High Speed Passenger Rail: Future Development Will Depend on Addressing Financial and Other Challenges and Establishing a Clear Federal Role
Published: 2009-03-19T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Federal and other decision makers have had a renewed interest in how high speed rail might fit into the national transportation system and address increasing mobility constraints on highways and at airports due to congestion. GAO was asked to review (1) the factors affecting the economic viability--meaning whether total social benefits offset or justify total social costs--of high speed rail projects, including difficulties in determining the economic viability of proposed projects; (2) the challenges in developing and financing high speed rail systems; and (3) the federal role in the potential development of U.S. high speed rail systems. GAO reviewed federal legislation; interviewed federal, state, local, and private sector officials, as well as U.S. project sponsors; and reviewed high speed rail development in France, Japan, and Spain.
section_title: What GAO Found
paragraphs: Factors affecting the economic viability of high speed rail lines include the level of expected riders, costs, and public benefits (i.e., benefits to non-riders and the nation as a whole from such things as reduced congestion), which are influenced by a line's corridor and service characteristics. High speed rail tends to attract riders in dense, highly populated corridors, especially where there is congestion on existing transportation modes. Costs largely hinge on the availability of rail right-of-way and on a corridor's terrain. To stay within financial or other constraints, project sponsors typically make trade-offs between cost and service characteristics. While some U.S. corridors have characteristics that suggest economic viability, uncertainty associated with rider and cost estimates and the valuation of public benefits makes it difficult to make such determinations on individual proposals. Research on rider and cost forecasts has shown they are often optimistic, and the extent that U.S. sponsors quantify and value public benefits varies. Once projects are deemed economically viable, project sponsors face the challenging tasks of securing the up-front investment for construction costs and sustaining public and political support and stakeholder consensus. In the three countries GAO visited, the central government generally funded the majority of the up-front costs of high speed rail lines. By contrast, federal funding for high speed rail has been derived from general revenues, not from trust funds or other dedicated funding sources. Consequently, high speed rail projects must compete with other nontransportation demands on federal funds (e.g., national defense or health care) as opposed to being compared with other alternative transportation investments in a corridor. Available federal loan programs can support only a fraction of potential high speed rail project costs. Without substantial public sector commitment, private sector participation is difficult to secure. The challenge of sustaining public support and stakeholder consensus is compounded by long project lead times, by numerous stakeholders, and by the absence of an established institutional framework. The recently enacted Passenger Rail Investment and Improvement Act of 2008 will likely increase the federal role in the development of high speed rail, as will the newly enacted American Recovery and Reinvestment Act of 2009. In the United States, federal involvement with high speed rail to date has been limited. The national rail plan required by the Passenger Rail Investment and Improvement Act of 2008 is an opportunity to identify the vision and goals for U.S. high speed rail and how it fits into the national transportation system, an exercise that has largely remained incomplete. Accountability can be enhanced by tying the specific, measurable goals required by the act to performance and accountability measures. In developing analytical tools to apply to the act's project selection criteria, it will be important to address optimistic rider and cost forecasts and varied public benefits analyses.

section_title: Letter
paragraphs: Federal, state, and local decision makers have had a renewed interest in  looking at how high speed rail might fit into our national transportation  system and address increasing mobility constraints on the nation’s  highways and at airports due to congestion. Although the current  economic downturn has recently reduced the level of highway and air  travel, projections show that intercity travel will grow again and that  existing transportation capacity limitations will constrain mobility. The  Department of Transportation (DOT) estimates that several intercity  highways linking major urban markets will experience significant  congestion by 2035. According to a recent report, capacity limitations will  constrain air traffic at 14 airports in 8 metropolitan areas, even if planned  capacity improvements are carried out through 2025. In addition, the  dependence of growing highway and air travel on fossil fuels raises  significant environmental concerns regarding greenhouse gas emissions.  As a result, transportation decision makers are exploring options that not  only expand transportation capacity and relieve increasing congestion but  also minimize the deleterious environmental impacts of increasing  highway and air travel. The average intercity passenger train can produce  significantly less emissions than other transportation modes.
The National Railroad Passenger Rail Corporation (Amtrak), the nation’s  intercity passenger rail provider, has seen nearly a 20 percent increase in  riders in the last 2 years, in part because service enhancements in some  intercity corridors have improved overall travel time and reliability,  making the train more competitive with highway and air travel. Still,  Amtrak does not offer service in many heavily traveled intercity corridors.  Moreover, Amtrak’s service continues to have slow average speeds relative  to other transport modes, and experiences significant delays, often  resulting from sharing track with commuter and freight rail. Proposals for  investment in high speed rail in the United States have existed for decades.  However, corridor service that exceeds Amtrak’s predominant top speed  of 79 miles per hour currently only exists on Amtrak’s Northeast Corridor  between Boston, Massachusetts, and Washington, D.C., and in a few other  corridors—including New York City, New York, to Albany, New York;  Philadelphia, Pennsylvania, to Harrisburg, Pennsylvania; and Los Angeles,  California, to San Diego, California—and on a segment of track between  Chicago, Illinois, and Detroit, Michigan. By contrast, countries in Europe  and Asia have developed extensive rail systems with top speeds exceeding  150 and even 200 miles per hour, which have attracted relatively high  numbers of riders compared with other transportation modes.
As part of a larger effort to reexamine transportation funding and decision  making in the United States, the National Surface Transportation Policy  and Revenue Study Commission and its Passenger Rail Working Group  issued a report that laid out the potential for a new vision of intercity and  high speed rail development in the United States, and that called for an  initial investment of $5 billion per year. Moreover, in October 2008,  Congress enacted the Passenger Rail Investment and Improvement Act of  2008 (PRIIA), which establishes a program to develop high speed rail  corridors—authorizing $1.5 billion in funding for project development.  The recently enacted American Recovery and Reinvestment of Act of 2009  (ARRA) appropriated $8 billion for high speed rail and intercity passenger  rail congestion and capital grants (the latter of which were authorized by  the PRIIA), with priority given to projects that support the development of  high speed rail service. To better understand the role that high speed rail  service could play in the U.S. transportation system, we were asked to  assess (1) the factors affecting the economic viability of high speed rail  projects—that is, whether a project’s total social benefits offset or justify  the total social costs—and difficulties in determining the economic  viability of proposed projects; (2) the challenges that U.S. project sponsors  experience in developing and financing high speed rail projects; and   (3) the federal role in the potential development of high speed rail  systems.
For the purposes of this report, we use the Federal Railroad  Administration’s (FRA) definition of high speed ground transportation,  which is “service that is time-competitive with air and/or automobile travel  in a given intercity corridor.” This definition does not define high speed  rail on the basis of a specific speed threshold. As a result, our review  includes a wide range of projects, including both “incremental” projects,  which are designed to increase the speed—above 79 miles per hour and up  to 150 miles per hour—or reliability of rail service on existing track  usually shared with commuter or freight railroads, and “new” high speed  rail projects—capable of speeds above 150 miles per hour—which are  designed to operate on their own tracks or guideway not shared with other  rail services. Our review is also technology neutral, meaning that we did  not analyze or consider the technical feasibility of the various rail  technologies available, such as diesel, electrified trains, or magnetic  levitation (maglev) trains, but rather we considered only the service and  performance aspects of these different technologies in the proposals we  reviewed.
We obtained information from numerous sources to address our  objectives. Specifically, we conducted structured interviews with officials  involved in the planning and operation of the 5 corridor rail lines that  currently exceed 79 miles per hour, and with project sponsors for 11  specific corridor projects in the United States that are actively being  pursued and have advanced into the environmental review phase of  project development. (See app. I for a detailed discussion of our scope and  methodology, and apps. II and III for a detailed description of each project  we reviewed.) The 5 existing projects are all incremental improvements,  and of the 11 proposed projects, 6 are incremental projects, and 5 are new  high speed rail projects that would involve new track or guideways. Three  of the latter projects are considering maglev technology. We structured the  interviews to determine (1) the most important characteristics and factors  that affect the project’s viability; (2) the most important challenges faced  by project sponsors in developing the project; and (3) the roles of various  federal, state, local, and private sector entities in the development of the  project. Also, we conducted case studies of 2 high speed rail projects that  had been terminated (the Florida Overland Express and the Texas TGV) as  well as case studies of high speed rail in France, Japan, and Spain (see  app. IV for more details on the terminated projects, and app. V for  information on the high speed rail systems in France, Japan, and Spain).  We chose the terminated projects to identify the challenges encountered  by previous attempts to develop high speed rail in the United States, and  we chose these countries on the basis of their experiences with the  development and operation of high speed rail service. In addition, we  reviewed relevant literature on high speed rail systems in these and other  countries as well as information, studies, and reports on domestic high  speed rail proposals. Lastly, we conducted over 90 interviews with a wide  range of stakeholders and interested parties, including academics;  consultants involved in ridership forecasting and planning; representatives  from private firms that invest in transportation infrastructure; engineers  involved in developing various rail technologies; state and local  government agencies and organizations; and officials at Amtrak, FRA, the  Surface Transportation Board, and other federal agencies involved in the  domestic projects we reviewed.
We conducted this performance audit from December 2007 to March 2009  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: Five corridor rail lines currently exceed Amtrak’s predominant top speed  of 79 miles per hour in the United States. Proposals for high speed rail  projects in 44 other specific corridors are at some stage of planning and  development. Eleven of these projects have advanced into the  environmental review phase (see table 1).
Financing for the proposed projects has yet to be arranged, with the  partial exception of the proposed Los Angeles, California, to San  Francisco, California, system, for which voters recently approved $9.95  billion in bond funding. For those projects that currently operate above 79  miles per hour, financing came from federal or state sources. Federal  funding for high speed rail has generally gone to improvements to rail  service in the Northeast Corridor between Washington, D.C., and Boston,  Massachusetts, and to research and development. Some $3.1 billion has  been spent by the federal government on the Northeast Corridor since  1990—about 75 percent of all federal funding identified by FRA as having  been spent for high speed rail over this period. The remaining 25 percent  has primarily gone to research and development purposes related to high  speed rail. For example, the first foray into high speed rail development  was in 1965, when Congress provided funding to begin studying high speed  rail technologies. Later, the Magnetic Levitation Deployment Program  provided funds to begin studying maglev as a new high speed  transportation technology and to advance a demonstration project in the  United States. States have also invested in high speed rail in some  instances. For example, state funding was used to help achieve speeds  above 79 miles per hour between New York, New York, and Albany, New  York; Los Angeles, California, and San Diego, California; Chicago, Illinois,  and Detroit, Michigan; and Philadelphia, Pennsylvania, and Harrisburg,  Pennsylvania.
Several federal agencies have played a role in the planning and  development of high speed rail projects to date, and others may potentially  be involved as projects progress. FRA has generally been the lead federal  agency—sharing that role with other federal agencies, such as the Surface  Transportation Board—regarding the environmental review process. The  Surface Transportation Board must give its approval before any new rail  lines can be constructed that connect to the interstate rail network. FRA  also designates corridors as “high speed rail” corridors, and is the agency  responsible for any safety regulations or standards regarding high speed  rail operations. Safety standards relative to tracks and signaling  requirements become more stringent as train speeds increase. For  example, at speeds of 125 miles per hour or higher, highway-rail grade  crossings must be eliminated, and trains must be equipped with positive  train control, which will automatically stop a train if the locomotive  engineer fails to respond to a signal. To operate at speeds above 150 miles  per hour, FRA requires dedicated track—that is, track that can only be  used for high speed rail service. No safety regulations currently exist for  speeds above 200 miles per hour. In addition to FRA and the Surface  Transportation Board, the Federal Highway Administration and the  Federal Transit Administration (FTA) may play a role if highway or other  transit right-of-way will be used or if highway or transit funds are to be  used for some part of a high speed rail project. The Bureau of Land  Management is responsible for granting rights-of-way on public lands for  transportation purposes and, thus, would be involved in any new high  speed rail project that envisions using public lands. Various other agencies  would be involved in the environmental approval process, including the  U.S. Fish and Wildlife Service and the Environmental Protection Agency,  among others.
section_title: Economic Viability of High Speed Rail Is Affected by Many Corridor and Service Characteristics, but Uncertainties About Ridership and Other Estimates Make Viability Determinations Difficult
paragraphs: Based on our interviews with both domestic project sponsors and foreign  operators of high speed rail lines, in addition to a literature review, we  identified many common characteristics that tend to lead to relatively high  numbers of riders and resulting public benefits and to relatively lower  costs. High speed rail tends to attract the most riders and resulting public  benefits in corridors between roughly 100 and 500 miles with existing high  demand for intercity travel. Service characteristics relative to other travel  alternatives—such as travel time and price competitiveness, high  frequency, greater reliability, and safety—are also critical in attracting  riders and producing public benefits. Costs of high speed rail tend to be  lower in corridors where right-of-way exists that can be used for high  speed rail purposes, and a relatively flat- and straight-alignment can be  used. While several U.S. corridors exhibit characteristics that suggest  potential economic viability, decision makers have faced difficulties in  ascertaining whether any specific proposed line will be viable due to  uncertainties in how accurately project sponsors forecast riders and  estimate costs, and to the lack of agreement and standards regarding how  a project’s public benefits should be valued and assessed.
subsections: section_title: Numerous Corridor and Service Characteristics, and Trade-offs between Service and Costs, Influence a Project’s Economic Viability
paragraphs: High levels of demand for intercity travel are needed to justify a new high  speed rail line. (See app. V for a discussion of techniques for forecasting  demand for intercity travel and riders on high speed rail.) Project sponsors  identified high levels of population and expected population growth along  a corridor, and strong business and cultural ties between cities as factors  that can lead to higher demand for intercity travel. In some corridors,  riders are expected to come from business travelers and commuters due  to the strong economic ties between cities along the corridor; while in  other corridors, a larger number of tourists and leisure travelers comprise  the expected riders. Officials in Japan expressed the importance of  connecting several high-population areas along a corridor as a key factor  in the high number of riders on their system, to effectively serve several  travel markets, including commuters and travelers from cities along the  corridor. The corridor between Tokyo and Osaka in Japan is unique in that  it is one of the most populous regions in the world, with multiple urban  areas of several million inhabitants located along the corridor. This  corridor attracts the highest number of riders of any high speed rail line in  the world—over 150 million riders annually. In other foreign corridors we  examined, however, population and densities were not as high, but foreign  officials indicated that high speed rail revenues in these areas were  sufficient to cover ongoing operating costs, although not necessarily  sufficient to recoup the initial investment in the line. Some, but not all of  the corridors under development in the United States today have  population levels similar to corridors in the foreign countries we examined  (see figs. 1 and 2).
Poption (in million)
Poption (grphic repreenttion)
City nme Poption (in million)
Poption (grphic repreenttion)
Several proposals exist in this corridor, with varying attributes and estimated travel times. See  appendix VII of this report for more information on the various proposals.
High speed rail also has more potential to attract riders in corridors  experiencing heavy travel on existing modes of transportation (i.e.,  conventional rail, air, and highways—including automobile and bus) and  where there is, or is projected to be, congestion and constraints on the  capacity of existing transportation systems. These situations lead to  demand for an additional transportation alternative, or demand for  expansion or improvements to existing transport modes. To attract riders  from existing transportation alternatives, a proposed high speed rail line  needs to be time- and price-competitive with the alternatives, and also  needs to have favorable service characteristics related to frequency,  reliability, and safety. FRA and others have found that high speed rail tends to be most time-competitive at distances of up to 500 miles in  length.  Existing high speed rail lines in Japan tend to be most time- competitive and attain the highest relative levels of service in corrido roughly similar distances (see fig. 3). According to foreign and domestic  officials with whom we spoke, generally lines significantly shorter than  100 miles do not compete well with the travel time and convenience of  automobile travel, and lines longer than 500 miles are unable to overcom e  the speed advantage of air travel. Between 100 and 500 miles, high speed  rail can often overcome air travel’s speed advantage because of reductions  in access and waiting times. Air travel requires time to get to the airport,  which can often be located a significant distance from a city center, as  well as time related to checking baggage, getting through security, waiti at the terminal, queuing for takeoff, and waiting for baggage upon arrival  at a destination. By contrast, high speed rail service is usually designed to go from city center to city center, which generally allows for reduced  access times for most travelers. Some travelers will have destinations  starting points outside of city centers in closer proximity to airports, thus potentially minimizing or eliminating in some cases the access time  advantage of high speed rail where high speed rail service does not  ,  connect to airports or other locations preferred by travelers. High sp rail also generally has less security and waiting time than airports. On th foreign high speed rail lines we observed, there was no formal security  comparable to airport security, and travelers could arrive at a station jus few minutes prior to departure.
