Bullet Train’s Benefits to Southern California Questioned at Hearing

High speed rail constructionSouthern California Democrats have said few, if any, critical words about the state rail authority’s decision in 2016 to drop Los Angeles as the starting point of the first segment of the statewide bullet train.

Rail officials announced at the time that they would instead invest the vast majority of available money to begin building from the Central Valley to the Bay Area.

Rep. Alan Lowenthal (D-Long Beach) broached the topic at a House rail subcommittee hearing on Thursday, asking state rail officials and other witnesses how he can justify the project to his constituents.

“What do I tell people in Los Angeles,” said Lowenthal, the former chairman of the state Senate transportation committee. “We talk about the [rail’s benefits] to Silicon Valley and the Central Valley, but … when are we going to see things going on in Los Angeles? We are the population center.”

Under the California High-Speed Rail Authority’s plans, it is providing more than $700 million to install an electrical power system for the Bay Area’s Caltrain commuter system and another $400 million for a downtown San Francisco station, along with other much bigger investments that will flow through Santa Clara County. …

Click here to read the full article from the L.A. Times

The Slower Reality of California High-Speed Rail

High speed rail constructionWhen California voters approved construction of a bullet train in 2008, they had a legal promise that passengers would be able to speed from Los Angeles to San Francisco in two hours and 40 minutes.

But over the next decade, the state rail authority made a series of political and financial compromises that slowed speeds on long stretches of the track.

The authority says it can still meet its trip time commitments, though not by much.

Computer simulations conducted earlier this year by the authority, obtained by The Times under a public records act request, show the bullet train is three minutes and 10 seconds inside the legal mandate. …

Click here to read the full article from the L.A. Times

Only 31% of Californians Want to Keep Paying for High-Speed Rail Project

Gov. Jerry Brown, Anne GustA new poll suggests that only 31% of registered voters in California want to keep paying for the California High-Speed Rail project, the “bullet train” that Gov. Jerry Brown sees as a major legacy project to fight climate change.

The USC Dornsife / Los Angeles Times poll asked 835 respondents whether they supported or opposed the project, and found Californians were evenly divided — until they were told about the cost, at which point support crashed, according to the Times:

About 48% of the poll’s 835 respondents said that in general they strongly or somewhat support the project, while 43% oppose it. USC poll director Jill Darling said those are not strong numbers of support or opposition, given the poll’s margin of error of 4 percentage points.

But when asked in a second question whether they would stop the project, given that the cost has doubled to $77 billion and the schedule has stretched to 2033, just 31% said they would keep going and 49% said they would halt construction. A sizable 19% did not know what to do about the problems.

As with many issues, the project’s strongest proponents are residents of the liberal San Francisco Bay area.

As Breitbart News has reported, the cost of the project has skyrocketed even as construction has bogged down. Gov. Brown has dismissed criticisms of high-speed rail as “bullshit,” but the fact is that the project, which was supposed to take passengers from Los Angeles to the San Francisco Bay area in less than three hours, cannot guarantee that travel time and will require heavy subsidies to remain competitive with air fares or driving costs.

Voters approved the project in a 2008 referendum, in the same election that brought Barack Obama to power. The new administration’s stimulus project emphasized high-speed rail projects — and sought to punish states that did not want to build them. But only California has persisted with its high-speed rail plans, and has done so despite facing opposition even from environmental groups.

Voters, too, are now souring on the project and its future seems dim — though gubernatorial frontrunner Gavin Newsom has reversed his former opposition and now supports the project.

Joel B. Pollak is Senior Editor-at-Large at Breitbart News. He was named to Forward’s 50 “most influential” Jews in 2017. He is the co-author of How Trump Won: The Inside Story of a Revolution, which is available from Regnery. Follow him on Twitter at @joelpollak.

This article was originally published by Breitbart.com/California 

The Fatally Flawed Centerpiece of California’s Transportation Future

High speed rail constructionCalifornia’s transportation future is bright. In every area of transportation innovation, California-based companies are leading the way. Consortiums of major global companies have offices throughout the San Francisco Bay area, pioneering self-driving cars that consolidate technologies from not just automakers, but cell phone manufacturers, chip designers, PC makers, telecoms, and software companies. In Southern California from the aerospace hub surrounding LAX to the Mojave desert, heavily funded consortiums experiment with everything from passenger drones to hyperloop technologies to hypersonic transports. It’s all happening here. It’s wondrous.

