California officials held a groundbreaking ceremony for a controversial high-speed rail project on Tuesday, despite having secured less than 20 percent of its projected cost.
According to NPR, “The milestone comes six years after voters first approved an almost $10 billion bond act to fund the project.” But even with an additional $3.2 billion in federal grants, funding for the project is still about $55 billion short of its $68 billion projected cost.
Moreover, some critics believe that official estimates drastically understate the project’s costs. Republican State Senator Andy Vadek told NPR the project could end up costing Californians $300 billion.
Vadek compares the project to a piñata, saying the wealthy and the politically connected will “grab all the candy,” while “most of us here in the state are going to get whacked by the stick.” (RELATED: All Aboard California’s High-Speed Train to Nowhere)
Even Democratic Gov. Jerry Brown, who has made the project a top priority for his fourth and final term, conceded during the groundbreaking that he has “some doubts about this project,” particularly with regard to the funding shortfall, though he hastened to tell the audience, “Don’t worry about it. We’re going to get [the money].”
In an op-ed for The Atlantic on Tuesday, James Fallows contends that current cost projections are overly pessimistic, noting that, “There is an established track record of overestimating the problems of big infrastructure projects, and shortsightedly under-envisioning their benefits.”
Among the projects “that seemed impractical, quixotic, ruinously expensive, or not worth the bother when proposed,” he says, are the Erie Canal, the Transcontinental Railroad, the Panama Canal and the Interstate Highway System—all of which are now hailed as triumphs. (RELATED: Infrastructure Spending: Are Buses the Answer?)
Fallows acknowledges that each of those projects experienced difficulties, but claims that, “the record of big ventures of this sort suggests that we are better at worrying about the problems and noting imperfections than we are at envisioning long-term rewards.”
Katrina Trinko, on the other hand, offers a more pessimistic appraisal in an op-ed for The Daily Signal, asserting that, “Building a costly high-speed rail train with few obvious consumers is a mistake—and one that will likely cost taxpayers dearly.”
Plans call for private investment to provide at least one-third of construction funding, “but so far, there have been no takers,” which Trinko says is not surprising, because “it’s hard to see how this project makes sense.” (RELATED: California to Use Cap and Trade to Pay for High-Speed Rail)
For one thing, $68 billion only covers the cost of construction, and “it’s possible that the high-speed rail train, rather than making a profit or breaking even, will lose even more money when operating” if consumers deem driving or flying more attractive travel options.
According to a 2013 Reason Foundation study, high-speed trains will likely take between 4 and 5 hours to travel the route—barely less than the 6 hours it takes to drive between the two cities, and considerably longer than the 1 hour and 15 minute flight time.
“In other words,” Trinko explains, high-speed rail “combines the longer time of driving with the lack of convenience of flying (that is, arriving without a car).”
Yet even if such drawbacks do not significantly diminish demand and the system somehow manages to attain European ridership levels, the Reason study concludes that, “it would hit just 7.6 million rides a year,” which would be at least 65 percent below current projections, forcing the state to spend $124 million to $373 million a year on operating subsidies.
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