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

New business plan for controversial system calls for Caltrain improvements, first segment between Central Valley and San Fernando Valley

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."

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Like this comment
Posted by Morris Brown
a resident of Menlo Park: Park Forest
on Apr 3, 2012 at 8:30 am

The new business plan should really be looked at as nothing more than an effort by the HSR Authority to get the State legislature to approve funding for the initial construction in the Central Valley.

The Authority is now promising both No. California and So. California transit (commuter) agencies, that Prop 1A funds will be used to enhance their systems. The Authority plans to spend close to $2 billion from Prop 1A bond funds in this effort. How many legislators in the north and south, will now vote to fund the project, because they see money flowing into their districts? That is the whole key to this plan.

Prop 1A was supposed to be funding a High Speed Rail project, and not about improving local commuter trains. The $30 billion in savings that Chair Richard is yelling about, is the result of changing the project from a real High Speed Rail project to something else.

Under this plan, only about 300 miles of the over 500 mile route from SF to LA would be real HSR tracks. The other 200 miles would be using commuter tracks. The result is much longer times to make the trip.

Prop 1A stated that travel time from SF to LA would be under 2 hr 42 minutes. If you do a speed profile with this new plan, you will find that the trip will be at least 4 hours and perhaps as long as 5 hours. This will effectively make the choice of using an airline or using the train fall very much on the side of air travel, which consumes only about 1 hour in the air, and even with extra time to get to the airport, check in etc., still will save a large amount of time relative to taking the train.

Ridership numbers will be much lower than forecast under the original full build out plan, and the net result will be the train will generate huge operating deficits (illegal under Prop 1A)

The new plan solves none of the financing problems facing the project. The business plan calls for an additional $38 billion from the Federal government, which has shut off funding for the last 2 years and is projecting no further funding for the next 5 years.

All of this simply make no sense. It is time to stop this boondoggle now.

Like this comment
Posted by Bradley
a resident of Atherton: Lloyden Park
on Apr 3, 2012 at 12:29 pm

Railroad tracks are like children and tatoos, they are forever. Burning fossil fuels for air travel warms the planet, remember? The trains now only blow their horns in wealthy neighborhoods that resisted grade separations. Be progresive now and support the inevitible. Else, keep the tomato baskets loaded for throwing

Like this comment
Posted by Wiser
a resident of another community
on Apr 3, 2012 at 12:36 pm

Morris is right on! Read beyond the headlines. It's not the same project that was approed by the voters. The HSR authority does not want you to know that. All they put out there is that the price tag has suddenly dropped by $30 billion....which, by the way, is still about 6 times as much as they said it was going to be when they were selling the bogus bill of goods to the voters. It's like the oil companies escalating gas prices up toward $5, just to make $4 look cheap. This was always a bad idea, promoted by a bunch of self serving snake oil sellers. Now it has become even worse--both the idea, and the sellers. How pathetic!

Like this comment
Posted by Sir Topham Hatt
a resident of Menlo Park: University Heights
on Apr 3, 2012 at 1:38 pm

Bradley is right- this project is indeed like a tattoo. An impulse decision made on emotion with no thoughts to the future consequences. Just as getting that barbed wire inked onto your bicep seemed like a fine idea in the midst of a spring-break bender, the illusion initally sold to voters may have sounded good at the time. Now it is looking like one of those teadrop tatoos that condemns you to not being allowed to work the front counter at Jack in the Box.

My tomatoes are ready to go- heirloom and organic only, natch.

Like this comment
Posted by Taxpayer
a resident of Menlo Park: Downtown
on Apr 3, 2012 at 4:02 pm

Once the giant civil engineering firms, unions, and legislators all see money at the end of a tunnel, it's hard to stop that snowball. They'll keep pushing, and tweaking, and spinning the story and the costs until they find a way to make it work (like Jerry Brown's tax hikes). This state is perpetually running a $20 billion deficit. How can we afford this?

They take $30 billion off the price tag, and it's still 75% over the original cost we were all told. I've heard from people "in the know" that the price will actually be twice that. Yikes.

