Development of a proposed hyperloop transportation system linking Pittsburgh, Cleveland and Chicago would not only be a boon to communities along the travel corridors but also would be a strong business investment.
That’s the conclusion of a 157-page feasibility study released Monday in Cleveland by the Northeast Ohio Areawide Coordinating Agency and Hyperloop Transportation Technologies Inc., a California-based company developing the technology to move passengers and freight at more than 500 mph through low-pressure tubes. Consultant Transportation Economics and Management Systems performed the $1.3 million study of the proposed Great Lakes Hyperloop System.
For the first time, the study estimated the costs of building the high-speed alternative to transportation by regular rail service and aviation. It said the cost to build the entire system would be about $40 billion, but investors could expect an operating profit of $30 billion during its first 25 years of hauling passengers and freight.
“The financial and economic results are unprecedented, illustrating a strong case for the public-private partnership to continue working to bring hyperloop to the Great Lakes corridor,” the study said. “Hyperloop will spur the New Economy service industries of finance, software and logistics; thus understanding the needs of the commuter population are paramount to maintaining a responsive service along the corridor.”
Alexander Metcalf, president of the consulting firm, stressed at a news conference at the Great Lakes Science Center in Cleveland that the project would be a good business investment. The expectation is that any hyperloop project would be a public-private partnership, with the public providing rights of way and stations and private investment paying capital costs for the tubes and technology.
“The biggest take-away from this study is that it is in fact a self-sustaining project,” said Mr. Metcalf, whose firm has conducted more than 40 studies for high-speed rail projects. “…Hyperloop is the first system to be shown as profitable from a financial standpoint, meaning it does not require government subsidies” for its operation.
Mr. Metcalf said he would expect pension funds and hedge funds to be interested in investing in a hyperloop project because of the projected profit margin.
The study broke down the project to three possible corridors from Cleveland to Chicago, with costs ranging from $16.9 billion to $20.7 billion, based on the route and the number of stops along the way.
For the two Pittsburgh options, the cost ranges from $8.4 billion for a path along the Pennsylvania and Ohio turnpikes by way of Cranberry to Downtown Pittsburgh, to $9.1 billion for a route following utility and railroad rights of way to Pittsburgh International Airport.
In the Pittsburgh area specifically, the study estimated benefits from a hyperloop project of $47.6 billion in income over 25 years, plus increases in property values ($11.9 billion), jobs (146,367), property taxes ($206 million), local taxes ($319 million) and income taxes ($1.5 billion).
Overall, the cost of construction would range from $49.2 million to $64.2 million per mile.
Despite those costs, the system could be profitable with reasonable fares, said Grace Gallucci, executive director of the Northeast Ohio planning agency. Planners will project those costs in the next round of preparation for the project.
“It isn’t profitable only because it is charging elite fares,” Ms. Gallucci said. “They would need to have more of like a commuter rail fare to be profitable.”
Although a hyperloop system would be profitable for private investors, Ms. Gallucci said government officials need to remain involved in developing the technology “to ensure it’s moving forward as a public asset.”
Dirk Ahlborn, chairman of Hyperloop Transportation, said the project has to get through “a lot of bureaucracy,” including federal approval of the technology. The projection is that it would take three to four years to complete an environmental impact assessment, then six years for construction.
“We need to build it,” Mr. Ahlborn said. “I believe that funding is not going to be an issue.”
Planners applied two weeks ago for $5 million in federal funding to help pay for the environmental study. Some Great Lakes officials will be in Pittsburgh on Wednesday for a public briefing coordinated by VisitPittsburgh.
First Published: December 17, 2019, 11:56 a.m.