In France, Japan, Spain, and elsewhere, high speed rail has been shown to  be time-competitive with air travel and has relieved capacity constraints at  airports. For example, high speed rail in Japan has resulted in eliminating  one air route (Tokyo-Nagoya), while several others have lost significant  market share to high speed rail. With the introduction of the Madrid- Barcelona high speed rail line in February 2008, air travel between th cities has dropped an estimated 30 percent (from 5.0 million to 3.5 million  air passengers), while high speed rail riders increased markedly. In  France, high speed rail has captured 90 percent of the Paris-Lyon air market, and Air France officials estimated that for high speed rail trips of  between 2 and 3 hours, high speed rail is likely to capture about 80 percen of the air-rail market over time. By displacing shorter distance air travel,  high speed rail has freed up considerable airport capacity in those cities  for other longer distance flights. However, because high speed rail  becomes a new competitor with short-distance air travel, airlines ha ve in  some cases actively opposed its development. In the United States, most  of the 16 high speed rail projects we focused on will connect metropolitan areas with anticipated capacity constraints at nearby airports (see fig. 4).
section_title: Uncertainty Regarding Forecasts of Riders and Costs, and How Public Benefits Are Quantified and Valued Make Determinations of a Specific Project’s Economic Viability Difficult
paragraphs: While several U.S. corridors exhibit characteristics that suggest potential  economic viability, determining whether any specific proposed line will be  viable has proven to be difficult for decision makers. This difficulty is due  to uncertainties with the forecasts of riders and cost estimates that project  sponsors produce, the lack of agreement and standards regarding how a  project’s public benefits should be valued and quantified, and the lack of  comparison with alternative investments in highway or air infrastructure.
subsections: section_title: Uncertainty and Inaccuracy in Forecasts of Riders and Costs
paragraphs: Rider forecasts and cost estimates are inherently uncertain and subject to  some degree of inaccuracy simply because they are trying to predict future  circumstances. However, analyses and research on the accuracy of rider  forecasts and cost estimates for rail infrastructure projects have found  that a systematic problem and incentive to be optimistic may exist—that  is, actual riders are more likely to be lower than forecasted, while actual  costs are more likely to be higher than estimated. For example, a study of  over 250 transportation infrastructure projects in Europe, North America,  and elsewhere, found that rail projects—while not all high speed—had the highest cost escalation out of all the transportation modes studied— averaging 45 percent higher than estimated. Another study that included  27 rail projects, 1 of which was a high speed rail project, from around the  world found that rider forecasts for over 90 percent of the rail projects  studied were overestimated, and 67 percent were overestimated by more  than two-thirds.
Numerous techniques are available in travel demand modeling (a  common tool for forecasting riders) and, thus, different models for the  same proposed project could have diverse results. A modeler usually  makes choices on the theory and assumptions upon which the model is  based, the mathematical form of the model, and the variables to be  included. For example, a modeler may design a survey to determine how  travelers would react to a new transportation mode, but there is a risk that  the design or implementation of that survey could lead to biased survey  results. Survey instruments can be scrutinized by third parties, but the  process of data collection is less accessible to outside observers,  especially after the fact. Furthermore, decisions on how to handle data  within a model may enable the analyst to steer the result in a preferred  direction. For an external, disinterested reviewer, the evolution of such  decisions is very difficult to trace. (See app. VI for more details on travel  demand forecasting and modeling.)
section_title: Lack of Consistency or Standards, and Difficulty in Valuing Public Benefits Relative to Modal Alternatives
paragraphs: While most project sponsors in the United States cited a variety of public  “external” benefits, such as congestion relief or environmental benefits  that would flow from their projects, the extent to which benefits had been  quantified and valued varied across projects. For the 16 domestic projects  that we reviewed, formal benefit-cost analyses have been conducted for 4  of them—although many proposed projects have not advanced to the  stage of conducting in-depth analyses. Of these analyses, none have  formally compared the proposed project with alternative modal  investments, such as airport or highway expansion, although the proposed  high speed rail line between Los Angeles, California, and San Francisco,  California, has created a rough comparison of high speed rail investment  with stated investment needs on the highway and air modes. Even if a  formal benefit-cost analysis has not been done, public benefits of some  domestic projects are considered in some ways within the context of the  National Environmental Policy Act (NEPA) process. Under NEPA, the  weighing of the merits and drawbacks of the various alternatives need not  be displayed in a monetary benefit-cost analysis, but an environmental  impact statement should at least indicate factors not related to  environmental quality, which are likely to be relevant and important to a  decision.
Project sponsors with whom we spoke—domestically and  internationally—cited several types of public benefits that were significant  in determining the economic viability of proposed high speed rail lines,  including:   Travel time savings: Travelers using alternative modes may experience  travel time savings as a result of reduced highway traffic and airport use  by travelers shifting to high speed rail.
Environmental benefits: Environmental benefits could result from  reducing pollution and carbon dioxide emissions, to the extent that the rail  service reduces congestion on highways or at airports and makes use of  fuel-efficient technology (i.e., high speed rail service using diesel  locomotives would provide less environmental benefit than service that is  electrified, all else being equal).
Traffic safety: Benefits from increased traffic safety include reduction in  traffic accidents, to the extent that the rail service reduces congestion on  highways.
Economic development, land use, and employment: A high speed rail  system that encourages relocation of households and firms, and in cities  where passenger rail stations are located, could experience growth of  population and business presence—increasing retail sales, rental income,  and property values.
Government officials in the countries we studied told us that a national  policy decision had been made that the public benefits flowing from high  speed rail are sufficient to justify some amount of public subsidy in high  speed rail systems. In other words, passenger fare revenues are not  necessarily expected to cover the full cost of constructing, operating, and  maintaining the system. For example, in Japan, government officials told  us that the construction of a new high speed rail line will be built only if  certain criteria are met, including stable public subsidies, profitability of  the operator, and a positive benefit-cost ratio. In Spain, one of the goals of  high speed rail is to increase social and territorial cohesion. French  officials said subsidies depend on the line—core lines like Paris-Lyon can  cover construction costs from passenger fares.
Quantifying public benefits can be difficult, however, and the level at  which to value some benefits can be subject to disagreement.  Furthermore, there are currently multiple federal guidelines in the United  States for valuing public benefits, yet none have been designated for use in  analyzing proposed high speed rail projects. For example, high speed rail  service that reduces congestion on highways or at airports and makes use  of fuel-efficient technology may provide an environmental benefit (i.e.,  reduced pollution and greenhouse gas emissions). However, the value to  assign to the reduction of pollution and greenhouse gas reductions is  difficult to determine, since there is no current market for pollution  reduction in the United States. Thus, the valuation of pollution  reduction—defined as the public’s willingness to pay—is generally left to  economists to estimate by indirect methods. The valuation of greenhouse  gas reductions entails additional considerations that are based on  uncertain future benefits. Other intangible benefits, such as economic  development impacts, are also difficult to estimate and are subject to  disagreement. Officials in Japan told us that, although they previously  calculated regional economic development benefits and included them in  high speed rail decision making, they abandoned the practice because it  was too difficult to isolate the impacts and because they believe that  benefits accrued through revenues and passenger benefits alone are  sufficient to meet their criteria for constructing new high speed rail lines.  Moreover, while benefits such as improvements in economic development  and employment may represent real benefits for the jurisdictions in which  a new high speed rail service is located, from another jurisdiction’s  perspective or from a national view they may represent a transfer or  relocation of benefits.
section_title: High Up-front Costs Are the Main Challenge to High Speed Rail Development, and Challenges Also Exist in Sustaining Support and Building Consensus
paragraphs: Once domestic projects are deemed to be economically viable, efforts to  develop those projects will continue to encounter significant challenges in  financing the high up-front construction and other costs. In addition,  sustaining public and political support for project development will also  be a challenge. Uncertainties regarding rider forecasts and cost estimates  can undermine confidence in whether projects will actually produce  claimed benefits. Project sponsors must also sustain political support over  several electoral cycles and coordinate project decisions among numerous  stakeholders in different jurisdictions, typically without the benefit of an  established institutional framework.
subsections: section_title: Substantial Up-front Investment Requirements Far Exceed Limited Available Public Funding
paragraphs: Once economic viability is determined, the main challenge is securing the  investment necessary to fund the substantial up-front capital costs, such  as those incurred for planning and preliminary engineering, building the  infrastructure, and acquiring train equipment. In addition, high speed rail  projects require a very long lead time, and the lengthy development  periods can increase the uncertainty over future costs and benefits, and  the front-loaded nature of the required spending can increase risk.  Passenger fares are generally insufficient to finance the capital and  operating costs of a high speed rail system, and the public “external”  benefits cannot necessarily be captured in a revenue stream based on  prices. Therefore, public subsidies are generally required, at least for the  initial investment. Domestic project sponsors for all of the proposed high  speed rail projects we reviewed, except one, indicated that they have or  will need some federal funding to develop and construct their projects.  The PRIIA authorized annual funding—a total of $1.5 billion for fiscal  years 2009 to 2013—for high speed rail corridor development across the  entire United States. ARRA appropriated $8 billion for high speed rail and  intercity passenger rail congestion and capital grants (the latter of which  were authorized by the PRIIA). However, this funding will not likely be  sufficient to fund large-scale projects. For example, project sponsors for  the proposed high speed rail line between Los Angeles, California, and San  Francisco, California, are anticipating $12 billion to $16 billion in federal  funding alone, and, according to the California High Speed Rail Authority,  total project costs are expected to exceed $40 billion if the entire system is  constructed.
Federal funding that has historically been made available for high speed  rail has been derived from general revenues, rather than a dedicated  funding source. Consequently, high speed rail projects must compete with  other nontransportation demands on federal funds, such as national  defense, education, or health care, as opposed to being compared with  other alternative transportation investments or policies in a corridor. By  contrast, other transportation modes are funded through federal  programs—such as federal-aid highways, the FTA’s New Starts Program,  and the federal Airport Improvement Program—which benefit from   (1) dedicated funding sources based on receipts from user fees and taxes,   (2) a format for allocating funds to states, and (3) in some cases, a  structure for identifying projects to be funded. As we have previously  reported, comparison of alternative investments in other transport modes,  such as high speed rail, generally does not occur when decision makers  are evaluating projects or applying for funding from any of these  programs.
Given the lack of dedicated federal grant funding currently available for  high speed rail projects, project sponsors are exploring other federal  financing mechanisms for high speed rail projects, such as federal loan  programs. Available federal loan programs, however, may be limited in  their ability to help fund the substantial cost of high speed rail projects or  the number of projects competing for federal loans. Two project sponsors  told us that they plan to apply (and one project sponsor indicated it did  not plan to apply, but elements of its project would be eligible) for credit  under the TIFIA program, which offers credit assistance to surface  transportation projects. According to TIFIA documents, the $122 million  authorized by Congress annually for the program provides over $2 billion  in credit assistance. Sponsors of high speed rail projects could request  that amount or more for one loan, thereby constraining TIFIA’s ability to  fund other projects in the same year, as we noted when analyzing the  Florida Overland Express (FOX) project in 1999. There may be other  challenges as well. For example, because TIFIA assistance cannot exceed  33 percent of a project’s construction costs, project sponsors must secure  other sources of funding to construct a project, which has proven  difficult. In addition, the availability of TIFIA funds, or other federal  funding, may be questionable since the federal government faces  significant future fiscal challenges, as we have noted in recent reports.  Finally, as Amtrak officials suggested, the TIFIA program’s requirement  that loans and loan guarantees be repaid may be another limitation on the  program’s usefulness in funding high speed rail projects.
In the countries we visited, the central government generally funds the  majority of up-front costs of their country’s respective high speed rail  projects, and they do so without the expectation that their investment will  be recouped through ticket revenues. The public sector’s ability to recover  its financial investment has varied on the basis of how revenues have  grown, but transportation officials in Japan and Spain told us that a public  subsidy was generally necessary because ticket revenues are insufficient  to fully recoup the initial investment. In Japan, while two early lines  developed in the 1960s and 1970s may have fully repaid the initial  investment and debt related to their construction, three of the high speed  rail lines built since the 1987 privatization have been able to recover 10  percent, 52 percent, and 63 percent of their construction costs through  ticket revenues. Spanish officials told us the original high speed line in  Spain between Madrid and Seville has been profitable on an operating cost  basis but has not covered all of its costs, including the original  construction costs. A Spanish academic researcher told us that future lines  might not cover even their operating costs.
State funding for high speed rail can also be limited by the lack of  dedicated funding sources and restrictions on the use of gasoline tax  revenues. None of the project sponsors with whom we spoke obtained  funding from a dedicated source of state funding for high speed rail; one  project sponsor (i.e., the Virginia Department of Rail and Public  Transportation), however, noted that it had a dedicated rail funding source  available. Since the two high speed rail projects currently being developed  in Virginia are still in the planning stages, according to the Virginia  Department of Rail and Public Transportation, they have not yet sought  funds from Virginia’s Rail Enhancement Fund, which provides about $25  million annually for both freight and passenger rail improvements. In  addition, according to a report by the Brookings Institution, 30 states— including states where high speed rail projects are proposed, such as  Minnesota, Nevada, and Pennsylvania—are restricted from spending  revenues from excise taxes on gasoline, which typically is a state’s main  source of transportation revenue.
In lieu of a dedicated source of state funding, some project sponsors have  sought funding directly through appropriations of state revenue or bond  measures, which compete with numerous other state budgetary needs.  New York State Department of Transportation officials said that  appropriations from general state revenue and bonding measures enabled  them to fund only incremental improvements along the New York, New  York, to Albany, New York, corridor, not the major expansions that had  been planned. The choice of a financing mechanism can have serious  implications for states and local governments, which as we have  previously reported, will face broader fiscal challenges over the next 10  years, because of increasing gaps between receipts and expenditures. For  example, in November 2008, California voters passed a ballot initiative that  would allow the state to issue $9.95 billion in bonds, $9.0 billion of which  would go toward the construction of a statewide high speed rail system.  According to information prepared by California, this bond issue,  including principal and interest, could cost the state general fund about  $19.4 billion over 30 years. Also, bonding mechanisms may cost more than  using appropriations of general revenues. For example, we reported that a  proposal to allow Amtrak to issue up to $12.0 billion in tax credit bonds  over a 10-year period for capital improvements on designated high speed  rail corridors and the Northeast Corridor would have cost the U.S.  Treasury as much as $11.2 billion (in present value terms) in lost tax  receipts over a 30-year period if states had financed their contribution  from tax-exempt borrowing and Amtrak had used accumulated losses to  offset taxable earnings in a trust fund established to repay the bond  principal. This cost compared with an estimated total cost to the U.S.  Treasury of between $7.3 billion and $8.2 billion (in present value terms) if  annual federal appropriations of federal revenues had been used for the  same purpose. Another possibility are tax-exempt private activity bonds,  which can be used to finance high speed rail facilities. Such bonds were  formerly restricted to high speed intercity passenger rail facilities that  operate at speeds in excess of 150 miles per hour and proceeds could not  be used for rolling stock (passenger rail vehicles). ARRA modified these  restrictions to make eligible projects that are “capable of attaining”  maximum speeds in excess of 150 miles per hour, rather than operating at  such speeds. This modification may increase the number of projects that  can qualify to use tax-exempt private activity bonds for high speed  intercity passenger rail facilities.
section_title: Attracting Private Capital Is Also a Challenge, Particularly When the Public Sector Does Not Assume Substantial Financial Risk
paragraphs: Both current and former domestic high speed rail project sponsors have  sought private financing but found it difficult to obtain private sector buy- in, given the significant financial risks high speed rail projects pose. In  February 2008, we reported that public-private partnerships can provide  potential benefits, such as transferring some risk from the public to the  private sector, and an increased potential for operational efficiencies. The  level of private sector involvement anticipated by some domestic high  speed rail projects is unprecedented, particularly given the limited private  sector involvement with operating domestic high speed rail to date. For  example, the California High Speed Rail Authority is looking to the private  sector to provide between $6.5 billion and $7.5 billion of the total cost to  finance, construct, operate, and maintain the first phase of its statewide  system.
