Roads & Transportation

Elon Musk puts the believable hype in Hyperloop

13 Aug 2013

Even if the Tesla and SpaceX entrepreneur isn’t the real brains behind a vacuum-style train, his personal brand championing the idea gives it a fresh chance for success. Musk’s Hyperloop may also cost a fraction of a standard transit line. That significantly enhances its appeal.

Obama’s corporate tax plan lacks solid foundation

30 Jul 2013

The U.S. president wants to end a congressional impasse by rewriting the tax code and using new proceeds to fix roads and bridges. Both ideas make sense; combining them doesn’t. Politically, it probably won’t work. Economically, better ways exist to fund infrastructure projects.

Mexico’s infrastructure blitz needs another flank

17 Jul 2013

President Peña Nieto expects some $300 bln of public and private funds to be spent on roads, broadband and the like through 2018. Such sums, however, could easily exacerbate corruption, deficits and waste. To get bang for the buck will require big investments in law and order.

HS2 train decision must wait for Heathrow 2015

4 Jul 2013

The HS2 high-speed rail project is under fire as cost estimates mount. But that is not the only problem with this massive project. A financial commitment now would pre-empt the 2015 report on airport strategy. Better to wait and not box the country into keeping the Heathrow hub.

UK must beware losing austerity on the train

25 Jun 2013

The austerity-minded British Chancellor will announce more spending cuts on Wednesday. Some infrastructure projects will sweeten the pill - and may help growth. But it’s risky to spend big on rail without first deciding on an airport hub. Care is needed on capital spending, too.

FirstGroup cash call shows deleveraging imperative

20 May 2013

The rail and bus operator is raising $1 bln to stave off a ratings downgrade. The chairman is leaving. Debt may be cheap, but too much is still a constraint. With equity markets rising, this won’t be the last over-geared firm to seek to restructure its balance sheet.

China rail reform skirts big question: who pays

20 Mar 2013

Building high-speed railways makes sense. Burdening the new operator with $420 billion of debt doesn’t. Passengers aren’t rich enough to bear the investment costs. Yet with some creative financing, it’s possible to tap those who benefit most: industry and local governments.

China’s pick-up is a tale of three engines

5 Dec 2012

Breakingviews’ China Tea Leaf Index shows the economy regaining traction. But not all growth is equally good, and not all the moving parts are yet running as they should. Yet more real estate investment and higher Audi sales suggest China’s bad habits are proving hard to kick.

Megastorm shows scope for U.S. infrastructure bank

31 Oct 2012

Any traveler knows America’s transport network is dilapidated. Now, devastation on the East Coast has underscored the lack of investment in defenses. Despite tight budgets, the world’s richest economy could afford more. A quasi-bank could provide the best bang for federal bucks.

UK needs to put outsourcing on new rails

3 Oct 2012

The British government has reacted with alacrity to the discovery of errors in the way it awarded the 6 bln stg West Coast rail franchise. But without serious assurance that the system can work better, private providers of state-sponsored services could start jacking up prices.

Chinese sightseers present challenge to the world

3 Oct 2012

Half the country’s 1.4 billion inhabitants are expected to travel during this week’s national holiday. A new love for tourism provides a much-needed economic boost. But giant traffic jams and a deadly boat crash in Hong Kong underscore the difficulty of coping with the crowds.

What else could Manmohan Singh reform?

17 Sep 2012

India’s prime minister has unleashed three bold economic reforms. Assuming his nerve holds in the face of strong protests, he may even get a taste for such announcements. India’s financial sector, mining industry and labour market would all benefit from a similar approach.

Italians railroad China’s PLA on soccer pitch

2 Aug 2012

How else to explain an investment in Inter Milan by China Railway Construction, a state group with origins in the People’s Liberation Army? Bragging rights are limited and industrial rationale non-existent. At best it’s a quid pro quo for the contract to build Inter’s new stadium.

JLR flotation would make sense for Tata Motors

15 Feb 2012

Jaguar Land Rover contributed 95 percent of the combined group’s profits last quarter. A minority listing of the UK firm would let Tata book a healthy return on its $2.3 bln purchase, and allow JLR to raise cheap capital overseas. There’s no need to keep this gem hidden.

Canuck railroad could gain from dose of Ackman

11 Jan 2012

A key measure of productivity puts Canadian Pacific dead last among North America’s big six railways. Even if a proxy fight being waged by Ackman’s Pershing Square fund isn’t successful, it could inject some healthy ambition in the company’s turnaround plan.

Fast-train UK hopes for some Olympic speed

10 Jan 2012

The decision to go ahead with the new high-speed rail shows the UK government is on the right track. It has been cutting its over-large public sector but wants to invest for long-term growth. Some added pace from the Olympics and the Queen’s jubilee should help this year.

China’s super-railways on track for debt troubles

15 Aug 2011

New super-fast railways would struggle to repay their colossal borrowings even before new safety fears, which will push costs up and demand down. The country benefits, since the perks of fast trains aren’t all financial. Not so investors in banks who fund these trophy projects.

China’s train crash sets new tests for freedoms

3 Aug 2011

Authorities’ attempt to censor coverage of China’s rail tragedy has backfired. Even official media defied orders or found ways to circumvent the ban. If Beijing now clamps down harder, the impact will be economic as much as social.

Train crash highlights Chinese hard landing risks

25 Jul 2011

The highspeed train tragedy shows when things fail to slow down properly in China, they crash. Highspeed rail is a typical symptom of China's investmentled growth models: wasteful, hazardous and unsustainable. A badly handled accident can trigger political tensions.

Descent of MAN shows failings of German M&A rules

5 Jul 2011

Outside shareholders have lost control of the truck maker without receiving a premium. Investors did not have to accept VW's clever lowball bid. But lax German takeover rules tilted the field against them. It's another reminder that the dysfunctional regime needs to change.