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chk999 (99.98)

Train From Victorville, Now Leaving On Track 1

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March 26, 2012 – Comments (16)

I hear a lot of stupid ideas, there is never any dearth of them. But this one is new and really stupid.

A high speed train from Victorville to Las Vegas.

For those of you that don't live in the LA metro area, Victorville is a small, dying town a long way from anywhere. It looks like it is about 140 driving miles from where I grew up in The Valley. The theory is that people from LA will drive to Victorville, park their cars their and then pay to take a 150 mph train to Las Vegas. The train is projected to cost 6.5 billion dollars to build. According to a Los Vegas website, there about 36 million visitors to Vegas each year with about 25%, or 9 million of them coming from Southern California. So this is about $72 for each visitor from Socal for ten years. 

I mean, what's the upside for the visitors? I'm already in the car and I've already driven for two or three hours. Why not keep on going? Why go spend money to make my tranport less flexible? It looks like Southwest flys from LA to Vegas for about $75 roundtrip. If I want to go fast, why not go at 580 miles an hour?

This is one of those projects that is a solution in search of a problem. The thinking seems to be that that Europe has trains, so they must be a good idea. I hope this one doesn't get funded, it will burn a lot of money and deliver nothing in return. 

16 Comments – Post Your Own

#1) On March 26, 2012 at 8:39 PM, portefeuille (99.77) wrote:

Europe has trains, so they must be a good idea.

At least Europe was right about the course of the S&P 500 index (see this post) ...



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And German manufacturing is doing just fine (see comment #5 here) ...



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A U.S. railroad order might keep it booming for another few month.

 

still a close race ...

 

 

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#2) On March 26, 2012 at 8:41 PM, portefeuille (99.77) wrote:

German manufacturing



enlarge

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#3) On March 26, 2012 at 9:04 PM, portefeuille (99.77) wrote:

month

months

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#4) On March 26, 2012 at 9:13 PM, rw3176 (< 20) wrote:

Victorville and the surrounding area has a population of 300,000 plus. Its grown a bit. They have been floating that idea around for years and it has always boiled down to funding, they cant put it together. On the other hand the amount of traffic going up and down I 15 is huge and it only keeps getting bigger. A bullet train would be a good alternative to trying to widen the freeway more than it already is. How much money does that cost? I agree that going out of the valley to victorville to get on a train is a little crazy. But then again how many hours do you spend going to Vegas from San Fernando and back? 

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#5) On March 27, 2012 at 9:13 AM, devoish (98.73) wrote:

Amazing. Whenever a Libertarian/Conservative speaks I wonder if there is more to the story. Lets ask Google what the benefit is to drivers.

DesertXpress allows passengers to bypass traffic, traveling at speeds of up to 150 mph non-stop to and from Las Vegas in approximately 80 minutes compared to an average highway drive time of approximately 4 hours. Driving on I-15 can take several more hours during peak times, and longer with any accidents or other delays. DesertXpress alleviates congestion on the I-15, providing a better, cleaner, safer, and faster alternative to driving, and an unparalleled transportation EXPERIENCE.

Because visitor trends and demographics clearly indicate the “Las Vegas EXPERIENCE” cannot start early enough, DesertXpress will be more than just a mode of travel. It will extend the Las Vegas EXPERIENCE through innovative concepts such as hotel check-in services, dinner and show reservations, and multiple entertainment options all on board the train.

DesertXpress will welcome America to our country’s first High Speed passenger EXPERIENCE. From the moment you arrive at the station the EXPERIENCE is designed to deliver convenience and Las Vegas EXCITEMENT. Every train is designed with state of the art amenities featuring all first and business class seating, and specially designed full-service entertainment club cars. Food, beverage, wifi, entertainment, concierge services, flexible club seating arrangements, and full handicap accessibility are just a few of the amenities available on every journey. Passengers will EXPERIENCE the most advanced high speed stations built anywhere in the world and designed to provide secure, yet barrier free arrivals and departures. Stations feature secure, covered parking, courtesy door to door baggage handling, a variety of dining and retail amenities; and complete intermodal transportation options.

And after getting through all these other hurdles, a Conservative/Libertarian stands in the way. Somebody send him a check to ease his financial principles.

With the environmental review process complete, all required federal right-of-way approvals in place, and having received the necessary licensing and approvals to construct and operate, DesertXpress will provide a foundation for high speed rail infrastructure in the Southwest Corridor. High speed rail represents the future of sustainable, green, high capacity and efficient transportation in the United States. Through private sector investment, DesertXpress meets America’s need for passenger rail infrastructure with a system that promises interoperability and regional connectivity.. 

The only issues here are whether or not the selected rail gauge is the most universal worldwide to allow the most flexibility into the future, whether or not there is significant environmental impacts to mitigate, and whether or not private property rights are impacted. Government has handled that as best as we allow it to.

Best wishes,

Steven 

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#6) On March 27, 2012 at 1:09 PM, ETFsRule (99.90) wrote:

"For those of you that don't live in the LA metro area, Victorville is a small, dying town a long way from anywhere."

It's a 90 minute drive from LA, and directly on the way to Vegas.

"It looks like Southwest flys from LA to Vegas for about $75 roundtrip."

The cheapest flights on SW are $90 roundtrip. Typical weekend flights are more like $250-$400 roundtrip. Plus you need to deal with delays, pay for airport parking, etc.

The train seems like it would be a pretty big improvement.

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#7) On March 27, 2012 at 1:18 PM, ricoy5 (26.95) wrote:

It's a 90 minute drive from LA, and directly on the way to Vegas.

