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There has been no shortage of newspaper headlines in the week since the release of a report on the California high-speed rail project, estimating higher fares and higher costs.
“Time to drop high-speed rail in California,” the Media News Group opined. “Business plan shows deceit of bullet train push,” the San Diego Union-Tribune wrote.
“Let’s stop this train now” was the blunt headline of an editorial in the Dec. 18 Daily Post.
The sharp reactions to the plan came largely as the result of three revised projections: an increase in one-way fares from San Francisco to Los Angeles (from $55 to $104.75, or from 50 percent of current airfare costs to 83 percent, respectively); a concomitant 29 percent decline in ridership; and an increase in cost from $33.8 billion to $42.6 billion.
The High-Speed Rail Authority worked quickly to tamp reports of escalating prices, saying the higher fare estimates are based on one of many possible assumptions, and that the agency’s board will have sole discretion to set fares when the Los Angeles-to-San Francisco stretch of the rail line opens (scheduled for 2020).
The rail authority attributed the cost increase largely to a new calculation method to account for inflation, and estimated the “real cost” increase at only 7.2 percent.
The agency is “years away from making any determination on the cost of a ticket to ride the train — and that decision will be made publicly with the public’s input,” Jeff Barker, deputy director of communications for the rail authority, wrote in a press release following reports of new projected fare costs.
It’s certainly possible that people have overreacted to the numbers in the plan, as Mr. Barker seems to imply.
Still, a few simple questions linger about why those numbers changed, and what the new estimates mean for the future of the project.
For one, why weren’t California voters presented with the higher cost and price estimates before they passed Proposition 1A in November 2008, approving $9.95 billion in bond funding for the project?
The fare estimate jumped because “of the importance of increasing the amount of private sector funding,” according to the business plan, which relies on $10 billion to $12 billion in private funding. The method of estimating costs changed because the application for federal stimulus funds required it, and because the new method is “more credible” than the old.
But wasn’t it just as important to obtain that funding in November 2008 as it is in December 2009? And wasn’t the new cost-calculation method just as credible then as it is now?
Elizabeth Alexis, co-founder of the group Californians Advocating Responsible Rail Design (CARRD), asks why the decision to use the higher fare estimate wasn’t made by the board of directors, instead of the consultants who drafted the business plan.
“Fare policy is a major decision, and it should have been discussed by the board at a public meeting — instead of made by consultants responsible for getting the business plan finished, or by board members behind closed doors,” Ms. Alexis wrote in an e-mail.
How would the rail authority respond? We don’t know. Mr. Barker did not return several requests for comment.
Questions remain
The rail authority revised its business plan at the behest of the state Legislature, after state officials criticized the previous plan for a lack of rigor.
But rail watchers say that major questions still remain.
Foremost among those are assumptions that the train will have heavy ridership, and that the rail authority will be able to secure funding to pay for the system. In addition to the $9 billion from Proposition 1A and the $10 billion to $12 billion from private sources, the plan counts on $17 billion to $19 billion from the federal government, and $4 billion to $5 billion from local jurisdictions and proceeds related to denser development around stations along the route.
The plan acknowledges that securing the federal funding will depend on “the creation of new programs designed specifically to advance high-speed rail projects,” and that the state would likely have to guarantee a return on private investment to attract financing.
“Someone has to own the risk, and there is a lot of risk,” Ms. Alexis wrote. “At the end of the day it will be California taxpayers, whether we want to be the ones or not.”
The plan outlines the following strategies to “mitigate” the risk that funding doesn’t come through: communicating often with investors, developing “back-up strategies,” and staggering construction.
“The funding plans are that they have plans to develop plans,” Nadia Naik, also a CARRD co-founder, wrote in an e-mail. “Clearly that is worrisome.”
CARRD is calling for the state to conduct an independent ridership study, saying that the method used in the current one are flawed.
The rail authority defended the projections, saying that a panel of transportation experts “concurred with the approach and the reasonableness of the results,” and that the chance of lower-than-expected ridership “is not a highly likely risk but is worth mentioning.”
