california bullet train

Politicians At It Again With High Speed Rail!

California politicians are at it again.  They just lowered the cost of the high speed rail system in California from $98 billion to what is going to be anybody’s best guess.  And, they will not have a high speed rail system!

The people are going to be taken for a ride on the slow train out of LA into San Francisco.  It turns out the cost cutting of on the project involves abandoning the concept of high speed in the metro areas.  It involves the adaptive use of existing track, grades, intersections and other rail infrastructure.  This means there is no way there will be a high speed rail network in California.  You may as well leave on a jet plane.

One only has to look to France and England to see how well high speed rail worked between Paris or Brussels into London a decade ago.   The high speed trains may only take an hour or two from the Brussels and Paris to reach the English side of the rail system.  Once they entered into the British rail system at the coast they had to reduce the train speed so that it required another hour or more to make it to London.  How’s that for high speed rail?

California is in the same situation – all of the metro areas will hinder high speed rail succeeding. It takes dedicated rail right of way, great grades, no intersections and a lot of money to implement high speed rail.  It takes more than riders paying their fares to make the system operate.

What we have here is a case of politicians taking the citizens of California for a ride!  Is it California Dreaming, Riders on the Storm, Ghost Riders in the Sky or something else?

Oh. By the Way…When a politician is saving you money, watch out!  It will cost you in the long run.

Hear it Here 1st – California Bullet Train Costs Will Go Higher, Faster

The California Bullet Train project costs are rising from $43 billion to over $98 billion.  And, it’s all because of a decision to stretch out the construction period!  The California High Speed Rail Authority is changing the schedule from a 2020 completion to 2033.  But guess what!  That’s not the news you will hear here first.  The news is:  Even the $98 billion number is too low.  You are hearing it here first.  Mark this date on your calendar.

It will be for several reasons too.

  • First is they are not reliably estimating the segment costs.  They are already reporting two segments are double the cost originally estimated.  There will be more segments with this problem.  Few, if any, segments will be lower cost that estimated, but that is not news.  It’s just how politics is played with funding.
  •  The next area involves cost growth or escalation.  Escalation is the increases in prices over time.  It comes from many factors.  The estimates have just been raised from an expected 2% annual escalation factor to a 3% annual factor.  The increase from 2% to 3% is due to higher anticipated inflation over project life.  The classic definition of inflation is the government printing more dollars than necessary.  But guess what?  The 3% rate is too low by most any historical guidelines.  The government is printing money like there is no tomorrow.  Five percent may be more appropriate but still too low.  Remember the late 1970’s, early 1980’s with inflation running better than 12% annually?

 These two reasons are just a start of why the costs will exceed $98 billion.  What are they using for contingency?  Was it enough?  Probably not!  The proponents, in their search for money, have more to benefit if the costs are estimated artificially low.

Oh, By the Way… The next headline major news on the project may be, “Bullet Train Costs Balloon, Routes Reduced” or “Bullet Train Economically Not Viable – Project Cancelled”