Private sector firms have expressed interest in high speed rail projects, but  the firms with which we spoke noted that without public sector  commitment—both financial and political— private sector involvement  and financing would be limited, due to the financial and ridership risks of  such projects. A good illustration of the domestic relationship between the  public and private sectors in high speed rail is the FOX project. The  private sector’s willingness to finance a portion of that project’s  construction costs was predicated on an understanding that Florida would  cover costs that could not be recouped through ticket revenues. Although  the state agreed to provide $70 million annually over a 40-year period to  support the project, it was terminated when this support was withdrawn.  (See app. IV for more detail on the FOX project.) Similarly, in California,  private sector entities have expressed interest in investing in part of the  high speed rail project, but noted that they would need substantial public  sector commitment to the project before participating.
Efforts to develop entirely privately financed high speed rail projects in  the United States have proven unsuccessful to date. According to the  Texas High Speed Rail Authority, the Texas TGV project, which was  intended to be a privately financed project in the Texas triangle (Houston- Dallas-Fort Worth-San Antonio), was unsuccessful, primarily because one  of the firms involved in the private consortium encountered financial  difficulties. (See app. IV for more details on the Texas TGV project.) In  Florida, an effort to pursue a privately financed high speed rail project  during the 1980s also failed (before the FOX project). One current project,  the Desert Xpress project, from Victorville, California, to Las Vegas,  Nevada, is also seeking to develop an entirely privately financed high  speed rail line, but as of February 2009, the project had not secured private  financing.
Public-private partnerships are one means by which foreign governments  are seeking to share the financial risks of their expanding high speed rail  systems. In Japan—where the rail system was privatized in 1987—the  national government and local governments still assume the financial risk  of constructing a new high speed rail line, investing two-thirds and one- third of the construction costs, respectively (see fig. 5). With the  government’s financial commitment, the private railroad operating  companies undertake the operational risk and rely on ticket revenues to  cover operating and maintenance costs. The railroad operating  companies’ business model, which includes various business ventures and  nonrail revenue streams, also helps them assume this risk for rail lines  with relatively low numbers of riders, since these additional revenues may  be able to cover high speed rail operating losses, if they occur.
As France and Spain look to expand their high speed rail systems, they are  exploring private sector participation to, among other reasons, attract  additional financing, and, in the case of France, tap private sector  management and technical expertise. France is contemplating a public- private partnership contract scheme where risks associated with  financing, designing, building, and maintaining a high speed rail line are  allocated to the private sector (see fig. 6). Under this scheme, the private  sector essentially would assume the responsibilities of the public  infrastructure manager, put up the initial construction financing, take on  the projects’ construction cost and schedule risks, and ensure that the  infrastructure is available to a passenger rail operator for a certain  percentage of time. The line must also be maintained to certain levels to  ensure safety. The public sector assumes the risk associated with  operating the rail service, and commits to making fixed annual payments  to the private sector, as long as the infrastructure is available the  prescribed percentage of time. French officials acknowledged that there  is currently much uncertainty about how these arrangements will work  and whether there will be sufficient private sector interest. At the time of  our visit, France had not implemented a public-private partnership.  However, a recent call for tenders on the Tours-Bordeaux line raised the  interest of 3 French contractors. French officials expect this contract to  close by the end of 2009. Spain was in the process of completing a public- private partnership for a line from Figueras to the French border.  However, this arrangement was used to construct a portion of a high  speed rail line in the Netherlands, and, according to an official with the  private sector consortium that constructed this line, if there is a public  sector commitment, the private sector can make a public-private  partnership work.
section_title: Sustaining Public and Political Support over Lengthy Development Process and Reaching Multistakeholder Consensus Will Also Be Challenges
paragraphs: Additional challenges faced in developing high speed rail projects include  sustaining public and political support over lengthy development timelines  for high speed rail. As we have previously mentioned, high speed rail  projects require long lead times. The five new right-of-way rail projects we  reviewed have been in project development between 4 years and 18 years,  and on average 13 years. Similarly, in France, transportation ministry  officials told us that high speed rail projects in their country take about 14  to 16 years to complete. This time comprises when project planning begins  to when the project opens for revenue service. A considerable amount of  this time is for studies and analysis as well as public debate about the  merits of a project. Sustaining public support over this length of time can  be difficult and can have significant impacts on a project. As the  experience with the FOX project demonstrated, development of high  speed rail projects can occur over multiple electoral cycles, which not  only can change the course of project development but can also lead to  project termination if public and political support is not sustained. For  example, as we have previously discussed, the Florida DOT had planned to  provide $70 million annually to help construct the FOX project. The  project began under one gubernatorial administration that supported the  project. The project was terminated under a different administration that  did not support the project. Several public and private sector officials we  spoke with cited the need for someone or some organization to  “champion” a project over a long period of time. French officials told us it  is easier to sustain public support for a high speed rail project once it has  the commitment of the central government.
There are also challenges associated with the ability to provide  transparency and confidence in project cost estimates and rider forecasts.  As we have previously discussed, these estimates and forecasts can often  be inaccurate, which may erode public support for high speed rail. During  the FOX project, advocacy organizations, state transportation agencies,  and GAO each questioned the reliability of project cost estimates and rider  forecasts. The governor of Florida decided to cancel state funding for the  project, in part due to the skepticism raised by these organizations.  Cancellation of state funding led to termination of the project. More  recently in California, a report by numerous advocacy organizations raised  similar concerns about the rider forecasts and costs estimates for the  statewide high speed rail project. Although the public approved nearly a  $9.95 billion bond to support this project, over time public support could  erode, along with public funding, if confidence in rider, revenue, and cost  estimates is lost.
Reaching consensus on project decisions, such as a rail line’s actual route,  involves difficult negotiations, which can cause substantial project delays  and disagreements among stakeholders. Given that high speed rail projects  can span hundreds of miles and sometimes cross multiple states,  numerous stakeholders and jurisdictions are involved. Stakeholders  typically include, among others, federal, state, and local governments; the  private sector; and advocacy organizations. For example, project sponsors  of the Southeast High Speed Rail Corridor (a project from Washington,  D.C., to Charlotte, North Carolina) noted that some 50 federal, state, and  local government agencies are involved in the project as well as a 214- member advisory committee. Coordinating on project decisions with these  stakeholders—each with their own priorities and views—can be difficult,  particularly without an established institutional framework within which  this can occur, as exists for other transportation modes. For example, in  planning highway and transit projects, federal agencies, local transit  agencies, metropolitan planning organizations, and state transportation  departments benefit from established procedures for planning and public  involvement.
Development of domestic high speed rail projects may typically be led by  rail divisions within state DOTs or by high speed rail authorities and  commissions. These organizations are often limited in terms of  institutional and financial resources. For example, in the case of the  California High Speed Rail Authority, funding has fluctuated from a little  over $1 million per year to a little over $14 million (see table 4) as a result  of changes in its annual appropriation from the state legislature. The $3.9  million in state funding for fiscal year 2005-2006 was planned to support  approximately 4 staff members in developing a $45 billion, 800-mile  statewide high speed rail system. Rail divisions within state DOTs also  face similar funding and manpower issues, since there is typically no  dedicated state funding for rail services, as we previously discussed. In  addition, rail has generally not been a primary focus of state  transportation plans, which are more focused on highway projects.
Commissions and authorities may face other institutional challenges  related to their role and authority. For example, a Virginia official told us  that legislation to create a high speed rail authority fails every year it  comes up for a vote because of concerns that an authority might issue  bonds and jeopardize the state’s triple A bond rating. In addition, the role  of high speed rail authorities is sometimes unclear. According to the final  report of the Texas High Speed Rail Authority, as well as the former  director of the authority, rail authorities can sometimes be conflicted  between advocating for a high speed rail project and objectively  determining whether a system is in the “public convenience and  necessity.”
Stakeholder consensus is also a considerable challenge for projects that  involve incremental improvements for high speed rail service. Nine of the  11 incremental project sponsors with whom we spoke said that working  with stakeholders such as Amtrak, commuter railroads, and private freight  railroads can be difficult and time-consuming since each has its own  interests. Projects that cross state lines pose additional stakeholder  challenges, particularly with respect to allocating benefits and costs  among the states. To address multistate issues, some states have pursued  interstate compacts and commissions as a means to formalize decision  making. For example, the Virginia-North Carolina Interstate High Speed  Rail Compact established a commission to provide project leadership and  vision and to define roles. However, interstate compacts can be difficult to  implement and involve working out many practical issues, including  deciding on what type of service to provide, how financial contributions  will be distributed, and what occurs if and when one or more states do not  meet their financial or other responsibilities.
section_title: Federal Leadership Has Been Limited, but Following Reexamination Principles Can Ensure That the Federal Role Is Focused on Yielding Maximum Benefits
paragraphs: In the United States, the federal government has not historically had a  strong leadership role in high speed rail. The recently enacted PRIIA  provides a framework for developing a federal role. ARRA will also likely  affect the federal role by providing $8 billion for high speed rail. Following  reexamination principles we have reported on for surface transportation  programs would help ensure that the implementation of the act, and a  possible heightened federal role, is efficient, effective, and focused on  yielding maximum benefits for its investment.
subsections: section_title: Federal Leadership Has Been Limited, but Recent Legislation Provides for a Potentially Greater Federal Role
paragraphs: Since the 1960s, Congress has authorized various programs dealing with  high speed ground transportation, including high speed rail, but no federal  vision or national plan for determining the role of high speed rail in the  U.S. transportation system exists. FRA officials told us that they do not  have a high speed ground transportation policy, and, as one FRA official  told us, policies related to high speed rail have varied from one  administration to another. FRA officials also told us that creating interest  in promoting high speed rail at the national level has been difficult to  sustain.
The recently enacted PRIIA, in addition to authorizing funding, provides  numerous other opportunities for a greater federal role in high speed rail  development, as follows:  the act requires the Secretary of Transportation to establish and carry out  a rail cooperative research program that will address, among other things,  new high speed wheel on rail systems; the FRA Administrator is tasked with the development of a long-range  national rail plan consistent with approved state rail plans and the rail  needs of the nation; the FRA Administrator is required to support high speed rail development,  including high speed rail planning; the act explicitly provides a framework for the establishment of a High  Speed Rail Corridor Development Program, which permits the Secretary  to make grants to states, groups of states, and others to finance capital  projects in high speed rail corridors; the act requires the Secretary to issue a request for proposals for the  financing, design, construction, operation, and maintenance of high speed  intercity passenger rail systems operating within high speed rail  corridors; and the Secretary is to study high speed rail routes and establish a process for  states or groups of states to redesignate or modify designated high speed  rail corridors.
High speed rail projects will largely continue to be initiated at the state- level, but the federal government can be expected to play an increased  role in funding and assisting in the development of high speed rail  corridors and projects.
section_title: Following Reexamination Principles Can Help Ensure the Federal Role Is Effective and Efficient and Focused on Yielding Maximum Benefits
paragraphs: A number of principles could help guide the potential federal role in high  speed rail, particularly as the newly enacted PRIIA and ARRA are  implemented. These principles will increase the likelihood that the federal  role in high speed rail is efficient, effective, sustainable, and focused on  maximizing public benefits. We have discussed such principles in our  work calling for a reexamination of federal surface transportation  programs. As applied here, the principles would address, going forward,  the federal interest in developing a high speed intercity passenger rail  policy, based on high speed rail purpose and relevance, its effectiveness in  achieving goals and outcomes, its efficiency and targeting, its affordability,  and its sustainability. These principles are as follows:    Create well-defined goals based on identified areas of national interest.  This would include establishing the expected outcomes related to each  goal, and the federal role in achieving each goal.
Incorporate performance and accountability for results into funding  decisions.
Employ the best analytical tools and approaches to emphasize return on  investment.
Ensure fiscal sustainability. This would include consideration of such  things as whether funding is affordable and stable over the short- and long- term; the extent to which costs and revenues are shared among federal,  state, and local participants; and whether any project fees and taxes are  aligned with use and benefits.
Given the current fiscal crisis facing the nation and the pressing needs  facing the federal government in many areas, it is critical that federal  dollars are used efficiently and effectively and are focused where they can  produce the greatest benefits. Failure to apply these principles could lead  to an unfocused federal investment in high speed rail corridors or projects  and, as a consequence, little impact on the congestion, environmental,  energy, and other issues that face the U.S. transportation system.
subsections: section_title: Identify Areas of Federal Interest, Create Well-Defined Goals, and Establish and Define the Federal Role
paragraphs: We have previously reported that specific, measurable, achievable, and  outcome-based goals that are in turn based on identified areas of federal  interest, improve the foundation for allocating federal resources and  optimizing the results from the investment. Determining the federal  interest involves examining the relevance and relative priority of  programs, including high speed rail, in light of 21st century challenges and  identifying areas of emerging national importance, such as congestion,  dependence on foreign fuel sources, and the impacts of transportation on  climate change. With the federal interest clearly defined, policymakers can  clarify the goals for federal involvement (i.e., specific goals could be set on  the basis of the expected outcomes), and can clearly define the roles of  federal, state, and local government in working toward each goal. Where  the federal interest is greatest, the federal government may play a direct  role in setting priorities and allocating resources, as well as fund a higher  share of program costs. Conversely, where the federal interest is less  evident, state and local governments could assume more responsibility.
To date, there has been little consideration at a national policy level of  how high speed rail could or should fit into the national transportation  system and what high speed rail development goals should be. In the 1990s  FRA studied the commercial feasibility of high speed rail and focused on  the economics of bringing high speed ground transportation (including  high speed rail) to well-populated groups of cities in the United States. Its  report identified potential opportunities where high speed rail could  complement highway or air travel. One purpose of the study was to lay  the groundwork for high speed rail policy in the United States. However,  according to FRA, this policy was never developed.
The PRIIA requires the FRA Administrator to prepare a long-range  national rail plan; preparing that plan will provide an opportunity for the  federal government to identify the vision and goals of high speed rail for  the nation and identify how, if at all, high speed rail fits into the national  transportation system. Although the act does explicitly require that high  speed rail be included in the national rail plan, the national rail plan must  be consistent with state rail plans and, among other things, state rail plans  are to include a review of all rail lines in a state, including proposed high  speed rail lines. National vision and goals, influenced by an intermodal  perspective, have been key components in the development of high speed  rail systems and national rail plans in both Europe and Asia. For example,  in Europe, the vision and goals laid out by the central governments have  evolved from being focused on reviving an industry (the railroads) and  addressing transportation capacity constraints, to being focused on  increasing the role of rail in an intermodal transportation system, making  rail a preferred transport mode in short-distance intercity corridors, and  using rail to achieve broader environmental, energy, and economic  development goals. In Japan, after the initial success of the first high speed  rail line between Tokyo and Osaka, the central government developed a  national rail master plan that laid out the vision and goals for how the  system would develop (including making passenger rail competitive with  air travel), where it would extend, and the benefits that were to be  expected. That master plan has guided high speed rail development ever  since.
