Monday, April 30, 2012

You can buy what the high-speed rail authority is selling on some street corners at night.

Good article in the Modesto Bee (related to the Sacramento Bee) by Lance Williams.

Let's specify some basic facts about the California High-Speed Rail Project and the people who are actively promoting it.

1. The project has become a "bait-and-switch."  What it now is planning to construct is NOTHING like what the voters voted for.

2. The rail authority has NEVER told the truth about anything.  A handful of citizens have devoted huge chunks of their time and life to disproving all the lies told by the rail authority and its supporters, including elected officials, high and low.

3. At face value, a great deal of what is now being proposed is explicitly illegal. The rail authority has the temerity to break the laws because of the unquestioning support by the State's Governor, Jerry Brown. Wouldn't you think that this Governor should also be the State's head law enforcer?  Well, you would be wrong about that. 

4. The rail authority has around $6 billion dollars more or less in hand to play with. And that's all. It is now absolutely clear that there will be no further high-speed rail funding for California from Washington so long as the House of Representatives remains a Republican majority.

5. Whatever the rail authority calculations about total costs are, and they have fluctuated wildly, they are far too low. This is based on the history of most recent other projects, both in the railroad construction industries and other infrastructure mega-projects world-wide. Typically, the final costs are several orders of magnitude greater than the initial low-ball estimates.

6. And in this article, Lance Williams identifies the untruths about the cost of operating the high-speed trains if indeed they ever are built.  The rail authority insists that the train will be "profitable." The also insist, against all the facts, that other high-speed trains in both Europe and Asia are profitable. This is simply not true.

One of the best sources of the factual basis for these claims which I have repeated in this blog many times is the following: 

And here is the specific documentation about operating costs:

These documents are the work of William Grindley and several others.  I can only urge you to download and read all this documentation for verification of all the claims made on this blog and, spreading like wildfire, the criticisms levelled at the rail authority in the press. 

It has become painfully obvious that the Democrats who continue to support this project do so knowingly; that is, they have been made aware of the facts, but are totally indifferent to them for the sake of the $3.5 billion free dollars from Washington.  

I call it political prostitution. 

Sunday, Apr. 29, 2012
California bullet train's operating costs questioned
By Lance Williams 
California Watch

By hitting the reset button, Gov. Jerry Brown bought some time for the embattled California high-speed rail plan.

In recent months, the chief executive officer of the controversial project resigned. Brown installed Dan Richard, an official with political and transportation industry connections, as new board chairman.

More importantly, the California High-Speed Rail Authority dramatically revamped its business plan, slashing as much as $30 billion from the price tag for building the San Francisco-to-Los Angeles system via the San Joaquin Valley — from $98 billion to as little as $68 billion.

But none of those changes addressed what a panel of outside financial experts has styled "the elephant in the room" for California's proposed high-speed rail system — its extraordinarily low projected operating costs.

If the bullet train project is to pencil out, it must operate far more economically than any high-speed rail system in the world, according to the experts, who include former World Bank executive William Grindley.

Unless these extraordinary economies are achieved, the train will require alarmingly high annual operating subsidies "forever," as the experts wrote in a report last month. The annual operating deficit could top $2 billion, they wrote.

The rail authority disputes the experts' conclusions. The issue is of crucial importance, because by law, the state is forbidden from subsidizing the bullet train.

"We showed that their (projected) operating costs and revenue costs per mile were significantly lower than what anybody anywhere in the world had ever been able to achieve," said Alan Bushell, a retired technology executive and co-author of the study. Other authors include retired Stanford University economics professor Alain Enthoven and Silicon Valley financial expert William Warren.

The rail authority's business plans indicate that the bullet train would cost about 10 cents per passenger mile to operate, Bushell said in a recent interview.

That means it would cost 10 cents to carry one passenger one mile on the rail system. But international high-speed rail systems cost on average about 43 cents per passenger mile, he said.

"They have to have worked some incredible operating efficiencies to justify those kinds of costs," Bushell said of California's rail planners. "I doubt they have."

International cost data

The financial experts' study reviewed operating cost data for international bullet trains.

The experts found the world's lowest operating costs were in Italy — about 34 cents per passenger mile. Highest costs were in Germany and Japan — 50 cents per passenger mile. In the United States, Amtrak's Acela Express, a high-speed line linking Washington, D.C., and Boston, costs about 44 cents.

The rail authority contends that its operating cost projections are sound, derived from a sophisticated computer model. The system will turn a profit and won't require operating subsidies, rail officials insist.

In a statement, rail board member Mike Rossi said the bullet train's planners used conservative assumptions to verify that the rail line will operate profitably.

Regarding the outside experts' critique, Rossi said, "We have met with the authors of the report in an attempt to correct their flawed assumptions and conclusions."

That's not precisely true, countered Grindley.

He said he and his co-authors have repeatedly asked the rail authority for the data that underlies their calculation of the bullet train's projected operating costs. The rail authority hasn't made the information public, he said.

California Watch is a project of the nonprofit Center for Investigative Reporting. For more, visit

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