The cost overruns to build California’s high-speed rail system have become a terrific parlor game of billion-dollar predictions.
But is the cost truly the biggest problem facing the bullet train?
Dan Walters of CALMatters argues that it might have a bigger, more fundamental problem.
…the latest version [of the HSR Authority business plan] would build the line to San Jose by using the project’s 25 percent share of proceeds from the auction of greenhouse gas emission permits, known as cap-and-trade, to secure a loan from somebody.
California consumers thus would be tapped, through their utility bills, gasoline purchases, etc, to pay for the bullet train, an indirect form of taxation. And to make the projected loan work, the business plan says, cap-and-trade would have to be extended from the current 2030 to 2050 and the state would also have to give the lenders some guarantees for backup payments.
He also notes that HSR will only reduce greenhouse emissions from cars by 1%.
Another key statement was this statistic from Walters:
[the HSR Authority business plan] assumes that once passengers were riding between San Francisco and Bakersfield, the system would generate enough profit from fares to finance extension to Los Angeles. That assumption counts on as many as 31.7 million passengers during the segment’s first full year, 2033, or roughly as many who board planes in the Dallas-Fort Worth Airport each year…
That kind of projection is about as incredulous as the cost projections from the 2008 ballot initiative.
Ultimately, the authority’s spending and revenue projections are still part of California’s great parlor game. What isn’t? As Walters writes, “the bullet train still looks like a solution in search of a problem, rather than a vital transportation system.”