The Train That’s Still Going Nowhere

The Legislative Analyst’s Office recently issued its Review of the Draft 2020 High-Speed Rail Business Plan. It’s not a ringing endorsement of the project. Three of the report’s five key oversight issues confirm what’s been known all along. California’s bullet train is a troubled enterprise.

  • First, says the LAO, “we point out that the near- and long-term schedules identified in the draft 2020 business plan appear ambitious.”
  • Next, “we identify some near- and long-term funding challenges confronting the project.”

The latest cost estimate “to complete Phase I is $80.3 billion, which is about $3 billion higher than the 2018 cost estimate. This cost estimate is about $1.3 billion higher than the 2019 cost estimate.”

At the same time, the California High-Speed Rail Authority “estimates available total project funding of between $20.6 billion and $23.4 billion through 2030.” While similar to the 2019 project update report estimate, it’s “lower than was assumed in 2018.”

  • Third, the system is likely to need taxpayers’ money before the first train leaves the station. The need for subsidies “does not appear to be consistent with the spirit of” Proposition 1A, which voters approved in 2008 to OK the bullet train. Under Prop 1A, passengers, “rather than the general public,” were expected to “pay for the full cost of its ongoing operations and maintenance.”

Yet “under HSRA’s proposed approach, the state (and general taxpayers) is anticipated to pay for whatever portion of the system’s operating costs that is not recovered from passenger fares — estimated at roughly $54 million annually.”

The fourth and fifth key oversight issues cover alternatives and “flexibility to change.”

According to the LAO, construction and completion schedules have also been miscalculated.

“Some activities,” says the LAO, “are anticipated to occur later than previously expected, including those related to project construction and interim operations, as well as environmental work. …

“Specifically, HSRA projects that trains will provide interim service from Merced to Bakersfield by 2029. In comparison, in the 2018 business plan, HSRA anticipated launching interim services on the ICS [initial construction segment] and the San Francisco-to-Gilroy segment by 2027, and the 2019 PUR [project update report] anticipated providing operating service between Merced and Bakersfield in 2029.”

The Valley-to-Valley line will be completed in 2031, two years later than the 2018 business plan and 2019 PUR had previously assumed.

The project as a whole is 13 years behind schedule, a likely foreshadowing of chronically late trains if the project is ever completed.

Seven years ago, after giving the project a poor review, the authors of the Reason Foundation’s analysis (“California High Speed Rail: An Updated Due Diligence Report”) said it was “not too late to save the California economy and taxpayers the enormous costs of the California high speed rail project.” Joe Vranich, a relocation specialist who has moved his business from California to Pennsylvania, believes it’s still not too late.

“If I had the time I’d do some research to find a leader who in the past made the best of a bad situation by shutting down a hopeless public project, cite the lessons learned from that person’s approach,” he told PRI, “and if that person is still alive, recommend that Gov. Newsom put that individual in charge of the California project — and shut it down.”

Officials need not let concerns about wasting funds that have already been spent cloud their judgment. It’s not out of the question that the private-sector could eventually make use of the construction that’s been completed, allowing taxpayers to recover the stranded costs. There is simply no compelling reason to force them to rescue the entire mess.

Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.

This article was originally published by the Pacific Research Institute.

Comments

  1. The future does not bode well for a potential operator of the train, if it ever gets built by state funds. Residents should know that, by law, the State will not operate the train, nor subsidize its operation. Once built, the State will seek an operator of the completed project, through competitive bidding.

    State law says that the system MUST OPERATE WITHOUT A TAXPAYER SUBSIDY, but according to a Reason Foundation study, there are more than 100 bullet trains worldwide and except for the one or two that operate profitably, all require subsidies, thus the end results for California’s high speed rail is that it will most likely necessitate taxpayer subsidies or higher fares per mile, or both.

    • Out of all the bullet train systems worldwide there are only 2 lines that turn a profit. One is part of the french system and the other is part of Japan’s system

  2. It is pure incompetence by the governor and the legislature to continue such a waste of resources.
    There is no electricity to operate a “high speed” train. The current route is through blue-collar counties who could ill afford fares that are not subsidized by the government, as Amtrak is. California has excessive debt that resource should be used to mitigate. California has insufficient water and power that could be readily correct, but the state refuses to address the problem. California is led by an incompetence that is irrational and contemptible. Led by a governor that bends to the will of unions and that is the prime reason the project, though digging a deeper and deeper hole, continues.

  3. I read while back 2018, California’s High-Speed Rail Authority forgo the high speed rails to cut the cost of the project. The reason, it’s virtually impossible to obtain the high speeds in majority of “lay” railed areas. What I understand about high speed trains, it is required due to the heat it creates when moving at high speed on the rails. I could be wrong, just can’t remember the details in the article. Secondly, the cost of operating high electrical capacity or current on the lines, is very high. let alone the maintenance. Like I said, I wish I had the article and will continue to research. Third reason reason according to the article, it was backed by the Unions who laid the pockets of politicians in Sacramento.

  4. Bogiewheel says

    I would Introduce a quote from a liberal of the highest-ranking: Willie Brown, the former Mayor of San Francisco and former Assembly Speaker wrote in a commentary: “In the world of civic projects, the first budget is really just a down payment. 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.”

  5. As long as the more rational thinkers refuse to unite the unreasonable failures of utopian transportation will continue.

    Are you still reading from the “company manual”…… That is the one where Democrats continue to spend your tax money on failed transportation planning. Theis where they destroy the highway system so they can justify things like the Broken Choo Choo, Buses no one uses, and bike paths that have failed all over (including Frisco).

    Want help, need help in transportation? Contact CarsAreBasic.org

  6. Blackhole

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