How China's Railways Are Leading to High-Speed Debt

Ozy ^ | AUG 19 2018 | Tom Mitchell and Xinning Liu

[N. Theknow]

Who most happy?

Wirrie Gleen?

[Yossarian]

In the USA trains are for COAL, not people.

Amen.

Just remember, when you're dealing with vannrox, to check out his posting history. He's gone full ChiCom. He must love the forced abortions, the social-credit scoring system, the political prisoner organ harvesting, etc., etc.

[VanShuyten]

A subway ride in the USSR cost me only 5 kopeks.

[Spktyr]

I would point out that HSR might make sense in limited, high traffic corridors in the US - and not government subsidized or controlled either. If a private company wants to try, should they be penalized?

Also, I would point out that the Amtrak Acela semi-high speed rail is the only part of Amtrak’s entire network that has good ridership and even begins to break even.

[norwaypinesavage]

“China Railway’s debt is government-backed,” says Li. “It won’t default.”

Riiiiiiight. Railways everywhere have the same problems as US railways: The value of the assets vastly exceeds the income generated. The Return On Net Assets (RONA) is miniscule. A very large chunk of the assets is land. As the country prospers, the asset value increases (the price of land goes up), and the revenue doesn't necessarily follow. High speed rail is even worse. The cost of the ultra smooth rail, aerodynamic equipment, high power locomotives, and fast ingress/egress gates is also much higher. An inherently corrupt communist governmental system exacerbates the problem even more. I wouldn't count on it lasting forever.

[rlmorel]

I was going to post a sarcastic reply with eye rolls and such saying that I had never thought of those things, but then I thought there is entirely too much of that going on these days.

A better way to respond is to say of course, I agree with you, which I do.

A better way to state it is, in a totalitarian state, which is a far easier way to control the movements of people: stopping them at the point of a train ticket purchase or denying them entry to a train and alerting police personnel (or shutting down the trains altogether) or sending police out to follow and intercept people driving cars?

Why make it easier for them to treat us like sheep being herded into pens?

[rlmorel]

Yes. They have gone quite a ways into pulling a velvet glove over an iron fist, but as you and I clearly see (but many Americans, including some here on FR don’t)...

An iron fist in a velvet glove is still an iron fist.

[oldtech]

Interesting to see how this comes down when all this debt starts backing up on them like a dirty sewer. I can’t envision how they expect to operate this way for any extended period.

[who_would_fardels_bear]

A while ago there was a report that only one or two train systems in the entire world, high speed or not, actually turn a profit. I believe those are in Japan where they pack the passengers in like sardines.

[Svartalfiar]

Key part here:

...dependent on unsustainable government subsidies with many lines incapable of repaying the interest on their debt, let alone principal.

[Zhang Fei]

[A while ago there was a report that only one or two train systems in the entire world, high speed or not, actually turn a profit. I believe those are in Japan where they pack the passengers in like sardines. ]

---

Back when NYC subways were privately owned, that’s what they did. Then the city made them freeze fares, and bought them for a song when the inevitable insolvency looked. Now a service that used to be cheap, and cost the taxpayer nothing, is now subsidized to the tune of ~$10b a year, or about 2/3 of what it costs to keep the trains running. In other words, fares only cover 1/3 of cap ex + running costs. And this is in a city with the best environment for mass transit, with population densities 10x or more that of other major American cities in Brooklyn, Queens and Manhattan, and significant costs imposed on car owners in the form of paid parking costs and high city gas taxes.

[Mr. Lucky]

Not to be argumentative, but US railroads tend to be reliably profitable and have no trouble raising capital in the open market.

Union Pacific, for instance, had net income of $6 Billion last year.

[elbook]

high speed rail systems are far more expensive to maintain - than ordinary trains which still must be subsidized by the taxpayers.

This started happening/happened in the US in the 50s and thats why there is virtually no long distance passenger train use in the US (note- short distance commuter trains likewise are not profitable and have to be subsidized)

[jonascord]

Compare passenger per ton/mile and freight per ton/mile.

Freight pays the bills. And bulk freight, at that. Coal, lumber, oil, grains, plastic pellets, chemicals. Bulk gondolas. and tank cars.