High-Speed Rail: Big Changes Afoot? Afoot? Changes Big Rail: High-Speed
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PAGES 4-5: A SACRAMENTO REGIONAL RAIL STRATEGY Volume 29 Number 1 May 2019 – August 2019 High-Speed Rail: Big Changes Afoot? By David Schonbrunn TRAC Vice President, Policy The Governor’s startlingly candid admission that “Right now, there simply isn’t a path to get from Sacra- mento to San Diego, let alone from San Francisco to LA” has triggered what could become a major reassessment of the State’s commitment to this project. Governor Newsom’s candor was a total break from eight years of uncompromising support by Jerry Brown for a project that still has no realistic long-term funding. The release of the California High- Speed Rail Authority’s (CHSRA) 2019 Project Update Report. and the Trump Administration’s cancellation of a $929 million grant to the project, when added to the Governor’s statement, combine to create a highly dynamic situation. While the State has sued the federal Daniel Schwen, own work 2008.. Creative Commons Attribution/Share 4.0 International government to recoup the funds, no one knows where any of this will end up. HSR system will never be more than a The private sector has wanted to standalone Bakersfield-to-Merced line. invest in passenger rail in California, CHSRA’s new plan calls for HSR but has been blocked by politicians service between Bakersfield and While transportation projects are promoting CHSRA’s project. CHSRA was Merced. This $20 billion plan would judged on their cost/benefit ratio, the cost $15 billion more than the $5 billion new plan completely flunks that test. (continued on Page Two) that has already been spent. Unlike any No one outside of California would normal rail project, that $5 billion has seriously propose to commit $20 not delivered any benefits to the public, billion to a standalone project like this. INSIDE especially not improved passenger That’s roughly the cost of London’s service. Legislative hearings so far new Crossrail subway system, which PAGE 3 suggest a far higher level of skepticism will carry vastly more ridership. That OAST BSERVATIONS than previous years that this project is extraordinary amount of money for a C O worth doing. project with such modest benefits is PAGE 6 ridiculous. For less than 5% of that TRAC’s Observations about the amount, Central Valley rail service could TRAC’S IDEAS FOR Update be made much faster. (See also, past SA C RAMENTO LRT The plan rests on the fundamental issues of California Rail News.) premise that this service will serve as It’s unclear whether the primary PAGE 7 “a building block” for a statewide HSR purpose of the Project Update is to keep system. In fact, CHSRA has never had A $6 BI ll ION PL AN the consultant gravy train in motion, a realistic plan to fund the building of or merely to be able to claim that the FOR AL TAMONT a statewide HSR system. As a result, project is going forward, to avoid having there simply won’t be a statewide PAGE 8 to give back billions of dollars to the system, despite the intense flurry of Trump Administration. What is clear is consultant work to put together plans TEXAS CENTRA L VS . that this is not a project being proposed for one. That means the proposed on its merits. CA L I F ORNIA HSR APPROACHING OR PAST OR APPROACHING Return Service Requested Service Return MEMBERSHIP IF THE DATE IS IS DATE THE IF MEMBERSHIP YOUR NAME AND RENEW YOUR YOUR RENEW AND NAME YOUR Sacramento, CA 95814-3516 CA Sacramento, THE RENEWAL DATE ABOVE ABOVE DATE RENEWAL THE MEMBERS, PLEASE CHECK CHECK PLEASE MEMBERS, 1025 Ninth Street #223 Street Ninth 1025 The Project Update acknowledges San Joaquins operate 5 trains a day to Big HSR Changes? that Bakersfield-Merced HSR service (continued from Page One) the Bay Area via a circuitous route that will not earn its operating costs. That doesn’t go to Silicon Valley. Connecting once offered a funded plan, but rejected violates an explicit provision of the 2008 every HSR train to a train to the Bay it. The French National Railways pro- HSR Bond measure, which promised Area or Sacramento would require the posed to build an HSR line from Los voters that no bond funds could be used expenditure of many more billions, Angeles to San Francisco on a different to build HSR tracks whose operations which have not been included in the route than CHSRA had approved, with would require subsidies. HSR cost estimates. funding from an investment bank. CHSRA rejected the offer and instead Brian Kelly, CEO of CHSRA, stated Ridership for the Valley HSR line launched into construction with the that, “Once [the project’s] done,” is based on Amtrak-level fares. Every State taking on 100% of the risk. By he said, “it