But that's out of a 3.5 hour drive... why would I go halfway, to get out and pay to get on a train?  If the train goes from Union Station, or even from the Antelope Valley (15min North of SFV)  that makes sense. 

I personally think that in the LONG TERM, the train from LA to Vegas is a good idea.  One that only goes halfway... not much use.

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#8) On March 27, 2012 at 1:31 PM, EnigmaDude (96.57) wrote:

After living in Vegas for nearly 5 years I can say that I think the train will be very profitable and not nearly as stupid as you think.  There is a huge population base within a 60-90 minute drive from Victorville and its nothing for people in SoCal to drive for 90 minutes to get anywhere.   And if they can hop on a train where they can DRINK on the way to Vegas (and on the way home) they will do it in a heartbeat.

The weekend traffic on I-15 between Vegas and LA is horrendous.  A train would substantially reduce the traffic and hopefully the number of accidents due to tired, hungover drivers on their way home from a weekend in Vegas. (The accidents would just occur between Victorville and LA!)

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#9) On March 27, 2012 at 2:41 PM, ETFsRule (99.90) wrote:

"But that's out of a 3.5 hour drive... why would I go halfway, to get out and pay to get on a train?  If the train goes from Union Station, or even from the Antelope Valley (15min North of SFV)  that makes sense.  "

According to Google it is 4 hours, 21 minutes from LA to Vegas. So the train takes you 65% of the way there.

Also there is the fact that not everyone lives in LA. For instance: what if you live in San Bernardino... would it make sense to drive west, through all that traffic, into downtown LA to get on the train?

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#10) On March 27, 2012 at 3:23 PM, chk999 (99.98) wrote:

Port, those graphs have nothing to do with this railroad, please try to stay on topic.

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#11) On March 27, 2012 at 5:17 PM, chk999 (99.98) wrote:

Devoish, that looks like marketing hype to me. Surely you are too experienced to fall for it.

Let's look at the numbers a bit. The capital outlay will be 6.5B. We'll assume a hurdle rate of 4%, since you can get that as dividends on large secure companies. If this investment can't beat that, then the money should just be put into stock.

Now our minimum acceptable return from the investment and hurdle rate is 260 million. At an estimated $75 per round trip ticket, that is roughly 3.5 million round trips a year, assuming that operating the train is free. (Which is roughly a third of the traffic from Socal.) Assuming that it is spread out evenly over the year, this is roughly 10,000 rounds trips per day. Assuming a train car holds 50 people this is 200 train car loads a day each way. This is big, but not out of the realm of the possible. But remember that we assumed that the trains were free to run. Let's make that more realistic and assume that opex is half of the fare. (This is low, not high.) Then we need 2/3s of the traffic from Socal each year and we need 400 train car loads a day each way. 

At this point it is pretty obvious that the proposed train can't make even a low hurdle rate, much less have any actual economic benefit. It is just a boondoggle that only benefits the construction companies and rail manufacturers.

Suppose instead of this, the 6.5 billion was spent buying new Priuses. At 24k each that is  roughy 271,000 cars. Since we only need about 30,000 to move the people going to Vegas from Socal on average each day, it would be cheaper to buy 30,000 cars and subsidize the gasoline. 

If something doesn't make economic sense, it doesn't make sense. 

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#12) On March 27, 2012 at 8:24 PM, ETFsRule (99.90) wrote:

1. The cost of the line is 5B, not 6.5B.

2. In the future, the line will be extended to come closer to LA.

3. You haven't accounted for the rising cost of gasoline, or the cost of highway maintenance.

4. The line could last hundreds of years, and each rail car will probably last 40 years... much longer than the lifespan of a Prius.

5. The initial ticket price will be $50 each way.

6. The estimate is 500 million round trips in the first year, not 350 million.

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#13) On March 27, 2012 at 10:52 PM, devoish (98.73) wrote:

Yes. I know I know I gave you the website for the private company that is promoting the project. I felt it was the closest I could come to providing an even balance to your post.

Trains represent true wealth and value. Stock is paper money, not even backed by your government. Because you can sell somebody something in the hope that someone else will buy it later, does not make it more valuable.

In fact, I would suggest that spending 5bil on a paper stock instead of a real train subtracts from real wealth, rather than increasing it.

Best wishes,

Steven 

 

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#14) On March 28, 2012 at 1:07 PM, chk999 (99.98) wrote:

Trains represent true wealth and value. 

Only if the line goes somewhere that people want to move goods and people. Building a new train line between Binford and Wimbledon in North Dakota is a waste of money, there isn't that much stuff to move between them. I think the chances that the Victorville to Vegas run will even be able to cover its opex is very small. I think the chance that it covers its opex and provides reasonable return on the capital is zero. 

 

I doubt this is going to get actually funded, money is tight right now and this has little obvious benefit, but it is a political thing, so anything may happen. If it does get funded I predict is loses money.  

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#15) On March 28, 2012 at 1:24 PM, chk999 (99.98) wrote:

6. The estimate is 500 million round trips in the first year, not 350 million.

Total vistors to LV in 2011 was 39 million. Where are the extra 461 million going to come from? Assuming you are off by a factor of 10, that still means that 11 million people will go to LV that would not have otherwise. Are the 300k people living near Victorville going to go 33 times each? 

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#16) On March 28, 2012 at 6:46 PM, ETFsRule (99.90) wrote:

I think I saw your number of 260 million (dollars) and got the order of magnitude mixed up with your figure of 3.5 million passengers, from the same paragraph.

Anyway, what I meant is, 5 million roundtrips, not 3.5 million. Which I got from the desertexpress wikipedia page.

Clearly I have done some real hard-hitting research on this topic.

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