High-speed rail project’s prospects called unpredictable
Ridership forecasts for the California high-speed rail project are so unreliable that it is difficult to predict whether the proposed bullet train would be profitable or suffer severe revenue shortfalls, according to a report released Thursday by transportation experts at UC Berkeley.
The analysis by the Institute of Transportation Studies challenges the optimistic ridership forecasts by the California High-Speed Rail Authority that indicate the 800-mile system from San Diego to San Francisco would not be a drain on taxpayers.
Predictions of ridership are crucial to the $42-billion project because they form the basis of ticket income, public funding, and the number and size of trains and stations required. Revenue forecasts tied to ridership estimates are being closely scrutinized by political leaders because when voters approved the bullet train, they prohibited any taxpayer subsidy of its operation.
The authority estimates that the system would have between 88 million and 117 million passengers a year by 2030. However, under various scenarios offered by the agency, the number of passengers could be as low as 40 million a year.
“The forecast of ridership is unlikely to be very close to the ridership that would actually materialize if the system were built,” said Samer Madanat, a civil engineering professor and the institute’s director. “As such, it is not possible to predict whether the proposed high-speed rail system in California will experience healthy profits or severe revenue shortfalls.”
The study was requested by state Sen. Alan Lowenthal (D- Long Beach), who chairs the Senate Transportation and Housing Committee that oversees the project. Funded by the rail authority, it is the first academic analysis of the project’s ridership forecasts.
Those projections were included in the state’s successful application for federal economic stimulus money, which resulted in a $2.25-billion award from the Obama administration in January. The extent of long-term federal support of the project remains uncertain.
The institute “concluded that what we have [in ridership forecasts] is not worth very much and that we need to start over,” Lowenthal said. “Their review is very damning, another example that the rail authority needs to get its act together and do a better job.”
Lowenthal added that he wants to address the ridership forecasts at a future committee hearing.
University researchers concluded that there are problems in the statistical model used for the forecasts, including methods that exaggerated the importance of frequent train service, faulty assumptions about which stations travelers would use, and inadequate sampling of long-distance travelers that was compensated for by using a technique that has been deemed obsolete.
“The consulting firm is very well-regarded. One of the statistical methods it used was thought to be accurate at the time,” Madanat said. “But based upon our review, we believe that a new model is necessary if policymakers want to accurately forecast high-speed rail demand in California.”
In a written response to the university researchers, the rail authority’s chief executive, Roelof van Ark, took particular issue with the conclusion that the bullet train might experience revenue shortfalls. He called it an “extraordinary statement” without foundation, adding that his agency still believes its ridership estimates are a “sound tool for high-speed rail planning and environmental analysis.”
The firm that prepared the authority’s ridership projections, Cambridge Systematics, also defended its work, saying it had followed standard modeling practices, brought 40 years of experience to the effort and had its work reviewed by experts. It said the teams that developed the projections are of the “firm belief” that they meet their goals, including being “appropriate for preparing ridership and revenue forecasts.”
Based on the experience of high speed rail systems in other countries and discussions with potential private investors, the rail authority remains “confident we will end up building a system that will make money,” said the agency’s deputy director, Jeff Barker. As assumptions are refined and detailed routing decisions are made, ridership estimates could change, he said.
Controversy has surrounded the credibility of the authority’s ridership projections for some time. They are now the subject of a pending lawsuit brought in the Bay Area by three environmental groups and two cities. Among other things, the plaintiffs cite predictions showing that the number of nonlocal trips for some smaller cities, such as Gilroy, Merced and Bakersfield, will be equal to or greater than for Los Angeles.
“The Institute of Transportation Studies just bolstered the case brought forward by our consultant and turned up some other issues that bear looking into,” said Richard Tolmach, president of the California Rail Foundation, one of the groups that sued.
The Berkeley study “says we are back to square one, that we have no information. The authority might as well have been throwing darts at a wall,” said Elizabeth Alexis, co-founder of Californians Advocating Responsible Rail Design, a Bay Area group that raised some of the first questions about the project’s ridership forecasts.
“This should be an excuse,” Alexis added, “for the authority to reevaluate its plans.”