California High-Speed Rail Authority Chairman Curt Pringle today urged businesses interested in winning contracts with the proposed $43 billion project to lobby Washington officials for funds.
“Each and every one of you in this room and the companies you represent,” Pringle told a crowd of business people representing about 1,000 companies, who were gathered at the Los Angeles Convention Center, “need to make your voices heard in Sacramento and Washington.”
His comments came in the wake of a stopgap federal budget extension last week that took out $2.9 billion that was supposed to go to rail projects this fiscal year. Those funds never were allocated so California’s project didn’t lose money.
But the temporary budget extension also took $400 million from $2.4 billion that Florida gave back from its project and that California hoped to acquire.
The rail authority wants to begin construction next year in the Central Valley. It has $5.5 billion in federal funds to begin work, but not enough to complete a section large enough to pay for itself without a government subsidy. And the 2008 state ballot proposition that approved $9 billion to help get planning and construction started, specified the project cannot use taxpayer funds to run the trains.
High speed rail officials are pressing ahead with plans to begin construction, apparently counting on federal funds to follow the tracks.
Republicans who control the House are opposed to high-speed rail. If more federal funds are cut in upcoming budget negotiations for the fiscal year that begins Oct. 1, it’s uncertain what that might do to the construction timetable.
High Speed Rail officials have said they plan to attract private investors to help finance the project. At the meeting today of prospective businesses, officials said they have had 22 firms express interest in investing, including one from China.
But state Treasurer Bill Lockyer, in an interview last month with NBC news in Los Angeles, warned the project needs a business plan before Wall Street will take it seriously.
The business plan isn’t scheduled to be released until next fall, just months before construction is supposed to begin.
Lockyer said high speed rail officials needs to show “people and investors how this system is going to be run and paid for. So far, we don’t have that plan.”
He said when the U.S. interstate highway system was built decades ago, it was financed with money from taxes on gasoline, ensuring it had the money to be completed.
California’s high-speed rail project doesn’t have that financial certainty, he said.
“This one, if it worked,” Lockyer said, “if it was real, great. But so far, we don’t have a plan that would show it makes any sense.”
He said only a small portion of the $9 billion in state bonds have been sold and before more are offered, they need to be authorized by the Legislature and the governor.
“The Legislature and governor have to approve the specific projects in the future,” he said during the NBC interview. “They’re going to have to go back to the Legislature and show that they’re a real deal here or it won’t go.”