The bad economic news keeps piling up in front of the California High-Speed Rail project but will it be enough to bring Governor Brown, the state Legislature and even the federal government to their senses?
Surely it is time for people with some clout in Sacramento and Washington to begin winding down this project, which keeps getting more expensive as the state's fiscal woes get worse. And remarkably, even though it lacks a viable business plan and has yet to line up any private capital, the project received another $89 million from Washington just a week or so ago.
Why is the federal government continuing to fund high-speed rail before making sure that the money won't be wasted on two Central Valley segments that could become a "Railroad to Nowhere?" like the project made famous by the late Sen. Ted Stevens, who shamefully promoted the "Bridge to Nowhere."
Ever since Proposition 1A passed in 2008, Peninsula residents have done everything possible to point out the many design flaws in the high-speed rail's plan, but instead of working to correct them, the rail authority was ordered to turn its focus to the Central Valley, where it was thought the project would get a much warmer reception. But even in this new, somewhat friendlier location, the rail authority must cope with skyrocketing costs and numerous other setbacks that have surfaced in recent weeks. For example:
● After absorbing a batch of already highly critical news over the preceding month, the rail authority released its cost estimates for two Central Valley segments, from Fresno to Merced and Merced to Bakersfield, last week. These relatively flat routes were expected to cost $7 billion, but the estimate jumped to between $10 billion and $13 billion in the recently released environmental impact report.
● Unlike the rail authority, which is sticking to its unbelievably low price tag of $42.6 billion for the entire project, the Palo Alto-based Californians Advocating Responsible Rail Design (CARRD) and the state's nonpartisan state Legislative Analyst's Office have much higher estimates -- $65 billion and $67 billion, respectively. This is a huge gap, more than 30 percent.
● In a study made public two weeks ago, a highly respected peer-review group of professors and transportation experts that report to rail authority CEO Roelof Van Ark said the authority has been using a flawed forecasting model to predict the number of passengers that will use the high-speed trains.
● The agency's public relations firm, Ogilivy Public Relations Worldwide, resigned about a month ago after fulfilling less than half of a 4-1/2-year, $9 million contract.
● Another public relations faux pas was the unexpected departure of Jeffrey Barker, the rail authority's deputy director in charge of communication, who failed to provide a timely response to a public information request from CARRD, allowing it to drag on for months. The Palo Alto-based organization was seeking release of the critical peer-review report, and was successful only after filing a chronology of its request with the authority. The information was released the following day, the same day that Barker resigned, saying he is going "to pursue other endeavors."
● On the economic front, the Republican takeover of the House of Representatives, including the budgeting process, has left little doubt that further federal support for high-speed rail will be drastically cut or eliminated altogether.
By any yardstick, the high-speed rail project is simply far too financially ambitious for the state to undertake at this time, when basic services have been cut to the bone and additional cuts could be on the way as a result of more federal belt-tightening. The idea of paying debt-service on nearly $10 billion in bonds makes no sense in this fiscal environment.
High-speed rail supporters have enormous obstacles to overcome in order to get this project back on track. They need a convincing business plan, a new management team, and most importantly, reliable funding sources that don't commit the taxpayers to unaffordable subsidies of construction and operation.
High-speed rail is looking more and more like a pipe-dream. The governor and the Legislature should provide the leadership to unwind this project, presumably through passage of another state ballot measure that counteracts the requirements of Prop. 1A, or by finding and embracing a new financing model. Otherwise, we are in danger of building a railroad to nowhere that will make Sen. Stevens' bridge look like child's play.