California 2014 High Speed Rail Business Plan Is Off Track

This upcoming November will be the sixth anniversary of the passage of California Proposition 1A to fund high-speed rail. The original goal was to provide rail service between Los Angeles and San Francisco in 2 hours and 30 minutes. Despite being panned by the Legislative Analyst’s Office, the University of California Berkeley and even the lieutenant governor, nothing can stop this runaway train.

Since our last installment of the CA HSR drama, the project’s cost has been reduced to 68 billion dollars because of a decision to use a blended rail system. The blended system will use a combination of pre-existing lines. While this helps reduce construction costs it also increases travel times. Curiously the high speed rail team continues to insist that the travel times remain unchanged and that speeds of 110 mph can be reached. Because of current commuter rail congestion on these lines, it is impossible for trains to reach these speeds. A more realistic travel time for the blended rail would be between 4 hours 35 minutes and 5 hours 25 minutes depending on the number of stops in between.

	High Speed Rail	High Speed Rail (Blended)	Amtrak Rail	Inter City Bus	Air Travel
Cost	$68	$86	$62	$35	$70-100
Travel Time	2 Hr. 40 Min.	2 Hr. 40 Min.	11 Hr. 44 Min.	7-8 Hours	1 Hour, 15 Min.

*All figures for a one way weekday trip from Los Angeles to San Francisco.

**High Speed Rail figures from 2008 & 2012 Business plans respectively.

Even with the use of blended rail, the project is slated to cost more than twice the original estimate of 33 billion dollars. Riders could take a flight from Los Angeles International to San Francisco International in 75 minutes for $85. Price conscious riders could elect to take inter-city buses instead of trains at prices that are half the cost.

While the train’s construction costs are estimated to be 68 billion dollars, its secured funding is a measly $3.5 billion from the 2009 federal stimulus package. The rail project has insufficient funding to complete its initial route. A state judge ruled against allowing bond funds to be used for the rail line unless the High Speed Rail Authority (HSRA) could prove there are sufficient funds to build the initial portion of the line. Further, the CA HSRA has $68 million in unpaid bills, for which it has no way of paying.

High-speed rail proponents’ hope that the private sector will agree to help fund the high speed rail. So far there has been little private sector interest. And since it is extremely doubtful the line will break even, let alone post a profit, any private company would be foolish to invest in this line. To date, there are only two profitable high speed rail lines; one in Japan (Osaka-Tokyo) and another in France (Paris-Lyon). A third rail line in Japan (Hakata-Osaka) breaks even but all other such lines lose money. The financial success of these two lines is due in part to a population’s support of train travel and high gasoline taxes.

The map above shows the absurdity of the CA high-speed rail project. In its recent 2014 business plan draft the HRSA provides readers a map showing all the lines that will transverse the Golden state. The map is less than honest. It includes already existing rail lines in California, slated to receive upgrading during the project’s duration. The Amtrak Surfliner is one such example. The map also shows the completed length of the rail line. The information conveyed by the map is misleading since it is extremely doubtful that the entire line will be built given the less than adequate funds procured by California.

A more realistic map would show just the initial operating section. The reader would see that since the taxpayers’ billions were spent on the initial section, there is insufficient funding for expanding the line to either Los Angeles or San Francisco.

The federal government would grant funds for the train’s construction, only if it traversed the central valley. However, most of the central valley cities including Bakersfield, Fresno, Merced and Palmdale are not large enough to add significant ridership. The initial section will end in the San Fernando Valley which is largely a residential suburban community, not a central city with extensive transit connections.

It will take 4 years and another $20 billion before the northern end of the line would be expanded to San Jose. However, the line will end in San Jose which is not connected to the BART transit system. This means riders would still have to transfer to another mode of transport if they plan to continue to San Francisco or Oakland. BART may expand to San Jose, but that expansion is not a certainty.

After spending a cumulative $51 billion dollars the high speed rail line will still not be finished. It will take another $17 billion and 14 years before Los Angeles and San Francisco are finally connected.

Section	Section Cost	Cumulative Cost	Service Begins
Initial Operational Section	31 Billion	31 Billion	2022
San Jose Extension	20 Billion	51 Billion	2026
San Francisco to Los Angeles	17 Billion	68 Billion	2028

Source: 2014 High Speed Rail Authority Business Plan Draft

California has just barely survived fiscal implosion. Any excess revenues should go towards filling gaps in the state budget or placing reserves in a rainy day account to avoid future fiscal disasters. The High Speed Rail line isn’t a railroad to nowhere. It just never reaches its destination.