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High-speed rail has high costs, but so do other options

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Stephanie Paige Ogburn | Nov 07, 2011 06:00 AM

When the California High-Speed Rail Authority released its revised business plan last week, headlines in the state and nation screamed gleefully about the project's ballooning costs. "More grim news on $99 billion high-speed rail plan, as showdown looms," lowed the Mercury News. "High-speed rail costs balloon to nearly $100B," reveled the gotcha-happy investigative outfit California Watch, tossing in an extra billion for effect. "Can Obama's high-speed rail plans survive California sticker shock?" asked The Christian Science Monitor.

A closer look at the business plan, which is revised regularly per project requirements, reveals cost projections of $65.4 billion in 2010 dollars, which inflate to $98.5 billion by 2033. That's when the first phase, which connects San Francisco with Los Angeles through a Central Valley route, is scheduled to finish. The initial segment of the project, which will connect Fresno to Bakersfield, is slated for completion in 2017.

Cost Projections

A table of projected costs from the updated business plan.

Sixty-five billion is still a lotta bills -- more than I, and many others, can fathom -- hence the "sticker shock." But California is going to have to spend money on a transportation system no matter what. The state is projected to grow by 20 million people in the next 40 years. Those people are going to need ways to move around the state. The rail investment, proponents say, is cheaper than projects that would move an equivalent number of people along similar pathways -- air and highways. Over the next 20 years, the business plan states, the necessary highway and air investment would total $170 billion. Thus, the debate shouldn't be framed in terms of whether to spend that "$100B." It should be on where to put that investment, and what is the best way to get a good return on it.

 Perhaps one reason a number of papers and citizens seemed to chortle at the project's price escalation stems from the rail authority’s recent public relations missteps. Farmers grouse about its Central Valley line cutting their fields into odd-sized parcels and making it inconvenient for them to get equipment around the route. Yet in May, rail authority chairman Curt Pringle appeared to dismiss their concerns, validating worries about the authority's top-down approach to the project. He resigned two months later.

And in late June, the project's public relations firm, Ogilvy Public Relations Worldwide, stepped down from its $9 million contract after its work was panned by another former authority board member, Quentin Kopp.

“Since Ogilvy’s engagement in February 2010, its inadequate performance can be measured, by among other things, the worsening legislative, media, academic and popular comments in the public domain about our project,” Kopp wrote in the letter to (current authority board chairman Roelof) van Ark.

Some of that worsening P.R. comes from the increasingly toxic and cash-thin situation in Washington, D.C. The rail authority has already secured about $4 billion from the feds to match state construction dollars.  (The original funding was increased when political posturing led Florida to give up their high-speed rail dollars, and California picked some up) But the transportation bill just passed by the Senate leaves just $100 million in funding for high-speed rail (Obama had sought $8 billion)  -- and it still has to be reconciled with the even skimpier House bill. This fuels worries that federal dollars won't come through to support the project throughout.

The rail authority, which has two new board members appointed by Jerry Brown, seems determined to be realistic about costs (hence the high price tag of this revised plan), and is sensitive to the fact that it has lost some public approval since 2008, when voters approved a nearly $10 billion bond measure for the project. Which brings me to another headline: this one from the state capitol's paper of record, the Sacramento Bee. Phase 1 map"California's high-speed rail backers take steps to quiet critics," it reads.

And while opponents criticize the phased approach that starts in the relatively unpopulated Central Valley, calling it "a train to nowhere," the two cities it is connecting have significant populations: Fresno at near a million, and Bakersfield at 250,000 and growing. Since the Central Valley is eligible for key federal development funds and, relatively speaking, easier to route a train through (imagine the NIMBY hell Californians will raise when the elevated tracks need to push through Silicon Valley), one can understand the authority's wish to push through a successful and funded project there while they can. As the authority points out, this is how major infrastructure projects are built. The interstate highway system took 50 years to complete.

The project is scheduled to break ground in the Central Valley and start spending the first billions of that 65 next year.

Stephanie Paige Ogburn is the online editor at High Country News.

Images courtesy the California High-Speed Rail Authority.

