The 2009 Business Plan Is Out

Dec 14th, 2009 | Posted by

Submitted one day early, the 2009 California High Speed Rail Business Plan is now available to the public. It is 145 pages long, but there are two basic points that you’re almost certainly going to hear about over the coming hours and days:

1. The estimated cost to build Phase I of the project is $42.6 billion

2. Estimated HSR fares are 83% of airfares

Both of those are higher than before, which will almost certainly lead to a new round of “oh my god high speed rail is a boondoggle we can’t afford, we have to kill it before it bankrupts us!” nonsense from the usual suspects.

But here at the California High Speed Rail Blog, we prefer common sense over misinterpretations. Even at $42 billion, HSR is a bargain given the cost of expanding freeways and airports to meet the same demand, a cost estimated to be anywhere from $80 to $150 billion. It’s also a bargain given that the cost of doing nothing is not zero – unchecked global warming, soaring oil prices, and a lack of green jobs will all cause widespread economic damage, whereas HSR is an investment in our future that will not only pay for itself, but will generate new savings, new income, new jobs, and new economic opportunities for generations to come.

That has to be weighed against the HSR deniers, the defenders of the status quo, who WILL argue that any change in the basic elements of the project, particularly cost, somehow proves the project is flawed, somehow proves the CHSRA is less than honest, somehow proves they were right all along. It does no such thing. So as the usual suspects ready their slings and arrows, let’s be clear on what the new business plan means.

First, the cost.

The 2008 Business Plan assumed a system cost of $33.6 billion. The 2009 Business Plan assumes a system cost of $34.9 billion. So where does the $42.9 billion number come from?

The first two numbers are in 2008 dollars. However, as a condition of receiving federal stimulus money, the CHSRA was told they had to cost it out in “year of expenditure” dollars – the projected cost when the money is actually spent. Assuming inflation, the overall cost rises to $42.9 billion dollars.

In other words, the cost increase is entirely outside the CHSRA’s control. It’s not because they screwed up, it’s not because the system is flawed. It’s because the feds told them to take a guess at inflation over the next 10 years.

And it’s a guess. Inflation could be much higher. Or deflation could continue and the final cost could be much lower.

What we do know is that this cost estimate is a more credible estimate. Assuming key elements of the project don’t change, such as route, there’s no reason to assume the final cost would be higher than $42.9 billion. That is, unless the Peninsula NIMBYs get their way and a tunnel is built from South San Francisco to Mountain View, in which case the cost would soar.

It’s good that we have a more credible estimate now. It produces less chance of sticker shock in the future. It helps us know what the costs are likely to be, and enables us to ensure we can deliver a project on-time and on-budget. And while the HSR deniers will claim that the 2008 estimates were misleading, the fact is that it makes sense to price it out in 2008 dollars, since especially these days, trying to determine future inflation rates is a total crapshoot.

The second issue is the cost of fares. This is linked to ridership, so it’s worth spending some time on the matter.

There is no inexorable force dictating fares. The Authority can basically choose the fares however they please. If they want to have fares set at 50% of airfare, they can do so. If they want to have fares set at 100% of airfare, they can do so. If they want to have fares set at 83% of airfare, as is assumed in the business plan, they can do so.

However, there are costs to doing so. A higher fare could generate more revenue to pay back private investors. But that might come at the expense of ridership.

It is worth quoting the business plan at some length on this topic. From page 67:

High-speed train fares are a key factor in the level of ridership and the revenue forecast. Forecasts for the programmatic EIR/EIS work used fares based on an LA – SF fare at half (50 percent) of the 2005 air fare, and varied proportionally with distance for other trips. This “50 percent” fare level generates relatively large passenger flows without requiring operating subsidy, and creates large public benefits from the public investment, e.g., air quality improvements, energy consumption reductions, and travel time savings. It also ensures that local and regional impacts of the high-speed train on items such as traffic, parking, sensitive lands, and water resources are not understated.

Tests of the sensitivity of riders and revenue to fare levels 33 percent higher and 66 percent higher than the “50 percent” base level showed progressively higher revenue, although lower ridership. The 66 percent higher case (which becomes the “83 percent” of air fare case) appears to be near the level that will generate the highest revenue, and reduces the operating costs and the number of trainsets needed. Because of the importance of increasing the amount of private sector funding in the construction and procurement of the project, the 83 percent fare scenario was adopted for this business plan. The fare is calculated in the same manner as the 50 percent, but is anchored by an LA-SF HST fare at 83 percent of the air fare, or in 2009 dollars a high-speed train fare of $105 vs. a $125 air fare, and a $118 cost to drive. [Emphasis mine]

In other words, the higher fares are there in order to generate more operating revenue to pay back the private investors who helped with the cost of construction. The business plan says that 83% of airfare is not unusual for HSR systems around the world:

The 83 percent level is in the middle of a wide range of experience in similar-length markets outside of California, based on prices examined in 200721. At the top end, weekend Acela fares in the New York to Washington market were higher than air fares, and on the Japanese Shinkansen fares were 108 percent of air fares for Tokyo- Osaka (322 miles) and 114 percent Tokyo-Hakata (722 miles). London – Paris Eurostar HST fares were 80 percent of air fares, both peak and off- peak. Madrid – Sevilla (333 miles) AVE fares were 71 percent of air, and Paris Lyon (244 miles) 71 percent of air. In the Paris Brussels market (191 miles) where HST has 95 percent of the air/rail market, and airlines are primarily connecting to long-distance flights, (similar to Central Valley service to San Francisco or San Diego-Los Angeles flights) air fares are very high, and HST fares were only 39 percent of air fares.

In any event, this discussion should sound somewhat familiar to you. In what was one of the most important posts of the year on HSR, DoDo’s “Puente Ave” article, he examined this very issue of initial fares and ridership, and concluded that initial fares should be kept low in order to generate riders – and that HSR systems should avoid seeking higher initial fares in order to pay back investors:

It happens actually quite often that a major new rail project gets off to a really bad start, generating bad publicity — and then turns into a solid mainstay of the transport system a few years later (with less media coverage). To sum up the reasons:

• an expectation that people will change travel patterns instantly;

financing (e.g. interest rates and period of maturity) and rosy projections themselves are tailored for short-term expectations on profitability;

• after diverse construction delays, (especially high-speed) lines are often opened half-finished (missing sections, stations, local transit connections, trains, signalling), and thus can’t realise their full potential instantly;

• when the builders become nervous about their ridership projections (be it due to cost overruns or ‘half-finished’ openings as per above), they tend to bet on passengers accepting higher ticket prices — which usually doesn’t work out.

DoDo then explored SNCF’s success on the first TGV line that opened in 1983. Despite cost overruns and their own use of private financing, SNCF refused to hike their fare structure. They had a low fare structure initially, and that generated an instant success on the system, enabling it to quickly become financially viable.

The 2009 Business Plan, ironically enough, suggests that the 83% fare isn’t all that necessary:

Predictably, ridership is better with fares at 50% of airfare. However, revenue isn’t all that much different – it looks like about $300M or $400M per year by 2035.

This would seem to be an argument for following the SNCF model. Of course, that would require more public funds in the project’s construction, and fewer private funds.

That’s a battle worth fighting in the coming years. The HSR deniers will take these numbers and use them to claim the system is flawed, there’s nothing we can do to stop them. But we can, and we must, continue to tell the truth about these numbers, explain why they’re there, why the cost estimate gives us a firmer and more accurate base to work with even while we realize inflation may not be that high going forward.

And more importantly, we need to continue to argue for a major infusion of federal funds in this project, in order to ensure we get high ridership instead of creating a temptation to raise fares to pay back investors.

Because even if it does cost $43 billion when all is said and done, high speed rail in California is still a cheaper option than the cost of doing nothing. Carbon emissions, fossil fuel dependence and the economic cost of such dependence, the cost of expanding roads and airports, and the cost of giving up 150,000 construction jobs we’re unlikely to create any other way.

  1. Evan
    Dec 14th, 2009 at 20:48

    That second graph seems off. The graph says “millions” but I think it should say “billions”.

