**Fiscal Discipline da 2
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- HSR is notorious for cost overruns and inaccurately low cost estimates
- Cost of HSR outweigh the economic benifits
Link-HSRHSR projects are expensive and depend on long-term subsidies-California proves Williams, reporter, 2012 [Lance, “Bullet train's low operating costs are 'elephant in room,' experts say,” April 30, 2012, California Watch http://californiawatch.org/print/15973]bg In recent months, the CEO of the controversial project resigned [2]. Brown installed Dan Richard, an official with political and transportation industry connections, as new board chairman. More importantly, the California High-Speed Rail Authority dramatically revamped its business plan, slashing as much as $30 billion[3] from the price tag for building the San Francisco-to-Los Angeles system – from $98 billion to as little as $68 billion. But none of those changes addressed what a panel of outside financial experts has styled “the elephant in the room” for California’s proposed high-speed rail system – its extraordinarily low projected operating costs. If the bullet train project is to pencil out, it must operate far more economically than any high-speed rail system in the world, according to the experts, who include former World Bank executive William Grindley. Unless these extraordinary economies actually are achieved, the train will require alarmingly high annual operating subsidies “forever,” as the experts wrote in a report [4] last month. The annual operating deficit could top $2 billion, they wrote. HSR is notorious for cost overruns and inaccurately low cost estimatesReisman, staff writer, 12 [Will, SF Examiner Staff Writer, “High-speed rail cost increase latest in public works projects,” 1-8-12, http://www.sfexaminer.com/local/transportation/2012/01/high-speed-rail-cost-increase-latest-public-works-projects] Overpromising and underdelivering have become the hallmark of California’s public works projects, and the latest plan to engage in this dubious practice is the state’s high-speed rail system. Originally estimated to cost $25 billion, the price tag for high-speed rail has now swelled to $98 billion, an explosion that has been assailed by critics and generated calls for the plan to be abandoned. Making that projection even more worrisome is that the original $25 billion estimate entailed the entire high-speed rail route from San Diego to Sacramento, while the newly revised $98 billion projection only details the costs from San Francisco to Anaheim. Click on the photo to the right to see photos from projects with cost overruns. The final tally of the state’s high-speed rail project will go well past $100 billion. Still, the story of high-speed rail is little different than the wildly vacillating cost estimates that have plagued other major projects. When the BART system was finally completed in the early 1970s, the total cost of the project was $1.6 billion — $624 million more than originally projected. BART’s project was so disappointing that it constitutes a chapter in Peter Hall’s 1980 book, “Great Planning Disasters.” It’s not alone. The rebuild of the Bay Bridge’s eastern span will cost $6.3 billion — more than four times the original projection of $1.5 billion, and more than 30 times an earlier $200 million estimate to retrofit the span. When the idea to connect Marin and San Francisco counties was first developed, the public was told that a bridge would cost $17 million. The Golden Gate Bridge ended up costing $35 million to complete. The BART extension to San Francisco International Airport, Muni’s Central Subway and T-Third Street expansion plans, and the Santa Clara Valley Transportation Agency’s light-rail system are just some of many examples of public works projects that exceeded their original price tags. According to a report by Caltrans, the state’s transportation department, a public works project with a value of more than $100 million is likely to have cost overruns ranging from 40 percent to 60 percent. Rod Diridon, executive director of the Mineta Transportation Institute and former member of the California High-Speed Rail Authority, said there are a number of reasons that contribute to this scenario. Federal mandates require that project backers release a cost estimate at the end of a plan’s concept study — a very rough sketch that often changes greatly as the undertaking is developed. As details emerge, the public often demands changes to the plan’s design, fearful that the project will interfere with their daily lives. That forces engineers and architects to come back with costlier versions of the original project. Redesigns create delays, which further drive up the overall cost of the project. “I compare public works projects to those hurricane forecasts that have these ‘cones of uncertainty’ where damage may be felt,” said