High Speed Passenger Rail
Future Development Will Depend on Addressing Financial and Other Challenges and Establishing a Clear Federal Role Gao ID: GAO-09-317 March 19, 2009Federal and other decision makers have had a renewed interest in how high speed rail might fit into the national transportation system and address increasing mobility constraints on highways and at airports due to congestion. GAO was asked to review (1) the factors affecting the economic viability--meaning whether total social benefits offset or justify total social costs--of high speed rail projects, including difficulties in determining the economic viability of proposed projects; (2) the challenges in developing and financing high speed rail systems; and (3) the federal role in the potential development of U.S. high speed rail systems. GAO reviewed federal legislation; interviewed federal, state, local, and private sector officials, as well as U.S. project sponsors; and reviewed high speed rail development in France, Japan, and Spain.
Factors affecting the economic viability of high speed rail lines include the level of expected riders, costs, and public benefits (i.e., benefits to non-riders and the nation as a whole from such things as reduced congestion), which are influenced by a line's corridor and service characteristics. High speed rail tends to attract riders in dense, highly populated corridors, especially where there is congestion on existing transportation modes. Costs largely hinge on the availability of rail right-of-way and on a corridor's terrain. To stay within financial or other constraints, project sponsors typically make trade-offs between cost and service characteristics. While some U.S. corridors have characteristics that suggest economic viability, uncertainty associated with rider and cost estimates and the valuation of public benefits makes it difficult to make such determinations on individual proposals. Research on rider and cost forecasts has shown they are often optimistic, and the extent that U.S. sponsors quantify and value public benefits varies. Once projects are deemed economically viable, project sponsors face the challenging tasks of securing the up-front investment for construction costs and sustaining public and political support and stakeholder consensus. In the three countries GAO visited, the central government generally funded the majority of the up-front costs of high speed rail lines. By contrast, federal funding for high speed rail has been derived from general revenues, not from trust funds or other dedicated funding sources. Consequently, high speed rail projects must compete with other nontransportation demands on federal funds (e.g., national defense or health care) as opposed to being compared with other alternative transportation investments in a corridor. Available federal loan programs can support only a fraction of potential high speed rail project costs. Without substantial public sector commitment, private sector participation is difficult to secure. The challenge of sustaining public support and stakeholder consensus is compounded by long project lead times, by numerous stakeholders, and by the absence of an established institutional framework. The recently enacted Passenger Rail Investment and Improvement Act of 2008 will likely increase the federal role in the development of high speed rail, as will the newly enacted American Recovery and Reinvestment Act of 2009. In the United States, federal involvement with high speed rail to date has been limited. The national rail plan required by the Passenger Rail Investment and Improvement Act of 2008 is an opportunity to identify the vision and goals for U.S. high speed rail and how it fits into the national transportation system, an exercise that has largely remained incomplete. Accountability can be enhanced by tying the specific, measurable goals required by the act to performance and accountability measures. In developing analytical tools to apply to the act's project selection criteria, it will be important to address optimistic rider and cost forecasts and varied public benefits analyses.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-09-317, High Speed Passenger Rail: Future Development Will Depend on Addressing Financial and Other Challenges and Establishing a Clear Federal Role
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Report to Congressional Requesters:
United States Government Accountability Office:
GAO:
March 2009:
High Speed Passenger Rail:
Future Development Will Depend on Addressing Financial and Other
Challenges and Establishing a Clear Federal Role:
GAO-09-317:
GAO Highlights:
Highlights of GAO-09-317, a report to congressional requesters.
Why GAO Did This Study:
Federal and other decision makers have had a renewed interest in how
high speed rail might fit into the national transportation system and
address increasing mobility constraints on highways and at airports due
to congestion. GAO was asked to review (1) the factors affecting the
economic viability”meaning whether total social benefits offset or
justify total social costs”of high speed rail projects, including
difficulties in determining the economic viability of proposed
projects; (2) the challenges in developing and financing high speed
rail systems; and (3) the federal role in the potential development of
U.S. high speed rail systems. GAO reviewed federal legislation;
interviewed federal, state, local, and private sector officials, as
well as U.S. project sponsors; and reviewed high speed rail development
in France, Japan, and Spain.
What GAO Found:
Factors affecting the economic viability of high speed rail lines
include the level of expected riders, costs, and public benefits (i.e.,
benefits to non-riders and the nation as a whole from such things as
reduced congestion), which are influenced by a line‘s corridor and
service characteristics. High speed rail tends to attract riders in
dense, highly populated corridors, especially where there is congestion
on existing transportation modes. Costs largely hinge on the
availability of rail right-of-way and on a corridor‘s terrain. To stay
within financial or other constraints, project sponsors typically make
trade-offs between cost and service characteristics. While some U.S.
corridors have characteristics that suggest economic viability,
uncertainty associated with rider and cost estimates and the valuation
of public benefits makes it difficult to make such determinations on
individual proposals. Research on rider and cost forecasts has shown
they are often optimistic, and the extent that U.S. sponsors quantify
and value public benefits varies.
Once projects are deemed economically viable, project sponsors face the
challenging tasks of securing the up-front investment for construction
costs and sustaining public and political support and stakeholder
consensus. In the three countries GAO visited, the central government
generally funded the majority of the up-front costs of high speed rail
lines. By contrast, federal funding for high speed rail has been
derived from general revenues, not from trust funds or other dedicated
funding sources. Consequently, high speed rail projects must compete
with other nontransportation demands on federal funds (e.g., national
defense or health care) as opposed to being compared with other
alternative transportation investments in a corridor. Available federal
loan programs can support only a fraction of potential high speed rail
project costs. Without substantial public sector commitment, private
sector participation is difficult to secure. The challenge of
sustaining public support and stakeholder consensus is compounded by
long project lead times, by numerous stakeholders, and by the absence
of an established institutional framework.
The recently enacted Passenger Rail Investment and Improvement Act of
2008 will likely increase the federal role in the development of high
speed rail, as will the newly enacted American Recovery and
Reinvestment Act of 2009. In the United States, federal involvement
with high speed rail to date has been limited. The national rail plan
required by the Passenger Rail Investment and Improvement Act of 2008
is an opportunity to identify the vision and goals for U.S. high speed
rail and how it fits into the national transportation system, an
exercise that has largely remained incomplete. Accountability can be
enhanced by tying the specific, measurable goals required by the act to
performance and accountability measures. In developing analytical tools
to apply to the act‘s project selection criteria, it will be important
to address optimistic rider and cost forecasts and varied public
benefits analyses.
What GAO Recommends:
GAO recommends that the Secretary of Transportation develop a strategic
vision of how high speed passenger rail systems fit into the national
transportation system, and develop guidance and tools to improve the
reliability and accuracy of ridership, cost, and other forecasts for
these systems. The Department of Transportation (DOT) said it generally
agreed with the information presented but did not take a position on
GAO‘s recommendations. DOT said the strategic plan required by the
American Recovery and Reinvestment Act of 2009 may include a vision for
high speed rail.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-09-317]. For more
information, contact Susan Fleming at (202) 512-2834 or
flemings@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Economic Viability of High Speed Rail Is Affected by Many Corridor and
Service Characteristics, but Uncertainties About Ridership and Other
Estimates Make Viability Determinations Difficult:
High Up-front Costs Are the Main Challenge to High Speed Rail
Development, and Challenges Also Exist in Sustaining Support and
Building Consensus:
Federal Leadership Has Been Limited, but Following Reexamination
Principles Can Ensure That the Federal Role Is Focused on Yielding
Maximum Benefits:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Description of U.S. Rail Corridors Operating at Speeds
Greater Than 79 Miles per Hour:
Appendix III: Description of Current U.S. High Speed Rail Proposals in
the Environmental Review Phase:
Appendix IV: Description of Past Projects Florida Overland Express and
Texas TGV Projects:
Appendix V: Description of High Speed Rail Systems in France, Japan,
and Spain:
Appendix VI: Description of Travel Demand Forecasting:
Appendix VII: Description of the Proposed Los Angeles, California, to
Las Vegas, Nevada, High Speed Rail Corridor:
Appendix VIII: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: High Speed Rail Projects in the United States:
Table 2: Estimated Construction Costs for Selected High Speed Rail
Projects in France, Japan, and Spain, by Construction Cost Per Mile:
Table 3: Estimated Construction Costs for Dedicated Right-of-Way High
Speed Rail Projects in the United States, by Construction Cost Per
Mile:
Table 4: State Funding for California High Speed Rail Authority:
Table 5: Timeline of High Speed Rail Development in Florida:
Table 6: Timeline of High Speed Rail Development in Texas:
Table 7: Summary of Three High Speed Passenger Rail Proposals in the
Los Angeles to Las Vegas Corridor:
Figures:
Figure 1: Population of Cities Along Selected Foreign High Speed Rail
Lines:
Figure 2: Population of Cities Along Selected Current and Proposed High
Speed Rail Lines in the United States:
Figure 3: Transportation Mode Share in Japan, by Distance Traveled:
Figure 4: Future Airport Capacity, by 2025, and Selected High Speed
Rail Proposals in the United States:
Figure 5: Public and Private Sector Roles in High Speed Rail
Development and Operation in Japan:
Figure 6: Proposed French Public-Private Partnership Contract Model:
Figure 7: High Speed Rail Project Proposals from Los Angeles to Las
Vegas:
Abbreviations:
Amtrak: National Railroad Passenger Rail Corporation:
ARRA: American Recovery and Reinvestment Act of 2009:
DOT: Department of Transportation:
FDOT: Florida Department of Transportation:
FOX: Florida Overland Express:
FRA: Federal Railroad Administration:
FTA: Federal Transit Administration:
I-15: Interstate 15:
maglev: magnetic levitation:
NEPA: National Environmental Policy Act:
PRIIA: Passenger Rail Investment and Improvement Act of 2008:
RFF: Réseau Ferré de France:
SAFETEA-LU: Safe, Accountable, Flexible, Efficient Transportation
Equity Act: A Legacy for Users:
SNCF: Société Nationale des Chemins de Fer Français:
TEA-21: Transportation Equity Act of the 21ST Century:
TGV: Train à Grande Vitesse:
THSRA: Texas High Speed Rail Authority:
TIFIA: Transportation Infrastructure Finance and Innovation Act of
1998:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
March 19, 2009:
Congressional Requesters:
Federal, state, and local decision makers have had a renewed interest
in looking at how high speed rail might fit into our national
transportation system and address increasing mobility constraints on
the nation's highways and at airports due to congestion. Although the
current economic downturn has recently reduced the level of highway and
air travel, projections show that intercity travel will grow again and
that existing transportation capacity limitations will constrain
mobility. The Department of Transportation (DOT) estimates that several
intercity highways linking major urban markets will experience
significant congestion by 2035. According to a recent report, capacity
limitations will constrain air traffic at 14 airports in 8 metropolitan
areas, even if planned capacity improvements are carried out through
2025.[Footnote 1] In addition, the dependence of growing highway and
air travel on fossil fuels raises significant environmental concerns
regarding greenhouse gas emissions. As a result, transportation
decision makers are exploring options that not only expand
transportation capacity and relieve increasing congestion but also
minimize the deleterious environmental impacts of increasing highway
and air travel. The average intercity passenger train can produce
significantly less emissions than other transportation modes.
The National Railroad Passenger Rail Corporation (Amtrak), the nation's
intercity passenger rail provider, has seen nearly a 20 percent
increase in riders in the last 2 years, in part because service
enhancements in some intercity corridors have improved overall travel
time and reliability, making the train more competitive with highway
and air travel. Still, Amtrak does not offer service in many heavily
traveled intercity corridors. Moreover, Amtrak's service continues to
have slow average speeds relative to other transport modes, and
experiences significant delays, often resulting from sharing track with
commuter and freight rail. Proposals for investment in high speed rail
in the United States have existed for decades. However, corridor
service that exceeds Amtrak's predominant top speed of 79 miles per
hour currently only exists on Amtrak's Northeast Corridor between
Boston, Massachusetts, and Washington, D.C., and in a few other
corridors--including New York City, New York, to Albany, New York;
Philadelphia, Pennsylvania, to Harrisburg, Pennsylvania; and Los
Angeles, California, to San Diego, California--and on a segment of
track between Chicago, Illinois, and Detroit, Michigan.[Footnote 2] By
contrast, countries in Europe and Asia have developed extensive rail
systems with top speeds exceeding 150 and even 200 miles per hour,
which have attracted relatively high numbers of riders compared with
other transportation modes.
As part of a larger effort to reexamine transportation funding and
decision making in the United States, the National Surface
Transportation Policy and Revenue Study Commission and its Passenger
Rail Working Group issued a report that laid out the potential for a
new vision of intercity and high speed rail development in the United
States, and that called for an initial investment of $5 billion per
year.[Footnote 3] Moreover, in October 2008, Congress enacted the
Passenger Rail Investment and Improvement Act of 2008 (PRIIA), which
establishes a program to develop high speed rail corridors--authorizing
$1.5 billion in funding for project development.[Footnote 4] The
recently enacted American Recovery and Reinvestment of Act of 2009
(ARRA) appropriated $8 billion for high speed rail and intercity
passenger rail congestion and capital grants (the latter of which were
authorized by the PRIIA), with priority given to projects that support
the development of high speed rail service.[Footnote 5] To better
understand the role that high speed rail service could play in the U.S.
transportation system, we were asked to assess (1) the factors
affecting the economic viability of high speed rail projects--that is,
whether a project's total social benefits offset or justify the total
social costs--and difficulties in determining the economic viability of
proposed projects; (2) the challenges that U.S. project sponsors
experience in developing and financing high speed rail projects; and
(3) the federal role in the potential development of high speed rail
systems.
For the purposes of this report, we use the Federal Railroad
Administration's (FRA) definition of high speed ground transportation,
which is "service that is time-competitive with air and/or automobile
travel in a given intercity corridor."[Footnote 6] This definition does
not define high speed rail on the basis of a specific speed threshold.
As a result, our review includes a wide range of projects, including
both "incremental" projects, which are designed to increase the speed-
-above 79 miles per hour and up to 150 miles per hour--or reliability
of rail service on existing track usually shared with commuter or
freight railroads, and "new" high speed rail projects--capable of
speeds above 150 miles per hour--which are designed to operate on their
own tracks or guideway not shared with other rail services. Our review
is also technology neutral, meaning that we did not analyze or consider
the technical feasibility of the various rail technologies available,
such as diesel, electrified trains, or magnetic levitation (maglev)
trains,[Footnote 7] but rather we considered only the service and
performance aspects of these different technologies in the proposals we
reviewed.
We obtained information from numerous sources to address our
objectives. Specifically, we conducted structured interviews with
officials involved in the planning and operation of the 5 corridor rail
lines that currently exceed 79 miles per hour, and with project
sponsors for 11 specific corridor projects in the United States that
are actively being pursued and have advanced into the environmental
review phase of project development. (See appendix I for a detailed
discussion of our scope and methodology, and apps. II and III for a
detailed description of each project we reviewed.) The 5 existing
projects are all incremental improvements, and of the 11 proposed
projects, 6 are incremental projects, and 5 are new high speed rail
projects that would involve new track or guideways. Three of the latter
projects are considering maglev technology. We structured the
interviews to determine (1) the most important characteristics and
factors that affect the project's viability; (2) the most important
challenges faced by project sponsors in developing the project; and (3)
the roles of various federal, state, local, and private sector entities
in the development of the project. Also, we conducted case studies of 2
high speed rail projects that had been terminated (the Florida Overland
Express and the Texas TGV) as well as case studies of high speed rail
in France, Japan, and Spain (see appendix IV for more details on the
terminated projects, and appendix V for information on the high speed
rail systems in France, Japan, and Spain). We chose the terminated
projects to identify the challenges encountered by previous attempts to
develop high speed rail in the United States, and we chose these
countries on the basis of their experiences with the development and
operation of high speed rail service. In addition, we reviewed relevant
literature on high speed rail systems in these and other countries as
well as information, studies, and reports on domestic high speed rail
proposals. Lastly, we conducted over 90 interviews with a wide range of
stakeholders and interested parties, including academics; consultants
involved in ridership forecasting and planning; representatives from
private firms that invest in transportation infrastructure; engineers
involved in developing various rail technologies; state and local
government agencies and organizations; and officials at Amtrak, FRA,
the Surface Transportation Board, and other federal agencies involved
in the domestic projects we reviewed.
We conducted this performance audit from December 2007 to March 2009 in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
Results in Brief:
Factors affecting the economic viability of high speed rail lines
include expected ridership levels, construction and operating costs,
and public benefits (i.e., benefits to nonriders and to the nation as a
whole) due, for example, to reduced congestion. While some U.S.
corridors have characteristics that suggest potential economic
viability, decision makers have faced difficulties in ascertaining
whether a specific proposed high speed rail line will be viable, due to
the uncertainties of ridership forecasts, cost estimates, and public
benefits proposed by project sponsors. In the United States or
elsewhere, high speed rail tends to attract riders in corridors with
high population and density, especially where congestion on existing
transportation modes prevails. Service characteristics of a high speed
rail line relative to other travel alternatives--such as trip time,
frequency of service, reliability, and safety--are also critical
factors. High speed rail lines incur high up-front costs, whether built
on dedicated right-of-way or as incremental improvements to existing
right-of-way. Corridors where right-of-way is available for rail
purposes and are relatively flat with straight track alignments can
help lower costs. To stay within financial or other constraints,
project sponsors must typically trade-off some level of ridership to
reduce costs. For example, most domestic projects currently under
consideration are incremental projects on track shared with freight
operators--a choice that limits the travel time competitiveness and
reliability valued by riders that would be possible on more expensive,
dedicated track. Research on ridership and cost forecasts for
transportation projects has shown that such forecasts are often
significantly optimistic, and different ridership forecasting methods
may yield diverse, and therefore uncertain, results. While all U.S.
sponsors cited a variety of public benefits that would flow from their
projects, such as congestion relief or environmental benefits, the
extent to which benefits have been quantified and valued varied across
projects.
Once projects are deemed economically viable, project sponsors
encounter several other challenges--most notably, securing the up-front
investment necessary to fund the substantial construction costs as well
as sustaining public and political support and obtaining stakeholder
consensus. In each of the three countries we visited, the central
government paid the up-front construction costs of their country's high
speed rail lines, and did so with no expectation that its investment
would be recouped through ticket revenues. Federal funding for rail in
general, and high speed rail in particular, has largely been derived
from general revenues, as opposed to trust funds or other dedicated
federal funding sources, such as those that fund other transportation
modes. Consequently, high speed rail projects must compete with other
nontransportation demands on federal funds, such as national defense,
education, or health care, as opposed to being compared with other
alternative transportation investments or policies in a corridor.
Alternative federal funding sources, such as authorized under the
Transportation Infrastructure Finance and Innovation Act of 1998
(TIFIA), are available, but in their present form can support no more
than a small fraction of potential high speed rail project costs. State
funding is also limited since few states have dedicated funding sources
for passenger rail, and general revenues can be limited. Private sector
participation is also difficult to secure without a substantial public
sector commitment--both financial and political. The financial and
ridership risks associated with high speed rail projects can also deter
private entities from investing. Sustaining public and political
support for high speed rail development is also challenging,
particularly since uncertainties regarding ridership forecasts and cost
estimates can undermine confidence in the benefits claimed for proposed
projects. Long project lead times compound the difficulty in sustaining
political support, which typically must extend over several electoral
cycles. In addition, project sponsors must coordinate project decisions
among numerous stakeholders and across jurisdictional boundaries--a
difficult task, especially in the absence of an established
institutional framework.
Although in the United States the federal government has not
historically exercised a strong leadership role in the development of
high speed rail, the recently enacted PRIIA will likely increase the
federal role. Following key principles we have developed for
reexamining surface transportation programs would help ensure that
implementation of the PRIIA and a possible heightened federal role is
both efficient and effective. For example, there is currently no
federal high speed rail policy. The national rail plan required by the
PRIIA provides an opportunity to identify the vision and goals for U.S.
high speed rail and how high speed rail might fit into the national
transportation system, as well as to identify the appropriate federal
role in achieving the established goals. There has been little effort
previously to identify the role of high speed rail, and the national
rail plan required by the PRIIA does not explicitly include high speed
rail, although it must be consistent with state rail plans that are to,
among other things, include a review of proposed high speed rail lines.
In the countries we visited, we found that national rail plans have
proven instrumental in guiding high speed rail development. In
addition, the PRIIA specifies criteria for selecting high speed rail
corridors and projects for development. The act also requires FRA to
develop a schedule for achieving specific, measurable goals related to
such things as the development of a national rail plan and to assess
progress against these goals. We have previously reported on the
importance of incorporating performance and accountability for results
to help target resources to programs that best achieve intended
outcomes and national transportation priorities. FRA has not yet
determined how performance and accountability will be incorporated into
the review and evaluation of grant applications. Accountability can be
enhanced by tying the specific, measurable goals required by the PRIIA
to performance and accountability measures. Furthermore, as FRA
develops analytical tools and approaches to apply the project selection
criteria, it will be important to address such things as optimistic
ridership and cost forecasts. Obtaining forecasts from independent
sources and subjecting forecasts to peer review are among the ways to
potentially increase the reliability of these forecasts. Ensuring the
fiscal sustainability of high speed rail projects, both while projects
are being planned and constructed, as well as once they become
operational, will also be important. The project selection criteria
contained in the PRIIA will help in efforts to ensure the short-and
long-term fiscal sustainability of federal investments in high speed
rail projects. FRA is currently in the process of evaluating the PRIIA
and preparing final rules for how high speed rail projects will be
reviewed and selected for federal funding under provisions of the act.
To ensure effective implementation of the provisions of the PRIIA that
relate to high speed passenger rail, we are recommending that the
Secretary of Transportation, in consultation with Congress and other
stakeholders, develop a written strategic vision for high speed rail,
particularly in relation to the role that high speed rail can play in
the national transportation system, clearly identifying potential
objectives and goals for high speed rail systems and the roles that
federal and other stakeholders should play in achieving each objective
and goal. We also recommend that the Secretary develop specific
policies and procedures for reviewing and evaluating grant applications
under the PRIIA that clearly identify the outcomes expected to be
achieved through the award of grant funds and that include performance
and accountability measures. Finally, we recommend that the Secretary
develop guidance and methods for ensuring the reliability of ridership
and other forecasts used to determine the viability of high speed rail
projects and to support the need for federal grant assistance.
We provided copies of our draft report to DOT and Amtrak for comment.
DOT said that it generally agreed with the information presented and
noted that with the passage of ARRA, its work on high speed rail has
been considerably accelerated. Specifically, the act calls for FRA to
submit, within an expedited time frame, a strategic plan to the
Congress describing how FRA will use the $8 billion funding identified
in the act to improve and deploy high speed passenger rail systems. DOT
indicated that the strategic plan may include the Department's vision
for developing high speed rail services, criteria for selecting
projects, an evaluation process that will be used to measure
effectiveness, and a discussion of the relationship between the ARRA
grant programs and the recently enacted PRIIA. DOT said it is also
working to comply with statutory requirements to issue interim guidance
in June 2009, describing grant terms, conditions and procedures. DOT
told us that in order to provide information to the public and
potential grantees as expeditiously as possible, it has already posted
a set of questions and answers relating to ARRA on its Web site.
Finally, DOT noted that the draft report does not include information
relating to the administration's new federal commitment to high speed
rail. Specifically, as described in the President's proposed fiscal
year 2010 budget, the administration has proposed a 5-year $5 billion
high-speed rail state grant program. DOT indicated that this program is
intended to build on the $8 billion included in ARRA for high speed
rail and marks a new federal commitment to practical and
environmentally sustainable transportation. DOT did not take a position
on our recommendations. Amtrak said it generally agreed with our
conclusions and also did not take a position on our recommendations.
Amtrak provided technical comments, which we incorporated where
appropriate.
Background:
Five corridor rail lines currently exceed Amtrak's predominant top
speed of 79 miles per hour in the United States. Proposals for high
speed rail projects in 44 other specific corridors are at some stage of
planning and development. Eleven of these projects have advanced into
the environmental review phase (see table 1).
Table 1: High Speed Rail Projects in the United States:
Rail corridors in current operation above 79 miles per hour[A]:
Corridor: Los Angeles, California - San Diego, California;
Number of miles: 130;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): 90.
Corridor: New York, New York - Albany/Schenectady, New York;
Number of miles: 158;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): 110.
Corridor: Philadelphia, Pennsylvania - Harrisburg, Pennsylvania;
Number of miles: 104;
Proposed type of improvement and technology to be used:
Incremental/Electric;
Current top speed of existing rail services (miles per hour): 110.
Corridor: Boston, Massachusetts - New York, New York - Washington,
D.C.;
Number of miles: 458;
Proposed type of improvement and technology to be used:
Incremental/Electric;
Current top speed of existing rail services (miles per hour): 150.
Corridor: Chicago, Illinois - Detroit/Pontiac, Michigan;
Number of miles: 304;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): 95.
High speed rail projects in the environmental review process:
Corridor: Los Angeles, California - San Francisco, California[B];
Number of miles: 520;
Proposed type of improvement and technology to be used: New/Electric;
Current top speed of existing rail services (miles per hour): 79[C].
Corridor: Anaheim, California - Las Vegas, Nevada;
Number of miles: 269;
Proposed type of improvement and technology to be used: New/Maglev;
Current top speed of existing rail services (miles per hour): No
service.
Corridor: Victorville, California - Las Vegas, Nevada;
Number of miles: 183;
Proposed type of improvement and technology to be used: New/Electric or
diesel;
Current top speed of existing rail services (miles per hour): No
service.
