The High Cost of High-Speed Trains: Is It Worth It?

High-speed trains have been a topic of interest and controversy for years. With ambitious projects across different regions, they have captured the attention of planners and taxpayers alike. However, the financial burden of these projects often overshadows their purported benefits. In this article, we will examine the true cost of high-speed trains, particularly in the context of California, the Northeast corridor, and France. We will also explore whether the economics and value justify the expense.

The Case of California's High-Speed Train

California's high-speed train project has long been a subject of debate. In 2008, Californians approved a $9.95 billion state bond measure to fund the initial phases of the project. However, the actual cost has skyrocketed due to inflation and cost overruns. According to experts, the current estimate exceeds $100 billion. This translates to approximately $10,000 per taxpayer, including interest and expected cost overruns. This considerable expense raises questions about the fiscal sustainability of such projects in the face of existing financial liabilities.

High-Speed Rail Economics: A Comparative Analysis

The Northeast corridor's high-speed rail project provides a telling example of the economic viability of such initiatives. According to Amtrak, the cost of constructing a high-speed rail train in the Northeast corridor is estimated at $500 million per mile. While this seems substantial at first glance, it's important to consider the current transportation habits of the American populace. Approximately 75% of Americans commute by car, making it challenging for high-speed rail to compete economically.

High-Speed Train Ticket Prices: A Reality Check

The cost of high-speed train tickets can vary significantly based on when you purchase them. For instance, consider a journey from Milan to Rome, a distance of 477.1 km (296.5 miles). On November 22, 2021, the cost of a ticket on the closest 16 trains departing that day ranged from €49.90 to €95.00. However, if you purchased the ticket for January 11, 2022, the prices dropped to €49.90 to €58.90. This price elasticity highlights a significant difference in cost based on purchase time, making high-speed rail a less favorable option for last-minute travelers.

The French Experience: A Tragic Example

France, a pioneer in developing high-speed rail technology, provides a cautionary tale. Despite massive investments in the 1980s, the French national train company (SNCF) has faced insurmountable debts. In 2019, the French government budgeted a small surplus that was entirely allocated to subsidizing the SNCF. This amounts to approximately 65 billion euros, an unsustainable burden given the company's debt-laden state. The decision to maintain outdated technology, despite better alternatives, has led to substantial financial strain on the taxpayer.

Elon Musk's Airless Bullet Train: Unattainable Dreams?

Elon Musk's vision of the "airless bullet train" has attracted significant attention. However, despite the apparent technological advancements, the project remains unfunded and unviable. Musk's track record with successful ventures like SpaceX and Tesla has fueled optimism, yet the high-speed rail industry is struggling to secure substantial capital. As a result, the dream of widespread adoption of high-speed rail faces significant barriers.

Conclusion: A Wise Investment?

The high cost of high-speed trains, evidenced by California’s project and the French experience, raises critical questions about their fiscal and economic viability. While high-speed rail can undoubtedly offer significant benefits, such as reducing traffic congestion and emissions, the financial burden cannot be ignored. It is imperative to carefully evaluate the long-term costs and benefits before committing to such ambitious and costly projects. Otherwise, we risk perpetuating what some have called a “walking dead” company, with squandered resources and decades of wasted investment.