Trains Helped Kill the Greek Economy – They’ll Kill Hawaii’s too

“Some years back a Greek finance minister, fed up with his country's waste and extravagance claimed that he could save money by shutting down the national railway and driving around its passengers in taxis.” [1]

Too bad he didn't execute his plan for the closure of the railways. In 2009 the Greek railways collected $250 million in fares and posted a net loss of $1.4 Billion. A Billion wasted here, and a Billion wasted there … the rest is history for the Greek economy. Greece is now in a debt crisis.

In 2000 a Greek colleague and I conducted research on Greek railroads and we developed models which predicted that the rail freight service would soon carry nothing [2]. No way, they said. Four years later the freight operations of Greek shut down for good. Unfortunately, investment on Obama-like medium-speed rail passenger service continued unabated in Greece. So the budget hole got even bigger.

The lesson here is that public investment in non-performing infrastructure will eventually swamp the budget and saddle current and future generations with a heavy debt burden. Non-performing is any infrastructure in constant need of subsidy whose contribution to the economy is less than its true cost. Roads cost a lot, but contribute much more to the economy, health and safety of the population. Trains cost even more, but offer much much less.

What do you think the future holds for our tiny island that "wants" a five to seven Billion dollar train?

What do you think the future holds for the car-dependent, and highway and airport vested state of California which still plans for a $35 Billion “high speed rail”? A lot of good answers can be found in the article: High Speed Rail and Social Equity. Basically, the only high speed rail that makes sense (and money) is the 340-mile Shinkansen. All the rest, including California's, are A Fast Track to Nowhere.

The lessons about trains "modern" trains can be summarized by three common sense idioms, as follows.

You can’t teach an old dog new tricks. Trains went obsolete for a reason. You can’t solve 21st century mobility problems with 19th century technology. There are always a few exceptions, but Greece, California and Hawaii trains have nothing exceptional.

Those who refuse to do arithmetic are doomed to talk nonsense. One can write a book on this but I will mention only three rail related “math” of Honolulu mayor Peter Carlisle: (1) Get Honolulu’s financial house in order ... by spending over five billion on rail, (2) HART will cost us nothing, and (3) The Ansaldo contract will save Honolulu tens of millions in rail costs. All of them pure nonsense.

They are taking Honolulu for a (train) ride. Biased politicians, biased government officials and their paid consultants deceive the public in order to get elected, become chief of a new division and make millions, respectively.


[1] The Economist, July 2, 2011, p.8.
[2] Paravantis, John A. and Panos D. Prevedouros, Railroads in Greece: History, Characteristics and Forecasts. Transportation Research Record, No. 1742: 34-44, 2001.

Honolulu Rail in Illegal Pact with Local Unions

UCLA Urban Planning Professor Brian Taylor sent me this brief but informative article about California's proposed High Speed Rail: High Speed Rail and Social Equity.

It contains a lot of interesting points and many of them such as construction cost, jobs, "green" transportation and equity apply to Honolulu's proposed heavy rail. However, one passage caught my attention:

"Since the federal regulations currently applicable to transportation infrastructure construction prohibit local hiring preferences, it is unlikely that there will be many jobs for low income people and people of color." No jobs for locals and Hawaiians?

True! The Code of Federal Regulations 23 CFR. §635.117 part (b) reads as follows: “No procedures or requirement shall be imposed by any State which will operate to discriminate against the employment of labor from any other State, possession or territory of the United States, in the construction of a Federal-aid project.” The rail project is clearly a Federal-aid project.

Contrast the facts above this fact from the recent past: Labor Unions Sign Rail Agreement with Honolulu City Officials. The goals of the RTSA include utilizing local labor for high quality work, on time and on budget. The mayor also stated that the agreement will avoid slowdowns and work stoppages.


This “partnership is a working relationship,” said Mayor Hanneman beside labor union leaders, in a conference room packed with reporters and laborers alike. In attendance were signatories to the agreement including: Ronald Taketa of the Hawaii Carpenters Local 745, Joe O’Donnell of the International Brotherhood of Ironworkers Local 625, Peter Iriarte of the International Union of Bricklayers & Allied Craft Workers Local 1, Vaughn Chong of the International Union of Painters & Allied Craft Workers Local 1791, Peter Gamban of the Operative Plasterers’ & Cement Masons’ International Association Local 630 , and William Mahoe of the Operating Engineers Local 3.

