High Speed Rail

California's Bullet Train: Underbudgeted, Underscheduled, and Underfunded, but Other Than That, Everything's Just Fine!

The bullet train mess is unspooling pretty much exactly how critics predicted.

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At least the crazy Hyperloop idea has novelty appeal.
CHSRA

As the California High-Speed Rail Authority (CHSRA) continues planning out community meetings about the massive bullet train system it is allegedly going to build someday, more and more evidence that its economic model is utter nonsense is piling up.

Over the weekend, the Los Angeles Times released a lengthy investigation showing that the massive $68 billion project is going to cost much more than estimated and that the state has underestimated the amount of time it will take to build it:

The California High-Speed Rail Authority hasn't yet chosen an exact route through the mountains. It also is behind schedule on land acquisition, financing and permit approvals, among other crucial tasks, and is facing multiple lawsuits. The first construction began in Fresno in July, 2 1/2 years behind the target the rail authority had set in early 2012.

A confidential 2013 report by the state's main project management contractor, New York-based Parsons Brinckerhoff, estimated that the cost of building the first phase from Burbank to Merced had risen 31% to $40 billion. And it projected that the cost of the entire project would rise at least 5%.

Parsons Brinckerhoff briefed state officials on the estimate in October 2013, according to the document obtained by The Times. But the state used a lower cost estimate when it issued its 2014 business plan four months later.

Jeff Morales, the rail authority chief executive, said he was not aware of the Parsons Brinckerhoff projection. A spokeswoman for the authority declined to discuss the differences in the estimates.

Research shows that other high-speed rail projects that have been built around the world end up being between 45 to 100 percent more than estimated. Experts believe that the state has seriously underestimated the challenges of carving the necessary tunnels through mountains it will need to create this network, particularly heading into southern California. After interviewing several experts about the state's geography, the story notes that CHSRA declined to make its own engineers available to discuss the challenges.

But wait, there's more! Guess which private interests have announced they're going to invest in this train project? That's right: Nobody. Nobody wants to risk a thin nickel of their own money on this deal, according to another Times story by the same reporter (Ralph Vartabedian). The CHSRA says a number of private investors have expressed interest, but they're not willing to commit any money.

Why? Because there's no actual evidence that the train is going to built past the first stage in the middle of the state. There is no additional state or federal funding on hand to complete the project. There is only $15 billion set aside (and none of it is private money) for this (likely more than) $68 billion project.

Vartabedian notes that interested investors wanted a guarantee of revenue from the state, when of course, the state can't even guarantee the thing is going to be built:

The companies that responded to the state solicitation left the door open to forming partnerships and making investments, but under terms that could be problematic for high-speed rail officials.

Rail authority Chairman Dan Richard said the companies generally want either a revenue guarantee or a record of financially successful operations. A state-backed operating revenue guarantee would be a "nonstarter" under voter-approved financial protections placed on the project, said Michael Rossi, a retired Bank of America vice chairman and a rail board financial expert.

"There is no proposal, there is no commitment to do anything" in the responses, Rossi said at a board meeting this week. "We need to be very, very careful."

Don't blame us for this eminently predictable disaster in the making. The Reason Foundation warned all the way back in 2008 that, among other things: cost overruns were likely, state and federal funding would not be sufficient to cover the costs of the project, the state would have to spend more money, and private investors would not be making up the difference. And that's exactly what is happening. Read more of those predictions here.

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  1. The California High-Speed Rail Authority hasn’t yet chosen an exact route through the mountains.

    They’re going *over* with their *bullet* train, DUH!

  2. Lyle Lanley is already on his way to Tahiti.

    1. And this time his plane won’t have a stopover in Sacramento North Haverbrook.

    2. I’m surprised California went for this. It’s really more of an Oregon idea…

      1. Naw – we prefer our boondoggles to be bridges

        http://www.oregonlive.com/busi…..pends.html

  3. Okay, all you California taxpayers! All aboard the Boondoggle Express!

    The train should pull out (if it does) somewhere around 2050…

    1. Don’t worry MOB, I’m sure there’s some federal tax dollars involved, too!

  4. I’m so glad libertarians weren’t as influential during the time they built the NYC subway.

    1. It takes a special kind of stupid to compare the NYC subway to an underbudgeted train project that is already supposed to cost $68 billion. When California voters approved it, the price tag was supposedly a fraction of that.

      All for a project that will be ‘carbon neutral’ through most of the century – if it ever even gets built.

