Why ‘No Reason to Expect’ New Orleans‐​Baton Rouge Train Could Work

Politicians may thrill to spending hundreds of millions of taxpayer dollars. But neither Louisiana nor her taxpayers will benefit from this boondoggle.
January 31, 2016 • Commentary
This article appeared in The Advocate on January 31, 2016.

Gov. John Bel Edwards wants to run passenger trains between New Orleans and Baton Rouge. I love passenger trains, but after reviewing this project, I’ve reluctantly concluded that it is likely to cost much more than anyone thinks and will not produce any of the benefits claimed for it.

Based on a feasibility study prepared for this project, trains between New Orleans and Baton Rouge will take less than 2 percent of the cars off Interstate 10 and require subsidies of at least $44 per ticket. This subsidy is so great that taxpayers could just as easily buy a brand‐​new Toyota Prius every year for anyone who rode the train round trip every weekday.

The study concluded it would take 10 years and cost nearly $450 million to get the tracks in shape to run trains at a top speed of 110‐​miles per hour (but a much lower average speed). It also found passenger fares would only cover about a third of operating costs, so taxpayers would have to spend an additional $16 million a year subsidizing operations.

Studies like these always are optimistic about costs and ridership. Government‐​subsidized rail projects have ended up costing an average of 50 percent more than originally projected, carrying an average of 30 percent fewer passengers than projected. But, for the sake of argument, let’s use the study’s numbers.

The study predicts that when completed, the eight round trips per weekday and four on weekends will attract 886,400 passengers per year. That works out to 1,420 people (or 710 round trips) per weekday.

By comparison, the Louisiana Department of Transportation records an average of 50,000 vehicles per day on I-10 between Baton Rouge and New Orleans, numbers that are likely to grow significantly in the next few years. Assuming the people taking the train would have otherwise driven in cars with an average of 1.4 people per car, this means the trains will carry less than 2 percent of the traffic between the two cities.

The plan calls for fares of $13 per trip, but these will not come close to covering costs. Rail infrastructure tends to have a 30‐​year lifespan, and amortizing the project’s capital costs at 3 percent (a typical rate for federal transportation loans) results in a $23 million annualized cost.

Add this to the $16 million operating cost and you get a subsidy of $44 per ticket. This means the annual subsidy for someone who took the train round trip every weekday between New Orleans and Baton Rouge would be nearly $23,000 per year, or roughly the price of a Toyota Prius.

Can anyone really believe that trains moving less than 2 percent of passenger travel will significantly relieve congestion, save energy or otherwise generate enough benefits to justify this high cost? The only real beneficiaries of the project will be the companies that get the contracts to build it.

Project advocates claim it will promote economic development. But transportation programs such as the Interstate Highway System stimulated growth only by producing large amounts of new travel. A train carrying a few hundred people a day who would have made the trip by car anyway will not generate any new development.

In fact, there’s no reason to expect the project could work. The Federal Railroad Administration says higher‐​speed trains have an advantage over driving or flying only in corridors of 200 to 600 miles. In 80‐​mile corridors such as the one between New Orleans and the capital city, trains simply cannot compete against the convenience of taking your car where you want to go when you want to go there. Add to this the fact that self‐​driving cars are likely to become a reality before this project is completed, and the market for such trains will be insignificant.

Politicians may thrill to spending hundreds of millions of taxpayer dollars. But neither Louisiana nor her taxpayers will benefit from this boondoggle.

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