Price Tag for California’s High Speed Rail Project Goes Up Again

Gov. Newsom of California is determined to see the high-speed rail system completed or at least started, but the bad news just keeps rolling in like a freight train (pun intended). Newsom is in the process of pushing for next fiscal year’s budget and as part of that process he has announced a plan to make sure the bullet train project gets money from the state climate fund.

California Gov. Gavin Newsom wants to tap at least $2.5 billion from the state’s climate fund to pay for state firefighting crews and the long-troubled high-speed rail project.

In his budget proposal unveiled last week, Newsom announced that he is seeking to extend the state’s landmark cap and trade program, which is funded by credits bought and sold by major polluters, through 2045. But the allocation of the money is already triggering a fervent debate among state lawmakers…

…through 2045, the governor’s plan would earmark at least $1 billion a year of the climate funds to the California high-speed rail project, which aims to connect Los Angeles to San Francisco. The project, which has been beset with construction delays, cost overruns and fights about the route for years, was allocated $407 million of cap and trade money last year.

Set aside for a moment the fact that the high-speed rail system will potentially need a billion dollars per year for the next 20 years. That’s bad enough given that the project is already 17 years old. 

But on top of that, the state climate fund is supposed to shrink over time as there are fewer oil related projects to pay into it. As one Democratic Assembly member put it, “the whole point is to transition.” The more you transition, the less money will be in that fund. So a plan to base fire prevention and high-speed rail on a fund that is going away doesn’t make a lot of sense even to supporters of California’s cap and trade system.

Today we’re also learning that as part of this new budget proposal the cost of high-speed rail has gone up yet again.

California’s High Speed Rail project may soon face a bigger price tag and a $10.2 billion budget gap, even larger than what lawmakers expected two months ago, as project leaders look to complete the first segment between Bakersfield and Merced…

Project leaders have been focused on completing the 171-mile Bakersfield to Merced line, which was expected to cost taxpayers an estimated $35.3 billion with a completion date sometime between 2030 and 2033, according to the California High Speed Rail Project’s 2024 business plan.

Consultants have now been informed and documents obtained by KCRA 3 show the Bakersfield to Merced project estimate could now grow by up to another $3.2 billion, reaching a total of $38.5 billion. In the project update report, project leaders pointed to inflation and the rising cost of certain materials, such as concrete and copper as some of the reasons for the possible increases. A spokesperson for the High-Speed Rail Authority confirmed the information.

To summarize, the cost of the plan went up $3.2 billion since the last estimate two months ago. At this rate, the projected cost could easily pass $40 billion before the end of the calendar year. And over the next 6-8 years while this is being built who knows. There’s another cost estimate expected this summer, so expect another jump in the price then.

When this project started in 2008 the entire line from Los Angeles to San Francisco was estimated to cost $33 billion. Now the cost of just a fraction of the line that no one will ride has surpassed that with years to go until completion. This is ridiculous.

I’ve said probably a dozen times that I personally really like high speed rail. The Shinkansen in Japan is a great way to get from Tokyo to Osaka in a matter of hours. But greater Tokyo (the city and surrounding areas) has a population roughly equivalent to the entire state of California and Osaka has a population of 19 million. In between is Kyoto with a population of nearly 1.5 million. It makes sense to have a bullet train connecting all of this.

Bakersfield has a population of 400,000 and Merced has a population of under 100,000. The entire county of Merced has a population under 300,000 people. There’s just no need for a bullet train connecting these two points, especially not one with a $38 billion price tag.

The original plan was to send the train up the center of the I-5 which already was cleared as a transportation corridor. At this point, with the total project cost surpassing $100 billion, Gov. Newsom should spend 6 months and get a fresh estimate for a train that takes the I-5 path north, bypassing the central valley. If that version of the system could be completed sooner and cheaper than the current boondoggle, the state should just admit failure and start over.

Here’s a local news report about the current state of this mess.