In an omission sure to attract the attention of local people, the plan does not analyze the cost of running trains through the Peninsula in a trench or tunnel.
Not surprisingly, the new plan has not changed the opinion of Menlo Park firebrand Martin Engel, a fervent high-speed rail opponent who sends several e-mails per day updating his followers on new developments.
“Barker (the communication director) says that ‘the figures are still subject to change in coming years,'” Mr. Engel wrote in one missive. “Sure they are. It’s easy to know things when you make them up. Does he mean that we shouldn’t believe these numbers either? Well, he’s convinced me. I didn’t believe the old ones. I don’t believe these.”
How did the news of increased costs and fares strike John Boyle, the lone council member from either Menlo Park or Atherton to publicly support the project?
“This is still the project I voted for,” Mr. Boyle said. “I’m not suggesting that (the costs) don’t matter; I’m disappointed. At some point, you say, ‘This isn’t what I supported, this isn’t what I voted for.’ But I think the changes to date are reasonable, and probably not outside the bounds” of what might have been expected.
The new business plan still fails to adequately disclose the true nature of the project.
Right now the PR machine of the Authority is justifying the new estimated cost for construction having escalated from 33 billion to 43 billion by saying it is due almost entirely to inflation. That is hardly the truth.
Just look at the new cost estimate for the LA to Anaheim segment which has doubled in cost to over $4 billion. That segment is the most advanced in planning and cost estimates. As the rest of the project gets to this stage it will become abundantly clear that the cost estimates are all on the low side.
As an obvious example look at the cost estimate of SF to San Jose, now at 4.2 billion with $700 million for possible over-runs. In conversations with CalTrain it has been noted that CalTrain estimated full grade crossings and electrifying their 2 track commuter system from SF to San Jose was %5 billion. So $5 billion for a 2 track system, vs. 4.2 billion for a High Speed Rail 4 track system make no sense at all. This doesn’t even include the needed tunnel from 4th and King to the Trans Bay Terminal, estimated at 1.5 to 2.5 billion.
So as this monster continues along it path, true costs will be revealed. No this is not a $43 billion project, think $65 to 80 billion. BTW, they only have $9 billion right now. Where is the rest of the funding going to be found?
Also please note, that last year, Judge Kopp talked about 117 – 120 million passenger to use the train by year 2030. Now they are talking 45 million passenger in year 2035. My how estimates change once the voters have been duped into approving the bond measure.
The article forgets to explain the basic relationship between fare level and revenue. In general, the point of maximum ridership is not the same as the point of maximum profit. As fares are increased, ridership drops, but overall revenue rises faster. Revenue continues to rise up to the point of maximum yield, which is evidently near 83% of airfare. They are now assuming 83% because they need to demonstrate maximum profitability to attract private investors. That’s why they are showing HSR being run like a for-profit airline (83%) rather than a public transit service (50%) that leaves money on the table in exchange for higher ridership.
What should be of greater concern is that they continue to engineer the system for the very high levels of ridership that would be achieved at the 50% airfare level, all the while assuming that they will charge 83%. At the lower level of ridership, train traffic will be reduced. Maybe you wouldn’t need expensive new tunnels into San Francisco, maybe you wouldn’t need to squeeze Caltrain into a tiny little corner of the Transbay Terminal, and maybe you wouldn’t need four tracks everywhere along the peninsula. Food for thought.
This whole thing is insanity.
Their numbers are based on ridership forecasts of 31,800 people per day boarding in the Bay Area, including 3,900 boarding at Redwood City alone. That’s 5% of the population of RWC taking the train to LA every day? No way.
How much money is going to be wasted on this boondoggle?
@ David
Please, explain to me why this project is a boondoggle when we built thousands of miles of freeway in California alone back in the 50s and 60s. Tell me how the Golden Gate Bridge and Hoover Dam are boondoggles. Please, explain to me since I’m confused on why this project would qualify as a boondoggle. Perhaps you don’t know the meaning of this term. Go look it up or get a real life. And by the way, the 3,900 boarding at Redwood City figure is for the ENTIRE Peninsula between south of SF and north of SJ. The California High-Speed Rail Authority didn’t just make up these numbers in their sleep.
