Tom Warne Report, 4 November 2011
SACRAMENTO, Calif. – A new business plan released by California’s High Speed Rail Authority estimates the nation’s most ambitious state rail project could cost $98.5 billion over a 20-year period, accounting for inflation. The new plan also says the system will not require public operating subsidies and will be profitable even with the lowest ridership estimates for the route between Anaheim and San Francisco.
With a scheduled completion of 2033, the plans assume 20 percent of the total funding will come from private investors, while the remainder will largely come from additional borrowing. The initial 2008 estimates to build the project when voters approved bond funding was $43 billion. With inflation, that amounts to $65.4 billion in 2010 dollars.
Critics worry that the authority’s continuing plan to begin construction on the Central Valley portion of the route – the least populated segment – could result in funding running out before the full system is finished. The plan likely retains the most controversial part segment because $3.5 billion in federal funding in contingent upon construction of the Central Valley portion beginning by October 2012. The new business plan states that the system will be constructed so that sections can run independently and be profitable, even if no additional tracks are completed.