As the state of Florida – and especially those who have skin in the game regarding the Orlando-Tampa high speed rail line, awaits Rick Scott’s analysis of that link and whether he wants to give state support to it, the libertarian Reason foundation on Thursday released a report that says that the route- expected to cost $2.7 billion overall- could cost “billions more” than estimated.
It’s important to note with the most recent federal stimulus grant, 90% of this line has already been paid for. Time magazine recently reported that the private contractor that ultimately wins the opportunity to build the route will probably pay for the difference, since it would give them a boost in becoming the contractor for the far more potentially lucrative Orlando-Miami route.
However, the authors of the Reason report, Wendell Cox and Robert Poole, write that Florida taxpayers face two potentially significant financial risks going forward on the Tampa-Orlando line:
1. Capital Cost Escalation: If construction cost projections prove overly optimistic, costs
could increase substantially from the current estimates. The state of Florida would be
responsible for virtually all of any such increase. This report estimates that the cost to
Florida taxpayers could be $3 billion more than currently projected.
2. Operating Subsidy Liability: If ridership and revenue projections prove overly optimistic, it
could become necessary for the state to provide an annual operating subsidy for the
service. A state operating subsidy could also be necessitated by operating costs that are
greater than projected. This risk could easily run into the hundreds of millions of dollars
per year.
This article appears in Jan 6-12, 2011.
