A Cautionary Tale - The Railroaded Not Taken

This is the waste, corruption and deadly planning the Democrats and the ruinous administration has set its cap to follow. m/r

The Railroaded Not Taken | The Antiplanner
This entry was posted in Transportation and tagged china, high-speed rail, Minnesota on March 24, 2013.

China’s high-speed rail fail.

Reeling from a scandal in which ministry employees allegedly embezzled at least $28.5 million, China has dismantled the Ministry of Railways and replaced it with a state-owned company. Managers of the new China Railway Co. had hoped that they would be given the Ministry’s assets but not its debt. However, the government says they will have to deal with its debt as well–all $428 billion of it (2.66 trillion yuan).

Restructuring will not save China from that debt, which either taxpayers or creditors will have to cover–it certainly won’t be repaid out of rail fares. The debt is roughly $73 million for each of the 5,840 miles of high-speed rail lines built by the Ministry. This suggests that China got off cheap considering that California is planning to spend close to $300 million per mile for its high-speed rail, while Amtrak wants to spend $345 million per mile ($151 billion divided by 438 miles) building a new Boston-to-Washington high-speed rail line.

Still, that $428 billion debt could prove crippling for China’s growing economy. It happened in Japan, which in the late 1980s was much more prosperous than China is today. But an extensive high-speed rail construction program had left the state-owned Japanese National Railways in debt to the tune of 28 trillion yen–about $300 billion in today’s money.

Japan responded by privatizing the rail lines but the government took over most of the debt. ...

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