Lessons from Spain’s bullet train: The numbers are lies, and it’s all about politics, not economics

Good for the Bee newspapers for actually doing original reporting on how Spain’s high-speed rail system is doing, and not giving the gig to the Sac Bee reporter who, amazingly, was the only person in North America impressed with the last version of the California High-Speed Rail Authority’s business plan. Key conclusions: Spain’s system is not making money, and the decisions about it are driven by politics, not economics, no matter what the public is told. Sound familiar, residents of California?

Reporter Tim Sheehan notes that Spain has spent $60 billion on building its bullet-train network since the late 1980s and that the result has been praised by President Obama as a model for what he wants to do in the United States. Surprise, surprise: It fits in with the president’s red-ink-doesn’t-matter approach to governing.

Despite assurances from the Spanish government that the long-distance AVE trains operate without a public subsidy, academics and analysts don’t believe that even the busiest high-speed route – between Madrid and Barcelona – musters enough riders to cover its operating costs, much less the billions of euros spent on infrastructure over the past 20 years. …

[Renowned Barcelona engineer Andreu] Ulied and Germà Bel, a professor of political economics at the University of Barcelona, agree that none of the Spanish high-speed rail routes carries enough riders to make the system financially sustainable.

“There is no question whether (Spain’s system) can cover its costs. It cannot,” Bel said. “It actually has not recovered one single euro from the infrastructure investment. The government claims they are recovering the operating costs, but the numbers are not clear.”

The busiest high-speed lines in the world are capable of making money, Bel said, including those between Paris and Lyon, where about 25 million people ride the French TGV trains each year, and the Japanese Shinkansen trains between Tokyo and Osaka, which draw about 130 million riders a year.

“But this is not the case with any single line in Spain,” Bel said. …

Then there was this hilarity:

Even the enthusiastic Spanish officials are curious about the logic of starting in the sparsely populated middle of California. The environmental benefits won’t be realized, they said, if the cities along the first line don’t have enough people to generate ridership.

“You need to have either Los Angeles or San Francisco,” said Pedro Pérez del Campo, environmental policy director for ADIF, Spain’s Administrator for Railway Infrastructures. “They should build it where it will have an impact so that people will support it.”

What’s so funny about this article is how it so conflicts with the message that the Brown administration tried like hell to sell last week, to wit: All the problems we’re seeing have to do with poor management, because the concept is just so, so awesome and can make lots and lots of money.

Yo, Jerry: They’re not making money in the nation the Obama administration wants to emulate.

Besides that enjoyable contradiction, there’s this: Theoretical speculation about what the distant future might hold for the bullet train isn’t on the Top 10 list of the biggest problems that the California High-Speed Rail Authority must deal with. That list starts with the fact that state law says no state funds can go to subsidize construction of the project, but no one in their right mind thinks private investors can be attracted without a revenue or ridership guarantee — which the Legislative Analyst’s Office points out is a promise of a subsidy if revenue or ridership is short, which is illegal.

All the spin in the world can’t change that fact. It would be fun to see the Bee newspapers take as hard a look at Problem No. 1 facing the CHSRA as it did at the theoretical problem of whether a built-out state bullet train would make money. And that wouldn’t even require sending someone to Spain — just to the University of California’s Institute for Transportation, the LAO’s archive, etc.

Prop. 1A says no subsidies. Experts say no subsidies, no private investment. Prop. 1A says no subsidies. So no sugar daddy Uncle Sam, no bullet train.

But instead of providing this basic context in every story, we are less likely to see this angle than a recyling of the narrative that bullet train critics are troglodytes or Obama haters or people with hidden agendas. Needed: reverse Pulitzers.

Prop. 1A says no subsidies. Experts say no subsidies, no private investment. Prop. 1A says no subsidies. So no sugar daddy Uncle Sam, no bullet train.


4 thoughts on “Lessons from Spain’s bullet train: The numbers are lies, and it’s all about politics, not economics

  1. Your confidence in the protection afforded by the text of prop 1a may be unjustified. Because on one hand, we have the rule of law. On the other hand, we have a lot of money just waiting to be disbursed.

  2. I agree that California’s high-speed rail is a very bad idea, but the article you quote doesn’t give any hard numbers, just people’s opinions.

  3. Pingback: End of the Line for the Bullet Train - Reason Magazine

  4. Pingback: End of the Line for the Bullet Train | Libertarios of America

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