus did not stop at every stop and instead you had to push a button to request for the bus to stop. While this is not necessarily an issue once you know the route, trying to navigate for the first time was stressful. Without the use of my smartphone, I would not have found or gotten off at the correct bus stops.

In other words, with buses you really have to know what you are doing.

Ignoring the recent rail disaster in London, are buses inferior to rail?

Privately Built High Speed Rail in Texas

Ever since Japan built the first high-speed rail line in the world linking Tokyo to Osaka in 1964, U.S. train advocates have been lobbying for true high-speed rail in the U.S. While France, Germany, Spain and recently China have built high-speed rail systems, the U.S. has resisted for many reasons. High-speed rail works most effectively transporting customers between dense city centers with robust transit systems and low rates of car ownership. A popular existing passenger rail system and higher costs of car ownership are important factors as well.

The U.S. has never fared particularly well in these categories for a number of reasons. First of all, car ownership in U.S. cities was far higher in the 1970’s than in Europe or Japan due to a more robust roadway network. In addition, U.S. cities are generally less dense than European cities. And U.S. city transit networks are much more skeletal making them less effective. Also U.S. taxes on gasoline are much lower making car travel cheaper than in Europe and Japan. Furthermore, U.S. rail tracks are dedicated to freight, creating the most efficient freight rail network in the world but limiting options for passenger rail.

Despite these challenges, in 2009, President Obama promised a national high-speed rail network. However, six years later that promise is nothing but a dream. The Obama administration strategy was flawed from the start. Instead of focusing on the most fiscally realistic place to build HSR, such as the northeast corridor, President Obama disbursed money to 38 states to build new rail but also to upgrade existing rail. The only high-speed rail project to begin construction is the California line from Los Angeles to San Francisco by way of the Central Valley. However, this project has a more than $50 billion funding hole, takes a circuitous route through the Central Valley making it physically impossible for the train to meet its travel time obligations, and is causing politicians to bend environmental review and ballot question intent laws. The project has no Republican support and is rapidly losing support from Democrats including the Lieutenant Governor. Most expect the project to be cancelled as soon as its major supporter, Jerry Brown, leaves office. High-speed rail’s track record in the U.S. has been one of almost complete failure.

All of these factors make potential high-speed rail success in the U.S. look doubtful at best.

However, there are several potential bright spots. The higher-speed Acela train operated by Amtrak on the northeast corridor has been a modest success. Train farebox revenue covers the full operating costs of the line. Many experts have speculated that a true 200-mile per hour high speed rail line would be even more successful financially. If this train could be operated by the private sector with competent management, which Amtrak has seldom provided, and be free of government restrictions such as Buy America, it might work. And if the private operator sought advice from successful rail operators in Japan instead of from the bungling bureaucrats advising the California and national rail lines, significant profits could be possible.

Two such lines are on the drawing boards. One is proposed for Florida linking Miami with Orlando International Airport. The other is proposed for Texas linking Dallas and Houston.

Let’s examine the Texas route from Dallas to Houston in a little more detail. The Texas line shares several characteristics with successful European and Japanese lines. Dallas to Houston is a popular air route, flown by three of the four largest airlines. Instead of trying to position the line in the middle of the highway or use existing tracks, the company is planning to build the line along a utility corridor. In addition to providing a dedicated right of way, such an alignment limits the number of folks living in the train’s path as people do not live in utility right of ways. The 250-mile flat distance between the two cities is perfect for high-speed rail. Finally, the metro areas each having more than 6 million folks are plenty big enough to serve as the endpoints.

However, there are several obstacles to the route as well. Neither metro area has an extensive transit system, nor the density to create such a system, so the train stations would have to feature many parking spaces. This is different from European or Japanese HSR. And whether folks living in the expansive suburbs especially near an airport would drive to the center city to take the train, versus drive to the airport is an open question. In both metro areas there are folks living in the train’s path. Living next to an Interstate highway is unpleasant; living next to a train would be unfeasible. The full cost of relocation would have to be offered to many homeowners, increasing the cost and opposition.

The biggest challenge is whether or not the system would need government funding. Texas Central Railway insists it does not. Regardless, since competitor modes, namely aviation and intercity bus are not subsidized, we should not be subsidizing HSR either.

The Texas high-speed rail proposal is intriguing. Proposed as a private operation with funding and guidance from Central Japan Railway Company the proposal is already far more promising than any of the Obama Administration’s previous lines. Nobody knows if such a private line can succeed, but Texas Central Railway certainly deserves a chance to try.



Add Taxpayer Protections to Railroad (RRIF) Program

Over the next few weeks, I will be highlighting six national transportation policies that need to be changed. 2015 provides a great opportunity to seek these changes because the federal bill that governs surface transportation policy is up for renewal. Republican majorities in the House and the Senate should create a more free-market oriented transportation policy.

Today’s recommendation is to add taxpayer safeguards to the Railroad Rehabilitation and Improvement Financing (RRIF) program. RRIF was created by 1998’s TEA-21 legislation. Under its provisions, the Federal Railroad Administration (FRA) can devote up to $35 billion to loans and loan guarantees for freight and passenger railroad infrastructure. Unlike DOT’s Transportation Infrastructure Finance and Innovation Act (TIFIA) loan program, there are few taxpayer safeguards in RRIF, other than a requirement for recipients to pay a credit risk premium. Loans may be extended for 100% of a project’s estimated cost with no explicit requirement for a dedicated revenue repayment stream.

