Wednesday, May 5, 2010

Taiwan's High Speed Line Sees Increase in Ridership Since Public Takeover

Recently someone forwarded an interesting press release from Taiwan's main news agency to a rail-oriented Yahoo group that I belong to. Apprently, the past year has been the best ever for ridership on Taiwan's high speed line. Currently, the one line serves 3 million passengers a year.

What is interesting about this is that the line has basically been nationalized over the past year. Previously, the private owners were constantly complaining that they couldn't make any money. That ticket sales and other sources of revenue only covered 97% of their operational costs.

The fact is that for a piece of infrastructure to cover 97% of its own costs is unusual. Roads and airports in particular require massive subsidies.

So various government entities allowed private interests to abandon the line to them, and then they lowered prices. Because it is always less of a subsidy for people to take the train than for them to drive. Or fly. And with the volume this line gets, it is less of a subsidy than if those people took the bus.

And of course now that they don't have to make a profit, the line is considered wildly successful.

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