2012-04-04 / News

Questions remain despite revised Calif. rail plan

By Don Thompson
Associated Press

SACRAMENTO—The agency overseeing California's high-speed rail project has issued a back-tothe drawing-board business plan that dramatically lowers the system's estimated cost and expands its initial phase, but critics say it still remains too costly and does not deliver what voters intended.

An updated business plan to be released Monday by the California High-Speed Rail Authority lowers the projected price tag from the $98 billion the authority proposed last fall to $68.4 billion. Even that amount is far higher than the $43 billion promised in the ballot initiative voters approved four years ago.

The other major change from last fall's draft plan is a new proposal for the first section of track. The draft plan said the initial section would be built from Madera to Bakersfield in a sparsely populated region of the state, leading critics to dub it the “train to nowhere.”

Under the revised plan, the first segment would connect the Central Valley city of Merced with the San Fernando Valley some 300 miles to the south, bringing the bullet train to the outskirts of downtown Los Angeles within 10 years. Instead of going straight into California's major cities, the high-speed system would stop short of Los Angeles and the San Francisco Bay area and connect with existing urban commuter rail lines.

The updated business plan also devotes up to $2 billion to improve existing urban rail. Linking with those systems rather than pushing the high-speed rail line into California's major cities is one of the biggest cost-savers in the new plan.

“We are not sitting here saying that we `saved' $30 billion,” rail authority chairman Dan Richard said Saturday. By using existing railroad rights of way, he said, “We can deliver high-speed rail, as the voters voted for it, for $30 billion less than if we had to build our own system the entire length of the way.”

The plan assumes that the federal government eventually will provide an additional $4 billion over the next decade, on top of the $3.5 billion it already is providing, even though Republican members of Congress have vowed to cut off further funding. Fares and private investment are expected to fill the rest of the gap.

Gov. Jerry Brown, who supports the rail project, also has proposed tapping revenue from the state's new industrial cap-and-trade program, which is the centerpiece of California's attempt to drastically reduce greenhouse gas emissions. It's not immediately clear how much of that revenue would go each year to the high-speed rail project.

Ridership projections in the revised plan are lower than earlier estimates but remain high enough to ensure the system will turn a profit, rail authority board member Michael Rossi said. In 2022, the first year of limited operation, ridership is projected to range between 2.9 million and 5 million, with 2.3 million needed to break even.

Critics say the revised plan still does not do what voters intended.

“Voters had very specifically in place that it would be a true high-speed rail from one end to another and that it has to operate on its own, that the state can't be underwriting it,” state Sen. Doug LaMalfa said. “This is far short.”

He and former Central Valley Congressman George Radanovich have submitted a ballot petition seeking to repeal the 2008 proposition that provided $9 billion in public financing to get the projected started.

LaMalfa and other critics have been concerned that the project might not be self-sustaining and could become a future liability for taxpayers. While he had not seen the updated business plan, the Republican from Willows said Saturday that the funding questions remain paramount.

“Where does the rest of the money come from?” LaMalfa said.

Gov. Jerry Brown and Richard have said for months that the cost of the project would need to be reduced and other changes would have to be made to the draft plan to make it palatable to lawmakers and taxpayers.

The rail authority board is expected to consider the revised plan on April 12, and lawmakers will debate whether to authorize selling a portion of the voter-authorized bond money in the coming weeks.

Brown is preparing to ask state lawmakers to appropriate $2.3 billion in rail bonds to begin building the first phase by year's end, a timeline that is a condition for receiving about $3.5 billion in federal money.

Republican state Assemblywoman Diane Harkey said she had not seen the revised business plan but had the same questions she has been asking for months, especially with the new price remaining $25 billion above the amount initially sold to voters and no guarantees of long-term funding.

She also noted that the plan before voters four years ago promised that passengers would be whisked on 220 mph trains between San Francisco and Los Angeles in about 2 hours and 40 minutes. The Dana Point Republican is sponsoring a bill that would repeal the state bond funding but free $950 million for local and regional rail projects.

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