Corridor: Eugene, Oregon - Portland, Oregon - Vancouver, Canada;
Number of miles: 310;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): 79.
Corridor: New York, New York - Scranton, Pennsylvania;
Number of miles: 133;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): No
service.
Corridor: Chicago, Illinois - St. Louis, Missouri;
Number of miles: 284;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): 79.
Corridor: Chicago, Illinois - Minneapolis/St. Paul, Minnesota;
Number of miles: 441;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): 79.
Corridor: Baltimore, Maryland - Washington, D.C.;
Number of miles: 40;
Proposed type of improvement and technology to be used: New/Maglev;
Current top speed of existing rail services (miles per hour): 110[D].
Corridor: Atlanta, Georgia - Chattanooga, Tennessee;
Number of miles: 251;
Proposed type of improvement and technology to be used: New/Maglev or
electric;
Current top speed of existing rail services (miles per hour): No
service.
Corridor: Washington, D.C. - Charlotte, North Carolina;
Number of miles: 452;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): 79.
Corridor: Richmond, Virginia - Hampton Roads, Virginia;
Number of miles: 108;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): 79.
High speed rail projects being planned that have yet to move into the
environmental review process:
Corridor: Phoenix, Arizona - Tucson, Arizona;
Number of miles: 119;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): No
service.
Corridor: Bay area, California - Los Angeles, California (Coastal);
Number of miles: 476;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): 79[C].
Corridor: San Jose, California - Sacramento, California;
Number of miles: 137;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): 79.
Corridor: Jacksonville, Florida - Orlando, Florida;
Number of miles: 140;
Proposed type of improvement and technology to be used: Not specified;
Current top speed of existing rail services (miles per hour): 79.
Corridor: Orlando, Florida - Miami, Florida;
Number of miles: 235;
Proposed type of improvement and technology to be used: Not specified;
Current top speed of existing rail services (miles per hour): 79.
Corridor: Tampa, Florida - Orlando, Florida;
Number of miles: 92;
Proposed type of improvement and technology to be used: Not specified;
Current top speed of existing rail services (miles per hour): 79.
Corridor: Casper, Wyoming - Denver, Colorado - Albuquerque, New Mexico;
Number of miles: 788;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): No
service.
Corridor: Atlanta, Georgia - New Orleans, Louisiana;
Number of miles: 518;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): 79.
Corridor: Houston, Texas - New Orleans, Louisiana;
Number of miles: 350;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): 79.
Corridor: New Orleans, Louisiana - Mobile, Alabama;
Number of miles: 141;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): 79.
Corridor: Chicago, Illinois - Carbondale, Illinois;
Number of miles: 309;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): 79.
Corridor: Chicago, Illinois - Cincinnati, Ohio;
Number of miles: 304;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): 79.
Corridor: Chicago, Illinois - Cleveland, Ohio;
Number of miles: 373;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): 79.
Corridor: Chicago, Illinois - Grand Rapids/Holland, Michigan;
Number of miles: 212;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): 79.
Corridor: Chicago, Illinois - Green Bay, Wisconsin;
Number of miles: 217;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): No
service[E].
Corridor: Chicago, Illinois - Omaha, Nebraska;
Number of miles: 476;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): 79.
Corridor: Chicago, Illinois - Port Huron, Michigan;
Number of miles: 319;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): 95[F].
Corridor: Chicago, Illinois - Quincy, Illinois;
Number of miles: 258;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): 79.
Corridor: Indianapolis, Indiana - Louisville, Kentucky;
Number of miles: 111;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): No
service.
Corridor: Kansas City, Missouri - St. Louis, Missouri;
Number of miles: 283;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): 79.
Corridor: Twin Cities, Minnesota - Duluth, Minnesota;
Number of miles: 154;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): No
service.
Corridor: Boston, Massachusetts - Montreal, Canada;
Number of miles: 330;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): No
service[G].
Corridor: New Haven, Connecticut - Springfield, Massachusetts;
Number of miles: 58;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): 79.
Corridor: Columbus, Ohio - Pittsburgh, Pennsylvania;
Number of miles: 99;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): No
service.
Corridor: Cincinnati, Ohio - Cleveland, Ohio;
Number of miles: 260;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): No
service.
Corridor: Cleveland, Ohio - Buffalo, New York - Toronto, Canada;
Number of miles: 294;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): 79.
Corridor: Cleveland, Ohio - Pittsburgh, Pennsylvania;
Number of miles: 154;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): 79.
Corridor: Cleveland, Ohio - Toledo, Ohio - Detroit, Michigan;
Number of miles: 154;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): No
service[H].
Corridor: Raleigh, North Carolina - Jacksonville, Florida;
Number of miles: 446;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): 79.
Corridor: Charlotte, North Carolina - Atlanta, Georgia - Macon,
Georgia;
Number of miles: 346;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): No
service[I].
Corridor: Atlanta, Georgia - Jacksonville, Florida;
Number of miles: 321;
Proposed type of improvement and technology to be used:
Incremental/Diesel;
Current top speed of existing rail services (miles per hour): No
service.
Corridor: Dallas, Texas - Houston, Texas;
Number of miles: 280;
Proposed type of improvement and technology to be used: New/Electric;
Current top speed of existing rail services (miles per hour): No
service[J].
Corridor: Dallas, Texas - San Antonio, Texas;
Number of miles: 271;
Proposed type of improvement and technology to be used: New/Electric;
Current top speed of existing rail services (miles per hour): 79.
Source: GAO, based on Joseph P. Schweiterman and Justin Scheidt,
"Survey of Current High-Speed Rail Planning Efforts in the United
States," interviews with project sponsors, and Amtrak schedules.
[A] All of these lines have plans to improve the speed and reliability
of the service. In addition to these corridors, the long-distance route
between Chicago, Illinois, and Los Angeles, California, operates at 90
miles per hour over portions of its route.
[B] This represents phase one of this project, starting in Anaheim,
California. Phase two envisions extensions to Sacramento, California,
and San Diego, California.
[C] Service between Los Angeles, California, and San Francisco,
California, exists along the coastal route as well as along an inland
route. The inland route requires a connection by bus between Los
Angeles, California, and Bakersfield, California.
[D] Current service is part of the Northeast Corridor, and reaches 110
miles per hour on this segment.
[E] Service exists on this corridor from Chicago, Illinois, to
Milwaukee, Wisconsin, but not between Milwaukee, Wisconsin, and Green
Bay, Wisconsin.
[F] Current service reaches 95 miles per hour on a segment that is also
part of the Chicago, Illinois, to Detroit, Michigan, line.
[G] Service is not direct and can only be provided through Albany, New
York. Service to Albany can be provided through Springfield,
Massachusetts.
[H] Rail service exists between Cleveland, Ohio, and Toledo, Ohio, but
not between Toledo, Ohio, and Detroit, Michigan. A bus connection is
required between Toledo, Ohio, and Detroit, Michigan.
[I] Service exists between Charlotte, North Carolina, and Atlanta,
Georgia, but not between Atlanta, Georgia, and Macon, Georgia.
[J] Service is not direct, and can only be provided through San
Antonio, Texas.
[End of table]
Financing for the proposed projects has yet to be arranged, with the
partial exception of the proposed Los Angeles, California, to San
Francisco, California, system, for which voters recently approved $9.95
billion in bond funding.[Footnote 8] For those projects that currently
operate above 79 miles per hour, financing came from federal or state
sources. Federal funding for high speed rail has generally gone to
improvements to rail service in the Northeast Corridor between
Washington, D.C., and Boston, Massachusetts, and to research and
development. Some $3.1 billion has been spent by the federal government
on the Northeast Corridor since 1990--about 75 percent of all federal
funding identified by FRA as having been spent for high speed rail over
this period. The remaining 25 percent has primarily gone to research
and development purposes related to high speed rail. For example, the
first foray into high speed rail development was in 1965, when Congress
provided funding to begin studying high speed rail technologies.
[Footnote 9] Later, the Magnetic Levitation Deployment Program provided
funds to begin studying maglev as a new high speed transportation
technology and to advance a demonstration project in the United States.
[Footnote 10] States have also invested in high speed rail in some
instances. For example, state funding was used to help achieve speeds
above 79 miles per hour between New York, New York, and Albany, New
York; Los Angeles, California, and San Diego, California; Chicago,
Illinois, and Detroit, Michigan; and Philadelphia, Pennsylvania, and
Harrisburg, Pennsylvania.
Several federal agencies have played a role in the planning and
development of high speed rail projects to date, and others may
potentially be involved as projects progress. FRA has generally been
the lead federal agency--sharing that role with other federal agencies,
such as the Surface Transportation Board--regarding the environmental
review process. The Surface Transportation Board must give its approval
before any new rail lines can be constructed that connect to the
interstate rail network.[Footnote 11] FRA also designates corridors as
"high speed rail" corridors, and is the agency responsible for any
safety regulations or standards regarding high speed rail operations.
Safety standards relative to tracks and signaling requirements become
more stringent as train speeds increase. For example, at speeds of 125
miles per hour or higher, highway-rail grade crossings must be
eliminated, and trains must be equipped with positive train control,
which will automatically stop a train if the locomotive engineer fails
to respond to a signal. To operate at speeds above 150 miles per hour,
FRA requires dedicated track--that is, track that can only be used for
high speed rail service. No safety regulations currently exist for
speeds above 200 miles per hour. In addition to FRA and the Surface
Transportation Board, the Federal Highway Administration and the
Federal Transit Administration (FTA) may play a role if highway or
other transit right-of-way will be used or if highway or transit funds
are to be used for some part of a high speed rail project. The Bureau
of Land Management is responsible for granting rights-of-way on public
lands for transportation purposes and, thus, would be involved in any
new high speed rail project that envisions using public lands. Various
other agencies would be involved in the environmental approval process,
including the U.S. Fish and Wildlife Service and the Environmental
Protection Agency, among others.
Economic Viability of High Speed Rail Is Affected by Many Corridor and
Service Characteristics, but Uncertainties About Ridership and Other
Estimates Make Viability Determinations Difficult:
Based on our interviews with both domestic project sponsors and foreign
operators of high speed rail lines, in addition to a literature review,
we identified many common characteristics that tend to lead to
relatively high numbers of riders and resulting public benefits and to
relatively lower costs. High speed rail tends to attract the most
riders and resulting public benefits in corridors between roughly 100
and 500 miles with existing high demand for intercity travel. Service
characteristics relative to other travel alternatives--such as travel
time and price competitiveness, high frequency, greater reliability,
and safety--are also critical in attracting riders and producing public
benefits. Costs of high speed rail tend to be lower in corridors where
right-of-way exists that can be used for high speed rail purposes, and
a relatively flat-and straight-alignment can be used. While several
U.S. corridors exhibit characteristics that suggest potential economic
viability, decision makers have faced difficulties in ascertaining
whether any specific proposed line will be viable due to uncertainties
in how accurately project sponsors forecast riders and estimate costs,
and to the lack of agreement and standards regarding how a project's
public benefits should be valued and assessed.
Numerous Corridor and Service Characteristics, and Trade-offs between
Service and Costs, Influence a Project's Economic Viability:
High levels of demand for intercity travel are needed to justify a new
high speed rail line. (See appendix V for a discussion of techniques
for forecasting demand for intercity travel and riders on high speed
rail.) Project sponsors identified high levels of population and
expected population growth along a corridor, and strong business and
cultural ties between cities as factors that can lead to higher demand
for intercity travel. In some corridors, riders are expected to come
from business travelers and commuters due to the strong economic ties
between cities along the corridor; while in other corridors, a larger
number of tourists and leisure travelers comprise the expected riders.
Officials in Japan expressed the importance of connecting several high-
population areas along a corridor as a key factor in the high number of
riders on their system, to effectively serve several travel markets,
including commuters and travelers from cities along the corridor. The
corridor between Tokyo and Osaka in Japan is unique in that it is one
of the most populous regions in the world, with multiple urban areas of
several million inhabitants located along the corridor. This corridor
attracts the highest number of riders of any high speed rail line in
the world--over 150 million riders annually. In other foreign corridors
we examined, however, population and densities were not as high, but
foreign officials indicated that high speed rail revenues in these
areas were sufficient to cover ongoing operating costs, although not
necessarily sufficient to recoup the initial investment in the line.
Some, but not all of the corridors under development in the United
States today have population levels similar to corridors in the foreign
countries we examined (see figures 1 and 2).
Figure 1: Population of Cities Along Selected Foreign High Speed Rail
Lines:
[Refer to PDF for image: illustration]
Project: Tokyo-Osaka (Japan);
City/Population: Tokyo/Yokohama; 34.0 million;
Distance to next city: approximately 110 miles;
City/Population: Shizuoka; 0.7 million;
Distance to next city: approximately 100 miles;
City/Population: Nagoya; 11.0 million;
Distance to next city: approximately 100 miles;
City/Population: Kyoto/Osaka; 18.0 million.
Total distance: 320 miles;
Travel time: 2 hours, 25 minutes.
Project: Tokyo-Hachinohe (Japan);
City/Population: Tokyo/Yokohama; 34.0 million;
Distance to next city: approximately 60 miles;
City/Population: Omiya; 1.2 million;
Distance to next city: approximately 120 miles;
City/Population: Fukushima; 0.3 million;
Distance to next city: approximately 40 miles;
City/Population: Sendai; 1.0 million;
Distance to next city: approximately 80 miles;
City/Population: Morioka; 0.3 million;
Distance to next city: approximately 70 miles;
City/Population: Hachinoche; 0.2 million;
Total distance: 368 miles;
Travel time: 2 hours, 56 minutes.
Project: Paris-Lyon (France);
City/Population: Paris; 10.4 million;
Distance to next city: 255 miles;
City/Population: Lyon; 1.3 million;
Total distance: 255 miles;
Travel time: 1 hour, 57 minutes.
Project: Madrid-Barcelona (Spain);
City/Population: Madrid; 4.9 million;
Distance to next city: approximately 40 miles;
City/Population: Guadalajara;
Distance to next city: approximately 150 miles;
City/Population: Zaragoza; 0.5 million;
Distance to next city: approximately 90 miles;
City/Population: Lleida; 0.4 million;
Distance to next city: approximately 50 miles;
City/Population: Tarragona; 0.7 million;
Distance to next city: approximately 60 miles;
City/Population: Barcelona; 3.9 million;
Total distance: 386 miles;
Travel time: 2 hours, 38 minutes.
Source: GAO analysis of data from domestic project sponsors, foreign
transportation officials, the U.S. Census Bureau, and Demographia.
[End of figure]
Figure 2: Population of Cities Along Selected Current and Proposed High
Speed Rail Lines in the United States:
[Refer to PDF for image: illustration]
Project: Los Angeles/Anaheim-San Francisco;
City/Population: Anaheim/Los Angeles; 12.9 million;
Distance to next city: approximately 30 miles;
City/Population: Los Angeles;
Distance to next city: approximately 60 miles;
City/Population: Palmdale; 0.1 million;
Distance to next city: approximately 90 miles;
City/Population: Bakersfield; 0.8 million;
Distance to next city: approximately 80 miles;
City/Population: Visalia; 0.4 million;
Distance to next city: approximately 50 miles;
City/Population: Fresno; 0.9 million;
Distance to next city: approximately 120 miles;
City/Population: Gilroy;
Distance to next city: approximately 30 miles;
City/Population: San Jose; 1.8 million;
Distance to next city: approximately 20 miles;
City/Population: Palo Alto;
Distance to next city: approximately 30 miles;
City/Population: San Francisco; 4.2 million;
Total distance: 520 miles;
Travel time: 2 hours, 38 minutes.
Project: Washington, D.C.-Boston;
City/Population: Washington, D.C.; 5.3 million;
Distance to next city: approximately 45 miles;
City/Population: Baltimore; 2.7 million;
Distance to next city: approximately 75 miles;
City/Population: Wilmington, DE/Philadephia; 5.8 million;
Distance to next city: approximately 60 miles;
City/Population: Trenton; 0.4 million;
Distance to next city: approximately 50 miles;
City/Population: New York; 18.8 million;
Distance to next city: approximately 75 miles;
City/Population: New Haven; 0.8 million;
Distance to next city: approximately 40 miles;
City/Population: New London; 0.3 million;
Distance to next city: approximately 60 miles;
City/Population: Providence; 1.6 million;
Distance to next city: approximately 45 miles;
City/Population: Boston; 4.5 million;
Total distance: 458 miles;
Travel time: 6 hours, 45 minutes.
Project: Los Angeles/Anaheim-Las Vegas[A];
City/Population: Los Angeles/Anaheim; 12.9 million;
Distance to next city: approximately 15 miles;
City/Population: Ontario; 4.1 million;
Distance to next city: approximately 45 miles;
City/Population: Victorville; 0.1 million;
Distance to next city: approximately 40 miles;
City/Population: Barstow;
Distance to next city: approximately 100 miles;
City/Population: Primm;
Distance to next city: approximately 40 miles;
City/Population: Las Vegas; 1.8 million;
Total distance: 183-321 miles[A];
Travel time: 1 hour, 20 minutes - 5 hours, 30 minutes[A].
Project: Chicago-Detroit/Pontiac;
City/Population: Chicago; 9.5 million;
Distance to next city: approximately 135 miles;
City/Population: Kalamazoo; 0.3 million;
Distance to next city: approximately 65 miles;
City/Population: Jackson; 0.2 million;
Distance to next city: approximately 80 miles;
City/Population: Detroit; 4.5 million;
Distance to next city: approximately 25 miles;
City/Population: Pontiac;
Total distance: 304 miles];
Travel time: 3 hours, 46 minutes.
Project: Washington, D.C. - Charlotte;
City/Population: Washington, D.C.; 4.2 million;
Distance to next city: approximately 90 miles;
City/Population: Richmond; 1.2 million;
Distance to next city: approximately 15 miles;
City/Population: Petersburg;
Distance to next city: approximately 115 miles;
City/Population: Rocky Mount; 0.2 million;
Distance to next city: approximately 90 miles;
City/Population: Raleigh; 1.0 million;
Distance to next city: approximately 70 miles;
City/Population: Greensboro/High Point; 0.7 million;
Distance to next city: approximately 70 miles;
City/Population: Charlotte; 1.7 million;
Total distance: 452 miles;
Travel time: 6 hours - 7 hours, 30 minutes.
Source: GAO analysis of data from domestic project sponsors, foreign
transportation officials, the U.S. Census Bureau, and Demographia.
[A] Several proposals exist in this corridor, with varying attributes
and estimated travel times. See appendix VII of this report for more
information on the various proposals.
[End of figure]
High speed rail also has more potential to attract riders in corridors
experiencing heavy travel on existing modes of transportation (i.e.,
conventional rail, air, and highways--including automobile and bus) and
where there is, or is projected to be, congestion and constraints on
the capacity of existing transportation systems.[Footnote 12] These
situations lead to demand for an additional transportation alternative,
or demand for expansion or improvements to existing transport modes. To
attract riders from existing transportation alternatives, a proposed
high speed rail line needs to be time-and price-competitive with the
alternatives, and also needs to have favorable service characteristics
related to frequency, reliability, and safety. FRA and others have
found that high speed rail tends to be most time-competitive at
distances of up to 500 miles in length.[Footnote 13] Existing high
speed rail lines in Japan tend to be most time-competitive and attain
the highest relative levels of service in corridors of roughly similar
distances (see figure 3).[Footnote 14] According to foreign and
domestic officials with whom we spoke, generally lines significantly
shorter than 100 miles do not compete well with the travel time and
convenience of automobile travel, and lines longer than 500 miles are
unable to overcome the speed advantage of air travel.[Footnote 15]
Between 100 and 500 miles, high speed rail can often overcome air
travel's speed advantage because of reductions in access and waiting
times. Air travel requires time to get to the airport, which can often
be located a significant distance from a city center, as well as time
related to checking baggage, getting through security, waiting at the
terminal, queuing for takeoff, and waiting for baggage upon arrival at
a destination.[Footnote 16] By contrast, high speed rail service is
usually designed to go from city center to city center, which generally
allows for reduced access times for most travelers. Some travelers will
have destinations or starting points outside of city centers in closer
proximity to airports, thus, potentially minimizing or eliminating in
some cases the access time advantage of high speed rail where high
speed rail service does not connect to airports or other locations
preferred by travelers. High speed rail also generally has less
security and waiting time than airports.[Footnote 17] On the foreign
high speed rail lines we observed, there was no formal security
comparable to airport security, and travelers could arrive at a station
just a few minutes prior to departure.[Footnote 18]
Figure 3: Transportation Mode Share in Japan, by Distance Traveled:
[Refer to PDF for image: stacked vertical bar graph]
Traveling distance: 188-313 miles;
Railway (share of passenger transportation): 38%;
Automobile (share of passenger transportation): 55%;
Ship (share of passenger transportation): 3%;
Airplane (share of passenger transportation): 4%.
Traveling distance: 314-469 miles;
Railway (share of passenger transportation): 52%;
Automobile (share of passenger transportation): 30%;
Ship (share of passenger transportation): 2%;
Airplane (share of passenger transportation): 16%.
Traveling distance: 470-625 miles;
Railway (share of passenger transportation): 20%;
Automobile (share of passenger transportation): 35%;
Ship (share of passenger transportation): 1%;
Airplane (share of passenger transportation): 44%.
Traveling distance: 626 or more miles;
Railway (share of passenger transportation): 5%;
Automobile (share of passenger transportation): 15%;
Ship (share of passenger transportation): 0%;
Airplane (share of passenger transportation): 79%.
Source: GAO presentation of Japanese Ministry of Land, Infrastructure,
Transport, and Tourism data.
[End of figure]
In France, Japan, Spain, and elsewhere, high speed rail has been shown
to be time-competitive with air travel and has relieved capacity
constraints at airports. For example, high speed rail in Japan has
resulted in eliminating one air route (Tokyo-Nagoya), while several
others have lost significant market share to high speed rail. With the
introduction of the Madrid-Barcelona high speed rail line in February
2008, air travel between the two cities has dropped an estimated 30
percent (from 5.0 million to 3.5 million air passengers), while high
speed rail riders increased markedly. In France, high speed rail has
captured 90 percent of the Paris-Lyon air-rail market, and Air France
officials estimated that for high speed rail trips of between 2 and 3
hours, high speed rail is likely to capture about 80 percent of the air-
rail market over time. By displacing shorter distance air travel, high
speed rail has freed up considerable airport capacity in those cities
for other longer distance flights. However, because high speed rail
becomes a new competitor with short-distance air travel, airlines have
in some cases actively opposed its development. In the United States,
most of the 16 high speed rail projects we focused on will connect
metropolitan areas with anticipated capacity constraints at nearby
airports (see figure 4).
Figure 4: Future Airport Capacity, by 2025, and Selected High Speed
Rail Proposals in the United States:
[Refer to PDF for image: illustration on map of the United States]
Proposed high speed rail projects:
1. Atlanta, GA, to Chattanooga, TN: [B, D, E]
2. Baltimore, MD, to Washington, D.C.: [A, C, E]
3. Anaheim, CA, to Las Vegas, NV: [B, D, E]
4. Victorville, CA, to Las Vegas, NV: [B, D, E]
5. Los Angeles, CA, to San Francisco, CA: [B, C, D, E]
6. Los Angeles, CA, to San Diego, CA: [B, C, D, E]
7. Portland, OR, to Vancouver, Canada: [A, C, E]
8. New York, NY, to Albany, NY, to Buffalo, NY: [B, D, E]
9. Boston, MA, to New York, NY, to Washington, D.C.: [B, C, D, E]
10. New York, NY, to Scranton, PA: [B, D, E]
11. Philadelphia, PA, to Harrisburg, PA: [B, D, E]
12. Chicago, IL, to Detroit/Pontiac, MI: [A, C, E]
13. Chicago, IL, to St. Louis, MO: [A, C, E]
14. Chicago, IL, to Minneapolis/St. Paul, MN: [A, C, E]
15. Washington, D.C., to Charlotte, NC: [A, C, E]
16. Richmond, VA, to Hampton Roads, VA: [E]
[A] Metropolitan areas with airports projected to meet capacity needs
in 2025 only if planned improvements occur (7 metro areas).
[B] Metropolitan areas with airports that will need additional capacity
in 2025, even after planned improvements occur (8 metro areas).
[C] Airports projected to need capacity in 2025 even after planned
improvements occur(13 airports).
[D] Airports projected to meet capacity needs in 2025 only if planned
improvements occur (14 airports).
[E] Proposed high speed rail projects.
Sources: FAA (airport capacity, metropolitan capacity); MapArt (base
map).
[End of figure]
While high speed rail will generally have superior travel times
compared with automobile or bus travel for trips greater than 100
miles--depending on the service--it is difficult for a high speed rail
service to compete with the low price of bus travel and convenience of
automobile travel and, therefore, is not likely to attract a sufficient
number of these travelers to have a significant effect on highway
congestion and capacity in a corridor. According to a study on high
speed rail ridership forecasting, intercity bus travel is limited and
bus riders care more about price than about time. Therefore, to the
extent that a new high speed rail line provided time savings at
somewhat higher cost, the contribution of bus travel to a new high
speed rail line will be insignificant.[Footnote 19] However, this
result depends on how the high speed rail service is priced. If the
high speed rail service is publicly funded, then a legitimate public
policy question arises regarding fare-setting (i.e., whether high speed
rail fares should be set to maximize revenues or to attract higher
numbers of riders from other modes). The study also contends that those
who travel by car tend to care more about price and convenience (e.g.,
leaving when they choose, bringing additional passengers or cargo at no
extra cost) and less about trip time.
