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China's Yearly Budget For High-Speed Rail: $100 Billion

An anonymous reader writes "For all of those wondering about China's massive high speed rail network, it costs some serious cash. Running high speed lines across the nation is expensive — to the tune of $100 billion dollars a year. This covers the cost to maintain the network, build it, and pay all of the staff. The problem is, corruption has reared its ugly head. The network itself has had its share of problems, with people dying as a result. There is also the problem that many of Chinese poor make so little money they can't afford to ride it. The sad fact is that so much money is being spent, no one can even keep count."

21 of 230 comments (clear)

  1. WTF, submitter and green-lighter?! by Anonymous Coward · · Score: 5, Interesting

    Where's the scandal?!

    $100B divided by 2 million employees equals $50,000 per employee -- high for China, maybe, but matches the MEDIAN male income in the U.S.

    Given that the $100B actually includes much more than employee salary, like, uh, the material costs of BUILDING the railroad, and trains, and stations, etc, the figure seems rather like a bargain.

    "The problem is, corruption has reared its ugly head." : When does that not happen to some extent?

    "The network itself has had its share of problems, with people dying as a result." : This happens everywhere.

    "There is also the problem that many of Chinese poor make so little money they can't afford to ride it." : Maybe China is planning for the future, maybe?! You know, like when their middle class is comparable in size to that in other developed nations?

    "The sad fact is that so much money is being spent, no one can even keep count." : Then what is the "$100 Billion" figure?! Sheesh! Make up your mind!

    1. Re:WTF, submitter and green-lighter?! by Anonymous Coward · · Score: 5, Informative

      This New Yorker article might add to the context of corruption and where the money is going.

    2. Re:WTF, submitter and green-lighter?! by curunir · · Score: 5, Informative

      Where's the scandal?!

      $100B divided by 2 million employees equals $50,000 per employee -- high for China, maybe, but matches the MEDIAN male income in the U.S.

      You should read the linked article (not the link from the story, but one linked from it.) The scale of the corruption seems to be reaching epidemic proportions. The story lists the yearly salary of the #2 official in the railway ministry as being $19k/yr and yet had a fortune over $100m. Another associate of the head of the railway ministry built a ~$700m business through bribes and kickbacks. The workers are, no doubt, being paid less than $1k/yr. Redo your calculations based on that and you'll find just how much money has gone missing. It's very common for officials that have been caught to have been found with tens of millions of dollars worth of bribes. One of the biggest impediments for these officials isn't actually accepting the bribes but, instead, finding a place to store all the cash since the largest bill in circulation is a 100 yuan note worth ~$16. It's gotten so bad that bribes are now commonly made in gift cards since they're able to store value more densely.

      Read the story...it's really shocking.

      --
      "Don't blame me, I voted for Kodos!"
    3. Re:WTF, submitter and green-lighter?! by TubeSteak · · Score: 4, Informative

      "The network itself has had its share of problems, with people dying as a result." : This happens everywhere.

      Not like this it doesn't: https://en.wikipedia.org/wiki/Wenzhou_train_collision
      Here's a picture of the accident scene: http://i.imgur.com/YJAAA.jpg

      There was a string of preventable events, from the lowliest track worker to the people that designed the control systems, which led up to the accident.
      The Chinese Government tried to throw a blanket over the whole event, but the public outrage forced a review of the events.
      /The USA actually has a lot of rail accidents, with injuries, but almost no one dies.

      --
      [Fuck Beta]
      o0t!
    4. Re:WTF, submitter and green-lighter?! by phantomfive · · Score: 3, Insightful

      Where's the scandal?! $100B divided by 2 million employees equals $50,000 per employee -- high for China, maybe, but matches the MEDIAN male income in the U.S.

      Because that money doesn't go to the workers.

      --
      "First they came for the slanderers and i said nothing."
    5. Re:WTF, submitter and green-lighter?! by tsotha · · Score: 3, Insightful

      They are building out a high speed rail network that, while capable of ferrying passengers, is not its primary purpose. China has a massive industrial infrastructure and a lot of land to cover between its mountainous and resource-rich areas and the coast, where ships pick up and transport the goods.

