Thursday, August 25, 2011

HSR on the federal and state heart/lung machine. Pulling the plug!

In California, the litany of grief knows no end.  The list of screw-ups by the high-speed rail authority lengthens daily.  The Alamanac editorial, below, provides an excellent but partial list.  The editors have ignored the horrendous collateral damage that will take place wherever the rail corridor is developed.  And the deleterious and adverse economic impact of that construction on cities, farms, suburbs and countryside. 

Nonetheless, the Party lines have been so firmly drawn in the sand that no Democrat, including our Governor, has the cojones to stop a project that, in the private sector would have seen a prompt massive lay-off of the entire organization.  They have been fished for by the White House and Ray LaHood, and caught on their hook with ARRA stimulus bait.  

They can stop this project if they wish.  When I say "they," I'm including all the recent names that have been bandied about, starting with Jerry Brown and including our leading Senators with jurisdiction over this project, Simitian and Lowenthal.  I'm also including Eshoo and Speier, as well as Gordon.  We can also include all the Peninsula local politicians who have been waffling and dancing around this issue since the Prop. 1A election. 

The Peninsula electeds want to "save Caltrain" and are prepared to throw us under the high-speed rail tracks to do so. They are under the impression that their political careers depend upon their ambivalent positions.

This comes down to two fundamental, and distinct issues.  One is the harm that high-speed rail will cause on the Peninsula, in the Central Valley, and in the LA Basin, regardless of the final route or alignments.  But, the larger issue is the rising cost of construction -- costs without end -- unknown and unknowable, like the number of stars in the Universe. 

One must ask each and every high-speed rail supporter the following questions.  Is there a cost so high that you would oppose this project, and if so, what is that cost?  $100 billion? $150 billion?  $200 billion?  Otherwise, does it not matter how much it costs -- even more than the annual Defense Department Budget, for example?  Would that be OK? 

These cost numbers seem not to be taken seriously by anyone.  We all know that they are higher than promised and we don't know how high they will go. The rail authority dismisses these increases as the cost of doing business. Not to worry. It's normal. Why is there not a suspension to this project right now and a demand that a final, fixed cost be determined; a cost ceiling that, when reached, ends the project automatically? The answer is obvious. We should stop the project now if we can realistically anticipate unaffordability. And, isn't that were we are now?

Other questions emanate from those basic questions.  Who should pay for a train that only those who can afford the tickets will ride?  Among all the Californians now driving on all our highways, how many of those will spend $200 to take a one way train from San Francisco to Los Angeles?  How much should all the taxpayers of California be expected to pay to subsidize the operation of this train?  How great a debt do you favor for the state to carry in order to build and operate this train?

At this point, our Democratic leaders have chosen to ignore all these financial issues, even as they seek to govern and legislate a state in very deep economic difficulties.  They claim that a major justification is to provide employment; that HSR is actually a social welfare jobs program, regardless of whether it will ever be completed or not. And that has become the political hot potato for the next year and a half, until the 2012 elections. 

It promises to be the flag for all of us to follow. . . .blindly.  

Then, the supporters must answer the following question.  Would you support this project if it can be demonstrated to your satisfaction that 90% of the jobs generated by the building of this project -- both construction and manufacturing -- will be outside the state?  Are you in favor of using federal and state dollars to provide profits for companies based overseas?  Are you in favor of recruiting HSR construction professionals from outside of our state, but paid for with stimulus funds intended to generate jobs for California unemployed residents?  

And this is a question aimed particularly at politicians who support the train in the Central Valley where unemployment is so high.  If the train project provides for the hiring of ten employees outside of the state for each one hired locally, would you still support it?

It is a "slow death" as the headline to the editorial states.  But, like many medical situations where a patient is sustained artificially and at great cost, it becomes a painful decision for those who cling to the belief that those $3 billion or more from Washington will save their political careers and save the state's economic malaise. 

Please do the humane thing and pull the plug now. 

Uploaded: Tuesday, August 16, 2011, 8:53 PM                                             

Editorial: The slow death of high-speed rail 
Time to wind down this project

The bad economic news keeps piling up in front of the California High-Speed Rail project but will it be enough to bring Governor Brown, the state Legislature and even the federal government to their senses?

Surely it is time for people with some clout in Sacramento and Washington to begin winding down this project, which keeps getting more expensive as the state's fiscal woes get worse. And remarkably, even though it lacks a viable business plan and has yet to line up any private capital, the project received another $89 million from Washington just a week or so ago.

Why is the federal government continuing to fund high-speed rail before making sure that the money won't be wasted on two Central Valley segments that could become a "Railroad to Nowhere?" like the project made famous by the late Sen. Ted Stevens, who shamefully promoted the "Bridge to Nowhere."

Ever since Proposition 1A passed in 2008, Peninsula residents have done everything possible to point out the many design flaws in the high-speed rail's plan, but instead of working to correct them, the rail authority was ordered to turn its focus to the Central Valley, where it was thought the project would get a much warmer reception. But even in this new, somewhat friendlier location, the rail authority must cope with skyrocketing costs and numerous other setbacks that have surfaced in recent weeks. For example:

•After absorbing a batch of already highly critical news over the preceding month, the rail authority released its cost estimates for two Central Valley segments, from Fresno to Merced and Merced to Bakersfield, last week. These relatively flat routes were expected to cost $7 billion, but the estimate jumped to between $10 billion and $13 billion in the recently released environmental impact report.

•Unlike the rail authority, which is sticking to its unbelievably low price tag of $42.6 billion for the entire project, the Palo Alto-based Californians Advocating Responsible Rail Design (CARRD) and the state's nonpartisan state Legislative Analyst's Office have much higher estimates -- $65 billion and $67 billion, respectively. This is a huge gap, more than 30 percent.

•In a study made public two weeks ago, a highly respected peer-review group of professors and transportation experts that report to rail authority CEO Roelof Van Ark said the authority has been using a flawed forecasting model to predict the number of passengers that will use the high-speed trains. 

•The agency's public relations firm, Ogilivy Public Relations Worldwide, resigned about a month ago after fulfilling less than half of a 4-1/2-year, $9 million contract.

•Another public relations faux pas was the unexpected departure of Jeffrey Barker, the rail authority's deputy director in charge of communication, who failed to provide a timely response to a public information request from CARRD, allowing it to drag on for months. The Palo Alto-based organization was seeking release of the critical peer-review report, and was successful only after filing a chronology of its request with the authority. The information was released the following day, the same day that Barker resigned, saying he is going "to pursue other endeavors."

•On the economic front, the Republican takeover of the House of Representatives, including the budgeting process, has left little doubt that further federal support for high-speed rail will be drastically cut or eliminated altogether. 

By any yardstick, the high-speed rail project is simply far too financially ambitious for the state to undertake at this time, when basic services have been cut to the bone and additional cuts could be on the way as a result of more federal belt-tightening. The idea of paying debt-service on nearly $10 billion in bonds makes no sense in this fiscal environment.

High-speed rail supporters have enormous obstacles to overcome in order to get this project back on track. They need a convincing business plan, a new management team, and most importantly, reliable funding sources that don't commit the taxpayers to unaffordable subsidies of construction and operation.

High-speed rail is looking more and more like a pipe-dream. The governor and the Legislature should provide the leadership to unwind this project, presumably through passage of another state ballot measure that counteracts the requirements of Prop. 1A, or by finding and embracing a new financing model. Otherwise, we are in danger of building a railroad to nowhere that will make Sen. Stevens' bridge look like child's play.

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