Meanwhile, instead of preparing the roads for smart cars, or designing hubs that integrate buses and cars-on-demand with aerial drones and hyperloop systems, the centerpiece of California’s transportation future is a train that isn’t very fast, being built at what is probably the highest cost-per-mile in the history of transportation, which hardly anyone will ever ride.

There is a stark contrast between California’s private entrepreneurial culture, as reflected in the marvels of transportation engineering they are developing, and California’s political culture, as reflected in their ongoing commitment to “high speed rail,” in all of its stupefying expense, its useless grandeur, its jobs for nothing, its monumental initial waste, situated miles from nowhere. Exploring that stark contrast, its origins, the players, the projects, the problems and the solutions, will be the topic of this and subsequent reports.

HIGH SPEED RAIL – THE FATALLY FLAWED CENTERPIECE

The fatally flawed centerpiece of California’s transportation future, the “Bullet Train,” unfairly dominates California’s transportation conversation. Unfair not only because it represents a prodigious waste of public resources and an epic failure of public policy, but because in spite of the Bullet Train fiasco, California’s private sector is designing and building a transportation future for the world at dazzling speed. But before surveying the excellent progress being made elsewhere in the Golden State, it is necessary, yet again, to tick through the reasons why the Bullet Train is the wrong solution, in the wrong place, at the wrong time.

Fifty years ago, before air travel became affordable to nearly anyone, before you could fly from San Francisco to Los Angeles for less money than it would cost in gasoline to drive there in your car, rail travel might have made sense. But today, airfare is only about twice the cost of bus fare, with total air travel time a minute fraction of what the same trip would take on a bus.

Fifty years ago, before land values and environmentalist lawsuits rendered any capital project prohibitively expensive, building a high-speed rail corridor between San Francisco and Los Angeles might have made sense. But today, the latest cost estimates for the SF/LA route exceed $100 billion.

Unrealistic Projections

High speed rail makes sense for intercity applications in megapolises. For example, a high speed rail line connects three of Japan’s largest cities, Tokyo, Nagoya, and Osaka. Nearly all of this 300 mile corridor is urbanized – in all, over 70 million Japanese live in this region of Japan.

By contrast, just phase one of the California high speed rail project, linking San Francisco with Los Angeles, will be 520 miles longconnecting about 24 million people. This doesn’t pass the density test. Compared to a successful high speed rail system – which the Tokyo/Osaka system certainly is – the San Francisco/Los Angeles system would be nearly twice as long, and serve only about one third as many people.

Put another way, there are 233,000 Japanese, per mile, living along the Tokyo/Osaka route, whereas there are 46,000 Californians, per mile, living along the proposed San Francisco/Los Angeles route. That means there are five times as many potential riders on Japan’s centerpiece bullet train as there might be on California’s.

Low ridership isn’t just a consequence of insufficient population density, although that is a critical precondition. Low ridership also stems from impracticality. The California High Speed Rail Authority’s 2018 “business plan” is disingenuous on this topic. They claim that travel to and from the airport chews up time, yet ignore travel time to and from a high-speed rail station. Travel time to these stations, air vs. rail, are entirely offsetting. Then they claim time that boarding high speed rail is quicker than boarding an airplane. Why? A frequent air traveler has TSA Pre, and typically sails through check-in and security. And won’t security be in place for high speed rail? Of course it will. Boarding time – also entirely offsetting. Which brings us to the actual travel time.

The current projection according to the CA HSR 2018 business plan (ref. page 7) is three hours for nonstop service from San Francisco to Los Angeles. This is definitely a best-case estimate. As reported on March 18th in the Los Angeles Times, “Of the roughly 434 miles of track between Los Angeles and San Francisco, 136 miles — nearly one-third of the total — could have at least some speed restrictions.” This would include tunnels, sharp curves, all transits through urban areas, and, incredibly, shared track and shared right-of-way with conventional rail carriers.

It is going to take twice as long to travel from San Francisco to Los Angeles via high speed rail vs. an airplane. Let’s not forget there are three major airports in the San Francisco Bay Area – SJC, OAK, and SFO. Five major airports serve the Los Angeles area – LAX, ONT, BUR, LGB and SNA. And flights connect all of them to each other, all day, every day.

Perpetual Financial Drain

Even if you accept the official projections for California’s high speed rail, the financial projections are unlikely to attract private capital. The table depicted below uses baseline projections from the CA HSR 2018 business plan (numbers directly taken from the business plan are highlighted in yellow, with numbers in intermediate years, which were not disclosed in the business plan, arrived at by extrapolation) to construct a cash flow for the “Phase One” portion of the project, those segments connecting San Francisco to Bakersfield. All of the variables are taken from that document. Several generous assumptions are necessary to accept these projections. They are:

(1) The entire capital cost for construction of the Phase One system linking San Francisco to Bakersfield is $40.1 billion (ref. page 32, exhibit 3.2 “Summary of Cost Estimates by Phase and by Range”). This is crazy. It will probably cost half that just to bore a tunnel under the Pacheco Pass.