  2. Spokker
    Dec 14th, 2009 at 21:01

    The fare is largely dependent on what you want HSR to do. Want it to make money? Set fares 83% of airline fares. Want to get cars off the road and reduce wasteful short-haul flights? Set fares to 50% of airline fares. I would go with 50% since I’m dirty liberal scum.

    Robert Cruickshank Reply:

    Of course, it would still make money at 50% of airline fares, just not as much as they’d want to repay a larger private investment share. This is pretty clearly an argument for more public spending on HSR.

    Walter Reply:

    I hate to be negative given how much I am eagerly awaiting the day I board a high speed trail in California. But there are no two ways about it–the ticket price is an issue.

    It might hinge on how much Southwest is paying for jet fuel in 2020. If they can still offer plane tickets between the Bay Area and LA/SD for $50-$60, paying $105 to take a train is going to be an offer that a lot of people can and will easily refuse. I’m not sure where $125 came from–it might be the average price of a plane flight between the Bay and LA. But for the purposes of ridership, the difference between high and low ridership will come from price-sensitive consumers–in other words, the ones who book Southwest flights far enough in advance to make a round trip come in around $125. These people (which includes people like college students) are much less likely to pay $210 round trip (and I imagine SF-SD will be more like $260).

    As for the cost of driving, the obvious omission from the CHSRA estimate is the fact that multiple people can be put in a car without increasing cost. A family of four with a reasonably efficient car can make the drive for well under $100 (20-25 gallons times $2.80ish). Is the CHSRA estimate based on an armed humvee? It assumes 9.2 mpg based on $2.85 gas and 381 miles of driving. Maybe they are assuming you’ll get a ticket on I-5. That’s actually pretty reasonable. Regardless, as long as the ticket is less than $300, it’s still cheaper than paying $420 each way for the family. It’s just a question of how much those three-plus hours are worth.

    All hair-splitting aside, the CHSRA is definitely messing with the numbers. Right here, on their own website, they tell the truth: They describe SF to LA as being an $86 drive (the truth) and a $120 flight (probably a technically accurate, though not a particularly useful number). They also say that the HSR ticket will cost $55. And that’s where I’m disappointed. I’d love to buy an HSR ticket for $55. As big a fan of this project as I am, a three-digit fare is going to be problematic. It will have extremely limited appeal and be a talking point for politicians here and elsewhere who oppose HSR. Mark my words.

    Spokker Reply:

    Is anyone able to put numbers into context? Articles are saying, “A 10 BILLION DOLLAR COST INCREASE HOLY MOLY!!!” when the CHSRA is simply putting the cost into year of expenditure dollars.

    Walter, you’re doing the same thing. Southwest isn’t going to be offering $50 flights in 2020. There will be high speed train fares above and below $105. If I wanted to leave tomorrow on Southwest from LA to SF I have to pay $140 with all fees included. Their lowest fare seems to be just under $70 all fees included. I don’t expect HSR to be any different.

    Yes, a family of four should probably travel by car. However, the average occupancy of a vehicle is under 2. Many people travel alone.

    There will be situations where HSR is the best option available. There will be situations where it is the worst option available. It is not the end all be all of transportation. It’s just another option.

    Walter Reply:

    I do understand that inflation will probably take place and that Southwest’s oil hedges will probably be ancient history by 2020. I’m not convinced, however, that flights between the Bay and LA for under $100 will be completely unavailable in 10 years, especially given the trend in the airline industry toward a low fare model. Several low-fare carriers already fly SFO-LA (SW, Virgin America, etc.).

    What I’m saying here is that we need to be concerned with price-sensitive consumers. To slightly overstep my economics expertise, the CHSRA is assuming train tickets have a little less price elasticity than they really do. There are people with limited means who travel between SF and LA.

    If they can get a plane ticket cheaper than a train ticket, they will. Even if this means booking two weeks in advance and going through security BS at the airport, a large portion of consumers will pick the cheapest option. If HSR is really the cheapest, no one will fly. Given how much faith I have in HSR and how much I’m rooting for it to succeed, I would be disappointed if people could that easily continue flying between these points.

    That’s all I’m trying to say.

    And yes, the CHSRA does need to put everything into one year. It’s far too easy to compare apples and oranges, or, more accurately, apples on the tree and apples of next year’s harvest.

    Rafael Reply:

    CHSRA’s analysis is not intended as a comprehensive pricing strategy including discount plans, special offers etc. SNCF and other HSR operators already have fairly sophisticated pricing models, roughly analogous to those airlines already use. About 80% of all TGV tickets sold are discounted in some way, so nominal prices are only one factor in predicting revenue. The other is the average discount rate.

    The fundamental decision to be made is whether California HSR fares should seek to maximize ridership (which is in the public interest) or profits (which may be essential for attracting private funding and getting the phase 2 spurs built as early as possible). IMHO, this decision ought to be up to the legislature rather than CHSRA, whose proper role is to prepare it and follow through.

    jimsf Reply:

    you’d be surprised how many people prefer to spend more and take longer on the train currently, than fly, even when I recommend they fly. The public and the media completely underestimate the number of people who do not want to fly.

    People do not want to fly. People hate to fly. People are scared to death to fly. just a few reasons I hear everyday. Many many many people do not want to fly and are terrified of it.

    jimsf Reply:

    as far as fares go. there won’t be “a fare” there will be any number of fares. I think Ive been over this before.

    The market – supply, demand, and competition, will dictate the fares, just as it does now.

    Brandon from San Diego Reply:


    Rafael Reply:

    You need to bring all fares to a common base year via a net present value calculation:

    Let B be the desired base year. Let Y be the year for which the price P is given. Let R be the average rate of general inflation in %.

    If Y>B, the net present value NPV = P / (1 + R/100)^(Y-B)
    If Y<B, NPV = P * (1 + R/100)^(B-Y)

    For example, the P = $55 fare came out of the low-fare scenario studied by Cambridge Systematics in Y = 2005. If the desired base year is B = 2020 and R = 3%, the NPV = $85.7. A more precise model would allow for different rates of inflation in each calendar year, so the power term would be replaced by a product over the applicable range.

    Note that

    (a) the ridership, revenue and operating cost models are all based on fares set at a percentage of prevailing airline tickets, and

    (b) actual train fares will be structured via branding and computed by a rating engine similar to the those used by airlines to maximize yield. Cp. e.g. SNCF’s pricing for TGV tickets. If you buy one of those several weeks in advance, you can easily find sweet deals. Frequent travelers can buy into discount plans, commuters into discounted monthly or annual passes etc.

    CHSRA’s fare indications are for not for special offers but the non-discounted non-refundable one-way price of a second class ticket purchased on the day of departure. For planning purposes, you therefore need to compare them to airline tickets subject to similar conditions, otherwise you’re talking apples and oranges.

    In the real world, there will be lots of price-sensitive people who will hunt for bargains on both train and airline web sites and pick whichever mode is substantially cheaper for a given trip, including the cost of connecting ground transportation at either end. Business travelers will typically be more sensitive to restrictions on change and cancellation fees, line haul time, comfort and productivity in transit than they are to price.

    Robert Cruickshank Reply:

    There is no way whatsoever that the cost of driving or flying in 2020 will be the same as it is now at the end of 2009. Southwest’s fuel hedges begin expiring next year, and since oil will never again be at $50 or $60 per barrel, their fares will rise too. Deutsche Bank predicts $175/bbl by 2017, which would make a train fare much more favorable under any circumstance.

    As to CHSRA, they’re not “messing with the numbers” – the map page hasn’t been updated to reflect the new assumptions from the 2009 plan.

    Rafael Reply:

    If they do update the map, they really need to indicate the base year for the fares quoted. One option would be to use the current year, as this makes it easier for the general public to compare them to current air fares. Another would be to pick a year in the future, e.g. 2018, and stick with that so realistic expectations are set for prices at the start of operations. Ideally, they’d quote both but that might be too confusing.

    Another way to go would be to quote the price of an airline ticket with comparable conditions for selected city pairs, e.g. SF-LA and SJ-Anaheim. That way, the general public wouldn’t fall into the trap of comparing a non-restricted train fare with a highly restricted special offer air fare. It’s very easy to end up comparing apples to oranges.

    elfling Reply:

    The true cost of flying is not $50 each way, not even on a Southwest special.

