California's High-Speed Rail Costs Soar, But Proponents Say There's "No Choice" But To Build
Wednesday, November 02, 2011 - 07:11 AM
The California High-Speed Rail Authority released a new business plan Tuesday outlining a multi-phase strategy for bringing bullet trains to the state. The total price tag? $98.5 billion. That’s almost three times the original estimate made in 2008 when voters approved a $9 billion bond measure in support of the project that ultimately would link San Francisco with Los Angeles.
In a state already infamous for snarled traffic, and where the population is projected to increase from 38 million to 60 million people by the middle of the century, improving transportation infrastructure and moving all those people around is a real concern.
“We don’t have many choices,” said Thomas Umberg, Chairman of the HS Rail Authority. “We can do nothing and bury our heads in the sand. We can build more freeways and airports. Or we can do something visionary that transforms California’s transportation infrastructure.”
Part of that vision comes in the plan’s “phased implementation,” in which high-speed rail is developed, constructed, and funded in segments. “If we have to pause, we’ll pause,” said Umberg.
There is currently approximately $6 billion in funding from the federal government and from bonds approved by California voters in Proposition 1A to pay for the first phase—130 miles of track to be laid between Fresno and Bakersfield, the heart of California’s Central Valley.
The federal money comes with deadlines and strings attached: if the federal funds aren’t used by 2017, the state loses the money, said HS Rail spokesperson Rachel Wall. In order to meet that deadline, construction on the rail lines in the Central Valley are slated to begin in October 2012. In addition, the federal funds mandate that construction begin in the Central Valley, far from major metropolitan population centers.
After that, where the additional $92.5 billion in projected costs will come from remains unclear. The second phase of the project, which would link the new Central Valley track to existing transportation systems in either Northern or Southern California, is projected to cost around $31 billion.
“We don’t have funding yet for the second segment,” said Mike Rossi, a High-Speed Rail Authority board member appointed by Governor Jerry Brown in 2011. “But we have three years before we have to worry about that.”
Although the plan relies on public funding, it is designed to operate without public subsidies. Private investment is also integral to the plan, said Rachel Wall. “When there’s a revenue stream in sight, when there are trains on the tracks and tickets being sold, then the private sector will come in.”
Elizabeth Alexis, co-founder of Californians Advocating Responsible Rail Design (CAARD), a critic of the project, says that without funding sources identified and secured, the burden would most likely be on the state of California.
“You’d like to say a realistic price tag makes the project more realistic,” she said. “But what it means is that the legislators have a really tough decision to make. Now there’s no excuse for not knowing what they’re signing up for. Before you could maybe pretend that you didn’t have this big liability for the state. The headline shouldn’t be why is the price tag so high, but why was it so low in the first place?”
Some of the cost increases come from the extension of the time line for completion from 2020 to 2033, and by using an estimated 3% annual inflation rate to calculate costs over time.
Daniel Krause, executive director of Californians for High Speed Rail, a supporter of the project, says some of those cost projections are too high because both the time line and inflation rate are too conservative.
“We think it’s a little out of whack,” he said. His organization believes that 2025 is a more realistic completion date, a change which he calculates would bring the price for high speed rail down by approximately $25 billion.
Political reaction to the new plan was mixed. Governor Jerry Brown and Senator Nancy Pelosi issued statements of support. State Senate Republican leader, Bob Dutton, called the new plan a “boondoggle,” and Republican State Senator Doug LaMalfa announced he would introduce legislation to put high-speed rail back on the California ballot.
“This is a hard project that’s going to take political courage and vision,” said Thomas Umberg. “Government is not tooled to have a succession of leaders with courage and vision. This is going to be a challenge for the state of California, but I think we’re up to the challenge.”
The plan is open to a 60-day comment period before it is finalized and goes to the California legislature in January 2012.