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I'll probably have grandchildren by the time this project starts (if ever).
...You're right. You likely will have grandchildren by the time this project starts, particularly if they attempt to finance it solely with increasingly scarce public funding.
There's AT LEAST an estimated $250 billion in private financing available on the international market (more if governments start using it).
A few years the State of Georgia had over $30 billion in private financing lined up to fund a much more publicly unpopular project in the form of a series of expressway tunnels under Intown East Atlanta (a resurrection of the unpopular proposed I-675 to GA 400 and I-485/GA 10/US 78 freeway links that sparked the Intown Freeway Revolts of the late 1960's and early 1970's).
If the State of Georgia wasn't so ideologically focused solely on (or more like infatuated with) tolled tunnels, the state could easily build-out a network of regional passenger rail lines (commuter & interurban rail) and fund Georgia's part of the East Coast high-speed rail corridor for just a fraction of what they were (and seemingly still are) willing to spend on some unpopular tolled tunnels under Intown East Atlanta.
$30 billion in private financing for some unpopular tunnels that the state had to back away from when the public found out about it, when a highly-desired regional rail network that has the overwhelming support of the public could likely be financed for under $10 billion in private funds (shaking my head).
The money is there, the State of Georgia just has to use it for the right purposes.
...You're right. You likely will have grandchildren by the time this project starts, particularly if they attempt to finance it solely with increasingly scarce public funding.
There's AT LEAST an estimated $250 billion in private financing available on the international market (more if governments start using it).
A few years the State of Georgia had over $30 billion in private financing lined up to fund a much more publicly unpopular project in the form of a series of expressway tunnels under Intown East Atlanta (a resurrection of the unpopular proposed I-675 to GA 400 and I-485/GA 10/US 78 freeway links that sparked the Intown Freeway Revolts of the late 1960's and early 1970's).
If the State of Georgia wasn't so ideologically focused solely on (or more like infatuated with) tolled tunnels, the state could easily build-out a network of regional passenger rail lines (commuter & interurban rail) and fund Georgia's part of the East Coast high-speed rail corridor for just a fraction of what they were (and seemingly still are) willing to spend on some unpopular tolled tunnels under Intown East Atlanta.
$30 billion in private financing for some unpopular tunnels that the state had to back away from when the public found out about it, when a highly-desired regional rail network that has the overwhelming support of the public could likely be financed for under $10 billion in private funds (shaking my head).
The money is there, the State of Georgia just has to use it for the right purposes.
First, lets establish the point of people investing private money. It is to make money. They will not invest in something that does not make money. What is a reasonable rate of return that a private entity would expect from a risky project? I'd say 10%, but for the sake of this, we'll low ball it and say they would be fine with 6%.
So... using the $30 billion investment total (which I think is low given that the $30 billion you quoted was from several years ago), but again, I'll low ball things.
Lets assume that the state puts in $15 billion and $15 billion is invested by private sources. I think that is a reasonable figure. Do you agree?
So... the private entity puts in $15 billion to build the tunnels, they are going to expect a 6% rate of return. So to solve for this, we can treat this as a 50 year bond with a 6% return. To make their money back (over a 50 year period) and get a 6% rate of return on their investment, the tunnels would have to produce about $81 million a month in tolls.
So... how many drivers would use these tunnels each day? Lets assume they are 6 lanes (3 each way). I think there are two tunnels so, I'll use 150,000 car trips a day in each tunnel. That means there are 300,000 trips a day utilizing these tunnels (again, a very high number). This translates to 9 million trips a month.
So, using very high user numbers (so high that it would likely result in gridlock), and very low construction costs, each trip would have to contribute $10 toward the debt repayment.
Then, you have to account for the operation and maintenance associated with the tunnels which is also costly. I don't have a figure for this, but $1 per rider seems like a very low assumption to use (so I'll use it). So... each trip need a toll of $11 to make the investors back their money and return a 6% rate of return.
Soooo... the toll would need to be $11. However, this analysis doesn't even account for the other $15 billion the taxpayers put into the project. That is money that would never be recovered.
Just throwing some numbers out there to put this into perspective... not that this plan is the least bit realistic because the construction costs estimate is very low.
I hope this helps you understand the economics of public-private investments a little better.
It can be argued that the NE has it already with Acela. But if we are still waiting on a NE HSR train, and it is projected for 2040, then we might as well forget about a Charlotte-Atlanta train unless we can somehow finance it ourselves. Boston-DC would be a priority over CLT-ATL.
...You make a great point that the implementation of faster HSR would likely be a much-higher priority in the Boston-Washington Corridor, for obvious reasons (...NYC is the financial capital of the world, DC is the political capital of the world, Boston is a major center of higher learning and culture, etc).
But implementing HSR between Washington DC and Atlanta by way of Charlotte will still likely be more of a priority to the Feds than many people think because of the continuing high rates of population growth in the key Southeastern states of Georgia and North Carolina.
Georgia (10 million) and North Carolina (9.8 million) have been growing so fast over the past few decades that both states have leapfrogged shrinking Michigan and slow-growing New Jersey to become the 8th and 9th-most populated states in the union, respectively.
And despite the economic downturn, the populations of Georgia and North Carolina are each expected to continue growing at very high rates and stay on a trajectory to leapfrog the much-slower growing states of Ohio (11.5 million), Pennsylvania (12.7 million) and Illinois (12.8 million) to become virtually tied for 5th place in total population behind only California (38 million), Texas (26 million), New York (19.5 million) and Florida (19.3 million).
That means that Georgia and North Carolina will likely become virtually tied for the position of 3rd-most populated state on the East Coast behind only New York and Florida.