Don’t journalists still believe in balance? Shouldn’t there be some quotes in here from HSR supporters? We do exist, and the Authority doesn’t necessarily suffice.
This article buys into the framing that somehow voters were misled. This is not true. Voters approved a system whose details were not yet finalized. This plan is a step towards finalizing those plans.
Elizabeth Alexis and I agree that the higher fares are undesirable. And both of us plan to fight this. We may not fight it together, we may not fight it for the same goals, but we recognize that this decision isn’t final, and any article that presents it as final is misleading readers.
In any case, 2010 will see the emergence of new pro-HSR voices, including the Peninsula itself. The Almanac will need to adjust its reporting accordingly, to include the sizable pro-HSR sentiment that remains.
YES this is what the MAJORITY voted yes on !! who cares what the nimbys and naysayers in this nimby paper say…GET a life you rich self centered creeps
The people of Ca. narrowly voted yes for the HSR project but not at any cost. Just as important as the vote is the law AB3034 which was part of what people voted for and requires fiscal responsibility be proven. That means the numbers must be sound and not merely backed into in order to come up with a profitability number. Read the statement below and then tell me how reasonable the business plan numbers are:
Amtrak’s Northeast Corridor has a population base of 38 million and total Northeast corridor FY 2009 ridership of 9,946,027. Of that total, just 3,019,627 used the high speed Acela service. The California High Speed Rail Corridor has a population of 21 million yet HSR estimates it will attract 41 million riders each year in California. In FY 2008, Amtrak earned approximately $2.45 billion in total revenue and incurred about $3.41 billion in expenses resulting in a loss of $960 million.
Jon Coupal has just written an outstanding article titled:
Wheels Coming Off High Speed Rail
Read it and get the true picture of this monster boondoggle.
http://foxandhoundsdaily.com/blog/jon-coupal/6129-wheels-coming-off-high-speed-rail
morris brown
stone pine lane
MP..
I didn’t vote for it. It was way too expensive. What surprises me is that many on the left are against it. I thought they just love spending other people’s money. I now have to admit that they are capable of rational reasoning. I welcome their support of fiscal responsibility.
the main contractor to this project was the principal contractor for the boston “big dig”. in that case they later admitted in court that they were well aware the initial stated cost of $2 billion for the project was unrealistic. their excuse? “they kept quiet because that is what their client insisted they do.” that project actually cost you, the taxpayer, well over $10 billion. now we see the same pattern slowly emerging, here in california…taxpayers to the rescue!
By the time the damn thing gets completed (if it ever does) it will be cheaper (and quicker) to fly. If you dam a river to create a better life for one fish upstream, the shallow water below it kills another.
Ever see a dog chase his own tail!
“Your problem”. I am selling and moving to someplace run by SANE legislation, like LAS VEGAS!
@ KJI
Oh yeah, because it’ll totally be possible to build a jet that can go faster (faster = less fuel efficiency = more pollution)and be cheaper (because the price of oil will somehow drop substantially) in the near future. Face the facts KJI, flying will only become more expensive and more of a hassle in the future.
YESWEDID –
You’re right that the HSR proposition did pass by a majority in 2008. However, it was a slim majority of only 2%.
Would you be willing to put the issue before the voters of California again, now that more realistic numbers are available and the issue has been more thoroughly considered by the press?
Didn’t think so . . .
@Kathy. For all the flaws in the business plan, you shouldn’t need to cherry-pick the numbers to make your argument work.
It states (Table C page 72) that inter-regional ridership will be 29 million, not 41 million as you quoted. Of that total, ridership between the Bay Area and LA Basin will account for just 7.9 million annual boardings in 2035.
Today in 2009 (a full quarter century earlier than the figures quoted above) there were roughly DOUBLE that amount of annual airline boardings between the Bay Area and the LA Basin, with nearly 200 flights flying each way, every weekday… nearly 100 of which are flown by one airline alone, Southwest.
