21 Jun

Texas hopes to copy Japanese rail success

Another article about Texas rail:

“Richard Lawless, who as a C.I.A. officer posted in Tokyo in the 1980s was a frequent Shinkansen passenger, has long found America’s failure to embrace high-speed rail ‘mind-boggling.’ But today the former Bush administration official is in a position to change things, as chairman and CEO of Texas Central Railway, a private company that plans to link Dallas and Houston with a 200-mile-per-hour bullet train as soon as 2021. The venture just might be high-speed rail’s best hope in the United States.

‘The project has been progressing below the radar, very quietly, very deliberately, over the last four years plus,’ says Lawless. It’s now undergoing an environmental impact study that will take between two and three years, but Texas Central, whose backers include Japan’s JR Central railway, has already conducted its own extensive research. The company, originally called U.S.-Japan High-Speed Rail, looked at 97 possible routes nationwide before concluding that Texas was the ideal place for a high-speed line — and that healthy profits could be made in long-distance passenger rail, a travel mode that for the past 40 years has existed only with the help of massive government subsidies.”

(Via The Big Texas Plan to Copy Japan’s High-Speed Rail Success – CityLab.)

People keep saying that last line (US rail only survives via massive subsidies). But it ignores the fact that the Acela (and even the slower North East Corridor) is profitable. It’s just that Amtrak was mandated to take on all long distance lines whether it made sense to or not, so in order to keep all lines going it has to be subsidized.

I’ve talked about how to kill off unprofitable lines to make a profitable Amtrak before:

Acela makes $220,200,000 a year.
Northeast Regional makes $146,500,000 a year
Northeast Corridor ‘special trains’ make $3,600,000 a year.
According to the chart you need to deduct $1,300,000 for labor on the NEC corridor.

You’re left with the North East Corridor routes making $369,000,000 in profit a year.

The Government Accountability Office and Subsidy Scope claim that Amtrak’s depreciation, ancillary businesses and overhead costs are $24.29 a customer.

That gives you $265,000,000 (roughly) in overhead. That means the North East Corridor lines mentioned above make $104 million dollars in profit a year.