I'm in Europe for a few days in part to examine how countriesthere are dealing with infrastructure solutions to keep themcompetitive in the future. New infrastructure can become a big lossleader. In the U.S. we can point to Boston's "Big Dig" -- itsbillions of dollars in cost overruns and leaking tunnels. Butthe new road, tunnel and bridge system has transformed Boston'sfinancial district and arguably helps position the city forlong-term growth.
The 32-mile long English Channel tunnel (the Chunnel) is anotherexample of huge infrastructure expense overruns and operatingdeficits. Completed in 1994, the Chunnel cost $21 billion toconstruct in a titanic engineering feat to bore the world's longestunderwater tunnel. Chunnel operators, meanwhile, continue toregister large (though declining) annual deficits for freight andpassenger service between England and the Continent. Payingoff debt is a huge anchor and high charges discourage some use.
Still, the Chunnel's future value to the UK and France appearsconsiderable, especially now with introduction of high speedpassenger train service from London to Paris and Brussels. Thetrips take two hours plus center city to center city. No more hourlong cab rides to and from airports and potential weather delays ininclement Northern European climates. In fact, plane trips betweenthe cities have dropped dramatically, and the train has become thefavored form of intercity transport -- it's just faster and moreconvenient or in other words more efficient and counter-intuitivelymore 21st century. Yes, in a retro sense, railways may offer morefuturistic solutions to congestion and pollution problems thancontinued dependency on our two most significant and transformative20th century inventions -- cars and planes.
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