    Parking in the Bay Area adds $20 per day. Or, you can shuttle for about $30 per person, possibly on each end. The train stations might be right at your destination or within a very short friend or taxi ride.

    Buying a ticket a few days out, as many business travelers do, is $250 each way.

    And, being able to eat, or do work, or play games for the length of the trip has a value too. I certainly prefer train travel with my daughter to driving, with the bathroom and snack car always available.

  3. Rafael
    Dec 14th, 2009 at 21:06

    (1) CHSRA is billing this as a “Report to the State Legislature”, i.e. its primary purpose is to enable project oversight by elected officials. It is not a business plan in the traditional sense of a document intended to attract private investment, though that remains a core objective.

    (2) Headline inflation happens and is indeed beyond CHSRA’s control. Unfortunately, media reports often quote only the nominal amount and ignore net present value effects because math is hard. That said, the Authority does need to hold the line on real cost escalations, including especially tunnels through suburbia that don’t add any ridership. Other adverse factors include lack of co-operation from UPRR and Caltrans on right of way acquisition. CHSRA can’t do anything about that, but the state legislature and/or Congress could.

    (3) What private investors care about is not just revenue but also profitability. With fares set at 50% of airfare, revenue might be similar to that in the 83% scenario, but operating and maintenance costs will be markedly different.

    (4) The principal reason for building California HSR is to avoid having to build lots of new runways and highway lane-miles. Forcing CHSRA to maximize profits not ridership in an effort to attract private investment means more people will stick with flying and driving. Whatever the state “saves” by leveraging its own investment in HSR via a PPP may have to be invested in additional capacity on those more expensive alternate modes after all.

    On the other hand, maximizing profits is considered critical for early construction of the phase 2 spurs. However, that’s basically just another way of saying the state wants to maximize the leverage of its initial investment, so the previous argument applies yet again.

    Another factor is that maximizing ridership rather than profits also maximizes induced demand, transit-oriented development, CO2 reductions, diversification away from oil and other desirable ancillary outcomes. The popularity of the French TGV system, made possible by an egalitarian low fare strategy, has literally transformed how cities in that country approach the whole issue of attracting inward investment. It has also ensured strong and lasting public support for extending the network domestically and to neighboring countries will depressing demand for spending taxpayer euros on expanding motorways and regional airports. Most motorways in France are fairly expensive toll roads and afaik Lyon St. Exupéry is operating below capacity. It is not being used to avoid expansion at Paris CDG, even though both airports have TGV stations.

    Conversely, Taiwan HSR had to be bailed out by the government when it failed to service the mountain of private-sector debt related to its construction. Its fares aren’t particularly high, reportedly about half of those over comparable distances in Japan. However, some stations were sited well away of established downtown areas and the operator wasn’t able to raise fares, at least not by much. Penny-wise turned out to be pound-foolish.

    In the long run, fare levels have impacts well beyond the HSR operator’s balance sheet. Involving the private sector can end up costing taxpayers more than funding the whole project publicly from the start. That’s a counter-intuitive outcome for free-market advocates, but the state legislature should heed the lessons learned in other countries. In general, it’s far more productive overall to seek maximum ridership levels because that exploits the sunk costs in the infrastructure much earlier, induces more economic activity and hence leads to greater revenue for the state’s general fund.

  4. AndyDuncan
    Dec 14th, 2009 at 21:33

    page seven:

    “The Authority directed staff to prepare the necessary revisions to the program EIR and circulate them in accordance with CEQA for public comment. The Authority will consider the revised program EIR and the entire record of material before making a new decision to certify the revised final program EIR. The Authority will also make a new decision on a network alternative, preferred alignments, and preferred station locations for further study in project EIRs.”

    That’ll get Morris excited. Not that they’ll come to a different decision on the biggest “preferred alignment” of them all, but that sounds like they’re admitting they have to study it.

    Rafael Reply:

    They don’t have much choice in the matter, both CEQA law and Judge Kenny’s ruling require a due consideration of the alternatives based on the information available. CHSRA is currently studying express HSR through the Altamont Corridor for the overlay it has proposed, public comments from that process should be considered in assessing the environmental impact of grade separations etc. in Fremont, Pleasanton and Livermore. In addition, UPRR’s stance on selling any part of either of its two rights of ways between San Jose and Stockton needs to be included in the revised program EIS/EIR, as does its position on the Fresno-Manteca section that would be moved forward to phase 1 if Pacheco were abandoned.

    Basically, even though Judge Kenny did not uphold plaintiffs’ claim that CHSRA’s decision in favor of Pacheco was biased, they should still explain in more detail why certain alternatives were rejected, based on up-to-date information. Is supect there are a lot of people in the mid-peninsula and south San Jose that underestimate the technical and environmental difficulties of constructing HSR in the 101 corridor in the peninsula or indeed, Altamont-via-Dumbarton. They may also underestimate the long-term benefits upgrading Caltrain in the context of the HSR project while overestimating land use, noise and vibration impacts.

    CHSRA, for its part, has essentially failed to acknowledge that a well-executed Altamont project could do double duty, serving both intercity and regional/commuter needs on a shared dual-track infrastructure featuring an integrated timetable. ACE runs far fewer trains than Caltrain and most of its stations are much further apart, so there would be no reason for quad tracking a double-duty Altamont Corridor beyond express bypass tracks at (selected) stations.

    The Pacheco route does not offer comparable potential for double duty, though CHSRA is contemplating limited service between SF and Merced in phase 1.

    However, whether or not the fully built-out core HSR network should ever support anything other than a large volume of intercity trains between the Bay Area, SoCal and Sacramento is central to the issue of what exactly CHSRA is supposed to deliver. Its understanding of that may be subtly different from the what the state legislature and cities along the route are now looking for, especially in light of the new Javelin and Fyra services in the UK and Benelux, respectively.

    adirondacker12800 Reply:

    The Pacheco route does not offer comparable potential for double duty,

    Except for the fiddly bits between San Jose and San Francisco…

  5. Stephen
    Dec 14th, 2009 at 22:52

    With these ever increasing numbers being circulated by media, as pro-HSR citizens, we need to explain everyone the reason behind the increase in these numbers. Also, ticket fares are not set at this level; the Business Plan merely states that setting HSR fares to 83% to airfare will maximize revenue (maybe profit?). With fewer passengers, fewer train sets will be used, thus reducing the initials costs.

    I hope the projections for revenue are correct because if fares are $100, they’d lose my business. I’d probably go to LA by car, since I go with my family or friends (most cost effective, by far). I normally fly to LA when the air fare is around $60-80 one way, but I know those days are over now. Despite this fact, I’d still support CAHSR. In the end, it is my dream to work in HSR/snail rail industry, working with logistics/scheduling of the routes, staff labor, etc.

    Do you think maximizing revenue is most important first, over ridership figures? Perhaps there will be discounts for off-peak travel, such as lower fares Mon-Thurs and standard pricing for Fri-Sun. (I was going to call this congestion pricing, but that brings a negative connotation and it’s probably not going to be congested at onset, but the economic principles are the same.)

    Rafael Reply:

    WordPress held your comment for administrator approval, dunno why. See my comments under subthreads #2 and #3 above.

  6. jimsf
    Dec 14th, 2009 at 23:26

    Oh my god! THis is a boondoggle we can’t afford.

    Rafael Reply:

    Worse, it’s one we can’t afford not to afford!

  7. jimsf
    Dec 14th, 2009 at 23:36

    are they taking into account the economic effect/benefit of future increased and reliable statewide mobility and the tax revenue that will be generated by such effect?
    That would include local business stimulated by generated traffic, big business enticed to the state by this new infrastructure, and increased flexibility and opportunity for housing and education options due to the availability of such mobility to current and future residents. Such opportunities attract new residents which in turn further stimulate the economy.
    I mean people don’t live in Manhattan for the weather, its the opportunity.

    Rafael Reply:

    Unfortunately, state legislators must always look for ways to balance the budget, even in the midst of a severe economic downturn. Short-term considerations regarding how little there is to spend therefore tend to trump anticipated long-term benefits that are hard to quantify and will anyhow accrue only in the distant future (i.e. multiple election cycles later).

