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usually these projects are pandering to donors and expected donors. There have been numerous reports that many high speed rail lines only serve to allow the ver

usually these projects are pandering to donors and expected donors. There have been numerous reports that many high speed rail lines only serve to allow the very well off to live where they want with access to other places they need. The build out costs are not the same as funding day to day operations. Usually subsidizing implies the fare is lowered because of government spending.

joosters 13y ago
Like any big project, I'm sure some of the money is going to well-connected people, and the route is partially influenced by politics. That's not the subsidy bit. The real subsidy is that once the line is complete, the rail franchise will be sold off, allowing a company to run a rail service on the line. This is in effect a subsidy, since it's letting a company run a rail service without having to foot the bill for the construction. Sure, it's a form of rent, but the risks associated with the line construction have been swallowed by government money. Plus, the UK government(s) have an absymal record for selling franchises below their 'true cost' (see the original rail privitisations, where franchises were bought and then sold-on shortly later at vastly inflated prices). Only an eternal optimist could happily assume they'll get it right this time! Finally, consider that these big rail projects are never initiated by private business. Few enterprises willingly stump up the cash to construct a big railway line just so it can run trains on it later. They only do so when government invests the cash. This surely implies that the government-backed schemes must be of benefit to the railway companies => there's the subsidy.
- tonyedgecombe 13y ago
  Actually I think all the major lines were initiated by private businesses, during the steam era.
  - lmm 13y ago
    Most of them were, but HS1 is major (and it's a new line, not a conversion of an existing one) and government-initiated.

joosters 13y ago

Like any big project, I'm sure some of the money is going to well-connected people, and the route is partially influenced by politics. That's not the subsidy bit. The real subsidy is that once the line is complete, the rail franchise will be sold off, allowing a company to run a rail service on the line. This is in effect a subsidy, since it's letting a company run a rail service without having to foot the bill for the construction. Sure, it's a form of rent, but the risks associated with the line construction have been swallowed by government money. Plus, the UK government(s) have an absymal record for selling franchises below their 'true cost' (see the original rail privitisations, where franchises were bought and then sold-on shortly later at vastly inflated prices). Only an eternal optimist could happily assume they'll get it right this time! Finally, consider that these big rail projects are never initiated by private business. Few enterprises willingly stump up the cash to construct a big railway line just so it can run trains on it later. They only do so when government invests the cash. This surely implies that the government-backed schemes must be of benefit to the railway companies => there's the subsidy.

tonyedgecombe 13y ago
Actually I think all the major lines were initiated by private businesses, during the steam era.
- lmm 13y ago
  Most of them were, but HS1 is major (and it's a new line, not a conversion of an existing one) and government-initiated.