Update: High-speed rail price tag drops by $30B in new plan

California’s proposed high-speed rail system would extend from the Central Valley to the Los Angeles Basin within the next decade and would cost $30 billion less than previous estimates indicated under a new business plan that the agency charged with building the system released this morning, April 2.

The revised business plan, which the California High-Speed Rail Authority’s board of directors expects to discuss and approve on April 12, departs in many key ways from the draft the agency released in November. The new plan commits to building the system through a “blended” design under which high-speed rail and Caltrain would share two tracks on the Peninsula. It also calls for early investment in the northern and southern segments (known as the “bookends”) of the San Francisco-to-Los Angeles line, including the long-awaited electrification of Caltrain on the Peninsula.

The revised plan also specifies for the first time that the first usable segment of the rail line would be a 300-mile segment from Central Valley south to the San Fernando Valley. This stretch, the plan states, “will be transformational in creating a passenger rail nexus between one of the fastest growing regions in the state with the state’s largest population center.”

This “initial operating section” would extend from Merced through Bakersfield and Palmdale to the San Fernando Valley, according to the business plan. The prior plan committed only to an “initial construction segment” — a set of train-less test tracks between north of Bakersfield and south of Merced (this segment was characterized by many critics as a “train to nowhere”).

At a press conference in Fresno Monday morning, the rail authority’s board Chair Dan Richard emphasized the significance difference between the agency’s previous proposal for the system’s initial phase and the one laid out in the new business plan.

“Beginning next year, we will begin construction here in the Valley not of a mere track but a fully operational 300-mile electrified operating segment that will connect the valley to the Los Angeles Basin,” Richard said.

“This will bring high-speed rail not only to California — it will bring high-speed rail to America,” he said.

The business plan also offers a firmer commitment from the rail authority to improve Caltrain and to rely on existing tracks on the Peninsula. This marks a dramatic departure from the rail authority’s initial vision for the system — a four-track system along the Peninsula with high-speed rail on the inside tracks and Caltrain on the outside. The four-track design was widely panned, with many Peninsula residents and city officials expressed concerns about the seizure of property and the visual barriers a four-track system would necessitate.

The authority began to back away from the four-track design in its November business plan, which was amenable to the “blended” two-track approach. But the newly revised business plan cements its commitment to the blended design, which was first proposed a year ago by State Sen. Joe Simitian, D-Palo Alto, U.S. Rep. Anna Eshoo, D-Palo Alto, and state Assemblyman Rich Gordon, D-Menlo Park.

“Benefits will be delivered faster through the adoption of the blended approach and through investment in the bookends,” the new plan states. “Across the state, transportation systems will be improved and jobs will be created through the implementation of these improvements.”

The blended approach, which places a greater emphasis on improving existing infrastructure than the four-track design, is expected shave more than 30 percent off the $98.5 billion price tag cited in the November plan. The new document pegs the cost of the San Francisco-to-Los Angeles system at $68.4 billion. That figure remains significantly higher than the $40 billion price tag presented to state voters in 2008, however.

The main driver behind the major cost spike between 2009 and 2011, according to the revised plan, is a greater reliance on tunnels and elevated structures throughout the system. The plan notes that the possible length of elevated structures went up from 77 miles in 2009 to between 113 and 140 miles under the current plan. The length of tunnels, meanwhile, increased from 32 miles to between 44 and 48 miles.

The proposed $68.4 billion system features new infrastructure between San Jose and Los Angeles, shared electrified tracks on the Peninsula and an upgrades to the Metrolink Corridor between Los Angeles and Anahaim.

“The benefits of investing in high-speed rail will be delivered far cheaper than previously estimated,” the revised business plan states. “Through the adoption of a blended approach, the Authority has confidence that the cost of delivering the San Francisco-to-Los Angeles/Anaheim system, in accordance with Proposition 1A performance standards, is reduced by almost $30 billion, now estimated at $68.4 billion.”

Even with the lower cost estimate, funding remains a major wildcard. California voters had approved a $9.95 billion bond for the proposed system when they passed Proposition 1A in 2008. The bond measure requires the new system to be capable for whisking passengers between San Francisco and Los Angeles in about two-and-a-half hours.

The rail authority hopes to build the system through a combination of bond funding, federal grants, local contributions and private investments. So far, the system has received about $3 billion in grants from the federal government. At Monday’s press conference in Fresno, Karen Hedlund, deputy administrator of the Federal Railroad Administration, praised the plan and said her agency looks forward to “working with the High-Speed Rail Authority to making this plan a reality.”

“By listening carefully to everyone involved, the High-Speed Rail Authority has offered a new plan today that lays out a faster, better and more cost-effective path to building a high-speed rail system that is so critical to California’s economic future,” Hedland said. “The new plan will create hundreds of thousands of jobs and deliver the economic benefits of high-speed rail faster and more affordably.”

The new business plan is the latest milestone for a project has been facing intense scrutiny throughout the state and particularly on the Peninsula. The Palo Alto City Council, which initially supported the project, adopted in December as the city’s official position a call for the project’s termination. Palo Alto had also joined Atherton and Menlo Park in suing the rail authority over its environmental analysis for the project.

Republicans in Sacramento remain vehemently opposed to the project, with one legislator, Assemblywoman Diane Harkey, R-Dana Point, pushing a “lemon law” that would cut off funding for high-speed rail. Their counterparts in Washington, D.C., have been equally adamant about resisting President Barack Obama’s proposal to connect 80 percent of the nation through high-speed-rail systems in the next 25 years.

The rail authority’s new business plan, by committing to the blended system and to early investments on the Peninsula, aims to win over some of the project’s toughest critics. The rail authority’s proposal to help electrify Caltrain — a long-awaited project that has languished under inadequate funding — was greeted with great enthusiasm last week by the Metropolitan Transportation Commission, which approved an agreement with the rail authority that includes a funding plan for the electrification.

Richard said Monday that upgrades to existing rail services, including Caltrain, “will provide near-term benefits” while also building “a portion of the system that we will ultimately be using.”

But the new document is unlikely to assuage all of the Peninsula’s concerns. Members of the Palo Alto council remain concerned about the fact that the rail authority’s environmental impact report for the system still describes a four-track system. Councilman Pat Burt and others have also raised flags at recent meetings about the prospect of the rail authority seeking exemptions from the California Environmental Quality Act (CEQA) — exemptions that would allow the agency to expedite its environmental-review process.

Dan Richard cited on Monday recent media reports about the rail authority seeking CEQA exemptions and assured those present that the agency plans to fully comply with environmental law.

“Despite recent reports, we’re not looking for CEQA exemptions,” Richard said. “We’re doing a full environmental-review process.”

Richard called the new business plan an “overall approach to building tomorrow’s transportation system.” He lauded the plan for reducing both the project’s price tag and its timeline.

“This plan is about more than just high-speed rail as a standalone system or a ‘cool train,’ if you will,” Richard said. “Our plan sees high-speed rail as a strategic tool in an integrated transportation system to meet California’s growing mobility needs.”