The Uncertain Future of the California Bullet Train

On July 18, at a site pregnant with symbolism— the future location of  what HSR advocates hope will become San Francisco’s terminus of the  state’s bullet train — California Gov. Jerry Brown signed a bill to fund  construction of the first section of the high-speed line. Earlier in the  day, Brown had traveled for a similar ceremony to Los Angeles, the other  ”bookend” of the project. The bill signing ceremonies followed the state  Senate’s approval (by a single vote) earlier in the month of nearly $8  billion in state and federal money to build the initial section of the  line in the Central Valley and to make  a series of   transportation infrastructure improvements in the LA and Bay  Area.

According to sources at the California High Speed Rail Authority  (CHSRA), the total infrastructure commitment now involves:

  • $6 billion for construction of the first section of the  high-speed line in the Central Valley ($2.7B of state HSR bonds and $3.3B  of federal ARRA funds);
  • $1.2 billion for electrification of Caltrain, the commuter rail  line in the SF Peninsula (half from state HSR bonds and half from local  funds);
  • $1 billion for San Francisco’s Central Subway (of which $61M is  in HSR “connectivity” funds and $930M in federal New Starts money);
  • $1.5 billion in other connectivity improvements (BART car  replacements, LA Metrolink upgrades, LA regional connector, grade  separation improvements) funded by the remaining “connectivity” funds,  which must be matched ; and
  • $1 billion in other SoCal projects ($500M from state HSR funds which must be matched).

As can be seen from the above summary, almost half the funding is  for upgrades  to conventional transit/commuter rail  services in LA and the Bay Area. Much to the chagrin of high-speed  purists, the project has morphed into a statewide transportation program  much of which is totally  unrelated to the high-speed rail initiative  approved by the voters in Proposition 1A.

Whether this shift in emphasis represents “a giant fraud perpetrated on  the voters who passed Proposition 1A and voted for a true HSR system;” or  whether this is “a victory for common sense, a decision that wisely places  greater value on satisfying present-day needs than on promises and  conjectures of distant-in-time benefits” depends on one’s point of view  (both are direct quotes from our interviews.) While bullet train  visionaries will view the “bookends” strategy as a betrayal of the  original Prop 1A pledge, pragmatists will hail it as a prudent and  realistic move to gain political support and a  hedge against   the uncertainties facing the high speed rail project itself. Just  what  obstacles confront the project in the months  ahead can be gleaned from the discussion below.

Obstacles and Uncertainties

Despite the celebratory and self-congratulatory tone of the Governor’s  speech, the project faces a number of impediments that could delay it  for years if not put an end to it altogether. As a headline in a Wall  Street Journal article put it, “For Now, the Bullet Train May Go Nowhere.”  (WSJ, July 8, 2012). The hurdles the project must overcome include:

  • A major lawsuit asserting that the Central Valley line  project as proposed and approved by the Legislature does not comply with  various provisions of the enabling Proposition 1A. According to the  plaintiffs, the deficiencies include:(1) no electrification, (2) lack of a  ”useable segment” (the 130 mile section in the Central Valley by itself is  claimed not to satisfy the requirements of an operable segment); (3) lack  of adequate committed funding; (4) trip times above the promised 2 hrs 40  min; (5) the need for an operating subsidy; (6) inability to meet the  Federal requirement to complete project by September 2017; and (7)  inability to meet the promise of a “one-seat ride” from LA to SF (the  ”blended” approach would require at least one transfer). (John Tos,  Aaron Fukuda and County of Kings v. California High Speed Rail  Authority). The suit is moving toward trial sometime in 2013.
  • A lawsuit filed by the Madera County and the Madera and  Merced County Farm Bureaus asking for a preliminary injunction to block  rail construction in the Central Valley, slated to begin later this year.  The suit asserts that the rail line would disrupt 1500 acres of fertile  land by cutting off irrigation canals. Officials of the two bureaus say  more than 500 farmers whose land lies in the path of the rail line plan to  fight any attempts by the state to seize their properties by eminent  domain. “It’s going to be a long battle for the Rail Authority,” said  executive director of the Merced County Farm Bureau. “There is going to be  opposition every step of the way.”
  • Several lawsuits challenging the Program level EIR for  the Bay-Area-to-Central-Valley section of the statewide project. A victory  by the challengers of the Program EIR would “undo” the project level EIRs  for the Central Valley construction project, according to Gary A Patton,  an attorney who has been involved in the litigation.
  • Several environmental lawsuits charging the HSR  project with violations of the state environmental law (CEQUA) and the  Endangered Species Act. The Governor, under pressure from  environmentalists, has recently withdrawn his threat  to waive CEQUA  requirements.
  • The possibility of a legal challenge that Proposition 1A  money is being used “unlawfully,” i.e. for non-HSR projects, in the  ”bookend” areas.