The development of a vision for high speed rail in the United States may  need to be coordinated with reexamination of other federal surface  transportation programs. As we reported, in March 2008, one reason that  existing federal transportation programs are not effective in addressing  key challenges, such as increasing highway and airport congestion and  freight transportation demand, is because federal roles and goals are not  clear. In addition, we reported that many programs lack links to needs or  performance, the programs lack the best analytical tools and approaches,  and there is modal stovepiping at DOT.
Project sponsors, states, and others with whom we spoke are looking for  federal leadership and funding in creating a structure for high speed rail  development and in identifying how to achieve the potential benefits that  these projects may offer. All but 1 of the 11 high speed rail proposals we  reviewed have a projected need for federal funds in addition to any state,  local, or other funding they may receive. Aside from funding, project  sponsors and others are also looking for a stronger federal policy and  programmatic role. For example, officials from 15 of the 16 projects we  reviewed told us that the federal role should be to set the vision or  direction for high speed rail in the United States. An official with the  Florida DOT told us that no high speed rail system would be built in  Florida or elsewhere in the United States absent a true federal high speed  rail program. Private sector officials also told us of the importance of a  federal role and vision for high speed rail, and that leadership is needed  from the federal government in providing governance structures for high  speed rail projects that help to overcome the institutional challenges  previously described in this report. Other stakeholders similarly  mentioned the need for a federal role in promoting interagency and  interstate cooperation, and identified other potential federal roles, such as  setting safety standards, promoting intermodal models of transportation,  and assisting with right-of-way acquisition.
section_title: Incorporate Performance and Accountability for Results
paragraphs: As we reported in July 2008, our work has shown that an increased focus  on performance and accountability for results could help the federal  government target resources to programs that best achieve intended  outcomes and national transportation priorities. Tracking specific  outcomes that are clearly linked to program goals can provide a strong  foundation for holding potential grant recipients responsible for achieving  federal objectives and measuring overall program performance.  Accountability mechanisms can be incorporated into grants in a variety of  ways. For example, as we reported in March 2008, grant guidelines can  establish uniform outcome measures for evaluating grantees’ performance  toward specific goals, and grant agreements can depend in part on the  grantees’ performance instead of set formulas. Incentive grants or penalty  provisions in transportation grants can also create clear links between  performance and funding and help hold grantees accountable for  achieving desired results.
The PRIIA establishes criteria for the selection of high speed rail corridors  and high speed rail projects for development. The criteria include a  determination that the proposals are likely to result in a positive impact on  the nation’s transportation system. The Secretary of Transportation will  select proposals that provide substantial benefits to the public and the  national transportation system, is cost-effective, offers significant  advantages over existing services, and meets other relevant factors  determined by the Secretary. The PRIIA also requires that the FRA  Administrator develop a schedule for achieving specific, measurable  performance goals related to such things as the development of a long- range national rail plan, and, beginning in fiscal year 2010, to submit to the  relevant congressional committees the administration’s performance  goals, schedule, and a progress assessment. FRA has not yet determined  how performance and accountability will be incorporated into the review  and evaluation of grant applications under the PRIIA.
The extent to which other countries we visited used performance and  accountability measures in their high speed rail systems was limited. In  France, postproject evaluations of the performance of major transport  infrastructure projects have been required since 1982. However, a French  government official told us that most of the current French high speed rail  network was built before this 1982 postproject evaluation requirement  began to be enforced. Consequently, few postproject evaluations have  been done, even though this official said some evaluations had been done.  Government officials in Spain said that economic evaluations of high  speed lines had been conducted but, in some cases, did not determine the  government’s choice of lines to develop. Rather, the government chose to  develop lines that would create a high speed network that extends the  benefits of high speed rail to the whole national territory. Territorial  criteria have played an important role in the Spanish government’s  decision to prioritize high speed rail. In Japan, historical postproject  evaluations have generally not been done. A comparison of actual and  forecasted ridership has been done for recent high speed rail lines and the  estimates have been within 90 percent accuracy. The performance of high  speed rail lines has focused on the accuracy of ridership forecasts, and  these estimates are an integral part of negotiations between the  government and private operators for construction of new high speed rail  lines. For example, construction of new lines is carried out by the  government, but a private operator assumes control over the line and  assumes all the operating and maintenance responsibilities and ridership  risk. Under the Japanese rail structure, the private company has an  incentive—the profit motive—to ensure that the line performs well. We  discuss Japan’s incentive structure further in the next section on analytical  tools.
section_title: Employ the Best Analytical Tools and Approaches to Emphasize Return on Investment
paragraphs: The effectiveness of any overall federal program design can be increased  by promoting and facilitating the use of the best analytical tools and  approaches. We have reported on a number of analytical tools and  approaches that may be used. These include using quantitative analyses  based on identifying benefits and costs, managing existing transportation  capacity, and developing public-private partnerships. Benefit-cost analysis,  in particular, is a useful analytical tool for evaluating projects and ensuring  goals are met. Benefit-cost analysis gives transportation decision makers a  way to identify projects with the greatest net benefits and compare  alternatives for individual projects. By translating benefits and costs into  quantitative comparisons to the maximum extent possible, these analyses  provide a concrete way to link transportation investments to program  goals.
The PRIIA specifies various criteria for which high speed rail grant  proposals will be evaluated to determine federal investment. Specifically,  project selection is partially dependent on the consideration of the  project’s anticipated favorable impact on air or highway traffic congestion,  capacity, and safety. Project selection criteria encourage a project sponsor  to evaluate public benefits. For example, greater consideration is to be  given to proposed projects that, among other things, provide  environmental benefits and positive economic and employment impacts.  The rail cooperative research program established by the PRIIA will also,  among other things, include research into developing more accurate  models for evaluating the impact of rail passenger and freight service,  including the effects on highway and airport and airway congestion,  environmental quality, and energy consumption.
Although the PRIIA does not provide explicit guidance for quantifying or  valuing the economic and other impacts specified in the project selection  criteria, a more established approach to analyzing proposed projects and  quantifying and valuing nonfinancial benefits may emerge, given the  potential results of the rail cooperative research program and since future  proposed rail projects may be evaluated within the context of state  transportation systems and will need to meet specific criteria contained in  the PRIIA to obtain federal funding. In our view, any approach developed,  to the extent practicable, should conform to Executive Order 12893. This  order directs federal executive departments and agencies with  infrastructure responsibilities to develop and implement infrastructure  investment and management plans consistent with the principles in the  order. A key principle is that infrastructure investments are to be based on  a systematic analysis of expected benefits and costs, including both  quantitative and qualitative measures reflecting values that are not readily  quantified. The order also directs that agencies encourage state and local  recipients of federal grants to implement planning and information  management systems that support the principles articulated in the order.  In creating a more consistent approach, proposed projects may be more  easily compared with one another, ensuring that public funding is applied  to the projects and corridors with the greatest potential benefits.
Similarly, the PRIIA requires that consideration be given to projects with  positive economic and employment impacts, but again does not provide  explicit guidance on determining what is or is not a positive economic or  employment impact. As we have previously discussed in this report,  economic impacts are difficult to isolate, therefore, economic  development locally may not constitute a national net benefit—rather it  could be a redistribution of resources. For example, development of a high  speed rail system could increase economic development in the area where  it is built. However, this increased economic development could be a  redistribution of resources rather than a net benefit. Consequently, it will  be important in implementation of the PRIIA for guidelines to be  developed on how to consider national economic and employment  benefits in relation to local benefits. FRA is currently in the process of  evaluating the PRIIA and preparing final rules for how high speed rail  projects will be reviewed and selected for federal funding under  provisions of the act. The final rules are required to be issued in October  2009.
Forecasts of riders and costs are two key components of evaluating the  economic viability of high speed rail projects, and rider forecasts are the  anchor for the array of public benefits that a new line might bring.  However, as we have discussed, these forecasts are often optimistic,  calling into possible question the credibility of information being used by  decision makers to pursue high speed rail. Development of stronger  policies, procedures, and tools could enhance the accuracy and credibility  of the forecasts and contribute to better decision making. There are a  variety of means that have been discussed in the transportation literature  and could potentially be employed to strengthen the accuracy of  forecasting. These means include the following:    obligating state and local governments to share some of the risks of  underestimated costs for those projects seeking federal financial support;   obtaining forecasts and estimates from independent sources, such as a  state auditor or a federal agency, rather than sources contracted to  construct projects for a high speed rail project sponsor;   subjecting forecasts to peer review with possible public disclosure of all  relevant data and public hearings; and    conducting horizontal comparisons of projects—that is, using data from  different projects reported using a standardized accounting system to  prepare probability distributions of the accuracy of project estimates of  cost and demand—to evaluate new high speed rail projects.
Another potential means to improving the accuracy of these estimates is to  align the incentives of public and private interests. For example, in Japan,  for a new line to be built, the private operator must be able to make a  reasonable profit over and above operating costs, maintenance costs, and  lease payments made to the government for use of the track. The private  operator then has an incentive to maximize riders, but also to minimize the  lease payments, to increase its profit potential. Therefore, the private  operator wants to be conservative regarding rider forecasting and wants  the government to build the infrastructure in order to allow for the lowest  cost operation and maintenance. The central government has an incentive  to keep costs low in constructing the line and to extract the highest lease  payment it can negotiate from the private operator. The private rail  operator and the central government negotiate and agree upon a lease  payment, which remains set over a 30-year period. These negotiations are  based on forecasts of riders over the ensuing 30 years and the existing cost  estimates. According to officials and academics in Japan, this structure  has resulted in a discipline that has vastly improved the accuracy of rider  forecasting and cost estimation. For one newly constructed line, actual  riders were within 90 percent of forecasted riders, and the construction of  the line was within budget and ontime.
In Europe, we found that the use of analytical tools and approaches for  analyzing the public benefits of high speed rail projects was generally a  requirement, and that these analytical tools led to public benefits being  more systematically quantified and valued compared with projects in the  United States. As we previously discussed in this report, evaluation of  benefits can often be difficult and give rise to disagreements, and few  standards exist in the United States to govern such analyses. A French  official said evaluations of public benefits and costs began in the 1980s as  the result of a 1982 law. France’s current approach to analyzing proposed  projects includes analysis of public benefits—including travel-time  savings, security, noise, and pollution—in conjunction with financial  benefits to calculate financial and socioeconomic indicators (such as  financial internal rate of return and socioeconomic rate of return). These  financial and socioeconomic indicators are generally used to compare  proposed projects that meet certain minimum thresholds and to prioritize  them for construction. France’s 2004 Ministerial Order for analyzing  proposed transportation infrastructure projects provides guidance to  project sponsors in quantifying and valuing these benefits, and sets forth  monetized values for specific public benefits and costs. In addition, France  plans to soon build a multicriteria analysis tool that will take into account  additional nonfinancial benefits and costs, such as building in greenhouse  gas emissions reductions, as a means to advance sustainable development  objectives. This tool will guide France in adopting a new national  infrastructure planning scheme. Spain began explicitly including public  benefits and costs in proposed project analyses in 2003. Specific benefits  of rail projects are also outlined in a European Commission guide for  investment projects, and include time savings, additional capacity, and  wider economic benefits such as economic development.
section_title: Ensure Fiscal Sustainability
paragraphs: Our work has shown that transportation funding faces an imbalance of  revenues and expenditures and other threats to its long-term  sustainability. We have reported that a sustainable surface transportation  program will require targeted investment, with adequate return on  investment, from not only the federal funds invested but also investments  from state and local governments and the private sector. In the context of  high speed rail, fiscal sustainability includes consideration of such things  as whether federal, state, and other funding is affordable and stable over  the short- and long-term (i.e., both while a project is being planned and  constructed as well as after the high speed rail line is in operation); the  extent to which costs and revenues are shared among federal, state, local,  and private participants; and whether any project fees and taxes are  aligned with use and benefits. Moreover, sustainability can refer to the  extent to which ticket revenues will cover ongoing operating and  maintenance costs to avoid ongoing public subsidy.
The PRIIA includes recognition of the potential fiscal sustainability high  speed rail projects that might be selected for development. For example,  the PRIIA requires the federal government to give greater consideration to  high speed rail corridor projects that incorporate, among other things,  equitable financial participation in the project’s financing, including  financial contributions by intercity passenger, freight, and commuter  railroads commensurate with the benefits expected to their operations as  well as financial commitments from host railroads, nonfederal entities,  and nongovernment entities. Similarly, proposals under the PRIIA for  specific high speed rail projects are required to contain a description of  the projected revenues and sources of revenue, including the expected  levels of both public contributions and private investment. The level of  public and private contributions, in addition to a summary of the potential  risks to the public, including risks associated with project financing, must  be considered in project selection by commissions set up by the Secretary  to review the proposals.
The National Surface Transportation Policy and Revenue Study  Commission, created to study the condition and needs of the nation’s  surface transportation infrastructure, called for an increase in intercity  passenger rail service, including high speed rail service, and also proposed  a system of fiscal sustainability in its final report in January 2008. The  commission’s final report suggested that funding should come from a  variety of sources, and that a fund should be set up for rail investment that  would collect money from a new federal ticket tax levied on users of the  system. Currently, users of intercity passenger rail in the United States do  not pay ticket taxes or user fees similar to those paid by users of the  aviation system or fuel taxes used to support the highway system.
In other countries, high speed rail systems appear to be fiscally sustainable  on an ongoing financial basis. For example, new high speed rail lines are  not constructed in Japan unless they can cover their operating and  maintenance costs, not including the payback of the initial investment in  the infrastructure. Similarly, European officials told us that some of their  high speed rail lines require little, if any, public operating subsidies outside  of initial capital costs, since revenue is sufficient to cover operating costs.
section_title: Conclusions
paragraphs: High speed rail does not offer a quick or simple solution to relieving  congestion on our nation’s highways and airways. High speed rail projects  are costly, risky, take years to develop and build, and require substantial  up-front public investment as well as potentially long-term operating  subsidies. Yet the potential benefits of high speed rail—both to riders and  nonriders—are many. Whether any of the nearly 50 current domestic high  speed rail proposals (or any future domestic high speed rail proposal),  may eventually be built will hinge on addressing the funding, public  support, and other challenges facing these projects. Determining which, if  any, proposed high speed rail projects should be built will require decision  makers to be better able to determine a project’s economic viability.
It is not likely high speed rail projects will come to fruition without federal  assistance. The PRIIA establishes a good framework for helping craft a  federal role in high speed rail (which, to date, has been limited) to address  these challenges. Given the complexity, high cost, and long development  time for high speed rail projects, it will be critical to first determine how  high speed rail fits into the national transportation system and establish a  strategic vision and goals for such systems. This will establish the baseline  for federal involvement. To maximize returns on federal investments, it  will also be critical when reviewing grant applications under the PRIIA  high speed rail provisions to clearly identify expected outcomes and to  incorporate performance and accountability measures to ensure these  outcomes are achieved. The failure to incorporate such measures is a  common drawback of federal transportation programs. Finally, it will be  incumbent upon the federal government to develop the guidelines,  methods, and analytical tools to develop credible and reliable ridership,  cost, and public benefit forecasts. Without such guidelines, methods, and  tools, reliable determinations of economic viability will continue to be the  exception rather than the norm, and the efficiency and effectiveness of any  federal assistance to high speed rail could be jeopardized.
section_title: Recommendations for Executive Action
paragraphs: To ensure effective implementation of provisions of the PRIIA related to  high speed rail and equitable consideration of high speed rail as a potential  option to address demands on the nation’s transportation system, we  recommend that the Secretary of Transportation, in consultation with  Congress and other stakeholders, take the following three actions:    Develop a written strategic vision for high speed rail, particularly in  relation to the role high speed rail systems can play in the national  transportation system, clearly identifying potential objectives and goals for  high speed rail systems and the roles federal and other stakeholders  should play in achieving each objective and goal.
