New cost estimate for California high-speed project puts it deeper in the red

(Gary Coronado/Los Angeles Times)

New cost estimate for California high-speed project puts it deeper in the red

California politics

Ralph Vartabedian

March 11, 2023

When Governor Gavin Newsom unveiled his scaled-down blueprint for the California bullet train four years ago. He proposed building a 171-mile launch segment in the Central Valley that would begin operating in 2030 and cost $22.8 billion.

Today, the blueprint is fraying as costs now exceed future funding, an official estimate of future passenger numbers is down 25%, and the schedule to start moving people is slipping. It raises new concerns about the future of the nation’s largest infrastructure project.

New cost figures in an update report from the California High-Speed ​​Rail Authority show that the plan to build the 171-mile first segment has risen to a high of $35 billion, exceeding guaranteed funding by $10 billion .

The cost of that partial system now exceeds the $33 billion estimate for the entire 500-mile system from Los Angeles to San-Francisco when voters approved a bond in 2008.

What’s worse is that the full system cost is set at $128 billion in the update, leaving a total funding gap of over $100 billion.

for politicians to think. The cost estimate for the first 171-mile segment now surpasses the $33 billion estimate for the entire 500-mile system from Los Angeles to San Francisco when voters approved a bond in 2008.

Ethan Elkind, who is in college

watches

Transportation problems in California as director of the climate change program at UC Berkeley’s law school said the mounting problems cloud the future of projects.

It’s in danger, Elkind said. It’s unpredictable. There is no way forward for the entire system from Los Angeles to San Francisco, it is important that they get something done.

The $128 billion price tag does not include cost updates for two separate segments between Palmdale and Anaheim because the railroad authority has historically failed to update costs until environmental assessments are completed.

There may be additional shocks of sticker shock when those charges are added in the future.

It is clear that additional funding will be needed to deliver the… operational Merced-to-Bakersfield passenger transportation system, the report said.

Brian Kelly,

of the railway company

chief executive, said in an interview that represents higher costs that have hit projects across the country

S

a tough challenge.

There has never been an easy time for this project, he said. Nothing has ever been easy here. This project has never had full funding.

Kelly notes that the range of estimates for the Central Valley segment is $35 billion to $28 billion. The project’s price tag has risen since 2008, exceeding all

prior

previous cost classes.

The current battle follows a period when the project received strong support from the Biden

a

Administration and Congress. But the Republican

takeover seizure

of the House in the 2022 election could lead to more difficult times ahead.

Bakersfield born and now

Speaker of the House Kevin McCarthy,

a resident of Bakersfield,

has long called the project, which would serve its own district, a boondoggle.

In no way, shape or form should the federal government allocate another dollar to California’s inept high-speed rail service, McCarthy said in a statement to CalMatters. The California High-Speed ​​Rail Authority has missed numerous timelines and misled the public about the costs, which are exorbitantly higher than originally estimated.

The reliability of the new cost estimates is likely to come under scrutiny among impartial state analysts, including by the state-appointed Peer Review Group.

Bill Ibbs, a retired UC Berkeley civil engineer who is part of the group and has consulted on international high-speed rail projects, said he is concerned about the lack of attention to engineering risk.

They don’t directly address the hardcore technical issues, Ibbs said, particularly the 38 miles of mountain tunnels planned for Southern California alone. What are the major technical challenges ahead and why don’t you talk about them in this report?

The report also indicates that the date for operating the 171-mile system could extend to 2033 from 2030, delaying public benefits and explaining cost pressures.

And perhaps more concerning is a 25% reduction in projected future passenger numbers, due to the reality that the COVID-19 pandemic has fundamentally reduced public transportation use and reduced California’s projected population growth. A major justification for the bullet train from its inception was the expectation that population growth would necessitate improved passenger rail. The report nevertheless claims that of the system

passenger taxes would be comparable to those of comparable performance

Amtrak’s northeast corridor

passenger loads

.

Those factors are beyond the ability of the railroad authority to control, though it has struggled with construction problems of its own in the Central Valley for the past 10 years.

More than 1,000 change orders, whether issued by the railway authority or by contractors, have been approved and are responsible for much of the cost growth. They include big-ticket items such as misjudging the need for massive barriers to prevent freight trains from derailing on nearby tracks and crashing into a high-speed train. About 20 change orders for that item alone cost more than half a billion dollars.

Construction has been delayed due to problems moving utilities such as underground sewage, water and gas lines.

Currently,

About half of the 2,800 projects to move underground utilities have not been completed, according to a separate status report from the railroad board’s finance and audit committee. Two dozen major structures, such as viaducts and bridges, have not even started construction.

But those issues are being resolved, and major disputes over change orders are in the rearview mirror, the report said. Of the 2,300 lots required for the railway, only 92 have yet to be acquired.

Newsom approved his plan for a launch system in 2018, based on a strategy that demonstrating an operational system in the Central Valley would generate public support for building the more expensive thoroughfares through coastal mountains to the Bay Area and Southern California.

That idea preceded significant cost growth that outpaced funding, leading Democrats in the legislature to become increasingly skittish and Republicans calling for a full withdrawal.

It’s on the ventilator now, said Sen. Brian Jones, a San Diego County Republican and Senate Minority Leader. The governor has failed to keep his promises.

At this point, Jones says, the project should be stopped and

,

the existing buildings in the Central Valley will be demolished if they cannot be repurposed.

Democratic leaders have refused or failed to respond to requests for interviews. Newsom’s office did not respond to a request for comment.

Kelly believes there is a reasonable path forward. The report, released March 1, sets a goal for the railroad authority to obtain $8 billion in federal grants under the Bipartisan Infrastructure Law passed by Congress last year.

The whole pool of money for the railway set in the

infrastructure

law is $75 billion, so $8 billion seems like a fair share for California. But the Biden administration and Congress have been much more generous to the Amtrak system in law, allocating about $24 billion to its operations, without setting aside a guaranteed chunk of money for California. In addition, there are other California passenger rail systems that may want some of the money going to the Golden State.

Kelly acknowledges that the $8 billion target is aggressive and rightly so, as California is paying 84% of the cost so far.

If the national government wants to have a nationally cleaner, faster electrified rail system, it must be better than 16%. And so we went to defend that case,”

he said.

I think it’s a fair and sensible question.

said Kelly.

The state will know early next year if it gets the lifeline. Without it, the funding gap will be breathtaking. Before then, the Senate and Assembly will hold hearings in the coming month.

It’s certainly a significant funding gap, said Helen Kerstein, who covers the railroad project at the nonpartisan Legislative Analysts Office. In the absence of very substantial additional federal funds, the state will have to contribute additional funding to get that segment from Merced to Bakersfield completed.

Kerstein noted that the project received no funding boost from the General Fund as the state was left with excess revenue in recent years.

and N

the state is in deficit

other

with the possibility that more will follow. At the same time, there are other priorities.

Kerstein added: It’s going to be tough.

Elkind, the UC Berkeley law professor, said the state will eventually have to go back to voters and ask for another bond issuance if there is any hope of building the full system.

It’s going to be harder to go back to voters and ask for more money, but I think ultimately that’s what’s going to be needed, which is why it’s so important for them to finish this first segment, he said.

It’s incredibly sad that it will take two decades from when voters approved this to get the first essentially 25% of the system up and running, which is also the 25% of the system that serves the fewest people by population . California along the route.

CalMatters.org

is a non-profit, impartial media company that explains California policies and politics.

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