Costs of California’s troubled bullet train rise again, by estimated $5B(latimes.com)
latimes.com
Costs of California’s troubled bullet train rise again, by estimated $5B
https://www.latimes.com/california/story/2022-02-08/california-bullet-train-costs-rise-roughly-5-billion
66 comments
Are there many large infrastructure projects in America that actually turn out to be a waste of time? It seems like any large infrastructure project tends to get a whole load of pushback and political shenanigans (which often are the direct cause of spiralling costs), but in the end once it's built (if it's built) it's a massive benefit. Is the real lesson here just that we should all just shut up and get on with it?
My aggravation with infrastructure projects is not with the rebar and concrete parts but with the “everyone will vote for this, so I’m going to staple some completely unrelated pork to it” BS that is frequently attempted and sometimes succeeds in US politics.
Of course, one person’s pork is another person’s dinner, so it’s unlikely to stop.
I’m not sure this project would have been viewed quite as favorably as the Big Dig: https://en.m.wikipedia.org/wiki/Gravina_Island_Bridge though there are many who characterize the Big Dig itself as a massive pork barrel project.
Of course, one person’s pork is another person’s dinner, so it’s unlikely to stop.
I’m not sure this project would have been viewed quite as favorably as the Big Dig: https://en.m.wikipedia.org/wiki/Gravina_Island_Bridge though there are many who characterize the Big Dig itself as a massive pork barrel project.
I'm from EU, living in EU and... Can't really answer for USA but in EU all large infra projects have proven countless time big waste of resources, even the very few that for some reason prove to work a bit for a short period of time... I suppose that's happen equally around the world. Some, who shape things more for the today economy suffer more (like probably USA, or Germany) and those who plan a bit more for States interest suffer a bit less (like France) but in the end the outcome is not that different, only more or less visible to anyone.
In transportation terms the main issue is that you plan something that will be ready after many years, when it will be ready (if it ever will) things have changes and so the once theoretically good infra is now not needed/nor useful anymore...
In transportation terms the main issue is that you plan something that will be ready after many years, when it will be ready (if it ever will) things have changes and so the once theoretically good infra is now not needed/nor useful anymore...
It never got built but it's hard to see how the famous Alaska Bridge To Nowhere [1] could have ever penciled out if it were built.
[1] https://en.wikipedia.org/wiki/Gravina_Island_Bridge
[1] https://en.wikipedia.org/wiki/Gravina_Island_Bridge
> in the end once it's built (if it's built) it's a massive benefit
Like what?
Like what?
That "Big Dig" in Boston is probably a good example. It was like... 10 years past its original schedule, wayyyy over budget... but I don't think anyone in Boston wants to go back to before it.
https://en.wikipedia.org/wiki/Big_Dig
https://en.wikipedia.org/wiki/Big_Dig
Been on a road or pavement lately? Airport, railway, school, park, townhall etc.?
Someone complained that thing was a waste of money when it was built.
Someone complained that thing was a waste of money when it was built.
I don't know. Maybe something like the Interstate Highway System.
BART.
Simple rule of thumb:
If it is transit related, then it is a waste of time.
If it is auto and truck related, then it is not a waste of time.
Transit projects get a lot more “help” to make them viable because the lawsuit folks think that they are more green and for the greater good.
Auto projects (roadways and highways) go through much more scrutiny and evaluation than transit, so you better be sure to have your i’s dotted on these.
Which means there is much more analysis to justify a need for the roadway. Transit items are given as much lee way as possible to make it work.
If it is transit related, then it is a waste of time.
If it is auto and truck related, then it is not a waste of time.
Transit projects get a lot more “help” to make them viable because the lawsuit folks think that they are more green and for the greater good.
Auto projects (roadways and highways) go through much more scrutiny and evaluation than transit, so you better be sure to have your i’s dotted on these.
Which means there is much more analysis to justify a need for the roadway. Transit items are given as much lee way as possible to make it work.
So the total projected end to end cost is up to $105b from $100b 2 years ago. Isn't that just accounting for inflation? The LA times really has an axe to grind whenever they write about the bullet train.
