Sunday, December 12, 2010

Wendell Cox: Building the Train to Nowhere

Wendell Cox, as I've said previously, is one of the leading professional analysts and critics of this high-speed rail project. He and Joe Vranich wrote a definite White Paper before the '08 elections called "The Due-Diligence Report." They did a superb job of taking this project apart cross-tie by cross-tie. Here Prof. Cox provides a clear summary of where we now stand.

Perhaps the pivotal issue here is that the rail authority is determined to get this project started, regardless of where or under what circumstances. Once started, it will be impossible to stop. The Democratic Congress and Administration have opened the federal piggy bank to withdraw more borrowed money to ship to "deserving" states. The central mission of the CHSRA is get and spend those dollars.

Getting holes dug in the ground is the way to create momentum. And once construction starts, Californians will watch as the costs skyrocket (inflation has just begun in earnest), they run out of funds, and then run to Washington to lobby for more funds. The pitch will be to throw good money after bad (always a good idea!). A few more dollars; a few more miles of useless track.

And, this will come to bite Californians in the back. There should be no doubt that not only will Californians be paying two dollars for every Prop. 1A dollar spent, but there will be other future costs.

Even though AB3034 states that no further state funds will be required, with the project construction underway, the Rail Authority will find ways to seduce a willing Legislature to keep State funding available, even after the initial $9 billion are spent.

My current concern is whether the new Republicans in Congress will put their money where their mouth is; that is, will they terminate the high-speed rail effort to reduce the federal deficit?

The Rail Authority screws things up weekly. We can only hope that it really does become an embarrassment for the Democrats who so avidly support this project now.

It is really very disillusioning to see our Democratic representatives in Sacramento and in Washington so obsessed with shipping funding into California that they recklessly disregard the black-hole where those dollars are headed; an inept and unscrupulous Rail Authority that is accountable to no one.



by Wendell Cox 12/10/2010

The California High Speed Rail Authority has approved building its first 54 miles in the San Joaquin Valley. A somewhat longer route, 65 miles, has been indicated in a number of press reports, but Authority documents indicate that only 54 miles of high speed rail track will be built. The route would start in Corcoran, and go through Fresno to Borden, a small, unincorporated community south of Madera. All of this would cost $4.15 billion. The route would include two stations, in Fresno and Hanford/Visalia. [Edit: The additional federal $614 million will extend the route down to Bakersfield, they say. We'll see how far that $614 million goes.]

The segment was adopted under pressure by the United States Department of Transportation, which was interested in ensuring that the line would be usable (have "independent utility") by Amtrak should the high speed rail project be cancelled due to lack of funds. The first section of the California high speed rail line would instead be a somewhat incongruously high-tech Corcoran to Borden spur, or perhaps more accurately stub to the region’s rather sparse conventional rail services.

There are appear to have been concerns that growing opposition movements in the San Francisco and Los Angeles areas could have delayed construction, which could have put the federal money at risk. The Sacramento Bee's Dan Walters, perhaps the leading political columnist in the state implied an ulterior motive:

"You'd have to be terminally naive not to believe that the splashy announcement, made personally by an Obama administration official in Fresno, was to help an embattled local congressman, Democrat Jim Costa, stave off a very stiff Republican challenge."

Officials representing communities – many of them with high levels of unemployment – on the segment itself were elated, as any would be at the prospect of a rush of new construction jobs, regardless of what was being built. But, most everywhere else the reaction to the selection largely has been negative. Walters labeled it the "train to nowhere" in a November 29 commentary. State Senator Alan Lowenthal, who chairs the legislative committee overseeing the high speed rail project said that the Authority "could be creating an 'orphan' stretch of track, that will never be used by high-speed trains."

Richard Tolmach, president of the California Rail Foundation, an intercity rail advocacy organization, told Authority members " It’s a crazy idea. He went on to say that “You guys are gonna be a laughingstock in Congress."

Already, problems are building in the now more decidedly more conservative Congress. California Republican Congressman Jerry Lewis and 27 colleagues have introduced the “American Recovery and Reinvestment Rescission Act,” which would apply unspent stimulus money to the deficit, including $2 billion that has been promised to the California high speed rail line.

Batteries (and Trains) Not Included: Even after the $4.15 billion has been spent, the Corcoran to Borden rail stub will be incomplete. The Authority's plan includes only the building of the rail bed and the necessary viaducts. There is no money for trains. There is no money for the electrical infrastructure necessary to power the trains. Trains and electricity infrastructure would add at least 15 percent to the bill, based upon previous California High Speed Rail reports. Thus, when and if completed, the trains and electrification would lift the cost of the Corcoran to Borden high speed rail stub to at least $4.8 billion.

Bare Bones Stations: The plan calls for building only "basic" stations, with two tracks (one in each direction). That is fine if the line is serving Amtrak and there are only a few trains per day. But the high speed rail plan assumes frequent trains, including some that stop at all stations, some express trains that skip some stations and some express trains running non-stop from the Transbay Terminal in San Francisco to Union Station in Los Angeles. The only place that an express train can pass a slower train is at a station. That means that passing tracks must be built at virtually all stations. The passing tracks (two interior tracks in addition to the two tracks for stopped trains) required in stations are illustrated in this California High Speed Rail illustration (also above).

The full system, or (perhaps the more likely outcome) a truncated San Jose to Palmdale line (with slower running lines over the commuter rail tracks into San Francisco and Los Angeles), would require passing tracks at the Fresno and Hanford/Visalia stations.

Rebuilding these stations would increase the cost above the $4.8 billion, and that's before the seemingly inevitable cost escalation.

Indeed, the Corcoran to Borden stub entails a potentially large cost increase compared to previous California High Speed Rail Authority documents. After making all of the necessary adjustments to update the last available segment costs to the cost accounting method ("year of expenditure" dollars), the cost of the Corcoran to Borden stub could be at least 30 percent higher than would have been expected in the present $43 billion San Francisco to Anaheim cost.

Applied to the entire line, a 30 percent cost escalation could take the price of the San Francisco to Anaheim line to more than $55 billion. Based upon cost ratios released by the Authority in 2008, the later extensions to Sacramento and San Diego would lift the bill to more than staggering $80 billion. Even that does not pay the entire bill, because promises have been made in state legislation for improvements across Altamont pass from Stockton to the East Bay and Oakland.

Not that coming up with any of this money will be easy, particularly with a more deficit conscious Congress. Congressman John Mica of Florida, who will likely lead the House of Representatives Transportation and Infrastructure Committee has promised a review of all federal high speed rail grants. The Authority expects to obtain funding from local governments in California, a number of which are teetering toward financial insolvency.

The Authority expects between $10 and $12 billion from private investors. These potential investors will all be aware of the fact that virtually every dollar of private investment in new high-speed rail lines has been lost or required a government bailout. They will not participate without subsidies, which are prohibited by California law. Finally, all these elements of the financing plan will be made even more problematic if the first phase of the project continues to rise from $43 billion to $55 billion.

Washington analyst C. Kenneth Orski noted that the Corcoran to Borden stub could "become a huge embarrassment for the Administration" and that by its train to nowhere ”casts doubt on the soundness of the entire federal high-speed rail program and its decision-making process."

There, even if California gets to keep the federal money, there are still formidable financial barriers. A likely result is high speed rail in Amtrak mode which probably won't make much difference to passengers riding the infrequent San Joaquin service. After the Authority action, Bill Bronte, who heads the rail division of the California Department of Transportation said that "The improvements in performance might be less than one would expect." But that might not bother contractors and consultants who can feast on what might prove to be the most expensive conventional intercity train project in history.

Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris and the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life