Thursday, February 2, 2012

Lies, Damn Lies, and High-Speed Rail

It may not have been made sufficiently clear.  While you will see one, two or three articles posted each day on this blog, these are selected from a much larger number that are found by search engines and then appear on my computer screen for reading.

As we've been saying, the number of critical articles that oppose HSR are increasing in number daily.  We can attribute this mostly to the reviews and critiques found in reports from responsible government agencies asked to perform oversight on this project and the organization responsible for its development.  

We've listed these agencies a number of times.  They have been uniformly concerned about the many failings of this project, the most egregious being its continuance with no further funding on the horizon.

We can also attribute this to the highly visible persistence of mis-management, incompetence and lying that characterizes the high-speed rail authority's progress. THey have been their own worst enemies.

The point here is that until the past six months or so, most newspaper articles about HSR simply parroted the public relations press releases from the CHSRA and their relentless distortions of the facts to sell themselves to the public.  It does not go without notice that although the voters supported the project at the '08 elections, the rail authority found it necessary to keep marketing this project to the public.  

So, we have to ask the question of why a government agency has had to so aggressively promote itself and its project to the public, to the extent that the rail authority has spent over $12 million on such efforts, at least as far as we know. It could be more.  

The answer is that this project has always been nothing more than a concept or vision; the rail authority board has acknowledged as much. Travelling overseas on junkets, the politicians got wined and dined and had free rides on that country's fastest trains.  What's not to like? Forgive the Freudianism, but it's nothing more than penis-envy.

So, the sales job begins to convince a majority of Americans that blowing hundreds of billions of tax dollars on such a train is a great idea.  What then happened is that there has been no interjection of reality into this fantasy until recently when actual project design responsibilities could no longer be evaded. 

Perhaps the single best example of all this is the astronomic climb of the project costs.  First forecast before the 2008 elections, the projection was then going to be $33 billion, of which the state taxpayers were to bear no more than the costs of sustaining the borrowing of $9 billion in bonds. 

Right after the elections however, when the voters had, by a narrow margin, agreed to support this project, the cost forecast abruptly rose to $44 billion. It has kept climbing until now when the rail authority itself, in their last iteration of their business plan, admits to as much as $117 billion, and that's only for the SF to LA first Phase. And, please note that this cost projection preceeds any construction whatsoever.  Most infrastructure projects have serious accelerating costs once construction begins.

Other experts, not in the rail authority employ, are now considering more realistic and inclusive dollar numbers with their forecasts approaching and surpassing $200 billion for the entire project from Sacramento to San Diego.

You might be moved to say that it certainly is better that the truth about this project comes out now, before the damage is done, the construction has started, and billions of dollars are flowing down the toilet. Unfortunately, our Governor doesn't see it that way, or care that much about the truth of this project for that matter.  

This project, which, according to Jerry Brown, we must have, is somewhat of a problem since the funds for it don't exist and most likely won't exist. But start he intends to do anyhow.  Jerry Brown will do his rain dance, and doubtlessly it will start raining HSR funding.  

It's difficult to say how much of all this is illegal.  But, there should be absolutely no doubt that what is going on with this project is immoral and unethical.  The voters and taxpayers of California have been lied to, and based on those lies, voted for this project. Now they know better. 

As my attorney friend puts it, this project is a fraud upon the voters of California.  And it will be a fraud upon all the taxpayers of the United States whose dollars are being flushed down this project in California.

Oakland Tribune editorial: State auditor is latest critic of high-speed rail, which is fiscally irresponsible.
Oakland Tribune editorial
© Copyright 2011, Bay Area News Group
Posted:   02/01/2012 04:00:00 PM PST
Updated:   02/01/2012 04:21:36 PM PST

It is becoming increasingly clear that it would be a grave mistake to spend another dime on California's high-speed rail fantasy. The latest blow to the project comes from state Auditor Elaine Howle, who said that "the program's overall financial situation has become increasingly risky."

Her negative report comes on top of severe criticism from the Legislative Analyst's Office and the rail authority's own peer review group.

They all have accurately concluded that the rail project lacks anywhere near the state, federal and private financing required to build a $98 billion high-speed rail system from the Bay Area to Los Angeles.

Howle questions the rail authority's ridership projections, saying the group that reviewed those numbers was "hand-picked" by the authority's chief executive officer.

Ridership is the foundation to the fiscal viability of the rail system. Without an adequate number of riders, there will not be a sufficient revenue stream to pay for operational expenses and to attract private investors, both of which are requirements for the success of high-speed rail and to meet the mandates of the rail bond measure voters passed in 2008.

There is no way the high-speed rail can meet the latest forecast of 36.8 million rides a year on a San Francisco-to-Los Angeles system. Where will the riders come from? There are only about 3.2 million airline riders a year going to and from Los Angeles and San Francisco and another 1.7 million traveling between Los Angeles and Oakland and San Jose.

That's 4.9 million airline riders. Even if all of them quit flying and took the train, another 31.9 million riders would have to come from those who now drive. But why would huge numbers of motorists choose a 2.5-hour train ride when they have rejected a one-hour plane ride?

The auditor also found that:

The cost estimates do not include phase one's operating and maintenance costs, yet based on data in the plan these costs could total about $96.8 billion from 2025 through 2060.

There are no details about the current largest potential funding source, the federal government.

There have been inappropriate contracting practices such as splitting Information Technology services totaling $3.1 million into 13 individual contracts with one vendor. The State Contracting Manual prohibits agencies from splitting contracts to avoid competitive bidding requirements.

The authority is missing statements of economic interest for some of its contractors despite the conflict-of-interest code requirements; and the authority does not require any of its subcontractors to file statements of economic interest. As a result, the authority has no way to verify that subcontractors do not have real or perceived conflicts of interest.

It is time for Gov. Jerry Brown to face reality and kill the high-speed rail project as it is now configured. Committing billions of dollars of money that could be used for schools and other needed state services makes no sense at a time of large budget deficits and could undermine the governor's ballot initiative asking for tax increases.

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