Develop specific policies and procedures for reviewing and evaluating  grant applications under the high speed rail provisions of the PRIIA that  clearly identify the outcomes expected to be achieved through the award  of grant funds and include performance and accountability measures.
Develop guidance and methods for ensuring reliability of ridership and  other forecasts used to determine the viability of high speed rail projects  and support the need for federal grant assistance. The methods could  include such things as independent, third-party reviews of applicable  ridership and other forecasts, identifying and implementing ways to  structure incentives to improve the precision of ridership and cost  estimates received from grant applicants, or other methods that can  ensure a high degree of reliability of such forecasts.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided copies of our draft report to DOT for comment prior to  finalizing the report. DOT provided its comments in an e-mail message on  March 10, 2009. DOT said that it generally agreed with the information  presented and noted that with the passage of ARRA, its work on high  speed rail has been considerably accelerated. Specifically, the act calls for  FRA to submit, within an expedited time frame, a strategic plan to the  Congress describing how FRA will use the $8 billion funding identified in  the act to improve and deploy high speed passenger rail systems. DOT  indicated that the strategic plan may include the Department’s vision for  developing high speed rail services, criteria for selecting projects, an  evaluation process that will be used to measure effectiveness, and a  discussion of the relationship between the ARRA grant programs and the  recently enacted PRIIA. DOT said it is also working to comply with  statutory requirements to issue interim guidance in June 2009, describing  grant terms, conditions, and procedures. DOT told us that in order to  provide information to the public and potential grantees as expeditiously  as possible, it has posted a set of questions and answers relating to ARRA  on its Web site. These questions and answers provide potential program  applicants with some preliminary but specific information on what to  expect in terms of coverage, limitations, and potential selection criteria.  Finally, DOT noted that the draft report does not include information  relating to the administration’s new federal commitment to high speed rail.  Specifically, as described in the President’s proposed fiscal year 2010  budget, the administration has proposed a 5-year $5 billion high speed rail  state grant program. DOT indicated that this program is intended to build  on the $8 billion included in ARRA for high speed rail. The Department  said the President’s proposal marks a new federal commitment to practical  and environmentally sustainable transportation. DOT did not take a  position on our recommendations.
We agree that the recently enacted ARRA will likely accelerate activity  related to the consideration and development of high speed rail in the  United States and will place a new emphasis on the federal role in such  development. We also agree that the President’s proposed fiscal year 2010  budget, if enacted, could further increase the emphasis on high speed rail  and its potential development. As discussed in the report, high speed rail  systems can offer a number of benefits. However, these systems are very  expensive, can take a long time to develop, and face numerous financial  and other challenges to bring to fruition. Given the renewed interest in  high speed intercity passenger rail and its development and the substantial  resources that might be made available, it is even more important that  potential challenges are addressed and a clear federal role be established.  This includes developing a strategic vision for high speed rail that includes  consideration of how high speed rail fits into the nation’s transportation  system; that the review and evaluation of grant applications under PRIIA,  ARRA and other programs clearly identify outcomes to be achieved and  incorporate into grant documents appropriate performance and  accountability measures to ensure these outcomes are achieved; and that  guidance and methods be developed that increase the reliability of  ridership and other forecasts used to determine the economic viability of  high speed rail projects. Each of these actions is essential for ensuring that  federal expenditures on high speed rail are efficient, effective, and focused  on maximizing the return on the investment.
We also received comments from Amtrak in an e-mail message dated  March 3, 2009. Amtrak said it generally agreed with our conclusions.  Amtrak did not take a position on our recommendations. Amtrak also  provided technical corrections and comments, which we incorporated  where appropriate.
We are sending copies of this report to the appropriate congressional  committees; the Secretary of Transportation; the Administrator of the  Federal Railroad Administration; and the Director of the Office of  Management and Budget. The report will also be available at no charge on  the GAO Web site at http://www.gao.gov.
If you or your staff have any questions about this report, please contact me  at (202) 512-2834 or flemings@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. GAO staff who made major contributions to this report are  listed in appendix VIII.
section_title: Appendix I: Scope and Methodology
paragraphs: To better understand the potential viability of high speed rail service in the  United States, we reviewed (1) the factors affecting the economic viability  of high speed rail projects—that is, whether a project’s total social benefits  offset or justify the total social costs—and difficulties in determining the  economic viability of proposed projects; (2) the challenges that U.S.  project sponsors experience in developing and financing high speed rail  projects; and (3) the federal role in the potential development of high  speed rail systems.
For the purposes of this report, we used the Federal Railroad  Administration’s (FRA) definition of high speed ground transportation,  which is “service that is time-competitive with air and/or automobile for  trips in corridors of roughly 100 and 500 miles in length,” as opposed to a  specific top speed threshold. As a result, we included in our review a wide  range of projects, including “incremental” projects that are designed to  increase the speed (generally above 79 miles per hour up to 150 miles per  hour) or reliability of existing rail service on existing track usually shared  with freight or other passenger trains; and “new” high speed rail projects  (above 150 miles per hour and, in some cases, above 200 miles per hour)  designed to operate on new tracks or guideway on dedicated right-of-way  not shared with other rail services. Our review was technology neutral,  meaning that we did not analyze or consider the technical feasibility of  diesel, electrified, or magnetic levitation trains, but only considered the  service and performance aspects of the different technologies in the  project proposals we reviewed. The scope of our work did not include an  assessment of commuter rail or transit service where the primary purpose  is to travel between a suburb and a city center or within a metropolitan  area. However, the presence of these transportation modes as intermodal  connections to high speed rail service was considered in identifying  characteristics significant to how proposed high speed rail service is  analyzed and evaluated. Furthermore, it was not the intent of this study to  identify specific routes or corridors that are viable. Rather, this study  identifies characteristics of corridors and service and other factors that  contribute to a proposed project’s benefits and costs and the challenges in  developing and financing such projects.
subsections: section_title: Structured Interviews with Domestic Project Sponsors
paragraphs: To address our objectives, we conducted structured interviews with  officials for 5 projects that currently exceed Amtrak’s predominant top  speed of 79 miles per hour, and project sponsors for 11 different high  speed rail proposals in the United States. The criteria used to select which  existing or proposed domestic projects to review were twofold, as follows:  1.  The project’s planned or existing high speed rail service must include  operating at a top speed greater than 79 miles per hour (generally the  top speed for intercity passenger trains).  2.  The project’s planned service must be supported by a completed  environmental review (or equivalent project review) that would make  the project eligible for federal funding, or the project sponsor needed  to be actively pursuing the completion of such a review.
To identify projects for inclusion in our study, we reviewed a recent  survey of high speed rail projects in 64 corridors across the United States  to identify potential projects. The survey identified 16 projects that met  our criteria. To verify this information, we contacted project sponsors, or  another project affiliate, for each of these projects (16 projects). We also  contacted project sponsors (or another project affiliate) for the remaining  projects in the survey to verify that they had not advanced in their  planning process since issuance of the survey report, such that they would  now meet our criteria. As a result of this verification, one additional  project was included in our study, and two projects were dropped since  they had either not progressed to the environmental review phase or were  not being pursued for high speed rail. We also added another project (Los  Angeles, California, to San Diego, California) that met our criteria on the  basis of discussions with Amtrak. The latter project is separate from the  California High Speed Rail Authority’s statewide high speed rail initiative,  which also plans to serve San Diego from Los Angeles.
All 5 existing projects were incremental projects, and of the 11 proposed  projects included in our review, 6 were incremental improvements to  existing rail service in a corridor, and the remaining 5 projects would  implement service on new high speed track or guideways using dedicated  right-of-way. Three of the 5 dedicated right-of-way projects were  considering magnetic levitation technology at the time of our study. To  collect information about the high speed rail projects in development, we  conducted structured interviews with each project sponsor. The  interviews were structured to identify such things as (1) the important  characteristics and factors that affect a project’s viability; (2) the most  important challenges faced by project sponsors in developing the project;  and (3) the roles of various federal, state, local, and private sector entities  in the development of the project. We pretested the structured interview  instrument and made changes based on the pretest. These changes  included additional questions about project development and background  and stakeholders involved with the project. In addition, we requested and  reviewed any available data on ridership forecasts and evaluations, project  cost estimates and evaluations, costs to construct and maintain any  existing high speed rail service as well as any environmental reviews,  transportation plans, and other studies associated with the projects.  Information about the projects was shared with project sponsors to ensure  its accuracy.
section_title: International Case Studies
paragraphs: We also conducted case studies of international high speed rail systems in  France, Japan, and Spain. In selecting these three countries, we  considered a number of factors, including location, how long high speed  rail has been in service, and the availability of data and other information.  At the time of our visit, France and Spain had the highest kilometers of  high speed rail lines in Europe. Japan similarly had extensive high speed  rail lines and was one of the first countries to implement high speed rail  service. We conducted interviews in these countries with relevant  government officials, including transportation bureaus and embassy  officials; high speed rail infrastructure owners and service operators; and  other stakeholders, including academic professors and domestic airline  carriers or their trade associations. We requested and reviewed any  available data on ridership forecasts and evaluations, project cost  estimates and evaluations, as well as the costs to construct and maintain  high speed rail service in these countries. We also reviewed relevant  literature and studies on high speed rail systems in these and other  countries. To the extent available, we reviewed relevant laws, directives,  and guidance related to high speed rail systems in France, Japan, and  Spain, and the European Union. The information presented in this report  on international high speed rail systems, however, cannot be generalized  beyond these three countries.
section_title: Case Studies of Terminated Projects
paragraphs: To further identify the challenges encountered by previous high speed rail  projects in the United States, we conducted a case study analysis of two  terminated domestic high speed rail projects: the Florida Overland  Express (FOX) and the Texas TGV. To conduct the case study analyses,  we interviewed stakeholders affiliated with the projects and reviewed  documents, such as legislation, ridership studies, and other research  materials related to the projects.
section_title: Additional Methodologies
paragraphs: To further address our objectives, we obtained and analyzed information  from a variety of other sources, including reports and documentation from  FRA, the Department of Transportation (DOT), Amtrak, and the Surface  Transportation Board; prior GAO work; and other evaluations and studies  on transportation infrastructure projects and high speed rail service. In  addition to our structured interviews and international case studies, we  conducted over 90 interviews covering a wide range of stakeholders and  interested parties, including officials at FRA, DOT, Amtrak, the Surface  Transportation Board, state and local government agencies and  organizations, academics, consultants involved in high speed rail ridership  forecasting and planning, representatives from private equity firms that  invest in transportation infrastructure, and engineers involved in  developing various rail technologies.
To review how characteristics of corridors and proposed service identified  in our structured interviews and international case studies compare with  other corridors in the United States and internationally, we obtained and  analyzed data on corridor and service characteristics from numerous  sources, including the DOT’s Bureau of Transportation Statistics, the  Census Bureau, and other domestic and international academic studies  and government reports. We used standard tests and methodologies to  ensure reliability of the data collected. This included reviewing the data  for abnormalities, omissions, and obvious errors and corroborating  information obtained to the extent possible. These data are not intended  to make definitive conclusions on viability, but rather to allow us to make  reasonable comparisons using the best available data. For example,  variations exist in how data sources report population numbers based on  differences between the geographical definitions of cities, metropolitan  and other areas. In trying to maintain consistency, we attempted to use the  same population data source for international corridors, but this was not  always possible.
To further assess the roles and relevant interests of national and state  government agencies and officials, and the private sector in planning,  developing, and operating high speed rail projects, we reviewed applicable  federal laws and regulations. This included analyzing selected high speed  rail legislation from 1965 to 2008, including the Passenger Rail Investment  and Improvement Act of 2008. The latter includes a review of the high  speed rail provisions contained in the act, the role of the Secretary of  Transportation in relation to these provisions, and application procedures  for federal high speed rail grants.
We conducted this performance audit from December 2007 to March 2009  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix II: Description of U.S. Rail Corridors Operating at Speeds Greater Than 79 Miles per Hour
subsections: section_title: Washington, D.C.-New York-Boston Corridor
subsections: section_title: Project Description
paragraphs: Projects and improvements associated with Amtrak’s 456-mile Northeast  Corridor began in the 1970s. This included the Northeast Corridor  Improvement Program and the Northeast High Speed Rail Improvement  Program. Improvements included electrifying the line from New Haven  Connecticut, to Boston, Massachusetts, enhancing signaling systems, and  acquiring new high speed rail trainsets called Acela Express. The average  speed from Washington, D.C., to New York City, New York, is 82 miles per  hour, and the top speed is 135 miles per hour. The average speed from  New York City to Boston is 68 miles per hour, and the top speed is 150  miles per hour.
section_title: Date Originated
section_title: Project Sponsors
paragraphs: $3.8 billion (estimated since 1990)
section_title: Funding to Date
paragraphs: $3.8 billion (estimated since 1990)
section_title: Current Status
paragraphs: Project is open for passenger operations. Amtrak, in conjunction with the  nine states along the corridor, is currently developing a master plan for the  corridor that includes additional capital improvements.
section_title: Los Angeles to San Diego Corridor
subsections: section_title: Project Description
paragraphs: Amtrak began operating on the Los Angeles to San Diego corridor in 1971.  When Amtrak began operations, the passenger trains were already capable  of maximum speeds of 90 miles per hour on segments between Santa Ana  in Orange County and the Sorrento Valley because of an automatic track  signaling system that was already in place. Average speed along the 130- mile corridor is approximately 55 miles per hour.
section_title: Date Originated
section_title: Project Sponsors
section_title: Cost Estimate
paragraphs: Passenger rail operations are under way with top speeds of 90 miles per  hour in certain segments; however, continuing capital improvements are  occurring along the corridor to increase total average speed.
section_title: New York City to Albany/Schenectady Corridor
subsections: section_title: Project Description
paragraphs: From 1977 to 1997, the New York State Department of Transportation  made a series of incremental improvements to existing passenger rail  service between New York City and Albany/Schenectady along the Empire  Corridor, which stretches to Buffalo. Doing so has allowed for passenger  rail service to operate at a top speed of 110 miles per hour and an average  speed of between 80 and 90 miles per hour along the 158-mile corridor.
section_title: Date Originated
section_title: Project Sponsors
section_title: Cost Estimate
paragraphs: $97.2 million (actual)
section_title: Funding to Date
paragraphs: $97.2 million (100 percent from state funds)
section_title: Current Status
paragraphs: Intercity passenger rail operations are currently under way with a top  speed of 110 miles per hour. The New York State Department of  Transportation is planning on making $22 million in additional incremental  corridor investments, and is also anticipating new federal funding to make  further improvements.
section_title: Harrisburg to Philadelphia Corridor
subsections: section_title: Project Description
paragraphs: The Keystone Corridor Improvement Program consisted of making  incremental improvements (e.g., track work, bridge repairs,  communication and signaling improvements, and enhanced power  generation) along the Harrisburg to Philadelphia corridor to allow for  speeds of up to 110 miles per hour.
section_title: Date Originated
section_title: Project Sponsors
section_title: Cost Estimate
paragraphs: $145.5 million (actual)
section_title: Funding to Date
paragraphs: $145.5 million (50 percent from Amtrak, 40 percent from FTA, and 10  percent from state funds)
section_title: Current Status
paragraphs: Intercity passenger operations are currently under way with a top speed of  110 miles per hour. There are currently discussions under way to plan for  a second phase of improvements for the corridor.
