California High-Speed Rail: Highest Burn Rate Ever


Dan Richard, you're no Roelof van Ark.

Taxpayers in California and around the nation have a new reason to pull the plug on the Golden State's high-speed rail project. In order to meet its virtually impossible timeline, the project will have to spend $3.5 million per day, seven days a week, over the next five years, a spending rate that will easily make California high-speed rail the costliest per-diem transportation project in the history of the United States. 

Ralph Vartabedian explains in the Los Angeles Times that in order to meet a federally mandated September 2017 deadline for completion of the (also federally mandated) Fresno-Bakersfield leg, Sacramento, which is currently struggling to close a $16 billion budget deficit, would have to issue 120 permits through multiple regulatory agencies, buy about 1,100 parcels of land, work through lawsuits by local farmers and assemble a team of contractors with large workforces. 

And that's if everything goes according to plan. Says the Times

If the rail authority runs into technical problems, legal disputes, permit delays or political roadblocks, it could end up building less track and potentially leave an uncompleted project, according to warnings contained in its own business plan. If the project blows past the federal deadline, for example, the flow of money could be stopped. And the scramble to meet that deadline could lead to construction problems and drive up costs.

Rail officials acknowledge that their plans are aggressive but describe them as not unprecedented, pointing to the fast construction pace of the new Bay Bridge in Oakland and the Alameda Corridor freight rail line in Los Angeles.

But state reports show the $6.5-billion Bay Bridge will have an average spending or "burn rate" of $1.8 million per day when it is completed in 2013, less than half what the rail authority is planning. The Alameda Corridor also had a similar $1.8 million per day burn rate by its completion in April 2002, much less than planned for the bullet train even when adjusted for inflation.

The hurried project to improve I-15 in Salt Lake City before the 2002 Olympics, known in the construction industry as one of the fastest well-executed work packages, spent $1.6 million per day, according to John Njord, executive director of the Utah Department of Transportation.

"That was a burn rate like we have never seen before," he said, which was on schedule only because of careful planning. The California effort would more than double that pace.

Vartabedian deserves credit for his unflinching reporting on the California High-Speed Rail Authority's ongoing collapse. (This un-Times-like honesty has notably not filtered down to the paper's editorial board.) But even in a 340-line story that details how private contractors are walking away from the project (thanks in large parts to the state's plan to offload schedule and cost risks onto contractors), it's impossible to list all the evidence that the continuing brouhaha over the bullet train is just kabuki for a project that is in all practical senses already dead. 

Among other things, it is unlikely that the state can even issue the bonded debt voters approved for the project back in 2008. Those bonds by law can only cover capital costs for a train that will be able to operate without subsidies – a condition that Fresno-Bakersfield clearly does not fulfill. 

This is as close to the bullet train as you're likely to get.

In fact, meeting the federal deadline may be the least of the project's problems. The California High Speed Rail Authority (CHSRA) was originally required to break ground on the project by September of this year in order to qualify for $3.5 billion in ARRA stimulus funds. But that deadline went away when the state bowed to pressure from Transportation Secretary Ray LaHood to start the project with the Central Valley alignment. As the CHSRA's former spokeswoman explained earlier this year – just before joining an exodus of top-level employees from the sinking project – that deadline was only a placeholder meant to "memorialize" the September 2017 completion deadline. By the time that 2017 date approaches, the federal funds will have been disbursed (in the unlikely event the project is under active construction). 

Gov. Jerry Brown's "May revise" budgets only $705,000 to create seven positions at Caltrans "to work with the High?Speed Rail Authority…to improve service on Northern California intercity rail lines." The rest would have to come from a new bond issue, which has now become politically toxic. And the other reasons to stop the runaway train keep piling up, as I wrote in January

substantial majority of Californians oppose the bullet-train in its current form.  

That's a remarkable turnaround in a state where 53 percent of voters approved $9.95 billion in high-speed rail bonds during the high-turnout 2008 election. It seems like just a month ago that the California High-Speed Rail Authority (CHSRA) was an object of wonder for its reality-distorting public relations influence and political strength. Now even the left-leaning media treat with scorn the CHSRA and its plan to make a non-operational Bakersfield-Fresno run the great project's first phase. 

Meanwhile, the CHSRA's CEO and board chairman have both fled the collapsing project, in a move that neither the Brown nor the Obama Administration appears to have seen coming. The authority is in a dispute with its former PR firm, which was unable to distract public attention from the glaring truth that since 2008 the estimated cost of the project has more than doubled, from around $40 billion to $98.5 billion. (The suspiciously steep increase in projected costs has prompted calls for a new referendum on railway debt, on the grounds that the voters were hoodwinked the first time around.) The authority's own peer review group and the Legislative Analyst's Office have strongly recommended delaying and rethinking the project. A larger percentage of voters would now vote No on HSR bonds than voted for them in 2008. 

All of the conditions described above are still in effect.