The LA times only reports the high cost estimate for California's high speed rail because for whatever reason the LA Times has a hate boner for the project. If you go by them the costs keep massively going up while nothing has been done so far. One can also read progress reports from the rail authority and look at satellite pictures. Which will both show that estimated cost is increasing 'a bit' and steady progress being made in the central valley.
https://www.buildhsr.com/
Quote: The current cost estimate to deliver the 500-mile system linking San Francisco to Los Angeles/Anaheim via the Central Valley ranges from $69.01 to $99.9 billion.
From here https://hsr.ca.gov/about/capital-costs-funding/
You can compare that to the BART Silicon Valley Extension Phase II. Budget for that is 6.9 billion for a six mile extension. Which the press is studiously ignoring.
https://www.buildhsr.com/
Quote: The current cost estimate to deliver the 500-mile system linking San Francisco to Los Angeles/Anaheim via the Central Valley ranges from $69.01 to $99.9 billion.
From here https://hsr.ca.gov/about/capital-costs-funding/
You can compare that to the BART Silicon Valley Extension Phase II. Budget for that is 6.9 billion for a six mile extension. Which the press is studiously ignoring.
In 2018, the entirety of all corporate income taxes collected was $200b, and the entire Medicaid program was $389b[1].
" In 2021, the solar industry generated more than $33 billion of private investment in the American economy": So the entire solar industry is 1/3 of this single rail line.
You can't just casually call it "inflation" when you're spending significant percentages of the annual budget on a single train line and somehow it's still not enough. 1/6 of the entire solar industry is not "inflation".
Amtrak requested $4 billion in COVID relief from the government to maintain its national rail network, and $1.5 billion to "expand rail service"[2]. That entire amount you just called "inflation" for a single rail line, and they're running 26 lines all over the country. Also: Even if the construction costs somehow end up comparable, Amtrak's entire annual revenue is $2.3 billion. How long's it going to take to pay back $105 billion with this single rail line, if the entire Amtrak network would take 50 years to pay this one line back ignoring all operating costs?
[1] https://www.cbo.gov/publication/55342 [2] http://media.amtrak.com/wp-content/uploads/2021/04/Amtrak-Ge...
" In 2021, the solar industry generated more than $33 billion of private investment in the American economy": So the entire solar industry is 1/3 of this single rail line.
You can't just casually call it "inflation" when you're spending significant percentages of the annual budget on a single train line and somehow it's still not enough. 1/6 of the entire solar industry is not "inflation".
Amtrak requested $4 billion in COVID relief from the government to maintain its national rail network, and $1.5 billion to "expand rail service"[2]. That entire amount you just called "inflation" for a single rail line, and they're running 26 lines all over the country. Also: Even if the construction costs somehow end up comparable, Amtrak's entire annual revenue is $2.3 billion. How long's it going to take to pay back $105 billion with this single rail line, if the entire Amtrak network would take 50 years to pay this one line back ignoring all operating costs?
[1] https://www.cbo.gov/publication/55342 [2] http://media.amtrak.com/wp-content/uploads/2021/04/Amtrak-Ge...
Have you ever traveled long distance on amtrak? Their website claims there are trains between the stations you want but then a few clicks later tells you they are canceled for the day you chose to travel. Doesn't matter what day, it's canceled that day, sorry.
For example, try to get from the bay area to Chicago. Prices claim to start around 500 bucks for a non bed ticket for the 2.5 day trip. But it's actually not possible to get an itinerary that doesn't include traveling on a weekend.
For example, try to get from the bay area to Chicago. Prices claim to start around 500 bucks for a non bed ticket for the 2.5 day trip. But it's actually not possible to get an itinerary that doesn't include traveling on a weekend.
California (like most places) can clearly benefit from high quality rail infrastructure:
- more pleasant commutes over greater distances
- reduced housing market pressure near major offices
- reduced noise and air pollution compared to motor vehicles (for the same carrying capacity)
But how is it so expensive?