section_title: Chicago to Detroit Corridor
subsections: section_title: Project Description
paragraphs: Implementation of a positive train control system on 55 miles of Amtrak- owned right-of-way (Kalamazoo, Michigan, to about the Indiana state line)  along the Chicago, Illinois, to Detroit, Michigan, corridor. Improvements to  signaling and communication systems will allow Amtrak to operate up to a  top speed of 110 miles per hour along the 55-mile stretch.
section_title: Date Originated
section_title: Project Sponsors
section_title: Cost Estimate
paragraphs: $39 million (actual)
section_title: Funding to Date
paragraphs: $39 million (49 percent from FRA, 27 percent from state, and 24 percent  from Amtrak and General Electric)
section_title: Current Status
paragraphs: From Kalamazoo, Michigan, to Niles, Michigan, trains operate at 95 miles  per hour. From Niles, Michigan, to a point 20 miles west, positive train  control equipment is installed but is currently in the process of getting  approval from FRA for its use. Amtrak is currently testing a new radio  system with different frequencies. When testing is complete and the radio  system is installed, passenger rail operations would be able to operate at  110 miles per hour along the 55 mile-test bed.
section_title: Appendix III: Description of Current U.S. High Speed Rail Proposals in the Environmental Review Phase
paragraphs: Appendix III: D High Speed Environescription of Current U.S.
subsections: section_title: Atlanta, Georgia, to Chattanooga, Tennessee, High Speed Rail Project
subsections: section_title: Project Description
paragraphs: The project will connect Atlanta, Georgia, to Chattanooga, Tennessee,  along a combination of new right-of-way, rail right-of-way, and highway  right-of-way with a new high speed rail system. The length is  approximately 110 miles between the two cities. The envisioned system is  expected to operate at a top speed of 200 miles per hour and an average  speed of 180 miles per hour.
section_title: Date Originated
paragraphs: To be determined. Project sponsors are considering both magnetic  levitation and electrified steel-wheel on steel-rail technology. The  preferred technology will be recommended as a result of the program level  environmental impact statement.
section_title: Project Sponsors
section_title: Cost Estimate
paragraphs: Funding for the feasibility study, which was conducted by the Atlanta  Regional Commission, was provided through the Transportation Equity  Act of the 21st Century (TEA-21). Additional funding was authorized by  the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A  Legacy for Users (SAFETEA-LU), to study various transportation  technologies as well as through the SAFETEA-LU Technical Corrections  Act of 2008.
section_title: Current Status
paragraphs: Georgia Department of Transportation officials noted they were half way  through the 36-month program level environmental impact statement. The  department plans to have a record of decision on the program level  environmental statement by 2010.
section_title: Baltimore, Maryland, to Washington, D.C., Magnetic Levitation Project
subsections: section_title: Project Description
paragraphs: The Baltimore, Maryland, to Washington, D.C., project is a magnetic  levitation project that plans to connect the two cities, with a planned stop  at Baltimore-Washington International Airport. The length is 40 miles  between the two cities. The system is expected to operate at a top speed  of 250 miles per hour and an average speed of 125 miles per hour.
section_title: Date Originated
section_title: Cost Estimate
paragraphs: $5.15 billion (projected - 2007)
section_title: Funding to Date
paragraphs: The project completed a preliminary feasibility study in 1994 in response  to the Maglev Prototype Development Program created by the Intermodal  Surface Transportation Efficiency Act of 1991. In 1998, the project was one  of the seven projects selected and funded for study by the FRA as part of  the Maglev Deployment Program. In 2001, FRA selected this project to  receive funds for a draft environmental impact statement as part of the  TEA-21 Maglev Deployment Program. In 2003, a draft environmental  impact statement was completed and accepted by FRA.
section_title: Current Status
paragraphs: In October 2007, a draft of the final environmental impact statement was  submitted to FRA. FRA has requested additional information as part of  their review of this statement. Project sponsors are pursuing funding  under the SAFETEA-LU Technical Corrections Act of 2008 to complete the  final environmental impact statement.
section_title: Anaheim, California, to Las Vegas, Nevada, Magnetic Levitation Project
subsections: section_title: Project Description
paragraphs: This project is planned to connect Las Vegas, Nevada, to Anaheim,  California, with stops in Ontario, Victorville, Barstow (California) and  Primm (Nevada) with a magnetic levitation system. The length is 269 miles  between Anaheim, California, and Las Vegas, Nevada. The initial segment  to be developed is 40 miles from Las Vegas to Primm, Nevada. The system  is expected to operate at a top speed of 311 miles per hour and an average  speed of between 150 and 200 miles per hour.
section_title: Date Originated
paragraphs: FRA  California Nevada Super Speed Train Commission (created by California  and Nevada legislatures)
section_title: Cost Estimate
paragraphs: $12 billion (projected - 2005)
section_title: Funding to Date
section_title: Current Status
paragraphs: The commission recently received $45 million from the SAFETEA-LU  Technical Corrections Act of 2008, of which the commission will need to  provide 20 percent matching funds. Work on the environmental impact  statement is continuing, as is design/engineering work and preparation of  cost estimates. Project sponsors expect to issue a fixed price contract to  construct this project. The commission continues to have legislative  authority in Nevada, but its authorizing legislation in California was  allowed to lapse. However, according to the commission, the project  enjoys strong support in California, and is supported by the California  Department of Transportation in preparation of the environmental impact  statement.
section_title: Victorville, California, to Las Vegas, Nevada, High Speed Rail Project
subsections: section_title: Project Description
paragraphs: The Desert Xpress is a high speed rail project intended to connect Las  Vegas, Nevada, with Southern California through a station in Victorville,  California, a city that is less than 50 miles east of Palmdale where an  intermodal station is planned on the California High Speed Rail system; 35  miles northeast of Ontario International Airport; and 80 miles northeast of  downtown Los Angeles. The system is planned to operate on a new  dedicated right-of-way. The distance between Victorville, California, and  Las Vegas, Nevada, is approximately 183 miles. Project sponsors expect to  operate at a top speed of 150 miles per hour and an average speed of 125  miles per hour. Project sponsors also expect to construct the project using  existing highway right-of-way and using public lands owned by the Bureau  of Land Management. Desert Xpress is being implemented by a private  sector entity without public funding.
section_title: Date Originated
section_title: Primary Sponsor
paragraphs: $3.5 billion (projected - 2003)
section_title: Funding to Date
paragraphs: No public funding has been expended. All funding to-date has come from  Desert Xpress Enterprises.
section_title: Current Status
paragraphs: The draft environmental impact statement is currently being developed  and is scheduled for publication in early 2009. Desert Xpress officials  expect the final environmental impact statement to be completed in July  2009 with a final record of decision issued by the federal government  shortly thereafter.
section_title: Los Angeles, California, to San Francisco, California, High Speed Rail Project
subsections: section_title: Project Description
paragraphs: The California High Speed Rail Authority is pursuing a statewide high  speed rail system in California. Phase 1 of system will be from Anaheim,  California, to Los Angeles, California, then through California’s Central  Valley, and through the Pacheco Pass to the San Francisco Bay Area.  Phase 2 will include extensions to Sacramento, California, and San Diego,  California. Phase 1 of the system is 520 miles, and the authority expects  the service will operate at a top speed of 220 miles per hour. Authority  officials did not provide an average speed.
section_title: Date Originated
paragraphs: A predominantly dedicated right-of-way electrified steel-wheel on steel-rail  system. According to the authority, about 10 percent of the line will be  shared with other rail services.
section_title: Project Sponsors
paragraphs: FRA  California High Speed Rail Authority (created by the California legislature)
section_title: Cost Estimate
paragraphs: $32.8 - $33.6 billion for Phase 1 of project (projected - 2008)
section_title: Funding to Date
paragraphs: $9.95 billion in state bond funding (in addition to state support provided  for administration of California High Speed Rail Authority)
section_title: Current Status
paragraphs: As of July 2008, all program-level environmental review work has been  completed. The authority is now undertaking the project-level review and  approval process. In addition, on November 4, 2008, California voters  approved a ballot initiative that allows the state to issue $9.95 billion in  bonds for transit and other projects, $9.0 billion of which will go for  development of the statewide high speed rail system. Authority officials  said they plan to seek additional funding from the federal government and  private sector, as well as from local governments for the construction of  the system.
section_title: Richmond, Virginia, to Hampton Roads, Virginia, High Speed Rail Project
subsections: section_title: Project Description
paragraphs: The Virginia Department of Rail and Public Transportation is pursuing  improved passenger rail service between Richmond, Virginia, and the  Hampton Roads area of Virginia (Norfolk, Newport News, and other  cities). This service will ultimately connect to the Northeast Corridor in  conjunction with development of the Southeast High Speed Rail Corridor.  This project will use existing right-of-way. Depending on the preferred  alignment, the length of the corridor could be 74 miles or 93 miles, with a  planned top speed of 90 miles per hour. On December 14, 1995, FRA  administratively extended the Southeast High Speed Rail Corridor from  Richmond, Virginia, to Hampton Roads, Virginia.
section_title: Date Originated
section_title: Cost Estimate
paragraphs: Portions of the draft environmental impact statement were sent to FRA for  review in spring 2008. The project sponsor is currently awaiting FRA’s  response.
section_title: Eugene, Oregon, to Vancouver, British Columbia, Canada, High Speed Rail Project
subsections: section_title: Project Description
paragraphs: The federally designated Pacific Northwest Rail Corridor stretches from  Vancouver, British Columbia, Canada, to Eugene, Oregon, a distance of  466 miles. The Washington State Department of Transportation is pursuing  incremental improvements to intercity passenger rail service between  Portland, Oregon, to Vancouver, British Columbia, Canada, a distance of  341 miles. Improvements include upgrading grade crossings, improving  tracks and facilities, enhancing the signaling system, purchasing passenger  train equipment and improving stations, which would allow the top speed  to be 110 miles per hour.
section_title: Date Originated
paragraphs: Nonelectric locomotives on existing freight railroad right-of-way, with  minor alignment changes as needed.
section_title: Project Sponsors
section_title: Cost Estimate
paragraphs: $6.5 - $6.8 billion (2006 – projected)
section_title: Funding to Date
paragraphs: Current intercity passenger rail operating speeds are at or below 79 miles  per hour and, according to the department, increases in speed will require  a new signaling system along the corridor, although increases in  frequencies and travel times have occurred due to capital investments in  the corridor.
section_title: Scranton, Pennsylvania, to New York City, New York, High Speed Rail Project
subsections: section_title: Project Description
paragraphs: This is an extension of New Jersey Transit service to Scranton via existing  railroad right-of-way. The corridor is 133 miles and work will include  refurbishing 28 miles of abandoned railroad right-of-way. The top speed is  expected to be 110 miles per hour, with an average speed of just under 80  miles per hour.
section_title: Date Originated
section_title: Project Sponsors
section_title: Cost Estimate
paragraphs: $551 million (projected)
section_title: Funding to Date
paragraphs: According to project sponsors, $21 million in federal funding has been  received, primarily through earmarks in legislation.
section_title: Current Status
paragraphs: Project received a Finding of No Significant Impact by the FTA and,  according to one of the project sponsors, is ready to begin construction  upon availability of funding. The project sponsors are currently working  on a bistate funding agreement to allocate Pennsylvania’s and New  Jersey’s share of funding.
section_title: Chicago, Illinois, to Minneapolis/St. Paul, Minnesota, High Speed Rail Project
subsections: section_title: Project Description
paragraphs: This project includes making track, station, bridge, and culvert  improvements along the Chicago, Illinois, to Minneapolis/St. Paul,  Minnesota, corridor, with stops in Milwaukee and Madison, Wisconsin.  Enhanced passenger rail service, along existing railroad right-of-way, is  being pursued for a top speed of 110 miles per hour and average speeds of  between 66 and 70 miles per hour.
section_title: Date Originated
section_title: Project Sponsors
section_title: Cost Estimate
paragraphs: $1.5 billion (2002-projected)
section_title: Funding to Date
section_title: Current Status
paragraphs: The environmental review for the Madison to Milwaukee segment is  complete, and FRA has issued a Finding of No Significant Impact.  Engineering design work is complete for the Madison to Milwaukee  segment. In addition, updates to ridership and cost estimates were  recently completed for the full project. A grant of $5 million from FRA’s  Capital Assistance to States—Intercity Passenger Rail Service Program  will be used to complete track work between Milwaukee and the Illinois  state line. The Wisconsin Department of Transportation has also applied  for federal funds to improve highway-rail grade crossings between  Madison and Watertown.
section_title: Chicago, Illinois, to St. Louis, Missouri, High Speed Rail Project
subsections: section_title: Project Description
paragraphs: The Illinois Department of Transportation said numerous incremental  improvements have been made along this corridor to allow for increased  speeds. This includes track work and grade crossings on 118 miles of track  between Mazonia, Illinois, and Springfield, Illinois, completed in 2004. In  addition, the department is currently pursuing three phases of  improvements: a new cab signaling system (similar to the signaling system  used by the private freight carrier that owns this corridor); track work that  has been completed in Springfield, Illinois; and a centralized traffic control  system for the Joliet, Illinois, to Mazonia, Illinois, segment of the corridor.
section_title: Date Originated
section_title: Project Sponsors
section_title: Cost Estimate
paragraphs: $125 million (actual)
section_title: Funding to Date
paragraphs: According to project sponsors, $125 million in funding has been received  to date (28 percent from FRA, 56 percent from the states (Illinois and  Missouri), and 16 percent from private entities).
section_title: Current Status
paragraphs: A $1.55 million Capital Assistance to States—Intercity Passenger Rail  Service Program grant was received that will be used to continue work on  the project. Planned top speed is 110 miles per hour between Joliet,  Illinois, and Mazonia, Illinois.
section_title: Washington, D.C., to Charlotte, North Carolina, Southeast High Speed Rail Project
subsections: section_title: Project Description
paragraphs: The Washington, D.C., to Charlotte, North Carolina, corridor, which is 468  miles in length, will connect to the Northeast Corridor. Both Virginia and  North Carolina have established an interstate compact to pursue this  project. The project will make incremental improvements to existing  infrastructure, including track, route alignment, signaling systems,  highway-rail grade crossings, stations, train equipment, and facilities.  These improvements will allow a top speed of 110 miles per hour and an  average speed of between 85 to 87 miles per hour.
section_title: Date Originated
paragraphs: In 1992, FRA designated the corridor as a federal high speed rail corridor.
section_title: Proposed Technology
section_title: Project Sponsors
section_title: Cost Estimate
paragraphs: $3.8 – 5.3 billion (2011 to 2016 - projected)
section_title: Funding to Date
paragraphs: Over $300 million in state and federal funds have been invested in the  Washington to Charlotte portion of the corridor since 1999.
section_title: Current Status
paragraphs: The program-level environmental impact statement has been completed  for this project. Project sponsors are currently in the process of preparing  the project-level environmental impact statement for the Richmond,  Virginia, to Raleigh, North Carolina, segment of the corridor. This  statement has been in development since 2003 and is expected to be  available for public review in the summer of 2010.
section_title: Appendix IV: Description of Past Projects: Florida Overland Express and Texas TGV Projects
subsections: section_title: Florida Overland Express (FOX)
subsections: section_title: Proposed Technology
paragraphs: Proposed using an electrified high speed rail system similar to the French  Train à Grande Vitesse (TGV) system, capable of operating at a maximum  speed of 200 miles per hour.
section_title: Project Sponsors
section_title: Cost Estimates
paragraphs: The preliminary cost estimates ranged from $6 billion to $8 billion,  depending on the route chosen. In general, the FOX Consortium planned  on the system costing about $6 billion (in 1997 dollars).
