Midwest Network 220-mph High-Speed Rail Network Benefits Study

TranSystems was commissioned by the Midwest High Speed Rail Association to estimate the economic and environmental benefits of a four-spoke, 220-mph Core Express (HSR) system hubbed at Chicago with routes to Minneapolis, Detroit, Cleveland, Cincinnati, St. Louis, and intermediate cities.

This study builds upon the work of a study conducted by AECOM and the Economic Development Research Group (ERDG). The thrust of this study is to investigate the economic and environmental benefits of the system on each corridor, including the economic impact of HSR by community and its job creation benefits, user value-of-time benefits, consumer surplus benefits, user accident reduction benefits, and environmental benefits.

Building the HSR network will have a massive construction-industry job creation impact during the anticipated 11-year construction period. We estimate 609,852 job-years of work to construct the system – i.e. nearly 70,000 jobs per year for over a decade. The system would produce over 4,000 permanent jobs operations and maintenance jobs, and nearly 130,000 permanent jobs as a result of the economic growth induced by the availability of HSR service.

As the business and commerce capital of the Midwest and the common end-point shared by all of the proposed new Midwest HSR routes, Chicago will benefit from the most passenger traffic on the system. Indeed, 88% of the forecast nearly 44 million annual passenger trips will begin or end in Chicago. As a result, the city proper will gain over 53,000 jobs in the long term as a result of ongoing HSR economic activity. Indeed, the system will boost Chicago’s economic activity by nearly 1% through the passenger traffic generated at Union Station and a station at O’Hare Airport.

While Chicago and the large endpoint cities will see larger passenger volumes and greater numbers of new jobs as a result of HSR, somewhat larger relative local economic benefits will accrue to the system’s intermediate cities, such as LaCrosse, WI, Lafayette, IN, and Decatur, IL. There are two explanatory factors: the base economic activity levels are lower in the intermediate points, hence newly added value generates a larger percentage, and transportation/mobility options are improved more in the intermediate cities than the end-points.

La Crosse stands to experience the region’s greatest average percentage increase in economic activity due to HSR. That city’s regional base of 30,000 jobs will grow by nearly 1,000 as a result of induced job creation. Milwaukee, WI and Rochester, MN will both see gains of 2.17%, with Milwaukee adding 10,250 jobs, in large part due to serving over 4.5 million passengers with a 40-minute trip to downtown Chicago.

HSR service will dramatically impact cities like Lafayette, which stands to experience an increase of 2% in economic activity from its downtown station. HSR would allow the possibility of a 50-minute, long-distance commuting to or from Chicago. Lafayette’s downtown would be impacted by hosting nearly 300,000 passengers per year. And Fort Wayne, IN, which last saw passenger trains in 1990, would be about an hour from Chicago, Detroit, and Cleveland via HSR. A new HSR station on the site of the former PRR Baker Street Station could see an astounding 900,000 passengers per year, helping boost that city’s economy by nearly 2%.

A significant benefit of HSR over other travel modes is time and cost savings of faster and cheaper travel. The combination of fast running times, reliable service and affordable fares will result in significant mode shift for existing trips and substantial generation of new trips, known as “induced demand.” 77% of the network’s nearly 44 million annual passengers are expected to be diverted from cars, 9% diverted from airlines, 6% diverted from conventional rail service, and 8% of the system’s riders will result from induced demand.

Our models indicate that on the four-corridor network, over 35 million annual former auto drivers and former conventional rail users will save $1.2 billion in value of time saved switching to HSR. A combined 37 million auto- diverted and air-diverted trips will save $1.9 billion. And 32 million annual auto trips diverted to HSR will reduce total annual vehicle miles traveled 6.4 billion annual miles. Statistically, this will result annually in 2,615 fewer non- fatal and 43 fewer fatal accidents each year! While it is hard to put a value on this reduced impact on people, the monetized value of this safety benefit is $905 million annually using standard formulas.

There would also be major savings that have not yet been calculated in the investments in infrastructure improvements that can be avoided (i.e. Interstate Highway widening and added runways) as a result of the modal shift from auto and air travel to rail that will be made possible by the availability of high quality, high capacity HSR service.

The combined monetized value of the savings in value of time, consumer surplus, and accident reduction would be about $2.05 billion every year after the four-spoke, 220-mph Core Express Midwest HSR system is completed. This would be combined with the increase of 132,000 permanent jobs resulting from the increase in economic activity spurred by the tremendous reductions in travel time enabled by HSR and the reductions investment in highway and airport capacity as a result of the availability of a Midwest HSR network.

HSR would also improve the region’s air quality. By comparing the total emissions from the operation of the HSR network to the total emissions avoided as a result of its implementation, it is evident that HSR will be a more energy-efficient and less-polluting travel mode than the current modes of travel. CO2e emissions could be reduced by nearly 3.3 million metric tons in 2030 with adoption of HSR service. In addition, the region would also realize a net reduction in all criteria pollutants, with the exception of SO2. These reductions could assist metropolitan areas in the Midwest to reach (or stay in) attainment of the ozone and particulate matter requirements of the National Ambient Air Quality Standards set by the EPA.

The AECOM/ERDG study estimates the cost of the proposed 220 mph Midwest HSR network at $83.6 billion, including a significant contingency. The combination of the effects of very significant job creation, savings that would accrue that have been quantified and summarized in this Study, and the savings from avoided investment in infrastructure required to accommodate growth in auto and air traffic will most likely offset this construction cost by a wide margin. Based on the experience in virtually every other country, operation of the service will be fully self- supporting and, indeed, likely to be able to make a modest contribution to the cost of constructing/equipping the system. Thus, the case for starting construction is quite compelling.