Funding the High-Speed Rail: A Case Study of the California Project

Abstract

High-speed rail (HSR) projects are considered high-stake investments– both in construction, operation, and maintenance. Thus, HSR requires financing from various sources - public, private or a mix of both, as the case maybe. Traditional funding for HSR has usually been the public funds through various bonds and taxes. However, public funds are not easy to come by and are usually subjected to strict audits and reviews. Therefore, alternative funding sources are always sought after, especially those that are sustainable. A multiobjective optimization problem is proposed in this paper encompassing revenue generation, accessibility maximization and workforce-centric access measure (WAM) consideration for financing HSR development costs and justifying its purpose. The procedure identifies key HSR stations that could be developed and improved to positively increase revenue collected through taxes on surrounding properties that appreciated due to the HSR, or the appreciation that either occurred through accessibility increase or WAM considerations from the HSR. Such key stations that score high in one or more of these considerations could be considered for further development by policymakers and planners. Based on the multiobjective optimization problem proposed in this paper, and with the California HSR as an example, the three proposed stations of San Francisco Transbay Terminal, University City and Downtown Merced are recommended to be developed and improved to attract economic growth with the HSR line. The findings could help authorities focus on these stations (and similar others) for a sustainable means of at least partially funding California’s HSR project.