High Speed Rail

Federal Funding for California Bullet Train Boondoggle Formally Canceled

State leaders cannot seem to let a bad project die.

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Good news for every American who doesn't live in California: If that state insists on pushing forward with its overbudget, behind-schedule boondoggle of a bullet train, it won't be with your money.

The Federal Railroad Administration yesterday formally terminated a $929 million grant to help pay for the construction of a high-speed rail line that was originally supposed to link Los Angeles and San Francisco. The Los Angeles Times reports:

The California High-Speed Rail Authority "is chronically behind in project construction activities and has not been able to correct or mitigate its deficiencies," said Ronald Batory, chief of the federal agency.

The railroad administration's letter notes that the agency rejected every quarterly budget that the state authority submitted since late 2016, repeatedly admonishing the state for "deficiencies and errors" in its documents. The letter alleges the state made ineligible expenditures from the grants, including giving a bonus to consultants for meeting the terms of the grant and paying for expenses "related to a consultant's name change."

The feds warned back in February this was likely coming. While there is no love lost between President Donald Trump and California's political leadership, this isn't mere politics—it's a long-overdue response to a construction plan that has grown wildly, absurdly, almost comically out of control.

Voters were initially told they could have the entire train complete and running for $33 billion by 2028. Now the full costs are predicted at $77 billion, and they're probably much higher even than that. The first leg of the train, in the Central Valley, won't be running until 2028, at which point it is expected to cost more than $20 billion for 171 miles of track between Merced and Bakersfield. And there's no substantial plan for how these trains are going to realistically connect to San Francisco and Los Angeles.

Since the warning in February that the federal funding is in danger, even more details about the piss-poor management of the rail program have come to light.

The California High Speed Rail Authority sold the state the idea that they could save money in the design process by relying on outside contractors and consultants rather than state employees. That may superficially sound like a good idea, but these public-private partnerships are only as good as the oversight. In April, the Los Angeles Times reported that these consultants were raking in hundreds of millions of dollars—and that relying on them was actually driving up costs. An engineer from a consulting firm cost an average of $427,000 annually, compared to $131,000 for a state-employed engineer.

I didn't blog that April report at the time, because it felt as though we were treading into "dog bites man" journalism. The entire project was clearly intended to be captured by consultants, and that's exactly what happened. Reason has criticized this entire from the start, in part because we knew full well that the state had severely lowballed the costs.

But California's leadership is going to fight reality, because God help any government that acknowledges the sunk cost fallacy. Gov. Gavin Newsom initially suggested that he was going to scale back the train plan, but now apparently he's going to fight for this money. The Times reports that they're going to keep working on the train in hopes that they either win a legal challenge (which seems really dubious—even state auditors have been blasting the mismanagement of the project) or get more money from cap-and-trade auctions.

The feds are also still seriously considering trying to force California to pay back $2.5 billion of federal funds that have already been spent. So the skyrocketing costs of this trainwreck may eventually include repaying $2.5 billion to Washington.

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55 responses to “Federal Funding for California Bullet Train Boondoggle Formally Canceled

  1. Unpossible! Just a week ago, CNBC explained that China has bullet trains because its government cares about its people, while the US doesn’t have high speed rail because the US government has been taken over by car lobbyists!

    (Incidentally, most Asian and European rail systems require massive government subsidies and still can’t compete with buses or flying on price and convenience.)

    1. Heck, passenger rail can’t even compete with single occupancy cars on energy efficiency. Trains are a very efficient way to move bulk cargo over land. However, with passenger trains, from an energy perspective, you might as well be shuffling empty trains round.

      1. In Europe passenger rail crowds out bulk cargo forcing more of it onto trucks with the additional problems that entail.

        1. And from an energy efficiency, those crowded EU trains are still worse than single occupancy cars, still being only and insignificant tiny bit better than running empty trains.

        2. “In Europe passenger rail crowds out bulk cargo forcing more of it onto trucks with the additional problems that entail.”

          The Euro loading gauge is in scale with the size of the place; pretty damn small. So that also shoves cargo onto the highways.
          In Germany, you’d better jump in the exit lane one or two exits in advance, or you could end up several exits farther than you wanted top go.

    2. Granted, Lincoln got a railroad build from the East Coast to the West Coast while the Civil War was going on … but he didn’t have to deal with union labor. Who built that new railroad in China?

      1. No he didn’t, so try again,

      2. The first transcontinental railroad started during the Civil War, but most of the track was laid after the war and after Lincoln’s assassination.

        The enabling legislation failed in Congress in 1860 and 1861, with the southern delegations voting against it. It was re-introduced in 1862, when there were no southern Senators to vote against it, and passed. On the eastern end (Union Pacific), manpower and materials were unavailable due to the war, and they only broke ground after the war, in July 1865, and only laid 40 miles of track in 1865. Construction from the western end (Central Pacific) began first, on January 8, 1863, even though most of their equipment had to be shipped around Cape Horn. They were little affected by the war, and hired most of their labor force from Chinese fleeing the Taiping Rebellion. But the Central Pacific route was mountainous and once the Union Pacific reorganized it’s construction crews the UP laid several miles of track on the Great Plains for every mile the CP hacked through the mountains.