The effect on highway congestion of diverting automobile travelers to
high speed rail will vary based on the specific locations and times.
For example, if high speed rail can divert travelers from making an
intercity trip through a congested highway at peak times, then it may
have a noticeable effect on traffic. Over the long term, however,
whatever trips are diverted on a congested corridor to another mode of
travel are likely to be at least partially replaced by other trips,
since the reduced congestion from diversion makes it easier to travel-
-a phenomenon known as "induced demand." Nonetheless, given the great
number of trips by car, the diversion of a small percentage of
automobile travelers to high speed rail could have a significant impact
on the number of high speed rail riders, and result in benefits arising
from increased capacity in the transportation system and thus more
trips being carried. For example, in Japan, a survey on a recently
developed high speed rail line showed that 21 percent of riders on a
new high speed rail line diverted from the automobile mode. Similarly,
in studies conducted for California's proposed statewide high speed
rail system, over 40 percent of forecasted riders are projected to be
diverted from automobile travelers, but the high speed rail line will
only reduce automobile travel by an estimated 7 percent.
In the countries we visited, automobile travel also tends to be
significantly more expensive than in the United States, resulting from
tolls on intercity roads and higher gas prices and taxes, which makes
high speed rail a more cost-competitive option.[Footnote 20] For
example, according to Japanese government officials, to drive between
Tokyo and Osaka--a distance of approximately 318 miles by automobile--
can cost almost $200 each way, including over $90 in tolls, and between
$70 and $105 in fuel costs, depending on the fuel economy of the
vehicle (in August 2008, the average price of gasoline in Japan was
$6.50 per gallon).[Footnote 21] This cost compares with a high speed
rail fare of about $130 per passenger. By comparison, to travel one-way
between Los Angeles and San Francisco by automobile, a distance of 432
miles, will require a $4 toll to cross the Bay Bridge, and roughly $25
to $40 in fuel costs (on Jan. 27, 2009, the average price of gasoline
in California was $2.10 per gallon, although at gas prices over $4 per
gallon, at which they were recently, fuel costs could be over $80 and
could rise over the long term). This cost compares with an average air
fare of about $108, and the California High Speed Rail Authority is
anticipating a high speed rail fare of about half the air fare, or
about $60 in this example.
Another factor that affects the competitiveness of high speed rail
relative to alternative intercity transportation modes is the extent to
which it is part of an integrated transportation system and adequate
transit services are available at the destination points for travelers.
Foreign officials in France, Japan, and Spain pointed to the importance
of strong transit access to, from, and within downtown areas to attract
riders to high speed rail. European high speed rail stations are
designed to be integrated with the urban transportation network,
including subways, conventional rail, and local buses. In France, high
speed rail also connects with airports. In Spain, high speed rail
generally does not connect to airports. Japanese stations are also
integrated with transit options, although high speed rail in Japan also
does not connect to airports. In these countries, rail travelers will
generally not require an automobile at the end of the rail line to get
to their final destination in metropolitan areas. Most urban transit
systems in the United States are not as well developed as compared with
systems in France or Japan. For some proposed lines in the United
States, travelers may need access to an automobile at their
destination, potentially making travel by high speed rail a less
attractive option for those riders. However, a number of domestic
project sponsors recognize the importance associated with designing and
constructing their high speed rail systems to take advantage of
existing transit connections and planned improvements. For example, the
proposed maglev line between Las Vegas, Nevada, and Anaheim,
California, is being designed to connect to a new intermodal transit
terminal being built in Anaheim. In addition, in California, the bond
measure that was recently passed to help fund high speed rail
development allocates $950 million for funding toward connecting rail
transit services.
Officials in France, Japan, and Spain also attributed their high
ridership to the reliability and safety of their high speed rail lines,
relative to alternative modes of transportation. In Japan, the average
delay between Tokyo and Osaka was 30 seconds per train in 2007,
[Footnote 22] and, beginning in March 2009, up to 13 trains per hour
will leave Tokyo for Osaka on any given business day. In Spain and
France, delays are also minimal, although service is less frequent.
Between 20 and 36 one-way trains run daily on the Madrid to Seville,
Madrid to Barcelona, and Paris to Lyon lines.[Footnote 23] Regarding
safety, there have been no fatalities on Japanese high speed rail lines
in over 40 years of service, with a similar record in France and Spain.
By contrast, other transport modes do not have similar records of
safety reliability, particularly at peak periods, or where capacity
constraints exist. For example, automobile travel can be significantly
delayed by congestion at peak periods and results in tens of thousands
of injuries and fatalities per year. Similarly, the U.S. aviation
system is prone to significant delays. As we recently reported, 2007
represented the second worst year on record for flight delays and
cancellations, which have been steadily increasing since 2002[Footnote
24].
The economic viability of high speed rail is also affected by cost.
Costs of high speed rail tend to be lower in corridors where right-of-
way exists that can be used for rail purposes, and a relatively flat-
and straight-alignment can be used, compared with corridors that
require the acquisition of new right-of-way, substantial tunneling, or
bridges. In addition, tradeoffs are often made relative to cost and
service characteristics. For example, incremental projects on track
shared with freight operators may be less expensive, but these tracks
often cannot achieve the same types of travel time-competitiveness or
reliability as dedicated track, which is not shared with other
trains.[Footnote 25] The foreign high speed rail systems we reviewed
attributed their ability to achieve the time-competitiveness,
frequency, reliability, and safety, that we have previously described,
to operating on dedicated track and having no at-grade highway or other
crossings. These systems cost billions of dollars to construct,
although construction cost per mile varied substantially (see table 2).
In Spain, construction costs ranged from $37 million to $53 million per
mile, the latter heavily influenced by the construction of two
tunnels.[Footnote 26] According to Japanese transportation officials,
construction costs in Japan are typically higher because of antiseismic
safeguards, high land costs, and the number of bridges and tunnels
needed to accommodate straight-and level-track through Japan's
mountainous terrain.
Table 2: Estimated Construction Costs for Selected High Speed Rail
Projects in France, Japan, and Spain, by Construction Cost Per Mile:
Europe: Cordoba - Malaga (Spain);
Length (in miles): 96;
Approximate construction cost (per route mile): $37 million;
Estimated construction cost (in 2008 dollars)[A]: $3,558 million;
Construction completion date: December 2007.
Europe: Madrid - Barcelona - Figueras (Spain)[B];
Length (in miles): 468;
Approximate construction cost (per route mile): $39 million;
Estimated construction cost (in 2008 dollars)[A]: $18,223 million;
Construction completion date: February 2008.
Europe: Paris - Strasbourg (France);
Length (in miles): 186;
Approximate construction cost (per route mile): $42 million;
Estimated construction cost (in 2008 dollars)[A]: $7,730 million;
Construction completion date: June 2007.
Europe: Madrid - Valladolid (Spain);
Length (in miles): 111;
Approximate construction cost (per route mile): $53 million;
Estimated construction cost (in 2008 dollars)[A]: $5,894 million;
Construction completion date: December 2007.
Japan: Yatsushiro - Kagoshima;
Length (in miles): 79;
Approximate construction cost (per route mile): $82 million;
Estimated construction cost (in 2008 dollars)[A]: $6,508 million;
Construction completion date: March 2004.
Japan: Takasaki - Nagano;
Length (in miles): 73;
Approximate construction cost (per route mile): $143 million;
Estimated construction cost (in 2008 dollars)[A]: $10,403 million;
Construction completion date: October 1997.
Source: GAO analysis of data provided by French, Japanese, and Spanish
officials.
[A] The cost figures for different projects are not strictly comparable
for a number of reasons including: provided data may be calculated
according to diverse accounting conventions, outlays for a project may
be expended at different points in time, and the schedule of such
outlays was not available to us. Cost estimates are based on different
foreign currencies with varying rates of inflation and fluctuating
exchange rates. Cost data was converted into 2008 dollars to provide a
rough approximation of the variation in construction costs for
different projects in different countries. Also, total construction
cost does not include the cost of the passenger rail vehicles. The
International Union of Railways noted that, historically, one high
speed rail trainset costs between $32 million and $40 million.
[B] Spanish officials noted that 82 miles of this line are still being
planned and constructed.
[End of table]
Four of the five new domestic projects we reviewed that were planning
to use dedicated track are also expected to cost several billion
dollars to construct (see table 3). The Baltimore, Maryland, to
Washington, D.C., project has the highest estimated construction cost
per mile, because it plans to use maglev technology, which is costlier
to construct than lines using electrified, diesel, or other train
technology,[Footnote 27] and to be built along a corridor that is
densely populated, meaning higher land acquisition costs and more
costly technical construction. On the other end of the spectrum is the
Victorville, California (a city 80 miles outside of Los Angeles,
California), to Las Vegas, Nevada, project. Factors contributing to
this project's relatively low estimated cost include the use of
electrified or diesel train technologies, which operate at lower top
speeds (i.e., up to 150 miles per hour); construction along a
relatively flat corridor; and starting service in Victorville, instead
of Los Angeles proper. These factors allow the project to avoid the
additional costs of bridges and tunnels through the mountain range
between the Los Angeles area and Victorville, as well as to avoid the
costs to build through the densely populated areas entering Los
Angeles. In addition, because the project is looking to use existing
highway right-of-way and land owned by the federal government,
acquisition costs are expected to be lower as compared with developing
new right-of-way on privately owned land.[Footnote 28] However, by
starting outside of the Los Angeles area, many stakeholders expressed
significant uncertainty about whether travelers will use the line at
the level being forecasted. (See appendix VII for a more detailed
discussion of the Los Angeles-Las Vegas corridor.)
Table 3: Estimated Construction Costs for Dedicated Right-of-Way High
Speed Rail Projects in the United States, by Construction Cost Per
Mile:
High Speed Rail Project: Victorville, California, to Las Vegas, Nevada;
Top speed: 150;
Average speed: 125;
Length (miles): 183;
Approximate construction cost (per route mile): $22 million;
Estimated construction cost (in 2008 dollars)[A]: $3,990 million;
Year costs were projected: 2003.
High Speed Rail Project: Anaheim, California, to Las Vegas, Nevada;
Top speed: 311;
Average speed: 150-200;
Length (miles): 269;
Approximate construction cost (per route mile): $48 million;
Estimated construction cost (in 2008 dollars)[A]: $12,798 million;
Year costs were projected: 2005/2006.
High Speed Rail Project: Los Angeles, California, to; San Francisco,
California[B];
Top speed: 220;
Average speed: Not available;
Length (miles): 520;
Approximate construction cost (per route mile): $63 - $65 million;
Estimated construction cost (in 2008 dollars)[A]: $32,785 - $33,625
million;
Year costs were projected: 2008.
High Speed Rail Project: Baltimore, Maryland, to Washington, D.C.;
Top speed: 250;
Average speed: 125;
Length (miles): 40;
Approximate construction cost (per route mile): $132 million;
Estimated construction cost (in 2008 dollars)[A]: $5,267 million;
Year costs were projected: 2007.
Source: GAO, from information provided by project sponsors.
Note: The Atlanta to Chattanooga dedicated high speed rail project did
not have project cost estimates available.
[A] The cost figures for different projects are not strictly comparable
for a number of reasons including: provided data may be calculated
according to diverse accounting conventions, outlays for a project may
be expended at different points in time, and the schedule of such
outlays was not available to us. Cost data was converted into current
dollars to provide a rough approximation of the variation in
construction costs for the proposed dedicated high speed rail projects.
[B] Only includes phase 1 of project and does not include phase 2
extensions of project to San Diego and Sacramento.
[End of table]
Incremental projects tend to cost less than new dedicated track
projects. Construction costs per mile for the 6 proposed incremental
projects that we reviewed ranged from $4.1 million to $11.4 million per
mile. Top and average speeds for the incremental projects, however,
ranged from 80 to 110 miles per hour--substantially slower than
dedicated track speeds. This slower speed could make these projects
less competitive with other transportation modes and less reliable than
dedicated track because of the need to share rail lines with other
passenger and freight operations.
Uncertainty Regarding Forecasts of Riders and Costs, and How Public
Benefits Are Quantified and Valued Make Determinations of a Specific
Project's Economic Viability Difficult:
While several U.S. corridors exhibit characteristics that suggest
potential economic viability, determining whether any specific proposed
line will be viable has proven to be difficult for decision makers.
This difficulty is due to uncertainties with the forecasts of riders
and cost estimates that project sponsors produce, the lack of agreement
and standards regarding how a project's public benefits should be
valued and quantified, and the lack of comparison with alternative
investments in highway or air infrastructure.
Uncertainty and Inaccuracy in Forecasts of Riders and Costs:
Rider forecasts and cost estimates are inherently uncertain and subject
to some degree of inaccuracy simply because they are trying to predict
future circumstances. However, analyses and research on the accuracy of
rider forecasts and cost estimates for rail infrastructure projects
have found that a systematic problem and incentive to be optimistic may
exist--that is, actual riders are more likely to be lower than
forecasted, while actual costs are more likely to be higher than
estimated. For example, a study of over 250 transportation
infrastructure projects in Europe, North America, and elsewhere, found
that rail projects--while not all high speed--had the highest cost
escalation out of all the transportation modes studied--averaging 45
percent higher than estimated.[Footnote 29] Another study that included
27 rail projects, 1 of which was a high speed rail project, from around
the world found that rider forecasts for over 90 percent of the rail
projects studied were overestimated, and 67 percent were overestimated
by more than two-thirds.[Footnote 30]
Numerous techniques are available in travel demand modeling[Footnote
31] (a common tool for forecasting riders) and, thus, different models
for the same proposed project could have diverse results. A modeler
usually makes choices on the theory and assumptions upon which the
model is based, the mathematical form of the model, and the variables
to be included. For example, a modeler may design a survey to determine
how travelers would react to a new transportation mode, but there is a
risk that the design or implementation of that survey could lead to
biased survey results. Survey instruments can be scrutinized by third
parties, but the process of data collection is less accessible to
outside observers, especially after the fact. Furthermore, decisions on
how to handle data within a model may enable the analyst to steer the
result in a preferred direction. For an external, disinterested
reviewer, the evolution of such decisions is very difficult to trace.
(See appendix VI for more details on travel demand forecasting and
modeling.)
Lack of Consistency or Standards, and Difficulty in Valuing Public
Benefits Relative to Modal Alternatives:
While most project sponsors in the United States cited a variety of
public "external" benefits, such as congestion relief or environmental
benefits that would flow from their projects, the extent to which
benefits had been quantified and valued varied across projects. For the
16 domestic projects that we reviewed, formal benefit-cost analyses
[Footnote 32] have been conducted for 4 of them[Footnote 33]-- although
many proposed projects have not advanced to the stage of conducting in-
depth analyses. Of these analyses, none have formally compared the
proposed project with alternative modal investments, such as airport or
highway expansion, although the proposed high speed rail line between
Los Angeles, California, and San Francisco, California, has created a
rough comparison of high speed rail investment with stated investment
needs on the highway and air modes. Even if a formal benefit-cost
analysis has not been done, public benefits of some domestic projects
are considered in some ways within the context of the National
Environmental Policy Act (NEPA) process.[Footnote 34] Under NEPA, the
weighing of the merits and drawbacks of the various alternatives need
not be displayed in a monetary benefit-cost analysis, but an
environmental impact statement should at least indicate factors not
related to environmental quality, which are likely to be relevant and
important to a decision.[Footnote 35]
Project sponsors with whom we spoke--domestically and internationally-
-cited several types of public benefits that were significant in
determining the economic viability of proposed high speed rail lines,
including:
* Travel time savings: Travelers using alternative modes may experience
travel time savings as a result of reduced highway traffic and airport
use by travelers shifting to high speed rail.
* Environmental benefits: Environmental benefits could result from
reducing pollution and carbon dioxide emissions, to the extent that the
rail service reduces congestion on highways or at airports and makes
use of fuel-efficient technology (i.e., high speed rail service using
diesel locomotives would provide less environmental benefit than
service that is electrified, all else being equal).
* Traffic safety: Benefits from increased traffic safety include
reduction in traffic accidents, to the extent that the rail service
reduces congestion on highways.
* Economic development, land use, and employment: A high speed rail
system that encourages relocation of households and firms, and in
cities where passenger rail stations are located, could experience
growth of population and business presence--increasing retail sales,
rental income, and property values.
Government officials in the countries we studied told us that a
national policy decision had been made that the public benefits flowing
from high speed rail are sufficient to justify some amount of public
subsidy in high speed rail systems. In other words, passenger fare
revenues are not necessarily expected to cover the full cost of
constructing, operating, and maintaining the system. For example, in
Japan, government officials told us that the construction of a new high
speed rail line will be built only if certain criteria are met,
including stable public subsidies, profitability of the operator, and a
positive benefit-cost ratio. In Spain, one of the goals of high speed
rail is to increase social and territorial cohesion. French officials
said subsidies depend on the line--core lines like Paris-Lyon can cover
construction costs from passenger fares.
Quantifying public benefits can be difficult, however, and the level at
which to value some benefits can be subject to disagreement.
Furthermore, there are currently multiple federal guidelines in the
United States for valuing public benefits, yet none have been
designated for use in analyzing proposed high speed rail projects. For
example, high speed rail service that reduces congestion on highways or
at airports and makes use of fuel-efficient technology may provide an
environmental benefit (i.e., reduced pollution and greenhouse gas
emissions). However, the value to assign to the reduction of pollution
and greenhouse gas reductions is difficult to determine, since there is
no current market for pollution reduction in the United States.
[Footnote 36] Thus, the valuation of pollution reduction-- defined as
the public's willingness to pay--is generally left to economists to
estimate by indirect methods. The valuation of greenhouse gas
reductions entails additional considerations that are based on
uncertain future benefits. Other intangible benefits, such as economic
development impacts, are also difficult to estimate and are subject to
disagreement. Officials in Japan told us that, although they previously
calculated regional economic development benefits and included them in
high speed rail decision making, they abandoned the practice because it
was too difficult to isolate the impacts and because they believe that
benefits accrued through revenues and passenger benefits alone are
sufficient to meet their criteria for constructing new high speed rail
lines. Moreover, while benefits such as improvements in economic
development and employment may represent real benefits for the
jurisdictions in which a new high speed rail service is located, from
another jurisdiction's perspective or from a national view they may
represent a transfer or relocation of benefits.
High Up-front Costs Are the Main Challenge to High Speed Rail
Development, and Challenges Also Exist in Sustaining Support and
Building Consensus:
Once domestic projects are deemed to be economically viable, efforts to
develop those projects will continue to encounter significant
challenges in financing the high up-front construction and other costs.
In addition, sustaining public and political support for project
development will also be a challenge. Uncertainties regarding rider
forecasts and cost estimates can undermine confidence in whether
projects will actually produce claimed benefits. Project sponsors must
also sustain political support over several electoral cycles and
coordinate project decisions among numerous stakeholders in different
jurisdictions, typically without the benefit of an established
institutional framework.
Substantial Up-front Investment Requirements Far Exceed Limited
Available Public Funding:
Once economic viability is determined, the main challenge is securing
the investment necessary to fund the substantial up-front capital
costs, such as those incurred for planning and preliminary engineering,
building the infrastructure, and acquiring train equipment. In
addition, high speed rail projects require a very long lead time, and
the lengthy development periods can increase the uncertainty over
future costs and benefits, and the front-loaded nature of the required
spending can increase risk. Passenger fares are generally insufficient
to finance the capital and operating costs of a high speed rail system,
and the public "external" benefits cannot necessarily be captured in a
revenue stream based on prices. Therefore, public subsidies are
generally required, at least for the initial investment. Domestic
project sponsors for all of the proposed high speed rail projects we
reviewed, except one,[Footnote 37] indicated that they have or will
need some federal funding to develop and construct their projects. The
PRIIA authorized annual funding--a total of $1.5 billion for fiscal
years 2009 to 2013--for high speed rail corridor development across the
entire United States. ARRA appropriated $8 billion for high speed rail
and intercity passenger rail congestion and capital grants (the latter
of which were authorized by the PRIIA). However, this funding will not
likely be sufficient to fund large-scale projects.[Footnote 38] For
example, project sponsors for the proposed high speed rail line between
Los Angeles, California, and San Francisco, California, are
anticipating $12 billion to $16 billion in federal funding alone, and,
according to the California High Speed Rail Authority, total project
costs are expected to exceed $40 billion if the entire system is
constructed.
Federal funding that has historically been made available for high
speed rail has been derived from general revenues, rather than a
dedicated funding source. Consequently, high speed rail projects must
compete with other nontransportation demands on federal funds, such as
national defense, education, or health care, as opposed to being
compared with other alternative transportation investments or policies
in a corridor. By contrast, other transportation modes are funded
through federal programs--such as federal-aid highways, the FTA's New
Starts Program, and the federal Airport Improvement Program--which
benefit from (1) dedicated funding sources based on receipts from user
fees and taxes, (2) a format for allocating funds to states, and (3) in
some cases, a structure for identifying projects to be funded. As we
have previously reported, comparison of alternative investments in
other transport modes, such as high speed rail, generally does not
occur when decision makers are evaluating projects or applying for
funding from any of these programs.[Footnote 39]
Given the lack of dedicated federal grant funding currently available
for high speed rail projects, project sponsors are exploring other
federal financing mechanisms for high speed rail projects, such as
federal loan programs. Available federal loan programs, however, may be
limited in their ability to help fund the substantial cost of high
speed rail projects or the number of projects competing for federal
loans. Two project sponsors told us that they plan to apply (and one
project sponsor indicated it did not plan to apply, but elements of its
project would be eligible) for credit under the TIFIA program, which
offers credit assistance to surface transportation projects.[Footnote
40] According to TIFIA documents, the $122 million authorized by
Congress annually for the program provides over $2 billion in credit
assistance.[Footnote 41] Sponsors of high speed rail projects could
request that amount or more for one loan, thereby constraining TIFIA's
ability to fund other projects in the same year, as we noted when
analyzing the Florida Overland Express (FOX) project in 1999.[Footnote
42] There may be other challenges as well. For example, because TIFIA
assistance cannot exceed 33 percent of a project's construction costs,
project sponsors must secure other sources of funding to construct a
project, which has proven difficult.[Footnote 43] In addition, the
availability of TIFIA funds, or other federal funding, may be
questionable since the federal government faces significant future
fiscal challenges, as we have noted in recent reports.[Footnote 44]
Finally, as Amtrak officials suggested, the TIFIA program's requirement
that loans and loan guarantees be repaid may be another limitation on
the program's usefulness in funding high speed rail projects.
In the countries we visited, the central government generally funds the
majority of up-front costs of their country's respective high speed
rail projects, and they do so without the expectation that their
investment will be recouped through ticket revenues. The public
sector's ability to recover its financial investment has varied on the
basis of how revenues have grown, but transportation officials in Japan
and Spain told us that a public subsidy was generally necessary because
ticket revenues are insufficient to fully recoup the initial
investment. In Japan, while two early lines developed in the 1960s and
1970s may have fully repaid the initial investment and debt related to
their construction, three of the high speed rail lines built since the
1987 privatization have been able to recover 10 percent, 52 percent,
and 63 percent of their construction costs through ticket revenues.
Spanish officials told us the original high speed line in Spain between
Madrid and Seville has been profitable on an operating cost basis but
has not covered all of its costs, including the original construction
costs. A Spanish academic researcher told us that future lines might
not cover even their operating costs.
State funding for high speed rail can also be limited by the lack of
dedicated funding sources and restrictions on the use of gasoline tax
revenues. None of the project sponsors with whom we spoke obtained
funding from a dedicated source of state funding for high speed rail;
one project sponsor (i.e., the Virginia Department of Rail and Public
Transportation), however, noted that it had a dedicated rail funding
source available. Since the two high speed rail projects currently
being developed in Virginia are still in the planning stages, according
to the Virginia Department of Rail and Public Transportation, they have
not yet sought funds from Virginia's Rail Enhancement Fund, which
provides about $25 million annually for both freight and passenger rail
improvements. In addition, according to a report by the Brookings
Institution, 30 states--including states where high speed rail projects
are proposed, such as Minnesota, Nevada, and Pennsylvania--are
restricted from spending revenues from excise taxes on gasoline, which
typically is a state's main source of transportation revenue.[Footnote
45]
In lieu of a dedicated source of state funding, some project sponsors
have sought funding directly through appropriations of state revenue or
bond measures, which compete with numerous other state budgetary needs.
New York State Department of Transportation officials said that
appropriations from general state revenue and bonding measures enabled
them to fund only incremental improvements along the New York, New
York, to Albany, New York, corridor, not the major expansions that had
been planned. The choice of a financing mechanism can have serious
implications for states and local governments, which as we have
previously reported, will face broader fiscal challenges over the next
10 years, because of increasing gaps between receipts and expenditures.
[Footnote 46] For example, in November 2008, California voters passed a
ballot initiative that would allow the state to issue $9.95 billion in
bonds, $9.0 billion of which would go toward the construction of a
statewide high speed rail system.[Footnote 47] According to information
prepared by California, this bond issue, including principal and
interest, could cost the state general fund about $19.4 billion over 30
years. Also, bonding mechanisms may cost more than using appropriations
of general revenues. For example, we reported that a proposal to allow
Amtrak to issue up to $12.0 billion in tax credit bonds over a 10-year
period for capital improvements on designated high speed rail corridors
and the Northeast Corridor would have cost the U.S. Treasury as much as
$11.2 billion (in present value terms) in lost tax receipts over a 30-
year period if states had financed their contribution from tax-exempt
borrowing and Amtrak had used accumulated losses to offset taxable
earnings in a trust fund established to repay the bond principal.