    That actually makes it all the more remarkable that California HSR is happening at all.

    jimsf Reply:

    Its remarkable that california itself even continues to happen. ( but that’s where the everlasting “california dream” comes in, the eternal optimism that we are all going to be stars as long as we believe hard enough)

  8. Clem
    Dec 14th, 2009 at 23:46

    Not good: p.90 San Francisco – San Jose
    minus $1,350 M for grade separations
    plus $1,144 M for “aerial structures”
    So long Caltrain and thanks for the right of way

    Rafael Reply:

    The changes may refer to the construction of aerials instead of deep road underpasses (or overpasses) for tracks at grade. The additional aerials could be for two tracks or for four, that’s not clear. In a recent meeting in Mtn View, Bob Doty apparently indicated that Caltrain and HSR tracks wouldn’t necessarily be at the same elevation level throughout the length of the corridor. Track stacking would probably mean the retention of selected grade crossings for Caltrain/UPRR traffic only. If Caltrain really runs 10tph during rush hour by 2025, gates at all remaining grade crossings could be closed up to 50% of the time (assuming an average of 90 seconds per closure event).

    It’s also not clear from that page to what extent that change is already informed by the ongoing project-level planning effort, in which Caltrain is intimately involved. Note that in addition to narrow sections of the ROW, track stacking might be necessary to keep UPRR certain freight spurs accessible.

    Robert Cruickshank Reply:

    On a conference call yesterday with CHSRA staff to discuss the report, a city official from Burlingame asked if these numbers included a possible tunnel. CHSRA staff indicated they did not, but that the decision on whether to pursue a tunnel or not had not yet been made and that the process of public engagement on the Peninsula was ongoing.

    The burden will be on the Peninsula to come up with the funds to pay for a tunnel, as it should be.

    Rafael Reply:

    Well, then the burden of paying for a tunnel section between Fullerton and Anaheim should be on those communities as well. Right now, it isn’t, which I attribute directly to Curt Pringle’s glaring conflict of interest. He is simultaneously the present Chairman of the CHSRA board – a state office – and the elected mayor of Anaheim.

    Robert Cruickshank Reply:

    Yeah, that is a big problem. Pringle has to know that he’s set a precedent there that the Peninsula folks will eagerly demand be followed in their backyard.

    AndyDuncan Reply:

    If the two of you have any additional information that indicates the decision to put the tracks underground in Anaheim has been made, please share it. The Draft EIR comes out in January, even that might not finalize the alignment.

    This report includes money for a tunnel, but that could just be the authority pricing out the options they’ve narrowed it down to, not the specific option they have chosen. If, for instance they were to present this report with pricing for a cheaper at-grade alignment while they know full well that a tunnel is one of their alignment choices, that would be irresponsible to say the least.

    Rafael Reply:

    The cost estimates need to reflect the scenario CHSRA considers most likely, which in the Fullerton area apparently means tunneling. Putting the associated cost line item in the business plan is a very heavy hint that CHSRA has already all but made its decision, even though city and county governments aren’t chipping in a fair chunk of the cost delta. Unsurprisingly, CHSRA chairman Curt Pringle would rather spend oodles of state and federal taxpayer funds than risk losing a re-election battle for a third term as mayor of Anaheim.

    In the SF peninsula, I suppose they could quote an affordable grade separation streategy plus a planning contingency to indicate to the state legislature roughly how nose-bleed expensive tunnels through suburbia would be. The objective would then be to secure local buy-in on implementation options that allow these contingencies to be removed from the business plan after the project-level EIS/EIR is completed.

    However, at this point CHSRA isn’t even certain yet if putting tracks underground is even technically feasible everywhere local communities have asked for that to be studied. Presumably, those engineering feasibility studies are in progress as we speak. If feasibility is confirmed, the Fullerton precedent will make it very hard for CHSRA to deny tunnels on the basis that they’re simply too expensive. There’s a reason SNCF has a long-standing standing policy to avoid tunneling if at all possible.

    Also, large planning contingencies would make it more difficult to attract private investment. Realistically, I don’t think any will be forthcoming until well after the environmental reviews are completed. After that, we’ll see.

  9. Rafael
    Dec 15th, 2009 at 04:41

    p. 91 is instructive in that it summarizes cost estimate changes in 2008 vs. 2009 dollars as well as in year of expenditure terms. Note 1 explains that the 7.2% increase includes 2.4% in general inflation. The rest is real cost escalation, with LA-Anaheim contributing the bulk of the change.

    p. 93 reveals that over a billion was added due to additional aerials and tunneling in Anaheim. In other words, Curt Pringle (mayor of Anaheim) refused to hold the line on cost escalations in his neck of the woods. Widening the right of way just south of Fullerton would have required eminent domain, but it would also have been substantially cheaper and included the legacy FRA tracks in the grade separation effort. And so it begins.

    Second nugget: about $500 million of the increase in LA-Anaheim is due to mapping the LA Union Station construction project to this segment. Page 90 explains that a corresponding reduction was included in the tally for Palmdale-LA, which nevertheless porked up a net $336m in spite of reduced grade separation costs. Deducting the wet from the dry, that implies close to a billion dollar increase in the cost of laying tracks, which includes access roads and tunnel construction in Soledad Canyon. That may be legit, e.g. increased tunnel length or additional viaduct construction to avoid newly identified geological hazards or else, a higher contingency because those hazards are not yet fully understood. Page 90 does not spell out the reasons.

    Third nugget: a cool billion dollars was slashed from the budget for vehicles, based on a smaller initial order and a larger number of options to expand the fleet in response to actual ridership levels (p.88). Other potential factors include streamlined operating procedures (shorter dwell times at termini, less frequent cleaning/provisioning), reduced number of spare trainsets based on more accurate reliability data and more aggressive turnaround time targets at the heavy maintenance facility. However, none of these are mentioned. Perhaps CHSRA will look to those for additional savings in future updates of its cost forecasts.

    morris brown Reply:

    This is only the very beginning of what will be constant upward revisions in cost to build.

    Of particular note is the estimate of 4.2 billion for the SF to SF run, which is totally out of line. CalTrain estimated 4.9 billion to electrify and grade cross their 2 tracks some time ago. then you have the tunnel into the TBT and facing reality they will have to tunnel elsewhere. so add another 4 to 8 billion there for starters. As I have said before, PB told insiders 18 months ago this was a 65 billion project — the reason report said about the same. this blog cried no no, but it is yes yes.

    The as you shall see, they now face the problem of not only getting Fed Stimulus funds, but the fact that Prop 1A will prevent them from using bond funds to match the stimulus funds.

    Hopefully the legislature will delete the request for the $9 million for PR. And as Director Crane has said, don’t look for private investement; that time has come and gonie.

    TomW Reply:

    Read the post, espeically the bit about inflation. The cost in 2008 dollars is effectively the same.

    Rafael Reply:

    No, it’s not. General inflation was 2.4% but the project cost increased by 7.2%. In real terms, that’s a 4.7% increase.

    Rafael Reply:

    We’ll see about those tunnels through suburbia, unfortunately CHSRA has set a poor precedent by caving to NIMBYs in the short stretch south of Fullerton without extracting a high local contribution pour encourager les autres. CHSRA have actually managed to identify some savings, but not enough to offset the increases. A fair chunk of the those is related to right of way acquisition because UPRR is holding firm on principle.

    Btw, Robert Cruickshank has said on a number of occasions that there may be a certain amount of cost escalation and that he’s ok with that. For my part, I want to see CHSRA justify any increases as essential either for securing environmental certification or for risk mitigation (e.g. for the tunnels through the mountain ranges). It’s not entirely fair to blame CHSRA for not baking huge contingencies into its estimates, because that would be an open invitation for even larger escalations. Now that voters have committed, NIMBYs are already acting as if the public purse were infinitely large, calling CHSRA arrogant for not having penciled in the most expensive implementation options to begin with.

    The biggest change this year was an accounting change from net present value (which is how private industry calculates) to year of expenditure (which is how Congress does, since its multi-year funding programs itemize dollar amounts that are not adjusted for inflation). However, there was also a 4.7% year-on-year increase in real terms, which is not unheard of in the project-level planning phase but still worryingly large. After all, we’re still in the early part of that phase.

    jim Reply:

    Several threads ago, I asked: Why LA-Anaheim? Rafael tried to answer me, but the answer didn’t stick. This increase raises the question again.

