Sunday, August 28, 2011

There is no ceiling on the costs of high-speed rail

We've asked this question before and want to ask it again: How much is too much?  The cost of building the high-speed train in California keeps rising.  Is there some point where even the most ardent HSR supporters will honestly admit that the projected costs are too high? That whatever benefits will derive from the construction and operation of this train are insufficient given the costs?  If one line is the project costs, and the other line defines the benefits, is there some point where the lines would cross on the graph, and if so, where is that cross-over point? It's a cost/benefit question.

The second question is, should they even start building a train for which there is nowhere near enough money?  And, furthermore, there will never be as much money available as this train will cost.    When does something that at first appears reasonable, stops being reasonable and starts being ridiculous and outrageous?  

Unfortunately, the answers that are being cooked up keep changing.  Now it's no longer the surplus revenue that the train will produce, or the huge ridership that will justify its construction and we no longer hear about the vast environmental benefits of a train that will sweep all vehicles off California' streets and highways. Now, we are told it's a jobs program regardless of how much it costs; those are worthy investments in improving the employment picture in our state. 

One of the representatives from KPMG, retained by the rail authority to produce their October 15 business plan (yet again), has explained that the rail authority, to build this train, will require 3 to 4 billion dollars annually for ten or fifteen years, and even that amount also would not be enough.  There needs to be the realization that there is no way that such funds can or will become available from the only source possible, the US Government. 

The article, below, will give you a hint of what I'm talking about.  Clearly CEO Van Ark and the rail authority are on a suicidal self-destruct mission.  Their orders are to keep planning and then building this project until they run out of funds. Consider it high-speed rail martyrdom. Their mission is to spend the money, whether the train actually gets built or not.

The supporting Democratic politicians and our state Governor can always say, well, we did our best with the billions we already had to spend.  We created tons of jobs, and spent the stimulus dollars and now we have a hundred miles of track that could be used by Amtrak (which hasn't asked for them and probably doesn't need them).  BUT, think of all the jobs we created until the money ran out.

The dissonance between the rising cost estimates to build this project -- and there have been no actual bids submitted by contractors yet -- and the persistence of the Governor and the Legislature to keep this project afloat, increases daily.  Rest assured that the project cost increases will jump dramatically with contractors construction proposals. 

The only available explanation is the Democrats' determination to obtain the $3.5 billion awarded but not yet granted from Washington, as well as roughly the same amount matched from the Prop. 1A bond measure.  Such a decision suggests that these Democrats, including our Governor, are fully aware of all the facts -- the incompetence and mismanagement of the rail authority and the stunningly ever higher costs -- but are totally indifferent to these facts.  As we've said, the current rationale and justification being that this project is a stimulus funded social welfare jobs program.

What a waste of funds that could have already been deployed to hire construction workers on shovel ready projects throughout the state that beg for maintenance and repair to our infrastructure.

And, when the funds run out, then what?  It's not like we are talking about Shubert's 'Unfinished Symphony.'  This is going to be an unfinished waste of over $6 billion dollars of taxpayers/ money that could and should have been spent productively.

High-speed rail's costs keep rising

Posted at 09:48 PM on Saturday, Aug. 27, 2011
By Tim Sheehan / The Fresno Bee
For two years, the California High-Speed Rail Authority said it could build 520 miles of high-speed train tracks between San Francisco and Los Angeles for about $43 billion.

But that figure -- long derided as unrealistic by critics -- went off the rails this month when the authority released detailed environmental reports for its proposed Merced-Fresno and Fresno-Bakersfield sections, the first two segments the agency wants to start building next year.

The authority's most optimistic estimates for the San Joaquin Valley sections alone total about $10 billion; route choices could run the price to $13.9 billion.

That's a far cry from the 2009 estimate of $8.1 billion.

If projected costs can rise by as much as 71% in the Valley -- a relatively flat, straightforward stretch -- what will happen when tracks must be built through mountains and across cities in the Bay Area or Southern California?

If costs escalate statewide as much as in the Valley, the price to build the system from San Francisco to Anaheim could leap from the 2009 estimate of $43 billion to as much as $67.3 billion, even before buying any trains.

Some critics are saying, "I told you so," and others worry about even more cost increases in the Valley and statewide before a decade of construction begins in late 2012, as planned.

"It is about time that more realistic numbers are being used," said Elizabeth Alexis, co-founder of Californians Advocating Responsible Rail Design, a group that has long doubted the authority's estimates.

Roelof van Ark, the rail authority's CEO, acknowledged last week that the earlier estimates, set forth in a 2009 business plan to the Legislature, were "a little bit optimistic."

Construction plans have changed in the Valley between 2009 and now, van Ark said.

He said that an updated plan due to the Legislature in October will reflect the higher costs for the Valley -- and statewide.

"What you're seeing in the Central Valley, you are going to see in the other parts of the state as well," van Ark said.

"Quite a few of the components [that add to the cost in the Valley] will definitely carry into other parts of the state.

However, some of them could be even larger."

Why so expensive?

The higher estimates in the draft environmental impact reports for the Valley segments are the result of engineers refining the route options and gaining a better understanding of construction challenges, van Ark said.

"We know more now," said van Ark, who was hired by the authority months after the 2009 plan was prepared. "When you start designing systems like this, you look at the alignment, the cities, the rural areas, and you make assumptions.

 ... [But] you don't have the detail to consider what real costs are going to come about."

With that detail in hand, the authority has identified about $5.8 billion in new costs, including:

-About $3 billion more to build about 36 miles of elevated tracks over the cities of Madera, Chowchilla and Corcoran to avoid closing streets.

-About $844 million more for elevated structures, tunnels, bridges, overpasses and undercrossings to cross waterways, streets, highways and railroads along the route.

-About $685 million more for earthworks and retaining walls to raise the tracks above floodplains.

-About $430 million more to purchase right of way along the route and to relocate displaced homes and businesses.

-About $142 million more to realign a two-mile portion of Highway 99 in west-central Fresno to make room for the high-speed tracks.

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