If you haven't had your fix of anger today, this should help. Four years ago, before the '08 elections, the cost forecast for the 800 mile high-speed rail system in California was $33 billion. That's what the voters voted for.
Soon thereafter, it went up to $44 billion. Today, its between $98.1 and $117.6 billion. If you had to choose, I'd go with the higher number, just to be safe.
But, you don't have to choose, since both numbers are grossly incorrect and way too low. The newest price, calculated with many costs that the rail authority has chosen to ignore for the time being, raises the final number for the final, completed system to well over $200 billion. (Between $208 billion and $215 billion) That's double again.
And, to remind you, no contract bids have come it. No track has been laid. The designs are still incomplete. It's still all on paper.
Just wait until the actual construction starts and they make daily "problem" discoveries. "Oh, we didn't know this obstruction was in the way. We're going to have to charge 20% more now."
Here's the current logic, not found in logic textbooks. Ridership numbers tell us whether the project will be profitable (as promised) or not. Ridership numbers are too high. Even the new audit suggests this. If the ridership number is too low, the train will require subsidies for operations. That's not permitted by law. If they can't anticipate enough of a ridership, there is no reason to build this train in the first place. Nor has there ever been a reliable demonstration that there's a need or public demand for this train.
To help you with an understanding of the ridership number, the current number of people flying between SF and LA is about 6 million annually. The HSR ridership projection is currently 41 million annual riders. And, we know that business travel is diminishing. Also, the train won't be operational for at least ten years.
Meanwhile, the costs of capital development have gone through the roof. Nonetheless, it is already clear to everyone that the funds for construction do not exist.
So, we're about to build a train -- the Governor insists -- that we don't need, can't afford, don't know how to pay for, and won't have enough people riding it so that the bill for train operations will come to the taxpayers forever.
Any questions?
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http://nextbigfuture.com/2012/01/california-high-speed-rail-audit-about.html
JANUARY 27, 2012
California high speed rail audit about $215 billion
The cost estimates for phase one of California High Speed rail increased to between $98.1 billion and $117.6 billion—of which approximately $12.5 billion has been secured. Although the Authority identifies the federal government as its largest potential funding source, the plan provides few details about how it expects to secure this money. The cost estimates do not include phase one's operating and maintenance costs, yet based on data in the plan these costs could total approximately $96.8 billion from 2025 through 2060.
The State will only be receiving profits for the first two years of operation in 2022 and 2023, and will potentially not receive profits again until 2060 in exchange for the almost $11 billion it assumes it will receive from the private sector.
The 800 mile system could end up costing over $260 million per mile, if there are no cost overruns through 2033 and ridership does not disappoint from 2025 through 2060.
From the audit report:
The ridership model the Authority presents in its 2012 draft business plan assumes an average ticket price of $81 and projects that passengers will take a total of 29 to 43 million annual trips by the completion of phase one. However, when the Authority's chief executive officer commissioned a ridership review group to independently assess the ridership projections, he handpicked the group's members, which may call into question the independent nature of their assessment.
Further, although the ridership review group determined that the ridership model was suitable for use in the 2012 draft business plan, the group presented several long-term concerns, such as potential biases in the survey data used in the model's development. The ridership review group's August 2011 report implied that if the Authority does not address these long-term concerns, the model may only be useful for projecting ridership for the operating section and not for the program's remaining sections.
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