Welcome to bankrupt California. Why would anyone want to go to LA anyway?

Like this comment
Posted by Bob
a resident of Menlo Park: Downtown
on Apr 3, 2012 at 4:13 pm

Even this project does go forward, when was the last time the State did anything On TIME and ON BUDGET?

Like this comment
Posted by Hank Lawrence
a resident of Menlo Park: Sharon Heights
on Apr 4, 2012 at 9:36 am

I just love the Aston Martin Rapide. It is the most gorgeosu 4-dorr sedan I have ever seen. But at my income level it would not be a prudent purchase. This is because it would crowd out other things that are more important to me that I would like to purchase with my discretionary income.

There are several things wrong with the HSR.

1. It is truly a bait and switch

2. The HSR Commission has done nothing to validate its numbers. It just pulled the costs out of thin air, inflating the income estimates, and underestimating the procurement and operations and maintenance costs, not to mention the costs of servicing the bonds.

3. California is upside down with its budget deficit.

4. Programs such as Education, Earthquake Reponsiveness, Roads and Highways, and Dams would have their budgets trimmed back to support HSR.

Given the above it is imprudent at this time to fund HSR.

Like this comment
Posted by Harrumphh
a resident of Menlo Park: Linfield Oaks
on Apr 4, 2012 at 1:53 pm

In other April Fools News, the State of California decided to reduce income taxes by 50%.

Like this comment
Posted by R.Gordon
a resident of another community
on Apr 4, 2012 at 4:50 pm

They will never stop HSR from happenning.
I'm sure a lot of you fogies remember the antipathy for the Grand Coulee Dam when you were in rompers and probably not as rich or unsophisticated as you are today.
Well, thanks to that dam just happened to save a lot of people from starving during the depression and they had no opposition except from the money costs.
You people basically object to the noise of the train. Well, sorry to inform you, but HSR is going to be running through a lot of houses and mansions and parks and stables in order to save California.
You have lived long enough and it is now time for you to learn how to pass on your good fortunes to those in need.

Like this comment
Posted by R.Gordon
a resident of another community
on Apr 4, 2012 at 5:05 pm

It is rumored the savings comes from changing the routing. It will be coming to San Francisco in an almost straight line and avoiding a lot of mountain passes and the verdict will probably include the use of emininent domain for the direct route to the city.
San Francisco is now about the most expensive city in the country in which to live, and that will include nothing but big time money from all over the world who love the CITY BY THE BAY.
Our family home sold for 11 million in the 80' was only 8500 sq.ft.

Like this comment
Posted by Menlo Voter
a resident of Menlo Park: other
on Apr 4, 2012 at 7:05 pm

Mr. Gordon:

you should know better. If you REALLY are old money. It is gauche to discuss your wealth.

By the way, HSR is certainly not going to be run as it was originally sold. Becasue it was sold with a pack of lies and 75% of the voters have figured it out.

Like this comment
Posted by R.Gordon
a resident of another community
on Apr 5, 2012 at 2:05 pm

And it is declasse to even say the word gauche....very 20's.

I am not talking REAL money when I say 8 million. I am comparing property values to a really cosmopolitan atmosphere which is far more in tune than the suburbs.

I DID used to visit Lady Astor who told me about minding my manners and I do not think I erred.The editor will have his scissors out on this one since I am correct again. BUT, the HSR will survive unlike the Republic of Mitt...He built an elevator for his car as you know.
THAT is declasse during this recession.

Like this comment
Posted by Margaret Fruth
a resident of Menlo Park: Suburban Park/Lorelei Manor/Flood Park Triangle
on Apr 7, 2012 at 9:47 pm

Irrespective of all other issues, we can't afford this train. The debt service alone will be huge enough to adversely impact other programs, such as schools. If the governor & legislature sell bonds in June, I will have to conclude that we don't need to vote for any new taxes whatsoever this November. Any politician who votes for selling these bonds, doesn't need my vote.

Sorry, but further commenting on this topic has been closed.

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