[Footnote 48] This cost compared with an estimated total cost to the
U.S. Treasury of between $7.3 billion and $8.2 billion (in present
value terms) if annual federal appropriations of federal revenues had
been used for the same purpose. Another possibility are tax-exempt
private activity bonds, which can be used to finance high speed rail
facilities. Such bonds were formerly restricted to high speed intercity
passenger rail facilities that operate at speeds in excess of 150 miles
per hour and proceeds could not be used for rolling stock (passenger
rail vehicles).[Footnote 49] ARRA modified these restrictions to make
eligible projects that are "capable of attaining" maximum speeds in
excess of 150 miles per hour, rather than operating at such speeds.
This modification may increase the number of projects that can qualify
to use tax-exempt private activity bonds for high speed intercity
passenger rail facilities.[Footnote 50]
Attracting Private Capital Is Also a Challenge, Particularly When the
Public Sector Does Not Assume Substantial Financial Risk:
Both current and former domestic high speed rail project sponsors have
sought private financing but found it difficult to obtain private
sector buy-in, given the significant financial risks high speed rail
projects pose. In February 2008, we reported that public-private
partnerships can provide potential benefits, such as transferring some
risk from the public to the private sector, and an increased potential
for operational efficiencies. The level of private sector involvement
anticipated by some domestic high speed rail projects is unprecedented,
particularly given the limited private sector involvement with
operating domestic high speed rail to date.[Footnote 51] For example,
the California High Speed Rail Authority is looking to the private
sector to provide between $6.5 billion and $7.5 billion of the total
cost to finance, construct, operate, and maintain the first phase of
its statewide system.
Private sector firms have expressed interest in high speed rail
projects, but the firms with which we spoke noted that without public
sector commitment--both financial and political--private sector
involvement and financing would be limited, due to the financial and
ridership risks of such projects. A good illustration of the domestic
relationship between the public and private sectors in high speed rail
is the FOX project. The private sector's willingness to finance a
portion of that project's construction costs was predicated on an
understanding that Florida would cover costs that could not be recouped
through ticket revenues. Although the state agreed to provide $70
million annually over a 40-year period to support the project, it was
terminated when this support was withdrawn. (See appendix IV for more
detail on the FOX project.) Similarly, in California, private sector
entities have expressed interest in investing in part of the high speed
rail project, but noted that they would need substantial public sector
commitment to the project before participating.
Efforts to develop entirely privately financed high speed rail projects
in the United States have proven unsuccessful to date. According to the
Texas High Speed Rail Authority, the Texas TGV project, which was
intended to be a privately financed project in the Texas triangle
(Houston-Dallas-Fort Worth-San Antonio), was unsuccessful, primarily
because one of the firms involved in the private consortium encountered
financial difficulties. (See appendix IV for more details on the Texas
TGV project.) In Florida, an effort to pursue a privately financed high
speed rail project during the 1980s also failed (before the FOX
project). One current project, the Desert Xpress project, from
Victorville, California, to Las Vegas, Nevada, is also seeking to
develop an entirely privately financed high speed rail line, but as of
February 2009, the project had not secured private financing.[Footnote
52]
Public-private partnerships are one means by which foreign governments
are seeking to share the financial risks of their expanding high speed
rail systems. In Japan--where the rail system was privatized in 1987--
the national government and local governments still assume the
financial risk of constructing a new high speed rail line, investing
two-thirds and one-third of the construction costs, respectively (see
figure 5). With the government's financial commitment, the private
railroad operating companies undertake the operational risk and rely on
ticket revenues to cover operating and maintenance costs.[Footnote 53]
The railroad operating companies' business model, which includes
various business ventures and nonrail revenue streams, also helps them
assume this risk for rail lines with relatively low numbers of riders,
since these additional revenues may be able to cover high speed rail
operating losses, if they occur.
Figure 5: Public and Private Sector Roles in High Speed Rail
Development and Operation in Japan:
[Refer to PDF for image: illustration]
Construction:
* Public Entity;
* Public subsidies:
- National government (2/3);
- Local government (1/3);
* construction of high speed rail line.
Operations and maintenance:
* Private entity:
* Lease infrastructure;
* Track usage fees[A] (returned to pubic entity).
Source: GAO.
[A] According to Japanese officials, track usage fees are set at the
break-even level, assuming the rail operator's income is only from
ticket revenues. This fee is set for a 30-year period, indirectly
providing incentives to improve the operational efficiency of the rail
operator over time.
[End of figure]
As France and Spain look to expand their high speed rail systems, they
are exploring private sector participation to, among other reasons,
attract additional financing, and, in the case of France, tap private
sector management and technical expertise.[Footnote 54] France is
contemplating a public-private partnership contract scheme where risks
associated with financing, designing, building, and maintaining a high
speed rail line are allocated to the private sector (see figure 6).
Under this scheme, the private sector essentially would assume the
responsibilities of the public infrastructure manager,[Footnote 55] put
up the initial construction financing, take on the projects'
construction cost and schedule risks, and ensure that the
infrastructure is available to a passenger rail operator for a certain
percentage of time.[Footnote 56] The line must also be maintained to
certain levels to ensure safety. The public sector assumes the risk
associated with operating the rail service, and commits to making fixed
annual payments to the private sector, as long as the infrastructure is
available the prescribed percentage of time.[Footnote 57] French
officials acknowledged that there is currently much uncertainty about
how these arrangements will work and whether there will be sufficient
private sector interest. At the time of our visit, France had not
implemented a public-private partnership. However, a recent call for
tenders on the Tours-Bordeaux line raised the interest of 3 French
contractors. French officials expect this contract to close by the end
of 2009. Spain was in the process of completing a public-private
partnership for a line from Figueras to the French border. However,
this arrangement was used to construct a portion of a high speed rail
line in the Netherlands, and, according to an official with the private
sector consortium that constructed this line, if there is a public
sector commitment, the private sector can make a public-private
partnership work.
Figure 6: Proposed French Public-Private Partnership Contract Model:
[Refer to PDF for image: illustration]
High speed passenger rail provider, ’public entity“:
Responsibilities:
* Passenger operations.
Infrastructure fees to: Infrastructure manager, ’public entity“.
National government, local government(s), and European Union:
Responsibilities:
* Approves projects;
* Enforces laws and regulations;
* Sets policy.
Public subsidies to: Infrastructure manager, ’public entity“.
Infrastructure manager, ’public entity“:
Responsibilities:
* Contracting Authority;
* Traffic Management;
* Capacity Allocation;
* Owner of Rail Network.
Availability payments to: Private sector[A].
Private sector[A]:
Responsibilities:
* Financing;
* Designing;
* Building;
* Maintaining.
Private financing to: Construction of high speed rail project.
Source: GAO.
[A] In countries such as the Netherlands where the contract partnership
structure has been implemented, the private sector entity was a
consortium consisting of construction, engineering, management, and
financial firms.
[End of figure]
Sustaining Public and Political Support over Lengthy Development
Process and Reaching Multistakeholder Consensus Will Also Be
Challenges:
Additional challenges faced in developing high speed rail projects
include sustaining public and political support over lengthy
development timelines for high speed rail. As we have previously
mentioned, high speed rail projects require long lead times. The five
new right-of-way rail projects we reviewed have been in project
development between 4 years and 18 years, and on average 13 years.
Similarly, in France, transportation ministry officials told us that
high speed rail projects in their country take about 14 to 16 years to
complete. This time comprises when project planning begins to when the
project opens for revenue service. A considerable amount of this time
is for studies and analysis as well as public debate about the merits
of a project. Sustaining public support over this length of time can be
difficult and can have significant impacts on a project. As the
experience with the FOX project demonstrated, development of high speed
rail projects can occur over multiple electoral cycles, which not only
can change the course of project development but can also lead to
project termination if public and political support is not sustained.
For example, as we have previously discussed, the Florida DOT had
planned to provide $70 million annually to help construct the FOX
project. The project began under one gubernatorial administration that
supported the project. The project was terminated under a different
administration that did not support the project. Several public and
private sector officials we spoke with cited the need for someone or
some organization to "champion" a project over a long period of time.
French officials told us it is easier to sustain public support for a
high speed rail project once it has the commitment of the central
government.
There are also challenges associated with the ability to provide
transparency and confidence in project cost estimates and rider
forecasts. As we have previously discussed, these estimates and
forecasts can often be inaccurate, which may erode public support for
high speed rail. During the FOX project, advocacy organizations, state
transportation agencies, and GAO each questioned the reliability of
project cost estimates and rider forecasts.[Footnote 58] The governor
of Florida decided to cancel state funding for the project, in part due
to the skepticism raised by these organizations. Cancellation of state
funding led to termination of the project. More recently in California,
a report by numerous advocacy organizations raised similar concerns
about the rider forecasts and costs estimates for the statewide high
speed rail project. Although the public approved nearly a $9.95 billion
bond to support this project, over time public support could erode,
along with public funding, if confidence in rider, revenue, and cost
estimates is lost.
Reaching consensus on project decisions, such as a rail line's actual
route, involves difficult negotiations, which can cause substantial
project delays and disagreements among stakeholders. Given that high
speed rail projects can span hundreds of miles and sometimes cross
multiple states, numerous stakeholders and jurisdictions are involved.
Stakeholders typically include, among others, federal, state, and local
governments; the private sector; and advocacy organizations. For
example, project sponsors of the Southeast High Speed Rail Corridor (a
project from Washington, D.C., to Charlotte, North Carolina) noted that
some 50 federal, state, and local government agencies are involved in
the project as well as a 214-member advisory committee. Coordinating on
project decisions with these stakeholders--each with their own
priorities and views--can be difficult, particularly without an
established institutional framework within which this can occur, as
exists for other transportation modes. For example, in planning highway
and transit projects, federal agencies, local transit agencies,
metropolitan planning organizations, and state transportation
departments benefit from established procedures for planning and public
involvement.
Development of domestic high speed rail projects may typically be led
by rail divisions within state DOTs or by high speed rail authorities
and commissions. These organizations are often limited in terms of
institutional and financial resources. For example, in the case of the
California High Speed Rail Authority, funding has fluctuated from a
little over $1 million per year to a little over $14 million (see table
4) as a result of changes in its annual appropriation from the state
legislature. The $3.9 million in state funding for fiscal year 2005-
2006 was planned to support approximately 4 staff members in developing
a $45 billion, 800-mile statewide high speed rail system. Rail
divisions within state DOTs also face similar funding and manpower
issues, since there is typically no dedicated state funding for rail
services, as we previously discussed. In addition, rail has generally
not been a primary focus of state transportation plans, which are more
focused on highway projects.
Table 4: State Funding for California High Speed Rail Authority:
Dollars in millions (nominal):
2004-2005;
Budget: $1.1.
2005-2006;
Budget: $3.9.
2006-2007;
Budget: $14.3.
2007-2008;
Budget: $1.2.
Source: GAO analysis of California budgets.
[End of table]
Commissions and authorities may face other institutional challenges
related to their role and authority. For example, a Virginia official
told us that legislation to create a high speed rail authority fails
every year it comes up for a vote because of concerns that an authority
might issue bonds and jeopardize the state's triple A bond rating. In
addition, the role of high speed rail authorities is sometimes unclear.
According to the final report of the Texas High Speed Rail Authority,
as well as the former director of the authority, rail authorities can
sometimes be conflicted between advocating for a high speed rail
project and objectively determining whether a system is in the "public
convenience and necessity."[Footnote 59]
Stakeholder consensus is also a considerable challenge for projects
that involve incremental improvements for high speed rail service. Nine
of the 11 incremental project sponsors with whom we spoke said that
working with stakeholders such as Amtrak, commuter railroads, and
private freight railroads can be difficult and time-consuming since
each has its own interests. Projects that cross state lines pose
additional stakeholder challenges, particularly with respect to
allocating benefits and costs among the states. To address multistate
issues, some states have pursued interstate compacts and commissions as
a means to formalize decision making. For example, the Virginia-North
Carolina Interstate High Speed Rail Compact established a commission to
provide project leadership and vision and to define roles. However,
interstate compacts can be difficult to implement and involve working
out many practical issues, including deciding on what type of service
to provide, how financial contributions will be distributed, and what
occurs if and when one or more states do not meet their financial or
other responsibilities.
Federal Leadership Has Been Limited, but Following Reexamination
Principles Can Ensure That the Federal Role Is Focused on Yielding
Maximum Benefits:
In the United States, the federal government has not historically had a
strong leadership role in high speed rail. The recently enacted PRIIA
provides a framework for developing a federal role. ARRA will also
likely affect the federal role by providing $8 billion for high speed
rail. Following reexamination principles we have reported on for
surface transportation programs would help ensure that the
implementation of the act, and a possible heightened federal role, is
efficient, effective, and focused on yielding maximum benefits for its
investment.
Federal Leadership Has Been Limited, but Recent Legislation Provides
for a Potentially Greater Federal Role:
Since the 1960s, Congress has authorized various programs dealing with
high speed ground transportation, including high speed rail, but no
federal vision or national plan for determining the role of high speed
rail in the U.S. transportation system exists. FRA officials told us
that they do not have a high speed ground transportation policy, and,
as one FRA official told us, policies related to high speed rail have
varied from one administration to another. FRA officials also told us
that creating interest in promoting high speed rail at the national
level has been difficult to sustain.
The recently enacted PRIIA, in addition to authorizing funding,
provides numerous other opportunities for a greater federal role in
high speed rail development, as follows:
* the act requires the Secretary of Transportation to establish and
carry out a rail cooperative research program that will address, among
other things, new high speed wheel on rail systems;[Footnote 60]
* the FRA Administrator is tasked with the development of a long-range
national rail plan consistent with approved state rail plans and the
rail needs of the nation;
* the FRA Administrator is required to support high speed rail
development, including high speed rail planning;[Footnote 61]
* the act explicitly provides a framework for the establishment of a
High Speed Rail Corridor Development Program, which permits the
Secretary to make grants to states, groups of states, and others to
finance capital projects in high speed rail corridors;[Footnote 62]
* the act requires the Secretary to issue a request for proposals for
the financing, design, construction, operation, and maintenance of high
speed intercity passenger rail systems operating within high speed rail
corridors;[Footnote 63] and:
* the Secretary is to study high speed rail routes and establish a
process for states or groups of states to redesignate or modify
designated high speed rail corridors.[Footnote 64]
High speed rail projects will largely continue to be initiated at the
state-level, but the federal government can be expected to play an
increased role in funding and assisting in the development of high
speed rail corridors and projects.
Following Reexamination Principles Can Help Ensure the Federal Role Is
Effective and Efficient and Focused on Yielding Maximum Benefits:
A number of principles could help guide the potential federal role in
high speed rail, particularly as the newly enacted PRIIA and ARRA are
implemented. These principles will increase the likelihood that the
federal role in high speed rail is efficient, effective, sustainable,
and focused on maximizing public benefits. We have discussed such
principles in our work calling for a reexamination of federal surface
transportation programs.[Footnote 65] As applied here, the principles
would address, going forward, the federal interest in developing a high
speed intercity passenger rail policy, based on high speed rail purpose
and relevance, its effectiveness in achieving goals and outcomes, its
efficiency and targeting, its affordability, and its sustainability.
These principles are as follows:
* Create well-defined goals based on identified areas of national
interest. This would include establishing the expected outcomes related
to each goal, and the federal role in achieving each goal.
* Incorporate performance and accountability for results into funding
decisions.
* Employ the best analytical tools and approaches to emphasize return
on investment.
* Ensure fiscal sustainability. This would include consideration of
such things as whether funding is affordable and stable over the short-
and long-term; the extent to which costs and revenues are shared among
federal, state, and local participants; and whether any project fees
and taxes are aligned with use and benefits.
Given the current fiscal crisis facing the nation and the pressing
needs facing the federal government in many areas, it is critical that
federal dollars are used efficiently and effectively and are focused
where they can produce the greatest benefits. Failure to apply these
principles could lead to an unfocused federal investment in high speed
rail corridors or projects and, as a consequence, little impact on the
congestion, environmental, energy, and other issues that face the U.S.
transportation system.
Identify Areas of Federal Interest, Create Well-Defined Goals, and
Establish and Define the Federal Role:
We have previously reported that specific, measurable, achievable, and
outcome-based goals that are in turn based on identified areas of
federal interest, improve the foundation for allocating federal
resources and optimizing the results from the investment. Determining
the federal interest involves examining the relevance and relative
priority of programs, including high speed rail, in light of 21st
century challenges and identifying areas of emerging national
importance, such as congestion, dependence on foreign fuel sources, and
the impacts of transportation on climate change. With the federal
interest clearly defined, policymakers can clarify the goals for
federal involvement (i.e., specific goals could be set on the basis of
the expected outcomes), and can clearly define the roles of federal,
state, and local government in working toward each goal. Where the
federal interest is greatest, the federal government may play a direct
role in setting priorities and allocating resources, as well as fund a
higher share of program costs. Conversely, where the federal interest
is less evident, state and local governments could assume more
responsibility.
To date, there has been little consideration at a national policy level
of how high speed rail could or should fit into the national
transportation system and what high speed rail development goals should
be. In the 1990s FRA studied the commercial feasibility of high speed
rail and focused on the economics of bringing high speed ground
transportation (including high speed rail) to well-populated groups of
cities in the United States. Its report identified potential
opportunities where high speed rail could complement highway or air
travel.[Footnote 66] One purpose of the study was to lay the groundwork
for high speed rail policy in the United States. However, according to
FRA, this policy was never developed.
The PRIIA requires the FRA Administrator to prepare a long-range
national rail plan; preparing that plan will provide an opportunity for
the federal government to identify the vision and goals of high speed
rail for the nation and identify how, if at all, high speed rail fits
into the national transportation system.[Footnote 67] Although the act
does explicitly require that high speed rail be included in the
national rail plan, the national rail plan must be consistent with
state rail plans and, among other things, state rail plans are to
include a review of all rail lines in a state, including proposed high
speed rail lines. National vision and goals, influenced by an
intermodal perspective, have been key components in the development of
high speed rail systems and national rail plans in both Europe and
Asia. For example, in Europe, the vision and goals laid out by the
central governments have evolved from being focused on reviving an
industry (the railroads) and addressing transportation capacity
constraints, to being focused on increasing the role of rail in an
intermodal transportation system, making rail a preferred transport
mode in short-distance intercity corridors, and using rail to achieve
broader environmental, energy, and economic development goals. In
Japan, after the initial success of the first high speed rail line
between Tokyo and Osaka, the central government developed a national
rail master plan that laid out the vision and goals for how the system
would develop (including making passenger rail competitive with air
travel), where it would extend, and the benefits that were to be
expected. That master plan has guided high speed rail development ever
since.
The development of a vision for high speed rail in the United States
may need to be coordinated with reexamination of other federal surface
transportation programs. As we reported, in March 2008, one reason that
existing federal transportation programs are not effective in
addressing key challenges, such as increasing highway and airport
congestion and freight transportation demand, is because federal roles
and goals are not clear. In addition, we reported that many programs
lack links to needs or performance, the programs lack the best
analytical tools and approaches, and there is modal stovepiping at DOT.
[Footnote 68]
Project sponsors, states, and others with whom we spoke are looking for
federal leadership and funding in creating a structure for high speed
rail development and in identifying how to achieve the potential
benefits that these projects may offer. All but 1 of the 11 high speed
rail proposals we reviewed have a projected need for federal funds in
addition to any state, local, or other funding they may receive. Aside
from funding, project sponsors and others are also looking for a
stronger federal policy and programmatic role. For example, officials
from 15 of the 16 projects we reviewed told us that the federal role
should be to set the vision or direction for high speed rail in the
United States. An official with the Florida DOT told us that no high
speed rail system would be built in Florida or elsewhere in the United
States absent a true federal high speed rail program. Private sector
officials also told us of the importance of a federal role and vision
for high speed rail, and that leadership is needed from the federal
government in providing governance structures for high speed rail
projects that help to overcome the institutional challenges previously
described in this report. Other stakeholders similarly mentioned the
need for a federal role in promoting interagency and interstate
cooperation, and identified other potential federal roles, such as
setting safety standards, promoting intermodal models of
transportation, and assisting with right-of-way acquisition.
Incorporate Performance and Accountability for Results:
As we reported in July 2008, our work has shown that an increased focus
on performance and accountability for results could help the federal
government target resources to programs that best achieve intended
outcomes and national transportation priorities.[Footnote 69] Tracking
specific outcomes that are clearly linked to program goals can provide
a strong foundation for holding potential grant recipients responsible
for achieving federal objectives and measuring overall program
performance. Accountability mechanisms can be incorporated into grants
in a variety of ways. For example, as we reported in March 2008, grant
guidelines can establish uniform outcome measures for evaluating
grantees' performance toward specific goals, and grant agreements can
depend in part on the grantees' performance instead of set formulas.
Incentive grants or penalty provisions in transportation grants can
also create clear links between performance and funding and help hold
grantees accountable for achieving desired results.
The PRIIA establishes criteria for the selection of high speed rail
corridors and high speed rail projects for development.[Footnote 70]
The criteria include a determination that the proposals are likely to
result in a positive impact on the nation's transportation system. The
Secretary of Transportation will select proposals that provide
substantial benefits to the public and the national transportation
system, is cost-effective, offers significant advantages over existing
services, and meets other relevant factors determined by the Secretary.
The PRIIA also requires that the FRA Administrator develop a schedule
for achieving specific, measurable performance goals related to such
things as the development of a long-range national rail plan, and,
beginning in fiscal year 2010, to submit to the relevant congressional
committees the administration's performance goals, schedule, and a
progress assessment.[Footnote 71] FRA has not yet determined how
performance and accountability will be incorporated into the review and
evaluation of grant applications under the PRIIA.
The extent to which other countries we visited used performance and
accountability measures in their high speed rail systems was limited.
In France, postproject evaluations of the performance of major
transport infrastructure projects have been required since 1982.
However, a French government official told us that most of the current
French high speed rail network was built before this 1982 postproject
evaluation requirement began to be enforced. Consequently, few
postproject evaluations have been done, even though this official said
some evaluations had been done. Government officials in Spain said that
economic evaluations of high speed lines had been conducted but, in
some cases, did not determine the government's choice of lines to
develop. Rather, the government chose to develop lines that would
create a high speed network that extends the benefits of high speed
rail to the whole national territory. Territorial criteria have played
an important role in the Spanish government's decision to prioritize
high speed rail. In Japan, historical postproject evaluations have
generally not been done. A comparison of actual and forecasted
ridership has been done for recent high speed rail lines and the
estimates have been within 90 percent accuracy. The performance of high
speed rail lines has focused on the accuracy of ridership forecasts,
and these estimates are an integral part of negotiations between the
government and private operators for construction of new high speed
rail lines. For example, construction of new lines is carried out by
the government, but a private operator assumes control over the line
and assumes all the operating and maintenance responsibilities and
ridership risk. Under the Japanese rail structure, the private company
has an incentive--the profit motive--to ensure that the line performs
well. We discuss Japan's incentive structure further in the next
section on analytical tools.
Employ the Best Analytical Tools and Approaches to Emphasize Return on
Investment:
The effectiveness of any overall federal program design can be
increased by promoting and facilitating the use of the best analytical
tools and approaches. We have reported on a number of analytical tools
and approaches that may be used.[Footnote 72] These include using
quantitative analyses based on identifying benefits and costs, managing
existing transportation capacity, and developing public-private
partnerships. Benefit-cost analysis, in particular, is a useful
analytical tool for evaluating projects and ensuring goals are met.
Benefit-cost analysis gives transportation decision makers a way to
identify projects with the greatest net benefits and compare
alternatives for individual projects. By translating benefits and costs
into quantitative comparisons to the maximum extent possible, these
analyses provide a concrete way to link transportation investments to
program goals.
The PRIIA specifies various criteria for which high speed rail grant
proposals will be evaluated to determine federal investment.
Specifically, project selection is partially dependent on the
consideration of the project's anticipated favorable impact on air or
highway traffic congestion, capacity, and safety. Project selection
criteria encourage a project sponsor to evaluate public benefits. For
example, greater consideration is to be given to proposed projects
that, among other things, provide environmental benefits and positive
economic and employment impacts. The rail cooperative research program
established by the PRIIA will also, among other things, include
research into developing more accurate models for evaluating the impact
of rail passenger and freight service, including the effects on highway
and airport and airway congestion, environmental quality, and energy
consumption.
Although the PRIIA does not provide explicit guidance for quantifying
or valuing the economic and other impacts specified in the project
selection criteria, a more established approach to analyzing proposed
projects and quantifying and valuing nonfinancial benefits may emerge,
given the potential results of the rail cooperative research program
and since future proposed rail projects may be evaluated within the
context of state transportation systems and will need to meet specific
criteria contained in the PRIIA to obtain federal funding. In our view,
any approach developed, to the extent practicable, should conform to
Executive Order 12893.[Footnote 73] This order directs federal
executive departments and agencies with infrastructure responsibilities
to develop and implement infrastructure investment and management plans
consistent with the principles in the order. A key principle is that
infrastructure investments are to be based on a systematic analysis of
expected benefits and costs, including both quantitative and
qualitative measures reflecting values that are not readily quantified.
The order also directs that agencies encourage state and local
recipients of federal grants to implement planning and information
management systems that support the principles articulated in the
order. In creating a more consistent approach, proposed projects may be
more easily compared with one another, ensuring that public funding is
applied to the projects and corridors with the greatest potential
benefits.