Does that really sound so crazy?
Flying is about to get taxed sky high because of its enormous carbon footprint. Maybe not this year or next, but by 2035 you can count on it. Flying is a transport mode that is technologically extremely difficult to wean from fossil fuels because there is no practical source of energy lighter and more compact than jet fuel.
Why is only air travel mentioned as competitive to HSR? We just drove in a car (!) to southern California where we didn’t have to rent a car, take any other form of transit or waste hours trying to connect.
Far better use of taxpayer money would be to enhance local and regional transit, encourage non-gas vehicles, and improve the electrical grid to support alternative energy.
Clem,
Re: energy efficiency-“Unless ridership is very high, rail cannot perform better than air travel.””Low ridership in the early part of the project counts heavily against HSR in terms of emission” by Arpad Horvath.
Re: Cost-you can also buy a plane ticket for half as much and get where you’re going in far less time than the train ride since much of the state will have to physically drive to the station like they have to drive to the airport.
Re: Ridership-The Berkeley Transportation group quotes 8 million riders would be more like it. Sorry I don’t have the breakdown of the kind of ridership this is.
I’d like us to agree on one thing, I proposethe ridership survey be done by an independent source- not ordered by or under the direction of the High Speed Rail Authority. Let’s see what the numbers are.
I can fly from any bay area airport to any LA airport for $59 each way on Southwest (and other airlines too). Around the world, HSR is premium priced: a trip on Acela that is half the distance from LA-SF is about $140. Why would our HSR be any different? I can understand why people take Acela: travelers who arrive in Boston, New York, or D.C. can use public transit to get to their destination. Not true anywhere in California except San Francisco.
HSR is not environmentally friendly. That was part of the hype that surrounded Prop 1A but had no practical validity.
HSR will not save us money on freeways or airports. We will still need our freeways to get to work and our airports to travel everywhere except LA. As we continue to cram more people into this area, the need for local freeways will increase exponentially.
I have driven to LA in every season and at various times of day and don’t remember ever running into traffic on 5 or 101 once outside LA and the bay area. I always thought it was sad that we could drive to LA in 5 or 6 hours but then spend 3 hours in miserable LA traffic to reach our final destination.
Local congestion is the real problem. CHSR is an expensive, disruptive, backward-thinking solution to a problem that doesn’t exist. The only reason it is still being debated is that it would siphon a huge chunk of taxpayer dollars into some pretty deep pockets. I guess if I stood to make tens of millions from HSR, I’d fight for it too, but there’s no way anyone with any integrity can argue that it’s in our state’s best interests.
@ frequent traveler
Completely not true. Los Angeles, San Diego, Sacramento and San Jose all have mass transit systems, let it be subways or light rail. I suggest you do some research before going around making false assumptions.
Some information that may prove useful to you in the near future:
Los Angeles Metro: http://www.metro.net/index.asp
Santa Clara Valley Transit: http://www.vta.org/
Sacramento Regional Transit: http://www.sacrt.com/
San Diego Trolley: http://www.sdcommute.com/
You NIMBY people are a joke. If this train were in poor people’s neighborhoods, you would be all for it.
This train project is badly-needed to protect California against high oil prices. We need to jobs it will create and foster.
It’s coming and you cannot stop it. The more you work yourselves in a lather the more upset you will be. And the more hypocritical and stupid you show yourselves to be.
PLEASE! STOP WYNNNNNING! THE MARGIN WAS MUCH HIGHER THAN 2%. IF WE WERE TO VOTE TODAY. THE VAST MAJORITY WOULD VOTE A MILE WIDE SWAT CLEARING THROUGH ATHERTON AND MENLO PARK. I am tired of disrobing at SFO just to fly to LA. I would pay $200.00 to avoid the cattle treatment at all airports, if I am flying less than 1000 miles. You complain about little noise and vista blockage. There are millions that live near freight train tracks. You have to strap yourself to your bed and plug your ears just to sleep few hrs. To cover their behinds, to trains blow their horn every 20 seconds, to warn people that they are about to be crushed. YOU ARE JUST FINE WITH THE STATUS AS IT IS NOW. I WANT IT CHANGED, PERIOD. If you don,t like it, there are plenty of cheap homes near present freight train tracks, so move.
