Holy, Moly! Private-Sector Passenger Rail in Va.?

High-speed rail in the UK.

While the McDonnell administration seeks funding to extend Amtrak passenger service in Virginia, Hampton Roads planners are pushing European-style high-speed rail from Norfolk to Richmond and Washington — financed largely by the private sector.

by James A. Bacon

There’s an inherent difficulty in getting High Speed Rail to Virginia. Amtrak leases its rail lines from freight railroads. Freight rail tracks are designed to handle heavy-laden cargo trains, not fast-moving passenger trains, effectively limiting speeds to about 75 miles per hour. But 75 mph is barely faster than vehicles can travel the Interstate. Motorists stick to their cars and Amtrak is hard pressed to generate enough fares to pay its operating costs, never mind the capital cost of upgrading the rail lines.

But what if… What if a public-private partnership built its own line from Norfolk to Richmond and Washington that didn’t have to share the rail with freight trains? Such a partnership could design the rail line for passenger trains to run as fast as 150 mph. In that case, says Alexander E. Metcalf, president of Transportation Economics & Management Systems, Inc., a passenger rail consulting firm, the economics would change dramatically.

The faster a train can travel and the more frequent its schedule, the greater the number of people who want to use it and the more they are willing to pay for a ticket. As a rule of thumb, says Metcalf, a 110-mph train can contribute fares equivalent to five to ten percent of its capital cost. A 150 mph train can kick in 20%. Also, as demonstrated repeatedly in Japan and Europe, stations serving fast trains act as magnets for development. Office landlords charge higher leases, property values rise, and, if some of that value can be captured through a special tax district or other means, it could be possible to pay even more of the the rail line’s up-front capital cost.

Unbeknownst to most Virginians, Metcalf says, the Norfolk-Richmond-Washington route may be the best prospect in the country for high speed passenger service outside of the densely populated Washington-New York corridor. Driven by the rising price of aviation fuel, airlines are retreating from short flights. Meanwhile, rising gasoline prices and increasing Interstate congestion make long car trips increasingly expensive and inconvenient. The middle-range distance between Norfolk and Washington is the sweet spot where rail is most competitive.

While Virginia rail policy has achieved some notable successes, such as extending the slower Amtrak service from Washington to Lynchburg — a profitable route, incidentally — and from Norfolk to Richmond, the McDonnell administration has focused its high-speed rail initiatives mainly on the Washington-Richmond-Raleigh corridor, leaving Hampton Roads out of the loop.

However, the Hampton Roads Transportation Planning Organization has been building a case for a high-speed Washington-Richmond-Norfolk route. For the military-dependent region, a fast rail connection is a strategic economic-development imperative. Providing military personnel the ability to reach the Washington area, participate in a meeting and ride back in a normal work day would make Hampton Roads more competitive with other regions as the Department of Defense grapples with budget cuts and base closings.

“A two-hour trip to D.C. changes the way Hampton Roads does business,” says Dwight Farmer, executive director of the HRTPO. “We become a suburb of Washington, D.C. … If you downsize the military, where would you consolidate [operations]? Hampton Roads!”

According to the Preliminary Vision Plan published in 2010, there could be as many as 14 stations between Norfolk and Washington, D.C., including the terminus at Union Station. The route would swing south of the James River, running through Suffolk and Petersburg before stopping at Main Street station in downtown Richmond. Then the route would run north to Washington, with at least one major stop in the Pentagon/Reagan National Airport area. Some trains would halt at smaller stations along the way but others would blast through without stopping. Read More.

16 Responses to Holy, Moly! Private-Sector Passenger Rail in Va.?

  1. It’s interesting. The original “railing” of the US began with the govt giving the rail companies not only right of way but great gobs of land adjacent to the rights of way – in exchange for them building the rail network.

    ” The federal government operated a land grant system between 1855 and 1871, through which new railway companies in the uninhabited West were given millions of acres they could sell or pledge to bondholders. A total of 129 million acres (520,000 km2) were granted to the railroads before the program ended, supplemented by a further 51 million acres (210,000 km2) granted by the states, and by various government subsidies.”

    http://en.wikipedia.org/wiki/History_of_rail_transport_in_the_United_States

    so could we do something like that again in Virginia? Who would own the right of way?

    How about this. The current landowners would. Each landowner in the proposed right-of-way would become a bondholder. Stations would be put out for bid and developers would flock like bees to honey to buy the stations and the land around them?

    The Hampton Roads guy said that such a rail line would make Hampton a suburb of NoVa.

    I’d say that every place within 30 miles of the line between NoVa and Hampton would also become a suburb.

    You’d have people living in Hanover County that would commute to jobs in NoVa – in less time that it would take a guy in Stafford in a car to get to the same NoVa destination.

    Would this work or would it become a giant boondocks infested with rent-seekers?

  2. dang the spellchecker! boondoggle!

  3. Washington – Baltimore – Wilmington – Philadelphia – Newark – New York – Stamford – Boston.

    Vs

    Hampton Roads – Richmond – Washington.

    I seriously question the business plan that has enough passengers going from Hampton Roads to Washington to justify the cost of building and operating the service.

  4. who would have thought Amtrak service from Lynchburg to DC would have been profitable?

    http://cs.trains.com/trn/b/fred-frailey/archive/2011/02/03/amtrak-trains-that-make-money-really.aspx

    • As I understand it, Virginia makes money on the Lynchburg-Charlottesville-Washington route right now. But that’s because the state was able to negotiate a really favorable contract with Amtrak. Tt is widely assumed that when that contract expires and is renegotiated, the route will no longer run in the black. Don’t ask me about the mechanics of how the fund transfers work because I don’t know.

      As for the rest of the Amtrak rail service in Virginia, I believe that it does require ongoing subsidies.

