Cost Control cp
Download 0.6 Mb.
|
- Navigate this page:
- Solvency (HSR)
Solvency (HSR)HSR projects always have tax overruns—empirics, shortfalls, and projected costs proveCox 11, international public policy consultant. He is the principal and sole owner of Wendell Cox Consultancy/Demographia, based in the St. Louis, (Wendell, The Tampa to Orlando High-Speed Rail Project: Florida Taxpayer Risk Assessment, Reason Roundation report, January 2011, http://www.infrastructureusa.org/wp-content/uploads/2011/01/florida_high_speed_rail_analysis.pdf (Google Scholar)//AG 1. Accuracy of Capital Cost Projections: International Experience: International research indicates that high-speed rail projects often exceed their capital cost estimates. European academics Bent Flyvbjerg, Nils Bruzelius and Werner Rothengatter examined 258 transportation infrastructure “megaprojects” covering 70 years in North America, Europe and elsewhere.6 They found that capital cost escalation from the point of project approval to completion can be as much as 50 percent to 100 percent above projections. The average capital cost overrun for passenger rail projects was 45 percent and cost overruns above 40 percent in fixed prices are common, especially for rail projects and overruns above 80 percent are not uncommon.7 Moreover, they found that capital cost overruns were pervasive, occurring in 9 out of 10 projects. The following examples illustrate high-speed rail risks that have been assumed by taxpayers: ! The government of the United Kingdom has assumed £5.2 billion in debts of the builder/operator of the high-speed rail Channel Tunnel link to St. Pancras Station. This is in addition to the £1.7 billion that had been granted by the government to the builder/operator to construct the line.8 ! The UK government has decided to sell this high-speed rail line for an expected £1.5 billion after it cost at total of £6.9 billion, a loss of well over £5 billion including debt service payments.9 ! According to the president of the Korean national railway (Korail), the South Korea highspeed rail system had capital costs that were three to four times the original projection.10 The Taiwan high-speed line was to have been built by a private company and operated by them without any government funding (Florida’s plans also call for private operations without government subsidy). But due to huge losses, the Taiwanese government has taken control of the company's board and nearly $10 billion in debt has now been guaranteed by the government.11 ! The projected costs of the California high-speed rail project escalated at least 50 percent from 1999 to 2008.12 If the Tampa to Orlando high-speed rail line experiences cost escalation typical of international high-speed rail projects, it will cost between $0.54 billion and $2.7 billion more than projected. Based on averages, most likely the overrun would be about $1.2 billion, all of which would be the responsibility of Florida taxpayers. 2. Comparison to the California High-Speed Rail Project: A comparison to the costs of the recently approved first segment of the California high-speed rail project suggests a greater risk to Florida taxpayers than indicated in the international research. The California high-speed rail project is intended to serve from Los Angeles to San Francisco in its first phase and is currently projected to cost approximately $45 billion. A considerable funding shortfall exists and it is not known when service will begin. The cost of the Tampa to Orlando line is projected at $32.1 million per mile (based upon the cost of $2.7 billion), which is well below the estimated costs of the proposed California segment. This includes all projected costs for building the track, purchasing trains and building stations and facilities, divided by the number of miles (84). The initial segment of the California system is projected to cost $64 million per mile, for a total cost of $4.15 billion for 64 miles.13 The California segment is not being built to full high-speed rail standards, because of a legal requirement that the line be usable by conventional Amtrak services if the Los Angeles to San Francisco project is not completed.14 The line would be upgraded to full high-speed rail standards when and if the much longer route is completed. Solvency (HSR)HSR cost overruns are huge – turns solvency because congress would cancel the planLarkin 11 – Plain Dealer's editorial director from 1991 until his retirement in 2009 (Brent, “Rail money that Ohio spurned chugs into the California sunset: Brent Larkin” Cleveland.com, Dec 24, 2011, http://www.cleveland.com/opinion/index.ssf/2011/12/rail_money_that_ohio_spurned_c.html)//ctc Across the country, high-speed rail projects are flying off the tracks, with states either pulling the plug on them or grappling with epic cost overruns. And nowhere are those overruns worse than in California, where most of Ohio's $400 million ended up. U.S. taxpayers have contributed $3.5 billion in federal stimulus to the initial, 178-mile leg of California's 800-mile, high-speed rail project. And while not an inch of track has been laid, the cost overruns are already staggering. A state report issued last month estimated the cost of the project at $98 billion -- nearly triple the original estimate of $33 billion. That's more than $122 million a mile. The completion date has been moved from 2020 to 2033. So gigantic are the overruns that the House Transportation and Infrastructure Committee has held two hearings to examine how a project could go so wrong so soon. And three weeks ago, California's legislative budget office said the overruns are now so great that it is "highly uncertain" the project will ever be built. With a couple of exceptions, newspaper editorial boards in the state have turned against the rail plan, as have some Democratic legislators who were once among its loudest cheerleaders. In November, a Washington Post editorial begged, "Somebody please stop this train." There is now a move afoot to put the issue before California's voters. If that happens, polls show it's doomed. The California project is managed by the Parsons Brinckerhoff engineering firm. This is the same outfit the Strickland administration handed a $23 million no-bid contract to do planning and design work on the Ohio project that Kasich killed. But California is hardly alone. Earlier this year, the Florida Supreme Court ruled that Gov. Rick Scott had every right to reject $2.4 billion in federal funds for an 84-mile rail project linking Tampa and Orlando. Explaining his decision, the governor cited huge cost overruns, high maintenance costs and wildly optimistic ridership projections. In Wisconsin, Gov. Scott Walker turned down more than $800 million in federal funds for a high-speed rail project there. In theory, high-speed rail is a great thing for the country's population centers -- a concept good for the economy and environment. But the peanut-butter approach used by the Obama administration to dispense stimulus money for high-speed rail seemed to be dictated more by politics than practicality. Directory: files files -> Answer True False 2 points Question 2 files -> Integer programming and game theory files -> 4 Integer Programming files -> Bpa vehicle Window Repair Scenario #1 task: Procure vehicle window relacement. Objective files -> Pop Warner History files -> North Carolina Inclusion Initiative Mapping Where Children with ieps are Being Served Purpose files -> Fall 2013 Spring 2014 Program Data: Standard 1 Exhibit 4d files -> Hanban – asia society confucius classrooms network 2010 request for proposal files -> Northern England’s set-jetting locations Download 0.6 Mb. Share with your friends:
|