Any of the above actions could delay the issuance of the bonds and/or  land acquisition, potentially delaying the start of construction and  threatening the Authority’s ability to complete the Central Valley section  by the federally imposed deadline of September 2017.

When asked about the potential impact of litigation on the Authority’s  schedule, Chairman Dan Richard observed that “simply filing a lawsuit does  not means they will win, nor if they do win does it automatically mean  injunctive relief.” In other words, the litigation may or may not delay  construction in the Central Valley. It’s California, so there will always  be lawsuits,” Richard added with a chuckle.

The ” Bookends” Approach  

Chairman Richard’s approach is two-pronged. While supportive of the  distant vision of linking the Southern and Northern portions of the state  with a high-speed rail line, he sees a need to show signs of near-term  service improvements in order to gain crucial political support of  skeptical local officials and the public. The dollars spent on the  ”bookends” could have “an immediate and dramatic effect” he told us.

Improving the metropolitan ”bookends” of the system will make it  possible to increase the speed of local commuter trains and thus bring  immediate travel benefits to large segments of California’s urban  population. Will Kempton, chief executive of the Orange County  Transportation Authority (OCTA) and chairman of the Independent Peer  Review Group advising the High Speed rail Authority agrees. It will be a  good investment whether or not the overall $68 billion high-speed rail  project ever get completed, he said. Sensing a promise of new money,  planning and transportation agencies in Southern California and the Bay  Area have thrown their support to the Authority’s  ”bookend”  strategy.

The Long-Term Strategy

As for implementing the high-speed rail project itself, Richard is  convinced that its various pieces will eventually fall into place, one  step at a time. “What we’re doing is building a high-speed rail line,” he  told us, “that will connect to the existing tracks and allow  passenger-only service between the town of Madera (north of Fresno) and  Bakersfield. It will cut significant time off the trip from  Oakland/Sacramento to Bakersfield.. At the same time we will be upgrading  Metrolink from LA/Union Station up to Palmdale and we have our sight set  on the next phase, which is Bakersfield to Palmdale. Once that gap is  closed, we’ll have an intercity rail line from LA to northern California,  albeit one with a couple of transfers, but we think that is when private  sector investment will come in and help upgrade the entire line to full  high speed rail. Even our critics agree that if we get to Palmdale, everything changes. We’re not that far away, in terms of either miles or dollars. Richard summed up, “We took great pains to make sure the  investment is not stranded. The point is that we have an effective  beachhead for a true advanced passenger rail system.”

Exactly how does the Authority propose to fund the $8-11B cost to close  the gap from Bakersfield and the Central Valley to Palmdale and down to LA  (assuming the project does not go over budget)? Richard remains serene and  confident. “We will have about $4 billion of our bonds left,” he said. ”  They must be matched. We will be looking for federal funding, to be sure,  arguing that this can help free up freight capacity, assist goods movement  through the Central Valley and enhance the efficiency of ports. … We  will also be pushing hard to look at other private sources…If all of  that fails, we have the prospect of state cap-and-trade revenues.”

These are heroic assumptions. Future federal support is highly uncertain. Congress, by eliminating Title V of the Senate transportation  bill (the National Rail System Preservation, Expansion and development Act of 2012) from the final version of the surface transportation reauthorization (MAP-21) and by denying Administration requests for  high-speed rail funds three years in a row, could not have sent a clearer  message that states should not count on continued congressional funding of  high speed rail, Transportation Secretary Ray LaHood’s bluster  notwithstanding (“We will not be dissuaded by the naysayers in  Congress…High speed rail is alive and well in America…The  Administration is keeping high-speed rail on track…”) “The President’s  high-speed rail program is “a vision disconnected from reality,” members  of the Democratic-controlled Senate Budget Committee lectured a chastened  Secretary LaHood at a recent hearing.

Private sector funding is equally problematic. “We see no evidence that  private investors are taking serious interest in this project at this  time,” a financial consultant knowledgeable in public-private partnerships  told us. As for cap-and-trade revenues, their use to bail out HSR is  expected to meet with opposition from the state legislature, according to  several sources.

For the backers of high speed rail, the implications are grave. Absent  further federal funds and absent private capital, the State will be  obliged to seek a fresh infusion of public money as early as 2014 if it is  to continue pursuing its $68 billion train project. Will California voters  be willing to approve new bonds for this venture, given recent surveys  indicating dwindling popular support? Can the Governor and the Authority  keep the faith alive by dangling a vision of a bullet train that few voters (and politicians) can hope to see deployed in their lifetime? There is reason to be skeptical.

(Ken Orski is a Public Policy Consultant and former Principal of the Urban Mobility Corporation. Originally posted on Fox & Hounds.)