Monday, March 26, 2012

H-i-g-h-S-p-e-e-d R-a-i-l is the way you spell Government Pork.

Being a Democrat, this is a very hard comment to write. What the article, below, talks about is the so-called DesertExpress, a high-speed rail line initially intended to go from Las Vegas to Los Angeles.

Additionally, this article, from today's Los Angeles Times, bears out the central theme of this blog entry: government pork.

We'll have more to say about the turmoil over HSR and so-called HSR funding in California in the future.   

Since we spend most of our time discussing the California project and its recent upheavals, we want to focus on this Las Vegas, government loan of nearly $5 billion.  And, as you know full well, often such loans from the federal government are forgiven; that is, rendered to be gifts.

It is no coincidence that Majority Democratic Leader Harry Reid of Nevada has been an active promoter of a rail line between Las Vegas and Los Angeles.  At one time, maglev was under serious consideration.  A number of federal grants have been provided over the past years for studies which contemplate the possibilities of such a train.

One lesson learned was that maglev (magnetic levitation) would be even more expensive than high-speed rail (steel on steel). Another lesson is that going into Los Angeles was economically almost impossible, but Victorville, around 100 miles outside of greater LA, was a likely terminal for the Las Vegas rail line.

Initially, it was even imagined that a combination of Las Vegas Casino investments on the one hand, and Disneyland investments in Anaheim would provide the capital for such a transit linkage to benefit both their business interests.  (Entertainment for and revenues from, the entire family!)

But, what is happening now in two projects, the Las Vegas train, and the California HSR project, is the availability of funding that, in the California case, may not even be legal. But, apparently that's not important since the claim is repeatedly made that this is about "jobs" and a "recovering economy." 

What this is all actually about is government pork. And this is the hard part to write about.  It would seem that the Obama Administration, now fully engaged in the re-election campaign of the President, needs to maintain the momentum of economic recovery, since that is the central theme of Obama's platform.  More jobs, better local and regional economies.  

And to that end, the Administration is offering as much funding as possible, and spread as widely as possible, to sustain this recovery trajectory. Among the funding buckets most readily available are those that come from the Department of Transportation. These funds are now the substitutes for the former earmarks whereby legislators saw to it that their district or state was well salted with federal funding for all manner of projects. 

So, in northern and southern California, funds are now being pursued to fund regional rail upgrades (in anticipation of HSR, even it there are no further HSR funds).  Even, possibly illegal funds from state bonds are being sought by local and regional transportation agencies to get in on this temporary government largesse.  An extra-terrestrial visitor might feel embarrassed by this shameless scramble for government pork.  No such sensitivity exists, however, among our eager legislators, and bureaucrats in the transit and rail communities.

How else to describe this as not being about fixing our broken urban and regional transit systems or of upgrading transit opportunities between our major population regions, but it being a desperate grab for free pork-barrel funding, to be paid for by taxpayers over multiple generations to come?  

There's an unpleasant taste in the mouth that comes from the contemplation of something that appears corrupt. We, the taxpayers, are being had and we have not yet been awakened to the realities of the collusion between governments and their corporate sponsors and how costly that is to each and every one of us.

$4.9 billion loan in the works for bullet train from Victorville to Vegas
By Peter Svensson, The Associated Press
Created:   03/25/2012 04:27:13 PM PDT

VICTORVILLE - On a dusty, rock-strewn expanse in the High Desert, a company linked to Senate Majority Leader Harry Reid, D-Nev., wants to build a bullet train that would rocket tourists from the middle of nowhere to the gambling palaces of Las Vegas.

Privately held DesertXpress is on the verge of landing a $4.9billion loan from the Obama administration to build the 150mph train, which could be a lifeline for a region devastated by the housing crash or a crap shoot for taxpayers weary of Washington spending.

The vast park-and-ride project hinges on the untested idea that car-loving Southern Californians will drive about 100 miles from the Los Angeles area, pull off the busy 15 Freeway and board a train for the final leg to the famous Strip.

Planners imagine that millions of travelers a year will one day flock to a station outside down-on-its-luck Victorville, where shuttered storefronts pock the historic downtown.

An alliance of business and political rainmakers from The Strip to Capitol Hill is backing the project that could become the first high-speed system to break ground under President Barack Obama's push to modernize the U.S. rail network - and give the Democratic president's re-election prospects a lift in battleground Nevada.

Transportation Secretary Ray LaHood has publicly blessed the train - it means jobs, he says - and it's cleared several regulatory hurdles in Washington.

