>> and those hi speed lines experience a profit.
I have no idea where your idea comes from on this, but I doubt it, given Tim's posts on the matter.
Why would you think that? After all, most of Tim's links were to rightwing media and you know how frequently they get it wrong.
The reality:
From its TGV services, SNCF has made significant profits, which have reached €900 million annually in recent years, much of which has been used to cross-subsidize losses on slower Intercités trains serving smaller cities and TER operations offering regional rail.
But the demands by President Nicolas Sarkozy — who recently said “The TGV, it’s France” — on the national public rail infrastructure owner RFF to build more high-speed lines has changed the equation. Though new routes are usually partially funded by local, regional, and national governments, TGV offerings have been expected to pay back a portion of construction costs (and the much smaller cost of line maintenance) through fees on track usage. RFF covered 28% of the construction costs of the LGV Rhin-Rhône Branche Est, which will open for service later this year, for instance; those costs will be paid back through track fees eventually passed down to passengers on TGVs.
But debt accumulated to build the lines has reached €29 billion for RFF and €9 billion for SNCF; new lines, at a cost of €16-27 million per kilometer, will increase those sums substantially.
RFF has responded to this increase in debt by significantly increasing track fees, and it plans to do so by 40% between 2008 and 2012 — enough to wipe out SNCF’s margin of profitability on the TGV entirely (though the French government has said it would work to stabilize those charges after 2013). RFF will increase fees on the most popular TGV routes the most.
SNCF has responded by threatening to cancel routes with lower ridership (even though they are profitable if excluding the track fees devoted to construction) and it has said the loss of profitability will make it impossible for it to replace the original 1981 fleet of TGVs before 2020. Fares are increasing at 3.4% annually, twice the rate of inflation, and SNCF plans to charge users more on select routes even as it reduces customer service for others to a low-cost model over the next few years. Competition on international routes running through France, expected to begin later this year, will put another cog in the TGV’s future.
Other solutions, such as public-private partnerships for new routes, may reduce the burden on RFF, but they won’t help much for SNCF or riders because someone will have to pay for construction costs at some point. The new LGV Sud Europe Atlantique, to run from Tours to Bordeaux, will cover 55% of its construction costs through track fees, but the project’s PPP partner’s investment in the project will have to be paid back through higher track fees on trains through the corridor (the private investor will also get to keep all profits from the line). RFF’s 14% share of the costs of this project will have to be covered by riders on other lines paying track fees, since all track fees from this route will go to the investor, not RFF.
The irony of charging more track fees to pay for the construction of new lines is a lower degree of service on existing lines and less train travel, since SNCF must cover capital costs with operations profits and higher fares reduce demand.
Standing in the way is the inherent conflict between SNCF’s interests, which revolve around maximizing passenger revenue, and those of RFF, which are about minimizing debt from infrastructure construction and maintenance. These must be harmonized. SNCF’s President Guillaume Pépy has suggested that the current separation of operations from track ownership is a clunky, inefficient model that does not respond adequately to the needs of the railway. Other solutions, such as Germany’s or Spain’s, in which infrastructure is owned by a division of the national rail company, may be less amenable to future competition in services but may make for a less administratively complex system.
The fundamental question is whether France should continue to build new lines (and increase the debt of agencies like RFF), even if that means putting existing services out of the price range of some riders. The government has chosen to pursue that path, but it may not be a solution that is viable in the long term.
Nonetheless, the TGV remains a model for the rest of the world. SNCF has successfully demonstrated how to extend fast, safe, and environmentally friendly rail services to most of the country at prices that most of the population can afford.
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Why would the US be different?
One could easily list a dozen reasons, but it would be mere speculation.
And it isn't necessary. What IS necessary is to see that there are no investors willing to take on these projects, WHICH THERE WOULD BE if anyone could see their way to profitability. So, it would seem, if you REALLY support the development of rail, you should be able to show investors how they can turn a profit on it.
It is pretty obvious when one looks at even the estimates for the proposed LA & SF line there is no chance, whatsoever, of a profit. None. And as you have pointed out, that rail line has more potential than just about anywhere in the country.
If rail can be done at reasonable cost between certain cities, someone might do it. For example, land is comparably cheap in TX, so Houston/Austin/San Antonio/Dallas is a possibility. But investors won't even tackle that (which would run a fraction of the cost of LA/SFO).
Where are the investors?
First of all, there is very little commitment to high speed rail thanks to Rs. They have so denigrated the concept that no investor would even look at it.
Secondly, there is not one example of mass transit in this country which does not get subsidies in one form or the another.........airlines, buses, the automobile.........and yet, Rs prefer to starve Amtrak to death and refuse to help rail in any shape or form.
Finally, hi speed rail can not be built without gov't involvement. Just as gov't has built airports and the interstate system, gov't will have to be involved in the build out of new track because to be successful, hi speed rail in this country can't run on the same track as freight.
The bottom line: Profitability alludes most of the airlines and so they keep cutting back flights. First the majors cut service to very small airports and replaced that service with their regionals. But that isn't working either and many small airports are losing commercial service completely. Now they are starting to do the same thing to third and some second tier cities. Cities like Buffalo, Rochester and Syracuse are served mostly by regionals now and not the majors, and the service is much diminished compared to even ten years ago. Only non stop routes between major cities seem to be profitable for the majors and I foresee a time when that's all they fly. That's where rail comes in.........they can be profitable on much shorter routes......like between LA and San Diego or DC and NY or Chicago and Detroit or Dallas and Houston. Between bigger cities like Dallas and Houston or LA and SFO, you do hi speed rail. Between cities like LA and San Diego the Acela engine will do. |