section_title: Proposed Route
paragraphs: The FOX project would have operated along a 320-mile long dedicated  right-of-way from Miami, Florida, to Tampa, Florida, via Orlando, Florida.  The project was planned to serve seven stations: Miami International  Airport, Fort Lauderdale, West Palm Beach, Orlando International Airport,  Orlando Attractions, Lakeland, and Downtown Tampa.
section_title: Financing Plan
paragraphs: In total, the FOX Consortium planned to raise $9.3 billion to finance the  estimated $6.3 billion needed for construction. The additional $3 billion  accounts for inflation and to pay for such things as interest on state and  system infrastructure bonds during the construction period, establish  reserve funds required by bondholders, and cover the costs of issuing the  bonds. According to the FOX Consortium, the following sources were  expected to provide the $9.3 billion in funding:    State contributed equity – $256 million (3 percent)    FOX Consortium contributed equity – $349 million (4 percent)    Train equipment financing – $569 million (6 percent)   Interest earnings and balances – $588 million (6 percent)    Federal loan – $2.0 billion (22 percent)    State infrastructure bonds – $2.146 billion (23 percent)    System infrastructure bonds – $3.346 billion (36 percent)
section_title: Ridership Forecasts
paragraphs: KPMG Peat Marwick projected annual ridership of 8 million passengers by  2010. Systra projected ridership of 8.5 million by 2010. The consensus  average of the two ridership studies was approximately 8.3 million  passengers by 2010.
section_title: Timeline
paragraphs: Table 5 shows the timeline of events in the development of high speed rail  in Florida.
section_title: Texas TGV
subsections: section_title: Proposed Technology
paragraphs: A new electrified, steel-wheel on steel-rail high speed rail system similar to  the French TGV system.
section_title: Project Sponsors
section_title: Cost Estimates
paragraphs: The cost estimate was $4 billion.
section_title: Proposed Route
paragraphs: The high speed rail system would have provided service to Dallas, Fort  Worth, Dallas/Fort Worth Airport, Houston, Austin, and San Antonio. The  initial service between Dallas/Fort Worth and Houston would have begun  in 1998, and subsequent service between San Antonio and Austin to Dallas  would have begun by 1999. Special or limited service would have been  provided to Bryan/College Station and Waco if it were determined to be  economically feasible. In addition, service from Houston to San Antonio  would have been provided if it were determined to be economically  feasible.
section_title: Financing Plan
paragraphs: We were not able to obtain a complete financing plan. The 1993 security  offering was for $200 million in notes, backed by a $225 million letter of  credit from the Canadian Imperial Bank of Commerce and a $75 million  counter-guarantee to be provided by Morrison Knudsen Corporation (one  of the original project developers). The Texas High Speed Rail Authority  Act prohibited use of public funds for constructing the system, and, as a  result, all construction costs would have been privately financed.
section_title: Ridership Projections
paragraphs: Based on the five route alternatives, ridership projections by 2015 ranged  from 11.3 million to 18.0 million.
section_title: Timeline
paragraphs: Table 6 shows the timeline of events in the development of high speed rail  in Texas.
section_title: Appendix V: Description of High Speed Rail Systems in France, Japan, and Spain
subsections: section_title: France
subsections: section_title: Background
paragraphs: France first developed high speed rail lines with the opening of the TGV  Sud Est line from Paris to Lyon in 1981. Since then, France has  constructed additional high speed rail lines connecting major cities in  France, as well as connecting high speed rail lines to cities in Germany,  Belgium, and the United Kingdom. The French railway system has  undergone a couple of major reforms, the most notable one occurring in  1997, with the creation of Réseau Ferré de France (RFF), France’s national  intercity rail network infrastructure manager. This reform took place as  France had to comply with European Union directives, which required the  separation of passenger operations and infrastructure management. In  addition, the ownership of the rail network, including the high speed rail  network, was transferred from the national government to RFF. RFF is  also responsible for capacity allocation, contracting, traffic management,  and maintenance, although it subcontracts the traffic management and  maintenance to the passenger rail operator, Société Nationale des  Chemins de Fer Français (SNCF). The Ministry of Ecology, Energy,  Sustainable Development, and Spatial Planning sets policy, enforces laws  and regulations, and approves and finances projects. Moving forward,  France is pursuing a high speed rail plan on the basis of a recommendation  from a national environmental conference (Le Grenelle Environnement),  which called for investments in sustainable transportation modes.  Specifically, it recommended building about 1,200 miles of additional high  speed rail lines before 2020 and studying the viability of another  approximately 1,500 miles of high speed rail lines.
Snapshot of the French High Speed Rail System
Date of initiation: 1981
Length of high speed rail system: 1,180 miles
Top commercial speed: 199 miles per hour
High speed rail ridership: Approximately 100 million (2007)
section_title: Funding
paragraphs: Prior to the creation of RFF in 1997, most of the funding for the  construction of high speed rail lines came from the national government  (through SNCF). Since then, funding for high speed rail construction is  derived from a variety of sources, including the national government,  regional governments, RFF, SNCF, and the European Union.
section_title: Operations
paragraphs: SNCF is the sole provider of domestic high speed rail operations in  France. The Eurostar and Thalys TGV, of which SNCF is a shareholder,  provide international high speed rail operations to locations in Belgium,  Holland, and the United Kingdom. According to European Union  directives, international high speed rail lines must be opened for  competition starting in 2010. Therefore, France will be required to allow  private and public competitors to operate their trains over these lines.
section_title: Infrastructure
paragraphs: In terms of track ownership, RFF is an owner of all intercity railway  property in France. RFF is also responsible for allocating capacity for the  high speed rail infrastructure and for the maintenance and management of  traffic of the high speed rail system. However, these responsibilities have  been subcontracted to SNCF. SNCF pays RFF infrastructure fees to use  the high speed rail lines.
section_title: Japan
subsections: section_title: Background
paragraphs: Japan was the first country in the world to develop high speed rail  operations, which occurred in 1964 with the opening of the Shinkansen  between Tokyo and Osaka. In addition, in 1970, the Nationwide  Shinkansen Railway Development Act was established, which created a  master plan for the expansion of high speed rail lines throughout Japan.  After this, four high speed rail lines were constructed prior to the 1987  reform of the passenger rail industry in Japan. The 1987 reform broke the  fully integrated state railway entity, Japanese National Railways, into six  private intercity passenger rail operators based on six distinct geographic  regions, as well as a freight operator. Since then, three high speed rail lines  have been built under the reformed structure, and the high speed rail  system continues to expand on the basis of the high speed rail master plan.
Snapshot of the Japanese High Speed Rail System
Date of initiation: 1964
Length of high speed rail system: 1,360 miles
Top commercial speed: 188 miles per hour
High speed rail ridership: Approximately 300 million (fiscal year 2006)
section_title: Funding
paragraphs: Prior to the 1987 reform, the construction of high speed rail in Japan was  funded through debt incurred by the national government and Japan  National Railways. After the 1987 reform, the national government funds  two-thirds of the construction cost, and local governments fund one-third  of the construction cost under the Nationwide Shinkansen Railway  Development Act. The national government funding is derived from the  revenues from the sale of rail lines to private companies and the national  public works budget. Private companies purchased the four constructed  high speed rail lines from the national government in 1991, and in turn the  companies have to pay an annual fee to the national government for 60  years. For high speed rail lines built after the 1987 reform, the companies  pay a lease payment to the Japan Railway Construction, Transportation,  and Technology Agency for the use of the high speed rail lines, on the  basis of projected ridership. The national government does not provide  operating subsidies for high speed rail passenger operations.
section_title: Operations
paragraphs: Prior to the 1987 reform, Japan National Railways was a fully integrated  state-owned entity that was the sole high speed passenger rail operator in  Japan. After the 1987 reform, Japan National Railways was split into six  private operators, three are on the mainland (JR East, JR Central, and JR  West) and the other three are each on an island (JR Hokkaido, JR Shikoku,  and JR Kyushu). JR East, JR Central, JR West, and JR Kyushu operate high  speed rail lines. JR East operates Shinkansen lines between Tokyo and  Nagano, Tokyo and Niigata, and Tokyo and Hachinohe; JR Central  operates the Shinkansen line between Tokyo and Osaka; JR West operates  the Shinkansen line between Osaka and Fukuoka; and, JR Kyushu  operates the Shinkansen line between Kagoshima and Shin Yatsushiro.  The three mainland operators are considered fully privatized entities.
section_title: Infrastructure
paragraphs: High speed rail lines built after the 1987 reform are constructed and  owned by the Japan Railway Construction, Transportation, and  Technology Agency, and are leased to the JR companies. As a result of the  1991 law, JR East purchased the high speed rail line from Tokyo to Niigata  and the track from Tokyo to Morioka. JR Central purchased the high speed  rail line from Tokyo to Osaka, and JR West purchased the high speed rail  line from Osaka to Hakata.
section_title: Spain
subsections: section_title: Background
paragraphs: Spain first developed high speed rail lines with the opening of the Madrid  to Seville line in 1992. Since then, Spain has constructed additional high  speed rail lines from Madrid to Barcelona and Madrid to Valladolid, in 2007  and 2008, respectively, and from Córdoba to Málaga, with extensions built  off these main lines as well (i.e., to Toledo in 2005). The construction of  these lines was based on a national rail plan created in 1987 and national  transportation plans created in 1993, 1997, and 2005. In 2005, Spain’s  railway system was restructured in accordance with the European Union  directive requiring the separation of passenger operations and  infrastructure management. In accordance with these directives, Spain  passed its own legislation, which split its state railway entity, Renfe, into  two entities, Adif and Renfe-Operadora. Adif is responsible for  infrastructure management and capacity allocation, and Renfe-Operadora  is responsible for passenger operations. The Ministerio de Fomento  (Ministry of Public Works) is responsible for setting policy, enforcing laws  and regulations, and approving and financing projects. Spain’s most recent  national transportation plan calls for $103.9 billion in investment for  creating 5,592 miles of high speed rail lines.
Snapshot of the Spanish High Speed Rail System
Date of initiation: 1992
Length of high speed rail system: 981 miles
Top commercial speed: 186 miles per hour
High speed rail ridership: 9 million (2007)
section_title: Funding
paragraphs: Spanish transportation officials with whom we spoke noted that a majority  of funding to construct the Madrid to Seville high speed rail line was  provided by the national government. Of the high speed rail lines built  since then, construction costs have been derived from funding from the  national government, the European Union, and Adif. Moving forward, it is  planned that funding for expansion of the existing high speed rail network  will be derived from the national government, local governments, Adif, and  loans from the European Investment Bank. For cross-border high speed  rail lines, it is also planned that funding will be derived from the European  Union as part of the Trans-European Transport Network.
section_title: Operations
paragraphs: Renfe-Operadora is the sole provider of high speed rail operations in  Spain. According to European Union directives, international high speed  rail lines must be opened to competition starting in 2010. Therefore, Spain  will be required to allow private and public competitors to operate their  trains over these international lines.
section_title: Infrastructure
paragraphs: In terms of track ownership, Adif owns the current high speed rail lines as  well as passenger rail stations, freight terminals, and the  telecommunications network. In addition, Adif constructs and maintains  high speed rail lines, allocates capacity to passenger rail operators, and  manages traffic control operations and safety systems. Renfe-Operadora  pays Adif infrastructure fees to use the high speed rail lines.
section_title: Appendix VI: Description of Travel Demand Forecasting
subsections: section_title: Travel Demand Modeling
paragraphs: The benefits of a proposed project depend on the popularity of a new  service, that is, high ridership. Thus, a critical factor in determining the net  benefits, or viability, of a proposed project is its ridership forecasts.  Ridership forecasts are generally conducted by modeling travel demand  for the corridor in which the new service is being proposed. Travel  demand modeling can be conducted at the macro level or the micro level,  depending on the types of available data and the level of information  needed from the results of the model. The use of travel demand models in  the policy process could be conceived of in terms of the following three  activities: data collection, model building, and estimation.  1. Data collection: Aggregate data refers to variables that summarize the  characteristics of a group of individual units, such as an average, a total, or  a median. Examples include per capita income or vehicle miles traveled.  An aggregate model is founded on such data. In the case of travel demand,  the analysis applies to those residing or doing business in a region. Data  sources are typically official statistics routinely collected by public  agencies, including administrative data. An advantage of such data is that  they are inexpensive for the secondary user and have been subjected to  some degree of quality control by the originating agency. One  disadvantage is that the results of any analysis do not necessarily apply to  a specific transportation project. Another limitation is that the model is  limited by the available data. Micro models can help inform specific policy  changes, such as the option of adding high speed rail service to a  transportation system. Micro data refers to individuals’ characteristics and  behavior. These data are often gleaned from surveys of travelers or  households. Micro data, however, are generally expensive to obtain, their  collection may be limited due to privacy considerations, and their quality  depends on the sophistication of the survey methodology. A danger in  survey data, just as in political polling, is that the design or  implementation of a survey could lead to biased survey results. Survey  instruments can be scrutinized by third parties, but the process of data  collection is less accessible to outside observers, especially after the fact.  Typically, a survey, as well as ensuing analysis, will be commissioned by  the public agency that is sponsoring a project, raising conflict-of-interest  concerns. Surveys can provide ambiguous results for innocent reasons as  well (e.g., such results may be due to differences in methodology).  2. Model building: Constructing a formal travel demand model generally  entails a number of choices and professional judgment. For example, a  modeler usually makes choices on the theory and assumptions upon  which the model is based, the mathematical form of the model, and the  variables to be included. Because models entail professional judgment,  many models are sufficiently diverse (e.g., include differing assumptions)  such that alternative models of the same problem can yield different  results. Also, alternative theories of travel demand could imply different  models with diverse findings. Models with conflicting rationales can both  claim legitimate empirical support.