    Actually two questions: (1) Why is LA-Anaheim-Irvine part of the plan at all? It’s a very short segment. Stations are close together. Average speeds are going to be around 60 mph. It looks to the outsider like very expensive commuter rail. (2) Even if LA-Anaheim is a necessary part of the system, why is it in Phase I? The core of the system is SF-LA. There’s a spur off to Sacramento, an LA-Riverside-San Diego addition and this short tail. The other two non-SF-LA bits are relegated to Phase II. What’s special about LA-Anaheim?

    Rafael Reply:

    In a nutshell, Orange county has about the same population as San Diego county. At least part of at least one of these had to be in phase 1 to get prop 1A(2008) passed. LA-San Diego is a lot longer and more complicated and, Anaheim has been kicking around the idea of a maglev link to Las Vegas that would compete with CHSRA’s system in the Inland Empire.

    I’m pretty sure LA county would have preferred that Ontario Airport be included in phase 1 instead of Anaheim, but politics is the art of the possible.

    AndyDuncan Reply:

    It’s also the likely catchment station for much of south LA county as well. They appear to be designing ARTIC as the park-and-ride facility for points south of LAUS (Fullerton/Norwalk more likely “true” TOD stations), which means the catchment is going to be quite large. That’s the only explanation I can come up with for Anaheim’s projected boardings going from 4million/year in the initial projections to around 10m/year.

    Rafael Reply:

    I expect Disneyland would be also be a major incentive for families to hop on an HSR train. Flying with small children is a major hassle for out-of-towners, as is driving through the LA basin.

    Any savvy HSR operator will offer family-friendly combo tickets to attract ridership. To the extent that those induce additional demand, Disneyland could discount its portion of the ticket.

    AndyDuncan Reply:

    We did some back-of-the-dirty-napkin numbers on one of these comment threads. Between the parks, the convention center, the baseball stadium and the hockey rink, it’s somewhere over 100,000 people per day at those locations, and can be over 200,000 on overlapping game days in the spring and fall, plus the people who are employed at those attractions.

    How many of those people choose to take HSR is the hard part.

    jim Reply:

    Thank you. I can understand that if it wasn’t there, the prop wouldn’t have passed. And elsewhere on the thread my follow-up question has already been answered: If it’s in the plan because of politics, why isn’t it scheduled later? If CAHSR has a running LA-SF line, even if it’s missing a station or two, when the money runs out, then it will have won and what it has built can be further built on. If when the money runs out all there is is SF-Bakersfield and LA-Anaheim, then it will have lost. But the Mayor of Anaheim is the Chair of the CHSRA. You (Californians) need to fix that.

    morris brown Reply:

    If they needed Orange or San Diego to help pass Prop 1A, they sure missed the boat — they both went no and Orange Co by about 57%.

    AndyDuncan Reply:

    I didn’t realize we passed propositions via an electoral college. Surely that 57% would have been worse had the line not gone to Anaheim.

    Rafael Reply:

    And they would have missed by a lot more if neither county had been included in phase 1, which would have meant the bond would have failed statewide. Including Anaheim was a defensive move to neutralize opposition in conservative OC as much as possible.

    Alon Levy Reply:

    The answer to both your questions is that CHSRA didn’t try to sell the idea of high-speed trains running on upgraded low-speed lines. The Caltrain corridor is basically a four-track medium-speed line that will host some high-speed trains. The LA-Anaheim corridor is the same, but because Metrolink has no plan to electrify or integrate operations with HSR in any way, the HSRA didn’t say, “The core line will be LA to SJ, but we will leverage upgraded commuter corridors to run trains north to SF and south to Anaheim.”

    Rafael Reply:

    Metrolink could conceivably implement a limited volume of strictly regional HSR service between Palmdale and Anaheim (later Irvine). The rolling stock would have to be crash compatible with the intercity trains plying the NorCal-SoCal routes, feature compatible platform heights and also sufficient acceleration performance and top speed.

    Cp. SouthEastern’s Hitachi class 395 in the UK and Fyra’s AnsaldoBreda V250 Albatross sharing track with Eurostar and Thalys, respectively.

    Alon Levy Reply:

    This line would be nearly useless as regional rail. The Metrolink lines HSR will run on have other important stops, such as Glendale and Santa Ana; the Ventura County Line could act as a branch line, with such key stops as Burbank Airport and Van Nuys. It makes little sense not to serve them with regional rail, just as it makes little sense to serve them with HSR.

    The Caltrain solution of having a four-track line with HSR and express regional trains sharing tracks is a much better idea.

  10. TomW
    Dec 15th, 2009 at 07:27

    “weekend Acela fares in the New York to Washington market were higher than air fares”
    That’s because Amtrak doesn’t have enough trains to accomadte demand, so had to set the fares artifically high. I suspect that if they had more trains, they could lower fares but still get more revenue.

    A slightly odd thing happens when you have fares set to maximis revenue: varying fares slightly doesn’t lead to any significant change in revenue, even though ridership changes. This allows the operator to tweak fares to match ridership to capacity without havign too much about the bottom line.

    I think it is a shame that fares have been set high to reduce costs (i.e. by reduceing demand and hence trainsets required).

    Rafael Reply:

    Amtrak only has a limited number of available slots for Acela on the NEC. If they had more rolling stock, they might well use it to run longer trains rather than more of them. One complication is that FRA crippled Bombardier’s active tilt design by imposing ludicrous buff strength requirements late in the process, so maintenance overheads for Acela rolling stock are sky-high compared to other HSR systems. Buff strength provide passive crash safety at very low relative speeds, but the extra mass actually makes high speed trains more dangerous.

    CHSRA has decided not to attempt the development of FRA-compliant rolling stock capable of 220mph. The flip side of that is that the network requires new, dedicated tracks not just in the countryside where speeds will be high but also in urban areas where they won’t be.

    adirondacker12800 Reply:

    Amtrak has a limited number of slots weekdays during rush hours. There’s enough capacity over the weekend that they close down one of the tracks for maintenance fairly frequently.

    TomW Reply:

    Speaking of FRA rolling stock requirements… in the Preliminary national rail plan, it said “Going forward, PTC, in combination with other technologies and strategies, can offer levels of passenger protection that can be incorporated into new equipment design standards.” (page 26). Reading between the lines, I would say that means the FRA reconosies there are better ways of protecting passengers that just building like a tank. (Examples: monocqoue construction rarther than underframe and body, welding not rivets, couplings that don’t break in an accident, lifeguards on wheels, ‘cup and cone’ to prevent riding-up, laminated glass to keep passengers inside during a collision, etc.). My bet is that the FRA will draw up a new set of specs based on outputs (“the vehicle must behave like this under these conditions”) rather than inputs (“the vehicle must have 1 inch thick walls”)

  11. Elizabeth
    Dec 15th, 2009 at 08:15

    A couple of notes:

    1) The fare hike was entirely predictable from a close reading of the previous business plan. We said so in comments we presented to the Authority at their September meeting. (
    2) The fare hike is a MAJOR policy decision. Why did consultants rushing to get this done by the deadline make this? Why wasn’t it a board agenda item?
    3) Some of “inflation” adjustment is because of the mistake they made in not thinking about the impact of inflation on the buying power of the bond proceeds. This was a mistake we pointed out. While it is great that adjustments have been made, it still was a major error that created a $2 billion gap, now plugged by the higher fare structure.

    We did make additional comments in a biz plan preview at This was the document referenced by Fiona Ma’s aide during the stakeholder call (the same one in which Robert “Smith” Cruickshanks participated)

    Rafael Reply:

    Well, I guess one way to maximize the buying power of prop 1A(2008) bonds is to spend them early. Perhaps that’s part of why California’s $4.7 billion ARRA application included a promise to match a grant dollar-for-dollar even though that was not at all required and the project isn’t yet as mature as it ought to be before that large a sum is sunk into actual construction. Still, the recession is now, jobs are needed asap and California doesn’t have the luxury of deciding when to apply for federal funds or subject to which conditions.

