Federal report on California's high-speed rail raises more funding concerns 

With California’s high-speed rail project still expecting to receive tens of billions of dollars in federal funding, a new report from Washington, D.C., highlighted concerns about the plan’s financial assumptions.

The U.S. Government Accountability Office issued a detailed report on the $68 billion undertaking, which is slated to be the largest public works project in state history. While the report indicated that the California High-Speed Rail Authority, which is overseeing the project, has exhibited some best practices in developing its long-term strategy for the plan, questions remain -- including volatility in ridership projections, lingering environmental issues and, most pressing, a lack of funding.

So far, roughly $11.5 billion in state and federal sources have been identified for the project, leaving a $57 billion shortfall. Of the remaining funds needed, the authority has projected that $37 billion will come from Washington, yet lawmakers have been divided on the federal spending practices. The GAO report noted several roadblocks.

“Given that the program has not received funding for the last two fiscal years and that future funding proposals will likely be met with continued concern about federal spending, the largest block of expected funds is uncertain,” the report said.

But Rod Diridon, former chairman of the authority, said that once construction begins next year on the project in the Central Valley, private investors will take interest, knowing California is serious about the undertaking. Although the authority expects to receive $13 billion in private investment, Diridon said private consortia — from countries such as China, South Korea and Japan — would be willing to put up $55 billion so long as they get to run the system and receive profits.

Diridon said the authority has made great strides since Jerry Brown was elected governor. He also noted that the latest GAO report was much less critical than past audits of the authority.

Still, the GAO report pointed out that several lawsuits against the project are still pending, and the authority might face difficulty making necessary right-of-way rail acquisitions.

During a hearing Thursday before Congress, House Republicans — including Majority Whip Kevin McCarthy, R-Bakersfield, and Rep. Jeff Denham, R-Fresno — asserted their opposition to funding the project.

Despite the challenges facing the project, which is slated to transport passengers from Los Angeles to San Francisco in 2½ hours, authority leaders are confident.

“The authority’s business plan provides a cost-effective and efficient approach to deliver the nation’s first high-speed rail system,” said authority Chairman Dan Richard. “This is truly a statewide rail modernization plan which includes improvements that will greatly enhance the efficiency and reliability of regional transit.”    


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