High-Speed Rail in California is Worrying Itself to Death

Yesterday, for the second time in as many weeks, the House T&I committee held a hearing on the benefit-versus-boondoggle high-speed rail debate. Last time, Transportation Secretary Ray LaHood was asked to defend the peppering of high-speed rail grants to projects outside the Northeast Corridor. Yesterday, the topic narrowed to focus just on California’s high-speed rail project, whose recently-drafted business plan [PDF] has revised its total construction cost to $98.5 billion through 2033—up from $43 billion though 2020 just a few short years ago.

The initial operating segment of California HSR has critics worrying about the entire system. Full Image: ##http://www.cahighspeedrail.ca.gov/uploadedImages/Routes/Project_Sections/Preferred_state_map_FINAL.jpg##CHSRA##

First to take center stage were the members of the California congressional delegation, whom ranking member Nick Rahall (D-WV) likened to the cast of a reality TV show for “always fighting.” And fight they did: about alignments, the proper location for an initial operating segment, and whether HSR is needed at all.

The committee seemed primarily concerned with three things:

  • the choice of the Central Valley as the project’s initial operating segment
  • a recent poll showing dwindling public support for the project in its present form, and
  • the uncertain availability of funds, given such a dramatic increase in project cost estimates

Regarding the choice of the Bakersfield-to-Fresno initial segment, FRA Administrator Joseph Szabo was unequivocal. “We have a legal and binding obligation to move forward,” he told the committee. “We don’t have the authority to shift these dollars now [to a different segment] and meet the requirements of the law.” He’s right: The FRA, in awarding federal money to CA HSR, is executing its duties set forth in laws like the stimulus act, PRIIA [PDF], and others, passed to permit expansion of passenger rail while SAFETEA-LU stuck around.

Assessing the other two fears – dwindling public support and uncertainty of funds – is less straightforward.

Petra Todorovich, director of the rail advocacy group America 2050, told Streetsblog that she sees the uncertainty of funds as the greater threat. “It adds delay to the project, which is one of the reasons that the recent cost estimates were revised upwards,” she said. “If California can accelerate the project, it will cost less money.” And it’s a vicious cycle: The more the project costs, the less inclined private investors will be to sign on to the project, and the slower the project will be able to proceed.

Both sides agree that the success of the project depends on finding private capital to fill the growing gap in the up-front costs. The business plan (conservatively) predicts an $11 billion investment from the private sector, but even if all $11 billion were to turn up, Rep. Andy Miller (R-MD) expressed his extreme reluctance to ask his constituents in Maryland to help come up with the remaining balance. If that attitude prevails in the belt-tightening House, private sources have even less incentive to invest, and so the cycle continues. In this way, the entire House hearing could be seen as self-fulfilling.

After all, the hearing was titled “California’s High-Speed Rail Plan: Skyrocketing Costs & Project Concerns,” leaving no doubt about whether the convening Republicans wanted to paint the project in a negative light. But some said that plan backfired. Thomas Umberg, California High-Speed Rail Authority Chair, told Streetsblog he was gratified that, “While the hearing was called as a critique of the plan, in fact… federal officials, members of Congress, and the Mayor of Fresno strongly defended the plan.”

Still, it has plenty of detractors. And with Congress unwilling to commit to CA HSR and the State of California essentially unable to, it’s no wonder popular support has faded. Ray LaHood frequently reiterated in his testimony last week that HSR is “what America wants” (which he said again to a media conference call yesterday) but many skeptics yesterday cited a poll that would indicate otherwise: 59 percent of respondents in California said they would vote against the nearly $10 billion bond issue in Proposition 1A if it were to come up for election today.

Of course, Prop 1A passed by a 5 percent margin in 2008, so what can be done about an “unpopular” use of funds which happened to pass by popular a vote with 80 percent voter turnout? “The voters chose wisely when they voted [to provide] an alternative to the road congestion that is a drag on the state’s competitiveness,” said Todorovich. “For the sake of the state’s economy and quality of life, I hope they can keep the faith.”

19 thoughts on High-Speed Rail in California is Worrying Itself to Death

  1. Dear Andy Miller: your state is one of the biggest net federal tax recipients. It would still be a poor Southern state if it weren’t for the huge employment provided by DC. If California didn’t have to fork over $40 billion a year to make your constituents more comfortable, it would be able to fund this thing out of pocket.

  2. An important clarification- the section currently funded (roughly Merced to Bakersfield) is the Initial Construction Segment. The Initial Operating Segment will likely be Merced to LA, or Bakersfield to SF, depending on which segment they construct next. There won’t be any trains other than test trains operating on the Initial Construction Segment, as they don’t expect to be able to make any money until they can connect people to LA or SF.

  3. The CHSRA has done everything imaginable to bungle its mandate of bringing HSR to California, such as building budget-busting viaducts, when the standard is to build at grade among other things.  See here for what HSR in California could be: http://caltrain-hsr.blogspot.com/

  4. Why would any private investors provide up-front money to build the system? Without state guarantees on investments—prohibited by Prop. 1A—there’s no money to be made in building the system. We could do what Spain did: build the system with taxpayers’ money and turn it over to a private operator, but that sill won’t get the system built.

    It was always a bad project, advanced by misinformation and outright lies. Governor Brown should kill it now that he has public opinion on his side.

  5.  What they need is a test track. The best place for a test track is in the Central Valley.

    Also, it makes no sense to avoid the population centers of the Central Valley.  

    You can’t build a high-speed rail system with grade crossings. You need either underpasses or overpasses.

  6. Communities face the prospect of giant concrete aerials blasting through their downtowns. The ridership model was fabricated, and since 2008 the cost has exploded by 3x — even after dropping important cities like San Diego and Sacramento. 

    Seriously…if this isn’t the time for Congress to be “worried to death”, then when would be a good time?

  7. At the time voters approved Prop 1A, they had no idea the implications of a 200+ mph high speed rail system, or of the travel time. I am in agreement with Tolmach that the way to salvage this is to build it down I-5 and upgrade the existing San Joauqin trains to 90 mph regional rail as a connector. The key market is LA-SF, and we should not be turning Fresno into the next Philadelphia, as a commuter town to Los Angeles.

  8. James Fujita refers to the Central Valley ‘test track’, but the initial $6 billion, gets only track, no electrification, no trains, and no stations. That’s not a test track. That’s 100+ miles of unusable track.

  9. “The more the project costs, the less inclined private investors will be to sign on to the project….”

    Is it even conceivable that private could be LESS inclined to sign on to this dog?

    Nobody is interested now… N O B O D Y! What’s less?

  10. Private investment would not be asked for until an Initial Operating Segment has been run for two years showing a steady income stream.  Then investors would bid on a 30 year concession to collect the income from running the trains.  The concession would cost investors and estimated $11 billion to $20 billion which would be used to build more of the system.  After 30 years the concession would expire and could be sold again generating another $11 billion or more for the next 30 year concession.

  11. In other words, taxpayers would pay to build the system until it’s profitable, when it would be turned over to private investors, socializing the costs and privatizing the profits.

  12. Rob Anderson,  you cannot complain that investors will not come and then complain that if investors buy the concession rights for $11 billion to $20 billion that they would make the profits off government expense.   Investors will pay up front for 30 years of fare collection which will build the system.  As the life of the system is well over 100 years the concession can be sold over and over every 30 years providing more money to the state of California which could be used to build more rail.  How much would equivalent road and airfield capacity return to the state of California?

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