    The decision to base estimated ticket prices on 83% of air fare is indeed significant. However, in a representative democracy, it seems reasonable to let the legislature decide whether or not this is in the best interest of the future finances of the state of California and assess other impacts on public policy. I imagine there will be some discussion on this point during oversight meetings, including whether or not it’s even up to CHSRA to make that particular decision. Personally, I’d prefer they continue to run both the 50% and the 83% scenario for a few more years, at which point it will be clearer if and how much private capital needs to be attracted.

    morris brown Reply:

    Again, the promise to match the stimulus funds with Prop 1A bond funds, is illegal under terms of the Prop !A proposition. A condition that bond funds must be used such that full funding for a segment or corridor must be in place before construction can start and must guarantee a completed and usable segment or corridor.

    The allocation of stimulus funds was not proportioned such that these conditions would be met, therefore, Prop 1A funds cannot be used to match federal stimulus funding. This might well end up in court.

    Robert Cruickshank Reply:

    Like Rafael, I agree about the fare increase being a significant issue, and said as much in the post. I do not see that decision as set in stone, and believe further advocacy is warranted to increase public funding for the project so as to be able to attract more riders with lower fares.

    Your documents are both very interesting and I’m glad you’ve posted them. I’d be curious to see a more specific and complete explanation of your comments about the ridership model flaws.

    I think you’re using a misleading frame when you say there is a “funding shortfall” of $20 billion – the fact is the complete funding has yet to be identified. A “funding shortfall” happens when you’ve completed the budget and funding process and still come up short. We can agree the complete $42.9 billion has yet to be funded, but the only reason you’d frame it as a “shortfall” is if you were trying to undermine the project. Especially when you know as well as we supporters do that there’s no way to know how much federal funding we can actually get. If you want this to be completed, you’d join us in advocating the federal government create a sustainable, large, and long-term funding mechanism for HSR projects.

    I do agree with you guys about “excessive outsourcing” and I further agree, as I laid out in an extensive fashion in this post, that we need to not rely too much on private funding, that any risk should be borne by the investors and not by the state. Here again I invite you to join in ensuring we can find sufficient public funding to prevent the problems and costs inherent with outsourcing and too much private sector involvement.

    Finally, it’s worth noting that your organization, “Californians Advocating Responsible Rail Design,” are some of the Peninsula folks who are demanding costly implementations of HSR, including a tunnel. If financial responsibility is your concern, that means you need to identify the funding source for that tunnel. It is telling that your organization instead seems to prefer a challenge the HSR project itself, rather than collaboratively seek ways to ensure it is properly funded and built.

    (Note: the Robert “Smith” Cruickshank comment refers to the stakeholder call – after spending 5 minutes on hold the first AT&T operator put me in the wrong call, where people were talking about sales targets. So when I called back my goal was just to get in the freaking thing, and didn’t want to waste time having the operator figure out my last name. If your last name was Cruickshank you’d understand!)

    Elizabeth Reply:

    CARRD doesn’t take any stance on specific alignments. As individuals, we are all over the map with our personal opinions on all sorts of aspects about this, just like any group.

    Our main position on has been to advocate for CSS. We were the ones who originally put forward this concept and we think it is the right way to do a project and lowers the tremendous risk of stakeholder buy-in by putting that upfront in the project. From our understanding of the TGV, a similar process was actually used.

    Funding shortfall is an appropriate term to use, given that this plan has been presented as a funding plan. The private money EXPLICITLY will require a taxpayer guarantee on the ridership /revenue numbers – private money without this is said to not be viable, an assumption that is backed up by the research we’ve done but an option that is a non-starter at the moment with the legislature and taxpayer. The local money ($4-5 billion) plan is “plans to develop plans” . The number they have comes from taking the % of local transit that is paid for by localities and extrapolating this out to the total costs of the high speed rail project. This is not a reasonable assumption, given the difference in magnitude between local transit and high speed rail construction costs.

    Until these sources have reasonable substantiation, they don’t exist and there is a funding gap that must be filled.

    I actually thought the Robert Smith thing was kind of funny.

    Rafael Reply:

    In this context, I’d welcome clear communication from CHSRA regarding whether or not all of the stations are considered part of the HSR project and if so, the scope of the functionality that the HSR project is on the hook for.

    This is especially pertinent to the complex $4.2 billion TTC project in SF. Phase 2 of that is $2.8 billion for the DTX tunnel and train box interior, something that SF wants the HSR project to help fund in a big way. If CHSRA wants four out of six platforms tracks, that would suggest it would also be on the hook for the same fraction of phase 2 cost – unless PCJPB plays hardball and insists that full funding of TTC phase 2 is part of the price tag for letting CHSRA use any of the Caltrain ROW in the first place.

    However, the issue of where HSR ends and local real estate development begins is also relevant for other major stations that will go beyond the basic transportation functionality of providing access to HSR trains. SJ Diridon, LA Union Station, Anaheim ARTIC, Sacramento and San Diego are all multimodal hubs that include some retail outlets, possibly parking structures and also investments to facilitate changes in traffic circulation near the new stations. Fresno and even Millbrae may well join the list.

    Conversely, there’s the question of the fraction of total station cost CHSRA is allowed to count as part of the HSR project. If that sum is greater than the Authority’s share of the investment, it will effectively have attracted city/county/private funds. Unfortunately, the accounting rules on this appear to be very murky.

    AndyDuncan Reply:

    Page 84:

    “The San Francisco-San Jose estimate includes an allowance of approximately $1 billion for the CHSTP contribution to the Transbay Terminal cost.”

    Whether that’s money for the trainbox under the TTC, or if it’s for a “eastern terminal” between beale and main, I suppose it open for discussion.

    So much for TBT not affecting the CHSRA budget.

    Rafael Reply:

    That doesn’t strike me as excessive, considering the need for a tunnel to reach a downtown SF station that can serve the North and East Bay as well. The problem is that phase 2 of the TTC, i.e. the DTX tunnel plus trainbox interior, is currently estimated at $2.8 billion. If HSR funds have to cover 2/3 of that for the use of 4 out of 6 platform tracks, the bill will be close to $2 billion. Considering the TTC location and the DTX tunnel + throat design are so suboptimal, that’s nose-bleed expensive. More to the point, it’s way more than CHSRA has budgeted, which is why they’re trying to get out of a prior commitment to TJPA’s baby.

    Note that the report is careful to call it the “CHSTP contribution” since TJPA applied for ARRA HSR funds directly, rather than going through CHSRA.

    AndyDuncan Reply:

    Yes, I did like the invention of a new organization called the “CHSTP”. I wonder if the $1b is what they figure it will take to build the Beale/Main station and approach, and are trying to bargain with TJPA with an argument along the lines of “we can build the other station for $1b, if you want us in the basement of the TTC, you need to pay for the extra cost it will take to get there).

    Rafael Reply:

    CHSTP = California High Speed Train Project, i.e. not an organization

    I’m pretty sure CHSRA could really spruce up 4th & King for $1 billion, complete with an upper deck for selected transbay buses, parking and a shopping mall. The TTC concept would effectively move to Mission Bay, but that’s not near where SF has worked so diligently to plan transit-oriented commuting and affordable housing. One intriguing idea would be an elevated people mover (urban gondola or inverted monorail) above Townsend and 2nd, terminating at Montgomery BART.

    A Beale/Main station would require a lot of eminent domain.

    The cheapest option with excellent connecting transit would be an underground station at Civic Center BART, e.g. 2×2 platform tracks under 7th. That wouldn’t be downtown but it would serve the needs of the intercity HSR system quite well. Unfortunately, it would also throw a huge spanner in SF’s urban development and regional transit plans, which are centered on a TTC with a downtown rail station. Caltrain would have to remain at 4th & King in this scenario, as the DTX tunnel + train box are too expensive for SF + PCJPB to afford on their own.

    If CHSRA is stuck with the Transbay Terminal, it might still be useful to replace the DTX tunnel with a single-track loop tunnel providing high capacity access to and egress from six run-through platform tracks. Such a tunnel could be built using regular TBM equipment instead of sequential
    excavation. Coupled with the small cross-section, that might even permit using 3rd instead of 2nd, easing the vexed curve radii considerably. It would be fairly easy to already include the turnouts for future fixed link to the East Bay at one of several cross streets. Northbound trains would then stop at the TTC, then loop around to head across to Oakland. Southbound trains would not need to run a full additional loop.