(2) Ridership on this segment will grow to 31.9 million fares per year by 2035. Assuming primarily commuter traffic, this assumes over 120,000 riders per day (ref. page 90, exhibit 7.1 “Ridership: Silicon Valley to Central Valley Line through Phase 1,” “Medium Ridership”).

(3) Incredibly, fare revenue will hit $1.86 billion by 2035. This assumes an average ticket price, in 2017 dollars, of $60. This, in turn, infers that the average commuter will be spending $1,220 per month to ride the bullet train (ref. page 90, exhibit 7.3 “Farebox Revenue: Silicon Valley to Central Valley Line through Phase 1,” “Medium Revenue”). This is perhaps the most far fetched of all assumptions made in the entire business plan. Imagine over 120,000 regular commuters spending $1,200 per month to ride this train, noting the fact that this sum would not include the additional costs virtually all commuters would incur to travel from their home to the HSR station, and then from the HSR station to their workplace, on both their outbound and inbound commute, day after day.

(4) Operations and maintenance for the train will be a mere $1.4 billion in 2035, then, after adjusting for 3% inflation, will only increase 11% by 2060 even though ridership is projected to rise from 31.9 million passengers in 2035 to 51.2 million by 2060 (ref. page 91, exhibit 7.5 “O&M Costs: Silicon Valley to Central Valley Line through Phase 1,” “Medium Cost Estimate”). This defies credulity. How will ridership increase by 61% between 2035 and 2060 while O&M costs only increase 11%?

(5) “Lifecycle Costs,” the capital reinvestment necessary to replace worn out rolling stock and other fixed assets, i.e. “capital rehabilitation and replacement costs for the infrastructure and assets of the future high-speed rail system,” as near as can be determined from the 2018 business plan, is estimated to only total around $5 billion between commencement of operations in 2029 and 2060, over 30 years (ref. page 91, exhibit 7.6 “Lifecycle Costs: Silicon Valley to Central Valley Line through Phase 1,” “Medium Lifecycle Cost”).

(6) In the analysis below, loan payments are deferred for up to ten years until rail operations begin in 2029. In reality, of course, payments begin as soon as the money is loaned. Notwithstanding that, the annual loan payments are calculated based on loan of $40.1 billion, a 30 year term, and 5% interest.

CALIFORNIA HIGH SPEED RAIL
CASH FLOW USING 2018 BUSINESS PLAN’S “BASELINE” PROJECTIONS, $=M

Taking into account these are – for the six reasons just stated – very optimistic projections, there remain problems with these numbers that would give any investor pause. For starters, there is a cumulative negative cash flow of $14 billion, representing the period up until 2039 when the system is projected to become cash-positive. This represents over 20 years of negative cash flow. Where will this $14 billion come from? Bear in mind it will be more than $14 billion, since payments on the loans commence when the monies are loaned, not when the system begins operations. Maybe some of it will come from “cap and trade” proceeds, although if so, it would consume nearly all of them. Would private investors step up?

The problem with that is if you review this best-case scenario, you can see that selling the future positive cash flow to finance the initial negative cash flow would yield an internal rate of return of 4.7%. While that’s not an impossibly low rate for a municipal financing, it is exceedingly low for a private financing subject to this level of risk. And what about the risk?

High Speed Rail Cash Flow Using Conservative Assumptions

The next chart shows a cash flow scenario for high speed rail, phase one, with key assumptions changed. Instead of costing $40.1 billion, it costs $49 billion, the “High” range of cost estimates as disclosed on the HSR 2018 business plan, page 32. Instead of an average ticket price of $60, a more affordable $30 price is used, based on the assumption that the average commuter will not be willing to spend more than $600 per month on train fare. As ridership grows by 60% between 2035 and 2060, operations and maintenance costs are escalated by 30% instead of only 11%. And instead of spending a mere $5 billion on ongoing capital investments between 2029 and 2060, that is doubled to a still paltry $10 billion. What happens?