- more pleasant commutes over greater distances
- reduced housing market pressure near major offices
- reduced noise and air pollution compared to motor vehicles (for the same carrying capacity)
But how is it so expensive?
Every step in a project needs to go through long approval/permitting processes that cost a lot of time and money. This ignores the high cost of labor/materials in California.
The only reason why the NYC subway, and the Chicago L are there today is because they were built before all of these processes existed. You could not build anything like them in modern day.
The only reason why the NYC subway, and the Chicago L are there today is because they were built before all of these processes existed. You could not build anything like them in modern day.
> You could not build anything like them in modern day.
You can not build it in the USA. London is about to open the newly built Elizabeth line, which cuts through the city with 60 miles of tunnels. Modern Metro/Subway infrastructure can be built in densely populated areas like Chicago and NYC. It's a political issue, not an engineering one.
You can not build it in the USA. London is about to open the newly built Elizabeth line, which cuts through the city with 60 miles of tunnels. Modern Metro/Subway infrastructure can be built in densely populated areas like Chicago and NYC. It's a political issue, not an engineering one.
> You can not build it in the USA.
Precisely. Asia is on a roll in this regard.
Precisely. Asia is on a roll in this regard.
Meanwhile, over here, we're paying EUR ~10 billion to rebuild a single train station in one of our mid-sized cities: https://en.wikipedia.org/wiki/Stuttgart_21
OTOH, building the HSR between Berlin and Munich (~500 km) was also about EUR 10 billion, which I guess makes it a bargain. These things aren't comparable, though.
OTOH, building the HSR between Berlin and Munich (~500 km) was also about EUR 10 billion, which I guess makes it a bargain. These things aren't comparable, though.
IMHO Stuttgart 21 is as much a real estate grab as it is about a new rail station. Not sure, but doesn't the cost include all/ parts of the new tunnels and railways that go through the not-so-stable hills east of Stuttgart?
Anyway, Stuttgart 21 is a highly convoluted project, one that was really pushed hard by politicians. The last bit makes me usually skeptical in itself.
Anyway, Stuttgart 21 is a highly convoluted project, one that was really pushed hard by politicians. The last bit makes me usually skeptical in itself.
>But how is it so expensive?
that is a classic megaproject which will be expanding in cost until there is no more expansion is possible and then a bit more.
Lets imagine some numbers - at 100B cost and say $5B/year expenses, it would need $7B/year of tickets for 50 years ROI, ie. it would need $20M/day, which is 100000 passengers/day at $200/ticket, like a 100 trains/day with 1000 riders each.
that is a classic megaproject which will be expanding in cost until there is no more expansion is possible and then a bit more.
Lets imagine some numbers - at 100B cost and say $5B/year expenses, it would need $7B/year of tickets for 50 years ROI, ie. it would need $20M/day, which is 100000 passengers/day at $200/ticket, like a 100 trains/day with 1000 riders each.
That's not how you assess ROI. You assess ROI by estimating the total economic contribution to the area.
https://www.apta.com/wp-content/uploads/Resources/resources/...
https://www.apta.com/wp-content/uploads/Resources/resources/...
Oh! you're right. Such approach though would easily allow the cost to continue balloon, and $200B by 2027 don't look unimaginable.
Large infrastructure projects like this are paying it forward. They are a gift to future generations who will reap the benefit without having to pay for it, just as we have benefited from inherited infrastructure of our cities.
> They are a gift to future generations who will reap the benefit without having to pay for it, …
Thanks to deficit spending they will be paying for it.
The only people getting a gift here are the ones fleecing the government to run up the costs. They get their money now and all our kids and grandkids get the bill.
Thanks to deficit spending they will be paying for it.
The only people getting a gift here are the ones fleecing the government to run up the costs. They get their money now and all our kids and grandkids get the bill.
As is the way with most government debt - ideally, economic growth will outpace the cumulative interest accrued by the debt. There are other externalities too, like the economic benefits from quicker transport between major cities.
If you want to ask the size of those benefits, imagine London or New York without their underground/subway systems. It is a big deal and can't just be counted by ticket prices!
