Case Study on the California High Speed Rail System

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A Case Study on the California High Speed Rail System (CAHSR) - Is It Feasible?

By

Hardeep Ramesh, MS ISE

Engineering Economics (ISE 460)

University of Southern California

December 3, 2010

Abstract:

California High Speed Rail (CHSR) system is a mega project planned by the California High Speed Rail Authority (CA HSRA), connecting the major metropolitan areas of California. The project finalized in mid 2000, is estimated to be one of the most expensive of its kind. It is in the lines of the high speed rail systems existing in France, Japan and China. The cost of the total project, which will cover around 800 miles, is estimated to be around $45 billion as of 2008. At this time of economic instability and no proper funding expected the big question is that - is the project economically feasible?

This case study evaluates the financial benefits of the project. It will show the various sources from which the project will be benefited. Since it is a public investment if the total benefits are more than the total costs it is said to be economically feasible. This case study uses the benefit-cost analysis as an evaluation to establish this. It uses only the benefits and costs which are quantifiable and those which are not duplicative.

Introduction:

California’s burgeoning population and increasingly congested highways and airports demanded new transportation solutions. Highway construction The California High Speed Railway Authority (CHSRA) was created in 1996 to build a high-speed train system connecting California’s major metropolitan areas. By 2000, the authority had developed investment-grade ridership forecasts, revenue, cost and benefit of the system. The high-speed train system will create more economic stimulus and cost less than half as much as the alternative - building more lanes, bridges and ramps…...

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