By Roger Rudick, December 9, 2013
TGV High Speed Rail in France.
Last week, the media reported, once again, that the California High Speed Rail (HSR) project is in its death throes.
The latest batch of articles are based on a Nov. 25 decision by
Superior Court Judge Michael Kenny. The judge ordered the California HSR
Authority to revise a 2011 funding plan before it issues state bonds
under Prop. 1A, the 2008 measure that set California’s HSR project
going. The ruling also green-lighted work on the Central Valley portion
of the project.
What does that really mean?
“All you have to do is front-load the federal money. Spend the $3.4
billion from the Feds,” explained Rod Diridon, Executive Director of the
Mineta Transportation Institute and Chair Emeritus of the California
HSR Authority board, referring to stimulus spending that’s available
from Washington. “Then you spend the state part later.”
Plaintiffs include John Tos and Aaron Fukuda, Central Valley
landowners in the way of the tracks. It’s one of many suits pending. The
Authority tried an omnibus lawsuit, where it essentially sued itself as
a defense against the many different legal actions lining up to stop
the bonds. Judge Kenny didn’t go for it. “All the judge said is the
Authority can’t have blanket validation of the bonds,” said Diridon.
There was a third “key setback,” as the Los Angeles Times describes
them. On Dec. 5, the Surface Transportation Board of the US Department
of Transportation rejected an application from the California HSR
Authority to expedite review of the entire 114 mile Central Valley
portion of the project.
The sticking point is a five-mile section of the 29-mile
Madera-to-Fresno segment. Under the worst-case scenario, sources close
to the bid said the Authority will renegotiate a $511 million agreement
with Tutor-Perini, the construction contractor, to work around it.
Meanwhile, Dan Richard, the project chairman, said they will comply with
the orders and construction will start as soon as next month.
When it was placed on the ballot, Prop. 1A was the only way to give
the project a serious financial and political shove forward, by taking
it directly to the voters. Still, it was for a $9.95 billion bond issue;
a downpayment on the project. The costs for even the earliest
incarnations for California HSR were more than three times that much.
It’s a different state now. The Legislative Analyst’s Office is projecting $10 billion budget surpluses by 2018.
“When I ran for governor in California the first time,” said Jerry
Brown at a HSR event, “California’s private wealth, together, was about
$350 billion. Now it’s almost $2 trillion.” France, Japan and Germany
built modern rail networks with much less wealth. In other words, many
are saying Prop. 1A is less important now. And, for future segments,
maybe Washington doesn’t matter either.
Sacramento may vie to do this on
its own, through carbon offsets, the transportation budget, and perhaps
through a “franchise bid.” Under this idea, explained Diridon, an Asian
or European railway consortium pays to link, for example, Los Angeles
with the Central Valley. In exchange, they would collect all the profits
from HSR operations for a period of several decades.
Bottom line, construction on a segment from at least Madera to south
of Fresno will move forward. After that, more segments will be built.
There will be more legal battles. The political winds will, no doubt,
generate stops and starts. But despite all the doom-and-gloom reporting,
California HSR isn’t dead. However, given the many challenges, by the
time the first train runs from Los Angeles to San Francisco in less than
three hours, everyone reading this may be.