Tuesday, Nov. 1, 2011 | Leaders of California's proposed High-Speed Rail project, hoping to overcome the management mistakes of their predecessors, unveiled an optimistic new business plan Tuesday that more than doubles the cost of the Anaheim-to-San Francisco rail system to $98.5 billion.
The 230-page report also predicted enough people will ride the trains when they're finished in 2030 to operate the system without government subsidy.
Tom Umberg, chairman of the California High-Speed Rail Authority, and other rail leaders spoke enthusiastically of the 520-mile project during a news briefing at the California State Railroad Museum in Sacramento.
Gov. Jerry Brown's office issued a news release that declared "the High-Speed Rail Authority's business plan is solid and lays the foundation for a 21st century transportation system."
Umberg, a former Democratic Assemblyman from Orange County, said he "absolutely" had confidence in the rail authority management to successfully complete the system.
But questions remained among those who have challenged the way the system has been managed since voters approved construction of a high-speed rail system in 2008. Until the new report, the official cost estimate was $43 billion.
"On the upside," said state Sen. Joe Simitian (D-Palo Alto), "we finally have something that looks like a real number in terms of a price tag."
He also spoke approvingly of a decision by rail leaders to "blend" the high-speed train system into updated commuter lines in the Los Angeles, Orange County and San Francisco Bay areas.
Previously, rail leaders had insisted on pushing a dedicated high-speed system through the suburbs and cities at either end of the project, in spite of neighborhood objections to noise, visual pollution and destruction of sections of communities.
"On the downside," Simitian said, "you've got a number [$98.5 billion] that looks to be real, but it's a pretty scary number."
He said the high cost is going to put increased pressure on rail leaders to prove that their ridership and other projections are solid.
If They Build It, Will the Money Come?
Construction is scheduled to start next year in the Central Valley to take advantage of more than $3 billion in federal stimulus funds that are available only if work begins in 2012.
In the Central Valley, big agricultural interests, churches and neighborhood groups in Bakersfield are upset by plans to power past their objections and condemn land for the project.
But Umberg and others said building the high-speed system in phases as money becomes available will allow construction to begin. But it's not clear where future money will come from. Republicans who control the House of Representatives have said they won't support more money for high-speed rail.
"This is a draft plan," said Simitian. "Responsibility now falls on members of the Legislature and members of the public to critique the draft plan."
He said performance milestones need to be set so lawmakers and taxpayers can measure the actual costs and accomplishments of the rail authority.
The 2008 plan approved by voters prohibits using tax funds to operate the rail system once construction is finished. In addition, earlier plans talked of private investors sharing the construction costs with taxpayers. But the new plan doesn't anticipate private investment until construction is complete.
The business plan itself is written more in the style of a public relations promotion than a government report, offering sweeping statements of expected benefits with little or no factual support.
For example, at one point it declares "high-speed rail will bring significant benefits to California, both in the near term and in the long run, and for individuals and the state as a whole. Benefits will be statewide and will encompass both economic and environmental concerns, including the reduction of three million tons of carbon dioxide emissions annually."
It predicts the project will generate about 100,000 jobs "for the people who need them most" in the Central Valley, where unemployment is the highest in the state. But it doesn't specify whether those are permanent or temporary construction jobs.
Similarly, the report boasts "connecting the Los Angeles and San Francisco metropolitan areas will generate approximately 800,000 to
900,000 jobs and eventually more than one million jobs. High-speed rail is a major job generator, both in the short and long terms."
Can the project be built?
"I think it remains to be seen," said Simitian. "I think at some point the question you have to ask yourself is ‘are you throwing good money after bad?' "