Public Will Pay the Price for High-Speed RailOP-ED Monday, October 17, 2011
When I read the headline on the Oct. 3 Business Journal op-ed “State on Right Track” about California’s planned high-speed rail system, the first image that came to mind was the scene from “Back to the Future Part 3” where they get the train up to breakneck speed as it runs right off the end of an unfinished bridge. Yup, that’s it.
You need to be very alert. Virtually everything you read about high-speed rail is propaganda. Well thought out, highly polished, sooooo smooth, but pure propaganda – much of it written by people who stand to make a big pile of money from building it. Keep focused on that. It’s the real story.
Educate yourself on the history of these projects, not just here but all over the world. Over and over and over again there are wildly inflated passenger projections; cost estimates that are half, one-third or worse than the final bill; and projected maintenance and operating costs that are total fantasies.
I could go on for pages, but they won’t let me, so I’m going to straighten out at least one statement. The writer of the op-ed said: “Every high-speed rail system in the world operates at a profit.” Now a skeptical person might consider that statement less than accurate because the fact is, not one of them does. Two are suspected of being close to breaking even on operating costs, but their accounting, to be kind, is less than transparent.
Taken for ride
I recently spent a week in Taiwan, rode its train, and I’m here to tell you it works and it’s nice. But it’s a textbook example of how propaganda works. They claim to be operating at a profit, but you will never see a true, candid accounting, so you have to piece it together from bits and pieces.
Here’s the apparent deal simplified: Private investors put up the money so the government can make big hay out of it. (One thing I learned in Taiwan, nothing of any substance happens without governmental collusion. Half of a successful operation is getting the right guy on your side.) Investor money goes in, it’s guaranteed by the government, the train gets built, money ends up in many pockets. Maybe not unlike our system.
Now it’s time to actually run it. The investors knew from the beginning you can’t make money running the train, so the government buys them all out because, really, it’s such a great deal. The investors have all their money and then some, their “partners” in government all get theirs, and the public starts footing the bill. All of a sudden, it’s “profitable.” But no one gets to see the books. It is politically expedient for the government to make money so they simply decree it so. I guarantee that you will never see Deloitte doing an audit. Oh, and that enormous capital investment and debt? That doesn’t seem to exist anymore.