Hotline #791 -- December 28, 2012

China successfully launched service on the world’s longest high-speed rail line this week, with trains running at speeds of up to 186 mph on a 1,200 mile route between Beijing and Guangzhou.

The route, which connects the northeastern capital city with southeastChina’s largest city, is roughly the same distance asNew York Cityis fromKey West,Florida.  The new service will turn what was once a 21 hour train ride into an 8 hour trip.

With the launch of the world’s longest corridor,China’s high-speed rail ambitions are once again on display for the world to see. Chinahas gone from no high-speed rail in 2008, to a 5,809 mile network today.  This rapid expansion, in conjunction with a deadly accident that killed 40 passengers—the result of faulty signaling equipment—has led to concern among Chinese consumers about system safety.

However, the Chinese government responded by lowering top speeds from 218 mph to 186 mph, and—after a brief lull—continued building apace.  As reported in the New York Times, the Chinese government has used expansion of the high-speed rail network as an important stimulus program during the economic recession, employing hundreds of thousands of workers during a time when jobs were scarce.

While the Chinese Rail Ministry has accrued hundreds of billions of dollars in debt to build the line, economists predict much of that may be recaptured in expanded freight capacity on mixed-use corridors; each passenger rail car eliminated creates space for three freight rail cars.  Many of the shippers are state-owned enterprises, and finding the political leverage to charge them market rates will be an ongoing challenge.

 

A Burlington Northern Santa Fe representative confirmed yesterday that passenger rail service between Seattle and Everett, Washington, will be cancelled through next Monday due to mudslides.

Heavy rain has been drenching the Pacific Northwest, precipitating mudslides along BNSF’s tracks that run north of Seattle.  While freight trains are still being single tracked through the corridor, Sounder commuter trains and Amtrak’s Cascades service are being held back over concerns for passenger safety—seven cars on a BNSF freight train were derailed by a mudslide earlier this month, as captured on video below. 

The moratorium on passenger service began December 17.  BNSF officials are saying this is the worst year for mudslides in the last 20 years.  While service is expected to resume by December 31, crews will continue to assess the situation on a day-to-day basis.

 

The American Public Transportation Association’s (APTA) December Transit Savings Report revealed that public transportation riders will save $806 per month on average, and $9,667 annually, as compared to those who commute by car. 

The APTA analysis found that these savings have persisted in the face of declining gas prices, outlining their methodology:

These savings are based on the cost of commuting by public transportation compared to the cost of owning and driving a vehicle which includes the December 19, 2012 average national gas price ($3.42 per gallon- reported by AAA) and the national unreserved monthly parking rate.

The national average for a monthly unreserved parking space in a downtown business district is $166.26, according to the 2012 Colliers International Parking Rate Study.  Over the course of a year, parking costs for a vehicle can amount to an average of $1,995.

APTA identified the top 20 cities with the highest automotive commuting costs in 2012, with the top five rounded out by New York ($1,215 monthly, $14,585 annually), Boston ($1,052 monthly, $12,612 annually), San Francisco ($1,048 monthly, $12,575 annually), Philadelphia ($967 monthly, $11,605 annually), and Chicago ($937 monthly, $11,239 annually).

 

The Massachusetts Department of Transportation, the Massachusetts Bay Transportation Authority, and the Cape Cod Regional Transit Authority announced earlier this month that passenger rail service will be restored between Boston and Cape Cod this summer.

"Working closely together, MassDOT, the MBTA, and the Cape Cod Regional Transit Authority, with the support of Governor [Deval] Patrick, are excited about the opportunity to restore passenger rail service to the Capenext summer," MBTA spokesman Joe Pesaturo told the Barnstable Patriot. "A convenient alternative to highway travel, passenger rail service delivers economic and environmental benefits to the area."

Train service was discontinued to the area in 1988. The MBTA says that offering the service won’t actually cost more, with high ridership pushing farebox revenues up, offsetting operating costs.  The line carried 53,000 passengers in its final year of operations, despite slow speeds on parts of the line and no direct connection to South Station.

"The governor is glad we will be able to restore train service to theCape," said a statement from Governor Patrick’s spokeswoman Bonnie McGilpin. “It will be a boost to the tourism economy of the region and make life easier for year-round residents. This is only happening because of the Patrick-Murray Administration’s work on this effort and because of the collaboration between the MBTA, MassDOT and the Cape Cod Regional Transportation Authority."

