Ninety-eight point five billions dollars. That’s the new cost of California’s high-speed rail line from Los Angeles to San Francisco, according to a business plan released yesterday by the California High-Speed Rail Authority.
At least, that’s the cost reported (a half day in advance of the plan’s release) by the Los Angeles Times. The reason why the cost has more than doubled from previous estimates is that the Authority is now proposing to not finish the line until 2033 (vs. 2019 in the previous plan–see p. 52), and the added years of inflation make the cost higher in “year-of-expenditure” (YOE) dollars. When adjusted for inflation to today’s dollars, the cost is “only” $65 billion.
The media doesn’t seem to get the distinction between YOE and inflation-adjusted dollars. The same LA Times article notes that the previous business plan estimated a cost of $33 billion in 2008, which mysteriously went up in 2009 to $45 billion–in fact, the $33 billion was inflation-adjusted dollars while the $45 billion was YOE dollars.
The bad news for rail advocates is that the media, which happily printed the lower, inflation-adjusted numbers before the 2008 election, is now highlighting the higher YOE numbers, making appear costs have tripled from $33 billion to $98.5 billion in just three years, when in fact they “only” doubled.
(Actually, the original cost estimate, in 1996, was a little more than $10 billion, which is about $15 billion in today’s dollars, so costs have more than quadrupled since then. Even with the low 1996 estimate, researchers at the University of California calculated that “high-speed rail would be California’s most expensive mode of intercity transportation”–see pp.21-25.)
Other media reports are playing up the path of destruction the rail line will take through cities and opposition to the rail line from the Union Pacific Railroad and “farming giant J. G. Boswell.” “All Aboard the Train to Bankruptcyville,” read signs in California’s Central Valley. All these things make clear that rail advocates have lost the public-relations battle: If it were on the ballot today, high-speed rail would lose by a much larger margin than it won by in 2008.
Since it isn’t on the ballot, the question is what opponents can do about it. “Scrapping the railroad would all but send $650 million down the drain, as the rail authority has spent that much planning the project since 1998,” warns the San Jose Mercury-News. This is an idiotic argument, of course; more persuasive to some elected officials is the fact that giving up on the project would mean returning $2.2 billion to the federal government: no politician wants to lose face by giving up that kind of money. Maybe opponents should lobby Congress to allow California to keep the money if it spends it on more worthwhile transportation projects that won’t require further federal infusions and bailouts.
The scary thing is that, unless the legislature decides to halt the project, the Authority is almost certain to begin construction next year of a high-speed rail line to nowhere. It has less than $9 billion in hand, which might be enough to build (if there are no more cost overruns) from Corcoran to Borden–i.e., from the prison town where Charlie Manson lives to a ghost town. As the Mercury says, building this line will “provide a 45-minute shortcut for the 3,000 [daily] riders on Amtrak’s San Joaquin line” (and that optimistically assumes Amtrak will have trains that can operate both at conventional speeds and high speeds).
From out in right field, former General Motors executive Bob Lutz suggests that the feds raise gas taxes to “pay for upgrades of the nation’s aging rail system.” Apparently, Lutz, whose company was bailed out by the feds, hasn’t heard the news that America’s railroads are healthier than ever been if you don’t count that obsolete portion of them dedicated to passenger trains.
The real news in the Authority’s new business plan is the projected 14-year delay in completion. That means that a whole lot more people who voted for the project in 2008 won’t live to see it completed.
More relevant, perhaps, it also means that any projections of future needs or benefits are just that much more uncertain. The big argument for the rail line is that it will save energy, but the Authority’s 2005 environmental impact report erroneously assumed that cars in the future would be no more energy efficient than they are today. In fact, if auto manufacturers meet Obama’s fuel-economy standards, cars in 2033 will use only about half as much energy, per passenger mile, as cars today, which is a lot more than Amtrak uses. Airplanes are also expected to become far more energy-efficient, so the case for high-speed rail comes down to little more than pork barrel.