Similarly, the PRIIA requires that consideration be given to projects
with positive economic and employment impacts, but again does not
provide explicit guidance on determining what is or is not a positive
economic or employment impact. As we have previously discussed in this
report, economic impacts are difficult to isolate, therefore, economic
development locally may not constitute a national net benefit--rather
it could be a redistribution of resources. For example, development of
a high speed rail system could increase economic development in the
area where it is built. However, this increased economic development
could be a redistribution of resources rather than a net benefit.
Consequently, it will be important in implementation of the PRIIA for
guidelines to be developed on how to consider national economic and
employment benefits in relation to local benefits. FRA is currently in
the process of evaluating the PRIIA and preparing final rules for how
high speed rail projects will be reviewed and selected for federal
funding under provisions of the act. The final rules are required to be
issued in October 2009.[Footnote 74]
Forecasts of riders and costs are two key components of evaluating the
economic viability of high speed rail projects, and rider forecasts are
the anchor for the array of public benefits that a new line might
bring. However, as we have discussed, these forecasts are often
optimistic, calling into possible question the credibility of
information being used by decision makers to pursue high speed rail.
Development of stronger policies, procedures, and tools could enhance
the accuracy and credibility of the forecasts and contribute to better
decision making. There are a variety of means that have been discussed
in the transportation literature and could potentially be employed to
strengthen the accuracy of forecasting.[Footnote 75] These means
include the following:
* obligating state and local governments to share some of the risks of
underestimated costs for those projects seeking federal financial
support;
* obtaining forecasts and estimates from independent sources, such as a
state auditor or a federal agency, rather than sources contracted to
construct projects for a high speed rail project sponsor;
* subjecting forecasts to peer review with possible public disclosure
of all relevant data and public hearings; and:
* conducting horizontal comparisons of projects--that is, using data
from different projects reported using a standardized accounting system
to prepare probability distributions of the accuracy of project
estimates of cost and demand--to evaluate new high speed rail projects.
Another potential means to improving the accuracy of these estimates is
to align the incentives of public and private interests. For example,
in Japan, for a new line to be built, the private operator must be able
to make a reasonable profit over and above operating costs, maintenance
costs, and lease payments made to the government for use of the track.
The private operator then has an incentive to maximize riders, but also
to minimize the lease payments, to increase its profit potential.
Therefore, the private operator wants to be conservative regarding
rider forecasting and wants the government to build the infrastructure
in order to allow for the lowest cost operation and maintenance. The
central government has an incentive to keep costs low in constructing
the line and to extract the highest lease payment it can negotiate from
the private operator. The private rail operator and the central
government negotiate and agree upon a lease payment, which remains set
over a 30-year period. These negotiations are based on forecasts of
riders over the ensuing 30 years and the existing cost estimates.
According to officials and academics in Japan, this structure has
resulted in a discipline that has vastly improved the accuracy of rider
forecasting and cost estimation. For one newly constructed line, actual
riders were within 90 percent of forecasted riders, and the
construction of the line was within budget and ontime.
In Europe, we found that the use of analytical tools and approaches for
analyzing the public benefits of high speed rail projects was generally
a requirement, and that these analytical tools led to public benefits
being more systematically quantified and valued compared with projects
in the United States. As we previously discussed in this report,
evaluation of benefits can often be difficult and give rise to
disagreements, and few standards exist in the United States to govern
such analyses. A French official said evaluations of public benefits
and costs began in the 1980s as the result of a 1982 law. France's
current approach to analyzing proposed projects includes analysis of
public benefits--including travel-time savings, security, noise, and
pollution--in conjunction with financial benefits to calculate
financial and socioeconomic indicators (such as financial internal rate
of return and socioeconomic rate of return). These financial and
socioeconomic indicators are generally used to compare proposed
projects that meet certain minimum thresholds[Footnote 76] and to
prioritize them for construction. France's 2004 Ministerial Order for
analyzing proposed transportation infrastructure projects provides
guidance to project sponsors in quantifying and valuing these benefits,
and sets forth monetized values for specific public benefits and costs.
In addition, France plans to soon build a multicriteria analysis tool
that will take into account additional nonfinancial benefits and costs,
such as building in greenhouse gas emissions reductions, as a means to
advance sustainable development objectives. This tool will guide France
in adopting a new national infrastructure planning scheme. Spain began
explicitly including public benefits and costs in proposed project
analyses in 2003. Specific benefits of rail projects are also outlined
in a European Commission guide for investment projects, and include
time savings, additional capacity, and wider economic benefits such as
economic development.[Footnote 77]
Ensure Fiscal Sustainability:
Our work has shown that transportation funding faces an imbalance of
revenues and expenditures and other threats to its long-term
sustainability.[Footnote 78] We have reported that a sustainable
surface transportation program will require targeted investment, with
adequate return on investment, from not only the federal funds invested
but also investments from state and local governments and the private
sector. In the context of high speed rail, fiscal sustainability
includes consideration of such things as whether federal, state, and
other funding is affordable and stable over the short-and long-term
(i.e., both while a project is being planned and constructed as well as
after the high speed rail line is in operation); the extent to which
costs and revenues are shared among federal, state, local, and private
participants; and whether any project fees and taxes are aligned with
use and benefits. Moreover, sustainability can refer to the extent to
which ticket revenues will cover ongoing operating and maintenance
costs to avoid ongoing public subsidy.
The PRIIA includes recognition of the potential fiscal sustainability
high speed rail projects that might be selected for development. For
example, the PRIIA requires the federal government to give greater
consideration to high speed rail corridor projects that incorporate,
among other things, equitable financial participation in the project's
financing, including financial contributions by intercity passenger,
freight, and commuter railroads commensurate with the benefits expected
to their operations as well as financial commitments from host
railroads, nonfederal entities, and nongovernment entities.[Footnote
79] Similarly, proposals under the PRIIA for specific high speed rail
projects are required to contain a description of the projected
revenues and sources of revenue, including the expected levels of both
public contributions and private investment.[Footnote 80] The level of
public and private contributions, in addition to a summary of the
potential risks to the public, including risks associated with project
financing, must be considered in project selection by commissions set
up by the Secretary to review the proposals.[Footnote 81]
The National Surface Transportation Policy and Revenue Study
Commission,[Footnote 82] created to study the condition and needs of
the nation's surface transportation infrastructure, called for an
increase in intercity passenger rail service, including high speed rail
service, and also proposed a system of fiscal sustainability in its
final report in January 2008. The commission's final report suggested
that funding should come from a variety of sources, and that a fund
should be set up for rail investment that would collect money from a
new federal ticket tax levied on users of the system. Currently, users
of intercity passenger rail in the United States do not pay ticket
taxes or user fees similar to those paid by users of the aviation
system or fuel taxes used to support the highway system.
In other countries, high speed rail systems appear to be fiscally
sustainable on an ongoing financial basis. For example, new high speed
rail lines are not constructed in Japan unless they can cover their
operating and maintenance costs, not including the payback of the
initial investment in the infrastructure. Similarly, European officials
told us that some of their high speed rail lines require little, if
any, public operating subsidies outside of initial capital costs, since
revenue is sufficient to cover operating costs.
Conclusions:
High speed rail does not offer a quick or simple solution to relieving
congestion on our nation's highways and airways. High speed rail
projects are costly, risky, take years to develop and build, and
require substantial up-front public investment as well as potentially
long-term operating subsidies. Yet the potential benefits of high speed
rail--both to riders and nonriders--are many. Whether any of the nearly
50 current domestic high speed rail proposals (or any future domestic
high speed rail proposal), may eventually be built will hinge on
addressing the funding, public support, and other challenges facing
these projects. Determining which, if any, proposed high speed rail
projects should be built will require decision makers to be better able
to determine a project's economic viability.
It is not likely high speed rail projects will come to fruition without
federal assistance. The PRIIA establishes a good framework for helping
craft a federal role in high speed rail (which, to date, has been
limited) to address these challenges. Given the complexity, high cost,
and long development time for high speed rail projects, it will be
critical to first determine how high speed rail fits into the national
transportation system and establish a strategic vision and goals for
such systems. This will establish the baseline for federal involvement.
To maximize returns on federal investments, it will also be critical
when reviewing grant applications under the PRIIA high speed rail
provisions to clearly identify expected outcomes and to incorporate
performance and accountability measures to ensure these outcomes are
achieved. The failure to incorporate such measures is a common drawback
of federal transportation programs. Finally, it will be incumbent upon
the federal government to develop the guidelines, methods, and
analytical tools to develop credible and reliable ridership, cost, and
public benefit forecasts. Without such guidelines, methods, and tools,
reliable determinations of economic viability will continue to be the
exception rather than the norm, and the efficiency and effectiveness of
any federal assistance to high speed rail could be jeopardized.
Recommendations for Executive Action:
To ensure effective implementation of provisions of the PRIIA related
to high speed rail and equitable consideration of high speed rail as a
potential option to address demands on the nation's transportation
system, we recommend that the Secretary of Transportation, in
consultation with Congress and other stakeholders, take the following
three actions:
* Develop a written strategic vision for high speed rail, particularly
in relation to the role high speed rail systems can play in the
national transportation system, clearly identifying potential
objectives and goals for high speed rail systems and the roles federal
and other stakeholders should play in achieving each objective and
goal.
* Develop specific policies and procedures for reviewing and evaluating
grant applications under the high speed rail provisions of the PRIIA
that clearly identify the outcomes expected to be achieved through the
award of grant funds and include performance and accountability
measures.
* Develop guidance and methods for ensuring reliability of ridership
and other forecasts used to determine the viability of high speed rail
projects and support the need for federal grant assistance. The methods
could include such things as independent, third-party reviews of
applicable ridership and other forecasts, identifying and implementing
ways to structure incentives to improve the precision of ridership and
cost estimates received from grant applicants, or other methods that
can ensure a high degree of reliability of such forecasts.
Agency Comments and Our Evaluation:
We provided copies of our draft report to DOT for comment prior to
finalizing the report. DOT provided its comments in an e-mail message
on March 10, 2009. DOT said that it generally agreed with the
information presented and noted that with the passage of ARRA, its work
on high speed rail has been considerably accelerated. Specifically, the
act calls for FRA to submit, within an expedited time frame, a
strategic plan to the Congress describing how FRA will use the $8
billion funding identified in the act to improve and deploy high speed
passenger rail systems. DOT indicated that the strategic plan may
include the Department's vision for developing high speed rail
services, criteria for selecting projects, an evaluation process that
will be used to measure effectiveness, and a discussion of the
relationship between the ARRA grant programs and the recently enacted
PRIIA. DOT said it is also working to comply with statutory
requirements to issue interim guidance in June 2009, describing grant
terms, conditions, and procedures. DOT told us that in order to provide
information to the public and potential grantees as expeditiously as
possible, it has posted a set of questions and answers relating to ARRA
on its Web site. These questions and answers provide potential program
applicants with some preliminary but specific information on what to
expect in terms of coverage, limitations, and potential selection
criteria. Finally, DOT noted that the draft report does not include
information relating to the administration's new federal commitment to
high speed rail. Specifically, as described in the President's proposed
fiscal year 2010 budget, the administration has proposed a 5-year $5
billion high speed rail state grant program. DOT indicated that this
program is intended to build on the $8 billion included in ARRA for
high speed rail. The Department said the President's proposal marks a
new federal commitment to practical and environmentally sustainable
transportation. DOT did not take a position on our recommendations.
We agree that the recently enacted ARRA will likely accelerate activity
related to the consideration and development of high speed rail in the
United States and will place a new emphasis on the federal role in such
development. We also agree that the President's proposed fiscal year
2010 budget, if enacted, could further increase the emphasis on high
speed rail and its potential development. As discussed in the report,
high speed rail systems can offer a number of benefits. However, these
systems are very expensive, can take a long time to develop, and face
numerous financial and other challenges to bring to fruition. Given the
renewed interest in high speed intercity passenger rail and its
development and the substantial resources that might be made available,
it is even more important that potential challenges are addressed and a
clear federal role be established. This includes developing a strategic
vision for high speed rail that includes consideration of how high
speed rail fits into the nation's transportation system; that the
review and evaluation of grant applications under PRIIA, ARRA and other
programs clearly identify outcomes to be achieved and incorporate into
grant documents appropriate performance and accountability measures to
ensure these outcomes are achieved; and that guidance and methods be
developed that increase the reliability of ridership and other
forecasts used to determine the economic viability of high speed rail
projects. Each of these actions is essential for ensuring that federal
expenditures on high speed rail are efficient, effective, and focused
on maximizing the return on the investment.
We also received comments from Amtrak in an e-mail message dated March
3, 2009. Amtrak said it generally agreed with our conclusions. Amtrak
did not take a position on our recommendations. Amtrak also provided
technical corrections and comments, which we incorporated where
appropriate.
We are sending copies of this report to the appropriate congressional
committees; the Secretary of Transportation; the Administrator of the
Federal Railroad Administration; and the Director of the Office of
Management and Budget. The report will also be available at no charge
on the GAO Web site at [hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me at (202) 512-2834 or flemings@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report. GAO staff who made major contributions
to this report are listed in appendix VIII.
Signed by:
Susan A. Fleming:
Director, Physical Infrastructure Issues:
List of Requesters:
The Honorable Harry Reid:
Majority Leader:
United States Senate:
The Honorable John L. Mica:
Ranking Member:
Committee on Transportation and Infrastructure:
House of Representatives:
The Honorable John W. Olver:
Chairman:
Subcommittee on Transportation, Housing and Urban Development, and
Related Agencies:
Committee on Appropriations:
House of Representatives:
The Honorable Bill Shuster:
Ranking Member:
Subcommittee on Railroads, Pipelines, and Hazardous Materials:
Committee on Transportation and Infrastructure:
House of Representatives:
[End of section]
Appendix I: Scope and Methodology:
To better understand the potential viability of high speed rail service
in the United States, we reviewed (1) the factors affecting the
economic viability of high speed rail projects--that is, whether a
project's total social benefits offset or justify the total social
costs--and difficulties in determining the economic viability of
proposed projects; (2) the challenges that U.S. project sponsors
experience in developing and financing high speed rail projects; and
(3) the federal role in the potential development of high speed rail
systems.
For the purposes of this report, we used the Federal Railroad
Administration's (FRA) definition of high speed ground transportation,
which is "service that is time-competitive with air and/or automobile
for trips in corridors of roughly 100 and 500 miles in length,"
[Footnote 83] as opposed to a specific top speed threshold. As a
result, we included in our review a wide range of projects, including
"incremental" projects that are designed to increase the speed
(generally above 79 miles per hour up to 150 miles per hour) or
reliability of existing rail service on existing track usually shared
with freight or other passenger trains; and "new" high speed rail
projects (above 150 miles per hour and, in some cases, above 200 miles
per hour) designed to operate on new tracks or guideway on dedicated
right-of-way not shared with other rail services. Our review was
technology neutral, meaning that we did not analyze or consider the
technical feasibility of diesel, electrified, or magnetic levitation
trains, but only considered the service and performance aspects of the
different technologies in the project proposals we reviewed. The scope
of our work did not include an assessment of commuter rail or transit
service where the primary purpose is to travel between a suburb and a
city center or within a metropolitan area. However, the presence of
these transportation modes as intermodal connections to high speed rail
service was considered in identifying characteristics significant to
how proposed high speed rail service is analyzed and evaluated.
Furthermore, it was not the intent of this study to identify specific
routes or corridors that are viable. Rather, this study identifies
characteristics of corridors and service and other factors that
contribute to a proposed project's benefits and costs and the
challenges in developing and financing such projects.
Structured Interviews with Domestic Project Sponsors:
To address our objectives, we conducted structured interviews with
officials for 5 projects that currently exceed Amtrak's predominant top
speed of 79 miles per hour, and project sponsors for 11 different high
speed rail proposals in the United States. The criteria used to select
which existing or proposed domestic projects to review were twofold, as
follows:
1. The project's planned or existing high speed rail service must
include operating at a top speed greater than 79 miles per hour
(generally the top speed for intercity passenger trains).
2. The project's planned service must be supported by a completed
environmental review (or equivalent project review) that would make the
project eligible for federal funding, or the project sponsor needed to
be actively pursuing the completion of such a review.
To identify projects for inclusion in our study, we reviewed a recent
survey of high speed rail projects in 64 corridors across the United
States to identify potential projects.[Footnote 84] The survey
identified 16 projects that met our criteria.[Footnote 85] To verify
this information, we contacted project sponsors, or another project
affiliate, for each of these projects (16 projects). We also contacted
project sponsors (or another project affiliate) for the remaining
projects in the survey to verify that they had not advanced in their
planning process since issuance of the survey report, such that they
would now meet our criteria. As a result of this verification, one
additional project was included in our study, and two projects were
dropped since they had either not progressed to the environmental
review phase or were not being pursued for high speed rail. We also
added another project (Los Angeles, California, to San Diego,
California) that met our criteria on the basis of discussions with
Amtrak. The latter project is separate from the California High Speed
Rail Authority's statewide high speed rail initiative, which also plans
to serve San Diego from Los Angeles.
All 5 existing projects were incremental projects, and of the 11
proposed projects included in our review, 6 were incremental
improvements to existing rail service in a corridor, and the remaining
5 projects would implement service on new high speed track or guideways
using dedicated right-of-way. Three of the 5 dedicated right-of-way
projects were considering magnetic levitation technology at the time of
our study.[Footnote 86] To collect information about the high speed
rail projects in development, we conducted structured interviews with
each project sponsor. The interviews were structured to identify such
things as (1) the important characteristics and factors that affect a
project's viability; (2) the most important challenges faced by project
sponsors in developing the project; and (3) the roles of various
federal, state, local, and private sector entities in the development
of the project. We pretested the structured interview instrument and
made changes based on the pretest. These changes included additional
questions about project development and background and stakeholders
involved with the project. In addition, we requested and reviewed any
available data on ridership forecasts and evaluations, project cost
estimates and evaluations, costs to construct and maintain any existing
high speed rail service as well as any environmental reviews,
transportation plans, and other studies associated with the projects.
Information about the projects was shared with project sponsors to
ensure its accuracy.
International Case Studies:
We also conducted case studies of international high speed rail systems
in France, Japan, and Spain. In selecting these three countries, we
considered a number of factors, including location, how long high speed
rail has been in service, and the availability of data and other
information. At the time of our visit, France and Spain had the highest
kilometers of high speed rail lines in Europe. Japan similarly had
extensive high speed rail lines and was one of the first countries to
implement high speed rail service. We conducted interviews in these
countries with relevant government officials, including transportation
bureaus and embassy officials; high speed rail infrastructure owners
and service operators; and other stakeholders, including academic
professors and domestic airline carriers or their trade associations.
We requested and reviewed any available data on ridership forecasts and
evaluations, project cost estimates and evaluations, as well as the
costs to construct and maintain high speed rail service in these
countries. We also reviewed relevant literature and studies on high
speed rail systems in these and other countries. To the extent
available, we reviewed relevant laws, directives, and guidance related
to high speed rail systems in France, Japan, and Spain, and the
European Union. The information presented in this report on
international high speed rail systems, however, cannot be generalized
beyond these three countries.
Case Studies of Terminated Projects:
To further identify the challenges encountered by previous high speed
rail projects in the United States, we conducted a case study analysis
of two terminated domestic high speed rail projects: the Florida
Overland Express (FOX) and the Texas TGV. To conduct the case study
analyses, we interviewed stakeholders affiliated with the projects and
reviewed documents, such as legislation, ridership studies, and other
research materials related to the projects.
Additional Methodologies:
To further address our objectives, we obtained and analyzed information
from a variety of other sources, including reports and documentation
from FRA, the Department of Transportation (DOT), Amtrak, and the
Surface Transportation Board; prior GAO work; and other evaluations and
studies on transportation infrastructure projects and high speed rail
service. In addition to our structured interviews and international
case studies, we conducted over 90 interviews covering a wide range of
stakeholders and interested parties, including officials at FRA, DOT,
Amtrak, the Surface Transportation Board, state and local government
agencies and organizations, academics, consultants involved in high
speed rail ridership forecasting and planning, representatives from
private equity firms that invest in transportation infrastructure, and
engineers involved in developing various rail technologies.
To review how characteristics of corridors and proposed service
identified in our structured interviews and international case studies
compare with other corridors in the United States and internationally,
we obtained and analyzed data on corridor and service characteristics
from numerous sources, including the DOT's Bureau of Transportation
Statistics, the Census Bureau, and other domestic and international
academic studies and government reports. We used standard tests and
methodologies to ensure reliability of the data collected. This
included reviewing the data for abnormalities, omissions, and obvious
errors and corroborating information obtained to the extent possible.
These data are not intended to make definitive conclusions on
viability, but rather to allow us to make reasonable comparisons using
the best available data. For example, variations exist in how data
sources report population numbers based on differences between the
geographical definitions of cities, metropolitan and other areas. In
trying to maintain consistency, we attempted to use the same population
data source for international corridors, but this was not always
possible.
To further assess the roles and relevant interests of national and
state government agencies and officials, and the private sector in
planning, developing, and operating high speed rail projects, we
reviewed applicable federal laws and regulations. This included
analyzing selected high speed rail legislation from 1965 to 2008,
including the Passenger Rail Investment and Improvement Act of 2008.
The latter includes a review of the high speed rail provisions
contained in the act, the role of the Secretary of Transportation in
relation to these provisions, and application procedures for federal
high speed rail grants.
We conducted this performance audit from December 2007 to March 2009 in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
[End of section]
Appendix II: Description of U.S. Rail Corridors Operating at Speeds
Greater Than 79 Miles per Hour:
Washington, D.C.-New York-Boston Corridor:
Project Description:
Projects and improvements associated with Amtrak's 456-mile Northeast
Corridor began in the 1970s. This included the Northeast Corridor
Improvement Program and the Northeast High Speed Rail Improvement
Program. Improvements included electrifying the line from New Haven
Connecticut, to Boston, Massachusetts, enhancing signaling systems, and
acquiring new high speed rail trainsets called Acela Express. The
average speed from Washington, D.C., to New York City, New York, is 82
miles per hour, and the top speed is 135 miles per hour. The average
speed from New York City to Boston is 68 miles per hour, and the top
speed is 150 miles per hour.
Date Originated:
1970s:
Technology:
Electrified locomotives on existing railroad right-of-way:
Project Sponsors:
Amtrak FRA:
Cost Estimate:
$3.8 billion (estimated since 1990):
Funding to Date:
$3.8 billion (estimated since 1990):
Current Status:
Project is open for passenger operations. Amtrak, in conjunction with
the nine states along the corridor, is currently developing a master
plan for the corridor that includes additional capital improvements.
Los Angeles to San Diego Corridor:
Project Description:
Amtrak began operating on the Los Angeles to San Diego corridor in
1971. When Amtrak began operations, the passenger trains were already
capable of maximum speeds of 90 miles per hour on segments between
Santa Ana in Orange County and the Sorrento Valley because of an
automatic track signaling system that was already in place. Average
speed along the 130-mile corridor is approximately 55 miles per hour.
Date Originated:
1971:
Technology:
Diesel locomotives on existing railroad right-of-way:
Project Sponsors:
Amtrak Southern California Regional Rail Authority North County Transit
District Orange County Transit Authority California Department of
Transportation Burlington Northern Santa Fe Railroad:
Cost Estimate:
Not available:
Funding to Date:
Not available:
Current Status:
Passenger rail operations are under way with top speeds of 90 miles per
hour in certain segments; however, continuing capital improvements are
occurring along the corridor to increase total average speed.
New York City to Albany/Schenectady Corridor:
Project Description:
From 1977 to 1997, the New York State Department of Transportation made
a series of incremental improvements to existing passenger rail service
between New York City and Albany/Schenectady along the Empire Corridor,
which stretches to Buffalo. Doing so has allowed for passenger rail
service to operate at a top speed of 110 miles per hour and an average
speed of between 80 and 90 miles per hour along the 158-mile corridor.
Date Originated:
1977:
Technology:
Diesel locomotives on existing railroad right-of-way:
Project Sponsors:
New York State Department of Transportation Amtrak:
Cost Estimate:
$97.2 million (actual):
Funding to Date:
$97.2 million (100 percent from state funds):
Current Status:
Intercity passenger rail operations are currently under way with a top
speed of 110 miles per hour. The New York State Department of
Transportation is planning on making $22 million in additional
incremental corridor investments, and is also anticipating new federal
funding to make further improvements.
Harrisburg to Philadelphia Corridor:
Project Description:
The Keystone Corridor Improvement Program consisted of making
incremental improvements (e.g., track work, bridge repairs,
communication and signaling improvements, and enhanced power
generation) along the Harrisburg to Philadelphia corridor to allow for
speeds of up to 110 miles per hour.
Date Originated:
Late 1990s:
Technology:
Electrified locomotives on existing railroad right-of-way:
Project Sponsors:
FTA Amtrak Pennsylvania Department of Transportation:
Cost Estimate:
$145.5 million (actual):
Funding to Date:
$145.5 million (50 percent from Amtrak, 40 percent from FTA, and 10
percent from state funds):
Current Status:
Intercity passenger operations are currently under way with a top speed
of 110 miles per hour. There are currently discussions under way to
plan for a second phase of improvements for the corridor.
Chicago to Detroit Corridor:
Project Description:
Implementation of a positive train control system on 55 miles of Amtrak-
owned right-of-way (Kalamazoo, Michigan, to about the Indiana state
line) along the Chicago, Illinois, to Detroit, Michigan, corridor.
Improvements to signaling and communication systems will allow Amtrak
to operate up to a top speed of 110 miles per hour along the 55-mile
stretch.
