High Speed Ground Transportation: Financial Barriers to Development

GAO discussed the introduction of high-speed ground transportation (HSGT) in the United States. GAO noted that: (1) the cost of HSGT depends on the type of technology adopted; (2) costs for incremental improvements to the existing rail infrastructure range from $2.7 million to $10 million per mile for 110 to 150 miles-per-hour (mph) service, respectively; (3) Amtrak has made improvements in the Northeast corridor with incremental enhancements and hopes to have 150 mph service available by 2000; (4) higher-speed systems would require a new infrastructure and would cost $17 million or more per mile; (5) magnetic levitation systems are the most expensive at $20 million to $60 million per mile; (6) operating and maintenance costs of HSGT systems are likely to be higher than for conventional rail service, since safe operation of HSGT requires expensive signal and control systems; (7) HSGT projects are not likely to be built unless the government assumes a major role in system development, since private investors are unwilling to finance projects due to their high risk and unknown return on capital; (8) the government could provide financial assistance through loan guarantees, tax exemptions, and revolving loans for the initial development and construction of HSGT systems; (9) the government has provided funds for improving speeds in the Northeast corridor and the maglev study and has proposed $646 million for fiscal years 1994 through 1997 for HSGT; and (10) Congress needs to carefully analyze the cost-effectiveness of HSGT before allocating funds, but it lacks adequate data on the benefits of HSGT systems.