Saturday, June 19, 2010

High Speed Rail – Boom or Bust

The bloom is on the rose for HSR.  A lot of money is available to be spent on HSR projects, and still more is likely to come our way.  True or false?

There is no doubt that President Obama’s domestic policy includes favorable conditions for HSR projects.  Many communities are interested in HSR, and many private enterprises are prepared to offer their products and services to help build a high-speed system.  The element that seems on the fence is whether the most important private enterprise – the railroads themselves – are prepared to offer their products and services to make this happen.

I think it will happen, eventually.  And I hope something like a public-private partnership gets it done.  Public – so that capital costs that are too high for private enterprise to finance all at once can be borne by the public at large.  Private – so that there is always the possibility that somebody with an innovative mind and a new concept can make a go of HSR and make some money at it.  Money to be made not just by providing goods and services, but by running trains.

Railroads are big business.  And right now, big businesses are afraid of the government.  Look at big oil, and big manufacturing (read: the auto industry).  One false step and you jump from the gravy train to the shit list, without passing ‘go’ and without collecting $200.  Most railroads don’t like the FRA (Federal Railroad Administration) or the federal DOT telling them what they can and can’t agree with.  And that’s just what is happening in the process of granting the funds to get these projects moving.  There is a draft agreement that was created without private input, and the railroad involved must agree to it.  The private partners in the scheme are going to have to play second fiddle to the public (read: federal government). 

I predict that most railroads will not want to cross the Obama regime (word used intentionally).  They will, therefore, agree to the rules with little change.  That may be good for the regime, but it may be bad for business.  And to make these partnerships work, the private partner is going to have to stay solvent.

Oh, and even if the regime gets a second term, these projects will all still be only partially underway.  Don’t plan on riding a high-speed train next year, or even in 2016.  And if the railroads stop being scared and get pissed off?  I don’t know what will happen to HSR.  Neither true nor false, but wait and see.

©2010 – C. A. Turek –