      1. I thought $68 billion was the original price tag, but the original estimate was $40 billion. CHSRA now estimates it will be between $98 and $118 billion to complete. Prop 1A only approved $9.95 billion in bonds too. Classic.

        1. Yes – and the original measure said that no work could start until funding sources were identified. Funding sources were not identified, they started work anyway, got sued, and the Immortal JB got the case thrown out of court.

    2. Alice Bowie|10.26.15 @ 4:21PM|#
      “I’m so glad libertarians weren’t as influential during the time they built the NYC subway.”

      Yeah, slimy piles of shit are always in love with stealing more money.

    3. I’m so glad libertarians weren’t as influential during the time they built the NYC subway.

      Who, exactly, are “they” that built the NYC underground choo-choo network? Don’t look it up, it might give you a sad…and you were so happy

    4. This doesn’t… I don’t…

      Didn’t our trolls used to try?

    5. Yeah, if California’s electorate is known for anything, it the libertarian stranglehold.

    6. I’m so glad I don’t live in the human dumping ground that is NYC.

  5. Michael Rossi, a retired Bank of America vice chairman and a rail board financial expert.

    “Hi, I”m Michael, and I’m an expert choo-choo financier”

  6. Yeah, my favorite part was how they are going to have punch over 30 miles of tunnels through mountains that also host numerous fault lines that are famous for earthquakes.

    This thing is a grotesque fantasy. I cannot imagine that you can build a tunnel that can survive the actual mountains it goes through moving around. No wonder they haven’t picked a route: I doubt one is even possible.

    1. I dunno, how about the claim that it’ll be faster than flying since you won’t have to put up with TSA!
      I’d say that might be true for the first week of operation, until some yo-yo pulls out a bottle of shampoo.

    2. Yeah, my favorite part was how they are going to have punch over 30 miles of tunnels through mountains that also host numerous fault lines that are famous for earthquakes.

      As long as they aren’t punching for gas everything will work out for the best.

  7. A Fast Choo-Choo: 19th Century Technology for the Gleaming Future of Today!

  8. The chances of an earthquake hitting when a train is going through a 13.8 mile long tunnel through a seismically-active zone (including multiple unmapped faults) is approximately 200%, right?

  9. It is beginning to look like my $200 gigabuck estimate for the final cost if this ever gets built was lowball.

  10. Don’t blame us for this eminently predictable disaster in the making.

    It will *never* be disaster. It may be an utter financial debacle, it will probably be a ghost train of few riders, it’ll likely be a clusterfuck of epic proportions, but it will never be a failure.

    It will always be the shining beacon of the victory of democracy and progress against the troglodyte teathuglicans and their anti-gubmint views.

    1. If it gets built, I will confidently predict that no politician above the level of the California Assembly will use the thing.

      Nor will most of the feelgoodvironmentalists do so.

    2. It will *never* be disaster.

      First time one of those fault lines that the put the tunnel through hiccups, I think we’ll have a disaster by any definition.

  11. ” There is no additional state or federal funding on hand to complete the project. ”

    Finally some good news.

  12. So about those legal requirements in the proposition we passed that will never be met. Nothing enforces that right? Because you should be able to sue the project on fraud alone

    1. Already tried. Already lost.

      1. They did the same thing in Dallas. Big bond issue approved to, I think, clean up the Trinity River.

        They spent it all on a bridge instead.

        And the courts basically said to the voters who challenged this “You fucked up. You trusted them not to be lying pieces of shit.”

  13. In related new, China contracted to build a $5 billion bullet train system in Indonesia. ( http://www.bloomberg.com/news/…..nt-venture )

    Maybe it’s time we sell California to China in exchange for retiring the debt we owe China. There’s precedence for that. Jimmy Carter didn’t hesitate to hand over the Panama Canal Zone. Besides, the way things are going, California’s government will be more Communistic and inefficient than China’s within a generation or two.

  14. And here’s the company that got the first phase of the contract:

    https://en.wikipedia.org/wiki/Tutor_Perini

    Ronald Tutor being one of the most notoriously corrupt and belligerent contractors in the state – the bid rules were changed *after* the bids were in to award to T-P.

    From the article:

    “In 1997, Perini recapitalized, passing control to a California-based investor group led by Los Angeles-based construction executive Ronald Tutor and investor Richard Blum.”

    Richard Blum, otherwise known as Mr. Dianne Feinstein.

    They don’t call it the Golden State for nothin’.

  15. There is one thing this train will deliver at full velocity – the financial reaming of the state and it’s taxpayers.

  16. Thank God Florida’s governor Rick Scott got it right when he said “NO” to high speed rail.

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