    TJPA actually studied all this, but abandoned the idea because CHSRA is stubbornly holding fast to the idea that trains must dwell in SF for 30-40 minutes for cleaning and provisioning that could be done in SoCal and Sacramento.

    AndyDuncan Reply:

    There’s no room for the northwestern most tracks to loop around due to the foundation of that tower between beale and main, the caltrain tracks could, but the HSR tracks dead end at the basement wall of that building.

    And it’s not “a lot of eminent domain” it’s one condo building and a warehouse, and it’s only eminent domain if those people don’t want to sell. Half of them are probably underwater on those condos anyway.

    Rafael Reply:

    Not sure what you’re referring to, Andy. A single track tunnel under Main could hook west into the TTC, whose tracks would be shifted west as well by moving the single track egress tunnel to 3rd.

    As for those condos, last I heard about 300 homeowners were informed that their properties would have to be taken if a Beale/Main station were built. That sounds like a lot more than one building to me. Note that TJPA has already begun eminent domain action against a number of small businesses. It’s not exactly being generous with compensation.

    AndyDuncan Reply:

    I can’t find the maps right now, sorry, I’ll post them later if I find them. Basically there’s a tall building on Mission between Beale and Main, the one next to the Beale St. Bar and Grill. The foundation of that building is a constraint for the alignment of the tracks. In the most recent diagrams that TJPA released (which I can’t find right now), the HSR tracks had been moved northeast slightly to provide better curve radii (still not very good, but better) on the station throat. That bunches those platforms up against the foundation of the aforementioned building, leaving no room to begin the turn required for a tail track or a loop. The southeastern most tracks, designated as caltrain tracks, are just far enough away, and have a small enough minimum radius, that they can clear that building and turn down beale. Even if that building was removed, I’m not sure there would be enough room to turn make the turn before hitting Main, which means you’re now dealing with the foundations of all those new high rises along main.

    Steven Dale Reply:

    Hate to shill like this, but if you’re interested in Urban Gondolas, Raphael, you might want to check out my website

    AndyDuncan Reply:

    Choosing to base their numbers on the 83% does indeed allow them to “save” $1b in trainsets on their spreadsheets. Where are you seeing the other $1b? They don’t include operations and maintenance in their initial buildout numbers, so I’m not sure how teh 83% saves them any more than the cost of the trains.

  12. David S
    Dec 15th, 2009 at 10:56

    To clear things up, is the $105 fare in 2005 or 2020 dollars? Also, how do they calculate the “average” fare? As others have mentioned you can routinely get fares around $60 one way SF-LA with a little bit of planning, which creates a lot of sticker shock when you’re an “average Californian” looking at the numbers released. IMHO the release of these numbers could have been managed better.

    Rafael Reply:

    Neither, the $105 fare appears to be in 2009 dollars, reflecting 3.5% annual inflation since 2005 and a switch to from 50% to 83% of airfare.

    Since the majority of tickets will be sold at a discount to maximize yield, it’s important to factor in the target average discount rate when computing revenue potential. CHSRA could help matters by clarifying if the dollar figures reflect nominal (i.e. non-discounted), average discounted or bargain basement fares. The most useful semantics for planning purposes would be average discounted, but there is certainly scope for confusion in how the number should be interpreted.

  13. Elizabeth
    Dec 15th, 2009 at 11:03

    @David S

    The $105 dollar number is 2009 dollars – in 2030 it is assumed to be 83% of whatever airfares are then.

  14. synonymouse
    Dec 15th, 2009 at 11:29

    The issue of private capital is important for several reasons. One is that it shines the light of realism on foamer frenzy – a Richard Branson would never touch the retrograde Palmdale-Tehachapis route. The fact that for Bakersfield and Fresno the Grapevine is still faster is killer. Sandbagging an express concept with a significant detour is insane. Profitability and influence peddling(Palmdale) don’t mix.

    The corollary of private capital is private or outsourced operation which may be the only recourse available in the end to control labor costs. Witness the out-of-control labor situation the Pelosi political machine has created in BART and SF Muni. Don’t think for a moment that these militant unions won’t migrate to a government operated hsr. Use European railways as an example. The inevitability of high labor costs, featherbedding and service disruptions due to strikes and slowdowns has to be figured in ticket pricing. Airlines have had a natural advantage in keeping labor costs down – the hsr will try to quasi-privatize operations but it won’t take because the crappy circuitous route cannot be made profitable. Then it is back to subsidized government operation and militant unions

    There are at least two questionable assumptions which are influencing hsr decision making. Onee is that the California population and economy will continue to grow at a fast pace and that a great part of that growth will be in the San Joaquin Valley. I dispute that notion and suggest that the CV will remain impoverished and a poor transit market.

    The other assumption is that Las Vegas is an important destination for the future. Rethink this one in the light of what has happened to Reno. Still nascent indian gaming has way reduced California travel to Reno. We’re only talking about the effect of a relative handful of small casinos. Imagine what full legalization would do to the Las Vegas traffic. Mega gambling resorts in California would lay waste to Sin City. The drift toward decadence in California is profound – with legalized weed in the offing full legalization of casinos cannot be far off.

    Lastly this business report ignores the true cost of blight, which breeds crime and other social problems. The stigma of blight is very expensive to mitigate. Places like Palo Alto have been able to ride out the recession better than mostl and the reputation of having a genteel, upscale atmosphere is an important factor in this success. They will fight tooth and nail, as well they should, against cheap-outs like aerials and berms. Especially when they know that BART will provide thenm with the subway that they want. Some, perhaps even many towns enroute, have little to gain from the hsr and a lot to lose.

    Alon Levy Reply:

    Palo Alto and the other Bay Area suburbs have lost 30% of their housing values. That’s not riding out the recession better than most.

    wu ming Reply:

    palo alto genteel? dear lord, that’s as silly as “bucolic.” it’s mostly tract home suburbia with techie money, folks. if you’re so damn loaded, pony up the cash like berkeley did to put it underground, but don’t expect the state to pick up the tab for your beautiful minds.

  15. jimsf
    Dec 15th, 2009 at 12:08

    There’s no tax on railroad fares either. so 105 is 105
    a plane ticket for 105 plus taxes, fees, and baggage comes to over 150.

    Rafael Reply:

    Fair point, though I don’t see why railroad fares should be exempt from sales tax.

    AndyDuncan Reply:

    Airfare is exempt from state sales tax, there are other taxes, but not CA sales tax.

    Rafael Reply:

    Hmmm, true enough. Aviation fuel isn’t taxed, either. It’s really a sweetheart deal for airlines and the oil industry. Cars and on-road fuels are taxed, parking isn’t always free (i.e. taxpayer-funded).

    AndyDuncan Reply:

    Just don’t call it a subsidy :-) That makes libertarians angry!

    jimsf Reply:

    there’s no tax on an amtrak ticket the same way there is not tax on a postage stamp.

  16. jimsf
    Dec 15th, 2009 at 12:08

    There’s also no charge for baggage on trains.

    Rafael Reply:

    True. Airlines need to pay for handling and security overheads.

    Surcharges apply for checked bags above a certain weight limit per passenger, though they are not always collected. IIRC, its 60lbs total for checked bags in the US and on transatlantic flights. Baggage weight is not limited on trains.

    Alon Levy Reply:

    There’s no charge for baggage on Southwest, either.

    jimsf Reply:

    yes there is.

  17. jimsf
    Dec 15th, 2009 at 12:09

    At amtrak you get 5 bags per person at no charged. actually 6…
    3 checked at no charge, plus 2 carry ons at no charge plus a “personal item that isn’t counted.

    Rafael Reply:

    HSR trains usually don’t have a baggage car, as stowing and retrieving items would either increase dwell times or reduce punctuality. Special point-to-point airport shuttle trains between e.g. LA-Ontario and Ontario-San Diego could offer longer dwell times and even baggage handling services. Throw in secure platforms for those shuttles and you can check bags through at the train station of origin and possibly even pick them up there at the end of the return leg.

