Privately Funded Public Transportation

From the Detroit News,

Private investors have stepped forward with enough money to build a prototype for a futuristic elevated rail system that would race along freeway routes between Lansing, Ann Arbor and Detroit, according to experts who testified at a hearing on the proposal Monday.

This seems like a good idea, instead of demanding money from the government, they are actually coming up with money. I have often heard people saying things like "if high speed trains are such a good idea, then private industry would build one". Well, here they are, trying to build one. The only thing they are asking from the government is permission to build the track along the interstate corridor. If they build it and have a reasonable fare, I might use it every once in a while; I live in Lansing and my parents live near Detroit.

Now, my question is, what if the business fails? This may be economically viable, and it may not. If the business goes bad, what will happen with the miles of track along the highway? Will they come and ask for a government bailout if there are no riders? I would like the company to address this possibility, I certainly don't want to fund a loser and I would hate to see deteriorating tracks crossing the state.

In another developement, the Michigan State Department of Transportation is asking for Federal money to build a high speed rail from Detroit to Chicago. Of the two plans, I like the private venture better, just because it is privately funded. It will be interesting to see how the two projects turn out.

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It might jump start Detroit

Getting the right of way would be the most expensive part of the project so if they can get it as a gift from the state it might work. without a subsidy. I'm guessing it is cheaper to lay track than build highway.

If the project fails, the

If the project fails, the investors will be washed and the creditors will take a big hit. However, most of the cost will be sunk, so it will probably continue running. It's reasonably likely that the project will not recoup investments cost, it seems much more unlikely that profit can't cover operating costs.

I often go to a big multiplex cinema in the world financial center. It was built at a time where the neighborhood was booming. It's almost always empty now. Retrospectively, it was a terrible investment to make, but it's still profitable to run it.

Maintenance

In the long term, maintenance can be tantamount to rebuilding. Care for a car long enough, and you may eventually find yourself having replaced all the parts. So if the track is not worth the cost of building, there is the possibility that it may not be worth the cost of maintaining.

It may, but these kind of

It may, but these kind of project strike me as high initial capital, low maintenance. Hence they are very likely to go bankrupt yet keep operating.

Think about the channel tunnel for example, it was a money hole, but it wouldn't make sense not to use it now that it's here.

Yes it's possible

It's possible or even probable. But I have seen many abandoned rails in my life, so it can go the other way as well.

Moral hazard anyone?

I think anyone doing business with any government agency at the moment is in some way expecting the gov. to bail them out if things hit the fan. Also business decisions aren't driven by profit motives any more but simply by politics. Just look at GM...

Further if there really was a profit to be made here by the initial investors why didn't they start these projects 5 years ago during the boom? The long term outlook was much rosier back then. I certainly don't think there have been any major tech. innovations in recent years that dramatically lowered the cost of building mass transit systems.

I think the only argument one can make not involving an expectation to get bailed out is that investors are getting crazy low interest rates on borrowing capital. And we all know where that leads.

many rail spurs were abandoned because of the freeways

The people who live in cities paid for the freeways so that others could move to the suburbs and pollute the US.

People vote for light rail and busses because they think their neighbors will do the riding and leave the freeways for them. Fat chance of that! The car is the American sex symbol an a means for gutless wonders to show how big and bad they are. The same sorts of people who think it is amusing to own vicious dogs.

hayaloglu nakliyat

What makes a transportation design environmentally friendly? A few factors that are considered under the program are water and air quality protection

"Environmentally friendly" transportation

Presumably, a transportation option is environmentally friendly if it produces fewer pollutants and uses fewer resources. These are not necessarily connected. I suppose it would also be more environmentally friendly if it produced less road-kill, but that is a minor concern in these discussions.

Update: propasal moving through commitees

I just came across an udate on this story, the proposal is moving toward a vote. Read about it here.

hayaloglu nakliyat

The people who live in cities paid for the freeways so that others could move to the suburbs and pollute the US.

People vote for light rail and busses because they think their neighbors will do the riding and leave the freeways for them. Fat chance of that! The car is the American sex symbol an a means for gutless wonders to show how big and bad they are. The same sorts of people who think it is amusing to own vicious dogs.

hayaloglunakliyat

“I was thinking of challenging ASG to raise money for safe rides home in which the council could match its donation,” Jones said. “I’ve been telling my colleagues the private industry can handle transportation better than from a public transportation standpoint.”