Yet even as the Federal Railroa Administration considers awarding what would be, by far, the largest loan of its type, its own research warns it's difficult to predict how many people will ride the train, a critical measure of financial survival, an Associated Press review found.

There are other skeptics, as well.

"It's insanity," says Thomas Finkbiner of the Intermodal Transportation Institute at the University of Denver. "People won't drive to a train to go someplace. If you are going to drive, why not drive all the way and leave when you want?"

Construction cost projections have soared to as much as $6.5 billion, not including interest on the loan. Some fear taxpayer subsidies are inevitable.

Reid and other supporters point to research that shows 80,000 new jobs, but FRA documents show virtually all those would be temporary - no more than 722 would be permanent.

Victorville Mayor Ryan McEachron envisions a bustling transportation oasis with a hotel, restaurants, maybe even homes, on the proposed station site. He believes drivers can be enticed out of their cars, even in a region where the notion of rail travel can seem as distant as a New York subway.

The company is "going to have to market and market hard in order to get the ridership they need to support paying back the loan," the mayor says. "I think you can change the thinking."

Along with Reid, the president's most influential Democratic ally in Congress, the plan is being advanced by casino developer and contractor Anthony Marnell II, whose credits include building the Bellagio and Wynn Las Vegas and who heads Marnell Cos., the majority shareholder in DesertXpress; project consultant Sig Rogich, a Republican adviser to two presidential campaigns who founded Nevada's most influential lobbying and advertising company; and Canadian transportation giant Bombardier, a DesertXpress strategic adviser that wants to supply its rail cars.

A decision on the loan is not expected until mid-year, but the company has spent some $30 million sharpening its plan and refining ridership projections. Rising gas prices and increasing traffic congestion could help ticket sales, and the company is touting reduced air pollution from fewer cars on the road.

"It's Victorville that makes the project work," says chief executive Andrew Mack.

Far from being a train from nowhere, company planners see the struggling city of 115,000, once a stop on storied Route 66, as a collection point for millions of drivers heading north to Las Vegas.

Bringing the line deeper into the populous Los Angeles area would raise formidable challenges, Mack said, from crossing numerous freeways to finding space for track.

The lot now stippled with spindly creosote bushes has room for 15,000 parking spaces. Bags would be checked through to hotel rooms. At peak hours, trains would depart every 20 minutes. Mack says an average round-trip fare could be as low as $75, though documents estimate $100.

Mack says the train will deliver convenience - and for a price, luxury - that studies show passengers want.

DesertXpress officials once boasted they would build the line with private dollars, but they now plan to rely on FRA financing to cover the bulk of the cost. Mack didn't directly answer if the company turned to the FRA because private investors were unwilling to take the risk, but said the loan terms are attractive.

"When somebody comes and tells me I will build a system that pays for itself, I'm suspicious," said Hasan Ikhrata, executive director of the Southern California Association of Governments, which questioned ridership potential in a report last year. "There is no high-speed rail system in the world that operates without subsidies."

The company is seeking funds at a time when a proposed high-speed train running from San Francisco to Southern California has been questioned because of ballooning costs and fear it will sap taxpayer dollars.

Early company research projected the train would lure away nearly one in four car, bus and airline travelers, initially about 4 million people annually. The company now pegs first-year ridership at about 3 million, but that projection was trimmed to 2.5 million by government analysts who urged more study.

On clear roads, the 270-mile drive from downtown Los Angeles to Las Vegas takes about four hours. Planners say the train ride from Victorville to Las Vegas would take about 80 minutes, but it's debatable how much time would be saved after parking, boarding the train and reaching a Las Vegas hotel.

Round-trip flights from Los Angeles to Las Vegas can be booked for under $100.

The dream of uniting Southern California and Las Vegas by high-speed rail has been discussed for decades. In the mid-1980s, Las Vegas officials predicted a line would be running by 2000. DesertXpress, which would roughly parallel the 15 Freeway on a pair of new tracks, has predicted for several years that it would soon break ground.

Not everyone in the High Desert is on board with the project.

Thirty miles northeast of Victorville, officials in Barstow fear they'll lose 2,300 jobs. The impact will be "unsustainable," Mayor Joe Gomez wrote to LaHood in October 2010, according to a letter released under a public records request.

To appease those concerns, McEachron said the station's proposed location was moved about halfway to Barstow. The patch of vacant land is so remote the city would have to annex it.

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