      You wouldn't build a high-speed network if efficient movement of freight was your primary goal. HSR is much more expensive to build and maintain, a network built primarily to move people will go different places than one built to move things like coal and petrochemicals. The US probably has the most efficient freight network in the world in terms of $/mile/ton, but if you live anywhere outside the Northeast you may as well not bother even looking at intercity rail. Unless you're a lump of coal.

      In the case of China the network links major population centers. They even blew a large fortune on a maglev line that was supposed to go from Shanghai to Beijing , though it doesn't go maglev all the way for cost reasons. They also built a line to Tibet for strategic reasons. I don't know if that's high speed, though - looking at the web site it seems to average about 100 km/hr.

    6. Re:WTF, submitter and green-lighter?! by TheRaven64 · · Score: 3, Funny

      BOSS RAIL
      The disaster that exposed the underside of the boom.
      BY EVAN OSNOS
      OCTOBER 22, 2012

      Wow, an article that was posted two days in the future! Slashdot has really come a long way from posting old news...

      --
      I am TheRaven on Soylent News
    7. Re:WTF, submitter and green-lighter?! by TheRaven64 · · Score: 3, Interesting

      Is it? That's $100,000/rider, which sounds like a lot, but that's also including a lot of capital investment. In the UK, commuter rail tickets can cost over £5000 ($8000), so that's about 8% of the cost, but that cost only has to cover maintenance, not construction. For an infrastructure project on this scale, break even is typically meant to be somewhere in the 10-25 year mark. If they're still constructing infrastructure, then that's quite plausible.

      For comparison, the channel tunnel cost £9.5bn to build, and finished in 1994. Eurostar made its first operating profit in 2007 and the only reason it is nominally in the black is that they effectively sold most of the company to the banks that loaned them the money. They're making something like £150m/year in operating profit (most of which goes towards financing their debt), and so it will take them a very long time to make back the initial investment. The banks are making around a 2.5-3% annual return on investment in terms of interest on the debt, but they also own the majority of a profitable company with a very valuable asset, so they have a very good long-term investment.

      More importantly, a large piece of infrastructure was built and is getting regular use. Last year, around 17 million people used the channel tunnel (plus a load of freight), and that has a huge economic impact on Britain and France. It's now feasible for someone who works in London to go to Paris or Brussels for a meeting and be back the same day, for example. But if you'd done the same sums that you just did for its 1994 then you'd have seen a £9.5bn investment for 0.3 million passengers. That's £31,500/passenger, or around $50,000/passenger. In other words, about half the per-passenger cost of the Chinese high speed rail network. Clearly a waste of money...

      --
      I am TheRaven on Soylent News
  2. Don't bother reading the actual article. Its fake by tloh · · Score: 3, Insightful

    I don't know what kind of reputation "THE DIPLOMAT" has in the field of journalism, but this article is just pure crap. Despite the title, the article has almost nothing to do with high speed rail in China. Using recent problems that have come to light with the management of China's rail system, the article is actually just a mostly unflattering portrayal of the fiscal situation in China's military. A more accurate title for the article should be something like "Corruption plagues the PLA".

    An excerpt for you:

    This breakdown suggests that 100% of the PLA’s budget was diverted towards real requirements. But the parable of the railways strongly suggests that this cannot be right. How much of the PLA’s budget has been spent on retirement homes for generals in Florida, or funneled into private business ventures, or used to buy promotions? How much has been wasted on bogus capabilities that the military doesn’t really need, but whose purchase helped to line influential pockets? And how much has been spent on genuine capabilities, but capabilities whose price tag was hugely inflated so that highly-placed officials could skim off the surplus?

    There is almost nothing of value on high speed rail that has not been already revealed from other media sources.

    --
    Stay sentient. Don't drink bad milk.
  3. Has the author ever been to China? by __aaacoe2998 · · Score: 3, Insightful

    Well, obviously, the extremely poor can't afford to ride the train. American or European poor couldn't afford to ride the train either. I just got back. The cost of a ticket from Fuzhou to Xiamen (around 2 hours at about 200 km/h) was 122 RMB. That converts to just over $20 US dollars. Extremely inexpensive, in my opinion. There are many slower trains that are much cheaper. Many migrant workers travel by train to the cities, and back home during the holidays.

