High-speed rail plan flawed, says Legislature's financial analyst

There is a major flaw in the business plan for the $42.6-billion state high-speed rail network that would run from San Diego to San Francisco, according to the legislature’s nonpartisan fiscal watchdog.
 
Among the concerns expressed in a new report by the Legislative Analyst’s Office is that the state High-Speed Rail Authority failed to adequately consider what happens if few people ride the new trains, opening a potentially huge funding gap. Eric Thronson, a fiscal and policy analyst for the office, called a risk assessment in the business plan “incomplete and inappropriate for a project of this magnitude.’’
 
Thronson warned that there is no backup plan to keep the rail system solvent if it fails to draw 41 million people yearly. A bond measure approved by voters to help pay for the train network prohibits public funds from being spent on operating costs.

Thronson submitted his report at a hearing of the Assembly Transportation Committee. Assemblyman Roger Niello (R-Fair Oaks) said he likes it when people make bold proposals, like the train system, but added, "So did Don Quixote. I have huge concerns about this project.’’

Jeff Barker, a spokesman for the state authority proposing the system, said all risk would be addressed in the future, when the authority enters into contracts with private groups spelling out how much they would invest in building the project and the extent to which they would be on the hook financially if ridership falls short of expectations.

-- Patrick McGreevy in Sacramento

Comments

[Lornaj]

When I get a big ticket time figure out everything before hand. It is the tax payer's money, and it is not important to everything first. Jeff Barker said all risk would be addressed in the future. That is one of reasons why we are in the mess we are.

[Roadblock]

"No one would ride it?!" WE ARE DIEING TO RIDE IT!!

[bob]

Mr. McGreevy, do you have a link to the "new report" from the Legislative Analyst's Office? The last one I can find devoted to HSR was from May of last year. Maybe it's contained in the update on Federal stimulus spending from November?
I think we'd like to read the report that you speak of. Thanks.

[Dana Gabbard]

Bob, I have sent a query to LAO asking it post the analysis on their website.

Dana Gabbard
Executive Secretary
Southern California Transit Advocates

[bob]

Dana, you are fantastic.

[Linda Jeffery Sailors]

I find it interesting that the High Speed Rail people feel that they can build the project for $42.6 billion all the way up the state when the cost of extending BART for just 7 miles is $2-$4 billion. The cost per mile for basically the same type of system doesn't look right.

[Elizabeth]

Here is a link to a scanned in copy of the report

http://www.scribd.com/doc/25106741/LAO-Jan-2009-Review

[Michael]

Do we expect freeways or other infrastructure to be "solvent"? No? So why is there a double standard for public transportation?

[John Gault]

That amounts to over 112,000 passengers every day. California Dreaming, again.

[bullsballs]

So tax gasoline so it is $15.00/L and pay for the operation that way!
They stop driving, and ride public transport. Ya, right!
I love public works!

[Teaser38]

Its too bad that with the money we are spending in Iraq and Afghanistan, you could build a system in each of the 50 states and dramatically reduce our dependence on oil.

[Jay Tulock]

Michael you are correct. It is not right. They could not build a grade separated bicycle path on the proposed route for $42 billion. The cost per mile would be cheaper than BART in rural areas, but through urban areas the cost would be similar, higher in some cases due to the need to have nearly arrow straight track for long stretches to maintain speed enough to meet legislatively mandated running time.

[Dana Gabbard]

The report has been posted by LAO:
http://lao.ca.gov/laoapp/PubDetails.aspx?id=2159

[SLEZE]

41,000,000 riders yearly? At 112,000 riders per day, that would be a LOT of trains running per day. Is it some sort of conveyor belt from San Diego to San Fran?

[RealityCheck]

Just to keep things in perspective, Amtrak moves around 29 million people a year. So this single line needs to move about 1.4 times the number of passengers that are currently being served by our national passenger rail system.

[mrlewish]

I don't understand ... It this this were a money maker wouldn't private businesses be clamoring to build and operate it for the profit?

[Mr. Darb]

Of course Niello has concerns about the project. His family owns car dealerships in Sacramento.