High Speed Rail and Economic Development

Fiscal conservatives and politicians have fought tooth and nail to try to delay the construction of high-speed rail, arguing that the overall cost would far exceed the benefits. But what if high-speed rail could generate billions of dollars for the economy in a brief amount of time? What if the cost of construction could be offset in a matter of years not decades? A new report released on July 10, 2012 at a congressional briefing conducted by the American Public Transit Association suggests that building high-speed rail will generate nearly $26.4 billion in the next 40 years. 

The report Opportunity Cost of Inaction: High-Speed Rail and High Performance Passenger Rail Service estimates that the population will increase by nearly 100 million in the next 40 years. The tremendous strain this will place on existing infrastructure and limited resources could be devastating. The report proposes that the implementation of a high-speed rail service could significantly reduce the costs of roadway expansion, airport runways and new highway development. In any case, the expansion of roadways will be difficult as a result of lack of land on which to expand.

The report shows investment in high-speed rail not only aids in solving our shrinking capacity issue but also helps mitigate overall transportation costs. High-speed rail will reduce congestion and wear on roadways, decrease repair costs and help roadways operate more efficiently. Increased roadway congestion could lead to billions of dollars in lost opportunities. “It is critical that policy makers take a leadership role in moving high-speed rail forward to capture the billions of dollars of economic, mobility, energy and environmental benefits," said APTA President Michael Melaniphy.

Additional benefits resulting from the construction of high-speed rail include economic output generated, tax revenues, and offsetting environmental cost of carbon emissions.

Atlantic Cities recently examined how high speed rail would affect economic growth in smaller North Eastern cities between New York and Boston. They concluded: “By shrinking the distance between vibrant urban cores and the smaller communities that lie between them, high-speed rail could spark an economic boom, transforming the cities it touches. In the nineteenth century, railroads conferred a key advantage on cities competing for economic growth. In the twenty-first century, they may play that role yet again.”

The congressional briefing on high-speed rail was attended by railway representatives from eight countries, prior to the UIC (International Union of Railways) 8th World Congress on High-Speed Rail, which was scheduled to begin the following day in Philadelphia. China may be poised to bid for contracts to build high-speed rolling stock for the US. Let us hope the US is wise enough not to outsource this particular industry.

High-speed rail is common in Europe, Japan and China. If the US expects to compete economically with these advanced and fast developing nations, it will have to move fast to install high-speed intercity rail.

As of July 18th, Governor Jerry Brown of California signed legislation authorizing initial construction of California’s $68 billion dollar high-speed rail line. This bill authorizes $5.8 billion to start construction of a high-speed rail line in central valley. To gain support for the project in the state’s most densely populated areas, the administration included $1.9 billion dollars in state rail bonds to improve urban rail systems and provide better connections to high-speed rail. “This legislation will help put thousands of people in California back to work,” Brown stated. “By improving regional transportation systems, we are investing in the future of our state.”