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$100 Billion Bullet Train 

Democrats fray as cost skyrockets, feds bail, and Amtrak starts to look good

Thursday, Nov 24 2011
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How much does it cost to go from Los Angeles to San Francisco by train?

Nearly $100 billion.

It's not a punch line. It's the sticker-shock price tag from the California High-Speed Rail Authority to build a bullet train that engineering and transportations experts now say probably will not reach speeds of 150 or 200 mph, offering instead a not-that-fast rail route between L.A. and the Bay Area, whose cost will be paid by Californians for decades.

click to enlarge ILLUSTRATION BY PETER HOEY
  • ILLUSTRATION BY PETER HOEY

The nine-member California High-Speed Rail Authority board — made up almost entirely of big-labor cheerleaders of the project, as well as Democratic and Republican ex-politicians with little grasp of bullet-train engineering, finance, management or construction — had insisted that the train would cost $45 billion.

Yet for the past two years, one independent analyst after another has pilloried that figure, or estimated the true cost as being far higher.

In August, Gov. Jerry Brown set out to inject some honesty into the debate over the cost and business plan for the vast public works project — for which taxpayers are on the hook. He appointed two nonpoliticos, who also are free of longtime insider ties to big labor: rail expert Dan Richard and financial guru/banker Michael Rossi.

Their job was to help the reform-minded rail authority CEO who took over in 2010, Roelof van Ark, fix the spreadsheets and, no less important, repair the veracity of the High-Speed Rail Authority. Van Ark, with 30 years' experience as an engineer and manager for such big transportation companies as Siemens — which built the ICE bullet trains in Germany — crafted a truth-telling business plan with substantial tweaks made by Richard and Rossi, key state legislators tell L.A. Weekly.

Then, on Nov. 1, they revealed the staggering new $98.5 billion cost estimate.

Rail Authority spokesman Lance Simmens says Richard and Rossi "immersed themselves in every aspect of the new business plan and brought a green eye-shade view that created a credible, realistic and transparent perspective to the plan."

But their candor may be too late to save California's misfiring bullet-train project. None of the wealthy investors who were supposed to share the pain with taxpayers has materialized for this struggling "public-private" project, and on Nov. 17, a crucial source of billions of dollars in public funds dried up when the U.S. Senate voted to kill all future federal funding for high-speed rail — including for California's.

USC professor and transportation planner Lisa Schweitzer recalls that in 2008, when then-Gov. Arnold Schwarzenegger, then–Assembly Speaker Fabian Nuñez and their appointees on the rail authority board insisted the cost would be just $34 billion, "the coffee shot out of our noses" at USC.

Schweitzer's graduate class at USC's School of Policy, Planning and Development later completed an independent estimate, coming up with a figure of $90 billion to $105 billion, which closely aligns with the figure the authority released Nov. 1.

She describes the California High-Speed Rail Authority board as playing the ultimate political game with other people's money: "Lowball the cost, lowball it again, then at the last minute they say, 'Here's what it's really going to cost.' " The $98.5 billion figure, Schweitzer says, is "finally ... a good number."

For years, state Sen. Alan Lowenthal, a Democrat from Long Beach, has criticized the authority for acting like a group of cheerleaders when they really needed to be critical and perform due diligence. He's glad to see the realistic cost estimate and a new business plan — both of which Lowenthal has been demanding since 2007, when he was state Senate Transportation Committee chairman.

A similar report he received from the rail authority in 2009 "was totally inadequate," Lowenthal says. "They did not do a good job of doing their job. It was no way to do business. I told them they were crazy."

Now, a crack is forming in the once-solid Democratic political support for the California bullet train, which presents a problem for Jerry Brown, who several days ago staked much of his reputation on getting the bullet train built. In response to the unveiling of the new $98.5 billion cost, Brown declared, "California's high-speed rail project will create hundreds of thousands of jobs, linking California's population centers and avoiding the huge problems of massive airport and highway expansion."

State Assemblyman Richard Gordon is one Democrat who is beginning to break from the pack. He represents Menlo Park, a wealthy, liberal, high-tech enclave near Stanford University, where many residents are furious about the bullet train, which would chop up parts of Palo Alto and other suburban Bay Area communities.

In mid-November, Gordon did a radio interview in which he slammed the cost, as well as what seems to be a plan for a less-than-fast train that will make numerous stops.

Gordon tells the Weekly that Brown could hurt himself in a risky throw of the dice. "In light of the new business plan and cost, the governor may be rethinking his position," he says. "I need answers, and I hope he's looking for some as well."

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