China’s High-Speed Rail Disaster Is Not A Model For The U.S.

After taking office in 2009, President Obama aggressively marketed high-speed rail in the United States. (I noted at the time that most of what the administration called “high-speed rail” was in fact expensive slight upgrades to existing, money-losing passenger rail service.) After several states rejected rail funding and with California’s planned L.A.-San Francisco corridor facing majority opposition, lawsuits, ballooning costs, and generally dismal prospects, the Obama administration has largely downplayed its previous rail boosterism.

In his 2011 State of the Union address, President Obama made high-speed rail a priority of his administration:

Our infrastructure used to be the best, but our lead has slipped. South Korean homes now have greater Internet access than we do. Countries in Europe and Russia invest more in their roads and railways than we do. China is building faster trains and newer airports. Meanwhile, when our own engineers graded our nation’s infrastructure, they gave us a “D.”

We have to do better. America is the nation that built the transcontinental railroad, brought electricity to rural communities, constructed the Interstate Highway System. The jobs created by these projects didn’t just come from laying down track or pavement. They came from businesses that opened near a town’s new train station or the new off-ramp.

So over the last two years, we’ve begun rebuilding for the 21st century, a project that has meant thousands of good jobs for the hard-hit construction industry. And tonight, I’m proposing that we redouble those efforts.

We’ll put more Americans to work repairing crumbling roads and bridges. We’ll make sure this is fully paid for, attract private investment, and pick projects based [on] what’s best for the economy, not politicians.

Within 25 years, our goal is to give 80 percent of Americans access to high-speed rail. This could allow you to go places in half the time it takes to travel by car. For some trips, it will be faster than flying — without the pat-down. As we speak, routes in California and the Midwest are already underway.

But in his 2012 State of the Union speech, high-speed rail was not mentioned once. No new federal funding has been appropriated since 2009’s American Recovery and Reinvestment Act (“the stimulus”). Only gaffe-prone Secretary of Transportation Ray LaHood is still occasionally claiming the U.S. needs China-style choo-choos cross-crossing the country, recently telling a reporter, “The Chinese are more successful [in building infrastructure] because in their country, only three people make the decision. In our country, 3,000 people do, 3 million” and that “[w]e owe it to the next generation to leave them something. We shortchange the next generation if we don’t leave them high-speed rail. That’s our obligation.”

There is a reason for the president’s recent lack of enthusiasm. After a crash killed 40 and injured 192 people in 2011, high-speed rail has become one of the biggest political scandals in modern Chinese history. A new article in the New Yorker profiling the rise and fall of disgraced former Railway Minister Liu Zhijun details just how terrible China’s high-speed rail experiment has gone:

One of the most common rackets was illegal subcontracting. A single contract could be divvied up and sold for kickbacks, then sold again and again, until it reached the bottom of a food chain of labor, where the workers were cheap and unskilled. (The practice is hardly unique to the railways: in 2010, a rookie welder employed by an illegal subcontractor was working on a dormitory in Shanghai when he dropped his torch and set the building on fire; fifty-eight people died.) In November, 2011, a former cook with no engineering experience was found to be building a high-speed railway bridge using a crew of unskilled migrant laborers who substituted crushed stones for cement in the foundation. In railway circles, the practice of substituting cheap materials for real ones was common enough to rate its own expression: touliang huanzhu—robbing the beams to put in the pillars.

With so many kickbacks changing hands, it isn’t surprising that parts of the railway went wildly over budget. A station in Guangzhou slated to be built for three hundred and sixteen million dollars ended up costing seven times that. The ministry was so large that bureaucrats would create fictional departments and run up expenses for them. Procurement was a prime opportunity for graft. The ministry spent nearly three million dollars on a five-minute promotional video that went largely unseen. The video led investigators to the ministry’s deputy propaganda chief, a woman whose home contained a million and a half dollars in cash and the deeds to nine houses; her husband, who also worked for the ministry, was found to have a collection of gift cards—a discreet alternative to cash bribes. Other government agencies also had serious financial problems—out of fifty, auditors found problems with forty-nine—but the scale of plunder in the railway world was in a class by itself. Liao Ran, an Asia specialist at Transparency International, told the International Herald Tribune that China’s high-speed railway was shaping up to be “the biggest single financial scandal not just in China, but perhaps in the world.”

If the president is reelected in November, don’t expect a second-term Obama administration to renew its pledge “to give 80 percent of Americans access to high-speed rail” by 2035 because “China is building faster trains.”