Steve Snyder
Steve Snyder
Nov 07, 2011 02:32 PM
There's too many stations; it defeats the whole concept of HSR if you can never get up to top speed.
john burk
john burk
Nov 08, 2011 06:47 PM
The big Question is: If built, will it be used??
Peter Prince
Peter Prince Subscriber
Nov 08, 2011 10:01 PM
The author is spot on with comments about what constitutes a correct comparison. The appropriate question is "if not HSR what other option provides more benefits at lower cost?" And that includes a close look at do nothing. Rack them and stack them then let the numbers tell their story. All too frequently proponents and critics alike bring forth a convenient set of numbers that support their position but leave reality on the outside. The world is not black and white! We need to make decisions in the vastness of grey.
Steve Snyder
Steve Snyder
Nov 08, 2011 10:28 PM
John, for some time, Californians of various political stripes have claimed that ridership estimates have been inflated to vastly inflated. And, per Stephanie's response to my FB comment, NO HSR trains should stop anywhere between Cajon Pass and Modesto other than Fresno. (IMO, the "split" between Sacto and Bay area should be at Modesto, not Merced, too.) HSR has to have minimum separation distances between stops and minimum population densities at stops to be financially viable.
Steve Snyder
Steve Snyder
Nov 09, 2011 01:38 AM
Finally, let's not forget that California has (another) boondoggle coming down the pipe (literally, in this case), next year, when Jerry Brown tries to sell the state on the Peripheral Canal, which itself is suffering inflation in terms of job-production claims.
Rusty Austin
Rusty Austin Subscriber
Nov 11, 2011 01:29 PM
I would use it at least 3-4 times a year, and likely more, to travel from LA to the Bay Area, sadly, 2033 will come too late for me. HSR has pretty much worked everywhere it's been implemented, I don't see California as being that much different from the rest of the world.
Steve Snyder
Steve Snyder
Nov 11, 2011 01:52 PM
High speed rail isn't profitable, but, transportation in general is not necessarily "profitable." That said, we won't know how unprofitable HSR rail will be until somebody actually starts talking $$ of ticket prices. Short of that, I'm going to stand by think tanks that claim ridership estimates are inflated to highly inflated.
Rusty Austin
Rusty Austin Subscriber
Nov 11, 2011 02:06 PM
Well we could sit around and complain that any HSR is so expensive we might as well not even try it, and continue to drive around in traffic jams and wait hours at the dumb airport for the TSA to get us through security and pay through the nose to sit like so many sardines in seats made for 12-year-olds, or we could try to do something different. At the very least it'll give thousands of construction workers years of work.
Steve Snyder
Steve Snyder
Nov 11, 2011 02:30 PM
Rusty, I'm not arguing with you about the problems with air travel. That said, who's to say that TSA doesn't go nutbar over HSR in particular, or trains in general, at some point in the future? As for the thousands of construction jobs, I think TransCanada is making that same argument for Keystone XL. There's enough HSR in western Europe that California folks could throw out some tentative ticket prices, were they of a mind to do so. I'm not "biting" until they're of a mind to do so. If HSR were, say $200-$250 more than a shuttle flight from LAX-SFO, would you still travel that much on it?
Rusty Austin
Rusty Austin Subscriber
Nov 11, 2011 03:36 PM
Keystone I think has other problems, namely that the technology of getting tar out of sand is a huge step backwards, although, we'll need to get energy from somewhere to run trains. I agree that air travel is beside the point, what we're really talking about is getting out of our cars, or at least relieving ourselves of the burden of driving them. And whether or not I personally would pay more, the price has to be less I think to compete with air travel. As much as people complain about flying, it's cheap and getting cheaper all the time it seems. But even all that is beside the point, my argument is what we have now is bad for humanity and getting worse, instead of finding reasons why we can't fix it we need to be searching for ways we can. HSR in my opinion offers hope. I may be wrong, but I am willing to try.
Steve Snyder
Steve Snyder
Nov 11, 2011 04:00 PM
Oh I agree that it will likely be less polluting than air travel. But, if it's priced that much more, people aren't going to buy tickets out of the goodness of their carbon-offsetting hearts.
Christopher Patry
Christopher Patry Subscriber
Nov 16, 2011 07:54 PM
I don't think anyone can see what the demand will be, or what the final cost of construction and operation will be that far into the future. One thing is for sure, the current modes of transport in California are not feasible for a growing population. If the state wants to initiate an no growth policy, I'm all for that. That, however, is not going to happen. We need to face the future and build HSP in a responsible manner and it should be just as economical as it has shown to be in countries that are ahead of us in this regard. It will probably be more so for California in that it is such a bifurcated North/South state that is so large. I also agree with Steve that the stops are too many for HSR and this needs to be corrected - perhaps significantly reducing the costs.

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