California high-speed rail to cost $98B, plan says

Question of the Day

Should Congress make English the official language of the U.S.?

View results

SACRAMENTO, Calif. — The new business plan for California’s high-speed rail system shows the nation’s most ambitious state rail project could cost nearly $100 billion in inflation-adjusted funding over a 20-year construction period, according to a draft copy of the plan shared with the Associated Press.

But the plan also says the system would be profitable even at the lowest ridership estimates and wouldn’t require public operating subsidies.

The report reviewed late Monday estimates the actual cost at $98.5 billion if the route between San Francisco and Anaheim is completed in 2033. The plan assumes private investment will account for roughly 20 percent of the total cost, with much of the rest coming from additional borrowing.

The initial estimate to build the system when voters approved bond funding for it in 2008 was $43 billion. In non-adjusted, 2010 dollars that amount is now $65.4 billion, showing the costs have risen significantly.

“This is us telling it like it is to the public — no sugar-coating, no baloney,” said Dan Richard, one of two appointees Gov. Jerry Brown made to the California High-Speed Rail Authority last summer.

The business plan will be publicly released Tuesday during a news conference at the California State Railroad Museum in Sacramento.

It also calls for retaining the most controversial aspect of the proposed rail line — starting construction in the Central Valley. Critics want to start in more populated areas of southern or northern California in case money runs out before the full system is finished, which they worry would create a “train to nowhere.”

But $3.5 billion in federal funding is contingent upon the Central Valley route, and construction must begin before October 2012. That does not leave enough time for new engineering proposals and environmental reviews to be conducted elsewhere, the plan says.

The new business plan says the system will be built in sections than can operate independently and make money, even if no more track were ever built, Richard said. Planners hope each new section will generate momentum — and private investment — to complete subsequent sections.

The business plan also says the high-speed rail system will use existing rail lines to carry passengers on the final legs into San Francisco and the Los Angeles basin. Doing so instead of building new high-speed lines not only saves money but makes the project more politically palatable by reducing neighborhood objections.

Sen. Joe Simitian, D-Palo Alto, had pushed to use existing tracks in urban areas. He said that change in the plan was good news, along with more realistic cost projections in the new report, which he had not seen.

“The good news is they’re at least coming up with a real number; the bad news is that’s a pretty scary number,” Simitian told The Associated Press.

The plan is being released at a politically sensitive time for the rail project.

Governors and lawmakers in several other states have been backing away from costly high-speed rail plans because of ongoing state budget deficits caused by the recession. Florida, Wisconsin and Ohio all pulled back on their rail plans, leading the Obama administration to turn over their federal money to California.

California voters and the Obama administration already have committed nearly $13 billion to the state’s high-speed rail project, but the plan has faced increasing scrutiny about whether it will ever become reality.

Story Continues →

View Entire Story

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Comments
blog comments powered by Disqus
TWT Video Picks