Item — HN Reader

> the TGV is also profitable

Correct me if I’m wrong, but my impression is that this is only true if one excludes the capital costs associated with the railroad (tracks, right of way, and I think also rolling stock). If you factor in the infrastructure construction costs (and reasonable lifetimes for replacing rolling stock), a high speed trail line will never be profitable without significantly higher fare prices than are presently charged.

But that goes to further support your point that high speed rail can only be accomplished with government input.

To be fair, I think that the same argument can be made for the costs of interstate highway systems and passenger air travel.

3 comments

As far as I know, the TGV is indeed profitable even subtracting that. I believe the maintenance of the tracks falls under SNCF Réseau (owned by SNCF) and the rolling stock falls under SNCF.

Figures for the profitability of the individual lines, with construction costs included, can be found here [0] in French. You'll see several lines with yearly rates of return in the ~7-15% range depending on how you measure things. I'd call that excellent, especially given that there are other massive benefits (environmental, health, safety, national security etc) involved that are not included in that calculation.

That said, I may be forgetting to include something, so I may be wrong. But, like you said, only further supports the point that high speed rail can only be accomplished with government input :)

[0] http://geoconfluences.ens-lyon.fr/informations-scientifiques...

Public transit is almost always unprofitable without some way of capturing the increased land value near the stations.

Supposedly some subways (eg Hong Kong?) own the land near the stations and use the rents to fund the subway, rather than just using fares.

A land value tax that goes back into public transit would probably work too.

That's how it works in Japan. All the major train companies own the land around the major train stations and that's why you see all these department stores named after a train company.

Here's one, just follow the links to the group companies.

https://en.wikipedia.org/wiki/Tokyu_Department_Store

Yup, if you’ve spent time in Japan, you can see how stores, hotels and attractions are laid out to drive train passenger traffic.

The same was true for streetcars in the USA, many streetcar companies built amusement parks in the countryside at the end of their lines to encourage weekend trips.

Regular property tax works fine. Montreal recaptures the increase as values rise through transfer taxes and ocassional reassesments.

Transfer taxes are avoided by the wealthy. See London and NYC. An LLC purchased property. From that point the LLC is bought/sold/merged and the assets never change ownership

Maybe that ought to be fixed as well.

Unfortunately California doesn't have regular property tax thanks to Prop 13: even if values rise, taxes don't.

So high speed rail in California is always going to be a boondoggle.

I was told that Hong Kong metro makes more from real estate rental than ticket sales.

And just look at what we put next to our Bart stations: giant parking structures. Sigh.

Supposedly the Hong Kong metro is already profitable just via fares.

libed there a bit and have this to say: to cover thise extra costs, they would have to charge a ridiculous amount per ticket. like double the cost if a flight to those destinations. and they do. $300 for a 5 hour train ride. so i can totally see this being profitable all costs uncluded.

here's why i think they get customers. people don't like airports and plane travel, so they'll pay more for rail. car travel is unpleasant. cars are tiny and uncomfortable. their tolls are insane. like $50 in tolls for that same drive. less people have cars, and getting an license is a big expensive thing. they don't do roadtrips.