CALIFORNIA HIGH SPEED RAIL
CASH FLOW USING ALTERNATIVE (CONSERVATIVE) PROJECTIONS, $=M

As can be seen on this alternative analysis, if ridership revenue is significantly lower than projected, and if – one might argue – realistic operations and capital budgets are projected, and, if one merely uses the HSR Authority’s own high estimate of capital costs, there is no financial viability whatsoever to this project. The internal rate of return formula basically blows up, which is what happens when you burn through $91 billion before having your first break-even year in 2059. The question instead becomes, what else might Californians have done with $50 billion? The other question raised by this more conservative financial scenario, more disturbing, is what if high speed rail never makes money? How many additional tens of billions will be required to subsidize its operation?

The problem with dismissing these more bleak financial scenarios is simple: this is the sort of analysis that any savvy investment banker would start with. Then they would ask questions. WHY do you think 120,000 people are going to be willing to spend $1,200 per month in train fares to commute, not even including their costs to get to and from the train station? WHY do you think you can increase ridership by 60%, but only increase operations costs by 11%? WHY do you think you can operate a $50 billion railroad, and only expect to reinvest ten percent of that amount in capital equipment over thirty years?

The “Monte Carlo” Method of What-If Analysis

Instead of confronting these questions in plain English, the high speed rail authority did what-ifs using a “Monte Carlo” analysis. Here’s how they describe this (ref. page 93):

“Breakeven forecasts measure the likelihood that farebox revenue is equal to or greater than operations and maintenance costs in a given operating year. The analysis works as though there are two large bags full of marbles, one with thousands of marbles each representing a potential operations and maintenance cost, with more of the marbles having values around the median cost estimate than around the extreme (high or low) values. The second bag of marbles contains potential revenue outcomes, again with more marbles with values around the median than the high or low outliers.

The breakeven Monte Carlo analysis simply “picks” one marble at random from the revenue bag and one marble at random from the cost bag, subtracts the number written on the cost marble from the one written on the revenue marble and records the value. The analysis then puts the marbles back into their respective bags and repeats the process thousands more times which builds a distribution of potential results and generates a degree of confidence (or confidence interval, expressed as a percentage) as to the likelihood of project breakeven.”

If anyone wonders why projects in California cost far more than they should, please consider the role of consultants. The variables governing success or failure for California’s high speed rail project are tangible. They require urgent debate by practical people. How much will it cost to bore a tunnel through the Pacheco Pass? How likely is it that Union Pacific will share their right-of-ways with high speed rail, and if so, how much will that reduce costs, and how much will that reduce the speed of the train along those segments, and why? What is the real cost of the many engineering and environmental studies, and how many of them are necessary? Why is it that so many other nations, from socialist Europe to fascist China, manage to build these systems for a fraction of what Californians must expect to pay?

These are the questions that require answers. Counting metaphorical marbles does not add value to the process, nor does it add credibility to the financial projections. These qualitative questions regarding California’s high speed rail project have not been answered, because perhaps they cannot be answered. But the reasons California’s high speed rail system is so staggeringly, prohibitively expensive, are not problems that are confined to the high speed rail project. They infect every infrastructure program in the United States, and especially in California. Identifying the reasons infrastructure projects cost far more than they should, along with exploring tantalizing alternatives to high speed rail, will be the topic of future reports.

*   *   *

Edward Ring co-founded the California Policy Center in 2010 and served as its president through 2016. He is a prolific writer on the topics of political reform and sustainable economic development.

Jerry Brown Disses the Central Valley . . . Again

SACRAMENTO, CA - OCTOBER 27: California Governor Jerry Brown announces his public employee pension reform plan October 27, 2011 at the State Capitol in Sacramento, California. Gov. Brown proposed 12 major reforms for state and local pension systems that he claims would end abuses and reduce taypayer costs by billions of dollars. (Photo by Max Whittaker/Getty Images)

Many of my Central Valley legislative colleagues are furious that the staff at Governor Jerry Brown’s Water Commission have rigged the system so the recently announced proposed funding for Temperance Flat Reservoir is just that – flat.

It’s not surprising that environmentally-oriented staff at the California Water Commission (and other state agencies such as the State Water Resources Control Board or the multitude of regional water boards) would come down in favor of fish over people.

I hate to say it but it also won’t be surprising to see Brown and his appointees on the Water Commission go along with their staff recommendation and stiff the Central Valley.

Governor Brown has never respected the Central Valley as demonstrated by his stubbornness against spraying for the medfly during his first stint as Governor to more recently forcing an unwanted High Spending Rail onto us which is destroying our family homes, businesses and farms.

Even Brown’s “Twin Tunnels” project to divert water from the Delta is now really just aimed at helping his friends in Los Angeles.  Most of this water will flow through the Central Valley non-stop to Southern California.

