California’s high-speed rail project,
initiated by a $9.95 billion bond issuance on Nov 4, 2008, has just switched to
another track. Originally scheduled for completion
by 2019, the 400-mile system would convey passengers from Los Angeles to San
Francisco in 2 hours and 40 minutes. The
most recent plan by the High-Speed Rail Authority (HSR) proposes the first
segment be built between San Jose and the city of Shafter, population 17,000,
18 miles northwest of Bakersfield, with completion by 2025.
As for cost, HSR’s estimate for the entire
project is $64 billion. Actual committed
funds to date are the original $9.95 billion bond issue, $3.5 billion from a
federal stimulus plan and $500 million per year from state carbon cap-and-trade
revenue. The project is tens of billions
of dollars short, with no prospects for additional monies. Detractors of the rail plan contend the cost
estimate is unrealistically low, will never attract the number of passengers
predicted, and that if ever completed will function economically so to “eat
future generations alive”
Despite the many objections, and the numerous
studies which reveal fundamental defects in virtually aspect of the project, the
bullet train is actually proceeding exactly as its sponsors anticipated. Over the past seven years, untold sums of
money have been paid to favored parties for planning, design, studies,
environmental reports and the myriad of other boondoggles inherent when
government funds flow.
It’s been clear from the beginning that
California high-speed rail could never be economically feasible, and all of its
supporters, from Governor Brown on down, have known this from the onset. However, its promotion will not end because of
the extensive criticism it’s receiving from current Senate Transportation
Committee hearings. Neither will it be
terminated for ominous predictions of disaster nor for any other setback it may
experience. As long as there are funds
in the till to be passed around to politically connected contractors and
construction unions, the efforts will continue.
Only when all the money is gone will the project end.
A final word: Government programs
historically operate under-budgeted, not as planned, and rarely completed on
time. Welcome to the world of reality.
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If you enjoy this weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly Financial Newsletter, as well as my new book, The Road to Prosperity
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