Tag: rail

Privatize Washington’s Metro System

Some members of Congress are considering restructuring DC Metro’s management and oversight. Big reforms are needed given the disastrous service, safety, and financial performance of the system in recent years.

Why not privatize Metro? Countries around the world have been privatizing their transportation infrastructure in order to improve management and efficiency. Privatizing Metro buses would be straightforward, but even privatizing the subway system would not be an unheard of reform.

Hong Kong privatized its subway system in 2000. In a recent study on infrastructure, McKinsey reported:

Hong Kong’s MTR Corporation has defied the odds and delivered significant financial and social benefits: excellent transit, new and vibrant neighborhoods, opportunities for real-estate developers and small businesses, and the conservation of open space. The whole system operates on a self-sustaining basis, without the need for direct taxpayer subsidies.

MTR’s railway system covers 221 kilometers and is used by more than five million people each weekday. It not only performs well—trains run on schedule 99.9 percent of the time—but actually makes a profit: $1.5 billion in 2014. MTR fares are also relatively low compared with those of metro systems in other developed cities. The average fare for an MTR trip in 2014 was less than $1.00, well under base fares in Tokyo (about $1.50), New York ($2.75), and Stockholm (about $4.00).

That sounds pretty darn good. The average fare on the DC Metro is about $3. The on-time record of Metro is unclear, but in technical terms I think “crappy” best describes it. Note that Hong Kong’s 99.9 percent on-time record means that “of the average 5.2 million passenger trips made on the MTR heavy rail and light rail networks on each normal weekday, 5.195 million passengers safely reach their destinations within 5 minutes of their scheduled arrival times.” In 2014, “the system ran for 120 consecutive days without a single delay over eight minutes.” Wow.

That stellar performance induces strong demand for the Hong Kong system, which in turn generates high fare revenues. The ratio of passenger fares to operating costs is a high 185 percent, which means that fares fully cover operating costs and part of capital costs. MTR raises other funds for capital from real estate deals under which it gains from land value increases near stations. The Hong Kong system is profitable and unsubsidized. By contrast, the average ratio of fares to operating costs for U.S. subway systems is just 46 percent, and the systems are heavily subsidized.

The MTR is probably the best-run subway system in the world. The system is an “immaculately clean, well-signposted, cheap, regular, convenient system.” And there’s free Wi-Fi in most stations.

The system is so admired that MTR has been contracted to run systems in other cities. CNN says: “MTR Corporation now operates the London Overground, and two lines of the Beijing Metro, as well as parts of the Shenzhen and Hangzhou Metro systems in China, the Melbourne Metro in Australia and the Stockholm Metro in Sweden … London Overground enhanced its punctuality from 88.4% in 2007 to 96.7% in 2013 after MTR took over its operation for a year.”

Can we get MTR Corporation to expand into Washington? Metro Board Chairman Jack Evans wants a federal takeover of Metro, but how about a private takeover?

Short of Funds? Give the Feds More Power

In 2006, the National Transportation Safety Board found that 298 subway cars in the Washington Metrorail system are “vulnerable to catastrophic telescoping damage” and should be replaced or reinforced immediately. They weren’t, which was a major reason why nine people died in a rail collision last June.

In 2007, supposedly fail-safe circuits in Metrorail’s train detection and control system began to “intermittently malfunction.” This contributed to at least one near miss before the fatal crash, and was the other major reason why nine people died in June.

Clearly, the Washington Metropolitan Area Transportation Authority is short of funds. It still has not begun to replace the 298 cars; instead, it is merely inserting them into the middle of trains so that, in the event of a crash, the will be buffered by newer (and hopefully stronger) cars.

According to the Federal Transit Administration, it will cost nearly $50 billion to bring rail lines in Washington and five other urban areas – New York, Chicago, Philadelphia, Boston, and San Francisco – up to a “state of good repair.” Current rates of spending are not even adequate to keep these systems in the miserable condition they are in today. As an official with New York’s Metropolitan Transportation Authority says with resignation, “there will never be enough money” to restore New York’s rail system to a state of good repair (see p. 15).

