California bullet train cost rises to $77.3 billion
Last month, the California High-Speed Rail Authority announced that the cost of connecting Los Angeles to San Francisco would increase to $77.3 billion and could increase as high as $98.1 billion, which is an increase of at least $13 billion from estimates two years ago. The rail authority claims that the earliest trains could operate would be in 2029 on a partial system between San Francisco and Bakersfield. This is four years later than the previous projection and the full system is not expected to begin operating until 2033. The new estimates will have to force California’s leadership to increase its political and financial commitments if it wants to see the system completed, but not all elected officials are happy about the news. Assemblyman Jim Frazier (D-Discovery Bay), chairman of the Assembly Transportation Committee, stated,
At first glance, the High Speed Rail project is still over budget and the funding to complete the program hasn’t been identified. We still have no realistic way to pay for the project.
The rail authority was looking at a funding gap of over $40 billion for the full system, but that funding gap is sure to increase further under the new cost estimates. According to rail authority chief executive Brian Kelly, the rail authority is still counting on the Legislature to amend the state’s greenhouse gas auction system so that the system could borrow against future fees through 2050. However, even with that benefit the rail project will still face a financial shortfall that only partnerships with the federal government and private investors could fill in. According to the Los Angeles Times, “the original idea was that the federal government would pay about a third of what was then an estimated $33-billion project, with private investors covering another third.” We will have to wait and see what a state audit, which should be completed later this year, reveals about the issues with the high speed rail project.