Why carry on?
Pure logic tells you, in case you aren’t aware, is that the future has been here and is maybe going to continue.
HSR is part of it.
Financing is not just between SF and LA-San Diego
Soon there is going to be interest for connections to Texas, where a billion dollars is a drop in the barrel.
Cross country high speed?
The people who are nay sayers, are old farts like Byrd in D.C., who will be long gone before the first nail (electric plug) starts construction.
As it is, have you any idea how far behind we will be before the NY to FL HSR will be in operation and making billions?
The FUTURE…or, the opposite of PAST……no more horse and buggies or fintailed cars…..get a clue.
Regional transit is the real need right now. San Francisco is “ok” but San Jose and San Diego are not at all strong, and the rest of the bay area, LA are a joke. Regional transit is being cut back right now, yet that would be the quickest way to add jobs and get people out of cars. The priorities are way wrong. The thing is, even with HSR we still need regional transit, to repair roads and bridges, but there isn’t funding for all of it.
HSR is growth-inducing and sprawl-inducing in the central valley. Anyone who thinks otherwise is naive.
Conservative87
Don’t know where you get your “facts” but ballotpedia.org shows these results from the 2008 election:
California Proposition 1A
Votes Percentage
Yes 6,512,189 52.6%
No 5,887,181 47.4%
Total votes 12,399,370 100%
So a 2.6% swing in the voters would have stopped HSR. Remember that Prop1A was delayed in 2004 and again in 2006 because of concerns that it would fail. Ironic that it finally made it onto the ballot just as the great recession was getting underway.
You neglected to answer my question:
“Would you be willing to put the issue before the voters of California again, now that more realistic numbers are available and the issue has been more thoroughly considered by the press?”
Didn’t think so . . .
Accusing people of NIMBYism is the easy way out because it avoids addressing the issues. Starting with, front and center, that our state can’t afford this. We are mortgaging our future, depriving tens of thousands of our teens of an education, so that we can have a nice shiny train?
The fact that the proponents of HSR keep trying to position this as a rich vs poor “let them eat cake” issue is totally disgusting, especially when served up to the liberal-minded members of this community. I doubt you can find anyone on this board — or in Menlo Park — who would say that HSR is fine as long as it’s routed through the backyards of poor families. That’s just a specious argument.
IF the state had money and IF this project were being managed properly, there might be a case for putting high speed rail along 5, augmented by arterial modes of transit (including buses, which have some huge advantages over trains). But this is a project that has been mishandled by egocentric politicians and greedy business interests who are more focused on profiting short term than on doing what’s right for the state. Private investors aren’t biting: they know that CHSR is doomed to failure.
I realize that none of us will convince you jingoistic supporters, and also that nothing that we say on this board matters anyway. Fortunately, the legislature is becoming increasingly aware of the folly of continuing this project. I am now hopeful that we will reach a critical mass of awareness before more money gets wasted on this abomination.
R. Gordon –
I’m sure that once the New York to Florida HSR is operating and making Billions that private investors will jump to invest in a California HSR system and we won’t need any state bonds to pay for it.
Until then, let’s save the state $20Billion in bond & interest payments and use it to get the rest of our house in order.
Oh please. As a resident of Metrolpolitan Los Angeles and frequent traveler to San Diego, (using rail) I can say that both cities have GREAT rail systems. Los Angeles’ Metro Rail connects the major job centers and will be connecting the Westside (largest commercial job center in Los Angeles) to Downtown within the next decade. As for San Diego, the trolley system gets travelers where they need to be. Given you’re a resident of the Bay Area and I’m a resident of Los Angeles, I wouldn’t go around judging other cities transit systems. Have you looked at the links I’ve given you yet? Didn’t think so.