If you want to ask the size of those benefits, imagine London or New York without their underground/subway systems. It is a big deal and can't just be counted by ticket prices!
> As is the way with most government debt - ideally, economic growth will outpace the cumulative interest accrued by the debt.
Actual growth might not, but as most infra spending is financed with fixed rate bonds, a couple more years of Biden’s 9.6% inflation will take a nice bite out of those costs in future dollars.
Actual growth might not, but as most infra spending is financed with fixed rate bonds, a couple more years of Biden’s 9.6% inflation will take a nice bite out of those costs in future dollars.
"Biden's 9.6%" - I'm not american so this seems like a peculiar way of putting it since inflation is spiking across the whole western world. It seems weirdly partisan, was that the intention?
One can wonder what the future generations are robbed off by the money being redirected into the black hole of HSR.
Alright that settles it I’m going to move to the Nevada side of Lake Tahoe for half a year to cash out my QSBS stocks.
California taxes are a tax on poor people, exclusively.
California voters will just authorize a new bond issuance anyway.
California taxes are a tax on poor people, exclusively.
California voters will just authorize a new bond issuance anyway.
You'll still pay California taxes. Getting around California taxes is VERY hard to do, and they will come after you if they think you left to avoid taxes. Even if you never return to the state.
I can meet their safe harbors and actually leave, I only rent and already travel elsewhere more than 6 months (which is not enough on its own). So I would actually leave, get a new drivers license and register to vote in the other state (Nevada). I usually have enough deductions to get my AGI to zero or negative anyway (no tax). When it comes to QSBS liquidations though, I’m already good with the feds (no tax), only California uniquely would try to tax that separately.
This is why I won't even change planes in California if I can possibly avoid it.
Under what circumstances can you leave California and not pay Californian tax?
You leave and never come back. Sell all property. Demonstrate clear intent to live elsewhere (e.g. buying property in other state.) leave nothing behind, not even a storage unit.
Oh, and you need to move to another state, not another country.
Oh, and you need to move to another state, not another country.
One thing about the route I don’t get… why don’t they use the space between the roads on the 5? Isn’t that mostly accounted for by the government already? Especially if so much of the tracks is raised.
It's not about space. You don't spend $105,000,000,000 on land.
You can spend real money on construction that causes a minimum of inconvenience. Say you want to build on a road median, and then someone imposes a requirement that at most one lane be closed during the construction. The land isn't a problem, doing the construction while closing only one lane is expensive.
There are other variants. Basically, every time either the route or the construction is constrained, the cost goes up. You have to enter a city at one spot instead of 10m/100m further east? You have to build a bridge at one spot instead of 5km further west? I know examples where both of those caused well over 100% cost increases.
You can spend real money on construction that causes a minimum of inconvenience. Say you want to build on a road median, and then someone imposes a requirement that at most one lane be closed during the construction. The land isn't a problem, doing the construction while closing only one lane is expensive.
There are other variants. Basically, every time either the route or the construction is constrained, the cost goes up. You have to enter a city at one spot instead of 10m/100m further east? You have to build a bridge at one spot instead of 5km further west? I know examples where both of those caused well over 100% cost increases.
I want to digress.
http://www.railfaneurope.net/tgv/images/construction/vdcavig... shows a part of TGV track being lifted into place. TGV is cheap high-speed track, particularly if one is willing to leverage the experience the French have built. That seems to be for a bridge, so not cheap, but the width ought to match the usual track width.
Would that fit in a road median? It seems implausible.
If not, then it's a fair assumption that building something narrower will add to the cost. The French didn't spend extra to build wider than optimal tracks, after all.
EDIT: I found http://www.railfaneurope.net/tgv/track.html and… wow.
http://www.railfaneurope.net/tgv/images/construction/vdcavig... shows a part of TGV track being lifted into place. TGV is cheap high-speed track, particularly if one is willing to leverage the experience the French have built. That seems to be for a bridge, so not cheap, but the width ought to match the usual track width.
