Sunday, April 15, 2012

Expecting Too Much

Continuing thoughts about what will and what will not work on the subject of privatizing Passenger Rail in the United States.

I think most of the rest of the list of what will not work comes down to expecting too much.

There are many special interest groups, and even those on the same side don't agree.  For example:  Some environmentalists like trains because they are the most energy efficient way to move people and goods - pound for pound.  Environmentalists - and I guarantee this - will also throw up unreasonable restrictions on building new HSR routes or adding trains to existing rail routes because it will in some way harm the environment.  If the costs of meeting these unreasonable restrictions get too high, no private enterprise is going to want any of it.

Random thought:  How did the original developers of railroads in North America get started and make money? They didn't - not always.  But what they did to was start with a forward-thinking idea and get backers interested in the project.  People put in their capital and they got what they got.  It was not always good, but we moved forward.

Now for differences between then and now:  To get backers today, you have to go to a bank, or an investment house, and you have the SEC looking over your shoulder.  To build, you have to jump through hoops with federal, state and local government.  If you want to build a widget factory, you can't just get the money and build it.  You have to get permits and environmental studies, and, God forbid the land you bought had anything spilled on it by a prior owner.  It'll be years before that mess is unraveled.  If you want to hire men to help you build widgets, you can't just hire them.  You have to make sure you have workers comp first, and insurance, and a benefits package in place, and you don't want to piss off any unions.  You'll have to account for fairness, too.  You will have to be fair to all groups and sub-groups of groups, and every color and creed under the rainbow, ad infinitum.  You also should have a good lawyer, because when you do piss somebody off, they won't just call you out on the streets of Dodge for a gunfight, they will sue your butt through more courts than Wimbledon.

Get the picture?  All this takes money.  So when you do raise the capital for your passenger railroad, you better raise ten times as much as you need for the trains and tracks, because you will have to grease the wheels of more than just your trains.

I'm starting to think I was right the first time.  Passenger Rail will never be profitable without government subsidy.  Unless we change things.

©2012 - C. A. Turek -

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