    Otherwise, HSR means carry-ons only, with very limited scope for odd-sized baggage. Folding bicycles are almost always permitted on board but full-sized ones often are not. Surfboards etc. are also problematic. For a nominal fee, SNCF does offer a service that delivers such items to their destination station within 24 hours, where passengers can pick them up.

    If you need to haul a lot of bags, you’re probably better off taking a standard-speed train or driving. That’s an important point for families who like to schlep a lot of stuff around. HSR works best if you travel light, e.g. for day trips and weekend getaways.

    jimsf Reply:

    all cali state trains are bike and surfboard rack equipped. its a west coast thing.

    Rafael Reply:

    As I said, that works for standard-speed trains. It won’t work for HSR.

    jimsf Reply:

    oh but californians will want it and caltrans will wind up insisting on it. especailly bike racks.

    TomW Reply:

    Able-bodied people will just have to cary their luggage onto the train – what’s so bad about that? After all, you have to carry it into the station.

  18. jimsf
    Dec 15th, 2009 at 12:10

    a family of four can, with no additional charge – bring a total of 24 pieces of luggage at no charge. Try that on a flight.

    Rafael Reply:

    If you’re moving house, please rent a U-Haul instead. Otherwise, if you can afford that much luggage, you probably own your own jet anyhow.

    jimsf Reply:

    They do use us to move. literally. all the time. hefty bags and all.

  19. Truth be Told
    Dec 15th, 2009 at 15:04

    We now learn that the projected construction cost is increasing from $33.6 to $42.6 billion dollars, or an increase of nine billion dollars. Oh, they used 2008 dollars rather than time of construction costs, which we should have been told before casting our votes. I say that because ridership costs are increasing even before we lay the first mile of track. So their business plan will now reflect higher commuter ticket costs resulting in 14 million fewer riders due to a simple cost/benefit analysis by potential riders.

    In selling Californians to support Prop 1A voters were deceived in being told that the cost of a high-speed train ticket from San Francisco to LA was to be $55 yet their latest projected cost is pegged at $105.” Continued….

  20. BruceMcF
    Dec 15th, 2009 at 15:54


    Its more like, want to make more money in the first few years, charge higher fare, want to make more money over the longer term, charge intermediate fares, want to maximize ridership, charge the fare that allows you to cover operating costs and a cushion (assuming HSR where its possible to reach 100%+ operating recovery ratios).

    Given where the money is slated to go, to expanding the system first, there’s probably a case to be made for an intermediate fare, eg 67% of comparable air fare.

  21. Spokker
    Dec 15th, 2009 at 21:19

    Ray LaHood is on the Daily Show tonight (12/15). The full interview will be on their web site at

    A guy on the East Coast who just saw it says he talks about high speed rail.

    jimsf Reply:

    missed it but its on again tonight at 130am.

  22. jimsf
    Dec 16th, 2009 at 00:05

    There are currently 12 fare plans between sfc and lax with prices
    of 50 52 54 55 62 64 65 78 82 98 102 and 385 ( for a 10 ride pass) plus upgrades to business and first on a limited basis.

    these fares are based on route and availability, ( surfliner, san joa, starlight)

    of course any person who has an IQ above 90 and who doesn’t live in one of those tidal caves on the San Diego coast or in a doorway, knows that these wont be the same fares that are available in 2025.

    who among would actually think the 55 dollars today would mean 55 dollars forever?
    Is it those teabaggers again?

    i swear everytime I hear comments where people freak out about how they were tricked into voting for something I think of that woman that saturday night live made fun of at the john mccain rally who thought obama was a terrorist.
    I simply can not believe that my country is this over run by people who are that stupid. I’m glad Ill be dead soon enough because its more than I can stand to witness.

  23. jimsf
    Dec 16th, 2009 at 00:09

    I want to say to these people: “I mean did you really vote on prop 1a because you actually thought that in 20 years you would be able to buy a 55 dollar ticket to la? did you really do that? really? that’s what you really thought? do you also believe that the earth is flat and the moon is made of cheese? If you are that stupid then you deserve to be tricked. Its how the rest of us keep you from having any influence.”

    Robert Cruickshank Reply:

    Very few people voted for Prop 1A on the basis of a $55 fare. In my own posts I called that figure “tentative” and I know I’ve expressed skepticism that it could be maintained. HSR is valuable at 50% of airfare, 83% of airfare, and 100% of airfare. The key is that HSR’s operating costs will remain largely stable over time because there will be no concern over the price of oil, something that airlines already had to deal with and will have to contend with more frequently over the coming decades, likely to the point where short-haul flights become a thing of the past.

    jimsf Reply:

    Yes, so why are these “journalists” (cough choke gag) writing these articles about how all of a sudden the end of the world is coming cuz we’ve all been tricked by prop 1a.

  24. jimsf
    Dec 16th, 2009 at 00:10

    “duh… but they said….. der de der….” freakin retards.

  25. Paul H.
    Dec 16th, 2009 at 02:19

    A really excellent interview from LaHood. Obama made a great decision bringing him on. He really pushed for high speed rail in the interview, naming the midwest (chicago hub), california, the south, and upgrading the NEC as some of the corridors likely to get ARRA funds. It looks promising that CAHSR will get a lot of federal funding during the Obama Administration with LaHood at the helm of DOT.

  26. synonymouse
    Dec 16th, 2009 at 13:27

    The CHSRA should be compelled to have full financing in place before a single shovel is turned. Either their concept is inherently profitable and they can secure private financing or they should be forced to place a bond issue measure for the full amount before the voters.

    Of course now that the electorate is hip to the CHSRA scheme the bond issue would fail and 99-Tehachapis-Palmdale would be kicked to the curb. High time for a rethink.

    Alon Levy Reply:

    How many highway networks had full financing before a single shovel was turned?

    synonymouse Reply:

    There has never been a non-toll highway constructed in the US that has not been a success, that was not used and not hailed by its users. Highways, just like automobiles, are popular. Sorry

    I don’t drive drive so I am no highway lobby shill. But the other reality has to be faced is that the current hsrr scheme is a turkey, a decent enough concept initially but one that has been dumbed down.

    The only way the secondary and inferior Tehachapis alignment should be built is if it could be used for freight as well. But the hsr ruling gradient would be too steep for freight.

    Perhaps what I am saying might make more sense if you thought of Sacramento as part of the Greater Bay Area and Bakersfield-Fresno as part of Greater Southern California. That’s why I-5 is there and why it is the main artery. The rest of the CV is peripheral, highly rural, and can be accommodated by regular diesel service for now. The hsr needs the most direct route if it is to have a chance to succeed. Meandering to Palmdale is just idiotic. 220 mph is expensive overkill if you are not going to insist on a direct route with next to no stops in enroute.

    AndyDuncan Reply:

    Still waiting for one of you palmdale obsessives to provide a rational rebuttal to CHSRA’s tunneling report. Calling it “idiotic” over and over again without providing an explanation of why their conclusions in that report are faulty is, well, idiotic.

    synonymouse Reply:

    The consultants simply juiced their study to accord with the preferences of the folks who pay their fee. Happens all the time.

    Improved highways have been a sacred cow of American politics for a hundred years. The voters don’t much worry about the costs of highways because they consider roads a necessity like police and fire protection and national defense. Not fair, but that’s the way it is. Of course the highway lobby is there to campaign for more road construction and attack public transit. Greedy unions don’t help the transit cause either.

    Buyers’ remorse is setting in over the hsr. PR can only do so much with a flawed plan. experiencing buyers’ remorse

    Alon Levy Reply:

    Define “success.” If you mean financial success, then no, the non-toll highways built from the 1910s on recovered 50% of their construction and maintenance costs from user fees. The Interstate system recovers 67%, but that’s after decades of getting people to drive instead of taking streetcars.

  27. Emucrat
    Dec 16th, 2009 at 17:11

    Take a look at Acela Express. it is far more expensive than the plane, but the demand is very high. I’m from Germany and our fares have decreased just a few years ago. I remember that it wasn’t that cheap when I used to live in Germany in 2008. $ 42 billion is a pretty good deal for a high speed rail that will be longer than the current high speed rail system in Germany.

  28. ticket broker
    Dec 27th, 2009 at 10:17

    Hmmm, true enough Just don’t call it a subsidy

Comments are closed.