  5. If taxpayers subsidize METRO in NoVa why can they not subsidize Amtrak in Virginia?

  6. A PRIVATE entity is willing (or is that stupid enough) to undertake such a project, hey, go for it. But the government really needs to have the minimum of minimum involvement in this. As for the right-of-ways, nope, the company needs to deal with the property owners and purchase the property outright. Personally I don’t think the project will ever turn a profit, but if a company wants to try, go ahead. I wouldn’t use it, but other folks will.

    So I’m fine with it till we get to the statement “Even under the most optimistic scenario, though, a federal government contribution would be necessary.” Uh, wrong, the feds might (probably would) have to be involved with TSA, the might (probably would) have to be involved with certain restrictions on speed, the way the track is constructed and possibly with speed or other restrictions, but contributing money – forget about it. Another money losing government program – nope, if private money WANTS to gamble on it with their own money, have fun; if you want to gamble on the gambit with MY tax money, go away.

  7. Just curious – what is the difference between tax money for roads and tax money for rails?

    Bonus question: When the US govt gave railroads free right of way in exchange for rail infrastructure and service – was that a wrong thing to do? Would we have expanded the west without rail?

    • As I’ve said before, roads serve people, goods and services. This type of rail is designed ONLY for passengers. Even airports serve all three, but high speed rail, light rail and (god forbid) streetcars only serve people. You want it (you, Joe Average) then you pay for it, don’t tax all of us for the narrow benefits that go to a narrow group of people. Present rail (heavy rail) serves goods first and does a darn fine of job it, it serves people but only in a very secondary capacity. As second fiddle, the service is very isn’t considered ‘the way to go’ if you need to get somewhere in a hurry. But those who like to travel by rail, do and even there, we the taxpayer help pay the ticket.

      As for the bonus question – no, it was the correct thing to do. We would have expanded to the west but it would have been slower. Also the expansion (into the west and of rail) would have happened because the demand and the ability to charge and make profits would have eventually driven it. So too here, if the demand for high speed rail is there (and it’s not) then make the gamble and pony up the money and build it – go with the field of dreams mantra, ‘if they build it, they will come’. But to have the government subsidize and support it, well, have we forgotten Solendra so soon? High speed rail is a loser, if a company thinks different, then build it on your own dime. Solendra was a loser, we the taxpayer paid a bunch of losers to go under (gee thanks Obama).

      • when you look at the interstates and the rail routes on west, what do we notice? How about how straight they are.

        How straight would they have been if they were done by the private sector using willing seller transactions.

        Bonus Question: is the govt use of eminent domains a direct subsidy for roads and a double standard for modern rail right-of-way?

  8. For this to work, Richmond is going to need to invest in a light rail system.

    The California HSR system looking more interesting:
    http://www.foxnews.com/us/2012/10/07/california-gasoline-prices-hit-all-time-high/

    • Interesting article. That is one way to create traffic for rail — induce a shortage of refinery capacity that pushes up the cost of gasoline!

      I love the idea of high-speed rail but that’s not how I’d like to achieve it.

      Why do you say that Richmond needs to invest in light rail? To act as a feeder for the passenger rail?

      • Light rail as a feeder for HS passenger rail is an ancillary benefit.

        The main reason for a light rail system in Richmond is act a backbone for the transit system to support increased density in the downtown area. The increased density will provide the support for a HSR system.

        If passengers are to use the HSR system, they need to have options to get to there final destination.

        At Richmond’s Main Street Station, the only options available to a passenger exiting the station are a taxi or a local bus.

        At Washington DC Union Station, the options are METRO, local bus, Bikeshare, taxi, Cars2Go, Uber, MARC, VRE, or Streetcar (coming soon). METRO is the backbone of the system that drives the other modes.

        If anyone wants to see the effect of the streetcar just go to the H St. NE in DC. The amount of economic development created is amazing compared to 10 years ago.

  9. Hmmm, first I see “Private Sector,” and then I see “Public-Private Partnership,” and then I see “Federal Funding Partner.” That’s very interesting. It already sound like the same old same old.

    Will this project reject the the typical low-ball initial price estimates from the usual suspects, followed by the usual ballooning price, and the usual political talking point games?

    And what about the finance plan? Will it reject unworkable tolls on on people who do not benefit from the project? And will it reject fifty year debts and the financing costs they create?

    How about business tax districts? Will they be in the same boat as the other finance partners, subject to the same project overcost issues as everyone else?

    Will there even BE any businesses along the planned corridor to PAY business taxes, until many years have passed?

    Can we talk about BRT in the planned right of way on these routes, until at least such time as an actual corridor begins, at least, to develop?

    Can we agree to reject bids from construction companies, estimators, etc, that have a track record of such things as ballooning costs, bankrupt tollroads, project delays and sub-par construction?

    Will the management and proceeding be open and transparent, not containing such things as autonomous agencies that can reject FOI requests at whim?

    Why do I think that the answer is no? Why do I expect the same old lowball price estimates, and then the same old ballooning price, and then the same old political push to ‘move forward’, when that means over a cliff? Why do I expect a bogus financing plan, leading to a surprise changing story and gee, what do you know, more taxes and fees later, when it is too late to do anything about it? Why do I expect taxpayers to have to fund this, because the business districts will need to be incubated? Why do I expect that BRT just won’t be a good enough starting point for the planners of this system – as though gee, they need to maintain the lifestyle to which they have become accustomed? Why do I expect a parade of bids from the usual suspects, who had very good luck avoiding responsibility for their past disasters? Why do I expect an arrogant, above-the-law project management agency that just slaps a 900 page contract on the table and says “Oh, by the way, you have two weeks to agree to this.” And why do I expect the so-called ‘news media’ to be right in bed with the whole thing, every step of the way?

    Why? You tell me.

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