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High-speed rail costs balloon to nearly $100B

High-Speed Rail Authority

Building California’s high-speed rail project could cost $98.5 billion over 20 years, more than twice what was previously thought, according to a draft copy of a business plan obtained late Monday by a media partnership covering the project.

The amount is still far less than the cost of expanding airport and highway systems to accommodate the state’s growing population, the California High-Speed Rail Authority said in the report. Even with conservative ridership and cost estimates, it said, the system will operate at a profit.

In the plan, the authority recommits to starting construction in the Central Valley, a source of controversy because it is far from California’s population centers. The authority would start construction a year from now on the project’s first segment, from Bakersfield to near Chowchilla.

It would push completion of the full, San Francisco-to-Los Angeles area line back to 2033.

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The plan comes at a critical time for the project, whose management and cost have come under heavy criticism since voters approved $9 billion in rail bonds in 2008.

The report follows by two months Gov. Jerry Brown’s suggestion he could help authority officials “get their act together,” and the document represents his administration’s influence on the project. After the Democratic governor appointed two advisers to the rail authority board, the business plan’s release was delayed while those advisers, Mike Rossi and Dan Richard, reviewed it.
 
“This project will create 100,000 jobs at a time when we really need them and link the growing population centers of California without the huge expense and intractable problems of massive highway and airport expansion,” Brown said in a prepared statement.
 
The cost of the project, $65.4 billion in 2010 dollars or $98.5 billion in inflation-adjusted dollars, far exceeds the authority’s previous estimate of $43 billion. The authority characterized the cost estimate as conservative.
 
“We have not tried to sugar-coat or to hide what is our view of what it’s going to cost to actually build this thing,” Richard said.
 
The plan calls for phased implementation, proposing segments that could be used alone if the project is stalled. The Central Valley line, for example, could be used by Amtrak if construction is halted before it is expanded to the San Fernando Valley or San Jose. Authority officials said that expanded segment, on which high speed trains would first be operated, could be finished within 10 years.
 
The authority envisions using regional rail lines going into the Bay Area and Los Angeles areas, potentially reducing political opposition to construction in those areas.
 
It said the system would improve transportation, create jobs and reduce gridlock and pollution throughout the state.
 
“It’s not like it’s high speed rail or nothing,” Richard said. “You either do high-speed rail or you make other investments to try to achieve the same mobility, and those, we believe, will cost a lot more.”
 
Infrastructure to accommodate an equivalent transportation demand, the report said, could cost more than $170 billion over the next 20 years.
 
The authority acknowledges in the plan that billions of dollars in future funding is not yet secured. It said it would seek private investment once the first part of the system is operational, and also seek additional federal funds in future years.
 
Lance Simmens, the rail authority’s deputy director for communications and public policy, said last week that the plan “is going to go a long way in reassuring people that this is really a project that is in the best interest of every Californian.”
 
The document, scheduled to be released today at the California State Railroad Museum, updates 2009 ridership and cost estimates that were widely criticized as inadequate.
 
Projections contained in the plan are expected to be the focus of hearings in the Legislature next year about whether to move the project forward.
 
Opponents have criticized the authority’s decision to start construction in the Central Valley, urging it to build first around population centers in the Los Angeles or San Francisco areas. The federal government, which has announced some $3.6 billion in funding for the project, has conditioned funding on starting in the Central Valley.
 
The plan’s release represents a chance for the authority to restart a public relations campaign that turned increasingly sour in recent months.
 
In a September letter to the rail board’s Tom Umberg, former Caltrans director Will Kempton, chairman of the California High-Speed Rail Peer Review Group, called the plan “a defining document; if it addresses the concerns fully, favorable evaluations will lend confidence to the project; if it has gaps or errors, the risks of near-term decisions will be greatly increased."
 
David Siders covers high-speed rail for The Sacramento Bee. Contact him at dsiders@sacbee.com or 916-321-1199. This story resulted from a partnership among California news organizations following the state's high-speed rail program, including The Fresno Bee, The Sacramento Bee, California Watch, The Bakersfield Californian, The Orange County Register, the (Riverside) Press-Enterprise, the San Diego Union Tribune, KQED, the Merced Sun-Star, San Luis Obispo Tribune, Modesto Bee and the San Francisco Chronicle.

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