We recommend adding four taxpayer safeguards similar to those in TIFIA. First, restrict RRIF loans to 33% of the project’s budget. Second, require that senior debt of the project carry an investment-grade rating. Third, require that the loan recipient document the existence of a revenue stream dedicated to retiring the RRIF and other loans. And fourth, require that in the event of project bankruptcy, the RRIF loan moves to equal status with the primary debt (called the “springing lien” provision in TIFIA).

Why are these safeguards needed? The current RRIF program in effect invites applicants to apply for loans for risky, speculative projects. RRIF should be reconceived as providing supplemental, gap-closure financing, like TIFIA, rather than being the primary or sole source of a project’s financing. The speculative XpressWest high-speed rail project was ultimately rejected by the FRA, but only after strong objections were raised by Members of Congress. That project had requested a RRIF loan of $5.5 billion, which was between 80 and 100% of the estimated project budget. Limiting RRIF loans to a maximum of 33% (as in the original TIFIA legislation) would make it clear that projects must demonstrate their economic and financial feasibility by being able to attract primary financing (investment-grade senior debt) from the capital markets, with RRIF providing supplemental, gap-closure financing. Together with the requirement for the applicant to document the existence of a dedicated revenue stream, these reforms would provide significant protections for federal taxpayers, akin to those of the successful TIFIA program.

This change could save taxpayers billions. The taxpayer protection provisions would reduce the number of risky, speculative loan applications, thereby saving FRA time and money in processing them, resulting in modest FRA budgetary savings. More broadly, the provisions would protect taxpayers from future defaults that could result in billions of dollars in unpaid RRIF loans.


Transportation Budget from the White House – Deja Vu All Over Again

It is that time of year for a President Obama transportation tradition. Each of the past six years, the President has sent a transportation proposal, concept, or list of guidelines to Congress. And each year Congress, in a bipartisan manner, has rejected the President’s proposals as being completely unreasonable. Some hoped, with the prospect of corporate tax reform, that this year’s budget would be different. But while somewhat better than past years, this year’s budget is still an unrealistic document that is more focused on politics than policy.

The White House submitted a $95 billion budget request for USDOT for fiscal year 2016. The budget is a $22 billion or 31% increase, over 2015. And the Administration proposes to achieve this increase by removing Amtrak, transit new starts grants, TIGER grants, high speed rail funding, and a few other items controlled by the Appropriations committee. If this sounds familiar it is because the White House has submitted a variation of this proposal for the last several year; it has been rejected on all occasions in a bipartisan manner.

The first problem with this approach is it takes power out of the Appropriations committee and gives it to the White House. Appropriations committee members like the power of the purse and are unlikely to give it up even if they and the President agree on transportation policy.

The second problem is this proposal changes the fundamental users-pay/users-benefit nature of the highway trust fund. Both roadway and transit interests have dedicated funding in the current system. While transit might receive more funding under the President’s proposal, the funding is not guaranteed so it is unclear they would support this change. Other than passenger rail interests, it is unclear who would support this change.

The final and biggest problem is finding the money to pay for this proposal. The President is proposing a 14% tax on repatriated profits. However, there is bipartisan consensus that 14% is too high. Senators Boxer and Paul have introduced a 6% rate which is far more likely to pass. But the 6% does not provide enough money to fund the proposal. And both taxes are short-term fixes that do not provide the long-term certainty the transportation community is seeking.

For the seventh year in a row, the White House has proposed an overtly political budget which has no chance of passing. It is déjà vu all over again.

California High Speed Rail Advocates Want to Ignore Law

The California high-speed rail project is an out-of-control train careening down the tracks. Everybody knows the project is a disaster in the making. But Governor Jerry Brown and California’s political elite are so enamored with being remembered, they are less concerned with whether it is in a good or a bad way. Earlier this month, the authority broke ground on the first planned section between Madera and Fresno.

For those keeping track, the proposed high speed rail line has no realistic funding plan and uses wildly optimistic and unrealistic ridership forecasts. It has violated the language of its 2008 bonds by providing far slower service than initially proposed. It plans to use gas tax funding from an environmental protection plan to help build the train even though the California Air Resources Board found that high speed rail will increase greenhouse gas emissions for the near term.

The past few months have brought one more twist. Since its inception, the rail authority has promised that the project would comply with the California Environmental Quality Act (CEQA). But after plaintiffs filed seven different lawsuits, the California High Speed Rail Authority asked the Surface Transportation Board (STB) to invalidate these lawsuits arguing that the project only has to comply with federal guidelines that they say have been cleared because of regulatory approvals of the 114-mile Fresno to Bakersfield segment. In late December, the STB agreed with this dubious logic. However, the plaintiffs have promised to appeal and most experts doubt the Supreme Court will side with the STB.

A previous attempt by state lawyers to argue that CEQA was negated by federal approvals was rejected by a Sacramento appeals court. Further, the state Supreme Court declined to hear an appeal of a bullet train case in a similar case.

The authority’s spokesman says this isn’t an attempt to get around CEQA just an attempt to “clarify” matters. But it is clear the only reason the authority does not want to go through CEQA is because it will slow down of potentially cancel construction of the rail line.

The federal Surface Transportation Board consists of three appointees of President Obama who has strongly supported rail with earmarked high-speed rail funding and Transportation Investment Generating Economic Recovery (TIGER) grants. So the authority is making an end-run around the law which they ideologically support to get the train built. And they are turning to their political friends in the federal bureaucracy to ensure they can get away with ignoring the law. How many laws and rules will California politicians ignore to get this train built?