        The two railroads finally met in 1869, more than 4 years after Lee surrendered and Lincoln was assassinated.

  2. Simpsons did it

    1. That was a monorail, only costs 1/2 as much!

      1. Monorail! Monorail!

  3. As a recent escapee from California, this project was a boondoggle from its inception. But, even I, rather skeptical of such projects, didn’t think the State could muck it up as much as they did. There may be a case which could be made for improved rail service from, say, San Diego to Los Angeles (maybe), but this thing is just ridiculous.

  4. The engineer called up the dispatcher on the phone,
    To tell him all about his locomotive was gone.

  5. You think a state engineer has any better ability to design a high speed rail than an outside firm that does then you are sadly mistaking the abilities of state engineers who often have not worked on anything ever they are most often failed engineers form teh private sector who like to hold a grudge against those who can engineer

    1. Yep. It’s not an engineering problem, it’s a conceptual problem. Taken to its extreme, we should develop an interplanetary shuttle system to make it easier for up-scale executives and their underlings to commute to and from Mars in order to reduce traffic congestion.

  6. What advantages would passenger rail have over driving on the 5 Freeway?

    1. You have to pay a union thug to drive you there?

      1. “You have to pay a union thug to drive you there?”

        S – E – I – U
        That’s pretty much why the Ds are in love with choo-choos.

        1. I thought they just hated buses, because all the stops make it take for ever for a bus to get from point A to point B if the riders you talk to keep getting of at the next stop as soon as you start a conversation.

    2. Fresno!

      1. He said advantages.

    3. You can already ride the train between Los Angeles and San Francisco. Vs. this project that wants to build more infrastructure so that you can go “high speed” and get there before the airplane does.

      BTW, note that under Alexandria Ocasio-Cortez’s ‘Green New Deal’, you can’t take either the slow train or the fast train unless it is electric powered. (Which will require the building of more infrastructure, at union wages.) And in James Kunstler’s ‘Peak Oil’ concept, or economist EF Schumacher’s ‘Small is Beautiful’ concept, you very likely wouldn’t be making the trip at all.

    4. Assuming minimal performance by the train, you could drive yourself and arrive exhausted or take the train and arrive rested.

      Not saying that the Left’s obsession with rail is a good thing. It isn’t.

    5. What advantages?

      1) You wouldn’t have to drive and arrive exhausted. You could sleep, read, do your work on a laptop, or play video games for most of the trip…
      BUT most people would need two cars, to get to the train and then to get from it to wherever they were going. West coast cities grew around automobiles more than around mass transit or walking. The rental car adds to the cost, and you also add the time to park your car, pick up a rental, return that rental, and pick up your car to the trip time. Often you’ll also have considerably farther to go to/from a train station than you would from the nearest freeway exit.

      2) In theory, the train would be faster than driving and faster than an airline that is handicapped by the TSA.
      BUT:
      –It can only achieve top speed on very high quality tracks, separate from the freight network. Only part of the route was planned as new tracks; on the rest, top speed varies from 30 to 90 mph, and that’s only when other trains aren’t in the way. And that’s when the new track are _new_; they’ll wear down and the road bed will shift, and the train will have to slow until they are repaired. (And where will the train run while the repairs are done?)
      –The train has to stop for several minutes when even one person is getting on or off. Like all mass transit, this slows it considerably – unless they eliminate the intermediate stops, but then most of the state would get no benefit from the project.
      –At each stop, it takes 5-10 miles to stop from high speed, and 5-10 miles to reach high speed. Stops cost high speed rail more time than standard rail, and cost standard rail more time than a bus – but if you drive yourself, you only stop where you want to, and if you take an airplane, you usually go direct from one city to another.
      –Like all mass transit, including airlines, it doesn’t leave when you want to leave. I would count the mismatch between your schedule and their schedule in the travel time. Sometimes trains can be scheduled every 15 minutes so the wait isn’t too long, but I cannot see this getting enough riders for more than a few trains a day.

  7. The Federal Railroad Administration yesterday formally terminated a $929 million grant to help pay for the construction of a high-speed rail line that was originally supposed to link Los Angeles and San Francisco. The Los Angeles Times reports:

    The era of Trump strikes again.

    1. The era of sanity strikes again. FTFY

  8. It seems that high speed/ light rail has been part of the dogma of urban progressives for a couple of decades now. Like a city without a major sports team, they just have to “build it and they will come.” Failure to glom on means you lack civic pride, refuse to be part of the village, and apparently hate people in general, you fucking retrograde misanthrope!

    Or as someone who recently visited Denver told me, it doesn’t matter that it cost a billion dollars a mile, “people use it.”

  9. And exactly how many people would have voted for a 77 billion train to connect Merced and Bakersfield?
    Bait and switch is illegal in the private sector, why not in the public sector?
    And oh by the way, before the feds took over all airline control, there was an hourly shuttle between LAX and SFO that flew full or empty. You just walked up and got on, like a bus. If the plane filled up, they got another one for the overflow. $49.00 at the time. All in the state of CA, so no fed ‘helpful oversight’.

