Everyone who has been a high-speed rail follower and possesses an active 'crap detector' has predicted that whatever costs are attached to this HSR project in California by the rail authority will be far lower than the real, eventual costs.
One only has to track the cost increases for the Boston Big Dig to get the picture. They went from around $2 billion before construction started, to the last figure of $22 billion with all the interest costs factored in.
Before the voters were asked whether they wanted a high-speed train in California or not, they were told that this project would cost $33 billion.
The most recent numbers, based on the rail authority's own cost sheets, are around $66 billion. There should be no doubt in anyone's mind that the real, as-built, costs will be well over $100 billion. The supporting data is incontrovertible.
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On Cost Overruns While Building Megaprojects
Brief Note #3 – May 25th 2011
From the authors of The Financial Risks Of California’s Proposed High-Speed
Rail Project and six Briefing Papers. Available at http://www.cc-hsr.org/
Finding: Megaprojects overrun their original capital cost estimates.
Background: A 2003 study of more than 200 large-scale transport projects showed the average cost overrun to be 45%. Some examples:
The Channel tunnel was 80% over original estimates and bankrupted the
private companies that were to be its operators”1
Germany’s Inter-City Express (ICE) between Cologne and Frankfurt construction costs were 85% higher while the cost to build the Nuremberg- Munich link of ICE were 42% higher.2
Boston’s Big Dig, managed by the same Parsons Brinckerhoff presently employed by the CHSRA, cost more than three times its original estimate
A DOT study concluded the median of total cost overruns for ten rail projects was 61%, ranging from -10% to +106%.3
The yet-unfinished Oakland Bay Bridge is now more than five times its
original estimate.
Recent findings from the Authority’s own alternative analysis data suggests a steep rise in estimated costs – from $33Billion in 2008 to $43Billion in 2009 to a presently estimated $66Billion price tag for the LA-SF Phase One, a one year increase of nearly 60%.4
Conclusions: Two years after Prop1A and two years before construction in the relatively-easy-to-build-in Central Valley, construction costs are already twice the 2008 estimate and more than half again as large as 2009.
The construction costs of the project are only likely to escalate further; ultimately raising ticket prices in order to service the State’s debt exposure in what was claimed to be a system paid for by its users.5
The State needs to be indemnified from faulty cost estimates and should demand a financially guaranteed, fixed price construction contract before proceeding further.
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1. Op.cit Flyvbjerg, Bent; Bruzelius, Nils and Rothengatter, Werner: Megaprojects And Risk, An Anatomy of Ambition; Cambridge University Press, 2003; pg. 12
2. Ibid. pages. 40-41
3 Pickrell, Don; Urban Rail Transit Projects: Forecast Versus Actual Ridership and Costs (Washington, DC: US Department of Transportation, Urban Mass Transportation Administration, 1990).
4. See Californians Advocating Responsible Rail Design (CARRD) – Capital Cost Estimate; February 2011 at
http://www.calhsr.com/uncategorized/what-will-high-speed-rail-cost/ and Big Trouble For California’s High- Speed Train at http://www.cc-hsr.org/
5. The Official Voter Information Guide of the Tuesday, November 4, 2008 California General Election:
