NCPA - National Center for Policy Analysis

High-Speed Rail Lines Rarely Pay their Way

September 13, 2011

High-speed rail rarely delivers the widespread economic benefits its boosters predict, but high-speed talk is everywhere at the moment, says The Economist.

  • Six countries have put large sums into "bullet" trains: Japan, France, Germany, Spain, and, more recently, Italy and China.
  • Australia, Portugal and Indonesia are all considering new lines.
  • And the British government is pondering plans for a £32 billion ($52 billion) link from London to the north of England.
  • Ventures elsewhere have stumbled: China suspended new projects after a fatal collision of two high-speed trains in July; Brazil delayed plans for a rapid Rio de Janeiro-São Paulo link, after lack of interest from construction firms.
  • Yet governments remain susceptible to the idea that such projects can help to diminish regional inequalities and promote growth.

In fact, in most developed economies high-speed railways fail to bridge regional divides and sometimes exacerbate them.  Even if some cities benefit, other places beyond the rail network may suffer: speed is attained partly at the cost of stops, so areas well served by existing services may find new lines bypass them.  The advantages, meanwhile, mostly accrue to business travelers.  In China, ticket prices are beyond the reach of most people, so new trains yawn with empty seats.  Yet because high-speed lines require huge investments, usually by governments, ordinary taxpayers end up paying.  So instead of redistributing wealth and opportunities, rich regions and individuals benefit at the expense of poorer ones.

Source: "The Great Train Robbery," The Economist, September 3, 2011.

For text:


Browse more articles on Tax and Spending Issues