The Proposition 1 water bond (which was approved by 67% of the voters in 2014) was originally drafted and passed by the legislature back in 2009.  For a variety of mostly political reasons it was postponed going on the ballot for five years and ultimately parred back from an $11 billion water bond to one of only $7 billion before it hit the ballot.

Most critical was that the original amount dedicated to water storage projects (such as Temperance Flat or Sites Reservoir) was cut from $3 billion to $2.75 billion.  Brown and even some rogue farm groups had tried to cut it back to under $2 billion.  (That foolish idea was beaten back by Central Valley legislators but that’s another story.)

Adding insult to injury, the Water Commission’s staff recently recommended giving almost $1 billion to Sites Reservoir but only a lousy $170 million to Temperance Flat.

Why the funding gap between the two?

Again, Brown’s long history of treating the Central Valley with neglect and disdain is partly to blame.

The other reason is that Brown has announced when he leaves office next year he will retire to family-owned land up in Colusa County that is being “modernized” with money his Dad made from Indonesia oil deals decades ago. Colusa County unsurprisingly is also the home of the proposed Sites Reservoir.

To the detriment of those needing water from Temperance Flat, Brown is using state funding to curry favor with his future neighbors in Colusa County who overwhelmingly support building Sites Reservoir.

As the late Speaker Tip O’Neill once said – all politics is local.

There is a little bit of good news for the area of the Central Valley I represent – of the Proposition 1 money set aside for water quality and improvement projects, over $52 million (29%) has already gone out to water projects in Fresno, Kern, Kings and Tulare counties.  An additional $121 million is still in the pipeline for these four counties.

Thank goodness for small favors.

State Senator Andy Vidak proudly represents the residents of Fresno, Kern, Kings and Tulare counties.

This article was originally published by Fox and Hounds Daily

Bullet Train is Colliding with Reality

High speed rail constructionReality may finally be catching up with the vision – or pipedream – of a 200-mile-per-hour train connecting California’s northern and southern regions.

A few weeks ago, the High-Speed Rail Authority released its latest “business plan” that was supposed to tell Californians how the brief stretch of track now being constructed in the San Joaquin Valley can grow into a system stretching from San Francisco and Sacramento in the north to Los Angeles and San Diego in the south.

While the latest version of the plan, drafted by the latest of several management teams, appears to be more realistic about cost and construction schedules than its predecessors, it’s still sorely deficient, as its official reviewers pointed out last week during a legislative hearing.

After a decade-plus of cogitation, they said, the state still doesn’t have a complete scenario for raising the tens of billions of dollars it would take to extend the San Joaquin section into the San Francisco Bay Area via San Jose and southward to Los Angeles.

The plan suggests that the northward extension, which is the first priority, might be built with a bond issue backed by the project’s dedicated share of revenues from the state’s “cap-and-trade” auctions of greenhouse gas emission allowances.

And then, it continues, there would be an operable segment that would generate revenues from riders that could be used to finance the southward extension.

However, the plan contains caveats for the scheme to work, such as extending cap-and-trade from its current end date, 2030, to 2050, and offering lenders some guarantees to back up the notoriously volatile emission auctions.

The reviewers look somewhat askance at such a scheme.

Louis Thompson, one of the nation’s top rail system experts who chairs the project’s official “peer review” committee, sees “little prospect” that fares from the first extension could finance the second. He told legislators that the project, a favorite of Gov. Jerry Brown, is “at a critical point when difficult decisions need to be made,” and cited the need for a “credible long-term plan to finance the system.”

The Legislature’s budget analyst offered a similarly skeptical view of the business plan in its review.

Legislative Analyst Mac Taylor’s staff said there are multiple “issues” such as potentially higher costs than the current $77.3 billion estimate (twice what voters were told in 2008 when they passed a $9.95 billion bond issue), “significant uncertainties” about the bond issue proposal and finally, the lack of a “complete funding plan.”

The review concluded, “It is crucial for the high-speed rail project to have a complete and viable funding plan (and) at this time, no such funding plan exists.

There’s probably enough money to complete the 119-mile San Joaquin Valley stretch, which can be used for Amtrak service, and money is being spent to improve commuter service both in the Bay Area and in Southern California.

After that, the finances are very dicey, and it would be foolhardy to begin any extension without, as the business plan analysts say, a complete and viable financing plan. And if such a plan can’t be produced, we should call it quits on a project that was never grounded in reality.

olumnist for CALmatters

California On Verge of Second Massive Boondoggle

Gov. Jerry Brown, Anne Gust“I’ll gladly pay you Tuesday for a hamburger today.” That was the catchphrase of J. Wellington Wimpy, simply known as just “Wimpy” on the “Popeye” cartoon show. For good reason, the proprietor of the diner rejected Wimpy’s request because of his reputation for not paying on Tuesday.

