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.
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.
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.