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Re: Funding/subsidies worry potential partners in California's bullet train project
Author: J C Koans
Date: 10-17-2015 - 13:02
Bob Wrote:
-------------------------------------------------------
> Construction of the first section of the planned
> Los Angeles to San Francisco rail line began
> earlier this year. But the state has only half the
> $31 billion needed to complete the initial
> operating segment between Burbank and Merced.
>
> The appeal for financial and technical partners
> drew responses from across Europe, Asia and the
> U.S. But none of the companies expressed a
> readiness to invest their own money, and some
> included reservations about the risks.
>
> The state, which has been counting on private
> investment as part of its funding plans, disclosed
> receipt of the responses last week. They were
> released Friday after Public Records Act requests
> were filed by The Times and other organizations.
>
> Subsidiaries of the Spanish company Ferrovial SA
> wrote that most high-speed rail systems around the
> world require operating subsidies and that the
> same will probably be true for California's bullet
> train.
>
> "We believe it is highly unlikely that the will
> turn an operating profit within the first 10 years
> of operation," the company's 37-page submission
> said. "More likely, will require large government
> subsidies for years to come."
>
> Both German rail producer Siemens and Spanish
> construction company Sacyr Concesiones expressed
> similar concerns about whether the initial
> 300-mile segment between the Central and San
> Fernando valleys could operate profitably.
>
> Sacyr warned that "it is our opinion that the
> revenue from ridership may not be sufficient to
> cover all cost."
>
> As part of the taxpayer protections written in to
> a voter-approved plan to provide funding to build
> the line, public subsidies for operation of
> passenger service were banned. State officials
> have consistently projected the train will turn a
> profit as soon as it begins carrying riders. The
> issue is the subject of a lawsuit scheduled to go
> to trial next year.
>
> Dan Richard, the rail authority chairman,
> dismissed the suggestions that public subsidies
> would be needed once the trains are rolling,
> asserting that every major high-speed rail system
> in the world operates without subsidies.
>
> That point has been in dispute for years, with
> critics asserting that most foreign systems are
> heavily subsidized and supporters arguing that
> high-speed rail networks operate in the black.
>
>
> [touch.latimes.com]
> -84734733/
Dunno...
if a long ago built/paid for rail system such as METRA, serving 10's of thousands of riders a day requires govn't subsides, how can a new, expensive service, serving maybe a 10th of METRA ridership survive on ticket sales alone?
-------------------------------------------------------
> Construction of the first section of the planned
> Los Angeles to San Francisco rail line began
> earlier this year. But the state has only half the
> $31 billion needed to complete the initial
> operating segment between Burbank and Merced.
>
> The appeal for financial and technical partners
> drew responses from across Europe, Asia and the
> U.S. But none of the companies expressed a
> readiness to invest their own money, and some
> included reservations about the risks.
>
> The state, which has been counting on private
> investment as part of its funding plans, disclosed
> receipt of the responses last week. They were
> released Friday after Public Records Act requests
> were filed by The Times and other organizations.
>
> Subsidiaries of the Spanish company Ferrovial SA
> wrote that most high-speed rail systems around the
> world require operating subsidies and that the
> same will probably be true for California's bullet
> train.
>
> "We believe it is highly unlikely that the will
> turn an operating profit within the first 10 years
> of operation," the company's 37-page submission
> said. "More likely, will require large government
> subsidies for years to come."
>
> Both German rail producer Siemens and Spanish
> construction company Sacyr Concesiones expressed
> similar concerns about whether the initial
> 300-mile segment between the Central and San
> Fernando valleys could operate profitably.
>
> Sacyr warned that "it is our opinion that the
> revenue from ridership may not be sufficient to
> cover all cost."
>
> As part of the taxpayer protections written in to
> a voter-approved plan to provide funding to build
> the line, public subsidies for operation of
> passenger service were banned. State officials
> have consistently projected the train will turn a
> profit as soon as it begins carrying riders. The
> issue is the subject of a lawsuit scheduled to go
> to trial next year.
>
> Dan Richard, the rail authority chairman,
> dismissed the suggestions that public subsidies
> would be needed once the trains are rolling,
> asserting that every major high-speed rail system
> in the world operates without subsidies.
>
> That point has been in dispute for years, with
> critics asserting that most foreign systems are
> heavily subsidized and supporters arguing that
> high-speed rail networks operate in the black.
>
>
> [touch.latimes.com]
> -84734733/
Dunno...
if a long ago built/paid for rail system such as METRA, serving 10's of thousands of riders a day requires govn't subsides, how can a new, expensive service, serving maybe a 10th of METRA ridership survive on ticket sales alone?