The inability to repay one’s debts can come with severe consequences, as anyone who has borrowed money from a loan shark can attest. California, despite record revenue coming into the state treasury, has a real problem with debt. High on that list, of course, is the state’s multi-billion-dollar unfunded liabilities for its pension obligations. But we have a problem with bond debt as well.

State-issued bonds can be a legitimate method to finance public projects that have a long useful life. But key to bond financing is a clear and predictable plan to repay those bonds.

California is now on the verge of adopting a second massive boondoggle plagued with financing issues. We are all familiar with the notorious high-speed rail project that was sold to voters as a safe and economical alternative to air travel between Northern and Southern California. A third of the money was to come from the private sector, a third from the feds and the rest from the sale of Proposition 1A bonds. All three of those revenue sources have disappeared in a puff of smoke and, instead, the HSR project is kept on life support through “cap-and-trade” revenue that didn’t even exist when voters approved the original bond.

The second mega-project destined to adopt the boondoggle label is Gov. Jerry Brown’s “twin tunnels” project, intended to transport water from the Sacramento River to the pumping stations at the south end of the delta. Bear in mind that the project will not provide a new water source but would be built ostensibly for environmental reasons.

However, like the high-speed rail project, the financing for the twin tunnels is illusory. Virtually all the potential major wholesale customers of water from the twin tunnels are highly skeptical of its viability and balk at paying for it. The one exception is the Metropolitan Water District in the greater L.A. area, which is considering the adoption of a plan to finance a scaled-down version of the project — meaning one tunnel instead of two.

To read the entire column, please click here.

This article was originally published by the Orange County Register

High-Speed Rail Losing Business Support

High Speed Rail FresnoDo you know what really was deflating when California’s High-Speed Rail Authority issued its latest report a few weeks ago?

It wasn’t the revelation that the cost of building the bullet train between Los Angeles and San Francisco is going up by billions of dollars. (Again.) And it wasn’t that construction will be delayed. (Again.) Everybody knows those setbacks will happen with any big project, particularly a government one.

No, what was truly disheartening was the disclosure that the high-speed train will have to slow down on another stretch of track. That now makes three places along the proposed route where the train will be forced to throttle back to half speed. And you know, you just know – much like the expanding costs and the lengthening construction timetable – there’ll be more disclosures in future years about how the train will “need” to slow down on this stretch of track or that one to save money (the latest slow stretch will save $1.7 billion) or to make a stop in some politically connected town. Our high-speed train is devolving into a commuter express.

Here’s why that’s so disappointing: It pretty much kills the argument that the train will be attractive for business travelers.

Why? Because business folks, as you know, care less about price and much more about speed. And increasingly – or should we say “decreasingly” – the velocity of the so-called high-speed train is being compromised. The rail authority was supposed to build a system to get a train from Los Angeles to San Francisco in 2 hours and 40 minutes. But a good article in the Los Angeles Times last month pointed out that outside experts said it is improbable that such a time could ever be met, and even the rail authority says the fastest trip would be 3 ½ hours but a train with more stops could take 4 hours and 5 minutes. Truth be told, 4 hours is probably optimistic.

So, let’s say you’re a busy business person and you need to make a quick trip to San Francisco. Assume you leave home 1 ½ hours ahead of your departure and you take your trip by rail. Let’s give the rail authority the benefit of the doubt and say it’ll take 3 ½ hours. That gets you to a train station in San Francisco in 5 hours.

Now look at the train’s competition: airplanes. Let’s say you leave home 2 ½ hours ahead of your flight to allow extra time for the airport congestion, security screening, etc. Add the 1 ½ hour flight, and you’re in the airport in San Francisco in four hours.

The airplane wins by an hour each way; two hours round trip. That extra two hours will make for a longer day; it might be enough to force you to make a two-day trip instead of a one-day one.

Making the train less appealing to business travelers is important because the high-speed rail was already shaping up as unattractive to tourists. As you know, casual travelers are more sensitive to price, and high-speed rail will likely be no bargain.

Although train fares are not set, one published report suggested a round-trip ticket may cost $115. If true, that would be $460 for a family of four. Throw in transportation to the train station along with the cost of renting a car or taking multiple Uber trips in San Francisco, and you’re easily in the $600 range.

