Those charged with building California’s north-south bullet train system have been more or less making it up as they go along.
Preliminary construction is underway on a 118-mile stretch of track in the San Joaquin Valley, but what, if anything, happens after that section – from Madera to a field near Shafter – is finished has been, to put it charitably, uncertain.
For years, the California High-Speed Rail Authority has said it wouldn’t immediately extend the San Joaquin Valley section, but rather skip to connecting Palmdale with Burbank in Southern California.
Why? Apparently, it believed that Palmdale-Burbank could attract enough commuters to actually generate income. However, it drew fire from poor communities along the route.
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In February, as a legal challenge to the project’s viability was pending before a Sacramento judge, project managers suddenly switched course. Citing the high costs of the Southern California segment, they issued a new “business plan” that proposed, instead, to next link Madera with San Francisco through San Jose.
A few days later, Judge Michael Kenny rejected the challenge, saying, in essence, that the project had not gotten to the point that its legality could be judged.
He referred to it as “an ongoing, dynamic, changing project,” echoing an earlier appellate court declaration that “because there is no final funding plan and the design of the project remains in flux … we simply cannot determine whether the project will comply with the specific requirements of the (2008) bond act.”
The CHSRA’s abrupt change in its business plan underscores the judges’ characterization of the project as an ever-moving target, as does an even more recent change in the Southern California route.
The Legislative Analyst’s Office makes similar conclusions in an analysis of the new business plan that was issued Thursday.
Due to its ever-evolving design and uncertainty over its financing, the LAO report says, it’s impossible to say whether the project is proceeding well.
For instance, the latest business plan assumes that the project will receive a big hunk of the cap-and-trade fees that the Air Resources Board is collecting on carbon dioxide emissions for decades to come and can “securitize” the revenue, presumably either through bonds or a federal loan, to obtain enough money to build the Northern California segment.
But the authority to impose the fees runs out in four years, as the LAO notes, and would have to be more or less permanently renewed to become a reliable source of revenue to service the envisioned loan.
The LAO doesn’t mention two other factors – a pending lawsuit filed by business groups contending that the fees are a tax that would have to be approved by the Legislature on a two-thirds vote and a pending ballot measure that would require revenue-based bonds to receive approval in a statewide election.
The future availability of cap-and-trade fees is just one of “several uncertainties.” The biggest is that the CHSRA hasn’t yet said how the entire system construction, now pegged at $64 billion, would be financed.