Here's a thought. If high-speed rail successfully connects San Francisco and Los Angeles as the promoters promise, the results will be like the world of "Blade Runner." If you've never seen this film by Ridley Scott, you must. It's set in a mega-city Dystopia.
Beware of all those politicians who believe that high urban density is the wave of the future, supported by so-called "mass transit." These two commercial interests are in cahoots with one another and are banging on government doors for funding as a standard business model of theirs.
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There's a long, blathery article from Rod Diridon, former Board member of the CHSRA and the Executive Director of the Mineta Transportation Insitute. That latter fact is critical, as I soon shall point out. I won't reprint the entire article since it tells us that California HSR will cure all of our ills and make the state fabulously rich. He says: "If private bidders don't see profits, then there will be no bids, no project, and no debt. California taxpayers are protected."
This issue has become a major source of contention. By law, the rail authority is prohibited from constructing a rail system that requires subsidies of any kind. That is to say it must produce revenue surpluses, after operation and other support costs are met. That's most unlikely, Diridon's claims to the contrary notwithstanding. And, therefore, as Rod tells us, no "profits" (not a good word here) means no rail project. I wish!
You might be wondering why Diridon is writing such an aggressive advocacy article, the point of which is, as the title points out, "it's time to invest fully in high-speed rail" The answer is that it is my belief that Parsons Brinckerhoff is supporting the Institute that Rod heads with generous donations. Rod is a long-time pol with endless connections in various industries such as PB. The train's full build-out will doubtlessly reward Diridon and his croneys very well. Hence, his plea to "invest fully," by which he means federal funding, since private investment has next to no chance of happening and he knows it.
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Here's another brief thought. We need to be careful to distinguish among three "stakeholder/players." The first and only one in the game right now is the CHSRA. They will be the funded designer/builders, contracting everything out to private construction and development corporations. All the discussions today circle around the construction issue.
However, there are going to be two "significant others". One will be the eventual owner of the tracks and support technologies. It could be the State of California, Amtrak, or someone else. The other "significant other" will be the HSR operator. They may or they may not own the rolling stock. They will be operating the trains and collecting the ticket fares.
At this point, the impression is that the CHSRA wants to be all three, controlling everything. Therefore, they are the ones who intend to sit at the cash register, with the money coming in and going out.
Boy, is that a bad idea! None of this has yet come up for serious discussion. The sooner it does, the better.
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California Rail Program In Deep Doo-Doo
05.26.2011
Anthony Pignataro
GETTING THERE FROM HERE - You know a massive government program is in trouble when even its hand-picked “working group” of insiders starts crying foul. This is exactly what happened to the increasingly troubled California High-Speed Rail Authority (CHRSA) earlier this month.
Already suffering under the weight of critical activist groups, multiple state audits and a growing number of skeptical legislators, the rail authority took one on the chin from its own High-Speed Rail Independent Peer Review Group.
Created by Proposition 1A [link] in 2008 (and not to be confused with the Ridership Peer Review Group, which was created much later), the Independent Peer Review Group consists of eight members (two positions are open) appointed by various state officials such as the state treasurer and the secretary of the Business, Transportation and Housing Agency.
Though formed way back in early 2009, the group didn’t release its first report until November 2010. The report was generally critical of the effort to build 800 miles of bullet trains at a cost of at least $43 billion.
Questions
On May 2 of this year, they fired off a six-page letter to CHSRA Executive Director Roel of van Ark that listed a whole lot of questions and criticisms. Though buried in the letter, the most important of these observations dealt with the project’s exploding cost.
“We believe the Authority is increasingly aware of the challenge of accurate cost estimating,” wrote Peer Review Group Chairman Will Kempton, the current CEO of the Orange County Transportation Authority and a former Caltrans director in a May 2, 2011 letter obtained by the Palo Alto-based Californians for Responsible Rail Design. “However, as the Authority stated, ‘overall capital costs are trending upwards’.”
What’s more, Kempton says his group “does not yet see the establishment of a state-of-the-art cost estimating and budget management system that would permit immediate incorporation of actual experience as it emerges.” Since a mere 15 percent of the design plans have been completed so far, “this does not furnish a solid base for confidence in cost estimates, either for the estimated amounts or for the range of variation likely to be experienced.”
For that reason, Kempton urged the authority to “make every effort to state and qualify its estimates accordingly so that the public will understand that the $43 billion total is still a very preliminary estimate that could ‘trend upwards’.”
Translation: the $43 billion cost estimate stands nowhere near reality.
Another chilling finding from the Working Group was the rather cavalier way in which it states that, pretty much no matter what, the bullet train will not make any profit in its first years and will require some sort of public subsidy.
Support from Taxpayers
In fact, Kempton says the group believes it is “unreasonable” not to provide some kind of “support” to the project in its earliest years. “If the Legislature’s intent was that the entire project, at all stages, be financially profitable including payback of State bonds and all investment, then we agree with the Authority’s position that neither this project, nor any other HSR system (with the possible exception of the Tokaido Line in Japan and the Paris to Lyon TGV line) could meet this standard,” Kempton wrote. He apparently (and conveniently) forgot that profit at all stages was exactly the line fed to Prop. 1A bond voters back in 2008.
Kempton and his group also noted that rail authority staff is much too small to deal with so many contractors, right-of-way acquisition is going to be way more expensive than can be known at present and, of course, the authority needs to keep working on that ridership model — you know, the one that UC Berkeley transportation engineers said was bunk.
And Kempton also offered an unsubtle reminder that the rail authority needs to get some kind of final business plan — which should include a reasonably accurate cost estimate — by October 14 of this year. That so many years have gone by without such a document exemplifies the madness that hangs over the project, which will be either the largest capital works project or boondoggle in California history.
At this point, the latter looks most likely to be the case.
(Anthony Pignataro, former OC Weekly investigative reporter writes for calwatchdog.com where this article was first posted.) -cw
CityWatch
Vol 9 Issue 43
Pub: May 27, 2011
