West Coast Blog has this story about the final cost — so far — of the California boondoggle known as the Bullet Train:
Bullet Train From SF to LA Doesn’t Cost $33.6 Billion Anymore… Try $100 Billion!
Ok, so that headline may sound like Dr Evil from the Austin Powers movies. How many of you actually read it in the Dr Evil voice? But even though it wasn’t Dr Evil speaking the headline, it sure feels like he is controlling the budget for high-speed rail project in California.
The high-speed rail project was approved to build a bullet train, very similar to those in Europe and parts of Asia, to connect San Francisco and Los Angeles. It would cut the traveling time between the two cities from 5-6 hours (by car) down to 2 Hours 40 Minutes. When it was passed 3 years ago, the estimated cost was $33.6 Billion broken down as follows:
$15 Billion – Federal Government
$5 Billion – Local Government
$10 Billion – Private Investors
Remainder – California
But in the last 3 years, the California High-Speed Rail authority has had problems raising money from private investors. Surprise? Not only has the project had trouble finding investors, the estimated date of completion of 2020 has been pushed back to 2033. This delay in time has caused the majority of the cost increases and estimated costs are now expected at $100 Billion. FYI: the entire California state budget is only $86 Billion.
Take note the almost instantaneous ballooning effect of the total cost via government meddling, here is the L.A. Times giving the most recent total cost update:
As the price tag for California’s bullet train has soared to nearly $100 billion, a central argument for forging ahead with the controversial project is an even loftier figure: the $171 billion that promoters recently estimated will be needed for new roads and airports if no high-speed rail is built….
….The bullet train is aimed at meeting future transportation needs of the state….
Newsflash! People are leaving California, not coming to it!
Another L.A.Times story says this:
…When the first business plan surfaced, it projected a $34-billion cost. By 2009, the estimate had jumped to $43 billion, in part because the authority included future inflation in the estimated cost of building the system over the next decade.
In August, the authority released two planning documents that signaled even higher costs. The cost of building only the first two segments in the Central Valley had jumped in price by as much as 100%, not including future inflation…
And HotAir points out the death knell for this type of liberal thinking:
CA auditor warns bullet train project financing “increasingly risky”
Few people probably noticed the absence of “high-speed rail” from Barack Obama’s State of the Union speech last night. The issue took a prominent position in SOTU speeches in 2011, when Obama dedicated five paragraphs to pushing it, and in 2010, when Obama promoted the high-speed rail project in Florida that Governor Rick Scott killed. Last night’s mentions: zero.
Perhaps the White House didn’t have a good answer as to why their pet rail project in California has become so expensive and bloated that the state auditor issued a warning hours before the SOTU began about its financing becoming so “increasingly risky” that state lawmakers should consider whether to proceed (via Andrew Malcolm):
In the latest in a series of cautionary reports by outside agencies and groups, the auditor’s report finds that the California High-Speed Rail Authority has made some progress in addressing planning and fiscal concerns but still has important work to do to ensure that the project can be built as promised.
“The program’s overall financial situation has become increasingly risky, in part because the authority has not provided viable funding alternatives in the event its planned funding does not materialize,” the auditor’s report says.
The authority has secured $12.5 billion for the first leg — from Los Angeles to San Francisco — of what is planned to be an 80-mile network, according to the report says. But it notes the projected cost of that phase has risen to between $98.1 billion and $117.6 billion.
The auditor warns that the state has no clear way to raise the $105 billion in funding necessary to complete the project, but that’s just half of the problem:
“The success or failure of the program” depends on obtaining up to $105 billion in additional funding, which has not been identified, the report says. It also finds that cost estimates for the initial phase do not include operating or maintenance outlays, which the auditor estimates could total $97 billion between 2025 and 2060.