BY WINNIE CHEONG, VICTOR MAO, SONIA TORRES, JUNE TRAN, DANICA TONG, RAYMOND WONG, AND OLIVER YEN

High Speed Rail – A Biased View on the Costs and

Sustainabiltiy

High Speed CostsTable 1 Asian High Speed Rail Project Overview

Japan Taiwan Korea China

Origin destination

Tokyo–Shin-Osaka

Shin-Osaka–Hakata

Tokyo-Morioka

Omiya-Niigata

Taipei-Zuoying

Seal-Busan

Being-Tianjing

Line Length(KM)515.4 553.7 496.5 296.5 345 408 115

Operating Oct-64 Mar-75 Jun-82 Nov-82 Jan-17 Apr-04 Aug-08

Construction cost

Planned 197 (billion) yen

750 (billion)yen

880 (billion)yen

580(billion) yen

460 (billion)Taiwan dollar

5.8 Trillion won

13 billion yuan

Actual 330 910 2600 1700 480 22 14

Actual (Billion dollar/km

0.64 1.6 5.4 6.1 4.1 4 1.8

Costs

Environment study

Preliminary design

Purchase land

Build stations

Create more tunnels, bridges and fences.

Purchase costly new sensors

Monitoring systems

Labor

Technology

Where will the money come from?

An undertaking of this size will require a great deal of capital. This capital funding to develop the high-speed rail project will come from federal, state, local and private sources.

Initial Funding

The initial funding for the project was approved by California voters on November 4, 2008, with the passage of Proposition 1A authorizing the issuance of US$9.95 billion in general obligation bonds for the project.

High Speed Rail Stimulus FundsIn 2009 The Obama administration designated $8 billion in stimulus funds for high-speed rail corridors across the nation.

Experts say the $8 billion in stimulus money isn’t enough to pay for even one high speed system.

Obama’s 2010 budget proposed state grants for high speed rail totaling $5 billion over five years

High Speed Rail Stimulus Funds 2The administration specified where and how those billions of high-speed rail dollars would be allotted.

The biggest winners were two long-planned bullet-train routes: Florida (designed to span the 80 miles between Tampa and Orlando) took in $1.25 billion of federal money California ( a proposed system that would eventually connect Sacramento, San Francisco, Los Angeles, and San Diego) collected $2.3 billion.

Stimulus Fund Allotment

LOS ANGELES-SAN FRANCISCO $2.34 billion The infusion adds to a $9-billion bond approved by voters in 2008.

CHICAGO-ST. LOUIS $1.10 billion Track signal upgrades will increase top speeds from 79 to 110 mph.

MADISON-MILWAUKEE $810 million Most of the funds will go toward building new and refurbished stations.

Stimulus Fund Allotment 2

RALEIGH-CHARLOTTE $520 million Nearly 30 piecemeal projects will bump passenger service up to 90 mph. TAMPA-ORLANDO $1.25 billion The 84-mile project requires new track that is physically separated from roads and freight traffic.

Counter-Argument

The construction of high speed railway may bring economic benefits to California.

There are examples in other countries, where high speed rail has provided work and potentially stimulated economies.

Counter-Argument 2

For example, the GDP of China is increasing rapidly after building a high speed train (Rick Harnish, the executive director of the Midwest high speed rail association ). The construction of the line may be the cause.However, there are other alternative factors, such as other infrastructure or new government policy

Repaying the Cost

After the high speed rail line is built, it requires riders in order to keep it running and regain the money used in construction. However, the question is whether or not the estimates put forth by proponents of the high speed rail are accurate.

China 1

China’s Beijing – Tianjin high speed rail line measures 115 km in length. It was planned to cost 13 billion Yuan, but ended up costing 14 billion.

China 2

The ridership required in the first year to satisfy the operating margin was 24 million. However, actual ridership was 19 million.

Taiwan 1

Taiwan built a high speed line from Taipei–Zuoying that is 345 km in length and opened in the January of 2007. It went 20 billion Taiwanese dollars over the estimated price.

Taiwan 2

The estimated ridership for the first year was 51 million. The actual ridership was 19 million, far from the needed 67 million required first year traffic volume.

Korea 1

Korea’s line opened in the April of 2004 and runs from Seoul–Busan. It measures 408 km in length and was originally estimated to cost 5.8 trillion won. The final cost was a dramatically increased 22 trillion won. The estimated

Korea 2

The estimated ridership for the Seoul – Busan line was 69-130 million. The actual ridership was a disappointing 31 million.

Concluding Facts

• Individual states cover the majority cost of maintenance and investment • Funds for projects must be approved on a ballot • $9.95 billion in bonds approved in 2008 with only 52.7% of the votes • States are overburdened

Concluding Facts• Difference between what states spend on infrastructure and what they take in through taxes related to infrastructure is producing a total deficit of $181 billion • Congress is reducing federal funding on infrastructure • Available federal funding continues to favor capital projects rather than maintenance and operational funding on existing systems

References (Information)

Utsunomiya, Mariko1,"Financial Lessons From Asian Experience In Constructing And Operating High Speed Train Networks." Transportation 38.5 (2011): 753-764. Science Full Text Select (H.W. Wilson). Web. 24 Oct. 2013.

Julian, Liam. "The trouble with high-speed rail." Policy Review 160 (2010): 3+. Opposing Viewpoints In Context. Web. 17 Oct. 2013.

Brown, Stuart F. "Revolutionary RAIL." Scientific American 302.5 (2010): 54-59. Academic Search Premier. Web. 24 Oct. 2013.

Olea, Carlos A. "Financing Our Future." Civil Engineering (08857024) 83.4 (2013): 52-76. Academic Search Premier. Web. 24 Oct. 2013.

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