Can Obama's high-speed rail plans survive California sticker shock?
California's high-speed rail authority announced that its project will cost nearly $100 billion – two times higher than original estimates. Other regions supportive of President Obama's high-speed rail plans have started more modestly.
In what transportation experts say could be a cautionary tale for the rest of the country, the estimates for the cost and finish date of California's signature high-speed rail project have been dramatically altered.
The new cost estimate, formally released Tuesday by the California High Speed Rail Authority, is $98.5 billion, more than twice the previous estimate of $43 billion. The finish date is 2034, 14 years later than first predicted.
California voters approved a $10 billion bond in 2008 in support of plans to build a high-speed rail corridor to link northern and southern California, with trains reaching 220 m.p.h. The system would link to other rail lines that fanned out across the state.
Supporters of the project say this new estimate gives the state planning certainty. But critics are aghast. State Sen. Doug LaMalfa (R) announced plans to introduce legislation asking state voters to reconsider the bond measure they already approved.
“The voters were deceived in the original go-around with highly optimistic ridership and cost numbers that have not been borne out,” Senator LaMalfa told The Sacramento Bee, saying the larger figures “should have been in front of voters to begin with, so they would have the truth.”
Officials are rolling out other details of the plan to soften the blow, touting the connections to existing Metrolink rails in large cities, for example. They are also trying to be frank – and more conservative – about ridership estimates that critics say are way too high.
"This plan represents a new day, a new train, a new beginning for the California High Speed Rail Authority and for our system," said Tom Umberg, chairman of the authority board, in a statement.
Some analysts say the turn of events is a welcome bit of honesty, given that massive public-project costs generally balloon beyond expectations.
“The story is both shocking and unsurprising at the same time. It’s shocking because of the sheer size of the price tag,” says Jack Pitney, a political scientist at Claremont McKenna College. “It’s unsurprising because big projects often cost far more than the initial estimates.”
The episode could have an impact on plans for other rail projects nationwide. In February, Vice President Joe Biden announced a plan to put $53 billion in federal funds into a national, high-speed rail network, which could be built in regional sections.
But such projects are often more difficult than they seem at first, and California might have bitten off "way too much," says Steve Schlickman, executive director of Univeristy of Illinois at Chicago’s Urban Transportation Center.
"That is based on my personal project experience,” he says. “They should have taken a more incremental approach, like the Midwest, which is starting with higher speed of 110 m.p.h.”
Mr. Pitney says political opposition is likely to grow, especially in California’s current fiscal climate. “At a time when government at all levels has to cut back, many voters will wonder why California is spending so much on a system that so few of them will ever ride,” he says.
But the bad economy could also be a selling point. California has the second-highest unemployment rate in the nation. Studies show that for every $1 billion spent on infrastructure remediation creates between 18,000 and 34,000 jobs, says Barry LePatner, author of “Too Big to Fail: America’s Failing Infrastructure and the Way Forward."
Others, however, see this as evidence of what happens when government tries to trump the private sector.
"The idea for this was generated out of Washington in an attempt to stimulate the economy," says Peter Zaleski, an economics professor at the Villanova School of Business. "In the free marketplace, producers try to earn a profit by efficiently producing something that customers will value. Rarely are such calculations performed when the decisions are made by government administrators and elected officials."