    1. See the MA big dig!

      1. See the MA big dig!

        Let’s glue tons of concrete to the ceiling and then not really check for leaks. What could go wrong?

    2. Bait and switch is illegal in the private sector, why not in the public sector?

      Because when a federal judge put an injunction on the project because it was immediately in violation of the provision to identify funding sources in advance and cap the budget at $65B Gov. Jerry simply ignored them, and nothing more happened.

      Oh – were you looking for a reason?

      1. He is Governor Jerry Brown. His aura smiles, it never frowns. However, he will NOT soon be president.

      2. “Because when a federal judge put an injunction on the project because it was immediately in violation of the provision to identify funding sources in advance and cap the budget at $65B Gov. Jerry simply ignored them, and nothing more happened.”

        I believe Obo’s DoJ could have done something there, but I guess they were too busy jailing kids for smoking joints.

  10. What’s the fallback position? High speed stagecoach lines?

    1. Until the envirodementalists learn how much methane a horse emits.

  11. “The feds are also still seriously considering trying to force California to pay back $2.5 billion of federal funds that have already been spent. So the skyrocketing costs of this trainwreck may eventually include repaying $2.5 billion to Washington.”

    I see what you did there with ‘trainwreck’, but in fact the US taxpayers should in no way be liable for moonbeam’s union hiring hall on wheels which went nowhere.
    Unfortunately, we can’t seem to find a way to hold him personally liable for what we see and the un-seen costs, like SF’s hole in the ground for a train which will never get there.
    That pathetic piece of shit has been infecting the CA taxpayers with his imbecility since the ’70s. Like Tony, it’s a real shame his mom didn’t have an abortion; the world would have been a better place.

    1. Yet, CA voted for him. What twice? Three times? The majority wanted him so…

  12. This is like an old joke:

    Milton Friedman goes to an Asian country where the president of the country takes him to a transit hub. “Do you see that railroad?” he asks the economist.

    “Yes,” Milton replies.

    “Around 50% kickbacks,” the president brags.

    Then Milton goes to an African country where the president of the country brings him to an oasis and says, “Do you see that railroad line?”

    “No,” Milton replies.

    “100% kickbacks,” the president explains.

    Both Africa and China have improved since that joke was made decades ago. California is headed in the wrong direction.

    1. Thanks for bringing up the graft angle with a fine joke.
      Neither the article nor the comments point out that it’s not just their crony consultants, but big players, like the Feinsteins, with their Chinese business and espionage connections, who raked in the bucks over this boondoggle.

  13. The simple fact is that there isn’t a single “public transportation” system that could survive if the passengers were charged what it actually costs to run it.
    They all have to be subsidized, from other funding sources. Frequently, from those, who drive themselves to where they want to go.

    1. Almost correct: Many smaller cities, even there in CA, have municipal bus lines which have to at least break even. On the other hand, the service doesn’t come close to “full coverage.”

  14. For the public sector, failure is a justification for more money. Look at Head Start. Look at all of unionized public education.

  15. […] Federal Funding for California Bullet Train Boondoggle Formally Canceled Good news for every American who doesn’t live in California: If that state insists on pushing forward with its overbudget, behind-schedule boondoggle of a bullet train, it won’t be with your money. […]

  16. The key is to buy up the right of way first. I suspect that if CA had estimated that cost first the project would never have gotten off the ground.

    1. Willie Brown on budgeting public projects:
      “News that the Transbay Terminal is something like $300 million over budget should not come as a shock to anyone. We always knew the initial estimate was way under the real cost. Just like we never had a real cost for the [San Francisco] Central Subway or the [San Francisco-Oakland] Bay Bridge or any other massive construction project. So get off it. In the world of civic projects, the first budget is really just a down payment. If people knew the real cost from the start, nothing would ever be approved. The idea is to get going. Start digging a hole and make it so big, there’s no alternative to coming up with the money to fill it in.”
      https://www.cato.org/policy-report/januaryfebruary-2017/megaprojects-over-budget-over-time-over-over

  17. Even China can’t get high speed rail to pay for itself, but at least they can get the darn systems BUILT – more miles already than this country will ever see. And we think they only beat our brains out economically by cheating? I don’t think so.

  18. […] providing about $3.5 billion in federal stimulus. California has spent $2.5 billion of this money. Last week, the feds announced that, due to the California High-Speed Rail Association’s poor management […]

  19. […] providing about $3.5 billion in federal stimulus. California has spent $2.5 billion of this money. Last week, the feds announced that, due to the California High-Speed Rail Association’s poor management […]

  20. […] providing about $3.5 billion in federal stimulus. California has spent $2.5 billion of this money. Last week, the feds announced that, due to the California High-Speed Rail Association’s poor management and […]

  21. […] providing about $3.5 billion in federal stimulus. California has spent $2.5 billion of this money. Last week, the feds announced that, due to the California High-Speed Rail Association’s poor management […]

  22. […] providing about $3.5 billion in federal stimulus. California has spent $2.5 billion of this money. Last week, the feds announced that, due to the California High-Speed Rail Association’s poor management […]

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