Californians will have to shell out an additional $1.8 billion to complete the 119-mile stretch of tracks for the state’s first bullet train through the Central Valley, bringing the cost to $12.4 billion, according to a report released Wednesday by the state’s High Speed Rail Authority.
The report outlines a “building block approach” to construction, first put forth by Governor Gavin Newsom in his State-of-the-State address. The approach limits the line to an initial operating segment running from Bakersfield to Merced and delays the “bookend” projects to the Bay Area and Los Angeles until further funding can be found. In Merced, the bullet train would connect with Altamont Corridor Express (ACE) and Amtrak trains that can take passengers into the Bay Area, albeit on a much slower-than-anticipated route.
Rather than walk away from the project, however, which has involved nearly a decade’s worth of work and $5 billion already spent on unfinished infrastructure, the authority should focus on using the resources it has on hand to get some portion of the route up and running, Lenny Mendonca, the chairman of the authority’s board of directors, wrote in the report. This approach will boost the Central Valley economy and ultimately lead to connections with the economic powerhouses of Silicon Valley and Los Angeles, CEO Brain Kelley said in a statement Wednesday.
“The (plan) demonstrates a clear path forward of what we can — and will — do in the next few years to make high-speed rail a reality in California,” he said.
The plan, however, falls short of the vision outlined by regional leaders of using the high-speed rail to shuttle workers from homes on cheap land in the Central Valley to high-paying Bay Area jobs, without having to undergo what is now a harrowing, hours-long daily commute through stop-and-go traffic. Efforts to electrify Caltrain will speed that process along, said state Sen. Jim Beall, D-San Jose.
“Connecting affordable housing to job centers like San Jose is key to making high-speed rail work for all Californians,” he said in a statement Wednesday. “In San Jose, I’m focused on the Diridon Station improvement project currently underway and planning for the eventual arrival of high-speed rail to come to our city.”
Without a connection to the Bay Area, it’s unlikely high-speed rail will gain enough riders to cover the cost of operations. And, Californians will need to subsidize operations of high-speed rail in the Central Valley, breaking a long-held promise to voters that the service would be revenue-neutral, Roy Hill, the authority’s deputy Chief Operating Officer, said in an interview.
“It will require a subsidy in the Central Valley,” he said.
Assemblymember Jim Patterson, R-Fresno, called the plan a “shell game” and “absurd,” and described the project as a “multi-million rump railroad.”
“The end result is that it’s deceptive, and it doesn’t tell the truth,” he said. “It merely makes excuses for ongoing failures.”
To get trains moving, however, authority officials expect to spend $1.8 billion more on the 119-mile segment from Bakersfield to Madera than was estimated in 2018, a roughly 17 percent increase from last year and more than double the original $6 billion estimate. Changes to the design of the route, along with settlement negotiations and costs associated with delays, added to the ballooning budget, according to the report. The extension of the Central Valley route, from Madera to Merced along 52 miles of track, will cost another $6 billion.
And the full 800-mile route from San Francisco to Los Angeles line is expected to cost $79.1 billion, an estimate largely unchanged from last year’s projection that includes only the $1.8 billion added to the cost of the Central Valley segment. As the project’s timeline increases, though, costs will rise with inflation, the report cautioned.
In the authority’s first business plan from 2012, the authority estimated it would complete the San Francisco to Los Angeles route by 2028, a time for completion that was pushed out by five years to 2033 in its last report. In the report released Wednesday, that time estimate was taken out, as was the “Valley to Valley” segment that would link the Bay Area to the Central Valley.
Under the terms of the grant agreement, the authority must complete the 119-mile Bakersfield to Madera section by the end of 2022 or risk losing nearly $3.5 billion in federal funds, including having to pay back $2.5 billion it has already spent. The remaining stretch to Merced is not expected to be completed until 2028, according to the report.
In February, the Federal Railroad Administration said it would cancel $929 million in federal grants awarded under the Obama administration. The railroad administration said the beleaguered high-speed rail project had failed to deliver on key milestones in the agreement and the plan Newsom outlined in his address represented a “significant retreat from the state’s initial vision and commitment.” Newsom has since vowed to fight any take-back of funds in court.
On Wednesday, a spokesman for the railroad administration said the agency had yet to make a decision on whether it would continue to fund the project.
Assuming it does, the project still has only one-third of the money it needs to complete the project, and it will exhaust the money it does have on the Bakersfield to Merced segment, leaving Californians — and the Bay Area — without a clear path to building out the remaining route. That funding includes the federal grants, the Prop 1A bond, and 25 percent of annual Cap-and-Trade proceeds through 2030.
It’s unclear, however, how the authority will complete the Bakersfield to Merced segment by 2028 with funding that is not expected to materialize until 2030.