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May 10, 2008

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But does that flying time include checkin and such? Because even for short, internal flights these things can add up...

On a slightly longer timeframe, having an electric powered highspeed transport system to take the place of a fossil fuel powered one might not be bad either. Wasn't France selling the Argentinians nuclear powerstations as well?

In a way this whole highspeed train project sounds remarkably similar to the current mega project Amsterdam is engaged in, the building of a highspeed metro line linking the north of town with the south along a route for the most part already served with excellent but slower public transport options. It's costing hundreds of millions of euros that could've been better used on upgrading existing transport links in other parts of town. However, the sad truth seems to be that it's easier to get money for one big megaproject, even when the benefits are doubtful, than it is to free the same amount of money to pay for hundreds of smaller projects...

Hi, Martin. Sorry about the delay --- commentators! About Argentina! I am kvelling.

First, France isn't selling Argentina any nuclear reactors. Over on AFOE, Alex Harrowell joked, "How long before Sarko shows up to offer them a nuclear power station? Alstom and Areva: two great French quasi-state industries that taste great together." But he was joking.

Argentina has in fact restarted work on its third reactor (suspended in 1994), but the chief foreign partner is Atomic Energy of Canada Ltd, not a French firm. The budgeted cost is €466 million.

And that's the problem with the tren bala, Martin! Argentina is a much poorer country than the Netherlands, facing problems with all sorts of basic services ... electricity among them. There are all sorts of megaprojects that would have a bigger payoff than building a high-speed train that the majority of Argentines won't be able to afford. Nuclear power stations immediately come to mind, but there are many others.

Remember, this is a country where the median wage in 2007 was only €211 per month! Seriously ... €211.

Because B.A. is so nice, people don't always realize how poor Argentina actually is. That's two-thirds of the average salary in Mexico ... and even less when you account for Argentina's better average educational level and the sad fact that looking European can earn you a wage premium in Mexico.

This is why Mexico City is full of Argentine waiters and publicists and models and musicians.

But it's also why the Tren Bala is such an incredibly bad idea. Would the social return exceed the 10-12% that Argentina will pay for the money? It seems unlikely.

Of course, it's possible that Argentina will just default on the loans again, in which case I'll take it all back.

There is a but, however. Defaulting on these railroad loans might not be so easy, depending on how the deal is structured.

Has anyone else here heard of ICSID?

I believe we can use a HST from Mexico City,Queretaro,San Luis,Saltillo,Monterrey,Nuevo Laredo,Laredo,San Antonio,Austin,Dallas,Houston and back to Laredo.What do you think?

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