Date Originated:
1994:
Technology:
Positive train control and diesel locomotives on existing railroad
right-of-way:
Project Sponsors:
Michigan Department of Transportation Amtrak General Electric FRA:
Cost Estimate:
$39 million (actual):
Funding to Date:
$39 million (49 percent from FRA, 27 percent from state, and 24 percent
from Amtrak and General Electric):
Current Status:
From Kalamazoo, Michigan, to Niles, Michigan, trains operate at 95
miles per hour. From Niles, Michigan, to a point 20 miles west,
positive train control equipment is installed but is currently in the
process of getting approval from FRA for its use. Amtrak is currently
testing a new radio system with different frequencies. When testing is
complete and the radio system is installed, passenger rail operations
would be able to operate at 110 miles per hour along the 55 mile-test
bed.
[End of section]
Appendix III: Description of Current U.S. High Speed Rail Proposals in
the Environmental Review Phase:
Atlanta, Georgia, to Chattanooga, Tennessee, High Speed Rail Project:
Project Description:
The project will connect Atlanta, Georgia, to Chattanooga, Tennessee,
along a combination of new right-of-way, rail right-of-way, and highway
right-of-way with a new high speed rail system. The length is
approximately 110 miles between the two cities. The envisioned system
is expected to operate at a top speed of 200 miles per hour and an
average speed of 180 miles per hour.
Date Originated:
1998:
Proposed Technology:
To be determined. Project sponsors are considering both magnetic
levitation and electrified steel-wheel on steel-rail technology. The
preferred technology will be recommended as a result of the program
level environmental impact statement.
Project Sponsors:
Georgia Department of Transportation FRA Federal Highway
Administration:
Cost Estimate:
Not available:
Funding to Date:
Funding for the feasibility study, which was conducted by the Atlanta
Regional Commission, was provided through the Transportation Equity Act
of the 21st Century (TEA-21).[Footnote 87] Additional funding was
authorized by the Safe, Accountable, Flexible, Efficient Transportation
Equity Act: A Legacy for Users (SAFETEA-LU), to study various
transportation technologies[Footnote 88] as well as through the SAFETEA-
LU Technical Corrections Act of 2008.[Footnote 89]
Current Status:
Georgia Department of Transportation officials noted they were half way
through the 36-month program level environmental impact statement. The
department plans to have a record of decision on the program level
environmental statement by 2010.
Baltimore, Maryland, to Washington, D.C., Magnetic Levitation Project:
Project Description:
The Baltimore, Maryland, to Washington, D.C., project is a magnetic
levitation project that plans to connect the two cities, with a planned
stop at Baltimore-Washington International Airport. The length is 40
miles between the two cities. The system is expected to operate at a
top speed of 250 miles per hour and an average speed of 125 miles per
hour.
Date Originated:
1992:
Proposed Technology:
Magnetic levitation:
Project Sponsors:
FRA Maryland Department of Transportation Baltimore Development
Corporation District of Columbia Department of Transportation:
Cost Estimate:
$5.15 billion (projected - 2007):
Funding to Date:
The project completed a preliminary feasibility study in 1994 in
response to the Maglev Prototype Development Program created by the
Intermodal Surface Transportation Efficiency Act of 1991. In 1998, the
project was one of the seven projects selected and funded for study by
the FRA as part of the Maglev Deployment Program. In 2001, FRA selected
this project to receive funds for a draft environmental impact
statement as part of the TEA-21 Maglev Deployment Program. In 2003, a
draft environmental impact statement was completed and accepted by FRA.
Current Status:
In October 2007, a draft of the final environmental impact statement
was submitted to FRA. FRA has requested additional information as part
of their review of this statement. Project sponsors are pursuing
funding under the SAFETEA-LU Technical Corrections Act of 2008 to
complete the final environmental impact statement.
Anaheim, California, to Las Vegas, Nevada, Magnetic Levitation Project:
Project Description:
This project is planned to connect Las Vegas, Nevada, to Anaheim,
California, with stops in Ontario, Victorville, Barstow (California)
and Primm (Nevada) with a magnetic levitation system. The length is 269
miles between Anaheim, California, and Las Vegas, Nevada. The initial
segment to be developed is 40 miles from Las Vegas to Primm, Nevada.
The system is expected to operate at a top speed of 311 miles per hour
and an average speed of between 150 and 200 miles per hour.
Date Originated:
1988:
Proposed Technology:
Magnetic levitation:
Project Sponsors:
FRA California Nevada Super Speed Train Commission (created by
California and Nevada legislatures):
Cost Estimate:
$12 billion (projected - 2005):
Funding to Date:
$45 million, from the SAFETEA-LU Technical Corrections Act of 2008:
Current Status:
The commission recently received $45 million from the SAFETEA-LU
Technical Corrections Act of 2008, of which the commission will need to
provide 20 percent matching funds. Work on the environmental impact
statement is continuing, as is design/engineering work and preparation
of cost estimates. Project sponsors expect to issue a fixed price
contract to construct this project. The commission continues to have
legislative authority in Nevada, but its authorizing legislation in
California was allowed to lapse. However, according to the commission,
the project enjoys strong support in California, and is supported by
the California Department of Transportation in preparation of the
environmental impact statement.
Victorville, California, to Las Vegas, Nevada, High Speed Rail Project:
Project Description:
The Desert Xpress is a high speed rail project intended to connect Las
Vegas, Nevada, with Southern California through a station in
Victorville, California, a city that is less than 50 miles east of
Palmdale where an intermodal station is planned on the California High
Speed Rail system; 35 miles northeast of Ontario International Airport;
and 80 miles northeast of downtown Los Angeles. The system is planned
to operate on a new dedicated right-of-way. The distance between
Victorville, California, and Las Vegas, Nevada, is approximately 183
miles. Project sponsors expect to operate at a top speed of 150 miles
per hour and an average speed of 125 miles per hour. Project sponsors
also expect to construct the project using existing highway right-of-
way and using public lands owned by the Bureau of Land Management.
Desert Xpress is being implemented by a private sector entity without
public funding.
Date Originated:
2002:
Proposed Technology:
A dedicated right-of-way, steel-wheel on steel-rail system:
Primary Sponsor:
Desert Xpress Enterprises:
Cost Estimate:
$3.5 billion (projected - 2003):
Funding to Date:
No public funding has been expended. All funding to-date has come from
Desert Xpress Enterprises.
Current Status:
The draft environmental impact statement is currently being developed
and is scheduled for publication in early 2009. Desert Xpress officials
expect the final environmental impact statement to be completed in July
2009 with a final record of decision issued by the federal government
shortly thereafter.
Los Angeles, California, to San Francisco, California, High Speed Rail
Project:
Project Description:
The California High Speed Rail Authority is pursuing a statewide high
speed rail system in California. Phase 1 of system will be from
Anaheim, California, to Los Angeles, California, then through
California's Central Valley, and through the Pacheco Pass to the San
Francisco Bay Area. Phase 2 will include extensions to Sacramento,
California, and San Diego, California. Phase 1 of the system is 520
miles, and the authority expects the service will operate at a top
speed of 220 miles per hour. Authority officials did not provide an
average speed.
Date Originated:
1996:
Proposed Technology:
A predominantly dedicated right-of-way electrified steel-wheel on steel-
rail system. According to the authority, about 10 percent of the line
will be shared with other rail services.
Project Sponsors:
FRA California High Speed Rail Authority (created by the California
legislature):
Cost Estimate:
$32.8 - $33.6 billion for Phase 1 of project (projected - 2008):
Funding to Date:
$9.95 billion in state bond funding (in addition to state support
provided for administration of California High Speed Rail Authority):
Current Status:
As of July 2008, all program-level environmental review work has been
completed. The authority is now undertaking the project-level review
and approval process. In addition, on November 4, 2008, California
voters approved a ballot initiative that allows the state to issue
$9.95 billion in bonds for transit and other projects, $9.0 billion of
which will go for development of the statewide high speed rail system.
Authority officials said they plan to seek additional funding from the
federal government and private sector, as well as from local
governments for the construction of the system.
Richmond, Virginia, to Hampton Roads, Virginia, High Speed Rail
Project:
Project Description:
The Virginia Department of Rail and Public Transportation is pursuing
improved passenger rail service between Richmond, Virginia, and the
Hampton Roads area of Virginia (Norfolk, Newport News, and other
cities). This service will ultimately connect to the Northeast Corridor
in conjunction with development of the Southeast High Speed Rail
Corridor. This project will use existing right-of-way. Depending on the
preferred alignment, the length of the corridor could be 74 miles or 93
miles, with a planned top speed of 90 miles per hour. On December 14,
1995, FRA administratively extended the Southeast High Speed Rail
Corridor from Richmond, Virginia, to Hampton Roads, Virginia.
Date Originated:
2004:
Proposed Technology:
Steel-wheel on steel-rail:
Project Sponsors:
FRA Virginia Department of Rail and Public Transportation:
Cost Estimate:
Not available:
Funding to Date:
Not available:
Current Status:
Portions of the draft environmental impact statement were sent to FRA
for review in spring 2008. The project sponsor is currently awaiting
FRA's response.
Eugene, Oregon, to Vancouver, British Columbia, Canada, High Speed Rail
Project:
Project Description:
The federally designated Pacific Northwest Rail Corridor stretches from
Vancouver, British Columbia, Canada, to Eugene, Oregon, a distance of
466 miles. The Washington State Department of Transportation is
pursuing incremental improvements to intercity passenger rail service
between Portland, Oregon, to Vancouver, British Columbia, Canada, a
distance of 341 miles. Improvements include upgrading grade crossings,
improving tracks and facilities, enhancing the signaling system,
purchasing passenger train equipment and improving stations, which
would allow the top speed to be 110 miles per hour.
Date Originated:
Late 1980s:
Proposed Technology:
Nonelectric locomotives on existing freight railroad right-of-way, with
minor alignment changes as needed.
Project Sponsors:
FRA Washington Department of Transportation Amtrak State of Oregon
Province of British Columbia:
Cost Estimate:
$6.5 - $6.8 billion (2006 - projected):
Funding to Date:
$563.7 million:
Current Status:
Current intercity passenger rail operating speeds are at or below 79
miles per hour and, according to the department, increases in speed
will require a new signaling system along the corridor, although
increases in frequencies and travel times have occurred due to capital
investments in the corridor.
Scranton, Pennsylvania, to New York City, New York, High Speed Rail
Project:
Project Description:
This is an extension of New Jersey Transit service to Scranton via
existing railroad right-of-way. The corridor is 133 miles and work will
include refurbishing 28 miles of abandoned railroad right-of-way. The
top speed is expected to be 110 miles per hour, with an average speed
of just under 80 miles per hour.
Date Originated:
1995:
Proposed Technology:
Diesel locomotives on existing railroad right-of-way:
Project Sponsors:
FTA FRA Pennsylvania Northeast Regional Rail Authority New Jersey
Transit:
Cost Estimate:
$551 million (projected):
Funding to Date:
According to project sponsors, $21 million in federal funding has been
received, primarily through earmarks in legislation.
Current Status:
Project received a Finding of No Significant Impact[Footnote 90] by the
FTA and, according to one of the project sponsors, is ready to begin
construction upon availability of funding. The project sponsors are
currently working on a bistate funding agreement to allocate
Pennsylvania's and New Jersey's share of funding.
Chicago, Illinois, to Minneapolis/St. Paul, Minnesota, High Speed Rail
Project:
Project Description:
This project includes making track, station, bridge, and culvert
improvements along the Chicago, Illinois, to Minneapolis/St. Paul,
Minnesota, corridor, with stops in Milwaukee and Madison, Wisconsin.
Enhanced passenger rail service, along existing railroad right-of-way,
is being pursued for a top speed of 110 miles per hour and average
speeds of between 66 and 70 miles per hour.
Date Originated:
1994:
Proposed Technology:
Diesel electric on existing railroad right-of-way:
Project Sponsors:
FRA Amtrak Wisconsin Department of Transportation:
Cost Estimate:
$1.5 billion (2002-projected):
Funding to Date:
$5 million from Capital Assistance to States--Intercity Passenger Rail
Service Program[Footnote 91]
Current Status:
The environmental review for the Madison to Milwaukee segment is
complete, and FRA has issued a Finding of No Significant Impact.
Engineering design work is complete for the Madison to Milwaukee
segment. In addition, updates to ridership and cost estimates were
recently completed for the full project. A grant of $5 million from
FRA's Capital Assistance to States--Intercity Passenger Rail Service
Program will be used to complete track work between Milwaukee and the
Illinois state line. The Wisconsin Department of Transportation has
also applied for federal funds to improve highway-rail grade crossings
between Madison and Watertown.
Chicago, Illinois, to St. Louis, Missouri, High Speed Rail Project:
Project Description:
The Illinois Department of Transportation said numerous incremental
improvements have been made along this corridor to allow for increased
speeds. This includes track work and grade crossings on 118 miles of
track between Mazonia, Illinois, and Springfield, Illinois, completed
in 2004. In addition, the department is currently pursuing three phases
of improvements: a new cab signaling system (similar to the signaling
system used by the private freight carrier that owns this corridor);
track work that has been completed in Springfield, Illinois; and a
centralized traffic control system for the Joliet, Illinois, to
Mazonia, Illinois, segment of the corridor.
Date Originated:
1991:
Proposed Technology:
Diesel locomotives on existing railroad right-of-way:
Project Sponsors:
FRA Amtrak Illinois Department of Transportation:
Cost Estimate:
$125 million (actual):
Funding to Date:
According to project sponsors, $125 million in funding has been
received to date (28 percent from FRA, 56 percent from the states
(Illinois and Missouri), and 16 percent from private entities).
Current Status:
A $1.55 million Capital Assistance to States--Intercity Passenger Rail
Service Program grant was received that will be used to continue work
on the project. Planned top speed is 110 miles per hour between Joliet,
Illinois, and Mazonia, Illinois.
Washington, D.C., to Charlotte, North Carolina, Southeast High Speed
Rail Project:
Project Description:
The Washington, D.C., to Charlotte, North Carolina, corridor, which is
468 miles in length, will connect to the Northeast Corridor. Both
Virginia and North Carolina have established an interstate compact to
pursue this project. The project will make incremental improvements to
existing infrastructure, including track, route alignment, signaling
systems, highway-rail grade crossings, stations, train equipment, and
facilities. These improvements will allow a top speed of 110 miles per
hour and an average speed of between 85 to 87 miles per hour.
Date Originated:
In 1992, FRA designated the corridor as a federal high speed rail
corridor.
Proposed Technology:
Diesel locomotives primarily on existing railroad right-of-way:
Project Sponsors:
FRA Federal Highway Administration North Carolina Department of
Transportation Virginia Department of Transportation Virginia
Department of Rail and Public Transportation:
Cost Estimate:
$3.8 - 5.3 billion (2011 to 2016 - projected):
Funding to Date:
Over $300 million in state and federal funds have been invested in the
Washington to Charlotte portion of the corridor since 1999.
Current Status:
The program-level environmental impact statement has been completed for
this project. Project sponsors are currently in the process of
preparing the project-level environmental impact statement for the
Richmond, Virginia, to Raleigh, North Carolina, segment of the
corridor. This statement has been in development since 2003 and is
expected to be available for public review in the summer of 2010.
[End of section]
Appendix IV: Description of Past Projects: Florida Overland Express and
Texas TGV Projects:
Florida Overland Express (FOX):
Proposed Technology:
Proposed using an electrified high speed rail system similar to the
French Train à Grande Vitesse (TGV) system, capable of operating at a
maximum speed of 200 miles per hour.
Project Sponsors:
Florida Department of Transportation FOX Consortium[Footnote 92] FRA
Federal Highway Administration:
Cost Estimates:
The preliminary cost estimates ranged from $6 billion to $8 billion,
depending on the route chosen. In general, the FOX Consortium planned
on the system costing about $6 billion (in 1997 dollars).
Proposed Route:
The FOX project would have operated along a 320-mile long dedicated
right-of-way from Miami, Florida, to Tampa, Florida, via Orlando,
Florida. The project was planned to serve seven stations: Miami
International Airport, Fort Lauderdale, West Palm Beach, Orlando
International Airport, Orlando Attractions, Lakeland, and Downtown
Tampa.
Financing Plan:
In total, the FOX Consortium planned to raise $9.3 billion to finance
the estimated $6.3 billion needed for construction. The additional $3
billion accounts for inflation and to pay for such things as interest
on state and system infrastructure bonds during the construction
period, establish reserve funds required by bondholders, and cover the
costs of issuing the bonds. According to the FOX Consortium, the
following sources were expected to provide the $9.3 billion in funding:
* State contributed equity - $256 million (3 percent):
* FOX Consortium contributed equity - $349 million (4 percent):
* Train equipment financing - $569 million (6 percent):
* Interest earnings and balances - $588 million (6 percent):
* Federal loan - $2.0 billion (22 percent):
* State infrastructure bonds - $2.146 billion (23 percent):
* System infrastructure bonds - $3.346 billion (36 percent):
Ridership Forecasts:
KPMG Peat Marwick projected annual ridership of 8 million passengers by
2010. Systra projected ridership of 8.5 million by 2010. The consensus
average of the two ridership studies was approximately 8.3 million
passengers by 2010.
Timeline:
Table 5 shows the timeline of events in the development of high speed
rail in Florida.
Table 5: Timeline of High Speed Rail Development in Florida:
Date: 1982;
Event: The Governor of Florida established a committee to study high
speed rail development in Florida.
Date: 1984;
Event: The committee recommended using a public-private partnership to
develop a high speed rail system on existing right-of- way. State
legislation created the Florida High Speed Rail Commission (the
commission) to grant a franchise to develop a privately funded high
speed rail system.
Date: 1989;
Event: One of two private entities that submitted proposals to the
commission withdrew its proposal when it became apparent that Florida
would not provide any public funding.
Date: 1990;
Event: The Florida High Speed Rail Corporation revised its proposal
after the commission concluded that the proposed use of real estate
development rights along the route would not pay for the project.
Date: 1991;
Event: The Florida High Speed Rail Corporation withdrew its revised
proposal after the Governor rejected it, citing high project costs.
Date: 1992;
Event: State legislature transferred the commission's responsibilities
to the Florida Department of Transportation (FDOT).
Date: 1992-1996;
Event: After conducting corridor studies, FDOT said it would provide
$70 million annually for at least 40 years, to be adjusted for
inflation, to construct a high speed rail system. FDOT issued a request
for proposals. The FOX Consortium submitted the winning proposal from
among five, and entered into agreements with FDOT to develop the
system.
Date: 1997-1998;
Event: Stakeholders conducted work on environmental review, preliminary
engineering, ridership studies, and composed a financing plan and
safety regulations. Two external groups issued reports questioning
ridership studies, cost estimates, and construction schedule. Citizens
and elected public officials who were concerned about the potential
effect on land in their area formed an advocacy organization to oppose
the FOX project.
Date: 1999;
Event: After GAO and others issued reports raising concerns about
ridership and construction cost estimates, the construction schedule,
and the financing plan, the Governor recommended withdrawing FOX
project funding. The Florida legislature did so, ultimately terminating
the project.
Date: 2000-2001;
Event: Florida voters passed a constitutional amendment requiring
Florida state government to build a high speed ground transportation
system. The Florida legislature passed an act creating the Florida High
Speed Rail Authority (the authority) in response.
Date: 2002-2004;
Event: The authority selected a winning proposal from among four
responding to its request for proposal. Work on environmental review,
ridership studies, financing plan, and additional design work was
initiated.
Date: 2004;
Event: A general election ballot initiative passed, repealing the
state's 2000 constitutional amendment, which restricted the activities
of Florida High Speed Rail Authority.
Source: This timeline is primarily based on information contained in:
High Speed Rail Projects in the United States: Identifying the Elements
of Success, MTI Report 05-01, Mineta Transportation Institute, College
of Business, San Jose State University (October 2005).
[End of table]
Texas TGV:
Proposed Technology:
A new electrified, steel-wheel on steel-rail high speed rail system
similar to the French TGV system.
Project Sponsors:
Texas High Speed Rail Authority Texas TGV[Footnote 93] FRA:
Cost Estimates:
The cost estimate was $4 billion.
Proposed Route:
The high speed rail system would have provided service to Dallas, Fort
Worth, Dallas/Fort Worth Airport, Houston, Austin, and San Antonio. The
initial service between Dallas/Fort Worth and Houston would have begun
in 1998, and subsequent service between San Antonio and Austin to
Dallas would have begun by 1999. Special or limited service would have
been provided to Bryan/College Station and Waco if it were determined
to be economically feasible. In addition, service from Houston to San
Antonio would have been provided if it were determined to be
economically feasible.
Financing Plan:
We were not able to obtain a complete financing plan. The 1993 security
offering was for $200 million in notes, backed by a $225 million letter
of credit from the Canadian Imperial Bank of Commerce and a $75 million
counter-guarantee to be provided by Morrison Knudsen Corporation (one
of the original project developers). The Texas High Speed Rail
Authority Act prohibited use of public funds for constructing the
system, and, as a result, all construction costs would have been
privately financed.
Ridership Projections:
Based on the five route alternatives, ridership projections by 2015
ranged from 11.3 million to 18.0 million.
Timeline:
Table 6 shows the timeline of events in the development of high speed
rail in Texas.
Table 6: Timeline of High Speed Rail Development in Texas:
Date: 1982;
Event: A Texas legislature joint committee recommended that feasibility
studies examine the potential of conventional rail and high speed rail
between Texan cities. Proposed legislation to enact the joint committee
report recommendations failed.
Date: 1985;
Event: A German Consortium reported that a high speed rail system would
be viable from Dallas to Houston if the project obtained $500 million
for start up contributions and was financed with tax exempt bonds.
Date: 1987;
Event: German Consortium unsuccessfully lobbied the Texas legislature
to undertake the proposal. A job creation task force created by the
then-Governor recommended that the Governor support enabling
legislation for the Texas Turnpike Authority to conduct a high speed
rail feasibility study. The enabling legislation passed.
Date: 1989;
Event: After receipt of the study, the Texas legislature created the
Texas High Speed Rail Authority (THSRA). The THSRA was charged to
review objectively applications and grant a franchise for the
financing, construction, operation, and maintenance of a high speed
rail facility if it found that it is for the public convenience and
necessity.
Date: 1990-1991;
Event: The THSRA issues requests for proposals, in which two of three
applications met the criteria. Texas TGV Corporation was ultimately
granted the franchise after evidentiary hearings were held on franchise
applications. Court dismissed lawsuits filed by Southwest Airlines to
postpone the hearings and to rescind the rules of the THSRA. Texas TGV
Corporation, the THSRA, and FRA signed a memorandum of understanding
establishing environmental review responsibilities as well as other
responsibilities.
Date: 1992;
Event: The THSRA and Texas TGV Corporation signed the franchise
agreement and outlined responsibilities of Texas TGV Corporation, many
of which were time-sensitive. Work began on environmental review and
ridership studies, but environmental review work was eventually stopped
because of cost overruns. The first portion of public financing
offering of Texas TGV Corporation was delayed until December 31, 1993.
The Texas TGV argued it was due to lack of progress on environmental
review and investment grade ridership studies as well as other reasons.
Date: 1993;
Event: Delays forced renegotiation of franchise agreement, and
additional requirements were placed on the Texas TGV Corporation. The
corporation submitted a plan to the THSRA, which did not include
required detailed financial and milestones information, and released
its independent ridership study. Texas TGV Corporation issued its
initial security offering as we have previously described. A day before
the pricing and sale of the notes was scheduled to occur, Morrison
Knudsen announced that it was no longer going to provide the counter-
guarantee, and that the offering was going to be withdrawn. The Texas
TGV Corporation could not meet its deadline of December 31, 1993.
Date: 1994;
Event: Work was halted by the Texas TGV Corporation, which led to the
termination of the franchise agreement.
Date: 1995;
Event: The Texas legislature abolished the THSRA and its enabling
legislation.[A]
Source: This timeline is primarily based on information contained in
the following: Marc H. Burns, High Speed Rail in the Rear-View Mirror,
Final Report of the Texas High Speed Rail Authority (October 1995).
[A] Texas has taken no further action to establish a state high speed
rail system. However, a grassroots organization comprising of local
elected officials and others is pursuing high speed rail in the Texas
Triangle.
[End of table]
[End of section]
Appendix V: Description of High Speed Rail Systems in France, Japan,
and Spain:
France:
Background:
France first developed high speed rail lines with the opening of the
TGV Sud Est line from Paris to Lyon in 1981. Since then, France has
constructed additional high speed rail lines connecting major cities in
France, as well as connecting high speed rail lines to cities in
Germany, Belgium, and the United Kingdom. The French railway system has
undergone a couple of major reforms, the most notable one occurring in
1997, with the creation of Réseau Ferré de France (RFF), France's
national intercity rail network infrastructure manager. This reform
took place as France had to comply with European Union directives,
which required the separation of passenger operations and
infrastructure management. In addition, the ownership of the rail
network, including the high speed rail network, was transferred from
the national government to RFF. RFF is also responsible for capacity
allocation, contracting, traffic management, and maintenance, although
it subcontracts the traffic management and maintenance to the passenger
rail operator, Société Nationale des Chemins de Fer Français (SNCF).
The Ministry of Ecology, Energy, Sustainable Development, and Spatial
Planning sets policy, enforces laws and regulations, and approves and
finances projects. Moving forward, France is pursuing a high speed rail
plan on the basis of a recommendation from a national environmental
conference (Le Grenelle Environnement), which called for investments in
sustainable transportation modes. Specifically, it recommended building
about 1,200 miles of additional high speed rail lines before 2020 and
studying the viability of another approximately 1,500 miles of high
speed rail lines.
