California High-Speed Rail Update

Finishing the high-speed rail line from San Francisco to Los Angeles is now expected to cost $77.3 billion, says the California High-Speed Rail Authority’s latest cost estimate. This is a big jump from the 2016 estimate of $64.3 billion and an even bigger jump from the $25 billion estimated in 2000, which was the only one available when voters approved the project in 2008. Completion has also been pushed back from 2020 in the 2000 plan to 2029 in the 2016 plan to 2033 in the latest plan.

While the cost increase has gotten a lot of media attention, less noticed is the fact that this $77.3-billion plan is for trains that will go at “speeds exceeding 200 miles per hour” and “typically” take “under three hours” to go from Los Angeles to San Francisco. The 2000 plan called for trains going 220 miles per hour and taking two-and-a-half hours from LA to San Francisco.

Of course, 220 “exceeds” 200 and two-and-a-half hours is “under” three hours, but the softening of the language makes it clear that the authority doesn’t expect to meet the original 2000 targets. This is partly because of a 2013 law effectively limiting speeds in Santa Clara and San Mateo counties. A further quibble is that the “under three hours” estimate is for non-stop trains, and most trains “typically” won’t go non-stop.

To be fair, the authority’s estimates have shifted over the years from estimates adjusted for inflation to “year-of-expenditure” estimates. In the latter case, every delay to the project is going to cause estimates to rise. But even in constant-dollar estimates, the costs have nearly doubled.

The 2000 plan’s estimate of $25 billion was in 1999 dollars, which equals about $35.4 billion in 2017 dollars. The most recent plan’s estimate of $77.3 billion is in year-of-expenditure dollars, which equals about $67.5 billion in 2017 dollars. That’s a 91 percent increase in constant dollars.

Today’s estimate would be even more for a full 220-mph, 2-1/2-hour line that was promised in 2008. The last time the authority projected a cost of that line was 2012, when it was estimated to cost $74.5 billion in 2010 dollars ($83.5 billion in 2017 dollars). So the cost overrun for the as-promised-but-no-longer-planned system is at least 135 percent.

Although the authority calls last week’s document a “business plan,” it is as uncertain as ever about where all this money will come from. Governor Jerry Brown was hoping to finish the project with cap-and-trade money, but the state received less than $665 million in cap-and-trade funds in 2017, of which 25 percent was dedicated to the rail project. At this rate, unless the authority finds another pot of gold somewhere, it will take nearly 400 years to complete construction.

Even if construction is ever completed, the authority’s problems are not over. The plan estimates 18 million to 32 million riders in the opening year of the full, Los Angeles-to-San Francisco line, rising to 32 to 55 million trips by 2040. Based on this ridership, the authority estimates that fares will cover operating costs. But Amtrak only carries 12 million trips in the Boston-to-Washington corridor, which has more people and a better central anchor (New York vs. Fresno), so even California’s low numbers seem optimistic.

Even if it could cover operating costs, that won’t be enough for long, because rolling stock and fixed infrastructure soon wears out, as Boston, Chicago, New York, San Francisco, and Washington transit riders know all too well. The plan includes a “life-cycle” analysis that estimates taxpayers will have to start injecting about $500 million a year (in today’s dollars) after around 2060 to keep the system moving.

Thirteen years late, 91 percent cost overrun, broken promises about speeds, and some people still think this is a good idea. One who does not is Quentin Kopp, who is known as the “father of California high-speed rail.” As a state senator, Kopp introduced the original legislation creating the rail authority. As the first chair of the authority, he led the campaign to pass the 2008 ballot measure that allowed the state to sell $9 billion worth of bonds to fund the project.

Yet now he says that the project’s slower speeds means that it will fail to collect enough fares to cover operating costs, which he had promised it would do in 2008. As such, he now “regrets” supporting the program.

In 2008, it might have been easy to believe that $9 billion was a good start on a $25 billion project, since the federal government might pick up another $9 billion and the rest could come from a variety of sources including private operators eager to profit from operating the line. But with the cost rising to $77-billion-plus for a project that won’t keep its original promises, with little prospect for more federal funding and no prospect for private investors, it seems likely that Kopp’s baby will be stillborn.


6 thoughts on “California High-Speed Rail Update

  1. JOHN1000

    Kopp deserves a profiles in courage award for being willing to speak the truth once it became evident that the plan just won’t work.

    A lot of good things can be done with the $80 ++++++billion they will save.

  2. metrosucks

    “you hate rail, cause it’s rail”

    When the highwayman says trains operate on a politically tilted deck, does he mean the floor in his basement isn’t level?

  3. prk166

    I’m pretty sure this Cali HSR stuff is some sort of brilliant conspiracy by some folks in Alaska. They’re tired of us invoking their bridge to nowhere. And they’ve gotten the Californians to voluntarily build an HSR line to nowhere so that we’ll stop invoking their silly pork project for this beyond silly Cali pork.

  4. prk166

    You guys want cake, but you’re against the flour mill, that mills the flour for the cake :$

    Opposing the onerous sugar tariffs that the US has long inflicted on it’s citizens does not make one be anti-cake, it’s quite the opposite. It’s pro-cake.

    Opposing California’s pissing away of what will be, by the time loans are paid over, more than 1/3 of a trillion dollars doesn’t make one against people; it makes people pro-people. The problem is that California has a thousand other things more important that getting some upper middle class folks to live in Fresno while working in the Bay. California is, per capita, the most impoverished state in the union. Google “California homeless camps” to better understand one of the many pressing issues that is being neglected. It’s beyond shameful; it’s sinful.

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