WASTEBOOK: High Speed Train Going Nowhere Fast

$3.1 billion

California

Federal Railroad Administration

Six years have chugged by since the federal government awarded billions of dollars for California’s high-speed passenger train but not a single track has been laid.

The “bullet train” promised to make the 520 mile trip from San Francisco to the Los Angeles area in less than three hours by traveling over 200 miles per hour.  But the only thing high-speed about this train is how quickly it is chew chewing taxpayer dollars.

With a price tag of nearly $100 billion, this rail system is the single largest public works project currently underway in the U.S.

Already billions of dollars over budget and years behind schedule, the only ones being taken for a ride by the train are taxpayers.

The original plan had a cost of $64 billion with passenger service beginning by 2020.  That amount jumped to $98 billion and the departure time for passengers was delayed an additional 13 years to 2033.

 The initial 118-mile track segment of rail structures was to be completed next year, but this year the Federal Railroad Administration extended the deadline to 2022.  As of May, the rail authority still had fewer than half of the parcels of land needed to construct the segment.

In February, the rail authority redirected the first segment to head north to San Jose rather than south to the San Fernando Valley.  With the new end point in an empty lot near Bakersfield, the train is being ridiculed as “a high-priced train to nowhere.”  The Bakersfield Californian editorialized, “the California High Speed Rail Authority’s new plan to drop southbound passengers at a dusty rural junction 23 miles from Bakersfield is nuttier than a pistachio orchard— which, perhaps appropriately, is what that land was destined to become.”

The federal government is largely to blame for the project getting off track.

Federal funding for the bullet train comes from two separate grants: $2.25 billion from the American Recovery and Reinvestment Act, or stimulus, awarded in January 2010 and another $901 million federal grant provided in October 2010.

A September 30, 2017 deadline was set for spending the stimulus money.  The Obama Administration demanded the first segment of the railroad be built in the Central Valley believing that the less-populated farmland was the most “shovel ready.”

But construction began two years behind schedule because political, legal, logistical, environmental, and financial problems stopped the project in its tracks.  Lawsuits have hindered the acquisition of the 1,400 parcels the state is attempting “to purchase or seize through eminent domain.”

These setbacks “have forced contractors to leave equipment idle, which is likely to result in multimillion-dollar claims of losses,” according to the Los Angeles Times. “Construction experts are projecting the first 29 miles of construction alone could be as much as $400 million over budget.”

As of February, $1.1 billion of the $2.5 billion grant had been spent.  The rail authority “is accelerating its pace after a painfully slow start, with a half dozen construction crews now building overpasses, relocating utilities, and demolishing structures.”  No tracks, however, are being laid yet.

Public and private support for the train is declining, increasing the need for more government support.

The train was sold to voters, who approved a $9.95 billion bond referendum in 2008 to get the project started, with rosy projections and a stipulation that the system would operate without additional public subsidies.

Today, fewer than half of California voters—44 percent—favor building the high-speed rail system, according to a Public Policy Institute of California survey taken in March.

Despite the billions of dollars provided by the federal government, the rail system is struggling to attract capital and is $43.5 billion short.  Private investors have shown little interest in the project.  Financial support from the state has also been lagging, in part because the federal government waived the requirement for the state to make an upfront dollar-for-dollar match.  The unusual agreement allows California to spend federal dollars first before putting up any of its own money.  Money raised from state greenhouse gas fees was expected to bring in $150 million for the project this year, but only provided $2.5 million.

The Spanish construction firm Ferrovial, selected to build the train, cautioned on its winning bid application that “more than likely, the California high speed rail will require large government subsidies for years to come.”  The conclusion was based upon reviews of 111 high-speed train lines around the world.  The rail authority, however, tried to bury its tracks by deleting this warning when the proposal was posted online for the public.204

While the stimulus provided $8 billion to support high speed rail projects in the U.S., California was the only state to get aboard this gravy train.  A similar high speed passenger train that had been planned in Florida never left the station precisely because Governor Rick Scott worried such a train would take taxpayers for a ride. In 2011, he rejected $2.4 billion offered by the federal government for the project, explaining that it “would be far too costly to taxpayers and I believe the risk far outweighs the benefits.”

There is no way to get the bullet train back on track. Unless California derails it altogether, taxpayers in the state and across the country are going to be railroaded for years to come by this train wreck.

The Official Wastebook