Thursday, January 26, 2012

The project walks among us, the High-Speed Rail Zombie that won't die

What would it take for Governor Jerry Brown to turn on his heel and walk away from the high-speed rail project?  

As Kathy Grimes points out so eloquently, the California HSR project is like the "Walking Dead." It won't die. So far, no agency, critical of the HSR project has come to this twilight zone project with a wooden stake to drive through the high-speed rail Zombie's evil heart. 

There have been many reports, each of which should have been a "silver bullet." These reports keep on coming, but the project keeps on walking, even with its shredded bandages trailing behind it.

That triggers the key question, why is this happening? Why won't it die? Or to put it more politically, who continues to support the project and why.

The first answer, which we have offered on these pages previously, is the money. All together now: It's not about the train; it's about the money.  

There's a tempting, irresistible, $3.5 billion from the FRA.  The Governor and his Democratic minions in the Legislature, as well as the California Democratic electeds in Washington, take literally the notion of a bailout.  This much money, spent on an infrastructure project -- whether anything actually gets built or not -- is bound to buoy up the state's economy, which is job #1 for this Governor. At least, that's the rationale. 

And, secondarily, there's the looming question of jobs.  Again, these funds will create jobs.  All funds from Washington now come with a required label: This project creates jobs. Do not remove. Here too, that's the rationale.

Who would care about this? Kathy Grimes answers the question with one word: Unions.  It's their job. Whether there is any truth about all the jobs that the high-speed rail project will create is left unspoken.

We now know it's all hokum. It's the appearance, not the reality that matters to the Union executives who send campaign funds to Democrats to get elected and re-elected.  Jerry Brown is not ungrateful to the Unions in this regard. 

Let me hasten to say that as a life-time Democrat, I'm also a life-time Union supporter. Nonetheless, in this particular case, the Unions are wrong, and so is the Governor and the Democratic Legislators.

And so, under cover of darkness, the rail authority continues its plotting and scheming, giving out contracts that flout legality. We've pointed that out in prior blog entries.  

Again I ask, who cares? Well, we know who doesn't.  We can safely assume that the HSR promoters are right when they think that the voters have short memories and will forget about this walking zombie and the wasted billions as the economy recovers. 

By which time, the Central Valley will have 100 miles of rusted tracks to display to later archeologists.
January 25,2012

No Silver Bullet For Rail Plan

JAN. 25, 2012

Like Dracula rising from the grave, High-Speed Rail just won’t die. Even with the latest in a long line of damning reports blasting the growing rail monster, the reports have had the impact of a Nerf gun. I could be a good shot, but I am not going to stop anyone.
State Auditor Elaine Howle released another report Tuesday very critical of the High-Speed Rail Authority’s most recent attempt at a business plan. The report found that HSRA relies on uncertain funding sources and that “the program’s overall financial situation has become increasingly risky.”

“How many hundreds of pages must be generated before we pull the plug on this idea and begin using scarce state funds for real shovel-ready transportation jobs in our communities?” asked Assemblywoman Diane Harkey, R-Dana Point.

There hasn’t been a positive report yet about the dubious billions of dollars in costs and mismanagement of High-Speed Rail. But Gov. Jerry Brown is working like a traveling evangelist preacher to keep it alive.

It makes one wonder who is really banking on the losing plan. Who benefits the most if even only the first segment of High-Speed Rail is built? Every rail expert and Capitol staffer I ask says that it has to be labor unions. What other organization in the state would see High-Speed Rail as a boon to their survival? High-Speed Rail would mean big money, and lots of high-paying jobs, all wrapped in a public works project which would go on in perpetuity. It’s a labor union dream come true.
Landing the contracts for building the High-Speed Rail system would assure their future. But is anyone in a leadership role thinking about what building High-Speed Rail would do to the already shaky financial structure of the state?

The Future Looks Like A Wreck
The High-Speed Rail Authority failed to include operating and maintenance costs in its business plan. As Martin Engel points out in his story in High Speed Train Talk <>, “even these costs ignore the fact that replacement of all rolling stock (since it wears out so quickly) and all electronics (since it evolves so rapidly) will have to be cycled and factored in as well.”

Harkey said that local transportation systems risk losing funding if the High-Speed Rail project goes through. Most local public transportation systems are already operating in the red, and couldn’t afford to lose funding to the statewide rail system.

The High-Speed Rail plan is a disaster, and will bring California to its knees financially. With a conservative price tag of $98.6 billion for just one segment of the system, High-Speed Rail will be hundreds of billions of dollars before it is through, making it the largest public works project in the country in history.

Headed for a financial crash, why would taxpayers ever trust professional politicians about something as big as High-Speed Rail?

The High-Speed Rail pushers keep comparing the train system to building the computer industry and Silicon Valley. What a ridiculous comparison. The government had only a minimal role in building Silicon Valley and the computer chip industry. 

Gov. Jerry Brown and the other career bureaucrats who brought us AB 32, the other government scheme to create a huge state bureaucracy, have never worked in the private sector but love to compare government boondoggles to private industry.

The High-Speed Rail Peer Review Group, a state-mandated independent review board, has been urging state officials to delay issuing more than $2 billion in voter-approved bonds to fund the first phase of construction of High-Speed Rail in the Central Valley, the Los Angeles Times reported earlier in the month. “The panel concluded in its January 3 report that the California High Speed Rail Authority’s latest business plan, released in November, ‘is not feasible,’ represented ‘an immense financial risk,’ and required substantial revision.”

Special Interests
In the private sector, a business plan showing this level of future disaster would be shredded out of embarrassment — unless the planners could get someone from the government to bite.

Which only can lead one to believe that there is too much at stake for special interests.

Of other interest is the point made by the state auditor, after eviscerating the HSR for the grossly exaggerated ridership numbers, was the highly suspect IT contracts totaling $3.1 million to only one vendor.

-The Authority continues to struggle to provide an appropriate level of oversight.

-It is significantly understaffed and has struggled to oversee its contractors and subcontractors, who outnumber its employees by about 25 to one.

-It has delegated significant control to its contractors and may not have the information necessary to make critical decisions about the program’s future.

-It engaged in inappropriate contracting practices involving information technology (IT) services by splitting IT services totalling $3.1 million into 13 individual contracts with one vendor.

After reading the auditor’s report, one Capitol staffer asked, “If giving the people the right to vote on taxes is a great idea, then what about voting again on the train?”

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