Would that fit in a road median? It seems implausible.
If not, then it's a fair assumption that building something narrower will add to the cost. The French didn't spend extra to build wider than optimal tracks, after all.
EDIT: I found http://www.railfaneurope.net/tgv/track.html and… wow.
The design is not supposed to preclude operating at 250 MPH. The minimum curve radius for this speed is enormous. The median in the interstate is not straight enough to support the speeds needed for HSR. You can put light rail in there but not anything much faster than that.
Because the 5 is not where the population is in the central valley.
I'm sorry, but why are we optimizing around the Central Valley population centers? When I voted for this high-speed rail (which I now regret), it was a bullet train between San Francisco and Los Angeles. Now it connects to neither.
It will connect to both. Big projects like this are typically built in stages and the central valley stage is being built first. The upgrades planned on the each end to support the rail aren't even done yet (e.g. LINK union station). There are a lot of people who live in the central valley already, and there is room for these regions to infill still.
For pieces in LA and SF it will use commuter tracks and not be a new alignment.
It seems something like that could always be multitracked or a new alignment built in the future. Putting a right of way through an established urban area is not as cheap as using existing commuter lines. For instance in LA if you look at where the metrolink goes it would be foolish not to use that right of way if the goal is to go to union station.
I haven't followed this for a while, but this map still seems to connect SF to LA:
https://hsr.ca.gov/high-speed-rail-in-california/project-sec...
https://hsr.ca.gov/high-speed-rail-in-california/project-sec...
It was originally supposed to have a raised track to isolate the high-speed rail from jumpers and to avoid street crossings. That project was dropped. The segments in SF and LA will use commuter tracks (e.g. existing CalTrain) and run at a maximum of half the speed it obtains in the long Central Valley segments. Given the trouble that Caltrain has with clearing and keeping people and foreign objects off the tracks, I sincerely doubt that even that speed (110mi/h) could be achieved safely.
This is a faster-than-CalTrain-but-that's-not-saying-much rail connection from SF to the Central Valley, a bullet train down to Bakersfield, and then a similarly slow trek into LA.
This is a faster-than-CalTrain-but-that's-not-saying-much rail connection from SF to the Central Valley, a bullet train down to Bakersfield, and then a similarly slow trek into LA.
Metro link doesn't seem to have these issues and a lot of projects are in store to upgrade that right of way (like LINK union station to permit run through at union station instead of it being a stub). A lot of thought is being put into this. Using an existing right of way that can later be upgraded is sensible imo, especially when these terminii will have the highest land acquisition costs by far. The metrolink right of way from burbank into union station already has many key grade separations done. Its sensible to make use of it when its almost a direct shot as the crow flies.
over the past few decades the central valley has grown into a political power that can't be ignored (billions of dollars of agriculture). the path was a compromise, but also a huge mistake.
Also 6.5 million people live in the central valley so its not exactly empty. For reference, the bay area has 7.7 million people
What is the relative density of those areas? High speed trains only make sense moving between dense areas. The central valley is many multiples of size of the bay area and the population served by the train will be small.
Where it actually stops is not in the fields but in the city centers of places like fresno, a city larger than sacramento.
At one time Baltimore worked long and hard, and spent a lot of money, building a subway system.
When the system was done, a prof I knew did a cost-benefit analysis and looked for an optimal way to proceed. His result, clear and solid: Brick up the entrances to the subway and otherwise just f'get about it. That is, even given the subway already built and for free, just the continuing operating costs would exceed any reasonable list of benefits.
The idea of cost-benefit analysis goes way back to the early 1900s: People saw that could have water resource projects that would let a desert bloom. So, there were a lot of such proposals. So, to filter the proposals people worked out the technique of cost-benefit analysis and wrote into some laws that for any such water projects the benefits had to exceed the costs -- that requirement filtered out nearly all the water projects. Subways and trains stand to be filtered similarly.
When the system was done, a prof I knew did a cost-benefit analysis and looked for an optimal way to proceed. His result, clear and solid: Brick up the entrances to the subway and otherwise just f'get about it. That is, even given the subway already built and for free, just the continuing operating costs would exceed any reasonable list of benefits.
