One of the most consistent editorial opponents of high speed rail in California has been the MNG newspapers. They opposed Prop 1A, they’ve called HSR a boondoggle on occasions too numerous to count. So it should surprise nobody to learn they’ve taken the new cost estimates as a chance to renew their attack on HSR:

LAST YEAR, WHEN voters were presented with Proposition 1A, the $9.9 billion rail bond, proponents of a high-speed rail system estimated the fare from the Bay Area to Los Angeles would be $55. Now that the bond measure has passed, the forecast price of a ticket is $105.

The increase is not surprising given that the cost estimates for building the high-speed rail system have also risen dramatically to $42.6 billion, which also is no surprise.

The $55 fare was competitive with airline prices. But a $105 ticket does not compare well with Southwest Airlines’ $59 fares from the Bay Area to Los Angeles.

First, I strongly doubt that Prop 1A passed because the estimated fare was $55. People understood in 2008 that oil prices meant that we needed an alternative to oil-based travel. Second, MNG repeats the fallacy that airfares will remain that low in the future – Southwest’s fuel hedges, locked in when oil was at $50 or $60 a barrel, begin expiring next year, and their prices will be higher. Deutsche Bank has estimated oil prices will hit $175/bbl by 2017. But then, MNG editorialists have never really accepted the reality of peak oil. As we see in this editorial, they assume that conditions in 2009 will last indefinitely, which is a foolish assumption.

It is becoming more apparent that predictions about construction costs, ridership, fares and revenues are highly unreliable.

This is is a dishonest statement. They assume that because things change as more information is learned, that suddenly the predictions are “unreliable” and so is the system. That’s just not so. MNG newspapers have lost a lot of money and circulation in recent years. Does that make their newspapers unreliable?

As the cost of construction rises, fares will go up, ridership will decrease and revenues are likely to drop below estimates.

The cost of construction doesn’t necessarily have to rise significantly from this point. The only think that would cause such an increase is unexpected inflation, which would be out of CHSRA’s control; or a decision to build things like tunnels on the Peninsula, which would only partly be in CHSRA’s control.

More importantly, there’s not necessarily a link between the cost of construction and fares. Nobody has asked the interstate highway system to repay the over $400 billion it cost to build. We don’t pay tolls or gas taxes to cover that cost. Why shouldn’t we subsidize the construction of HSR lines the same way we did the interstates, and have fares go to paying operations and seeding the construction of new routes?

Predictions that a rail system will be operationally profitable are little more that wishful thinking. If estimates of costs, fares and ridership are grossly inaccurate after one year in which there was virtually no inflation, how can anyone have confidence of the accuracy of forecasts 25 years from now?

Yet another dishonest statement. (Seriously, aren’t journalists supposed to believe in accuracy and credibility?) The cost estimate changed not because of inflation between 2008 and 2009, but because the federal government mandated that costs be calculated in “year of expenditure” dollars, which assuming higher inflation over the next 10 years produced the $42.9 billion estimate. If inflation remains flat over the next 10 years, then we might actually see a final cost of $34 billion or so after all.

The high-speed rail system was flawed from the start. California does not have population densities close to those in Japan and Europe, which have successful high-speed rail systems.

As we have repeatedly proved, Spain and California have very similar population densities – and last time I checked, not only was Spain in Europe, but it also has a very successful HSR system.

Also, California has a poor record of accomplishing large construction projects anywhere near original estimates or completion forecasts.

This is untrue, since there are plenty of projects being built on-time and on-budget, such as the Metro Gold Line. There are indeed projects that weren’t built on-time or on-budget, such as the east span of the Bay Bridge or the BART to SFO extension, but that was largely due to design changes made during the project construction, which doesn’t necessarily have to happen with HSR.

Unfortunately, a majority of voters in November 2008 approved Prop. 1A, authorizing the sale of $9 billion in bonds for high-speed rail. Backers of the rail system believe they can appeal to the federal government and private investors to attract the additional $33.6 billion needed (by the latest estimates) to complete the project.

It is unlikely the federal government will supply a major percentage of what is needed to build the rail system. Private investors are even less likely to risk money on a project where the cost and ridership forecasts have changed so dramatically for the worse in just one year.

MNG is clearly upset with their readers for having voted for Prop 1A, so they choose to assume the federal government won’t provide the major percentage of what we need. Perhaps they won’t, but there’s every reason to believe they will. The $8 billion HSR stimulus and ongoing $2.5 billion for HSR are just the start – if we can get a stable, sustainable, and long-term funding source for HSR in the next transportation bill, then the federal government should definitely be able to provide the funding we need.

Of course, we can expect MNG to keep writing these kinds of nonsense editorials up to the time the HSR system opens from SF to LA, and they’ll probably call it a boondoggle after it hits its ridership goals and generates operating surpluses. It’s a shame that a Bay Area media conglomerate like them chooses to fill its editorial pages with such misinformation, but that’s why this blog exists – to counter that with the truth.