Mark Thein of Oroncoo Township raises a few questions about the North American High Speed Rail Group plan's economic good sense in a letter to the editors of the Zumbrota News Record:
Rochester Mayor Ardell Brede recently criticized Governor Mark Dayton for not being partisan enough and for being too conservative. Future historians may disagree with this assessment. However, perhaps his most incredible statement was that the proposed “private” passenger railway between MSP and Rochester “just makes good sense economically all the way around.”
Really?
Let’s assume that there is a group of billionaires with an extra $4.2 billion burning a hole in their pockets and they really were looking at a private passenger rail system from downtown Rochester to MSP as a cash cow. How would the numbers work out for them?
It’s safe to assume that these investors are smart enough to want a return on their investments. 3% seems low considering the risk involved (if this truly was a private venture), but we’ll go with that. Knowing that they have a depreciating asset that would eventually need future repair/replacement and would have a limited resale value (because there can’t be too many billionaires sitting around who are just itching to buy their own private passenger rail system), they would likely want to eventually get their initial investment paid back so they can reinvest in its next version or sell it at a reduced cost for the next billionaire to upgrade. Let’s assume they think long-term and are willing to wait 30 years for their initial investment to get totally paid down.
Using the above, very conservative, numbers, this private zip rail project would have to generate $17,707,400.00 in monthly profits (not revenue). Assuming that operating expenses would consume one-third of each passenger’s daily one-way fare of $30 (to pay such things as labor, energy, taxes, management and taxes), it would take 29,512 paid one-way trips each day to pay each day’s bills of $590,247.00,
Assuming that half of the passengers start at MSP and half at downtown Rochester and that each would return home at the end of the day, that means that 7,378 people are going to wake up each day and drive to MSP, find a parking space and buy their $30 ticket to Rochester. Additionally, another 7,378 people are going to have to wake up each morning, drive to downtown Rochester, find parking and buy their $30 ticket to MSP.
Do we truly believe this will happen?
Setting aside worries about how billionaires can justify this investment, we should look at whether this project “makes good sense” for the people of Rochester and southeast Minnesota.
Does it make good sense to promote Mayo Clinic visitors spending their nights in the Twin Cities instead of in our hotels, restaurants and shops?
Does it make good sense for our doctors to return each night to their homes in Wayzata and Edina instead of investing in homes in our communities?
Does it make good sense to even pretend that “private” railway could be elevated in the Highway 52 corridor when, as the Answer Man has already pointed out, the CapX2020 lines are already placed in that corridor and crisscross over the highway at least 10 times over that route, making it impossible to keep the needed separation between the top of the railcar and the bottom high voltage line?
Does it make sense to forcibly take private property – both within the City of Rochester and all along the route (since it is not feasible to build it along the highway) in order to benefit another “private” enterprise (the investors in this project)?
Does it make sense to pretend that our boondoggle is somehow tied to the rumored Las Vegas to Los Angeles boondoggle and we must hurry to get fleeced first?
Let’s face the facts. High-speed rail between Rochester and MSP is a dream for a few people connected with DMC. Like many dreams, it features grandiose ideas and is nonsensical. Thankfully, most dreamers wake up refreshed and reconnect with reality; those who don’t run the risk of turning their lives into nightmares.
It would be a nightmare for the residents of Rochester, southeast Minnesota, and the taxpayers of the state for this project to move forward, meet its inevitable failure and have to be supported ad infinitum by our tax dollars. Let’s end this folly now and realize that, Anyway you look at it, this project does not make good sense.
Bluestem has wondered this as well, especially the part about a private company using eminent domain to take private land from citizens. For a fact check on state and federal laws governing the use of eminent domain by private rail companies, see our post, Zombie Zip Rail question in CD2 GOP forum could re-animate eminent domain debate.
Image: There's something cartoonish about this plan...
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