The New California HSR Plan: Forecast of Doom or Blueprint for the Future?

Earlier this week, the California High-Speed Rail Authority released its new business plan [PDF]. The transportation establishment, the government, and the media issued a collective gasp: $98.5 billion? Thirteen years’ delay?

Making this artist's rendering a reality will cost more than projected. Image: CA High-Speed Rail Authority

It’s true – the price tag has more than doubled. “The good news is the numbers are more realistic; the bad news is they may well be beyond reach,” said Democratic state senator Joe Simitian.

The new estimate for California conservatively includes $16 billion for contingencies and miscellaneous cost increases. Acquiring real estate in California is another big expense — though the authority has cut costs where it could by sharing tracks with commuter rail systems, another move bound to be attacked for its reduced efficiency.

Petra Todorovich of the Regional Plan Association says that much of the cost of building any megaproject in the U.S. is spent mitigating its impact on local communities. “Some of the rises of this project have been costs for tunneling or viaducts,” she said. “Those are expensive measures to reduce the noise and visual impact on local neighborhoods. Are they worth it? They’re certainly worth it to those communities. And they may be the price of building this project.”

Indeed, appeasing residents has been one of the many hurdles the California High-Speed Rail Authority has had to overcome. Another has been criticism of the proposed first segment from Bakersfield to Fresno – “a fast train to nowhere,” as it’s been called. They’re sticking with that plan, but the CHSRA takes pains to say that “each segment of the construction project will have its own value and independent utility.” They predicate each additional segment on the availability of funding but assert that the Central Valley line, in and of itself, would be useful.

The Authority also insists the line will pay for itself – operationally, at least. It claims that after the initial funding is laid out for infrastructure, the operations will require no public subsidies, even at the lowest ridership estimates.

Brian Merchant of Treehugger characterized the uproar about the pricetag as post-Solyndra “green-bashing.” He says the media should stop freaking out about the cost when “after the initial investment, the entire system would pay for itself and then provide a much-desired, low-carbon transportation alternative to the people of California.”

“Yes, CA high speed rail may be more expensive then originally accounted for,” Merchant wrote. “But it’s still been found to be a really sound investment — and don’t forget, there are tons of saved costs that this plan doesn’t account for. The reduced traffic congestion and the lowered health costs from less air pollution spring to mind.”

To take the full measure of the project’s worth, you also need to consider the costs of not building the line. The CHSRA claims that given projected population increases and current congestion levels, the state would have to build “an additional 2,300 lane-miles of highways, 4 runways, and 115 airline gates” if it doesn’t build the high-speed rail line – at a total cost of $171 billion.

But where will the $98 billion for HSR come from? California has received $3.6 billion in federal stimulus dollars for the line, and the prospects for additional federal funding are looking grim, as both houses of Congress are slashing spending for the rail program. Just this week, members of the Congressional high-speed rail caucus sent a letter to their colleagues urging them not to cut the tiny bit the program has left [PDF], but the program could easily get zeroed out over the next few months.

It’s often been said that the greatest weakness of President Obama’s high-speed rail initiative was the dispersed manner in which the funds were allocated, and the California example appears to underscore that. Given the enormity and complexity of the project, a contribution of four percent of the total cost hardly seems like enough incentive to jump-start a national network of fast trains. While many rail advocates hope that the California line, once operational, will lead other states to follow suit, the constant price hikes and complications could just as easily scare them off.

So the CHSRA isn’t focusing so much on the price or even the fact that the line won’t require operating subsidies. It’s plugging the job-creating potential (100,000 jobs over the next five years and a million jobs “moving forward”) and the reduction of carbon emissions by three million tons a year.

In his story on the business plan, Atlantic Cities writer Eric Jaffe compares the building of the line to the construction of Boston’s rail network at a time when other localities were still investing in canals. There were “train to nowhere”-type allegations back then too, and criticism of the high cost and long construction delays. But canals soon became obsolete, and the rail system is still a backbone of the movement of people and goods.

Many things still need to fall into place for California’s high-speed line to be built. Private investors needs to come up with 20 percent of the total funding. The state legislature, bitterly divided over the issue, would have to approve it, as would the governor. And it sure would help if the federal government would loosen the pursestrings a little bit, or if California could pull itself out of debt. It’s a tough enough slog just to complete the initial segment between Fresno and Bakersfield, but the real benefits of the line won’t come until Los Angeles and San Francisco are finally connected — and the best-case scenario for that is now 2021.

  • Anonymous

    The cost escalation has absolutely nothing to do with “appeasing” local residents. There are no local mitigations, with the CHSRA insisting on blasting giant aerials through neighborhoods regardless of impacts.

    The problem is that planning for the project has been outsourced to the very same firm that will get the construction contracts. This is a gigantic conflict of interest — the kind of thing that would result in jail terms in any other country.

  • Richard Rabinowitz

    I am concerned that HSR might bankrupt California, which is one of our biggest states. Do we really want an Italy on our hands? We need cheaper passenger railroad projects, and we need more of them, and we need them more quickly than this. Scrap the authority.

  • John Dough

    “…the media should stop freaking out about the cost when “after the initial investment, the entire system would pay for itself ….”

    LOL

    Reminds me of the one about the realtor who told the client, “I know you can’t afford to buy the house but the rental income would pay the taxes.”

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