The major changes that were announced last week to the highly criticized original plan include the admission that the ultimate cost of the project will more than double to nearly $100 billion, a number that could go much higher if certain scenarios take place. Under the plan, the system will not be complete until 2033, 13 years later than previously forecast.
But this new-found cost realism does not lead to financial viability.
Outside the $10 billion in state bonds and $3.4 billion in federal grants, very little of the remaining funding needed has been identified. The plan is counting on up to $11 billion in private capital that is little more than wishful thinking.
Just a few months ago we said in this space that high-speed rail was in deep trouble due in part to its funding challenges at the federal level, where it faces the almost impossible task of seeking major support from a Republican-controlled Congress that is not eager to pass anything that can be seen as raising the federal deficit.
The new business plan only makes this challenge more formidable. How can Californians responsibly support this gargantuan project when the state is borrowing just to finance day-to-day operations?
In its 230-page revised business plan, the commission did scale back its ridership projections, although we still have a hard time understanding how the trains can possibly carry some 30 million passengers a year — more than 80,000 a day.
And the report abandoned plans for adding a parallel set of tracks on the Peninsula, which means that the high-speed trains would share Caltrain tracks between San Jose and San Francisco as suggested by area legislators.
"The good news is that we finally have a realistic number on the table," said state Sen. Joe Simitian. "The bad news is it's a very scary number."
And Assemblyman Rich Gordon is equally concerned, saying: "California remains in fiscal crisis. We do not have enough revenue to meet our expenses as it. Until we address our structural fiscal problems, I do not see how California can afford additional debt from high-speed rail."
The bottom line is that high-speed rail is inevitably dependent on mostly government financing, and is simply not affordable. There is nothing wrong with the vision of high-speed rail, which could reduce pollution and the need to build or expand roads and airports. But with the economy struggling at the state and national levels for the foreseeable future, legislators must act to end this project, either by not approving the sale of the bonds, or sending the issue back to the voters.