The latest business plan for California’s high-speed rail system confirms a proposed change in direction – rumored for several weeks – that would have the first passenger-carrying trains head to the Silicon Valley when operations commence in the mid-2020s.
The California High-Speed Rail Authority’s draft 2016 business plan, released Thursday evening, calls for the development of an operating route for the statewide bullet-train system from Kern County north through the San Joaquin Valley and then west to San Jose. It’s a major strategic pivot for the rail agency, which in its 2012 and 2014 versions of the business plan had proposed a route from Merced southward through the Valley to Bakersfield, then southeast to Palmdale and on to the San Fernando Valley and Los Angeles.
The cost of development, as well as the time needed for construction, were key factors in the decision to head north before heading south, said Jeff Morales, the rail authority’s CEO.
“The decision to go north isn’t about engineering,” Morales said of the challenges of crossing mountain ranges between Bakersfield and Burbank. “The southern segment is more costly, it’s longer, and tunnels just cost more.”
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In its 2014 business plan, the authority estimated that it would cost $31 billion to design and build an operational line between Merced and the San Fernando Valley by 2022. The plan unveiled Thursday carries an anticipated price tag of about $20 billion to reach from north of Bakersfield to downtown San Jose by 2025.
“The math is pretty clear,” rail authority board chairman Dan Richard said Thursday afternoon. “It’s longer and more expensive to get to L.A.”
$6 billionEstimated cost of initial Madera-Bakersfield high-speed rail construction segment
$19.8 billionEstimated cost of Kern County-San Jose ‘Valley to Valley’ high-speed rail connection
$64.1 billionEstimated cost of Phase 1 San Francisco-Los Angeles-Anaheim high-speed rail line
The rail authority has about $6 billion for construction of about 120 miles through the San Joaquin Valley. That includes about $3 billion in federal transportation and stimulus funds, plus another $3 billion from Proposition 1A, a $9.9 billion high-speed rail bond measure approved by California voters in 2008.
That leaves a gap of about $14 billion to get from the Valley over Pacheco Pass to Gilroy and San Jose. The rail agency anticipates using another $4.1 billion from Proposition 1A, plus about $10 billion from cap-and-trade money paid by companies to the state’s greenhouse gas-reduction program to buy air pollution credits, Morales said. About half of the cap-and-trade money would be spent directly on capital construction, while the other half would be used to leverage financing for construction.
Richard described the draft plan, which will go through a 60-day period of public review and comment before it is formally approved by the rail authority’s board and sent to the Legislature by May 1, as a turning point for the agency.
We now know with the available resources we have … those funds are sufficient to build and open and operate the first real high-speed rail leg in California.
Dan Richard, California High-Speed Rail Authority board chairman
“This marks a transition from what has been primarily planning and initial construction to being able to tell the Legislature and the people that we now know with the available resources we have … those funds are sufficient to build and open and operate the first real high-speed rail leg in California,” Richard said, “and to do so completely in compliance with the significant standards of Prop. 1A.”
Those requirements include a system capable of running electric trains at a sustained speed of 220 mph, ultimately designed to make a nonstop trip between San Francisco and Los Angeles in 2 hours, 40 minutes, and able to at least break even and run without any operating subsidy. “All of that will be achieved in this plan,” Richard said.
Construction work under the first of four contracts in the San Joaquin Valley began last summer in the Fresno-Madera area. Construction in Fresno is expected to be completed in 2018 or 2019. In the meantime, the rail agency said it intends to finalize its necessary environmental clearances for the rest of the statewide rail system between Los Angeles and San Francisco by the end of 2017. “We’ll be in position to move into final design and construction almost literally the next day, in early 2018, on the connection to San Jose,” Morales said.
A San Joaquin Valley-Silicon Valley section would span about 250 miles from the southernmost end of construction north of Bakersfield to San Jose. “Today it takes three to four hours to drive from Fresno to the Silicon Valley,” Morales said. “We’re talking about a rail connection of 45 minutes or so, and that’s a game changer for both economies, opening opportunities for people in the Central Valley and helping the Bay Area with its housing crisis.”
Fresno Mayor Ashley Swearengin has long hailed the prospect of high-speed rail connections to California’s major metropolitan and economic centers as crucial for Fresno and the Valley. “We think there are tremendous opportunities for Fresno entrepreneurs and our business community that will come as we connect our region to the Silicon Valley with fast and affordable transportation,” she said Thursday.
Richard said the rail authority hopes to seek an additional $2.9 billion from the federal government to extend construction to a station site in Bakersfield and further upgrade service between San Jose and San Francisco. Doing so, he said, would close gaps and “generate $4.7 billion in additional revenue on the line.”
The Republican-controlled Congress, led by Valley representatives including Kevin McCarthy of Bakersfield, David Valadao of Hanford and Jeff Denham of Turlock, has been steadfast in recent years in refusing to allocate any more federal funds for high-speed rail in California. “We understand the realities in Washington, but we think we’re going to make a good case,” Richard said. “If they don’t support it, we will build what we can build, and then we’ll operate it and be beneficial. But this would be more beneficial.”
