Although the future of American high-speed rail is still unclear, Japan Central Railway already has its eye on potential contracts. Recently, the company hosted a demonstration of its fastest bullet trains to rebut claims by European manufacturers that the company's locomotives can't top 170 mph. In the test, the railway's shinkansen trains exceeded 200 mph.
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The company's proposal for upgrading America's rail system is almost as slick as its locomotives: While most rail contracts use multiple vendors, Japan Central hopes to convince American policymakers to give it a consolidated package for the entire operation. If successful, the company would provide everything, from cars to signals, rails to maintenance. All told, the contract could total $600 billion or more, and would massively stimulate Japan's economy.
America Companies Could Still Play a Role
There are good and bad sides to this proposal. James P. RePass, CEO of the National Corridors Initiative, noted that putting the entire U.S. high-speed rail system in the hands of a single vendor would guarantee that all the various portions of the system would work together seamlessly. On the other hand, he warned that giving a single company sole responsibility for a system would place us "at the complete mercy of that vendor." If Japan Central chose to price gouge, failed to deliver cars, or otherwise fell down on the job, the high-speed rail system could collapse.
Beyond that, RePass noted that the use of multiple vendors can increase competition in the marketplace, helping to keep costs down. With several companies -- including Siemens, Alstom, and Bombardier -- available to build high-speed train systems, it might not be bad idea to spread the wealth. For that matter, it's worth asking why American companies couldn't construct portions of a domestic system. After all, as RePass notes, 1950s-era US trains were precursors of the shinkansen bullet trains, and "the idea that America can't relearn how to build trains is retrograde."
According to J. Bruce Richardson, president of the United Rail Passenger Alliance, it may not matter who gets the bid to build America's high-speed trains. In a recent interview, he suggested that, if Japan Central won the bid, Congress would probably pass laws requiring that a certain portion of the manufacturing had to be done domestically. In his estimation, Japan would "follow the automotive industry model" by setting up American factories to build the trains. He noted that this was the case with the Acela, America's sole high-speed rail line: Bombardier, a Canadian company, constructed many of the parts in Canada, but assembled the cars in Vermont.
On another note, Richardson points out that Japan's bullet train system is among the few profitable rail systems in the world.
Proposed Federal Funding Still Just a Drop in the Bucket
The most interesting thing about the Japanese demonstration may be the fact that Japan Central seems convinced that an American high-speed rail system will actually come to pass. This confidence is somewhat surprising: Although American policymakers have been discussing high-speed rail for decades, the nation's initiatives so far have been less than stellar: The Acela, which runs between Washington, D.C., and Boston, has a top speed of 160 mph, but runs below 90 mph for much of its length.
While there are 10 corridors clamoring for a high-speed rail system, the amount of funding that is currently in play would be barely enough to break ground on one. President Obama's much-touted high-speed rail initiative consists of an initial investment of $8 billion, followed by $1 billion per year for the next five years, yielding a total of $13 billion. By comparison, a high-speed rail line between Los Angeles and San Francisco -- just one section of one of the corridors -- would cost an estimated $42.6 billion.
Nonetheless, Japan Central and its various competitors in Germany and France are apparently convinced that there is money to be made on high-speed rail in the U.S., or at least that there will be in the relatively near future. The question is, what do they know that the rest of us don't?
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