The idea of cost-benefit analysis goes way back to the early 1900s: People saw that could have water resource projects that would let a desert bloom. So, there were a lot of such proposals. So, to filter the proposals people worked out the technique of cost-benefit analysis and wrote into some laws that for any such water projects the benefits had to exceed the costs -- that requirement filtered out nearly all the water projects. Subways and trains stand to be filtered similarly.
The shameful handling of this project will echo through the next decades, and it will be used by Elon Musk types to profit on electric cars and single car tunnels as the solution for modern infrastructure in the US.
105B/39.51M=2657. Can I just take the money?
IMVHO any of those kind of infra is a big waste of resources. The cost of certain infrastructure is simply too high.
Now we probably all know the classic economic theory of density, that state cities are needed because people together innovate more, create economy of scale etc, unfortunately too many forget the second part of such theory: a certain amount of density is needed, being more dense just skyrocket costs and create so many issue to nullify any eventually remaining benefit.
High speed trains, and in general ANY big infrastructure fall in this very case, because density does not mean just big cities but also infrastructures to serve them. A big railroad, commercials one included like the Chinese project across central Asia to Europe, means serve a high density area from production of another density area. Too dense in both case to give benefits stronger than their downsides.
IMVHO while for a very big timeslice of human history classic cities was the best density on average, now the best density is a sparse Riviera where resident and production are intermixed and near enough, with just few punctual dense complex for certain production and services like big complex for automotive/aerospace/naval/defense, hospitals, campus, ... but the rest sparse enough to have anything reasonably near (lower transportation costs) but with room to evolve at a slow and continuous peace. Sure, we are many in the world and some countries simply do not have even enough land to afford such model, but we see how big cities fails and we see how dense area fails equally... It's about time to realize that a certain kind of economic development is not viable anymore and we need another one, with some aspects already known from the past and some others brand new.
Just take metro trains: they are the key to city mobility, the sole that work efficiently at a city scale. Super expensive and move gazillion of people per day... Well, most of them are from the tertiary sector, witch means that most of them can WFH without need such super-expensive transportation means, many others are workers affluent of the tertiary sectors so people who need another job if WFH spread. Only a small cohort remain benefiting from metro trains and for them due to the size there is no reason to have nor cities nor metro.
Change is always difficult and always makes errors and horrors. USA have tried to push car sails the suburb model and was a failure, but not because of the suburb, just because suburb are just residential and workspace are far away. Intermixing them and pushing WFH solve suburb issue, in theory. It does not in practice because suburb themselves are dense enough to have tough time reshuffling from purely residential to commercial and residential mixed. And that's why we need less dense design: because such design might or might not work today and might or might not change tomorrow, if there is enough physical space evolution is possible, if not costs skyrocket not much differently than actual cities or suburbs. Things change, being able to adapt is the key, and it's not a new buzzword like "resilience" is the classic Charles Darwin theory of Evolution: not the strongest, not the today's better but the more able to adapt will survive.
Now we probably all know the classic economic theory of density, that state cities are needed because people together innovate more, create economy of scale etc, unfortunately too many forget the second part of such theory: a certain amount of density is needed, being more dense just skyrocket costs and create so many issue to nullify any eventually remaining benefit.
High speed trains, and in general ANY big infrastructure fall in this very case, because density does not mean just big cities but also infrastructures to serve them. A big railroad, commercials one included like the Chinese project across central Asia to Europe, means serve a high density area from production of another density area. Too dense in both case to give benefits stronger than their downsides.
IMVHO while for a very big timeslice of human history classic cities was the best density on average, now the best density is a sparse Riviera where resident and production are intermixed and near enough, with just few punctual dense complex for certain production and services like big complex for automotive/aerospace/naval/defense, hospitals, campus, ... but the rest sparse enough to have anything reasonably near (lower transportation costs) but with room to evolve at a slow and continuous peace. Sure, we are many in the world and some countries simply do not have even enough land to afford such model, but we see how big cities fails and we see how dense area fails equally... It's about time to realize that a certain kind of economic development is not viable anymore and we need another one, with some aspects already known from the past and some others brand new.
