Viewpoint: A model for building high-speed rail
Government agencies, particularly on the federal level, have been giving greater attention to plans for building out high-speed rail (HSR) throughout the nation. To analyze the demand for HSR properly, certain questions must be answered. What is the objective of HSR? How can it be made competitive economically? Studies to date have compared HSR with passenger vehicle traffic. However, the proper comparison is with short haul air traffic because HSR can deliver passengers in certain high demand markets from city center to city center in the same time frame. Beyond that point, HSR is non-competitive.
What is feasible for HSR in America is the interconnection of Midwest Metropolitan Statistical Areas (MSA). To be economically effective, the best operating parameter is for 200 mile-per-hour HSR to deliver passengers and freight 400 miles in two hours — the approximate time and distance promised by the airlines. Most feasible is a Chicago hub with spokes extending no more than 400 miles to major cities. Milwaukee would be the shortest leg. Terminals in Detroit, Cleveland, Indianapolis, Cincinnati, Louisville, St. Louis, Des Moines and Minneapolis would complete the circle and generate sufficient demand.
Who should pay to build such a network? The federal government built the Interstate Highway System, so should the federal government likewise purchase the right of way and construct the tracks on which the HSR rolling stock will move? Perhaps, but the states through which HSR passes must buy into the program. A multi-state public corporation should be established with funding resources sufficient to pay for the construction and maintenance of signalization, movement control equipment and the personnel costs associated with operating the system. Each city that would host a terminal would use the site for economic as well as transportation development; it would be up to the benefiting city to “pay to play.”
The final piece of the puzzle — the capital and operating costs of the rolling stock — are best funded by the risk-taking part of our economy: private enterprise. The airport/airline model is ideal. Competing corporations should bid for “slots” — departure and arrival time at the ending terminals. Let private enterprise buy (or lease) the rolling stock to match the speed parameters above within designated departure and arrival times. This is the vision of HSR that is supportable — basic costs paid by public entities, risk capital from the private sector to complete the picture. The economic stimulus caused by the proper infusion of money at the federal, state and local levels, and the participation of private enterprise, make this the ideal 21st century public-private project.
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Paul Speer is president of Buffalo Grove, Ill.-based municipal finance advisors MFCS, Inc. He has specialized for the last 19 years in developing new economic development financing techniques for state, county and local jurisdictions.