Just that statistic alone underscores how important it will be to provide increased connectivity between Atlanta and the DC-Philly-NYC-Boston Northeast Corridor by way of Charlotte.
And that numerical statistic does not even account for Atlanta's status as the home to the busiest passenger airport on the planet, Charlotte's status as the Financial Capital of the Southeast and Raleigh-Durham's status as a major center for higher education and life sciences research as a reason why implementing high-speed rail service between Washington and Atlanta will remain much more of a priority with the Feds than many people may be aware.
This train should just go one way. Charlotte is boring. Their only "hip neighborhood", SoDo or something, had less than a quarter of the shops open when I was there. Not because of the hour, because it was during the week. Seriously. Charlotte has less going on than Alpharetta.
First, lets establish the point of people investing private money. It is to make money. They will not invest in something that does not make money. What is a reasonable rate of return that a private entity would expect from a risky project? I'd say 10%, but for the sake of this, we'll low ball it and say they would be fine with 6%.
So... using the $30 billion investment total (which I think is low given that the $30 billion you quoted was from several years ago), but again, I'll low ball things.
Lets assume that the state puts in $15 billion and $15 billion is invested by private sources. I think that is a reasonable figure. Do you agree?
So... the private entity puts in $15 billion to build the tunnels, they are going to expect a 6% rate of return. So to solve for this, we can treat this as a 50 year bond with a 6% return. To make their money back (over a 50 year period) and get a 6% rate of return on their investment, the tunnels would have to produce about $81 million a month in tolls.
So... how many drivers would use these tunnels each day? Lets assume they are 6 lanes (3 each way). I think there are two tunnels so, I'll use 150,000 car trips a day in each tunnel. That means there are 300,000 trips a day utilizing these tunnels (again, a very high number). This translates to 9 million trips a month.
So, using very high user numbers (so high that it would likely result in gridlock), and very low construction costs, each trip would have to contribute $10 toward the debt repayment.
Then, you have to account for the operation and maintenance associated with the tunnels which is also costly. I don't have a figure for this, but $1 per rider seems like a very low assumption to use (so I'll use it). So... each trip need a toll of $11 to make the investors back their money and return a 6% rate of return.
Soooo... the toll would need to be $11. However, this analysis doesn't even account for the other $15 billion the taxpayers put into the project. That is money that would never be recovered.
Just throwing some numbers out there to put this into perspective... not that this plan is the least bit realistic because the construction costs estimate is very low.
I hope this helps you understand the economics of public-private investments a little better.
...Hey, don't kill the messenger, buddy! I didn't think that it was all great of an idea, either. I was just remarking about a costly (more like COST-PROHIBITIVE) ideologically-motivated harebrained roadbuilding scheme that GDOT was pushing forward as opposed to investing in a viable regional transit system for substantially less cost.
The exact cost of the overall proposal was $25 billion to build a series of tolled expressway tunnels throughout not just East Atlanta, but under much of Central Atlanta.
Here's a link to the proposal by the Reason Foundation recommending private investment on the scale of $25 billion (or more) that the Georgia Department of Transportation thought was such a great idea: Reason Foundation - Reducing Congestion in Atlanta
If the state is willing to marshal up to at least $25 billion in private investment (likely a conservative number by any stretch with the scale of the project) to attempt to build-out an unpopular network of tolled tunnels then you'd certainly have to agree that the state could definitely marshal up much less in both private and public resources to build-out a much more popular network of regional passenger trains (while also making much-needed expansions to freight rail capacity), wouldn't you?
This train should just go one way. Charlotte is boring. Their only "hip neighborhood", SoDo or something, had less than a quarter of the shops open when I was there. Not because of the hour, because it was during the week. Seriously. Charlotte has less going on than Alpharetta.
Charlotte has deep roots in banking and some of their megabanks gobbled up the smaller Atlanta banks.
I read that part of the reason why is because our legislature balked on extending incentives for banks to operate here. That's why I said, tongue-in-cheek, that we gave it to them. Had that legislation passed, then Charlotte's Uptown would be at Fairlie-Poplar
This train should just go one way. Charlotte is boring. Their only "hip neighborhood", SoDo or something, had less than a quarter of the shops open when I was there. Not because of the hour, because it was during the week. Seriously. Charlotte has less going on than Alpharetta.
Leaving aside the insecurity of the statement, it also ignores the many reasons why such a train would exist.
Quote:
I read that part of the reason why is because our legislature balked on extending incentives for banks to operate here
I've never seen the state lack incentives to sell its soul (our money) for business. Charlotte banks grew due to NC regulations (or lack of 'em) and I'm sure other circumstances that enabled them to get in the position that they got.... for better or worse.
That means that Georgia and North Carolina will likely become virtually tied for the position of 3rd-most populated state on the East Coast behind only New York and Florida.
Just that statistic alone underscores how important it will be to provide increased connectivity between Atlanta and the DC-Philly-NYC-Boston Northeast Corridor by way of Charlotte.
I don't think that necessarily translates into demand for train travel though.
If the demand for travel between Charlotte and Atlanta becomes that great, one simple alternative to HSR is to have air shuttle service between ATL and CDG every half hour. That should be easy to do in Atlanta since Delta is based there.
I honestly see this type of service going into effect before HSR between Charlotte and Atlanta. Do you think there's strong demand for flights leaving every 30 minutes between the two cities now? If not, then how does that affect your view of a potential HSR line?
^Not only is Delta's hub in Atlanta, US Airways has a major hub in Charlotte. They can do the flight in an hour without our having to spend billions and billions for new infrastructure. Carl Sagan would be useful right now to illustrate the cost...Billions...and Billions.
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