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John Hennessy III,

Opportunity Cost of Inaction: High-Speed Rail and High Performance Passenger Rail in the United States

Posted by Content Coordinator on Thursday, July 12th, 2012


Executive Summary

This paper addresses the initial investment and on-going cost of operation and maintenance of high- performance passenger rail (HPPR) in four of the Federal Railroad Administration (FRA) sanctioned HPPR regional networks – Northeast, Chicago Hub, California, and Northwest – over a 40 year period. The system can generate a net benefit of at least $660 million annually. If the nation should forgo this opportunity, it stands to sustain a cost of at least $26.4 billion in foregone economic benefits over the next four decades.

Studies by the Government Accountability Office (GAO), the European Union (EU), the International Union of Railroads (UIC), the American Association of State Highway and Transportation Officials (AASHTO) and others, suggest that the actual cost of building and/or improving rail lines is significantly less than the cost per mile of alternatives. In fact, in many corridors, passenger rail is the only feasible option for adding capacity, given the practical constraints facing aviation and highway expansion.

Passenger rail will benefit public transportation—regional HPPR networks will amplify the agglomeration economies associated with public transportation. Though not specifically enumerated in this paper, we anticipate these impacts will significantly increase net benefits.

The regional opportunity costs are also substantial. Not building HSR in California would cost the state $8.2 billion in foregone benefits over 40 years. The Midwest would forego $11.7 billion over 40 years. The Northeast Corridor would forego $5.5 billion over 40 years. The Pacific Northwest would forego $1.1 billion over 40 years.

This report provides clear evidence that maintaining the status quo will be an increasingly expensive proposition for American taxpayers.

Download full report (PDF): Opportunity Cost of Inaction: High-Speed Rail and High Performance Passenger Rail in the United States

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