High Speed Rail: Boon or Bust?
High Speed Rail: Boon or Bust?

As the 2010 World Cup games opened in South Africa, fans from around the world were able to arrive to the games on sub-Saharan Africa’s first high speed rail. The Gautrain, linking the airport to Johannesburg was ready only days before the games began. This high speed train, like many others around the world, is controversial and has sparked debate on the benefits and trade-offs of high speed rail.

Rail lines, a major element of a country’s infrastructure, have always been important for economic development, helping transfer goods from the factories to the ports. Good roads and dependable rail lines make a country much more attractive to foreign investment.

However, is high speed rail necessary for a country’s economic growth? Dedicated high speed rail lines are extremely expensive and often require state funding. Should the state be investing its funds in building these lines or in other projects that would have a broader impact? This news analysis will examine an overview of high speed rail projects around the world, as well as the benefits and trade-offs of high speed rail.

Overview of High Speed Rail

The first high-speed rail was built in Japan in time for the 1964 Olympics. Today, Japan’s bullet trains travel at speeds reaching 185 miles per hour over 1,500 miles of dedicated tracks.1

Europe’s first high speed rail was up and running in 1978 in Italy, with a Rome to Florence line. Today, Europe’s high speed trains reach speeds of 200 miles per hour and can be found in Spain, France, Germany, Belgium, and Britain.2 One of Europe’s key challenges is standardization because the lines in each country have different owners, all of whom charge different rates. Without the fair pooling, customers end up paying more, making the trains a somewhat less attractive choice.3

China is the world leader in high speed rail. China has invested more than $100 billion annually into its railways. By 2020, China plans to have 30,000 miles of high-speed track.4 A 700-mile Beijing-Shanghai route is expected to be completed by 2011. This trip is expected to take only four hours, with trains reaching speeds of 240 miles/hour.5 In the future, China hopes to extend its rail beyond its borders into Europe and across Asia.

In comparison, the United States has only one “high-speed” corridor in the Northeast, from Boston to Washington, DC. Amtrak’s Acela train rarely meets its top speed of 150 miles per hour and averages only 85 miles per hour.6 The 450 mile trip between Boston and DC takes about seven hours.7

The Obama administration is investing about $8 billion of the stimulus funds into preliminary studies on creating 13 high-speed rail lines. Much of these funds will be used to improve the current rail system and to create new lines linking important cities. The administration is hoping to create high-speed lines to accommodate trains reaching 150 -200 miles/hour.8 Four hub cities (Albany, Chicago, Orlando, and Los Angeles) will be the main beneficiaries. These cities are expected to gain tens of thousands of new jobs and billions of dollars of new businesses.9

The stimulus funds have helped push states to seek a broader cooperation with China to learn more about its high speed rail. The Chinese government and the state of California recently signed a cooperation agreement on high speed rail. In the preliminary agreement with California, China will license the technology, supply engineers, and provide 20 percent of the components. The other 80 percent of the components will come from American suppliers, due to the “Buy American” clause attached to stimulus funding.10

Not only will China provide expertise, it also helps to invest its own funds in the project. This is viewed as a great opportunity for China to diversify its investments. Already China has started building similar high speed rail lines in Turkey, Venezuela and Saudi Arabia and is in negotiations with Brazil.11

Benefits of High-Speed Rail

High speed rail obviously benefits business travelers. Rail stations are usually found in city centers, making them more convenient than most airports. Many of the high-speed trains also have Internet-access, an added benefit not found on most airlines.12 Business travelers though are not the only beneficiary.