Compare that to the cost of taking your car, which is the train’s main competition for the tourist dollar. If you wanted to drive your brood, you’re looking at about $100 in gasoline for a round trip. Throw in parking costs of $150 or so, and you’re up to about $250.

The car wins by $350.

In short, the high-speed train probably would never be big with tourists, and the latest news makes it less attractive to busy business folks. It’s hard to see how the high-speed rail, if built, would be much more than a novelty that a few people will find convenient, but most will use only occasionally.

The high-speed rail has slowly lost its many enthusiastic supporters over the years, mainly because of the rising costs. But now, as the speed of the train keeps slowing, it seems destined to lose the business traveler, too.

ditor and publisher of the San Fernando Valley Business Journal

This article was originally published by Fox and Hounds Daily

Jerry Brown’s Rail Fantasy Keeps Getting Pricier

High Speed Rail Fresno“That’s bulls**t,” Gov. Jerry Brown told a group of union leaders in Sacramento this week as he addressed the latest bad news about his pet project to build a bullet train connecting San Francisco with Los Angeles. The union folks probably loved the tirade, given that the proposed rail system is more of a make-work project for union members than a transportation system. But the governor’s promise that the state can build the railway if “we don’t let these small-minded people intimidate us into lowering our expectations” rang a bit hollow.

Brown said he is “so tired of all the nonsense that I read in the paper and you hear from other politicians.” But the latest nonsense comes from his own High-Speed Rail Authority, which released its latest business plan. The project already is over budget and behind schedule. The new plan bumps the predicted costs from $63 billion to $77 billion — and delays the opening date by four years, to 2033.

Those costs will surely grow even more given that the current overruns are taking place on the flat, easy-to-build section of the system through the Central Valley. Just wait until the real engineering challenge is confronted, as rail planners figure out how to take the train through the Tehachapi Mountains separating the valley from Southern California.

Look at other major California infrastructure projects for an idea of realistic cost overruns. Rebuilding the eastern span of the Bay Bridge, following the Loma Prieta earthquake in 1989, was 2,500 percent (that’s not a typo) over the original estimate and wasn’t completed until 2013.

Apparently, it’s “small minded” for Californians — including one of the authors of the 2008 statewide initiative that secured $9.95 billion in funding for the train project — to question the overruns, delays, and failure of the latest plan to live up to the promises made to voters. That author, former Sen. Quentin Kopp, remains an advocate of high-speed rail in concept, but he calls the current alignment “foolish” and said “it is almost a crime to sell bonds and encumber the taxpayers of California at a time when this is no longer high-speed rail.”

Kopp is right. To make it feasible, rail boosters created a route alignment that shares tracks with commuter trains (the blended route) on the peninsula south of San Francisco and in the Los Angeles area. It’s highly unlikely that it will connect the state’s two megalopolises anywhere near the promised time of 2 hours and 40 minutes given how slow the trains will go in these areas.

It’s magical thinking to expect the project to do that as 2008’s Proposition 1A promised – with no operating subsidies and at an affordable price funded by private investment. Investors have run for the hills and the subsidies are a given. And why is this project even needed? I just took a Southwest Airlines flight from Sacramento to Los Angeles for under $100 roundtrip (on a special deal, which you can regularly find) with a flying time of a little more than an hour. It’s not as if Californians have no options to travel up and down the state.

The project has been unable to tap federal funds now that the Obama administration, which supported the project, is history. The initial bond funding is a pittance of the project’s estimated total cost. The auctions of cap-and-trade credits are another funding source, but even the Democratic-controlled Legislature is reluctant to open up those spigots given its other priorities.

But Brown has a plan: “I’ll tell you how we’re going to fund the railroad. We’re going to take back the Congress and then a Democratic Congress is going to put the high-speed rail in the infrastructure bill and then we’ll get that trillion dollars and we’ll put America back to work.” That’s far from a certainty — and it’s a bizarre way to plan for a major investment. Let’s just start building and hope that the political winds change and a new Congress will dole out the money. OK, I guess.

That approach is reminiscent of the one detailed by flamboyant former Assembly Speaker Willie Brown. In a July 2013 San Francisco Chronicle column addressing $300 million in cost overruns for the city’s Transbay Terminal, he argued, “If people knew the real cost from the start, nothing would ever be approved. The idea is to get going. Start digging a hole and make it so big, there’s no alternative to coming up with the money to fill it in.”

The bullet-train project epitomizes such public-sector cynicism. Proposition 1A offered myriad detailed promises to woo skeptical voters. A superior court initially halted the sale of the bond funds to begin digging the hole, so to speak, because the authority wasn’t following requirements that it identify enough cash to complete the first 300-mile segment. Unfortunately, a higher court ultimately gave the project the go-ahead. That shouldn’t be a shock to Spectator readers, who are used to hearing the absurd promises made by politicians. But voter initiatives are written laws, not suggestions.

