Last March, I wrote that Brightline was broke. Well, it wasn’t quite broke yet, but anyone who could read the language, not the numbers, in a financial report knew they were basically broke.
Last Sunday, 60 Minutes did an expose on the train to nowhere in California. Billions spent, not a lick of track laid. The two guys in charge of getting it built said $129 billion more could finish it.
What?
In the same segment, 60 Minutes interviewed the Brightline CEO. He was cheery. Brightline was seeing more ridership month over month. Maybe that’s true. If you go from one rider to two, ridership increased. It’s another reason that when someone gives you a huge percentage increase in a time series, it's best to know the base.
If things are so rosy, why is this happening?
Nate Gregory has the skinny.“Brightline, the private passenger rail operator whose Florida route includes Miami, is preparing to file for Chapter 11 bankruptcy protection. The company has entered into a restructuring support agreement with Assured Guaranty, a bond insurer, which will provide at least $350 million in debtor-in-possession financing. This financial lifeline is intended to keep the railroad running while it reorganizes its balance sheet.”
Fortunately, not a lot of taxpayer money was committed to Brightline East. So far, none is being committed to Brightline West. But I am telling you right now the rail line from Las Vegas to LA will never get built. What fool would invest in it?
Nate concludes: “The Brightline case is a cautionary tale about the risks of investing in large-scale infrastructure projects. Even with strong political backing and a growing Florida economy, the economics of passenger rail are unforgiving. For investors, the key takeaway is that bond insurance does not guarantee full recovery; it simply shifts the priority of claims.
Assured Guaranty’s decision to fund the bankruptcy is a calculated bet that it can recoup its exposure by taking control of the reorganized company. If successful, it could emerge as the primary owner of a streamlined rail operator. If not, the losses will be absorbed by its own shareholders.”
In an endorsement interview during my campaign, one person said they loved rail and thought Las Vegas should have light rail. I was the only candidate who openly disagreed and didn’t get the endorsement. It’s a money loser, and the Boring Company expansion in Las Vegas proves it.
High-speed rail is catnip to politicians. Except it doesn’t work in America. Not only do we drive, but we take airplanes. As I said in March, much better to build more lanes on an expressway. Much better to change regulation so that air travel is significantly more competitive. Much better to build more gates at an airport.
High speed rail in America is performative theater. It’s a huge waste of taxpayer dollars. The only place it might work is in the Northeast.
The train to nowhere was absurd from the start. It would have taken an hour or so to reach the starting point and another on the SF side. And you wouldn’t have a car. The whole thing was a deliberate rip off by, guess who, California Democrats
2 things:
Perhaps the lust for rail is WHY, (since my teen years early 1970's) when trips began is there NO consistently available 3rd lane, either EB or WB on I-94 between Detroit & Chicago? It's been desperately needed for decades.
I don't doubt drivers in other regions can ask similar questions of the freeways they use.
To coin an InstaPundit phrase: The Desire of Streetcar