Securing the Financial Health of New High-Speed Projects

» The recent failure of Taiwan High-Speed Rail raises questions about the role of private investment in new trains systems.

The California High-Speed Rail Authority projects that it will need about 33 billion in 2008 dollars to complete its initial San Francisco-Anaheim link, a reasonable estimate considering the cost of peer systems. In addition to the $9 billion in state funds devoted to the project by last November’s referendum, the Authority is banking on $2-3 billion in local money and $12-16 billion in federal contributions. Because this aid won’t be enough to cover the full costs of the line, the state will also demand $6.5-7.5 billion in help from public/private partnerships. In other words, the Authority is hoping it can raise 20% of construction costs with the help of corporate interests that would be able to benefit from some of the line’s operating profit.

The international experience, however, could put a damper

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by Yonah Freemark

yfreemark (at) thetransportpolitic (dot) com

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