Will Eventually be subsidized. What can California do what other high speed rail countries cant? The pioneers of high speed rail Japan subsidizes its high speed rail along with many other countries.
A little history on high speed rail- From 1960 to 1980′s Japans high speed rail accumulated massive debts. The system was privatized by creating seven Japanese Railway operators, and the $280 billion debt was transferred to the taxpayer. Japanese tax payers are still paying on this debt. Four of the seven Japanese operators are government owned, and 3 are privately owned. The three private operators receive another $2 billion subsidies annually from the government. The government high speed rail is also subsidized. All 7 rail companies are subsidizes with tax dollars.
The French high speed rail program has a $10 billion annual subsidy according to a study by Amtrak in 2008. With trickery they show $1.75 billion profit but this is false because the $10 billion dollar subsidy makes it look like they have a profit. To deal with this debt, French high speed rail will increase track fees by 40% between 2008 and 2012 to reduce this debt, low ridership routes have been canceled. Fares are being increased by more than twice the rate of inflation and in some cases even more.
It is believed that Spain spends nearly $3 billion on high speed rail subsidies annually and Germany more than $1 billion per year. We also know that the high speed line between Amsterdam, Rotterdam and Breda (in the Netherlands) has been saved from bankruptcy with a £250m government bailout. It has been losing £320,000 per day due to disastrous levels of patronage.
In Taiwan, it became necessary for the Taiwanese government to take over the running of the Taiwan High Speed Rail Corporation in 2009 as it was almost bankrupt. Within 2 years Taiwan’s high speed rail lost more than $2.1 billion. Low passenger numbers were the main reason and the determination of how many riders the high speed rail would have was over estimated.
China which now has a greater distance of high speed line than any other country also has the largest debts from its rail building. Most average Chinese citizens cant afford to ride on the high speed rail. In 2011, these debts amounted to $317 billion, that was for only the first half of 2011 which has raised concerns for the World Bank. Which, is why the IMF tells governments to be prepared to come up with other revenue to keep the rails going.
California’s illusion of a profitable high rail is delusional and wont work. The Californian tax payer will be forced to pay or every man women and child in the United States will pay through taxes.