Snapshot of the French High Speed Rail System:
* Date of initiation: 1981;
* Length of high speed rail system: 1,180 miles;
* Top commercial speed: 199 miles per hour;
* High speed rail ridership: Approximately 100 million (2007).
Funding:
Prior to the creation of RFF in 1997, most of the funding for the
construction of high speed rail lines came from the national government
(through SNCF). Since then, funding for high speed rail construction is
derived from a variety of sources, including the national government,
regional governments, RFF, SNCF, and the European Union.
Operations:
SNCF is the sole provider of domestic high speed rail operations in
France. The Eurostar and Thalys TGV, of which SNCF is a shareholder,
provide international high speed rail operations to locations in
Belgium, Holland, and the United Kingdom. According to European Union
directives, international high speed rail lines must be opened for
competition starting in 2010. Therefore, France will be required to
allow private and public competitors to operate their trains over these
lines.
Infrastructure:
In terms of track ownership, RFF is an owner of all intercity railway
property in France. RFF is also responsible for allocating capacity for
the high speed rail infrastructure and for the maintenance and
management of traffic of the high speed rail system. However, these
responsibilities have been subcontracted to SNCF. SNCF pays RFF
infrastructure fees to use the high speed rail lines.
Japan:
Background:
Japan was the first country in the world to develop high speed rail
operations, which occurred in 1964 with the opening of the Shinkansen
between Tokyo and Osaka. In addition, in 1970, the Nationwide
Shinkansen Railway Development Act was established, which created a
master plan for the expansion of high speed rail lines throughout
Japan. After this, four high speed rail lines were constructed prior to
the 1987 reform of the passenger rail industry in Japan. The 1987
reform broke the fully integrated state railway entity, Japanese
National Railways, into six private intercity passenger rail operators
based on six distinct geographic regions, as well as a freight
operator. Since then, three high speed rail lines have been built under
the reformed structure, and the high speed rail system continues to
expand on the basis of the high speed rail master plan.
Snapshot of the Japanese High Speed Rail System:
* Date of initiation: 1964;
* Length of high speed rail system: 1,360 miles;
* Top commercial speed: 188 miles per hour;
* High speed rail ridership: Approximately 300 million (fiscal year
2006).
Funding:
Prior to the 1987 reform, the construction of high speed rail in Japan
was funded through debt incurred by the national government and Japan
National Railways. After the 1987 reform, the national government funds
two-thirds of the construction cost, and local governments fund one-
third of the construction cost under the Nationwide Shinkansen Railway
Development Act. The national government funding is derived from the
revenues from the sale of rail lines to private companies and the
national public works budget. Private companies purchased the four
constructed high speed rail lines from the national government in 1991,
and in turn the companies have to pay an annual fee to the national
government for 60 years. For high speed rail lines built after the 1987
reform, the companies pay a lease payment to the Japan Railway
Construction, Transportation, and Technology Agency for the use of the
high speed rail lines, on the basis of projected ridership. The
national government does not provide operating subsidies for high speed
rail passenger operations.
Operations:
Prior to the 1987 reform, Japan National Railways was a fully
integrated state-owned entity that was the sole high speed passenger
rail operator in Japan. After the 1987 reform, Japan National Railways
was split into six private operators, three are on the mainland (JR
East, JR Central, and JR West) and the other three are each on an
island (JR Hokkaido, JR Shikoku, and JR Kyushu). JR East, JR Central,
JR West, and JR Kyushu operate high speed rail lines. JR East operates
Shinkansen lines between Tokyo and Nagano, Tokyo and Niigata, and Tokyo
and Hachinohe; JR Central operates the Shinkansen line between Tokyo
and Osaka; JR West operates the Shinkansen line between Osaka and
Fukuoka; and, JR Kyushu operates the Shinkansen line between Kagoshima
and Shin Yatsushiro. The three mainland operators are considered fully
privatized entities.
Infrastructure:
High speed rail lines built after the 1987 reform are constructed and
owned by the Japan Railway Construction, Transportation, and Technology
Agency, and are leased to the JR companies. As a result of the 1991
law, JR East purchased the high speed rail line from Tokyo to Niigata
and the track from Tokyo to Morioka. JR Central purchased the high
speed rail line from Tokyo to Osaka, and JR West purchased the high
speed rail line from Osaka to Hakata.
Spain:
Background:
Spain first developed high speed rail lines with the opening of the
Madrid to Seville line in 1992. Since then, Spain has constructed
additional high speed rail lines from Madrid to Barcelona and Madrid to
Valladolid, in 2007 and 2008, respectively, and from Córdoba to Málaga,
with extensions built off these main lines as well (i.e., to Toledo in
2005). The construction of these lines was based on a national rail
plan created in 1987 and national transportation plans created in 1993,
1997, and 2005. In 2005, Spain's railway system was restructured in
accordance with the European Union directive requiring the separation
of passenger operations and infrastructure management. In accordance
with these directives, Spain passed its own legislation, which split
its state railway entity, Renfe, into two entities, Adif and Renfe-
Operadora. Adif is responsible for infrastructure management and
capacity allocation, and Renfe-Operadora is responsible for passenger
operations. The Ministerio de Fomento (Ministry of Public Works) is
responsible for setting policy, enforcing laws and regulations, and
approving and financing projects. Spain's most recent national
transportation plan calls for $103.9 billion in investment for creating
5,592 miles of high speed rail lines.
Snapshot of the Spanish High Speed Rail System:
* Date of initiation: 1992;
* Length of high speed rail system: 981 miles;
* Top commercial speed: 186 miles per hour;
* High speed rail ridership: 9 million (2007).
Funding:
Spanish transportation officials with whom we spoke noted that a
majority of funding to construct the Madrid to Seville high speed rail
line was provided by the national government. Of the high speed rail
lines built since then, construction costs have been derived from
funding from the national government, the European Union, and Adif.
Moving forward, it is planned that funding for expansion of the
existing high speed rail network will be derived from the national
government, local governments, Adif, and loans from the European
Investment Bank. For cross-border high speed rail lines, it is also
planned that funding will be derived from the European Union as part of
the Trans-European Transport Network.
Operations:
Renfe-Operadora is the sole provider of high speed rail operations in
Spain. According to European Union directives, international high speed
rail lines must be opened to competition starting in 2010. Therefore,
Spain will be required to allow private and public competitors to
operate their trains over these international lines.
Infrastructure:
In terms of track ownership, Adif owns the current high speed rail
lines as well as passenger rail stations, freight terminals, and the
telecommunications network. In addition, Adif constructs and maintains
high speed rail lines, allocates capacity to passenger rail operators,
and manages traffic control operations and safety systems. Renfe-
Operadora pays Adif infrastructure fees to use the high speed rail
lines.
[End of section]
Appendix VI: Description of Travel Demand Forecasting:
Travel Demand Modeling:
The benefits of a proposed project depend on the popularity of a new
service, that is, high ridership. Thus, a critical factor in
determining the net benefits, or viability, of a proposed project is
its ridership forecasts. Ridership forecasts are generally conducted by
modeling travel demand for the corridor in which the new service is
being proposed. Travel demand modeling can be conducted at the macro
level or the micro level, depending on the types of available data and
the level of information needed from the results of the model. The use
of travel demand models in the policy process could be conceived of in
terms of the following three activities: data collection, model
building, and estimation.
1. Data collection: Aggregate data refers to variables that summarize
the characteristics of a group of individual units, such as an average,
a total, or a median. Examples include per capita income or vehicle
miles traveled. An aggregate model is founded on such data. In the case
of travel demand, the analysis applies to those residing or doing
business in a region. Data sources are typically official statistics
routinely collected by public agencies, including administrative data.
An advantage of such data is that they are inexpensive for the
secondary user and have been subjected to some degree of quality
control by the originating agency. One disadvantage is that the results
of any analysis do not necessarily apply to a specific transportation
project. Another limitation is that the model is limited by the
available data. Micro models can help inform specific policy changes,
such as the option of adding high speed rail service to a
transportation system. Micro data refers to individuals'
characteristics and behavior. These data are often gleaned from surveys
of travelers or households.[Footnote 94] Micro data, however, are
generally expensive to obtain, their collection may be limited due to
privacy considerations, and their quality depends on the sophistication
of the survey methodology. A danger in survey data, just as in
political polling, is that the design or implementation of a survey
could lead to biased survey results. Survey instruments can be
scrutinized by third parties, but the process of data collection is
less accessible to outside observers, especially after the fact.
Typically, a survey, as well as ensuing analysis, will be commissioned
by the public agency that is sponsoring a project, raising conflict-of-
interest concerns. Surveys can provide ambiguous results for innocent
reasons as well (e.g., such results may be due to differences in
methodology).
2. Model building: Constructing a formal travel demand model[Footnote
95] generally entails a number of choices and professional judgment.
For example, a modeler usually makes choices on the theory and
assumptions upon which the model is based, the mathematical form of the
model, and the variables to be included. Because models entail
professional judgment, many models are sufficiently diverse (e.g.,
include differing assumptions) such that alternative models of the same
problem can yield different results. Also, alternative theories of
travel demand could imply different models with diverse findings.
Models with conflicting rationales can both claim legitimate empirical
support.
In predicting future demand for an existing or new transportation
facility, two types of data are typically involved: historic and
prospective. A model is often initially developed using historic data.
The effects and implied outcomes of the model are then compared with
actual experience to test the structure of the model (e.g., the theory
and assumptions on which the model is based). Details of the model may
be adjusted to improve the results--that is, to make the modeled
effects more closely match actual experience. Once a model has provided
satisfactory results, it may be deployed with data on projected future
conditions. Again, forecast modelers may adjust and readjust the
structure of the model. The use of statistical methods in testing
models is usually a trial-and-error process, thus, rarely is the first
result the end of the study.
3. Estimation: There are usually multiple criteria by which to analyze
or interpret the results of a model, and the analyst enjoys
considerable discretion in determining the direction of the analysis.
In addition, the foundation of the analysis is survey data, and the
data collected could yield results dramatically at variance with
theory, expected empirical impacts, and past experience. For these
reasons, the nature of the data and the decisions on how to handle them
may enable the analyst to steer the result in the analyst's preferred
direction. For an external, disinterested reviewer, the evolution of
such decisions is very difficult to trace. Because circulation of data
and models for outside review may be restricted by proprietary
considerations and the population of private sector organizations
equipped to conduct large-scale projects may be sufficiently limited,
the evaluation by independent peer reviewers may be difficult.
Standard Framework for Travel Demand Modeling:
In the intercity context, the standard framework for estimating travel
demand has been the four-step model.[Footnote 96] The four steps are as
follows:
1. Trip generation: This step refers to the total number of trips,
based on the idea of "productions" (households are the most important
source of production) and "attractions" (places of employment or retail
establishments are obvious attractors). Trips can have the purpose of
moving people or freight, either within a region, to or from a region,
or through a region. The main purposes for persons to travel include
commuting, business travel, and leisure travel. Thus, household and
business patterns of commuting and shopping are the most stable source
of information used in modeling, while a more variable source of
information are trips aimed at recreation, and other more episodic
decisions. Model inputs (or variables) used to explain trip productions
include trip purpose (e.g., commuting and home-to-school) household
size, auto ownership, and income. Trip attractions are chiefly
workplaces and retail outlets. These data can be obtained through
records, such as ticket sales, and supplemented by or derived
exclusively from surveys.
2. Trip distribution: This step pertains to trips in terms of connected
origins and destinations. The standard approach to estimating trip
distribution is what is known as a "gravity model." Gravity models were
used in models of trade and migration. In the context of this
discussion, trips from point A to point B are positively affected by
measures of mutual attraction (i.e., "productions" at point A and
"attractions" at point B). The analogy is to Newton's law of the
gravitational force between two bodies: that it increases with the mass
of each, and decreases with the distance between them. Trips are
negatively affected by some measure of "impedance" or friction
affecting the desirability of a trip between the two points, such as
distance, travel time, cost of travel, or some combination of such
factors. The inputs to a gravity model could be the number of trips
originating and ending at a given number of zones. A problem in
distribution is the feedback implied by possible congestion or crowding
of a transit facility. The more people decide to move from point A to
point B, the greater the impedance factor could be, depending on how
the factor is represented. This in turn could influence the number of
trips. Allowing for feedback requires additional complexity in a trip
distribution model. More complex models can be implemented. An
alternative approach to the gravity model--where time series data are
available--is a model that combines steps one and two.[Footnote 97] In
such a model, the number of trips between a given origin and
destination is explained by population levels at each end, travelers'
incomes, and the level of service available for the mode (e.g., rail
and automobile) in question. The apparent simplicity of such an
approach may obscure the advantages of implementing such a model for
the full gamut of trip purposes, in each mode, for each origin-
destination pair.
3. Mode choice: This step pertains to the decision on how to travel,
such as driving alone, carpooling, or taking some type of public
transportation. The probability of choosing among modes is modeled as a
function of the characteristics of individuals, trip purpose, and the
relative costs of alternative modes, among other possible factors. The
estimated probability for a population is the share estimated for a
given transportation mode.[Footnote 98] Obvious factors in the choice
of a travel mode include the relative costs, travel time, convenience,
and comfort of the travel alternatives in question. The choice of a
travel mode interacts with personal decisions on whether to own an
automobile, and, if so, how many, and where to reside. This chicken-egg
interaction complicates the analysis of causality in mode choice. Mode
choice models are founded on microeconomic consumer theory that depends
on a bevy of controversial, technical economic assumptions about human
behavior. In general, the theory assumes a high degree of rational and
consistent behavior on the part of individuals, including foresight,
self-discipline, an aversion to risk, and the capacity to process
information. Over the past two decades, a growing literature has
developed providing empirical evidence against such notions of
rationality.[Footnote 99]
The purpose of a mode split analysis is to predict the shares of trips
over existing and prospective modes. In principle, the factors that
distinguish choices in Europe from those in the United States would be
accounted for in the model. For example, if motor fuel in the United
States, factoring in the relevant taxes, is cheaper than in Europe, the
impact of differences in the costs of trips under different modes would
be reflected in the overall explanation of the extent to which
travelers might choose high speed rail over automobile and air. A good
mode split model will indicate the strengths of the assorted factors,
including the preference for one transportation mode over another,
assuming all other factors are equal. The extent to which government
policies--such as the impact of motor fuels' taxes on travel costs--
influence the choice, can be abstracted from, to assess underlying
preferences.
4. Route assignment: The final step of travel demand modeling is to
determine the distribution of trips between two given points for all
modes over the possible routes between the points. Assuming travelers
prefer the route that takes the least time, given decisions about
destination and mode, in a regional setting with many zones and a
multitude of paths between a multitude of points, a mathematical
programming problem of considerable complexity is encountered. Even so,
such a problem glosses over the extent of congestion and resulting
changes in travel time to which particular routes can be subjected.
Reckoning with the associated feedback--travelers on congested routes
choose alternatives--adds complexity to the exercise. When travel times
are minimized on all routes and no traveler has an incentive to choose
yet another alternative, the system is said to be in equilibrium.
Uncovering such an equilibrium is a goal of route assignment modeling.
Pressure on particular route segments provides information to the
policymaker on the possible expansion of the network or the use of
tolls to reduce congestion.
[End of section]
Appendix VII: Description of the Proposed Los Angeles, California, to
Las Vegas, Nevada, High Speed Rail Corridor:
Three separate high speed rail proposals connecting the Los Angeles,
California, and Las Vegas, Nevada, metropolitan areas illustrate the
ridership and cost trade-offs that are associated with selecting, among
other things, a particular route or train technology. The three options
being explored include an incremental improvement to an existing
conventional rail line, a high speed electrified (or diesel) steel-
wheel on steel-rail line on dedicated track (project sponsor - Desert
Xpress), and a magnetic levitation (maglev) proposal on dedicated
guideway (project sponsor - California-Nevada Super Speed Train
Commission). (See figure 7.) One selection of route or train technology
may maximize ridership and increase construction costs, while another
option may draw lower ridership but at a substantially lower cost.
Las Vegas is one of the most visited cities in the United States, and,
according to project proponents, the mostly flat and desert terrain
between Los Angeles and Las Vegas makes high speed rail development
relatively straightforward, although some portions of the corridor are
mountainous and have steep grades. Project sponsors for each option
indicated that a transportation need exists between the two regions,
due to capacity constraints on existing transportation modes,
significant growth in population and employment, and projections for
future growth in the long term. One-third of all visitors to Las Vegas
are from California, and more than 10 million visitors are estimated to
come from the Southern California area. This travel is estimated to
grow substantially by 2030, although the Las Vegas economy has been hit
particularly hard by the recent economic crisis, as reflected in the
recent decreases in visitor volume. However, according to one project
sponsor, travel from Southern California to Las Vegas has not been as
severely impacted as visitation from elsewhere, as reflected by traffic
counts on Interstate 15 (I-15) at the Nevada state line, which show
only about a 5 percent reduction in automobile traffic.
High speed rail stakeholders with whom we spoke said ridership on any
high speed rail line will be impacted by the location of the rail
stations in relation to where potential riders live for all stations
along the line, but especially at the ends of the line. Desert Xpress
will most likely forgo some ridership by terminating service outside of
the Los Angeles area (in Victorville). Because riders must first drive
their personal vehicles to Victorville--typically the most congested
portion of the automobile trip between the Los Angeles area and Las
Vegas--and then board a train, stakeholders have expressed concern
regarding the level of risk related to the estimates of riders.
Similarly, the maglev project is designed to terminate in Anaheim,
which may also result in fewer riders than connecting directly to the
more populous Los Angeles area, and similar concerns over risks
associated with overly optimistic ridership estimates have been
expressed.[Footnote 100] The conventional rail proposal, while
connecting directly into downtown Los Angeles, is plagued by slow
speeds and travel times that are not as competitive with automobile or
air travel. As such, the conventional rail proposal is likely to
attract far fewer riders than the other proposed services.
Table 7: Summary of Three High Speed Passenger Rail Proposals in the
Los Angeles to Las Vegas Corridor:
Project: Los Angeles - Las Vegas Conventional Rail Option;
Corridor length (in miles): 321;
Rail technology: Steel-wheel on steel- rail (diesel); Shared use with
other commuter and freight rail services;
On-board travel time: 5 hours 30 minutes;
Service frequency (daily): Between 4 and 9 one-way trips/day;
Projected construction costs/Cost per mile[A]: $1.1-3.5 billion/$3.4-
10.8 million;
Annual ridership (forecast year)[B]: 322,000-406,000; (2010);
Revenue forecast (forecast year): $16.7-20.9 million; (2010).
Project: Desert Xpress;
Corridor length (in miles): 183;
Rail technology: Steel-wheel on steel-rail (either diesel or
electrified); Exclusive, grade-separated right-of-way;
On-board travel time: 1 hour 24 minutes;
Service frequency (daily): Between 69-102 one-way trips/day;
Projected construction costs/Cost per mile[A]: $3.5 billion/$19.5
million;
Annual ridership (forecast year)[B]: 16.2 million; (2030);
Revenue forecast (forecast year): $1.2 billion; (2030).
Project: California - Nevada Super Speed Train;
Corridor length (in miles): 269;
Rail technology: Magnetic levitation; Exclusive guideway;
On-board travel time: 1 hour 20 minutes;
Service frequency (daily): 114 one-way trips/day;
Projected construction costs/Cost per mile[A]: $12.1 billion/$44.9
million;
Annual ridership (forecast year)[B]: 42.9 million; (2025);
Revenue forecast (forecast year): $517.4 million; (2025).
Sources: IBI Group, Transmax Group, and American Magline Group.
[A] In nominal dollars.
[B] We did not validate the ridership and cost estimates.
[End of table]
Project Proposals:
Los Angeles-Las Vegas Conventional Rail:
The Regional Transportation Commission of Southern Nevada, the
metropolitan planning organization for Southern Nevada, which
encompasses Las Vegas, has been focusing on reestablishing conventional
rail passenger service between Los Angeles and Las Vegas. Amtrak's
Desert Wind service[Footnote 101] was discontinued in 1997 as part of a
broader restructuring of intercity passenger rail service that included
the discontinuation, truncation, or restructuring of service on a
number of Amtrak's routes. The conventional rail option would make
incremental improvements to existing rail track (using diesel
equipment) and operate in a shared-use environment with commuter and
freight trains, and, as such, would require negotiations with the
private freight railroads that own the tracks. With the incremental
improvements, train speeds would be increased to allow for up to 90
miles per hour. The line would most likely begin in Los Angeles and
terminate in Las Vegas--a total length of over 300 miles and an
estimated travel time of over 5 hours. Prior passenger rail service on
Amtrak's Desert Wind took approximately 7 hours and 15 minutes between
Los Angeles and Las Vegas. The conventional rail option projects to
draw approximately 300,000 riders per year, and the estimated
construction costs to implement these upgrades would be between $1.1
and $3.5 billion, which would be less than either of the following two
options (see table 7 for a comparison of trip times, riders, and costs
for all three proposals).
Desert Xpress:
The Desert Xpress option would operate on dedicated right-of-way with
all new tracks not shared with other rail service with no grade
crossings, using steel-wheel on steel-rail electrified (or diesel)
equipment, with maximum speeds of up to 150 miles per hour, between
Victorville and Las Vegas--a distance of a little less than 200 miles.
Travel time between the two cities would be about 84 minutes.
Victorville, California--located in San Bernardino County--is the first
population center beyond the Cajon Pass from the Los Angeles basin.
Traffic from the Los Angeles area funnels onto I-15 south of
Victorville. Passengers from the Los Angeles area would need to drive
to Victorville to catch the train. According to project sponsors,
Victorville is generally within ½ to 1½ hours for many of the more than
20 million residents of the 4 county area (Los Angeles, San Bernardino,
Riverside, and Orange). However, according to transportation officials,
this segment of the trip can be significantly delayed depending on
traffic conditions, in some cases, resulting in travel times to
Victorville of up to 3 hours. Therefore, the overall envisioned trip
time for a traveler using the Desert Xpress is expected to be between 2
and 3 hours, with the potential to go to over 4 hours on the basis of
traffic conditions between Los Angeles and Victorville. According to
ridership forecasts prepared for Desert Xpress and reviewed by a third-
party contractor, the service is expected to attract up to 16.2 million
riders per year by 2030 (8.1 million round trips), and Desert Xpress
estimates the total project to cost approximately $3.5 billion. Desert
Xpress officials indicate that the project costs are significantly less
than most dedicated high speed rail projects, primarily because, by
terminating service in Victorville, they would avoid the construction
challenges and high costs of building through both the densely
populated and developed areas in Los Angeles and Orange counties and
the mountainous Cajon Pass. The planned route would also help reduce
project costs by mostly using existing right-of-way, running either
within or adjacent to the I-15 right-of-way and using adjacent federal
lands where the use of highway right-of-way is not possible. The
project sponsor is a private entity and would not be seeking any public
funding to finance the costs of this project.
California-Nevada Super Speed Train:
The California-Nevada Super Speed Train option would operate on
dedicated right-of-way, using maglev technology, with maximum speeds of
up to 300 miles per hour. The line would begin in Anaheim, California,
and terminate in Las Vegas--covering a distance of 269 miles in
approximately 1 hour and 20 minutes. Project sponsors indicate that
connecting Anaheim (where Disneyland is located) and Las Vegas, two
popular tourist destinations, will help them draw significant
ridership. The project is also being designed to connect to a new
intermodal facility that is planned to be the Anaheim station terminus
and would house transit connections to the Los Angeles area, including
the proposed Los Angeles to San Francisco high speed rail line. In
addition, project sponsors are considering a stop at the Ontario
Airport that would allow for a 15-minute trip from Anaheim and, thus,
make possible some diversion of air travelers from Los Angeles
International and Orange County airports, which are soon to be at
capacity. The estimated project costs of over $12 billion is the
highest among the three high speed rail options, mostly due to the
higher costs of constructing a maglev system. However, project sponsors
highlighted some advantages unique to maglev technology, such as lower
ongoing projected operation and maintenance costs and its ability to
handle steeper grades and curves as compared with steel-wheel on steel-
rail technologies.
Figure 7: High Speed Rail Project Proposals from Los Angeles to Las
Vegas:
[Refer to PDF for image: illustrated map]
Conventional train route:
Technology: Conventional steel-wheel on steel-rail (diesel);
Distance: 321 miles from Los Angeles, CA (Union Station), to Las Vegas,
NV.
Travel time: 5 hours, 30 minutes.
Desert Xpress:
Technology: High speed steel-wheel on steel-rail (either diesel or
electric);
Distance: 183 miles from Victorville, CA, to Las Vegas, NV;
Travel time: 1 hour, 24 minutes.
California-Nevada Super Speed Train:
Technology: Magnetic levitation;
Distance: 269 miles from Anaheim, CA, to Las Vegas, NV;
Travel time: 1 hour, 20 minutes.
Sources: Nevada DOT, Caltrans, and GAO.