 

A report released to the public reveals that All Aboard Florida expects its Orlando to Miami train to take in $145 million at the farebox by 2018.

An 81-page All Aboard Florida proposal submitted to the Florida Department of Transportation was made available to the public, and revealed a few important project details and projections.  The company will be looking for a 99-year lease on a right of way along the south edge of the BeachLine Expressway, which would allow the railroad to connect its 200 miles of coastal track to inlandOrlando, where the train will eventually terminate at theOrlandoInternationalAirport.  The total cost of the project has increased from an earlier $1 billion estimate to $1.5 billion.

The Orlando Sentinel is reporting that the $145 million is based on ridership projections of 1.5 million passengers, and a $100 one-way ticket pricing structure.  TheMiami toOrlando trip would take around 3 hours, which compares well to a four hour car ride.

 

The State of Arkansas announced it will move forward on a study to develop a modern rail line between Texarkana, Little Rock, and Memphis.

State transportation officials would study how best to develop existing passenger and freight service operating inArkansas.  Planners will also perform a study to look at how to integrate the state’s plan into a national vision for high-speed rail.  The two studies are expected to cost between $1.25 and $1.5 million—paid for by a mix of state and federal funds—and are a prerequisite for taking part in future rounds of federal passenger rail grants. 

It’s likely the rail development plan will outline incremental improvements that can be taken to modernize passenger and freight rail within the state, similar to the work being done inIllinoisandMichiganon the Midwestern high-speed rail network, which has introduced improved frequencies, 110 mph service, and better reliability.

 

Hotel developers are looking to future high-speed rail hubs as areas of economic opportunity, according to an analysis done by Hotel News Now.

“Looking into the future, if the U.S. gets on a kick of revitalization that would be under mass transit, it would be developing airport locations and developing high-speed trains going across America to connect metropolitan areas,” said Nancy Johnson, executive Vice President of development at Carlson Rezidor Hotel Group.

Johnson also talked about how hotels will begin to re-concentrate in urban areas, away from suburban development parks and airport hubs, and back towards downtowns, bringing guests within walking distances of businesses and services: 

[High-speed rail] would be changing the prime location for a hotel. The infrastructure of the city would be much more concentrated and more efficient. You would see more concentration into a major city for the hotel industry.  [It will] pull travelers back to urban areas and city centers.  There’s a recentralization of communities and more people are headed back to metropolitan areas.”

This trend has already manifested itself in rail corridors across the U.S., most noticeably along the dense Northeast Corridor.  The examples range from the $7 billion Burnham Place development plan for Washington Union Station being developed by Amtrak and the Akridge real estate firm, to a more modest mixed-use development slated to be built around the Route 128 Amtrak station in Westwood, Massachusetts.

“The rail station there is a good thing—especially how strong the market would be to build a hotel there,” said David Roedel, business development and acquisitions manager for hotel investment and management company Roedel Companies. “From a development perspective, it’s an interesting and intriguing opportunity.”

The challenge remains turning this private sector enthusiasm into a reliable source of funding for project development, whether through direct Public Private Partnerships, or Tax Increment Financing that would use taxes on real estate development surrounding train stations to help finance expanded and improved service.  The Obama Administration has publicly expressed confidence that, one way or another, they can harness private sector support to achieve its passenger rail ambitions. 

“We’re not giving up on high-speed rail,” said Transportation Secretary Ray LaHood during a December 6 House Transportation & Infrastructure Committee hearing on high-speed rail. “The president will include funding in his budget. I think we’ll get there with public money, but in the absence of that, we’ll get there with private money.”

 

In an effort to spur economic development, the Mexican government has announced its intention to develop high-speed rail along the Yucatan Peninsula.

"This project not only will enable the transportation of passengers, who will be able to travel quickly and safely, but will also be a means of cargo transport that facilitates trade and the shipping of merchandise from Yucatan to the state of Quintana Roo," said Mexican President Enrique Pena Nieto.

The Merida-Punta Venado Trans-Peninsular Train project will be funded and constructed as part of a Public Private Partnership, with the rights to develop the line put out to bid in the fall of 2013.

The route will run fromMerida, in northwesternYucatan, to Punta Venado, which is roughly 45 miles south ofCancun.  The corridor will connect some ofMexico’s most economically vital tourist regions, giving cruise-ship visitors easy access to important Mayan heritage sites.  Trains will be capable of reaching speeds of 100 to 110 MPH.