Tuesday, August 9, 2011

More about those "surprising," unexpected HSR cost increases in California

The California rail authority now estimates that construction costs in the Central Valley will be higher than estimated.  As we've said before, that's no surprise.  The cost of this project, especially given its size, will spiral upward until it is complete or it's finally terminated. 

The numbers are staggeringly large now, but just wait on the construction contract bids come in.  And then, after that, there will be surprise after surprise of "unexpected" problems and additional costs.  It's a standard pattern, only here on a much grander scale.

The term the article raises is the issue of "affordability."  That, of course, is a relative term.  Something is affordable if we derive great benefit from it, even if we have to make sacrifices for it.  That's part of a cost-benefit analysis.  Those who want this project, for whatever reason, will always find it "affordable" regardless of how high the costs become. But, this is a luxury train for affluent travelers.  Is that something the taxpayers can consider "affordable?"

No one in Washington, or in Sacramento has yet said, this is the upper limit; this is the ceiling of how much this project is allowed to cost.  We will spend this much and not a penny more.  Therefore, there is no ceiling; no upper cost limit.

One of our mantras on this blog is: It's not about the train; it's about the money.  No wonder the FRA or the DOT don't have any trouble with such cost increases.  The game here is not so much to build a train; that's only for our benefit.  The real process is the transfer of federal dollars to this state.  

The Department of Transportation is going to help Obama get re-elected and this is the price for that.  Everyone in Washington already understands that. That's why Brown isn't letting this project go. He's not going to be one of those three Republican Governors who returned the federal funds fearing for a greater burden of costs on their states. 

Van Ark is very familiar with infrastructure projects and cost increases. He says these are "now realistic and fair."  What the hell does that mean? Before, when they were lower, they weren't "realistic and fair," but now they are? 

Van Ark even acknowledges that the cost estimates will keep climbing. Presumably, as they do so, they will become more "realistic and fair."  Therefore, the rail authority invents terms like "value engineering" which is another way of saying they will build it "quick and dirty."  Van Ark goes on to say that these "higher cost estimates already have been factored into the federally funded construction." Of course they have. No one is surprised.

There never was a good reason to build this train. Yes, there are many problems in California, including problems of transit and transportation.  But this certainly isn't the solution.  There never has been a major planning exercise that analyzes the needs and the cost/effectiveness of alternatives to mitigating these problems.  

High-Speed Rail sprang up as a political program for many reasons having very little to do with transportation.  And its 'panacea power' was ascribed to it once the train concept for California developed currency. 

There just has to be a measure of integrity and intelligence, even in the state legislature, that will finally rise to the surface and acknowledge what a gross mistake this has been.  And a majority of legislators will say, enough, we want this terminated. We are waiting.

State High-Speed Rail Construction Cost Soars
Posted: 2:48 pm PDT August 9, 2011
SACRAMENTO, Calif. -- Building tracks for the first section of California's proposed high-speed rail line will cost $2.9 billion to $6.8 billion more than originally estimated, raising questions about the affordability of the nation's most ambitious rail project at a time when its planning and finances are under fire.

A 2009 business plan developed for the California High-Speed Authority, the entity overseeing the project, estimated costs at about $7.1 billion for the equivalent stretch of tracks. Officials say those estimates were made before detailed engineering work and feedback from communities along the proposed route.

The latest estimates are contained in two environmental impact studies that were shared with The Associated Press before their public release on Tuesday.

The rail authority's chief executive, Roelof van Ark, said planners anticipated the higher costs as more information about land acquisition and other details related to actual construction became known.

"We've had cost increases, but I believe the costs are now realistic and fair," he said.

Van Ark also said he expects the estimated total cost of the project, originally pegged at $43 billion, to rise.

Construction of the first stretch of tracks -- as much as 140 miles from south of Merced to just north of Bakersfield -- is scheduled to begin by September 2012 using $3.5 billion in federal money and an estimated $2.8 billion from the sale of state bonds approved by voters.

The higher cost estimates already have been factored into the federally funded construction, van Ark said.

The decision to start the planned 800-mile system in the Central Valley, linking relatively small towns, has generated criticism that the project could become a high-priced "train to nowhere." In a critical report earlier this year, the nonpartisan Legislative Analyst's office said the rail line should start near coastal population centers and recommended moving control of the project from the largely independent rail board to the state Department of Transportation.

The eventual plan is for a system of high-speed trains running from San Francisco to Los Angeles and Anaheim, with stops in the Central Valley.

Critics say the higher cost estimates contained in the environmental reports, the first detailed look at the project, is another warning sign that the rail line should be halted until cost and routing questions can be worked out.

State Sen. Doug La Malfa, R-Willows, said he is preparing legislation that would ask voters to reconsider the project in June 2012. Voters authorized $9 billion in bonds for the project in 2008, although most of those bonds have not yet been sold.

"This thing is well on its way to massive cost overruns," La Malfa said.

The documents being released Tuesday lay out specific route alternatives for the 178 miles of planned tracks between Merced and Bakersfield, with an estimated total cost of $10 billion to $13.9 billion, depending on which route is selected. The first portion to be built covers most of that area.

Supporters of the rail project, the nation's most ambitious, said the private sector will be a significant source of funding and that the money will start flowing once work begins.

La Malfa and other critics say the fiscal problems facing the federal and state governments, and the likelihood that Congress will continue to cut federal spending as it tries to reduce the nation's debt could choke off funding.

"The costs are starting to escalate and we need to take a time-out," he said.

Federal transportation officials remain supportive of California's project. The per-mile cost for the Central Valley segment is expected to be less than or in line with international averages for high-speed rail projects, said Roy Kienitz, undersecretary for policy with the U.S. Department of Transportation.

"Our goal is to help the state's decision-makers choose a design that avoids unnecessary costs, and we're pleased the authority has embraced many of the recommendations from the high volume of public response," he said in a statement.

Moving the initial section of tracks from the Central Valley would jeopardize federal money received for construction because it was granted with a strict timetable and requires that the work be done in the valley.

The environmental reports give a range of costs for different route options and contain higher land-acquisition costs based on a survey of specific parcels along the proposed routes. For example, up to $3.8 billion of the increased cost is associated with elevating the train tracks for up to 42 miles.

The rail authority will hold a series of public meetings and accept public comments until Sept. 28, before the board chooses a preferred route.

Copyright 2011 by KTVU.com. The Associated Press contributed to this report. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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