And the reason following I-5 for the alignment was rejected is because there’s nothing along it except cow pastures. All the major cities of the Central Valley (Fresno, Bakersfield, Merced, Modesto, etc.) are along Route 99. Building the alignment along I-5 is what I’d call a waste of money. You obviously have no experience in the field of transportation. You might as well stop trying to argue with this subject matter given you have no idea what you’re talking about, nor do you have valid points to back up your arguments. You’re basically trying to fight fire with fire here.
HSR for CA….THANKS FOR THE TRUTH.
These confined thinkers who want to protect their hamlets from the “outside world” actually are the same kind of noveau riche blood who has reached the age where they are having portraits painted for their grandchildren to throw spit balls at them.
Most of the mentalities are still stuck in IPO mentalities where there are no new businesses fluorishing and do not concern themselves even with the fact it takes 7 years to get a bridge built across to Oakland because of lies, fake governent both local and statewide.All of them do not realized they have been BUSTED and can no longer do things the 50’s ways. Gangsters and mobsters had this area in far better shape because they had all those aging council members paying attention to having good schools, their kids and were far better at taking “care of business”, the tennis clubs were more grand and had great pros……..all you people there do is worry about your money.
None of these big mouths have any ties to this area like most of the poorer citizens who are now just hanging on and being criticized for having their lands robbed by “chippies and movie stars”. This was a decent area, and today, people think that because Stanford is nearby, that the brain overflow is affecting their rhetoric. NOT.
90% of all engineering and scholarly classes are Asian or students from other countries. You ought to take a look at reality or the first contract for HSR will be from another country. TUNNELS! What lack of elasticity you “thinkers and critics” have.
TRAVEL find out what the rest of the world is accomplishing.
R. Gordon, what is up with you and your rants? How do you manage to insult practically every ethnic individual – “Asian”, government – “lies, fake government”, successful people -“noveau riche blood”, council members – “aging”, potential home buyers – “chippies and movie stars”, and so much else? Do you not like anyone? Wow, give us a break and please stay in your own community. We work hard in Menlo Park at our jobs, at building and maintaining a good community and at making difficult decisions. You my friend, are certifiable!
This project has become much more than was originally envisioned. It now has national prominence as a showpiece for HSR throughout the country. We have fallen behind the world in this area, we need to catch up, and this is our first real field test project. We cannot allow a few residents of a few small communities to mutilate this project to the detriment of the country as a whole.
You wonder why the US is back in the Stone Ages while other countries surpassed America.
I’ve been on High Speed Rail all over the world and it makes sense to run it. Yes, that means to make a sacrifice. It seems like American people are so much in love with themselves, that they don’t realize how they pollute the planet more than anyone else in the world.
When you travel in a distance between SF to LA, yes it takes an hour and a half longer than flying, but you don’t have to worry about the long drive to the airport. Plus, you don’t have to worry about getting strip-searched before boarding. Now that’s already 2 hours. Then you fly to your destination which is another hour. Then another long road trip to your final destination from the airport.
High speed trains will take you to the middle of the city so there is that long drive to your final destination. Why do you think the Japanese rather take the bullet train from Tokyo to Osaka or the French taking the TGV from Paris to Lyon???
Japan is currently making a maglev which will make it from Tokyo to Osaka in 1 hour compared to 2.5 hours on the bullet train.
If you want another Hurricane Katrina, then that’s fine with me, but you have no one to blame, but yourself.
Even Vietnam is about to make a line between Saigon to Hanoi.. Korea has the KTX, and Taiwan is running the HSR.
Is it that difficult for California?? Too bad most of you don’t realize the #1 deaths are related to automobile accident… Which is almost unheard of at other Asian nation.
To Mr Spokk,
Most High Speed geeks secretly dream about joining the ten foot high club at 220 in a high speed train bathroom. You dream about going number 2 in a high speed bathroom, and even call going number 2 in one’s home a “thrill”. A forensic phycologist would have a field day with this one; I cannot imagine what it says about you. I will never view one of your numerous, verbose, idealistic posts the same again.
By the way, Overturn 1A, boot Kopp Pringle Diridon Moshed, fire the overpriced leach consultant army.
Jay Tulock, Vacaville