Sunday, January 1, 2012

Ken Orski's agenda for HSR-spotting in Washington

Ken Orski's discussion about what might happen in Washington regarding the high-speed rail is a part of a longer discussion about other transportation matters which I have edited out, to focus exclusively on the high-speed rail issue.

We know that the House Committee on Transportation and Infrastructure took time to review the California project with the intention of discrediting it as much as possible.  We also know that Congressman Kevin McCarthy of California has made it public, along with ten other fellow Republicans, that he intends for the Congressional Accountability Office to audit the California project.

For the past several months, there have been new information releases from the CHSRA or its critics, exposing their flagrant violations of the law, they lying, and their gross mismanagement. Costs, jobs numbers, and other new "corrections" have come to light and we are at a point where nothing they say has any plausibility or truth-value. 

I was about to finish that sentence with 'any longer.' However, it is also the case that there has never been credibility in any of the HSR documentation.  I recall the lengthy and detailed Due Diligence Report which dismantled the HSR authority's flagrant manipulations of the facts.

There is little point in expecting the Democratic Legislature or Governor in California to take adequate corrective measures regarding this mega-billion dollar disaster. The burden falls to the Republicans who hold the majority in the House. 

That's what we will be watching; to see this process unfold.  There will be many steps, including the GAO audit.  There are many budgeting negotiations due, although, given the current political climate between the two Parties, those negotiations may be stuck in the station until after the elections.

In any case, the real game over HSR to watch is in Washington, not Sacramento.

Having said that, I'm always hopeful and willing to be surprised by miracles.
Vol. 23, No. 1

January 1, 2012

What Lies Ahead for Transportation in 2012?

As we enter 2012 ( and begin our 23rd year of publication), we wish our readers the best in the New Year!

As befits this time of year, our thoughts turn to the events that await us in the days ahead. Putting aside the major imponderable ˜ the outcome of the presidential and congressional elections that inevitably will impact the federal transportation program ˜what can the transportation community expect in 2012? Will Congress muster the will to enact a multi-year surface transportation reauthorization? Or will the legislation fall victim to election year paralysis? What other significant transportation-related developments lie ahead in the new year? Here are our speculations as we gaze into our somewhat clouded crystal ball.


Will California's lawmakers pull the plug on the high-speed train?
In 2011 Congress effectively put an end to the Administration's high-speed rail initiative by denying any funds to the program for a second year in a row. Does the same fate await the embattled $98 billion California high-speed rail project at the hands of California's governor and state legislature in 2012?

At a December 15 congressional oversight hearing, witnesses cited a litany of reasons why the projects is a "disaster" (Rep. John Mica‚s words). Among them: unrealistic assumptions concerning future funding; quixotic choice of location for the initial line section ("in a cow patch," as several lawmakers remarked); lack of evidence of any private investor interest in the project; eroding public support (nearly two-thirds of Californians would now oppose the project if given the chance, according to a recent poll); a "devastating" impact of the proposed line on local communities and farm land; unrealistic and out-of-date ridership forecasts; and lack of proper management oversight.

More recently, the project came under additional criticism. The job estimates claimed by the project's advocates ("over one million good-paying jobs" according to House Minority Leader Nancy Pelosi) have been challenged˜ and acknowledged by project officials˜ as grossly inflated. Four local governments in the Central Valley, including the City of Bakersfield, have formally voted to oppose the project, fearing harmful effect on their communities. And agricultural interests are gearing up for a major legal battle, according to the Los Angeles Times.

But most unsettling for the project's future is the inability of its sponsors to come up with the needed funding. To complete the "Initial Operating Segment" to San Jose (or the San Fernando Valley) would require an additional $24.7 billion. To finance this construction, the California Rail Authority's business plan calls for $4.9 billion in Proposition 1A bonds and assumes $19.8 billion in federal contributions ˆ $7.4 billion in federal grants and $12.4 billion in the so-called Qualified Tax Credit Bonds (QTCB). But the latter assumptions came in for sharp congressional criticism as so much wishful thinking, given the bipartisan congressional refusal to appropriate funds for high-speed rail two years in a row.

Further challenges await the project early in 2012. A group of 12 congressmen led by House Majority Whip Kevin McCarthy (R-CA) has formally requested the Government Accountability Office (GAO) to review the project's viability and "questionable ridership and cost projections." Also expected early in January are a critique of the Authority's business plan by the Independent Peer Review Group and a follow-up report by the State Auditor.

Meanwhile, the governor and state legislature, are being asked by the Rail Authority to approve a $2.7 billion bond issue authorized by Proposition 1A to fund and begin construction in the fall of 2012 of the initial Central Valley section of the rail line. Will they be swayed by the expected critical findings of the three respected reviewing bodies and by the increasingly negative editorial and public opinion? Or will they continue to hold on to the seductive vision of bullet trains zooming from northern to southern California in two and a half hours ˜ however distant and uncertain that vision may be? At this point, we believe the decision could go either way.



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