Many of the benefits of high speed rail will be felt across society as it has the potential to help bring down the cost of transporting goods (thus potentially decreasing the costs of the those goods for consumers). When dedicated lines are put in place for high speed rail, then existing lines will be open to other uses, especially freight traffic. In China, transport by freight cost 70 percent less than transport by trucks and transport by freight uses 77 percent less energy and creates 91 percent less carbon dioxide emissions.13

Hence, the use of freight will reduce costs for businesses and will have the added benefit of reduced emissions. Airplanes, cars and trucks all use more energy than freight trains. The Environmental Law and Policy Center claims that high speed trains are, “three times as fuel efficient as cars and six times as fuel efficient as planes on a per-passenger-mile basis.”14

Arguments Against High Speed Rail

So with all of these obvious benefits, why are many against the investment of high speed rail?

In South Africa, critics of the Gautrain believe that the funds could have been better used by upgrading transport infrastructure for the lower class. The high cost of the train makes it to expensive for poor people, making it only accessible to the elite of society. Some acknowledge though that society may benefit overall if traffic decreases in highly congested routes because those who can afford it would be taking the high speed rail.15

Similarly in Vietnam, some are questioning the high price tag ($56 billion dollars/60 percent of Vietnam’s 2009 GD) of the planned high speed rail that is expected to be completed by 2035. Vietnam’s infrastructure has many problems and basic infrastructure improvements are needed. For example, in the Central highlands, there are areas with no bridges where children have to get to school by swinging on a cable to cross a river.16

The high cost are prohibitive and the initial investments are often made by governments, rather than private investors. California’s high speed rail system is expected to cost $34 billion, with half of those funds coming from the federal government.17 With all of these tax dollars being invested in high speed rail, many worry about the long-term profitability of this investment. Amtrak, for example, relies on federal funds to keep it afloat, receiving more than $5 billion in federal appropriations and stimulus funds over the past three years. Europe’s high speed rail is highly subsidized as well; Germany, for example, provided annual subsidies of $11.6 billion (from 1996 – 2006).18

Looking to the Future

China clearly supports the concept of high speed rail and is investing their renbi both at home and abroad in high speed rail projects. With plans for more than 800 bullet trains within China and two international networks connecting China to Europe with terminuses in London and Berlin, as well as a third network in Asia, linking Vietnam, Thailand, Burma, Malaysia, and Singapore, China is taking the lead worldwide.19

While high speed rail will never replace airplanes, it seems that many believe it is a viable, investment-worthy alternative. Only time will tell if they are right.


 

1 James, Randy. “A Brief History of High-Speed Rail.” Time. April 20, 2009.
2 Ibid.
3 Wolmar, Christian. “Making High-Speed Tracks.” Wall Street Journal. May 26, 2010.
4 Ibid.
5 Ibid.
6 James, Randy. “A Brief History of High-Speed Rail.” Time. April 20, 2009.
7 Wolmar, Christian. “Making High-Speed Tracks.” Wall Street Journal. May 26, 2010.
8 Trottman, Melanie and Paul Glader. “High-Speed Rivalry Picks Up Steam.” Wall Street Journal. June 15, 2010.
9 Vaidyanathan, Gayathri. “High-Speed Rail Will Spur Growth in Hub Cities, Says Mayors Report.” New York Times. June 14, 2010.
10 Bradsher, Keith. “China Is Eager to Bring High-Speed Rail Expertise to the U.S.” New York Times. April 7, 2010.
11 Ibid.
12 Wolmar, Christian. “Making High-Speed Tracks.” Wall Street Journal. May 26, 2010.
13 Freeman, Will and Arthur Kroeber. “China’s Fast Track to Development.” Wall Street Journal. June 2, 2010.
14 http://elpc.org/category/smart-transportation
15 Dixon, Robin. “High-speed train gives South Africa a lift.” Los Angeles Times. June 9, 2010.
16 Timberlake, Ian. “Critics urge brakes on Vietnam’s high-speed rail.” June 13, 2010.
17 Smith, Aaron. “Money train: The cost of high-speed rail.” CNN. July 2, 2009.
18 Ibid.
19 Liu, Melinda and Anna Nemtsova, Owen Matthews “The New Silk Road.” Newsweek. May 10, 2010.

* Picture: http://www.flickr.com/photos/mujitra/3620377275/

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