[End of figure]
Highway Congestion:
It is estimated that 90 percent of the visitors to Las Vegas from the
Southern California region drive on I-15, which is the major highway
and the only available driving route connecting Las Vegas and Southern
California. According to stakeholders, congestion on I-15 has gotten
increasingly worse over the years, with a major choke point occurring
in Victorville, where the eight-lane highway narrows to three through
lanes in each direction for 30 miles to Barstow, and then to only two
through lanes in each direction through the desert to Las Vegas. Travel
times between the Los Angeles area and Las Vegas can increase 2 hours
or more (from approximately 4 to 6 hours) during weekend and holiday
peak travel times (reflective of the recreational nature of most
travelers). I-15 is also a heavily traveled freight route between the
two regions. Both Desert Xpress and the California-Nevada Super Speed
Train Commission anticipate that their high speed rail will help
relieve congestion along the I-15 corridor during peak periods. For
example, Desert Xpress anticipates that 87 percent of its riders will
be diverted from automobiles. However, other stakeholders indicated
that none of the current proposals are holistically looking at the
transportation problems endemic to the corridor, such as looking at how
to most effectively relieve some of the main drivers of traffic
congestion in the Southern California area, and as we discussed earlier
in this report, high speed rail's ability to have an impact on highway
congestion may be limited by the properties of induced demand and the
preferences of drivers.
Airport Congestion:
The single largest air market to Las Vegas is from Southern California,
and airports in Los Angeles and Las Vegas anticipate reaching and
exceeding capacity by 2025. Clark County Department of Aviation
[Footnote 102] officials estimate that in 2007, approximately 3.6
million passengers (15 percent of all passengers) flew in from 1 of the
5 Southern California airports (Los Angeles International Airport, Bob
Hope Airport in Burbank, Long Beach Airport, John Wayne Airport in
Orange County, Ontario International Airport) servicing Las Vegas's
McCarran International Airport (McCarran). Both Desert Xpress and the
California-Nevada Super Speed Train Commission anticipate that their
service will draw a significant number of travelers off of planes and
into trains. Desert Xpress estimates that just over 12 percent of its
passengers will be diverted from air, while California-Nevada Super
Speed Train Commission estimates attracting 20 percent of its
passengers from air. In addition, as we have previously mentioned, the
commission is planning a potential connection to Ontario International
Airport to relieve capacity constraints at other Southern California
airports.
Planned Capacity Improvements for Highways and Airports:
Current airport and highway expansion projects in the corridor also
complicate the decision of whether to invest in high speed rail and how
to design the system, and highlight the importance of comparing high
speed rail proposals with investment alternatives in other modes.
However, no single institutional entity exists to consider these
investments relative to one another, or in comparison with one another
to determine how the transportation needs in the corridor can best be
served. For example, two airport projects are currently being developed
that will significantly expand airport capacity in the Las Vegas area.
To address future projected growth, Clark County Department of Aviation
officials said they are preparing to add a third terminal to expand
McCarran's capacity by an additional 8 million passengers. In addition,
the department has plans to build a new airport in the Ivanpah Valley,
which is 6 miles north of the California state line and 30 miles south
of downtown Las Vegas (approximately a 45-minute drive from Las Vegas).
McCarran would then handle most of the domestic air travel, while the
Ivanpah Airport would handle primarily international air travel. The
planned opening of Ivanpah is in 2018, and, at full build-out, the
airport is expected to accommodate 30 to 35 million annual passengers.
The officials were incorporating the planned maglev line or Desert
Xpress line into plans for the new Ivanpah Airport, but primarily as a
means to transport international travelers from Ivanpah to the Las
Vegas city center. Officials indicated that the existence of a high
speed rail line could provide capacity that could delay the need to
build the Ivanpah Airport for several years, although eventually they
anticipate enough demand to support an additional airport. However,
airport expansion proposals do not consider the effects of a potential
new high speed rail line, nor are airport expansions evaluated
comparatively with high speed rail or highway expansion proposals.
Similarly, capacity improvements are also planned on I-15 between Los
Angeles and Las Vegas, and as with planned airport expansions, highway
expansion proposals do not consider the potential effects of either
rail or air travel alternatives and are not considered comparatively
with such investments.
[End of section]
Appendix VIII: GAO Contact and Staff Acknowledgments:
GAO Contact:
Susan A. Fleming, (202) 512-2834 or flemings@gao.gov:
Staff Acknowledgments:
In addition to the individual named above, Andrew Von Ah, Assistant
Director; Jay Cherlow; Colin Fallon; Greg Hanna; David Hooper; Delwen
Jones; Richard Jorgenson; Catherine Kim; Max Sawicky; Gretchen Snoey;
Jason Vassilicos; and Mindi Weisenbloom made key contributions to this
report.
[End of section]
Footnotes:
[1] The MITRE Corporation, Center for Advanced Aviation System
Development, Capacity Needs in the National Airspace System (2007-
2025), an Analysis of Airports and Metropolitan Area Demand and
Operational Capacity in the Future (May 2007).
[2] In addition to these corridors, the long-distance route between
Chicago, Illinois, and Los Angeles, California, operates at 90 miles
per hour over portions of its route.
[3] "Vision for the Future: U.S. intercity passenger rail network
through 2050," prepared by the Passenger Rail Working Group for the
National Surface Transportation Policy and Revenue Study Commission,
December 6, 2007.
[4] Pub. L. No. 110-432, Div. B, title V, § 501(d), 122 Stat. 4907,
4963 (Oct. 16, 2008), codified at 49 U.S.C. § 26106(h).
[5] Pub. L. No. 111-5, 123 Stat. 115 (2009)(ARRA).
[6] See, for example, FRA's Notice Requesting Expressions of Interest
in Implementing a High Speed Intercity Passenger Rail Corridor, 73 Fed.
Reg. 76443 (issued Dec. 16, 2008).
[7] According to FRA, maglev is an advanced transport technology in
which magnetic forces lift, propel, and guide a vehicle over a
specially designed guideway. This technology can reduce or eliminate
the need for wheels and many other parts, thereby minimizing mechanical
friction and permitting excellent acceleration, with cruising speeds of
about 300 miles per hour or more. See Department of Transportation,
Federal Railroad Administration, Costs and Benefits of Magnetic
Levitation (Washington, D.C.: 2005).
[8] Proposition 1A, Safe, Reliable High-Speed Train Act, approved
November 2008. This funding represents less than one-third of the total
estimated project cost.
[9] High Speed Ground Transportation Act of 1965, Pub. L. No. 89-220,
79 Stat. 893 (1965).
[10] Section 1218 of the Transportation Equity Act for the 21st Century
created a National Magnetic Levitation Transportation Technology
Development Program, Pub. L. No. 105-178, 112 Stat. 107, 216-219
(1998).
[11] 49 U.S.C. § 10901.
[12] The initial high speed rail lines in each of the three countries
we visited (i.e., Paris-Lyon, Madrid-Seville, and Tokyo-Osaka) were
specifically constructed, in part, to relieve at or near capacity
conventional rail lines.
[13] See DOT/FRA, Costs and Benefits of Magnetic Levitation, ES-6. Also
see GAO, Intercity Passenger Rail: National Policy and Strategies
Needed to Maximize Public Benefits from Federal Expenditures,
[hyperlink, http://www.gao.gov/products/GAO-07-15] (Washington, D.C.:
Nov. 13, 2006), which finds that corridor services are most competitive
between 100 and 300 miles; and Ginés De Rus and Gustavo Nombela, "Is
Investment in High Speed Rail Socially Profitable?" Economics of
Infrastructure and Transport, University of Las Palmas (Spain), April
2005, which finds that the time savings of high speed rail relative to
air are sufficient to offset the greater speed of airplanes over trains
typically over distances of 120 to 480 miles.
[14] In and of itself, a total travel time advantage does not guarantee
that a mode is viable, nor superior in those terms to some alternative.
[15] According to Amtrak officials, some shorter distance routes can be
competitive with automobile travel (e.g., New York, New York, to
Philadelphia, Pennsylvania, has the third highest Acela Express
ridership of any city pair on the Northeast Corridor), depending on the
level of traffic congestion.
[16] As an example, an official with the Department of Aviation for
Clark County, Nevada (Las Vegas), told us that at Las Vegas/McCarran
International Airport, it takes passengers about 35 to 45 minutes to
get to their gate from the curb. Upon arrival, a high percentage of
passengers claim a bag once they deplane, which takes an average of 22
minutes. At nonpeak times, it will take a passenger 15 minutes to get a
taxi or onto a bus connection and another 15 to 20 minutes to get to
their hotel. This results in it taking nearly 1 hour to get to the Las
Vegas city center once the plane has arrived.
[17] Some stakeholders argue that high speed rail may require
additional security that would increase these times for high speed
rail.
[18] Airports in these countries generally have fewer security delays
than airports in the United States. According to Japanese airline
officials, air travelers can arrive at Japanese airports 15 to 20
minutes prior to a domestic departure.
[19] Daniel Brand, Thomas E. Parody, Poh Ser Hsu, and Kevin F. Tierney,
"Forecasting High-Speed Rail Ridership," Transportation Research Record
1341 (1992), 12-18.
[20] In addition to costs associated with driving, several other
factors may also influence travelers' decisions between traveling by
automobile or rail. For example, lower car-ownership rates in an area
may make rail a more attractive option, whereas higher car-ownership
rates could predispose travelers to drive rather than travel by train.
[21] The level of tolls and taxation is a decision by the government to
make automobile travel more expensive. It reflects a social commitment
to divert some travel away from highways and toward other transport
modes, such as rail. One might view the tolls and taxes as either
justified or excessive recompense for the use of public roads,
depending on one's view of the social costs of automobile compared with
rail travel.
[22] This is the average delay throughout the year and includes delays
caused by typhoons, earthquakes, snowfall, heavy rain, and other
natural disasters.
[23] To ensure on-time performance in Europe and Japan, train operators
are given strong incentives to stay on-time, including passengers
receiving a full ticket price refund in Spain if the train is delayed
more than 5 minutes, and driver pay deductions in Japan if the train is
delayed more than 1 minute due to human error.
[24] GAO, National Airspace System: DOT and FAA Actions Will Likely
Have a Limited Effect on Reducing Delays during Summer 2008 Travel
Season, [hyperlink, http://www.gao.gov/products/GAO-08-934T]
(Washington, D.C.: July 15, 2008).
[25] Some lines have limited shared track in metropolitan areas.
[26] The 18-mile Guadarrama tunnel is the world's fifth longest tunnel
and cost about $1.5 billion to build.
[27] While construction costs of maglev systems are higher than other
technologies, proponents of this technology cite reduced ongoing
maintenance and operations costs as an advantage that should be taken
into account.
[28] This project will construct new rail right-of-way to provide
service, but this rail right-of-way will primarily be built in existing
highway right-of-way.
[29] Bent Flyvbjerg, Mette K. Skamris Holm, and Soren L. Buhl,
"Underestimating Costs in Public Works Projects: Error or Lie?,"
Journal of the American Planning Association, vol. 68, no. 3 (2002).
Fifty-eight of the total 258 transportation infrastructure projects
studied were rail projects.
[30] Bent Flyvbjerg, Mette K. Skamris Holm, and Soren L. Buhl,
"Inaccuracy in Traffic Forecasts," Transport Reviews, vol. 26, no. 1
(2006). The study covered a total of 210 transportation infrastructure
projects.
[31] In this context, a model is a mathematical equation describing a
relationship among a set of variables.
[32] Benefit-cost analysis is an established method for evaluating
infrastructure projects in the United States. For example, Executive
Order 12893 states that expected benefits and costs should be
quantified and monetized to the maximum extent practicable when
evaluating federal infrastructure investments in the areas of
transportation, water resources, energy, and environmental protection.
Federal spending infrastructure programs include direct spending and
grants. Executive Order 12893, Principles for Federal Infrastructure
Investments, 59 Fed. Reg. 4233 (Jan. 31, 1994).
[33] Studies of proposed domestic projects that have been conducted
have found the potential for positive public benefits. For example, a
study of the proposed California statewide high speed rail project
found that the total benefits exceeded costs by more than 2 to 1. See
Daniel Brand, Mark R. Kiefer, Thomas E. Parody, and Shomik R.
Mehndiratta, "Application of Benefit-Cost Analysis to the Proposed
California High-Speed Rail System," Transportation Research Record, no.
1742, Paper 01-2959 (2001). Also see DOT/FRA, High Speed Ground
Transportation for America (Washington, D.C.: September 1997), 7-23
through 7-28, which finds numerous corridors with the potential for
positive economic benefits.
[34] Pub. L. No. 91-190, 83 Stat. 852 (Jan. 1, 1970); 42 U.S.C. § 4321
et seq.
[35] 40 C.F.R. § 1502.23.
[36] Efforts are under way to organize "cap-and-trade" markets for
emission rights, but currently participation in such arrangements is
voluntary.
[37] The proposed project between Victorville, California, and Las
Vegas, Nevada, proposed by Desert Xpress Enterprises, expects to be
financed solely with private funds.
[38] Pub. L. No. 110-432, § 501(d).
[39] GAO, Highway and Transit Investments: Options for Improving
Information on Projects' Benefits and Costs and Increasing
Accountability for Results, [hyperlink,
http://www.gao.gov/products/GAO-05-172] (Washington, D.C.: Jan. 24,
2005).
[40] TIFIA authorizes DOT to provide credit assistance for projects of
national significance. As of February 2008, the Federal Highway
Administration had approved 15 TIFIA projects totaling over $4.3
billion, with individual TIFIA direct loans and loan guarantees ranging
from $42.0 million to $916.8 million. Project sponsors did not indicate
why they plan to use TIFIA in lieu of other debt-financing mechanisms.
[41] TIFIA Program Guide (January 2007), 1-2.
[42] GAO, Surface Transportation: High-Speed Rail Projects in the
United States, [hyperlink, http://www.gao.gov/products/GAO/RCED-99-44]
(Washington, D.C.: Jan. 14, 1999).
[43] See 49 C.F.R. § 80.5.
[44] GAO, The Nation's Long-Term Fiscal Outlook: September 2008 Update,
[hyperlink, http://www.gao.gov/products/GAO-09-94R] (Washington, D.C.:
Nov. 7, 2008).
[45] Robert Puentes and Ryan Prince, Fueling Transportation Finance: A
Primer on the Gas Tax, Brookings Series on Transportation Reform,
Center on Urban and Metropolitan Policy, Brookings Institution (March
2003). In some states, excise taxes on gasoline and other fuels may be
used to fund transit projects, including rail transit.
[46] GAO, State And Local Governments: Growing Fiscal Challenges Will
Emerge during the Next 10 Years, [hyperlink,
http://www.gao.gov/products/GAO-08-317] (Washington, D.C.: Jan. 22,
2008); and, A Call For Stewardship: Enhancing the Federal Government's
Ability to Address Key Fiscal and Other 21st Century Challenges,
[hyperlink, http://www.gao.gov/products/GAO-08-93SP] (Washington, D.C.:
Dec. 17, 2007).
[47] Proposition 1A, Safe, Reliable High-Speed Train Bond Act, approved
November 2008.
[48] GAO, The High-Speed Rail Investment Act of 2001 (S. 250),
[hyperlink, http://www.gao.gov/products/GAO-01-756R] (Washington, D.C.:
June 25, 2001). Under the proposal, bondholders would have received tax
credits instead of interest payments, and the principal would have been
repaid from a trust fund established for that purpose.
[49] Tax-exempt private activity bonds are used for purposes such as
transportation and water infrastructure, including high speed rail
facilities. Tax-exempt means that the interest paid to bondholders is
generally not included in the gross income of bondholders for federal
income tax purposes. Private activity bonds allow tax-exempt debt to be
used by private entities to help finance qualified facilities. Private
activity bonds used for government-owned high speed intercity
facilities are not subject to state volume caps--that is, a maximum
amount of tax-exempt bonds that can be issued during a calendar year.
However, 25 percent of private activity bonds used for privately owned
high speed intercity facilities are subject to state volume caps. In
both cases, for a government-owned high speed intercity rail facility
or a privately owned high speed intercity rail facility, a government
entity must approve the private activity bonds.
[50] See ARRA § 1504. AARA also provides a temporary modification of
alternative minimum tax limitations for such bonds. See § 1503.
[51] GAO, Highway Public-Private Partnerships: More Rigorous Up-front
Analysis Could Better Secure Potential Benefits and Protect the Public
Interest, [hyperlink, http://www.gao.gov/products/GAO-08-44]
(Washington, D.C.: Feb. 8, 2008).
[52] The Desert Xpress project has made progress on its planning and
environmental review studies, but has not yet started right-of-way
acquisition or construction.
[53] DOT officials told us that certain Japanese railroads, including
JR Kyushu, JR Hokkaido, JR Shikoku, and JR Freight are owned by the
Japanese government and that the remote island JRs are not profitable
enough for privatization.
[54] According to French documents, in 2006, a French national law
authorized the national government and infrastructure manager to
develop major national and international rail infrastructure projects
through public-private partnerships.
[55] In the early 1990s, Europe adopted a scheme in which rail
operations were separated from rail infrastructure ownership and
management. Under this scheme, rail operators pay an access fee to use
rail infrastructure to provide service. This separation of rail
operations from rail infrastructure ownership and management is not
typically seen in the United States.
[56] The availability payments begin once the private sector entity
makes the rail line available to an operator(s) and are calculated on
the basis of the percentage of time the line is available to the
operator(s). The availability payments should cover the cost of
financing, constructing, and maintaining a high speed rail line, while
providing a return on investment.
[57] A line might not be available due to such things as routine
maintenance or capital improvements.
[58] [hyperlink, http://www.gao.gov/products/GAO/RCED-99-44].
[59] Texas High Speed Rail Authority, High Speed Rail in the Rear-View
Mirror: A Final Report of the Texas High Speed Rail Authority (October
1995).
[60] Pub. L. No. 110-432, § 306, codified at 49 U.S.C. § 24910.
[61] A preliminary national rail plan is to be developed within 1 year
after the enactment of the PRIIA, Pub. L. No. 110-432, § 307, codified
at 49 U.S.C. § 103(j)(2), (3), and (5).
[62] For the purposes of this section, "high speed" is defined as
intercity passenger rail service that could reasonably be expected to
reach top speeds of at least 110 miles per hour. Pub. L. No. 110-432, §
501(d), codified at 49 U.S.C. § 26106(h)(4).
[63] Pub. L. No. 110-432, § 502(d), codified at 49 U.S.C. § 26106 note.
The law defines "high speed rail corridors" as the Northeast Corridor
and those corridors which have been designated by the Secretary of
Transportation pursuant to provisions of the law. The latter corridors
were designated under laws that predated the PRIIA. The request for
proposals was issued on Dec. 16, 2008. 73 Fed. Reg. 76443 (December 16,
2008). This is just the first step in the process. Expressions of
interests received will be reviewed by the Secretary and possibly by a
commission formed by the Secretary. The results of these reviews will
be summarized in one or more reports to Congress, which will make
recommendations for further action regarding no more than one project
concept for each corridor.
[64] Pub. L. No. 110-432, § 224(c)(1),(2). The high speed rail corridor
studies are to be submitted to Congress within 1 year after enactment
of the PRIIA.
[65] See, for example, GAO, Surface Transportation: Principles Can
Guide Efforts to Restructure and Fund Federal Programs, [hyperlink,
http://www.gao.gov/products/GAO-08-744T] (Washington, D.C.: July 10,
2008); and Surface Transportation: Restructured Federal Approach Needed
for More Focused, Performance-Based, and Sustainable Programs,
[hyperlink, http://www.gao.gov/products/GAO-08-400] (Washington, D.C.:
Mar. 6, 2008).
[66] DOT/FRA, High Speed Ground Transportation for America.
[67] Certain provisions of the PRIIA reflect intermodal considerations;
for example, FRA's high speed rail project selection will be based, in
part, on a project's anticipated ability to help relieve air and
highway congestion.
[68] [hyperlink, http://www.gao.gov/products/GAO-08-400].
[69] [hyperlink, http://www.gao.gov/products/GAO-08-744T].
[70] Pub. L. No. 110-432, § 501(d), 502, codified at 49 U.S.C. § 26106.
[71] Pub. L. No. 110-432, § 307, codified at 49 U.S.C. § 103(k).
[72] [hyperlink, http://www.gao.gov/products/GAO-08-400].
[73] Executive Order 12893, Principles for Federal Infrastructure
Investment. 59 Fed. Reg. 4233 (Jan. 31, 1994).
[74] Pub. L. No. 110-432, § 501(d), codified at 49 U.S.C. § 26106(g).
[75] Bent Flyvbjerg, "Measuring inaccuracy in travel demand
forecasting: methodological considerations regarding ramp up and
sampling," Transportation Research Part A: Policy and Practice, vol. 39
(2005), 522-530.
[76] For example, according to French officials, a project's financial
internal rate of return should exceed 8 percent, and the socioeconomic
internal rate of return should exceed 4 percent for the project to
proceed.
[77] European Commission, Guide to Cost-Benefit Analysis of Investment
Projects, Final Report (June 16, 2008). This guide updates and expands
the previous edition (2002), which in turn was the follow-up of a first
brief document (1997) and of a subsequent substantially revised and
augmented text (1999). The guide was developed under specific
requirements for the European Commission to provide guidance on project
appraisals because projects receiving funding from the European Union
require a cost-benefit analysis.
[78] [hyperlink, http://www.gao.gov/products/GAO-08-744T].
[79] Pub. L. No. 110-432, § 501, codified at 49 U.S.C. § 26106
(e)(2)(C)(ii).
[80] Pub. L. No. 110-432, § 502, codified at 49 U.S.C. § 26106 note.
[81] Section 502 requires the Secretary to establish and support the
formation of commissions, representing affected governors, mayors,
freight railroads, transit authorities, labor organizations, and
Amtrak.
[82] Congress created the National Surface Transportation Policy and
Revenue Study Commission in 2005 under Section 1909 of the Safe,
Accountable, Flexible, Efficient Transportation Equity Act--A Legacy
for Users, Pub. L. No. 109-59, § 1909, 119 Stat. 1471 (Aug. 10, 2005).
[83] DOT/FRA, High Speed Ground Transportation for America (Washington,
D.C.: September 1997), 2-1.
[84] Joseph P. Schwieterman and Justin Scheidt, "Survey of Current High-
Speed Rail Planning Efforts in the United States," Transportation
Research Board of the National Academies, Transportation Research
Record: Journal of the Transportation Research Board, no. 1995
(Washington, D.C.: 2007).
[85] The survey authors considered the Washington, D.C., to New York
City, New York, and the New York City, New York, to Boston,
Massachusetts, high speed rail project as two separate projects. For
the purposes of this report we considered these projects as one since
they are both part of Amtrak's Northeast Corridor Acela Express
service. The author also considered the Bay Area, California, to San
Diego, California, project and the Sacramento, California, to San
Diego, California, project as two separate projects. Again, for the
purposes of this report, we considered these projects as one since they
are both part of the California High Speed Rail Authority's planned
statewide high speed rail initiative. Finally, the author considered
the Washington, D.C., to Raleigh, North Carolina, project and the
Raleigh, North Carolina, to Charlotte, North Carolina, project as two
separate projects. For the purposes of this report, we considered these
projects as one, since they are considered by project sponsors to be
one project under the Southeast High Speed Rail Corridor development
initiative.
[86] The Atlanta, Georgia to Chattanooga, Tennessee, project is
considering both magnetic levitation and electrified locomotives.
[87] Pub. L. No. 105-178, 112 Stat. 107 (1998).
[88] Pub. L. No. 109-59, 119 Stat. 1144 (2005).
[89] Pub. L. No. 110-244, 122 Stat. 1572 (2008).
[90] A Finding of No Significant Impact presents the reasons why an
action, not otherwise excluded, will not have a significant effect on
the human environment and for which, therefore, an environmental impact
statement will not be prepared.
[91] This program was established in the fiscal year 2008 DOT
appropriations act that provided $30 million in fiscal year 2008 in
matching grants to states for intercity passenger rail capital
projects.
[92] The FOX Consortium consisted of the Fluor Daniel Corporation, a
U.S.-based engineering and construction firm, Odebrecht Contractors of
Florida, Bombardier Corporation, the manufacturer of rail passenger
cars, and GEC-Alstom (now known as Alstom).
[93] Texas TGV Corporation consisted of Morrison Knudsen (USA),
Bombardier (Canada), Alstom (France/UK), Crédit Lyonnais (France),
Banque IndoSuez (France), Merrill Lynch (USA), and others.
[94] Surveys may collect data on circumstances surrounding actual
choices (i.e., "revealed preference"), or they may collect data on a
hypothetical setting for a new mode of transportation (i.e., "stated
preference").
[95] In this context, a model is a mathematical equation describing a
relationship among a set of variables.
[96] Edward A. Beimborn, "A Transportation Modeling Primer," Center for
Urban Transportation Studies, University of Wisconsin-Milwaukee (June
2006). Kenneth A. Small and Clifford Winston, "The Demand for
Transportation: Models and Applications," UCI-ITS-WP-98-8, Institute of
Transportation Studies, University of California/Irvine (October 1998).
[97] Charles Rivers Associates Incorporated, Independent Ridership and
Passenger Revenue Projections for High Speed Rail Alternatives in
California, draft final report prepared for the California High-Speed
Rail Authority, CRA Project no. 1680-04 (January 2000).
[98] These estimates are derived from binary choice models, often with
the use of what are known as probit or logit specifications.
[99] Camerer, Colin F., George Loewenstein, and Matthew Rabin (eds.),
Advances in Behavioral Economics, Princeton University Press, 2003.
[100] BSL Management Consultants. Maglev or high speed rail in the Las
Vegas to Southern California Corridor. A report prepared at the request
of the City of Victorville. November, 2008.
[101] The Desert Wind service originated in Chicago and operated via
Denver, Salt Lake City, and Las Vegas to Los Angeles.
[102] The Clark County Department of Aviation is responsible for the
management of five aviation facilities in the Las Vegas region,
including McCarran International Airport and the proposed Ivanpah
Airport.
[End of section]
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