Tuesday, January 24, 2012

California's Governor Seeks to Maintain a High-Speed Rail Project That Can Never Be Built.

Here are the two sides of this HSR issue.  One article is from the perspective about how Governor Jerry Brown persists in supporting this project, and we have constantly claimed that he doesn't care about all the short-comings associated with this project, because he sees its purpose for one use only, to generate federal revenue streams for the state. If that requires dancing on the stage in a high-speed rail costume, so be it.  That's political show-business. Put on a big act and get the rewards.

The other article comes from a more global vision of this California project. It's from the German Marshall Fund web-site. Brent Riddle, the author, sees California's project as a failure in implementation, not as an undesirable concept.  He's bedazzled by the promises the train promoters dangle in front of everyone's eyes.  His point is that if we had done it the way Spain did theirs, one small section at at time, we would have been successful.

I don't agree. Regardless of how the California project had been launched and now proceeds, it is still wrong for a variety of reasons we have tried to articulate in these blog entries.  There can be no "right" way to do this.  

We have been told by many professionals who study this sort of thing that our costs are twice that of any other country in the capital development process for HSR.  We have no vibrant rail culture on which we can layer high-speed rail.  Although the last half of the 20th century saw the emergence of HSR in Europe and Asia, that window is closing and in the US, is now closed. It's too late to start now.

Not only are the costs-of-creation stunningly high -- too high -- but the continued operation of the train is far too expensive, per seat, per mile, to make it anything like cost-effective. And, cost/benefits are the ultimate measure of whether a project is viable or not.

The auto industry is profitable.  We all pay for the infrastructure we require to utilize the automobiles that we buy. The aviation industry is profitable. Also subsidized by the government, commercial aviation began as private enterprise and continues as a competitive industry.  

Freight rail is profitable.  Indeed, the freight carriers off-loaded their declining passenger rail service unto our tax-paying backs; that is, the Congress; that is, Amtrak.  It is a wild-eyed myth that now, somehow, American passenger rail will make a come-back, dressed in the gaudy clothes of high-speed rail. That's not going to happen. This isn't show-business; it's the US economy.


Governor hopes to convince lawmakers to launch high speed rail this year
8:07 a.m.  1/24/12

By Julie Small 

In his “State of the State” address last Wednesday, Governor Jerry Brown made it clear that he wants to break ground on California’s high-speed rail network this year. The fast-rising cost of the line’s Central Valley section has revved up opponents of the $98 billion project.

But the governor says the critics are — in his words — “declinists.” He says tough times shouldn’t stop lawmakers from investing in California’s future.

Now the question is: will they?

Governor Brown ended speculation about how much “skin” he would put in the game to defend high-speed rail when he called out the critics in his “State of the State” address by comparing them past rail critics.

“The master plan for the interstate highway system in 1939 was derided as ‘New Deal jitterbug economics’” Brown said. ”In 1966, then Mayor Johnson of Berkeley called BART (the Bay Area Rapid Transit) a “billion dollar potential fiasco.' Similarly, the Panama Canal was for years thought to be impractical — and Benjamin Disraeli himself said of the Suez Canal: “totally impossible.”

Brown paused before he delivered a kicker that drew applause: “Well, the critics were wrong then and they’re wrong now.”

'Make it a working system'

After the speech, Assemblywoman Diane Harkey (R-OC) shrugged off the governor’s criticism. She said she stands by the bill she introduced this year to halt bonds for high speed rail.

“Before we ‘think big,’ we need to have to some way of paying for it or making it actually a working system.” Harkey said.
Three years ago, California voters approved $9 billion in bonds to provide the seed money for a bullet train from Anaheim to San Francisco. The price of the project has since doubled to $98 billion.

High speed rail is feasible, Harkey said, with the help of reasonable people. She says she’d start by ditching the plan to build the first segment in the Central Valley. The former corporate banker says that route won’t have enough riders and won’t attract the private investors California needs to build the entire bullet train system.

“You need to bring in the private companies and say, ‘OK, if you’re going to do this, and you’re going to come in some time and we’re going to give this initial bit of seed capital, what do we need to do first?’" she said. "And the first thing you need to do is head to heavily populated areas.”

But the federal government has already put up $3.5 billion for the Central Valley track, and California has to match it with $2.7 billion or lose the money altogether.

Last month, a panel of rail transit experts advised state lawmakers not to issue the $2.7 billion in state bonds.

A hard sell

Dan Schnur, who served as former Governor Pete Wilson’s media spokesman, says Governor Brown can’t afford to back high speed rail much longer if he wants voters to back his tax hike initiative to balance the state budget.

“Before they vote for a tax increase they’re going to have to understand that the government prioritizes its spending," he said. "That’s schools; that’s public safety. High speed rail is probably a much harder sell.”

