Does the U.S. Need a High-Speed Train Network?

Since its beginning, one of the leitmotifs of the Obama presidency has been the need to invest in education and infrastructure in order not to miss the train of economic competition with the new emerging countries. This vision has expressed itself in a bet on renewable energies, the expansion of fiber optics and also the construction of a powerful network of high-speed trains (better known in Spain as AVE). However, each time more doubts arise in the U.S. about this last project’s return for society.

In his State of the Union address, Obama marked as a goal that in a period of 25 years, 80 percent of the U.S. population would have close-to-home access to a high-speed train station. In the budget for 2012 presented by the president this same week, he dedicates $53 billion to co-finance the construction of high-speed networks.

However, the Republicans, who now form the majority in the House of Representatives, have already announced that they’re not thinking of giving the green light to this expense item. When Obama speaks of “investing,” they hear rather “wasting.” And at least for the question of the AVE, they may be right.

The governor of Florida, Rick Scott, rejected on Wednesday the $2.4 billion in federal government subsidies to construct a high-speed line between Orlando’s airport and the city of Tampa. With reason, Scott argues that there isn’t a sufficient market to sustain the enormous spending required by not only the construction, but also the maintenance of the line. That is to say, that receiving the subsidy would be bread for today in the form of hundreds of jobs, but debts for tomorrow.

As a World Bank study points out, the high-speed train only makes sense in regions with a high population density, since it can serve to decongest the traffic between large cities that are at a medium distance. Applied to the U.S., that would mean that it is only profitable on the East Coast, to connect Boston with Washington via New York. At the most, maybe also on the West Coast to link San Francisco with San Diego via Los Angeles, a project already underway.

In any case, before throwing oneself at these types of mammoth projects that require the construction of new itineraries with extensions of different routes, one has to do a serious cost-benefit analysis to determine if it would not be more profitable to invest in improving the current lines for the trains that reach a greater speed. Certainly, the AVE is a “greener” way than the car or airplane, and that reality must be integrated in the studies, but its extremely elevated economic cost can not be avoided.

In this sense, the example of the Spanish case should not serve precisely to animate U.S. politicians. The governments, the PSOE as much as the PP, spent a fortune on the AVE while the economy flourished thanks to the real estate bubble, and seeing how the Spanish economy is, it does not seem to really have served to position Spain in a good place to compete in the global market.

Since its beginning, one of the leitmotifs of the Obama administration has been the need to invest in education and infrastructure, in order to not miss the train of economic competition with the new emerging countries. This vision has expressed itself in a bet on renewable energies, the expansion of fiber optics and also the construction of a powerful network of high-speed trains (better known in Spain as AVE). However, each time more doubts arise in the U.S. about this last project’s return to society.

In his State of the Union address, President Obama marked as a goal that in a period of 25 years 80 percent of the U.S. population would have close-to-home access to a high-speed train station. In the budget for 2012 presented by the president this same week, he dedicates $53 billion to co-finance the construction of high-speed networks.

However, the Republicans, who now constitute the majority in the House of Representatives, have already announced that they’re not thinking of giving the green light to this expense item. When President Obama speaks of “investing,” they hear rather “wasting.” And at least for the question of the AVE, they may be right.

The governor of Florida, Rick Scott, rejected on Wednesday the $2.4 billion in federal government subsidies to construct a high-speed line between Orlando’s airport and the city of Tampa. With reason, Scott argues that there isn’t a sufficient market to sustain the enormous spending required by not only the construction, but also the maintenance of the line. That is to say, that receiving the subsidy would be bread for today in the form of hundreds of jobs, but debts for tomorrow.

As a World Bank study points out, the high-speed train only makes sense in regions with a high population density, since it can serve to decongest the traffic between large cities that are at a medium distance. Applied to the U.S., that would mean that it is only profitable on the East Coast, to connect Boston with Washington via New York. At the most, maybe also on the West Coast to link San Francisco with San Diego via Los Angeles, a project already underway.

In any case, before throwing oneself at these types of mammoth projects that require the construction of new itineraries with extensions of different routes, one has to do a serious cost-benefit analysis to determine if it would not be more profitable to invest in improving the current lines for the trains that reach a greater speed. Certainly, the AVE is a “greener” way than the car or airplane, and that reality must be integrated in the studies, but it’s extremely elevated economic cost cannot be avoided.

In this sense, the example of the Spanish case should not serve precisely to animate U.S. politicians. The governments, the PSOE as much as the PP, spent a fortune on the AVE while the economy flourished thanks to the real estate bubble, and seeing how the Spanish economy is, it does not seem to really have served to position Spain in a good place to compete in the global market.

Maybe it would have been more productive to invest those thousands of millions in education, or in I+D, and now the Spanish economy would have a more healthy and sustainable structure. It was a pity that, in its moment, the opposition happily joined the party of “AVE for all,” instead of opening a wide debate about the project’s cost. This is precisely what the Republican Party is doing, and it will surely take a bigger role in making the decisions. Certainly, nobody hopes that the minister Pepe Blanco tells this story to his U.S. counterpart, Ray Lahood, in their meetings. Spanish businesses, some pointers on AVE technology, would make a veritable business. if President Obama’s plans went forward on this issue, then Blanco would be doing a good job lobbying. It remains to be seen if they will pursue sweet-talking Lahood, to promote that Spanish businesses in this sector, construct a network like that of the AVE in the United States.