And all of it is illegal!

Solar Power Plant on Oahu Does not Pass Muster

A five megawatt facility with solar thermal collectors is planned on DHHL lands. The provider and contractor is a local firm that has a smaller deployment on the Big Island.

The Big Island facility has used millions of taxpayer money in the form of technology credits to provide basically a tiny amount of usable energy, if any. As shown in the list below, depending on the source, the Big Island facility is mentioned as being able to generate 2000 KW (2 MW), 500 KW or 100 KW and to be feeding power to HELCO, the Big Island utility. The watt (W) is a measurement of electric power; KW is kilowatt and is equal to 1,000 watts; MW is megawatt and is equal to one million watts.

• Source (1) says that the power purchasing agreement started in January 2010 for 2 MW.
• A description of the same Big Island facility specifies 2 MW for $20 million invested using 1,008 solar concentrating panels on 4 acres of land; see source (2). That's $10 Million per MW which is expensive. It comes to $10 per watt whereas rooftop photovoltaic (PV) panel system costs about $5 per watt (See note 1).
• The company’s CEO said to me in person —and in source (3) cited below—that the facility produces 500 KW. That's $40 Million per MW which is absurdly expensive because now the cost is $40 per watt.
• The Nevada based electric generator manufacturer who sold the Green Machines that presently operate on the Big Island facility in question specifies two 50 KW generators. So the 4 acre site has a maximum power generation of just 100 KW; source (4). The CEO of the Big Island facility is quoted saying this: “The delivery and performance of the Green Machines have allowed us to fully utilize our solar field…” This means that indeed all that this facility can do on a sunny day without clouds is 100 KW. Now the cost per MW is clearly in the stratosphere at $200 Million per MW or $200 per watt.

The reduction from all this information is that 1,008 panels and 4 acres are required to produce 0.1 MW which is mostly used internally and none of it is sold to HELCO. Unlike a PV system, this concentrated solar panel system requires a lot of electricity to operate pumps, valves, and sun-tracking motors. This means that the amount of electricity sent to the grid is less than the 100 KW stated above, which further increases the cost per MW.

Oahu's daily needs exceed 1,200 MW. If this technology were to power Oahu it would require 48,000 acres and zero cloud cover over the panels 365 days a year. In addition a very large quantity of water would be needed to cool down the generators.

It appears that this locally developed technology of micro solar collectors (sun tracking troughs) can physically produce a small amount of electric power, but it does so at an exorbitant cost, especially when compared to other environmentally benign renewables such as PV.

Given all these facts, now I have several questions:

1. Were 1,008 solar troughs, that cost millions of dollars in high technology tax credits, installed for HECO TV commercials, politician photo ops, and investor enrichment?
2. Does HECO and the PUC have any idea as to what works, what doesn't and at what cost?
3. How can a solar plant with 1,008 collectors produce 2 MW per day and have zero sales to the utility? My home solar panels produce 0.0016 MWh per day and HECO knows all about it.
4. Have we legislated mandates that promote unreasonable ratepayer charges? Right now Hawaii power customers pay over 250% more for electricity than the mainland. Why do we develop policies and select options that make this premium go even higher?
5. One of the five stated purposes of Hawaii's PUC is to "Foster and encourage competition or other alternatives where reasonably feasible in an effort to provide consumers with meaningful choices for services at lower rates that are just and reasonable." Purchasing power from a power generating facility at a cost exceeding 22 cents per KWh is very expensive. Why does the PUC entertain rates higher than 25 cents per KWh specifically for “Concentrating Solar Power” as stated in the Feed-in Tariff (FIT) rates?
6. This preferential rate for a single technology is twice the baseline FIT rate of 13.8 cents per KWh for other renewable energy technologies. Why?
7. Such a discriminatory pricing begs another question: Is Hawaii so desperate for a local success story that we waste millions of taxpayer and ratepayer dollars in uncompetitive overpriced technologies?

