The idea that the federal government is proposing to finance a "high-speed" rail system in Florida -- along with similar projects elsewhere around the country -- is certainly causing sparks to fly. The problem is too many people are focused on the wrong question. The question should not be whether the government should subsidize a public passenger rail system or not. Most rail systems require some form of subsidy. The correct question is, Will the U.S. -- and the particular regions targeted for HSR -- be better off with a new rail system?
This question is relevant regardless of the funding process, because until that question is answered in the positive, no action should be taken. In other words, if the proposed rail line isn’t a benefit to the country (or region), it shouldn’t be built. Period! However, if it makes economic sense, then we need to determine as a society the best way to fund the project.
There are those that argue that if any rail system is built, it should be built with private funds. This sounds like a good idea. And if the economics work for a private venture, then that would be a preferred approach. However, even without government funding, the government will probably be needed to at least obtain the right-of-way, for instance. The obstacle to only relying on private investment is the playing field isn’t level. Rail service’s biggest competitors are roads and airlines, which are subsidized by the government.
In this scenario, however. If the private investment can’t stand totally on its own, it will not get built. And if there is a real benefit to U.S. society having a passenger rail system that alleviates congestion on the nation's highways, then that's a problem. Here, not funding rail may require as much additional taxes going into expanding roads and airports to handle the additional traffic not carried by the rail service if the rail system had been built in the first place. And if the roads don’t get built, then the taxpayers could spend more money in additional travel time sitting in traffic and the cost of goods could increase due to higher transportation expenses.
Again, we shouldn’t be subsidizing any rail systems just because it benefits a few; it must make economic sense for the entire community, including people who don't use rail. The American Society of Civil Engineers (ASCE) estimates that the average motorist spends $710 a year sitting in traffic. This figure is substantially higher in congested areas where rail service would offer the greatest financial benefits. Unfortunately, too many people that don’t ride the train are against any investments in trains. They want their tax dollars spent on fixing the highways. They don’t seem to understand that in many cases the most cost-effective way to reduce traffic congestion on our highways is to improve rail service.
Another important benefit of rail service is it requires less fuel to move people and cargo than other modes of transportation. Some argue that we should push for more rail service for this reason alone, but I don’t agree that we should impose additional costs for that reason. But it is a nice benefit when the rail line makes economic sense. In fact, if the financial analysis is a break-even situation, then energy consumption would be enough to tilt the discussion in its favor, because society would benefit from reduced demand for foreign oil.
In the end, what makes rail service work is convenient, cost-effective service. Trying to mandate that people use trains will get plenty of resistance and rightly so. Rail lines are very attractive in many locations. For example, Amtrak is popular with executives working in the Boston-to-Washington corridor. Also, when still a senator, Vice President Joseph Biden was famous for his daily trips from Wilmington, Del., to Washington, D.C.
In the end, what’s important is to make sure the ridership assumptions are accurate -- which is a big question -- that the service will be convenient and that we aren’t creating a white elephant. But that’s a discussion for another day.
Ted Garrison is a construction industry expert and civil engineer with more than 25 years of construction experience. During the last 12 years, he has authored Strategic Planning for Contractors and co-authored five other books on marketing, sales, customer service and leadership. Garrison also is the host of the Internet radio program, New Construction Strategies, www.NCS30.com, where he conducts weekly interviews of experts within the construction industry. He can be reached at Ted@TedGarrison.com or you can follow him Twitter @TedGarrison