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> Moreover, all lines [of the TGV] are very profitable excluding the cost of fixed capital. Why say this? It's a big capital-intensive project. A nuclear power

by lainga 5y ago

> Moreover, all lines [of the TGV] are very profitable excluding the cost of fixed capital. Why say this? It's a big capital-intensive project. A nuclear power plant is profitable if you exclude the cost of building the reactor, but that's the problem - you can't exclude it, and breakeven time is a big part of cost-benefit analysis. What was breakeven time for the TGV? That would convince me more.

timerol 5y ago
The next paragraph explains the return on capital for the various projects. This varies per-project and whether you include societal benefit or not. From a strictly financial return on capital perspective, the figures range from 15% to 4%, with the new Bordeaux-Toulouse likely to be under that.
swiley 5y ago
The US already has tons of rail, it's just only used for freight (often coal.) Maybe that's what they meant?
- moshmosh 5y ago
  I'd never made the connection between the gradual shuttering of coal plants and freight rail, but wow, that is a big deal. A quick search finds that coal is about 30% of rail tonnage in the US. A bunch more (not looking it up, but if you've ever seen a train, it's clearly also a lot of what they haul) is other fossil fuels. I wonder how they're going to cope with (let's give a very lowball estimate) 40% of their tonnage tapering off over the next few decades. Looks like coal shipped by rail is already way down from its peak, and dropping fast. Looks like they charge a premium for intermodal shipping—may have to cut prices on that to keep volume up.
  - bombcar 5y ago
    Coal and other bulk materials are “easy” - one customer on each end. Intermodal is more complicated but at the right price it’ll be competitive with trucking.
flukus 5y ago
> Why say this? Because as long as their aren't ongoing operational costs it's enticing to governments to build, they don't care if it loses money overall because they aren't profit driven and have non-monetary goals.

by lainga 5y ago

timerol 5y ago

The next paragraph explains the return on capital for the various projects. This varies per-project and whether you include societal benefit or not. From a strictly financial return on capital perspective, the figures range from 15% to 4%, with the new Bordeaux-Toulouse likely to be under that.

swiley 5y ago

The US already has tons of rail, it's just only used for freight (often coal.) Maybe that's what they meant?

moshmosh 5y ago
I'd never made the connection between the gradual shuttering of coal plants and freight rail, but wow, that is a big deal. A quick search finds that coal is about 30% of rail tonnage in the US. A bunch more (not looking it up, but if you've ever seen a train, it's clearly also a lot of what they haul) is other fossil fuels. I wonder how they're going to cope with (let's give a very lowball estimate) 40% of their tonnage tapering off over the next few decades. Looks like coal shipped by rail is already way down from its peak, and dropping fast. Looks like they charge a premium for intermodal shipping—may have to cut prices on that to keep volume up.
- bombcar 5y ago
  Coal and other bulk materials are “easy” - one customer on each end. Intermodal is more complicated but at the right price it’ll be competitive with trucking.

flukus 5y ago

> Why say this? Because as long as their aren't ongoing operational costs it's enticing to governments to build, they don't care if it loses money overall because they aren't profit driven and have non-monetary goals.