My questions point to a lack of due diligence or breach of fiduciary duty on the part of the utility industry in Hawaii, its regulators and our legislators. The governor must obtain an understanding of the realities of the renewable energy game in Hawaii. Or perhaps the governor is the problem – I mention it as a possibility, but I suspect that he's never received an unbiased briefing.

Hawaii’s energy arena needs clear metrics and performance based contracting, not fake promises and preferential treatment. Hawaii needs fact-based energy leadership, not rhetoric and commercials!

LINKS CITED: Source (1), Source (2), Source (3), Source (4), Note (1): A Price Point for Rooftop Solar Panels

Traffic Accident Investigation on Oahu: Stuck in the 1980s.

Civil Beat's Alia Wong has aired the festering problem of Honolulu Shutting Freeways Longer Than Other Cities which is indicative of Oahu's multilayered traffic mismanagement.

As far back as 1998 I wrote this opinion in the Star Bulletin: It takes too long on Oahu to investigate accidents.

Although the HPD is usually confronted with traffic crashes that are "manini" compared to those on the mainland, where jack-knifed trucks get mangled with several other vehicles, it takes hours instead of minutes to deal with incidents.

An incident on Kalanianaole Highway on Dec. 12 prompted me to write this letter. It was reported that at about 1:30 p.m. a car veered into a moped about half a mile east of Aina Koa Street.

At 2:30 p.m. I joined the queue, which had extended for more than a mile on H-1 freeway. It took 28 minutes to drive 1.5 miles. At the crash site, I saw a smashed moped, a car on the shoulder and at least six police vehicles.

Most streets around Kahala Mall were jammed. Waialae Avenue was gridlocked and the off-ramp was overflowing onto the freeway, creating a hazardous situation. At 4:30 p.m., police were still investigating and the queue on H-1 had reached Kokohead Avenue.

I estimate that this three-hour traffic "management" incident trapped more than 9,000 vehicles and more than 12,000 motorists. It caused more than 6,000 people hours of delay, increased the risk for secondary accidents, and resulted in more than 1,500 gallons of additional fuel consumption.

The mayor and the chief of police must remove the archaic and inefficient procedures for incident management and give our officers the education and training needed to get in step with contemporary national practice.

I am subcommittee chair of the Freeway Operations committee of the U.S. Transportation Research Board and I have assisted Attica Tollway in several operational issues. Some of my work on Freeway Incident Management has been published in professional, refereed venues, as follows:

• Incident Management Simulation on a Two Freeway Corridor in Honolulu. Proceedings of the 6th ITS World Congress, Toronto, November 1999.
• Video Incident Detection Tests in Freeway Tunnels. Transportation Research Record, No. 1959: 130-139, 2006.
• Automated Incident Detection and Automated O-D Generation for Freeways, Panel Session 539 on NEW TECHNOLOGY FOR FREEWAY OPERATIONS, Annual Meeting of TRB, Washington, D.C., 2006.
• Freeway Incidents – US, UK and Attica Tollway: Characteristics, Available Capacity and Models, Transportation Research Record, No. 2047: 57-65, 2008.

In all these years I have never been consulted by the city or state departments of transportation, or the traffic division of HPD. Apparently, all of them know all there is to know. And the results are obvious.

MEGA RAIL IN A MICRO CITY

Article published in New Geography. Also appeared in the Washington Examiner, NCPA, Hawaii Reporter and elsewhere.

An exorbitantly costly rapid transit heavy rail project has been proposed for the small Hawaiian island of Oahu, where the leading metropolis, Honolulu, ranks 53rd in population among U.S. cities, with less than 950,000 people. If the project moves forward it will be the world's only elevated heavy rail in a metro area with a population of under four million.

Nothing about this 20-mile long rail project makes sense, except for its politics and its cronyism. It is projected to cost $5.3 billion according to the financial analysis of the city, or $7.2 billion, according to the state. For comparison, the Blue Line between Los Angeles and Long Beach that opened in 1990 has the same length and would cost roughly $1.5 billion to build now.

