Friday, November 4, 2011

So, now HSR in California costs $100 billion. How about in three years?

While I'm not challenging the arithmetic, I strongly suspect that what John Seiler is forecasting will be more like an asymptotic curve.  That is, the S-curve sweeps steeply upward until it starts to gradually flatten out.  However, that also means that the gains (construction progress) will diminish even as the costs continue to escalate, even at a slower rate.  Let me say that another way.  The progress of the project will diminish; that is, it will take ever longer to complete less and less, even though the costs keep going up.  We will be obliged to pay ever more to get ever less.

Therefore, it isn't likely that the cost increases will continue to be a uniform 150% triennially.  They will increase logarithmically.  That ends up being less than $21 trillion (the federal debt is $14 trillion. (?)) but it will still be a staggering amount of money.  I humbly suggest that the current $100 billion forecast is already a staggering amount of money for a 400 mile long luxury train.

The best example is the Boston Big Dig, which began at an estimated forecast of $2 billion and ended up costing over $22 billion, and the litigation isn't over yet even now for this fifteen year long construction project. Which is to say, this is a 'gift' that will give on taking in perpetuity.  Just like HSR.

And, for all us HSR watchers, I remind you that construction -- and all its unanticipated and costly problems -- hasn't started yet, even as the project costs have jumped 150% on the drawing boards.

Which leads me to another point.  The President and his Administration have been promoting HSR for 80% of all Americans and talking about making $50 billion available to the eleven HSR corridors around the Nation.  (Currently quite unlikely.)

The last cost estimates for building out all eleven HSR corridors was in the neighborhood of $600 billion.  Well, based on the California cost forecast, that's a ridiculously low estimate.  I would guess that a minimum of $2 trillion would be needed to fulfill the President's HSR vision.  

Does he know that?  Does Sect. of Trans. Ray LaHood know that?  Where do they think that amount of funding will come from? Were they planning on closing down the Defense Department for a number of years?


NEW: High-Speed Rail Cost $22 trillion?
Nov. 4, 2011
John Seiler:

The new business plan from the California High-Speed Rail Authority estimates the cost now will be $98.5 billion. That’s up from $40 billion advertised in Proposition1A, which misled voters passed just three years ago, in November 2008. The cost estimate is good through 2033, the expected completion of the project.

That’s a 150 percent increase in just three years.

So, let’s project that increase out to 2033, with 150 percent increases every three years:

2008: $40 billion cost
2011: $100 billion
2014: $243billion
2017: $497 billion
2020: $1.47 trillion
2023: $3.62 trillion
2029: $8.92 trillion
2032: $21.96 trillion

So, the total cost could be 255 times the $86 billion current budget of California for fiscal 2011-12.

That would be 13 times the entire current $1.6 trillion GDP of California.

Think that’ll happen?

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