In predicting future demand for an existing or new transportation facility,  two types of data are typically involved: historic and prospective. A model  is often initially developed using historic data. The effects and implied  outcomes of the model are then compared with actual experience to test  the structure of the model (e.g., the theory and assumptions on which the  model is based). Details of the model may be adjusted to improve the  results—that is, to make the modeled effects more closely match actual  experience. Once a model has provided satisfactory results, it may be  deployed with data on projected future conditions. Again, forecast  modelers may adjust and readjust the structure of the model. The use of  statistical methods in testing models is usually a trial-and-error process,  thus, rarely is the first result the end of the study.  3. Estimation: There are usually multiple criteria by which to analyze or  interpret the results of a model, and the analyst enjoys considerable  discretion in determining the direction of the analysis. In addition, the  foundation of the analysis is survey data, and the data collected could  yield results dramatically at variance with theory, expected empirical  impacts, and past experience. For these reasons, the nature of the data  and the decisions on how to handle them may enable the analyst to steer  the result in the analyst’s preferred direction. For an external,  disinterested reviewer, the evolution of such decisions is very difficult to  trace. Because circulation of data and models for outside review may be  restricted by proprietary considerations and the population of private  sector organizations equipped to conduct large-scale projects may be  sufficiently limited, the evaluation by independent peer reviewers may be  difficult.
section_title: Standard Framework for Travel Demand Modeling
paragraphs: In the intercity context, the standard framework for estimating travel  demand has been the four-step model. The four steps are as follows:  1. Trip generation: This step refers to the total number of trips, based on  the idea of “productions” (households are the most important source of  production) and “attractions” (places of employment or retail  establishments are obvious attractors). Trips can have the purpose of  moving people or freight, either within a region, to or from a region, or  through a region. The main purposes for persons to travel include  commuting, business travel, and leisure travel. Thus, household and  business patterns of commuting and shopping are the most stable source  of information used in modeling, while a more variable source of  information are trips aimed at recreation, and other more episodic  decisions. Model inputs (or variables) used to explain trip productions  include trip purpose (e.g., commuting and home-to-school) household size,  auto ownership, and income. Trip attractions are chiefly workplaces and  retail outlets. These data can be obtained through records, such as ticket  sales, and supplemented by or derived exclusively from surveys.  2. Trip distribution: This step pertains to trips in terms of connected  origins and destinations. The standard approach to estimating trip  distribution is what is known as a “gravity model.” Gravity models were  used in models of trade and migration. In the context of this discussion,  trips from point A to point B are positively affected by measures of mutual  attraction (i.e., “productions” at point A and “attractions” at point B). The  analogy is to Newton’s law of the gravitational force between two bodies:  that it increases with the mass of each, and decreases with the distance  between them. Trips are negatively affected by some measure of  “impedance” or friction affecting the desirability of a trip between the two  points, such as distance, travel time, cost of travel, or some combination of  such factors. The inputs to a gravity model could be the number of trips  originating and ending at a given number of zones. A problem in  distribution is the feedback implied by possible congestion or crowding of  a transit facility. The more people decide to move from point A to point B,  the greater the impedance factor could be, depending on how the factor is  represented. This in turn could influence the number of trips. Allowing for  feedback requires additional complexity in a trip distribution model. More  complex models can be implemented. An alternative approach to the  gravity model—where time series data are available—is a model that  combines steps one and two. In such a model, the number of trips  between a given origin and destination is explained by population levels at  each end, travelers’ incomes, and the level of service available for the  mode (e.g., rail and automobile) in question. The apparent simplicity of  such an approach may obscure the advantages of implementing such a  model for the full gamut of trip purposes, in each mode, for each origin- destination pair.  3. Mode choice: This step pertains to the decision on how to travel, such as  driving alone, carpooling, or taking some type of public transportation.  The probability of choosing among modes is modeled as a function of the  characteristics of individuals, trip purpose, and the relative costs of  alternative modes, among other possible factors. The estimated probability  for a population is the share estimated for a given transportation mode.  Obvious factors in the choice of a travel mode include the relative costs,  travel time, convenience, and comfort of the travel alternatives in  question. The choice of a travel mode interacts with personal decisions on  whether to own an automobile, and, if so, how many, and where to reside.  This chicken-egg interaction complicates the analysis of causality in mode  choice. Mode choice models are founded on microeconomic consumer  theory that depends on a bevy of controversial, technical economic  assumptions about human behavior. In general, the theory assumes a high  degree of rational and consistent behavior on the part of individuals,  including foresight, self-discipline, an aversion to risk, and the capacity to  process information. Over the past two decades, a growing literature has  developed providing empirical evidence against such notions of  rationality.
The purpose of a mode split analysis is to predict the shares of trips over  existing and prospective modes. In principle, the factors that distinguish  choices in Europe from those in the United States would be accounted for  in the model. For example, if motor fuel in the United States, factoring in  the relevant taxes, is cheaper than in Europe, the impact of differences in  the costs of trips under different modes would be reflected in the overall  explanation of the extent to which travelers might choose high speed rail  over automobile and air. A good mode split model will indicate the  strengths of the assorted factors, including the preference for one  transportation mode over another, assuming all other factors are equal.  The extent to which government policies—such as the impact of motor  fuels’ taxes on travel costs—influence the choice, can be abstracted from,  to assess underlying preferences.  4. Route assignment: The final step of travel demand modeling is to  determine the distribution of trips between two given points for all modes  over the possible routes between the points. Assuming travelers prefer the  route that takes the least time, given decisions about destination and  mode, in a regional setting with many zones and a multitude of paths  between a multitude of points, a mathematical programming problem of  considerable complexity is encountered. Even so, such a problem glosses  over the extent of congestion and resulting changes in travel time to which  particular routes can be subjected. Reckoning with the associated  feedback—travelers on congested routes choose alternatives—adds  complexity to the exercise. When travel times are minimized on all routes  and no traveler has an incentive to choose yet another alternative, the  system is said to be in equilibrium. Uncovering such an equilibrium is a  goal of route assignment modeling. Pressure on particular route segments  provides information to the policymaker on the possible expansion of the  network or the use of tolls to reduce congestion.
section_title: Appendix VII: Description of the Proposed Los Angeles, California, to Las Vegas, Nevada, High Speed Rail Corridor
paragraphs: Three separate high speed rail proposals connecting the Los Angeles,  California, and Las Vegas, Nevada, metropolitan areas illustrate the  ridership and cost trade-offs that are associated with selecting, among  other things, a particular route or train technology. The three options  being explored include an incremental improvement to an existing  conventional rail line, a high speed electrified (or diesel) steel-wheel on  steel-rail line on dedicated track (project sponsor – Desert Xpress), and a  magnetic levitation (maglev) proposal on dedicated guideway (project  sponsor – California-Nevada Super Speed Train Commission). (See fig. 7.)  One selection of route or train technology may maximize ridership and  increase construction costs, while another option may draw lower  ridership but at a substantially lower cost.
Las Vegas is one of the most visited cities in the United States, and,  according to project proponents, the mostly flat and desert terrain  between Los Angeles and Las Vegas makes high speed rail development  relatively straightforward, although some portions of the corridor are  mountainous and have steep grades. Project sponsors for each option  indicated that a transportation need exists between the two regions, due  to capacity constraints on existing transportation modes, significant  growth in population and employment, and projections for future growth  in the long term. One-third of all visitors to Las Vegas are from California,  and more than 10 million visitors are estimated to come from the Southern  California area. This travel is estimated to grow substantially by 2030,  although the Las Vegas economy has been hit particularly hard by the  recent economic crisis, as reflected in the recent decreases in visitor  volume. However, according to one project sponsor, travel from Southern  California to Las Vegas has not been as severely impacted as visitation  from elsewhere, as reflected by traffic counts on Interstate 15 (I-15) at the  Nevada state line, which show only about a 5 percent reduction in  automobile traffic.
High speed rail stakeholders with whom we spoke said ridership on any  high speed rail line will be impacted by the location of the rail stations in  relation to where potential riders live for all stations along the line, but  especially at the ends of the line. Desert Xpress will most likely forgo some  ridership by terminating service outside of the Los Angeles area (in  Victorville). Because riders must first drive their personal vehicles to  Victorville—typically the most congested portion of the automobile trip  between the Los Angeles area and Las Vegas—and then board a train,  stakeholders have expressed concern regarding the level of risk related to  the estimates of riders. Similarly, the maglev project is designed to  terminate in Anaheim, which may also result in fewer riders than  connecting directly to the more populous Los Angeles area, and similar  concerns over risks associated with overly optimistic ridership estimates  have been expressed. The conventional rail proposal, while connecting  directly into downtown Los Angeles, is plagued by slow speeds and travel  times that are not as competitive with automobile or air travel. As such,  the conventional rail proposal is likely to attract far fewer riders than the  other proposed services.
subsections: section_title: Project Proposals
subsections: section_title: Los Angeles-Las Vegas Conventional Rail
paragraphs: The Regional Transportation Commission of Southern Nevada, the  metropolitan planning organization for Southern Nevada, which  encompasses Las Vegas, has been focusing on reestablishing conventional  rail passenger service between Los Angeles and Las Vegas. Amtrak’s  Desert Wind service was discontinued in 1997 as part of a broader  restructuring of intercity passenger rail service that included the  discontinuation, truncation, or restructuring of service on a number of  Amtrak’s routes. The conventional rail option would make incremental  improvements to existing rail track (using diesel equipment) and operate  in a shared-use environment with commuter and freight trains, and, as  such, would require negotiations with the private freight railroads that  own the tracks. With the incremental improvements, train speeds would  be increased to allow for up to 90 miles per hour. The line would most  likely begin in Los Angeles and terminate in Las Vegas—a total length of  over 300 miles and an estimated travel time of over 5 hours. Prior  passenger rail service on Amtrak’s Desert Wind took approximately 7  hours and 15 minutes between Los Angeles and Las Vegas. The  conventional rail option projects to draw approximately 300,000 riders per  year, and the estimated construction costs to implement these upgrades  would be between $1.1 and $3.5 billion, which would be less than either of  the following two options (see table 7 for a comparison of trip times,  riders, and costs for all three proposals).
section_title: Desert Xpress
paragraphs: The Desert Xpress option would operate on dedicated right-of-way with all  new tracks not shared with other rail service with no grade crossings,  using steel-wheel on steel-rail electrified (or diesel) equipment, with  maximum speeds of up to 150 miles per hour, between Victorville and Las  Vegas—a distance of a little less than 200 miles. Travel time between the  two cities would be about 84 minutes. Victorville, California—located in  San Bernardino County—is the first population center beyond the Cajon  Pass from the Los Angeles basin. Traffic from the Los Angeles area funnels  onto I-15 south of Victorville. Passengers from the Los Angeles area would  need to drive to Victorville to catch the train. According to project  sponsors, Victorville is generally within ½ to 1½ hours for many of the  more than 20 million residents of the 4 county area (Los Angeles, San  Bernardino, Riverside, and Orange). However, according to transportation  officials, this segment of the trip can be significantly delayed depending on  traffic conditions, in some cases, resulting in travel times to Victorville of  up to 3 hours. Therefore, the overall envisioned trip time for a traveler  using the Desert Xpress is expected to be between 2 and 3 hours, with the  potential to go to over 4 hours on the basis of traffic conditions between  Los Angeles and Victorville. According to ridership forecasts prepared for  Desert Xpress and reviewed by a third-party contractor, the service is  expected to attract up to 16.2 million riders per year by 2030 (8.1 million  round trips), and Desert Xpress estimates the total project to cost  approximately $3.5 billion. Desert Xpress officials indicate that the project  costs are significantly less than most dedicated high speed rail projects,  primarily because, by terminating service in Victorville, they would avoid  the construction challenges and high costs of building through both the  densely populated and developed areas in Los Angeles and Orange  counties and the mountainous Cajon Pass. The planned route would also  help reduce project costs by mostly using existing right-of-way, running  either within or adjacent to the I-15 right-of-way and using adjacent federal  lands where the use of highway right-of-way is not possible. The project  sponsor is a private entity and would not be seeking any public funding to  finance the costs of this project.
section_title: California-Nevada Super Speed Train
paragraphs: The California-Nevada Super Speed Train option would operate on  dedicated right-of-way, using maglev technology, with maximum speeds of  up to 300 miles per hour. The line would begin in Anaheim, California, and  terminate in Las Vegas—covering a distance of 269 miles in approximately  1 hour and 20 minutes. Project sponsors indicate that connecting Anaheim  (where Disneyland is located) and Las Vegas, two popular tourist  destinations, will help them draw significant ridership. The project is also  being designed to connect to a new intermodal facility that is planned to  be the Anaheim station terminus and would house transit connections to  the Los Angeles area, including the proposed Los Angeles to San Francisco  high speed rail line. In addition, project sponsors are considering a stop at  the Ontario Airport that would allow for a 15-minute trip from Anaheim  and, thus, make possible some diversion of air travelers from Los Angeles  International and Orange County airports, which are soon to be at  capacity. The estimated project costs of over $12 billion is the highest  among the three high speed rail options, mostly due to the higher costs of  constructing a maglev system. However, project sponsors highlighted  some advantages unique to maglev technology, such as lower ongoing  projected operation and maintenance costs and its ability to handle  steeper grades and curves as compared with steel-wheel on steel-rail  technologies.
section_title: Highway Congestion
paragraphs: It is estimated that 90 percent of the visitors to Las Vegas from the  Southern California region drive on I-15, which is the major highway and  the only available driving route connecting Las Vegas and Southern  California. According to stakeholders, congestion on I-15 has gotten  increasingly worse over the years, with a major choke point occurring in  Victorville, where the eight-lane highway narrows to three through lanes in  each direction for 30 miles to Barstow, and then to only two through lanes  in each direction through the desert to Las Vegas. Travel times between  the Los Angeles area and Las Vegas can increase 2 hours or more (from  approximately 4 to 6 hours) during weekend and holiday peak travel times  (reflective of the recreational nature of most travelers). I-15 is also a  heavily traveled freight route between the two regions. Both Desert Xpress  and the California-Nevada Super Speed Train Commission anticipate that  their high speed rail will help relieve congestion along the I-15 corridor  during peak periods. For example, Desert Xpress anticipates that 87  percent of its riders will be diverted from automobiles. However, other  stakeholders indicated that none of the current proposals are holistically  looking at the transportation problems endemic to the corridor, such as  looking at how to most effectively relieve some of the main drivers of  traffic congestion in the Southern California area, and as we discussed  earlier in this report, high speed rail’s ability to have an impact on highway  congestion may be limited by the properties of induced demand and the  preferences of drivers.
section_title: Airport Congestion
paragraphs: The single largest air market to Las Vegas is from Southern California, and  airports in Los Angeles and Las Vegas anticipate reaching and exceeding  capacity by 2025. Clark County Department of Aviation officials estimate  that in 2007, approximately 3.6 million passengers (15 percent of all  passengers) flew in from 1 of the 5 Southern California airports (Los  Angeles International Airport, Bob Hope Airport in Burbank, Long Beach  Airport, John Wayne Airport in Orange County, Ontario International  Airport) servicing Las Vegas’s McCarran International Airport (McCarran).  Both Desert Xpress and the California-Nevada Super Speed Train  Commission anticipate that their service will draw a significant number of  travelers off of planes and into trains. Desert Xpress estimates that just  over 12 percent of its passengers will be diverted from air, while  California-Nevada Super Speed Train Commission estimates attracting 20  percent of its passengers from air. In addition, as we have previously  mentioned, the commission is planning a potential connection to Ontario  International Airport to relieve capacity constraints at other Southern  California airports.
section_title: Planned Capacity Improvements for Highways and Airports
paragraphs: Current airport and highway expansion projects in the corridor also  complicate the decision of whether to invest in high speed rail and how to  design the system, and highlight the importance of comparing high speed  rail proposals with investment alternatives in other modes. However, no  single institutional entity exists to consider these investments relative to  one another, or in comparison with one another to determine how the  transportation needs in the corridor can best be served. For example, two  airport projects are currently being developed that will significantly  expand airport capacity in the Las Vegas area. To address future projected  growth, Clark County Department of Aviation officials said they are  preparing to add a third terminal to expand McCarran’s capacity by an  additional 8 million passengers. In addition, the department has plans to  build a new airport in the Ivanpah Valley, which is 6 miles north of the  California state line and 30 miles south of downtown Las Vegas  (approximately a 45-minute drive from Las Vegas). McCarran would then  handle most of the domestic air travel, while the Ivanpah Airport would  handle primarily international air travel. The planned opening of Ivanpah  is in 2018, and, at full build-out, the airport is expected to accommodate 30  to 35 million annual passengers. The officials were incorporating the  planned maglev line or Desert Xpress line into plans for the new Ivanpah  Airport, but primarily as a means to transport international travelers from  Ivanpah to the Las Vegas city center. Officials indicated that the existence  of a high speed rail line could provide capacity that could delay the need  to build the Ivanpah Airport for several years, although eventually they  anticipate enough demand to support an additional airport. However,  airport expansion proposals do not consider the effects of a potential new  high speed rail line, nor are airport expansions evaluated comparatively  with high speed rail or highway expansion proposals. Similarly, capacity  improvements are also planned on I-15 between Los Angeles and Las  Vegas, and as with planned airport expansions, highway expansion  proposals do not consider the potential effects of either rail or air travel  alternatives and are not considered comparatively with such investments.
section_title: Appendix VIII: GAO Contact and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Andrew Von Ah, Assistant  Director; Jay Cherlow; Colin Fallon; Greg Hanna; David Hooper; Delwen  Jones; Richard Jorgenson; Catherine Kim; Max Sawicky; Gretchen Snoey;  Jason Vassilicos; and Mindi Weisenbloom made key contributions to this  report.