will unlock financing to other HSR system in the world charges keeping the French offer secret, CHSRA tunnel beneath Pacheco Pass to reach premium fares. The obvious implication showed that it had priorities other than San Jose’s Diridon Station...” Kelly’s of this assumption is that the ridership getting HSR built and that it did not assertion that a money-losing service was tested using the fares proposed in want those priorities known by the will attract the $14+ billion in private the CHSRA 2018 Business Plan. Those public. investment needed to connect the ridership projections must have been so Central Valley to San Jose defies all dismal that they were unusable. Using TRAC has long been a supporter logic. Amtrak fares for Valley HSR is a tacit of high-speed rail (HSR) as the low- There is no assurance that the priv- admission that traveling at high speeds pollution way to connect the regions is not valued by the Central Valley of our large state. We have objected ate sector would have any interest in investing in California HSR, if this travel market. If the Valley isn’t willing to the design of this HSR project from to pay for HSR, why should the State? its inception, however, because it is Central Valley project were ever com- so distorted by political compromises. pleted. Before spending $15 billion What It All Means on this project, it would be prudent The complete lack of interest from The new plan is mired in the sunk the private sector in investing in this to invite the private sector to indicate what it would be willing to invest in. cost fallacy: “Because $5 billion has project, while private sector entities already been spent, we need to finish thought an HSR system on another CHSRA has been actively promoting the project.” It is foolish to spend a lot route would be profitable, is proof that the concept that HSR is part of the more money to make an initial decision its design is deeply flawed. Without solution to Northern California’s to spend look reasonable, if the project investment from the private sector, housing crisis. The 2018 CHSRA itself isn’t worth that money. It would there is no way a statewide project can Business Plan states that a Fresno-to- be far better to cut California’s losses be built. Federal and State funding can San Jose round trip ticket would cost now, when it is obvious there is no never be enough. $132. (HSR’s primary patrons have upside. Let’s not throw good money always been expected to be business after bad. people.) Even with a monthly discount, these HSR tickets would be far too This is an exciting time for rail expensive for daily commuting. Any advocates to be putting forward their benefit of lower housing costs would be ideas for alternatives to CHSRA’s wiped out by much higher commuting plans. There is a possibility of change costs. TRAC believes HSR’s housing in the air that was not present during benefits to be non-existent. the Brown Administration. TRAC Published June 20, 2019 has extensive plans for improving Published 2-3 times annually by the Now that the HSR project has been California Rail, which were presented to Train Riders Association of California downsized to only the Central Valley, Governor Newsom’s staff. We continue in cooperation with the there is no legitimacy to the claim that to believe that cost-effective plans, tied California Rail Foundation the project will produce meaningful to investment from the private sector, Ronald Jones, TRAC President GHG reductions. As a result, CHSRA are the most feasible way to improve Michael Setty, California Rail News Editor should no longer be eligible for Cap David Schonbrunn, Copy Editor California’s long-distance mobility. Our and Trade money. Without that money, website, calrailnews.org, will soon be Signed articles represent the views of their authors, not necessarily those of the above CHSRA would have to concede it cannot showcasing our plans. organizations. build this project. Dan Walters best summarized 1025 Ninth Street #223 The ridership projections are based CHSRA’s situation: “The bullet train Sacramento, CA 95814-3516 on 19 HSR trains per day, per direction. utterly lacks a rational purpose, has Telephone: 916-557-1667 However, limited infrastructure means been ill-managed from the onset e-mail: [email protected] that only 9 of those trains could connect www.calrailnews.org/ and is a black financial hole. If the to trains to the Bay Area. That makes Trumpies strangle it, they would be California Rail News encourages letters, comments, the proposed project’s ridership project- doing California a big favor.” TRAC and reports on local issues. Please submit your mate- ions impossible to achieve within its rial to California Rail News at the above address.