Just take metro trains: they are the key to city mobility, the sole that work efficiently at a city scale. Super expensive and move gazillion of people per day... Well, most of them are from the tertiary sector, witch means that most of them can WFH without need such super-expensive transportation means, many others are workers affluent of the tertiary sectors so people who need another job if WFH spread. Only a small cohort remain benefiting from metro trains and for them due to the size there is no reason to have nor cities nor metro.
Change is always difficult and always makes errors and horrors. USA have tried to push car sails the suburb model and was a failure, but not because of the suburb, just because suburb are just residential and workspace are far away. Intermixing them and pushing WFH solve suburb issue, in theory. It does not in practice because suburb themselves are dense enough to have tough time reshuffling from purely residential to commercial and residential mixed. And that's why we need less dense design: because such design might or might not work today and might or might not change tomorrow, if there is enough physical space evolution is possible, if not costs skyrocket not much differently than actual cities or suburbs. Things change, being able to adapt is the key, and it's not a new buzzword like "resilience" is the classic Charles Darwin theory of Evolution: not the strongest, not the today's better but the more able to adapt will survive.
This will grow until it cripples California's budget for decade, if it is not shut down.
See also "the big dig"
See also "the big dig"
What a joke.
There is no incentive for them to reduce costs. Any time some change or obstacle comes up - well, let's spend another $500M, that will take care of it.
And people still think we should place more of the economy under the control of the government?
There is no incentive for them to reduce costs. Any time some change or obstacle comes up - well, let's spend another $500M, that will take care of it.
And people still think we should place more of the economy under the control of the government?
Yes, the government is quite inefficient, but infrastructure is a natural Monopoly. Privatization doesn't work here either. Germany tried and failed that.
Natural monopolies only lead to rent seeking when in private hands. You'll pay even more than for inefficient government action. There's no incentive for them to lower their prices either.
Privatization only works when you consider negative externalities and have a competitive market.
For something like this you need a working democratic oversight. The people have to be the incentive to make it work.
Natural monopolies only lead to rent seeking when in private hands. You'll pay even more than for inefficient government action. There's no incentive for them to lower their prices either.
Privatization only works when you consider negative externalities and have a competitive market.
For something like this you need a working democratic oversight. The people have to be the incentive to make it work.
Ahhh.. Berlin-Brandenburg...
But I agree. Major infrastructure -roads, trains, electricity/energy, water, high-speed communication- should not be privatized, because they should simply work. And be maintained. And get upgraded on time. And they all involve planning time frames that span tens of years.
But I agree. Major infrastructure -roads, trains, electricity/energy, water, high-speed communication- should not be privatized, because they should simply work. And be maintained. And get upgraded on time. And they all involve planning time frames that span tens of years.
I don’t think it’s as black and white as that. The original railways in the US and in most of Europe were developed privately AFAIK - then in many cases the infrastructure was later nationalized - and in some cases subsequently privatized! More recently much of the mobile telecoms infrastructure was developed privately. Earlier it seems that much of the fixed line network globally was developed publicly.
The original railways in the US were giving outrageous rights and huge stretches of land, which quickly led to monopolies and cartel formations. That resulted in the first anti-trust laws in the US. On top of that, the current dire state of railways in the US can be directly linked to the fact that they are privatized.
Similarly, the early tracks in Europe were also often privately funded. Most were nationalized in the first half of the 20th century. Some countries tried privatizing tracks again (the UK, the Netherlands, Germany, ..) but quickly found out it didn't work.
Similarly, the early tracks in Europe were also often privately funded. Most were nationalized in the first half of the 20th century. Some countries tried privatizing tracks again (the UK, the Netherlands, Germany, ..) but quickly found out it didn't work.
The French build their high-speed track at 1/10th of the cost. So no, the problem is not the government. The latest track over there cost 5.4 billion dollars for 250 miles of track.