Cities worldwide and in the U.S. have shown a clear preference for light rail. The only rapid transit (heavy rail) system built in the US since 1990 is the one in Los Angeles in 1993; another was constructed in San Juan, Puerto Rico in 2004. In the same period, 19 light rail systems were installed.

READ MORE

Big Projects in Hawaii - Why Are They Stuck?

Big projects are complex. So the question why big projects get stuck can generate enormously complex responses. However, the answer boils down to a simple bottom line: Because they don't make the grade!

There are 10 basic dimensions that account for the reasons that big projects succeed or fail. Each project has its own complex set of technical, legal, institutional and financial requirements but 10 basic reasons cover the fundamental requirements.

A project needs to fulfill a major need (or mitigate a major problem), at a low cost, with a large share of it paid by outsiders, and with minimal environmental impacts and implementation risks. It is also important that a project has a strong local advocacy and a weak opposition, and some political support at all levels. A project has a better chance if it utilizes advance technology or is ahead of its time based on proven engineering (e.g., maglev trains, fiber based structural components, etc.) A sound business plan means that a scenario of reasonable adversity keeps the project's balance sheet solvent and subsidies are kept to a minimum even for government projects.

Table 1 presents the 10 fundamental requirements and theoretical scores using a scale where 5 is best and 1 is worst. As a result, a project that garners 50 points is “excellent” and would likely be built at a breakneck speed. Thirty or more points are needed for a project to be deemed “good,” therefore worthy of serious consideration for implementation. Projects with less than 30 points are deemed to be fair or bad and should be avoided.


There have been many high scoring projects such as the successful establishment of Costco and Wal-Mart in Hawaii in less than 10 years, the H-Power and AES power plants on Oahu, the 10 miles of Tampa’s reversible toll lanes built in less than 7 years for less than $400 Million, and the I-35W bridge replacement in the Twin Cities costing $234 Million (completed 3 months early and is Light Rail-ready,) just to mention a few.

Job creation is not a factor. While privately funded projects typically generate new jobs, several taxpayer funded projects tend to be make-work projects. In addition, the job creation aspect is partly accounted for by the Local Advocacy and Political Push factors.

Table 2 presents a sample of 8 big projects in Hawaii and their scores for the 10 basic requirements based on my ratings. Three local projects made it because they deserved it, two failed because they deserved it, and three big ones are predicted to fail. Other experts may assign different scores but the average scores of a handful of unbiased assessors with knowledge of all facets of a project should yield a reliable overall score for a proposed project.


Both the H-3 freeway and the grand expansion of the Honolulu International Airport (HIA) including its controversial reef runway had major cost and environmental problems, but their superior payoff (by providing needed roadway and runway capacity), sound business plan (by paying for themselves in the long run), and generous federal cost sharing garnered them a good score. They got done and work well.

Similarly the Hawaii Convention Center had a lot going for it. The main issue was its location. Once this was resolved, the project was built expeditiously. Its business plan was and still is weak.

Two recent project failures in Hawaii are unique. Both are water transportation projects, and both were implemented and then failed. Both should never have been started. This is particularly true for TheBoat that never had a credible business plan or solved a problem. It removed the equivalent of 2 to 4 buses from the road at a cost of $32 per commuter trip. The (sometimes nauceous) commuter paid only $2; all the rest was public tax subsidy.

The SuperFerry was a fitting transportation addition in the island state of Hawaii but it needed a super-sized investment in order to succeed; roughly four times what was actually available. It needed three fully debugged vessels with no need for custom docking platforms, and it needed media campaign and political greasing similar to the 2006-2008 pro-rail blitzkriegs. Given these requirements, it is questionable that a marine company can make a profit at the level of investment needed for establishing a competitive service. There have been several attempts since before statehood, all leading to losses and closures.

At least three large projects are currently "on the table" in Hawaii: The city's rail project, B.R.Horton's Hoopili project in Ewa (over 12,000 residential units), and the Big Wind project where wind turbines on Molokai and Lanai will generate 400 MW of electric power to be used on Oahu via submerged cables.

