Thursday, January 5, 2012

Ken Orski's latest: Heating Up High-Speed Rail on the Hot-Seat

The rapidity of events and the unfolding of news about HSR has become nearly overwhelming.  I can barely keep up.

I don't  know now else to say it: a lot of people are pissed-off with the California High-Speed Rail Authority.  A lot of people. And, that includes a lot of people who really know what they're talking about.

Ken Orski is the go-to guy for what's going on in matters Transportation and Transit in Washington, our Nation's Capital. 

The flood of news articles about the CHSRA Peer Review Committee's highly critical report are spectacular in quality and quantity. 

And, what's even more incredible is the response of the state governor, Jerry Brown.  He doesn't give a damn about a government group attached directly to his office, the High-Speed Rail Authority, even if said rail authority has robbed a bank,  is holding a knife in one hand, a gun in the other, and has blood all over its shirt. So, they're guilty of lying; big deal!  

Yes, I know, they didn't actually do those things, but they certainly have a list of egregious and allegedly illegal acts attached to their name. By now, one would think that the Governor ought to call in the Attorney General for a thorough investigation into possible "wrong-doing." But, for Jerry Brown, there are over-riding considerations. 

Why is Brown taking this persistent supportive position? One answer: It's about the money!  Free money from the FRA.  The head of the FRA, Joe Szabo, has been caught lying to the Congressional committee to whom he testified.  The Obama Administration and the DOT/FRA also are obsessed with keeping this zombie alive at any cost. We'll cover that story sometime today.

But, there are other funds involved as well. As we know, the Unions are very, very strong supporters of high-speed rail.  They have bought into the myth of zillions of jobs.  And, they make major campaign contributions both to candidates themselves and to PACs that support political campaigning.  

This, of course, is also true of the construction and manufacturing corporations world-wide that are in the high-speed rail business. Think Siemens. They too are buying this pipeline to federal dollars for themselves by way of lobbying, campaign funding, and other means of financial support to keep the government supporting this otherwise hopeless project. Parsons Brinckerhoff has its hands all over the public relations efforts to sustain this government funded disaster in the making.

Anyhow, here is Ken Orski's take on the rapid unfolding of events from the Washington and Sacramento perspective:
Vol. 23, No. 2

January 5, 2012

A Devastating Verdict

Like many other observers,  we have found  the California High-Speed Rail Peer Review Group to have made a convincing case for a fresh look at the feasibility of the California high-speed rail project. The Group's report was issued as eleven House Democrats -- eight fom California-- joined an earlier request from twelve Republican House members for an independent GAO investigation of the embattled project.   

That is why we find Governor Brown‚s reaction--- that the Peer Reviewers' report  "does not appear to add any arguments that are new or compelling enough to suggest a change of course" ---incomprehensible. Either the Governor issued the statement without the benefit of having read the report,  or else he is so ideologically committed to the project that he refuses to look the facts in the face.

Precisely which conclusions of the report  are not compelling enough, the Governor' s spokesman has not made clear.  Is it the statement that "the Funding Plan fails to identify any long term funding commitments" and therefore "the project as it is currently planned is not financially feasible"?

Is it the Reviewers'  assertion that "the [travel] forecasts have not been subject to external and public review" and, absent such an open examination,"they are simply unverifiable from our point of view"?

Could it be their statement that "the ICS [Initial Construction Section] has no independent utility other than as a possible temporary re-routing of the Amtrak-operated San Joaquin service...before an IOS [Initial Operating Segment] is opened"?

Or, is it  the Panel's conclusion that "...moving ahead on the HSR project without credible sources of funding, without a definitive business model, without a strategy to maximize the independent utility and value to the State, and without the appropriate management resources, represents an immense financial risk on the part of the State of California?"

To us, the findings seem at least deserving of  a respectful consideration.

But  the California High-Speed Rail Authority (CHSRA) is not ready to concede anything. Here is the opening paragraph of its response: "While some of the recommendations in the Peer Review Group report merit consideration, by and large this report is deeply flawed, in some areas misleading and its conclusions are unfounded. ...Although some high-speed rail experience exists among Peer Review Panel members, this report suffers from a lack of appreciation of how high-speed rail systems have been constructed throughout the world, makes unrealistic and unsubstantiated assumptions about private sector involvement in such systems and ignores or misconstrues the legal requirements that govern construction of the high speed rail program in California."

It is not our intention to delve in detail into the Authority's response and judge the soundness of its arguments. No doubt, the CHSRA response will come under a detailed examination by the Authority‚s critics in the days ahead. Suffice it to say that, having carefully and with an open mind examined the Authority‚s rambling nine-page response, we find that it did not satisfactorily rebut the Peer Group‚s central point: that it is not prudent, nor "financially feasible," to proceed with the $6 billion dollar rail project in the Central Valley (including $2.7 billion in Proposition 1A bonds) in the absence of any identifiable source of funding with which to complete even the Initial Operating Segment. To do so, would be to expose the State to the risk of being stuck, perhaps for many years,  with a rail segment unconnected to major urban areas and unable to generate sufficient ridership to operate without a significant state subsidy. 

The Authority's lashing out at  the Peer Group and the dismissive tone of its response suggest that it  has already made up its mind to stay the course and circle the wagons. That  is not a wise posture to assume in the face of an already skeptical state legislature.  



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