  4. Concern troll submitter is concerned by Anonymous Coward · · Score: 4, Insightful

    What is it with Americans' hatred of passenger rail? It works, it's safe, cost-effective, and requires less government subsidy than highways or airport travel. It's also a hell of a lot more pleasant than flying.

    1. Re:Concern troll submitter is concerned by Miamicanes · · Score: 4, Insightful

      The problem isn't that the US is more spread out... the problem is that Europe actually HAS open space to cheaply build new rail corridors in between cities, whereas in many parts of the eastern US, you can drive a hundred miles or more without seeing anything more rural than an occasional vacant lot next to the interstate. Nebraska and Kansas might have cities surrounded by cornfields, but east of the Mississippi, our cities tend to be surrounded by hundreds of miles of single-family homes, strip malls, and office parks.

      The other problem in the US is our obsession with either keeping high-speed passenger trains 100% separate every last inch of the way, or forcing them to be capable of surviving a head-on collision at full speed with a mile-long coal train if they share tracks with a conventional train anywhere along the route... even if they'd only be running at low speed in the areas where they shared tracks (like the last mile or two into a big city station). In Europe (particularly in Germany), they built the first segment of the new high-speed tracks, and tied them in to the existing rail network at both ends... then extended them from there. In America, we piously plan to do stupid things, like build isolated segments of high-speed rail that don't directly connect to *anything*, and would force passengers to physically switch trains for years, or forever.

      HSR between ONLY Bakersfield and Corcoran, or ONLY Tampa and Orlando, is insane. Brand new HSR tracks between Bakersfield and Corcoran that continue into LA and San Francisco along the existing tracks and immediately cut an hour or two off the time it would take to make the trip at low speed, then fill in the gaps to reduce the time even more, are a great start to what's going to be an awesome HSR network someday. Ditto, for new HSR tracks between Melbourne and Orlando (eventually Tampa) that connect to the existing FEC tracks between Jacksonville and Miami.

      Engineering-wise, Acela-type trains aren't ideal... but they're actually pretty good. Their 150mph speed limit is due to Amtrak, not engineering -- Bombardier's engineers designed them to run at 186mph, and in a flat state like Florida, they could do 200mph without breaking a sweat given suitable tracks and administrative approval.

      As far as subsidies go, EVERY transportation mode is subsidized from general tax revenues. Gas taxes haven't fully supported road construction and maintenance costs since the mid-1990s (they USED to, but as gas prices have increased, the federal and state governments have gradually reduced them to levels that no longer cover 100% of costs). In 2011, Amtrak's total subsidy came out to about $4.25 per American. Nothing to really be proud of, but far from the scandalous rape some would have you believe it is... and most of THAT is for fixed costs that are basically the same regardless of whether Amtrak runs one train or ten trains through any given station per day. Under the current status quo, Amtrak can't "win" regardless of what it does. If it raises fares, it gets decried for being expensive. If it lowers fares, it gets attacked for requiring subsidies. The point is, Amtrak is Amtrak. For better or worse, right now it's all we have. In a few years, we'll have the backbone of California HSR, and FEC Railroad's new passenger service in Florida running along with Amtrak.

  5. Re:What Is It ... by vakuona · · Score: 5, Interesting

    Wrong on many levels. The West Coast Main Line (WCML) is forecast to hit capacity soon. In fact, they have had to reduce stops, remove stops etc, to keep the line running with any reasonable frequency. So a new line is needed. If you are building a new line, there is no good reason to not build HSR line. The costs will be fairly similar anyway. The high speed element is something nice, but not the main point of building a new line.

  6. Who says the US isn't investing in high speed rail by T-Bucket · · Score: 5, Funny

    See, who says the US isn't investing in high speed rail! Whose $100B do you think that is?