None of these projects make the grade. This does not mean that they will not be built. But it does mean that building them is not a good idea and that the monies should have been better spent on other projects and opportunities. Here is why.

Both Rail and Big Wind fulfill a major need but with archaic or problematic technology. Their project proponents have greased the wheels well and they enjoy strong political support, but both projects are very expensive for what they offer and the cost share by outsiders is small or nil. They have large impacts mostly borne by non-users. Both have strong local advocacy and opposition so that's a wash.

Hoopili and Big Wind have credible business plans but their externalities are not accounted for, e.g., Hoopili and surrounding developments require their own freeway lane to/from town, but none is being built. As a result, over 100,000 existing residents will suffer much worse congestion upon Hoopili’s completion and occupancy (even assuming rail is there.) In addition, both the rail and Hoopili obliterate a large portion of prime agricultural land in central Oahu.

A major externality of rail and Hoopili that is not accounted for in their direct costs is the loss of a major portion of prime agricultural land on Oahu. This is a huge loss for an overpopulated remote island.

The 20 mile rail should be replaced by 11 miles of High Occupancy and Toll (HOT) lanes and point-to-point express buses. Hoopili's 12,000 units should be replaced with 12,000 units in Kalihi and Kakaako. Big Wind should be replaced with geothermal power plants on Maui and Big Island, and coal, solar and biomass on Oahu.

The scores for HOT Lanes and Better Energy are shown in Table 3 below. These are good projects that should get done!

Note 1: Those who desire a better understanding on why big projects get or don’t get done may read articles on Megaprojects by Oxford University professor Bent Flyvbjerg, and Utah University's study on Bootleggers, Baptists and Enterprising Politicians, that is, the alliance of profit-driven interests, groups of uncompensated advocates, and opportunist politicians that form the tripartite support alliances needed for a big project to muddle through the project development process.

Note 2: On June 23rd at the Plaza Club, HVCA and ThinkTech present Big Projects in Hawaii - Why are they stuck? Contact: Jay Fidell, ThinkTech Hawaii, jay@fidell.com, (808) 780-9254 for information.

A Price Point for Rooftop Solar Panels

With a flurry of proposals being floated around for renewable and other forms of energy, it is good to establish practical and realistic reference costs or price points.

In June 2011 COSTCO Wholesale through Costco.com offered for the first time a home or small business rooftop photovoltaic system with a maximum power of 5060 Watt for a cost of $18,000, which includes shipping and handling.

Such a large and involved system requires a city permit for installation and an inspection by the utility. A licensed electrician is strongly recommended for the installation. All inclusive, this system installed would cost about $25,000 or just under $5 per Watt. (This does not include Federal and State tax credits which in Hawaii would total roughly $9,000.)

The system's literature states that it will generate between 462kWh and 924kWh of electricity per month depending on placement, longitude, latitude and hours of sun exposure. By Hawaii standards, this system is big. For example, my home which houses 3 adults and 2 children consumed 420 KWh in 32 days, based on an April 2011 HECO bill. That's why I have a 1,600 Watt PV system on the roof. My system cost $13,000 or $8 per Watt installed about a year ago. Indeed PV prices are coming down fast.

Remember this figure: $5 per Watt installed. Next time a politician, legislator, salesman or contractor makes you an offer that is substantially higher either for a residential installation or as part of a utility Power Purchasing Agreement, then you are likely being taken for a ride as a customer, taxpayer or ratepayer.(1)

It should be added that the system referenced above is not the least expensive one. One can find solar panels of Asian manufacture that are sold by the palette at an even lower cost.

UPDATE: Google creates $280-million solar power fund, Los Angeles Times, 6.14.2011.

Note(1): We need to be mindful of special circumstances such as shipping and labor costs in Hawaii, specific solar exposure at each location, etc. Careful design is needed and PV is sensitive to proper orientation and as little cloud cover as possible. Given Hawaii's cost premium "substantially higher" in Hawaii (for residential installations under 4 KW) is over $7 per watt, assuming an easy installation; see note below.

Note(2): The low cost pricing assumes an easy installation and minimal safety risk for the installation crew; i.e., one floor high roof. Installations can be problematic, thus expensive.