Tom Radulovich, a BART board member. “Well, the further a project is from being completed, the bigger its ‘cone of uncertainty’ is.” John Knox White, a program director at TransForm, a regional transit advocacy group, said policymakers become enamored with an idea for a project, and then put the rosiest possible projections before the public to garner support for the plan. “If there is an idea, no one wants to overestimate the cost, because the more expensive it becomes, the less likely there will be support,” Knox White said Cost of HSR outweigh the economic benifitsO’Toole, cato institute senior fellow, 2009 (randal, 8/24/2009, cato, “high speed fail”, http://www.cato-at-liberty.org/high-speed-fail/, 6/26/2012,) TAS In a four-part series on the New York Times Economix blog, Harvard economist Edward Glaeser scrutinized high-speed rail and concluded that the benefits are overwhelmed by the costs. After making generous assumptions regarding the costs, user benefits, environmental benefits, and effects on urban development, Glaeser concludes that all the benefits of high-speed rail would still be less than half the costs. As Washington Post writer Robert Samuelson observes, the Obama administration’s vision of high-speed rail is “a mirage. The costs of high-speed rail would be huge, and the public benefits meager.” Yet even Samuelson falls victim to the common assumption that high-speed rail “works in Europe and Asia” because population densities in those places are higher than in the United States. The truth is that high-speed rail doesn’t work in Europe or Asia either. Japan and France have both spent about as much on high-speed rail as they have on their intercity freeway systems, yet the average residents of those countries travel by car 10 to 20 times as much as they travel by high-speed rail. They also fly domestically more than they take high-speed rail. While the highways and airlines pay for themselves out of gas taxes and other user fees, high-speed rail is heavily subsidized and serves only a tiny urban elite.
(randal, 10/31/2012, cato, “High-Speed Rail: The Wrong Road for America”, http://www.cato.org/publications/policy-analysis/highspeed-rail-wrong-road-america, 6/26/12,) TAS In the face of high energy prices and concerns about global warming, environmentalists and planners offer high-speed rail as an environmentally friendly alternative to driving and air travel. California, Florida, the Midwest, and other parts of the country are actively considering specific high-speed rail plans. Close scrutiny of these plans reveals that they do not live up to the hype. As attractive as 110-to 220-mile-per-hour trains might sound, even the most optimistic forecasts predict they will take few cars off the road. At best, they will replace for profit private commuter airlines with heavily subsidized public rail systems that are likely to require continued subsidies far into the future. Nor are high-speed rail lines particularly environmentally friendly. Planners have predicted that a proposed line in Florida would use more energy and emit more of some pollutants than all of the cars it would take off the road. California planners forecast that high-speed rail would reduce pollution and greenhouse gas emissions by a mere 0.7 to 1.5 percent—but only if ridership reached the high end of projected levels. Lower ridership would nullify energy savings and pollution reductions. More by Randal O'Toole These assessments are confirmed by the actual experience of high-speed rail lines in Japan and Europe. Since Japan introduced high-speed bullet trains, passenger rail has lost more than half its market share to the automobile. Since Italy, France, and other European countries opened their high-speed rail lines, rail's market share in Europe has dwindled from 8.2 to 5.8 percent of travel. If high-speed rail doesn't work in Japan and Europe, how can it work in the United States? As megaprojects—the California high-speed rail is projected to cost $33 to $37 billion—high-speed rail plans pose serious risks for taxpayers. Costs of recent rail projects in Denver and Seattle are running 60 to 100 percent above projections. Once construction begins, politicians will feel obligated to throw good taxpayers' money after bad. Once projects are completed , most plans call for them to be turned over to private companies that will keep any operational profits,while taxpayers will remain vulnerable if the trains lose money. In short, high-speed rail proposals are high cost, high-risk megaprojects that promise little or no congestion relief, energy savings, or other environmental benefits. Taxpayers and politicians should be wary of any transportation projects that cannot be paid for out of user fees. 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 0.63 Mb. Share with your friends:
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