  7. Re:Don't bother reading the actual article. Its fa by philpalm · · Score: 4, Informative

    They link to the New Yorker's article: http://www.newyorker.com/reporting/2012/10/22/121022fa_fact_osnos?currentPage=all Corruption is continuing in China, but it will take a major reform/progressive movement to stop it all. The New Yorker is mainly on the railroad budget and you will have to go elsewhere to find dirt on the PLA's progress/threat.

  8. Re:Conservative Hit-piece by slashdyke · · Score: 3, Interesting

    I can't comment about California, but the Chineese goal is quite good. HSR to connect South East Asia to the Middle East and Europe. There is lots of trade between those regions, that right now goes over the sea. Slow and limited. HSR that could traverse the continents in 2 ro 3 days, would be great for trade, and much more economical. The goal is a lofty one. How it is being carried out may be a different situation.

  9. Re:Conservative Hit-piece by Ash+Vince · · Score: 3, Insightful

    I see a bunch of name-calling here. What I don't see is a sane reason to build high speed rail.

    That is probably just because your american and you whole way of life and cultural identity revolves around car use. It makes it far more difficult to see a world where cars simply cease to exist in their current form.

    Sorry, but every other developed country recognises that us all having our own, incredibly energy hungry tin box that goes where we tell it is just not sustainable after the oil runs out and even before then is just not the most efficient way of doing things. It might take 100 years for us to run out of oil completely but how long is it before it simply becomes too expensive for a large part of the population to afford to drive to work every day?

    You guys in the states have spent decades building cities that are just too spread out for their own good. Sooner or later you are going to have to build more cities like New York where you have an incredibly high population density. Then you can build a decent mass transit system that takes people most of the way, then lets them walk the remaining few hundred yards.

    The alternative is to cope with fuel costs that constantly spiral upward until it runs out, this has already started. Even if you build an entire countries worth of electric cars in order to power them all you would need a nuclear plant on every street corner to generate that much power.

    The simple fact is that in the decades to come mass transit and densely populated cities where most of the population live is simply going to become more and more like the only option unless someone cracks a way of getting energy for nothing without drilling it up out of the ground like we do currently.

    China might be throwing money at their high speed rail industry now, but sooner or later they might end up selling the expertise they gain to every other country in the world.

    --
    I dont read /. to RTFA, I read /. to offend people in ignorance.
  10. Re:Conservative Hit-piece by Vanders · · Score: 3, Insightful

    What I don't see is a sane reason to build high speed rail.

    Because the ability to move people and goods around very quickly efficiently and with minimal pollution is a good thing?

  11. I don't like living in a shoe box by portforward · · Score: 3, Interesting

    I live 10 minutes from work, 5 minutes from my wife's school, 3 minutes from my son's school, 2 minutes from the grocery store and 5 minutes from church. I live 20 minutes from a major airport and 25 from another one. I am positive that you have heard of the city I live in. This year I ate grapes from my own grape vines, peaches from my own peach trees, asian pears from my own trees, and citrus from my own tree and a vegetable garden. It isn't huge, but I can see the sky above my head.

    My wife is from Europe, and I have lived in two European capital cities for a year and half, and pretty much lived a month in New York City. Living in a shoe box surrounded by other shoe boxes is hell. I don't know what is going to happen 10-15 years from now, let alone 100, but what you describe sounds awful, like one of the worst types of dystopia. The funny thing is that the first thing most Europeans do when they get here is buy the biggest Buick or Mercury Grand Marquis they can find.

  12. Re:Conservative Hit-piece by Vanders · · Score: 3, Insightful

    You asked about High Speed Rail, not the specific (apparently extremely brain dead) plans in the United States. Perhaps a better question is why is the USA now failing to implement major infrastructure projects?

  13. /Rolls Eyes by Uberbah · · Score: 4, Funny

    "For all of those wondering about America's massive interstate highway network, it costs some serious cash. Running roads across the nation is expensive - to the tune of $50 billion dollars a year. This covers the cost to maintain the network, build it, and pay all of the staff. The problem is, corruption has reared its ugly head. The network itself has had its share of problems, with people dying as a result. There is also the problem that many of America's poor make so little money they can't afford to ride it. The sad fact is that so much money is being spent, no one can even keep count."