The problem, of course, is that rail transit does not come close to paying for itself out of transit fares. Fares cover about 60 percent of the cost of operating Washington’s Metrorail system, but none of the costs of building or maintaining it – and has one of the highest cost recovery ratios in the industry. Transit agencies have convinced most legislators that transit shouldn’t have to pay for itself – but that leaves them perennially short of funds and their patrons in danger of deadly accidents.

Legislators love to fund “ribbons, not brooms” – that is, new, highly visible projects such as the $5.2 billion silver line to Dulles Airport rather than the cost of maintaining the existing system.

So what’s the solution? How about federal regulation of transit agencies? That won’t solve any of the problems, but at least we’ll have a whole new layer of bureaucracy to blame the next time people are killed in a train crash.

The real solution is to stop building expensive rail transit lines that cities can’t afford to maintain. Transit should be privatized, which will lead transit companies to run vehicles – mostly buses – where people want to go, not where bureaucrats and politicians decide they ought to go.

Randal O’Toole Takes on Smart Growth in the NYT

The New York Times has a long profile today of Cato’s Randal O’Toole, scourge of urban planners.

But O’Toole doesn’t fit the portrait of a corporate advocate. On visits to Capitol Hill, he blends in as a middle-aged, middle-height man in a dark suit – but his beard gives him away, its shaggy twists seemingly fitting for a forest dweller. He wears a string tie that most Americans would only recognize on Colonel Sanders. His lapel doesn’t carry the standard-issue flag pin but a bronze bust of his dog, Chip. The Belgian tervuren won it in a dog show.

O’Toole routinely hikes and bikes dozens of miles, and he proudly announces that he has never driven a car to work. Far from living on a luxurious Virginia manor, he left his last Oregon town when it added a third stoplight.

Now, from his home computer in Camp Sherman, Ore., population 300, O’Toole rails against smart-growth policies as money sponges that never calm traffic, fill seats on trains, or help the environment.

The story ends with Randal on his way to a conference in Las Vegas, which I also attended. There in the 80-degree early morning heat, he biked 50 miles each morning, on a folding bicycle that he could fit into a suitcase – and still got back to the hotel in time to fix my Powerpoint before my speech. He’s a Renaissance man.

Washington Metro’s Problem: Too Much Money

The terrible Washington Metrorail crash that killed nine people has led to calls for more money for transit. Yet the real problem with Washington Metro, as with almost every other transit agency in this country, is that it has too much money – it just spends the money in the wrong places.

“More money” seems to be the solution to every transit issue. Is ridership down? Then transit agencies need more money to attract more riders. Is ridership up? Then agencies need more money because fares only cover a quarter of the costs.

Yet the truth is that urban transit is the most expensive form of transportation in the United States. Where the average auto user spends about 24 cents per passenger mile, transit costs more than 80 cents per passenger mile, three-fourths of which is subsidized by general taxpayers. Subsidies to auto driving average less than a penny per passenger mile. Where autos carry 85 percent of American passenger travel, transit carries about 1 percent.

When Congress began diverting highway user fees to transit in 1982, it gave transit agencies incentives to invest in high-cost transportation systems such as subways and light rail when lower-cost systems such as buses would often work just as well. Once they build the high-cost systems, the transit agencies never plan for the costs of reconstructing them, which is needed about every 30 years. The Washington Metro system, which was built as a “demonstration project” in the 1970s, is just a little ahead of the curve.

Now over 30 years old, Washington’s subways are beginning to break down. Before the recent accident, some of the symptoms were broken rails, smoke in the tunnels, and elevator and escalator outages.

Now we learn that the National Transportation Safety Board told Metro in 2006 to replace the cars that crashed on Monday because they were in danger of “telescoping,” which is what killed so many people in Monday’s accident. Also, the brakes were overdue for maintenance. Metro responded that it planned to eventually replace the obsolete cars, but didn’t have the money for it.

But it does have money to build an expensive new rail line to Tysons Corner and, eventually, Dulles Airport. Planners had originally recommended running bus-rapid transit along this route, but that wasn’t expensive enough so Metro decided to go with rails instead – at ten times the cost of the bus line.

The simple problem is that we have forgotten about the need to weigh revenues and costs. Instead, transit has become a favorite form of pork barrel and, for the slightly more idealistic, a method of social engineering, meaning a part of the Obama administration’s campaign to “coerce people out of their cars.”

That’s one more government program we can do without.