Here’s a perfect example of something that’s just too expensive to implement.
If it’s $42B for the first 520 miles of an 800 mile system, let’s go ahead and double it to $85B. We know the final price would be higher. And that’s just to build the thing.
Now to borrowing costs. Let’s pretend that there are people or institutions who would buy 30-year CA bonds in the first place. But we can’t pretend as well that they’ll go along with a couple of percent interest. Let’s say the bonds pay eight percent.
Just doing the simple math of $85B at 8% instead of working int out with a loan calculation program gives $6.8B per year in interest needing to be paid. Divide that by the article’s ridership figure of 60M people per year to get a fare of $113 per person as an absolute minimum just to pay the bond interest for what they built.
Oops, excuse me, according to the article, a fare of $105 drops ridership by 1/3, from 60M to 40M, moving that bond-interest-per-ride figure from $113 to $170, which by the same economic reasoning would cut ridership some more, etc. We’re looking at $200 per ticket to break even on interest payments alone.
I leave it to others more familiar with the day to day costs of running a business to offer suggestions as to how much more needs to be added to that $113 fare for the expenses of running the railroad itself — fuel, salaries, advertisements, etc.
NFW can this thing be anything but a complete money pit.
BTW that would be a one-way fare between SF and LA, using the article's description of ridership numbers.