The project's only hope is a new business plan that convincingly offers a realistic assessment of the number of riders such a train service would attract, as well as how to attract private investment to replace the federal funds that now appear all but gone in the wake of the nation's economic problems and divisive politics.
In just the last few weeks the California High-Speed Rail Authority has been hit with a series of setbacks that raise new doubts about its ability to manage what would be the largest construction project in the state's history. To have any hope of moving this project forward, it is imperative that the federal government and private industry commit to spend billions of dollars beyond the nearly $10 billion that voters approved in Prop. 1A.
But the likelihood of that happening is withering away as the economy remains stagnant and Congress appears headed toward massive cuts in federal spending. At the state level, Sen. Joe Simitian and other legislators have publicly questioned the authority's business plan as well. These and other recent developments have all put cast the death knell on this project. Consider the following:
• In a study just made public earlier this week, a highly-respected peer-review group of professors and transportation experts that report to rail authority CEO Roelof Van Ark, said the authority has been using a flawed forecasting model to predict the number of passengers that will use the high-speed trains. The report largely confirms a previous criticism from a UC Berkeley group issued last year.
• The agency's public relations firm, Ogilivy Public Relations Worldwide, resigned about a month ago after fulfilling less than two years on a four and a half-year, $9 million contract. The firm was pummeled by criticism from Peninsula residents, including members of Palo Alto-based Californians Advocating for Responsible Rail Design, when attempting to defend the rail authority board that often antagonized opponents, rather than hear their concerns.
• Another public relations faux pas was the unexpected departure of Jeffrey Barker, the rail authority's deputy director in charge of communication, who failed to provide a timely response to a public information request from CARRD that dragged on for months. The group was seeking release of the critical peer-review report, and was successful only after filing a chronology of its request with the authority last week. The report was released the following day, the same day that Barker resigned, saying he is going "to pursue other endeavors."
• On the economic front, the Republican takeover of the House of Representatives, including the budgeting process, has left little doubt that further federal support for high-speed rail will be drastically cut or eliminated altogether. None of the $917 billion in cuts promised in the debt-ceiling legislation have been identified, but whether the House would vote to spend more than a fraction of that amount on a high-speed rail project appears to be unlikely.
By any yardstick, the high-speed rail project is simply far too financially ambitious for the state to undertake at this time, when basic services have been cut to the bone and additional cuts could be on the way as a result of more federal belt-tightening. The idea of paying debt-service on nearly $10 billion in bonds makes no sense in this fiscal environment.
High-speed rail supporters have enormous obstacles to overcome in order to get this project back on track. They need a convincing business plan, a new management team, and most importantly, reliable funding sources that don't commit the taxpayers to unaffordable subsidies of construction and operation.
HSR is looking more and more like a pipe-dream. It's time for the legislature to take the initiative and either provide the leadership to unwind this project, presumably through passage of another state ballot measure that counteracts the requirements of Prop. 1A, or by finding and embracing a new financing model.
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