There are fears in Southern California, however, that the shift in strategy to begin the initial passenger operations to the Bay Area instead of the San Fernando Valley will be to the detriment of the Southland.
“I am concerned by the High-Speed Rail Authority’s change to starting construction in Northern California,” Assembly Speaker-elect Anthony Rendon, D-Lakewood, said in a written statement. “This project is meant to connect the north and the south. Neglecting the south would be unacceptable.”
Richard and Morales sought to allay concerns from Southern California leaders. Even as construction continues in the San Joaquin Valley and extends toward San Jose, Richard said, “we would be making concurrent investments in other critical parts of the state, particularly in the Burbank-Los Angeles-Anaheim corridor” to prepare for the eventual operation of high-speed trains. Those improvements, amounting to about $4 billion over the coming few years, would include upgraded tracks and new street over- and underpasses to reduce the dangers from at-grade street crossings in areas that serve Los Angeles Metrolink commuter trains, freight railroads and the future high-speed rail route.
One apparent factor in the rail authority’s strategic decision is the challenge – both in cost and complexity – of spanning the Tehachapi and San Gabriel mountain ranges to close the passenger-rail gap between Bakersfield and the San Fernando Valley, said Rod Diridon, a former chairman of the rail authority board and director emeritus of the Mineta Transportation Institute at San Jose State University. Passengers riding Amtrak’s San Joaquin passenger trains through the Valley now stop at Bakersfield and transfer to buses to continue on to Union Station in Los Angeles.
“The primary advantage is cost, and that’s nothing that anybody can control,” Diridon said Thursday. “The cost of getting from Fresno to the Silicon Valley through Pacheco Pass is much less than going from Bakersfield over the Tehachapis to Los Angeles. There is much more difficult terrain going through the Tehachapis and the canyon country south of Palmdale.”
Richard and Morales added that proving ridership and revenue on a Bakersfield-San Jose stretch of the system will also be the nudge that private-sector industry interests will need to invest or provide financing to help pay for the remaining portion of the route.
The overall cost of the full Phase 1 San Francisco-Los Angeles system, forecast to be completed in 2028, is also lower than the estimate from two years ago. The 2014 business plan projected a cost of $67.6 billion. But Richard said that based on bids for the San Joaquin Valley construction contracts coming in below engineers’ estimates, as well as new ideas to reduce development costs, the price tag has been revised downward to about $62.1 billion in the draft 2016 plan. Of that $5.5 billion in savings, the agency plans to use $2 billion to make additional upgrades, including additional tracks in the Burbank-Anaheim stretch to improve service, resulting in a net San Francisco-Anaheim estimate of $64.1 billion.
Republican skeptics did not hesitate to criticize the new plan.
“No surprise here,” said state Sen. Andy Vidak, R-Hanford. “The system design is fatally flawed, the alleged private funding is nonexistent, the waste and cost escalations are rampant. … Hopefully the next governor will see this project for the albatross it is and join the rest of us in running the High-Speed Rail Authority out of town on a rail.”
The decision to switch construction to the Bay Area amounts to nothing more than kicking the can down the alley. The Tehachapi Mountains won’t disappear because the authority decided to change plans.
George Runner, State Board of Equalization vice chairman
George Runner, a Republican from Lancaster and vice chairman of the state Board of Equalization, described the new plan as an act of desperation by the rail authority.
The authority “wants to lay as much track as possible so that it becomes more difficult to stop the project,” said Runner, who is backing a pair of initiative efforts for voters to take bond funds away from the rail agency. “The decision to switch construction to the Bay Area amounts to nothing more than kicking the can down the alley. The Tehachapi Mountains won’t disappear because the authority decided to change plans.”
In the Bay Area, Silicon Valley Leadership Group executive director Carl Guardino was ecstatic about the new rail plan. “What excites us most is that this is a convergence of commute options all into downtown San Jose,” said Guardino, who has also been a member of the California Transportation Commission since 2007.
“With high-speed rail operating by 2025, we’ll see 220-mph trains that will shrink the globe between Fresno and San Jose to about 60 minutes,” he added. “You can’t get from one end of San Jose to the other in an hour (during peak traffic times), but you’ll be able to go between Fresno and San Jose in that time.”
Downtown San Jose’s main transportation station is a hub for the Caltrain commuter trains that run on the San Francisco Peninsula between Gilroy and San Francisco, but also for a future 2025 extension of the BART light-rail system, Amtrak trains from Sacramento and ACE commuter trains from Stockton, in addition to the future high-speed trains. “We’re going to have three rapid-rail systems all converging with platform-to-platform transfers,” Guardino said. “With train service every 10 to 15 minutes, it makes trains not only time-competitive with a car on all three systems, but with a frequency that business travelers can trust.”
That speed and convenience, he predicted, would be attractive enough to get people out of their cars and onto trains in sufficient numbers to make the high-speed rail operation profitable.