Thursday, January 06, 2011

More on the CA/PRChina High-Speed Rail

Below, we did the bare-bones.

There are a few interesting little notes.

California expects to spend about $43 billion over the next decade to build the backbone of an 800-mile high-speed system linking the state's major cities.

California voters approved a $9.9 billion bond measure in 2008 to help pay for high-speed rail, and rail officials say they expect the federal government to contribute $17 billion to $19 billion over the coming decade.

The state must find $14 billion to $16 billion from other sources, both foreign and domestic

So an outside investor (say PRC) will not really put up ALL the cash; in fact, they'll put up about one-third of the capital. Hmmmmm.

Some question whether this really will be "for profit", too.

China's state-supported companies have a leg up in that kind of competition, said Haley, who also is a research associate with the Economic Policy Institute, a liberal think tank in Washington, D.C., because they might be willing to sacrifice profit for prestige.

Oh. Well. Maybe it's not "for profit."

And the heavy-duty domestic push for HSR--where did that come from?

The Chinese are jockeying to establish themselves in anticipation of high-speed rail in America.

Last month, General Electric announced an agreement with CSR Corp. Ltd., China's largest manufacturer of high-speed trains, to invest $50 million in a joint venture to build trains in the United States

GE is one of the 5 largest rent-seekers in the US, of course.

Things are becoming much more clear.

HSR may or may not be "for profit," and in the case at hand, the major player, PRC, will only contribute 1/3rd of the capital in the first place. That sure helps the 'cost-of-capital' line on the old P&L/Sources & Uses line.

The background noise about 'The Utter Wonderfulness of Pixie Dust, HSR, and Unicorns' has a source: GE.



Dan said...

You know how many miles of high speed rail the $9.9 billion got?
Zero. None. Nada. If $9.9 billion won't get you 1 inch of high speed rail, why even bother with the rest?

Dad29 said...

I don't care, so long as it's PRChina's money.

neomom said...

There are days that I hanf my head in shame at the evil multinational.


neomom said...