Last month, the Field Poll found that voters would now reject high speed rail bonds by a nearly 2-to-1 margin.

“The State of California is about as likely to build high speed rail in the immediate future as they are to build a Mars space shuttle.” said Schnur, who now heads USC’s Jesse M. Unruh Institute of Politics.

The rail line is a hard sell in a year when the Governor wants to reduce aid for developmentally disabled and elderly people, plus cut $1 billion from the CalWorks “welfare to work” program. In his “State of the State” address, Brown didn’t talk about welfare.

Assemblywoman Holly Mitchell (D-Culver City) said that he told her, “ It isn’t on his radar.”
Mitchell says she’s supports the Governor's budget plan, up to a point.

“I completely back the ballot initiative to increase revenue into the State of California. I don’t, however, believe that we can balance the remaining deficit on the backs of the most vulnerable in the state of California: low-income working families, children and the disabled and the elderly.”

Senate leader Darrell Steinberg (D-Sacramento) sees no contradiction in supporting budget cuts while selling more bonds for high speed rail.

“We have a simultaneous obligation to balance the budget and help build the economy," Steinberg said. "The high speed rail project certainly is an important part of that second obligation.”

It takes only a simple majority of lawmakers in both houses to pass the bond issue for the high-speed rail project’s first phase. If lawmakers vote for the bonds, Governor Brown says California’s High Speed Rail Authority can launch the project in the fall.

Obama’s High-Speed Rail Network Plans Are Off Track
Posted on 24 January 2012.

WASHINGTON–A year ago, during his State of the Union address, U.S. President Barack Obama set a goal for a national high-speed rail (HSR) network: 80 percent of the country’s population would have access to HSR within 25 years. One year later, that goal seems wildly optimistic.

Within a month of Obama’s speech, Florida Governor Rick Scott joined the governors of Ohio and Wisconsin (all Republicans) in rejecting HSR funds that had been targeted for his state. He, like many critics of HSR, argued that the project was too costly during a time of economic crisis and the risks would outweigh the benefits. 

Then, earlier this month, California’s HSR effort appeared to run out of steam. The California High-Speed Rail Peer Review Group, an independent body created by the California High-Speed Rail Authority to advise on the proposed system, released a report that detailed numerous concerns about the project’s overall funding plan and the lack of a fully vetted business plan. In the end, the report concludes that too many flaws and financial unknowns exist in the plans, representing “an immense financial risk” to the state of California. The report might well kill the prospects for a true HSR project in the United States for the foreseeable future.

So, why did Obama’s signature infrastructure project meet such a quick demise? While each project has its own reasons for failure, the Obama administration also made a critical tactical error in the way it awarded funds. Instead of identifying and investing in one promising project, the administration allocated $10 billion ($8 billion from the American Recovery and Reinvestment Act and $2 billion from appropriations) to 13 HSR projects in 31 states to foster the development of a national HSR network all at once. Additional federal funds for the network (approximately $43 billion according to Obama’s plan) were to be secured through the annual appropriations processes. 

The administration’s strategy appears to have been to hope the initial federal investments would spur even more substantial state and local investments in HSR, especially in a number of swing states, leading to the creation of a national network. At current estimates, a national HSR network could cost hundreds of billions of dollars — the California system alone is projected at $98 billion. With dramatic budget cuts looming, a slow economic recovery, and a toxic political environment, this strategy is not viable.

The lack of significant progress on HSR is unfortunate. A well-planned and smartly operated HSR system can be transformational for cities, helping them to maintain or improve quality of life and enhance economic competitiveness in the global economy. At one level, HSR facilitates intercity travel, fosters regionalism, and can enhance regional economic viability. At another level, as populations and densities are projected to rise in America’s large urban regions, new and better mobility alternatives will be imperative to meet a host of associated challenges. When integrated intelligently with other modes of transportation into the urban fabric, HSR can help stimulate the development of economically vibrant corridors and station stops.

A better approach to start up a national HSR network in the United States can be found in Spain. Over the past two decades, Spain has created the longest HSR network in Europe. However, AVE, the Spanish network, began with a single project, the Madrid-Seville line, which proved itself for more than 10 years before significant expansion occurred. The line, averaging 185 mph, cut the 300-mile trip time by more than half between the two cities, significantly decreasing the automobile and air travel between them but increasing the number of individual trips. Equally compelling, existing businesses near AVE stations have reported significant benefits from the investments in infrastructure. None of this is to say that Spanish HSR has been perfect — the Spanish government ultimately may have over-invested. But if the Obama administration chooses to revisit HSR, a more effective strategy would be to start small, be focused, invest smartly, and allow HSR to prove itself, which could put aspirations for a national HSR rail network back on track.

Brent Riddle is a Senior Program Officer in the German Marshall Fund’s Urban and Regional Program.

No comments: