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New bullet train plan shaves $30B from cost

California High-Speed Rail Authority

The California High-Speed Rail Authority unveiled a new business plan yesterday slashing $30 billion from the price tag for connecting Anaheim and San Francisco.

And retreating from a series of political missteps, the authority also vowed to connect its initial segment between Bakersfield and Fresno – the so-called “Train to Nowhere” – to the San Fernando Valley within the decade.

Just five months ago, the authority was saying it would spend $98 billion to build a 220 mph train that would begin full operations around 2033.

Gov. Jerry Brown installed a new chairman, Dan Richard, after that November 2011 business plan generated a storm of criticism. Chairman Tom Umberg, a former Orange County legislator, and Chief Executive Officer Roelof van Ark both stepped down to make way for Brown's team.

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Now the commission hopes to build a high-speed link between Los Angeles and Merced, with medium-speed links to the north, in about a decade and have full high-speed service by 2028. Cost: $68.4 billion to $79.7 billion.

The big savings would come in the Los Angeles Basin and on the San Francisco Peninsula, where the authority would help finance improvements to make existing commuter rail lines “high-speed rail ready.” Those improvements would come years, perhaps a decade or more, before high-speed trains do.

Take the Peninsula: The authority has been locked in litigation for years with Peninsula community groups over its plans to punch four high-speed rail tracks from San Jose to San Francisco.

Now it is saying it needs just two tracks within the existing Caltrain commuter-rail alignment. It will help pay for improvements to Caltrain quickly, rather than wait for inflation to boost costs. And high-speed rail passengers will ride on Caltrain between San Francisco and San Jose until the high-speed line is completed.

The compromise solves political and financial problems but might open entirely new financial and legal problems.

Richard Tolmach of the California Rail Foundation, a longtime critic of the authority, said he can’t figure out how the agency shaved 30 percent off its costs.

The November business plan – much criticized for its $98 billion cost – clearly laid out the sources for its numbers, Tolmach said. Not this plan.

“This time, more than last time, (the plan) is a sales job,” Tolmach said. “It doesn’t have actual facts, but it must have 20 pictures of (rail) boosters and parades.”

For example, experts estimate it will cost $1 billion per year to operate the train. The new plan estimates it will cost no more than $573 million – $70 million less than the authority projected in November. It’s unclear how this savings occurred.

Meanwhile, retired Judge Quentin Kopp – former chairman of the authority and, as a state senator, co-author of the bill creating the first high-speed rail study – branded the new plan “the great train robbery.”

Transit advocates in Los Angeles and on the Peninsula have been trying for years to “pick the pocket” of the bullet train by urging that project funds be used for local improvements, Kopp said.

“Sharing the tracks with Caltrain here and with Metrolink and Amtrak between Los Angeles and Anaheim bars operating more than maybe two trains per hour of high-speed rail,” Kopp said in a phone interview. But high-speed rail revenue projections were based on operating trains every five or six minutes.

In addition, Kopp added, blended service could violate Proposition 1A. The voter-approved bond required that passengers travel between Los Angeles and San Francisco without changing trains. A blended service likely would require two transfers: in Sylmar and in San Jose.

The authority says it can pay for the entire “initial operating section” – the high-speed rail line from Merced south 300 miles to the San Fernando Valley – using a combination of $6 billion in federal funds, $9 billion from voter-approved Prop. 1A, local funds and cap-and-trade money.

The last category is money the state would get under its first-in-the-nation law restricting emissions of greenhouse gases. Brown floated the idea of using cap-and-trade money to finance high-speed rail in a television interview last year. The business plan adopts it as a formal strategy.

The authority says the train will make money from the start. In 2022, the first year of operations, it projects a net cash flow of $35 million to $59 million, rising each year after that. By 2030 or 2031, the authority projects the train would generate more than $1 billion annually in cash.

Ronald Campbell is a reporter for The Orange County Register. Lance Williams is a senior reporter for California Watch. 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 San Francisco Chronicle, The (Riverside) Press-Enterprise, U-T San Diego, KQED, the Merced Sun-Star, The Tribune of San Luis Obispo and The Modesto Bee.

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