May 3, 2014
Every now and then we hear about high speed rail in Oklahoma. We may want to consider the experience in England and other areas before proceeding. The economic transformation of the North of England is central to the government’s promotion of the High Speed 2 rail line (HS2). It claims that the new line would boost employment and address the North-South divide, but there is reason for skepticism. Policymakers made similar claims prior to the use of High Speed 1 for fast domestic services to East Kent. Yet, since the introduction of high-speed services, East Kent has performed far worse in terms of employment than the rest of the South East and Britain. Some parts of the area now have similar employment rates to depressed old northern industrial cities. It would appear that the impact has been too small to counteract other more important economic factors, including the very large tax bill, relatively low levels of human capital in locations on the route, and a risk that disruptive technologies will undermine many of the purported benefits.
December 7, 2013
Oklahoma has considered high speed rail service in the past. Before we get too serious, it might make sense to consider Florida’s experience. The Tampa to Orlando high-speed rail project was cancelled by Governor Rick Scott in 2011 to shield Florida taxpayers from billions of dollars in liabilities. Yet, a recent report for the Florida Department of Transportation (FDOT) estimated that the line could have earned an operating surplus of $38.0 million by 2026. International research indicates that passenger rail projects are characterized by optimism bias in ridership and revenue forecasts. On average, eventual ridership totals 39% below forecast. If the Tampa to Orlando high-speed rail had equaled the international average (which seems optimistic, given recent cost trends in the high-speed rail industry), the cost overrun would have been $1.2 billion (45%). These deficits would have been the responsibility of Florida taxpayers.