Major changes were made to the previously published and highly criticized plan, including the admission that the ultimate cost of the project will more than double to nearly $100 billion, a number that could go as high as $117 billion if certain scenarios take place. Under this plan, the system will not be complete until 2033, 13 years later than previously forecast.
But this newfound cost realism does not lead to financial viability.
Outside the $10 billion in state bonds and $3.4 billion in federal grants, very little of the remaining funding needed has been identified. The plan is counting on up to $11 billion in private capital that is little more than wishful thinking.
Just over two months ago, we said that high-speed rail was in deep trouble due in part to its funding challenges at the federal level, where it faces the almost impossible task of seeking major support from a Republican-controlled Congress that is not eager to pass anything that can be seen as raising the federal deficit.
The new business plan only makes this challenge more formidable. How can Californians responsibly support this gargantuan project when the state is borrowing just to finance day to day operations?
In its 230-page revised business plan, the commission did scale back its ridership projections, although we still have a hard time understanding how the trains can possibly carry 28.9 million passengers a year — more than 80,000 a day.
And the report abandoned plans for adding a parallel set of tracks on the Peninsula, which means that the high-speed trains would share Caltrain tracks between San Jose and San Francisco.
But the bottom line is that high-speed rail is inevitably dependent on mostly government financing, and is simply not affordable. There is nothing wrong with the vision of high-speed rail, which could reduce pollution and the need to build or expand new roads and airports. But with the economy struggling at the state and national levels for the foreseeable future, legislators must act to end this project, either by simply not approving the sale of the bonds, or sending the issue back to the voters.