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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.
This is an excellent compilation of many of the facts that have been pointing to just how ridiculous this project has been, what miss-representations it has trumpeted, and what a disaster it will be for the State.
Nevertheless, the legislature, despite numerous opportunities to halt the project has thus far, even in face of all this evidence, gone ahead and continued to fund. Right now the project is eating up about $700,000 per day. Yet we are cutting education, social programs and other much needed services in these trying times.
It just makes no sense.
Kill HSR. Kill it yesterday. Put that money somewhere useful.
Just follow the money. Much of the $700,000 the state spends on high state rail goes to consultants. Those same consultants are making large contributions to the campaigns of our elected officials starting with Jerry Brown and our US senators.
Is there any wonder our elected officials won’t stop the money?
I would love to have an HSR to LA. I just don’t want to have to help fork over $80 to $100 billion to make it happen. And, in the end, it would probably still be cheaper and faster to fly, or (more slowly) drive down with 2-3 people in the car. There are folks out there who are so taken with rail transportation that they’re blind to reality. It’s like back in the 1800s when rail was king, and they thought that rail would eventually serve every little burg in California! Soon, reality set in and only the biggest rail lines survived. Also, I would’ve preferred for the HSR route to follow the Amtrak Coast Starlight route to SoCal — much faster and much less expensive.
Mother Jones – the ultra liberal, leftist, greenist, periodical in the World said on 8/11/2011 in an article titled “California’s HSR Boondoggle – Now More Boondoggly” that the California High Speed boondoggle should be ended, now, for several reasons, mostly that construction costs have already ballooned, likely to exceed $100,000,000,000,000.00 ($100 billion) in 2011-year dollars. Call California Governor Jerry Brown at (916) 445-2841 to demand that he end the boondoggle now. Mother Jones said: “Look, I’m sorry HSR lovers. I love me some HSR too, but this project is just a fantastic boondoggle. It didn’t even make sense with the original cost estimates, and it’s now plain that it’s going to cost three or four times more than that. What’s more, the ridership estimates are still fantasies and it won’t be able to compete with air travel without large, permanent subsidies. This is just too much money to spend on something this dumb. It’s the kind of thing that could set back HSR for decades. Sacramento needs to pull the plug on this, and they need to pull it now. We have way better uses for this dough.” Article here: http://motherjones.com/kevin-drum/2011/08/californias-hsr-boondoggle-now-even-more-boondoggly
Combine MJ’s call to kill the boondoggle with Democratic California Treasurer Bill Lockyer saying the project should be ended (for numerous business reasons) – http://www.nbclosangeles.com/on-air/as-seen-on/NewsConference___California_Treasurer_Bill_Lockyer__Part_3_Los_Angeles-117841823.html and the United States House of Representatives recognizing this national boondoggle as the national embarrassment that it is, and giving it the national “Boondoggle of the Year”, then this project needs to be ended today. National recognition here: http://budget.house.gov/UploadedFiles/Budget_Boondoggle_Award-traintonowhere.pdf
Very unfortunately, but certainly not unexpected, Governor Brown came out again in favor of the project, despite all it problems.
See:
http://blogs.sacbee.com/capitolalertlatest/2011/08/jerry-brown-calls-for-high-spe.html
August 17, 2011
Jerry Brown calls for high speed rail to move forward ….
When are the voters of this backward state going to look in the mirror? They keep voting for unsustainable projects, programs, and entitlements, and then elect the self-righteous liberals to approve the funding that they don’t have, then somehow blame it on the conservatives, who don’t even have the power. Meg Whitman wouldn’t have let it get this far! (Can’t wait to see the responses to that bold statement. Let ’em rip, Libs!)
Well speaking as a liberal, I totally believe Darling Meg would have let it go forward too……….If we are going to stop this foolishness we need to set aside our political differences and start using some commom sense…….
Its like a person who has lost their job deciding to buy a Rolls Royce….Bloody lunacy
Interested –
I only wish it were like a person who has lost their job deciding to buy a Rolls Royce. That would be just $250,000 or so.
In this case, it’s like a person who has lost their job deciding to buy a dozen Nimitz class nuclear aircraft carriers.
Private companies will transport tens of thousands of people between the Bay Area and Southern California today without the government spending a dime. (And for those of you who wish to note the cost of the FAA and airports, like Social Security benefits, those costs are borne by travelers who use the service.)
If ever there were an example of our government not working, this project would be it. This is sheer lunacy.
No, it’s more like you lost your job, but still pay for your kid to go to college.
And no, private companies don’t transport people without the government spending a dime. Who pays for the roads or the airports or the air traffic control? Not the private companies, that’s for sure.
Build HSR today for the future!
KILL HSR and kill it NOW.
I’m an environmentalist and a liberal, but it’s obvious that HSR is a poorly thought-out project. And who is going to use it? It costs $100 to ride the Acela from Boston to NYC and takes over 3 hours. It costs less to fly to LA on Southwest with advance ticket purchase or you can drive there for $70 worth of gas. The destruction that would be wrought on Peninsula neighborhoods would be awful, too. Quit wasting the money and support schools and health care. I voted against this from the get-go. A terrible idea.
Good points, J. Wong.
The costs and benefits of infrastructure, including the infrastructure of the rule of law, are conveniently forgotten in so many calculations of “free enterprise” and the “invisible hand” of the market and disrespect for regulation and admonishments to run governments like businesses.
I am not defending the current HSR plan, but I am defending HSR done right and with sacrifices, if necessary. The Republican model so vigorously and skillfully insinuated into the culture over the past 30 years has gotten us to where we are today. It doesn’t work.
We need progressive tax rates and rational politics and lasting disrespect for greed and its associated behaviors. That’s what will work for everyone, not just the wealthy and powerful.
The comparison to the 1800s’ mad rush to build railroads is interesting. Most of those efforts, including the great transcontinental line, were based on money from gullible investors who were left with nothing each time the rail companies reorganized – this is how the system was financed, and that in a day when there was no viable competition to rail once completed. The builders of the 19th century rail lines were the Enron and Lehman Bros. of the day, giving rise to the title “Robber Barons”. California and DC want to emulate that fraud with taxpayer dollars so they can “out people to work”. Thats noble.
J Wong smugly asks, “Who pays for the roads or the airports or the air traffic control?”
Unlike High Speed Rail that is NOT designed to be self-supporting and REQUIRES subsidies from non-users, airports and air traffic control are paid exclusively by airline passenger taxes. You should read your airline receipts more carefully.
As for roads, airline passengers – as well as everyone else who purchases fuel or a vehicle license fee – pays for those too.