California Bullet Train Costs Rise by Another $1 Billion in New Estimate

An artist’s rendering of a bullet train gliding through a California city. (Credit: California High-Speed Rail Authority)

(CN) — Dogged by cost overruns and contract management issues, California High Speed Rail raised the estimate of its total cost by $1.3 billion on Wednesday as it released its draft business plan for 2020.

The recently released estimated increase is smaller than previous years but still reflects an infrastructure project that has earned bipartisan criticism and remains a flashpoint of debate on both sides of the aisle in Sacramento.

The business plan estimates the total cost of a high speed rail network capable of running trains from San Francisco to Los Angeles at $80.3 billion. The latest increase is largely because the completion date for the project has been pushed back to 2031, approximately a quarter century after voters passed Proposition 1A.

California High Speed Rail Authority CEO Brian Kelly said the project cost is “virtually unchanged” and the cost increase is markedly different from past draft business plans.

“This transformation is well underway in California,” Kelly said Wednesday. “Now is not the time to turn back.”

In 2016, the draft business plan said the project would cost $64 billion, already nearly double the price tag of $33 billion initially sold to voters in 2008. In the 2018 draft business plan, the cost increase jumped by another $13 billion and $2 billion more was tacked on by the end of the year.

Republican lawmakers in California increased their calls for abandoning a project they characterized as a boondoggle, and incoming Governor Gavin Newsom changed leadership at the authority while promising to scale back the project focus to concentrate on the 119-mile segment of track through the Central Valley.

The authority is under increasing pressure to complete laying track for that segment by 2022 – the deadline stipulated by the Obama administration when they released about $3.5 billion to the project as part of stimulus funds.

Rail authority spokeswoman Melissa Figueroa told the Associated Press the rail authority expects to meet its deadline.

“It’s going to be hard, no question about that,” she said. “But we have plans in place and everyone is focused on getting that done.”

The authority’s focus on the Central Valley has made it susceptible to criticism as some lawmakers advocate to peel off funding for the rail project to help ease the worsening congestion in California’s dense urban centers.

“We don’t have to give up on HSR to improve trains where millions of people can use them,” Assembly Speaker Anthony Rendon said in November. “A modest shift from the Central Valley gives us higher speeds up California’s core, with stronger connections at either end.”

But the rail authority made it clear in its business plan that the Central Valley provides an opportunity for trains to reach the highest speeds while garnering air quality benefits.

Critics point to ridership issues in the less populated part of the state, but proponents say high speed rail could help commuters to Silicon Valley and help with the housing affordability crisis there.

The rail project is also dogged by disagreements with the federal government, as the Trump administration and its multi-pronged hostility to all things California, attempted to claw back nearly a billion dollars in federal funding for the project last year.

The state of California sued the federal government and the case is pending in federal court.

But the lawsuit highlights funding problems. Currently the project has about 25% of the funds necessary to get trains running between Los Angeles and San Francisco.

The rail authority can make use of cap and trade funds and other sources, but help from the federal government will probably be needed to get the project to the finish line.

The draft business plan will be sent to the Legislature for approval in May.

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