TRAC Rail News: Ridership estimates flawed and intentionally misleading

The Train Riders Association of California (TRAC) September newsletter includes a column arguing that the the Rail Authority used false and misleading ridership estimates in its 2009 Business Plan. See: Richard Tolmach, How HSRA Ridership Soared Out of Proportion: Research by volunteer Peninsula group found HSRA gamed ridership data to benefit Pacheco, Rail News, pages 4-5, September 2010. It is worth reading.

Here are some nuggets I extracted from the column:

“Late last year, Californians Advocating for Responsible Rail Design (CARRD), a Peninsula group with econometrics expertise, alerted CRF about problems in the sampling methods used in the surveys. These included using current California rail passengers for a disproportionate percentage of its sample in surveys to determine attitudes toward using high speed rail, which introduced obvious bias into the model.”

The CARRD web site has more detail, also addressed further below. Back to the TRAC newsletter:

“Constants specific to air, high-speed rail and conventional rail are now very large relative to other parameters. … Models are supposed to work without big modal constants….

“Transportation modeling consultant, Norm Marshall of Smart Mobility based in Norwich, Vermont made the following finding: “I conclude that the final coefficients and constants introduce unacceptable biases into the model, and that the model as presented in the January 29, 2010 memo is invalid for forecasting future HSR ridership and revenue.”

The University of California at Berkeley’s nationally-recognized Institute for Transportation Studies subsequently made the finding that the model was “unreliable for policy analysis….”

[One conclusion in the article is that ] Claims that the HSRA project will not require public subsidy are no longer credible.”

It is the last point that should get the most traction. California expects it will need private financing to pay for the high speed rail project. The Rail Authority estimates the first section between San Francisco and Anaheim will cost about $45 billion while other estimates are closer to $75 billion. See: It will cost how much?

If the ridership forecasts are too rosy, there is a very high possibility that the high speed train system will become a three headed beast. California will be left with three main options: 1) suck it up and subsidize high speed rail operations with money from the general fund, which currently has a $20 billion deficit ; 2) raise taxes, likely gas taxes and airport gate fees, specifically to subsidize high speed rail operations; or 3) default on loans used to build the system. In the third scenario, the high speed rail system would then likely be owned by a foreign country through one of its sovereign wealth funds. The Japanese government has offered to lend California money necessary to build the system, contingent on Japanese companies being chosen to build the trains and operate the system. China and Germany are expected to make similar offers.

For its part, the CARRD web site limits itself to questioning the methodology and results of the ridership forecasts used by the Rail Authority. It states:

“Serious questions have been raised about the methodology and results of this study [ridership forecast].

  • Sample methods were highly biased towards those who are most likely to take a High Speed Rail train. 96% of the Californians surveyed to assess their interest in taking High Speed Rail for commuting were current train riders. [page 2-3, table 2-1 PDF]
  • Documentation for the study is voluminous, yet confusing and missing key information required to assess the validity of the results.
  • Drastic changes were made to the model used to produce forecasts, yet these changes were not included in the public documentation, the final project report or information provided to the peer review committee. According to the ridership consultant, this was a conscious decision on the part of MTC. [Transmittal Letter from Ridership Consultant]
  • The final model reflects the data quality issues and fails industry standard primary validation checks. Producing forecasts from invalid models is problematic.
  • It is concerning that the real model was never made public nor apparently distributed to the peer review panel, particularly as there were significant and obvious issues with model’s validity.”

Bottom line: The Rail Authority is relying on flawed ridership data to inform its business plan. In all likelihood, California taxpayers may be required to subsidize operations of the high speed rail system, much like we already do bus and light rail operations. That, or California defaults on its loan obligations and surrenders the high speed rail system to its foreign lenders.

In addition, these flaws in the ridership study may be used by parties who challenge the Rail Authority’s decisions to route its trains through certain communities and not others. For example, the failure to study Orange County ridership levels provides Alhambra (and other cities in the path of high speed trains to the Inland Empire) an opportunity to challenge the Rail Authority’s compliance with environmental protection statutes.

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