Will It be Derail or Fail?

EXCLUSIVE: Crazifornia excerpt on High Speed Rail included in this post!

An extensive (5 second) search of the Internet reveals that in all likelihood, odds makers aren’t yet taking bets on whether California’s proposed high speed rail system will derail before it’s built, or will move forward before it ultimately fails.  If they were, odds for premature derailing would have gone up this morning, on this news from the Fresno Bee:

Kings County and two of its residents filed a lawsuit against the California High Speed Rail Authority, stating that its plan for the central San Joaquin Valley portion of the rail line violates sections of Proposition 1A.

The suit, filed Monday in Sacramento County Superior Court, claims that the authority’s use of funds from Prop 1A, which created the agency and commissioned a high-speed rail line, cannot be used under current plans.

According to the suit, the authority’s construction of the Valley portion of the rail line illegally uses Prop 1A bond funds for a non-electric, or conventional, rail line. The suit states that because the proposition called for an electric rail system, the use of proposition funds for a non-electric rail line — even in the “preliminary” stage — violates state law.

The lawsuit also charges that the train, as currently proposed, violates the law because it will require subsidies, which are prohibited by Prop 1A.

Yeah, but this is California, where perfectly good winning propositions get thrown out by a couple judges, and perfectly insane ideas are kept on life support by a different couple of judges.  So you might still want to place your money on this multi-billion-dollar boondoggle going through.

As promised, here’s a preview of Crazifornia, the recently completed section on the state’s High Speed Rail debacle in the making:

High Speed Fail

It turns out the 2000 California energy crisis wasn’t the biggest display of bureaucratic ineptitude California has ever seen.  The bureaucrats and appointed board members at the California High Speed Rail Authority have overtaken it at high speed – hopefully the only high speed maneuver they will ever be allowed to execute.  Like the California Energy Commission in the energy crisis, the Rail Authority got its start with a proposition, but this time, it was one that passed:  2008’s Prop 1A.  Like many propositions, its title was a hint of what was promised with all the surety a political campaign can muster, in this case the Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century … I suppose that would be SRHSPTBA21C for short. 

            Prop 1A’s promise was futuristic and optimistic, calling to mind Donald Fagen’s song I.G.Y., from his 1982 solo album, The Nightfly:

This dream’s in sight
You’ve got to admit it
At this point in time that it’s clear
The future looks bright

On that train all graphite and glitter
Undersea by rail
Ninety minutes from New York to Paris
Well by seventy-six we’ll be A.O.K.

What a beautiful world this will be
What a glorious time to be free.

            Glorious indeed, for just $9.95 billion (heaven forbid that it should be $10 billion), California would be on its way to a sexy high-speed rail line connecting San Francisco to Los Angeles.   Passage of the proposition, voters were told, would trigger matching federal funds, and together this less than $20 billion would get the core route built, and the entire system would come it at $43 billion.  In no time, happy voters realized, they would no longer have to hang their heads in shame whenever France’s TGV or Japan’s Shinkansen high speed trains were mentioned. 

          Even as it passed, Prop 1A was already behind schedule.  It was originally slated for the ballot four years earlier, in 2004, but was delayed when Gov. Schwarzenegger pulled most of the project’s initial funding from an earlier bond.  Unfortunately, he gave the project enough money to keep it on life support, and it resurfaced for the 2006 election, only to be pulled again out of fear an even larger revenue bond on that ballot would diminish the chance it would pass.  Finally, in 2008, it made the ballot with a $2.6 million campaign bankroll behind it, funded by unions and private companies well positioned for future rail contracts.  One of those companies, AECOM Technology Corporation, gave $50,000 to the campaign and has won Rail Authority contracts totaling at least $70 million to date, a tidy return.  Opposition to the rail proposal hadn’t yet solidified and no campaign was run against the measure, and it passed 53 percent to 47 percent.

            It turns out the original $34 billion cost promised by supporters of Prop 1A was a bit too low for all that graphite and glitter.  By 2009, a year after the measure’s passage, the Rail Authority said the cost would actually be almost one-third higher, or $43 billion.  Then, just after Halloween in 2011, it released a new estimate that more doubled the two-year-old estimate, to $98.5 billion … or maybe $117.6 billion, who could really tell for sure?  At about the same time, a report by the California Transportation Commission found a $294 billion deficit in funding needed to maintain the state’s existing transportation infrastructure over the next nine years – or more than $30 billion in shortfall annually.While the high speed rail pot of money is separate from the general transportation pot, the dubious sanity of continuing pursuit of the costly new and shiny when the future viability of the state’s established and dull system of roads and rail is in such bad shape.

            To keep the new estimate under $100 billion (or maybe a little over it), the Rail Authority staff stealthily redefined the project, whacking Sacramento and San Diego out of the project.  Oh, they’ll still get their promised stops on the high speed rail route, but not until some ill-defined future phase, which could add another $80 billion to the price tag.  Even without that, the new estimate to bring high speed rail to life is five times more than five years of funding for the University of California, points out high speed rail critic Richard White, a Stanford University professor.

            The Rail Authority’s November 2011 revised business plan shows a total of $15.55 billion available to build the core route – the original bond, $3.3 billion in federal matching funds and $3.25 billion in federal stimulus funds – which should be just enough to build the much-anticipated route from Bakersfield to Merced in the Central Valley.  No other route could be built for that little, given the high cost of purchasing or condemning private property along more populous segments of the proposed route.  Most riders will have to wait until 2033 to experience a segment of the train line that actually travels between two points significant numbers of passengers are likely to travel between. 

            The Authority also says the finished route will be profitable – with a definition of profitability only a government employee would be comfortable with:  A profit will be declared if the train covers its operating and maintenance expenses.  Never mind the $100 billion to build it; paying for that shouldn’t bother the profit bean-counters at the Rail Authority, and it won’t, under California’s proposed definition of high speed rail profitability.  The profitability projections are also based ridership projections of 28.6 to 37.1 million passengers a year.  Proposition 1A was sold to the voters on projections of 90 million riders a year, so the Rail Authority is being more honest than it once was, but it is still a long way from being able to make any claim of honesty.  White points out that if California’s high speed trains end up capturing the same ridership levels enjoyed by Amtrak’s most successful train, which services the highly populated, rail-friendly run from New York to Boston, it would transport about 5 million riders annually, not 28 or 37 million.  But still, the Rail Authority assures Californians, it will be profitable.

So far, the Rail Authority has only exceeded expectations in the area of incompetence – failing to identify a route that makes sense any way but politically, failing on all its projections, and failing to be open with the public (it prohibits its vendors from discussing their contracts publicly, for example).  Unless high speed rail is killed – and it might, if a proposed proposition defunding it qualifies and is passed – the Authority will go on to show even greater levels of bureaucratic ineptitude as it tries to actually build and operate a railroad.

If you want to read more, sign up in the box on the upper right for notification when Crazifornia is published, hopefully early next year.

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