In recent months, the governor’s other large infrastructure boondoggle has also run into trouble. Brown wants to build two giant 35-mile tunnels underneath the Sacramento-San Joaquin Delta to bring water from the relatively rainy north to arid Southern California. It’s a way to keep water flowing even when the state shuts the pumps to protect the endangered Delta smelt.

“The $17-billion bill for the twin-tunnel version was supposed to be paid by the San Joaquin Valley agricultural districts and Southland urban agencies,” reported the Los Angeles Times. “But the farm districts have for the most part declined to open their wallets, saying the water is too expensive for them.” Not all of the urban agencies are all that excited about paying for it, either.

These projects are unfathomable given that Brown last year insisted that Californians raise gas taxes — or else their roads and bridges will continue to crumble. As Brown leaves the public stage after decades of elected office, he is reduced to hurling insults at Californians who make perfectly reasonable criticisms of costly projects that divert money from far more pressing priorities. In my view, that’s very definition of small-minded BS.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

This article was originally published by the American Spectator

New Bullet Train Woes Cause Fresh Headaches for Democrat Gubernatorial Candidates

High speed rail constructionThe March 9 release of the first updated business plan in two years for the state’s high-speed rail project could sharply intensify the pressure on Democratic gubernatorial candidates who back the project to explain their support.

The Republican candidates – Assemblyman Travis Allen of Huntington Beach and Rancho Santa Fe businessman John Cox – reflect the GOP consensus that the project is a boondoggle that’s unlikely to ever be completed. But the major Democratic hopefuls – Lt. Gov. Gavin Newsom, former Los Angeles Mayor Antonio Villaraigosa, state Treasurer John Chiang and former Superintendent of Public Instruction Delaine Eastin – have all indicated they would continue with rail project, albeit with little of the enthusiasm shown by present Gov. Jerry Brown.

While the new business plan was depicted by the California High-Speed Rail Authority’s new CEO, Brian Kelly, as a constructive step toward salvaging the project, the plan’s key details were daunting:

The estimated cost of the project, which has yo-yoed from $34 billion to $98 billion to $64 billion, changed once again. The business plan abandoned the previous $64 billion estimate for an estimate of $77 billion – accompanied by a warning that the cost could go as high as $98 billion.

Even at the lower price tag, the state didn’t have adequate funds to complete a first $20 billion-plus bullet-train segment linking populated areas. The present plan for a Central Valley route has an eastern terminus in a remote agricultural fieldnorth of Shafter. That’s because the $9.95 billion in bond seed money that state voters provided in 2008 has only been buttressed to a relatively slight degree by additional public dollars from cap-and-trade pollution permits.

The business plan cites the possibility of additional federal funds beyond the $3.3 billion allocated by Washington early in the Obama administration. It doesn’t note, however, that domestic discretionary spending has plunged in recent years amid congressional concern about the national debt blowing past $20 trillion.

The business plan also promotes the possibility of outside investors. It doesn’t mention that such investors have passed on the project for years because state law bars the California High-Speed Rail Authority from offering them a revenue or ridership guarantee.

From 5 years behind schedule to 10 years behind

The initial operation of a bullet-train link serving California residents went from five years behind schedule, in the estimate of the Los Angeles Times, to 10 years behind schedule. The business plan said the project would begin operations no sooner than 2029.

The potential immense cost overrun of the bullet train segment in the mountains north of Los Angeles was fully acknowledged for the first time. A 2015 Times story laid out the “monumental” challenge.

Democratic candidates to succeed Brown have chosen to focus on housing, single-payer health care, immigration and criticism of President Donald Trump in most early forums and campaign appearances. But front-runners Newsom and Villaraigosa in particular seem likely to be pressed on how they can square their claims to be experienced, tough-minded managers with support for a project which seems less likely to be completed with every passing year.

Proposition 70 on the June primary ballot also will keep the bullet train on the campaign’s front burner, to some extent. It was placed on the ballot as part of a 2017 deal cut by the governor to extend the state’s cap-and-trade program until 2030. If Proposition 70 passed, it would require a one-off vote in 2024 in which cap-and-trade proceeds could only be used for specific needs with two-thirds support of each house of the Legislature. Republicans may be able to use these votes to shut off the last ongoing source of new revenue for the high-speed rail project.

This article was originally published by CalWatchdog.com