Written by Gordon Webster, Jr.
The high-speed rail project is in trouble, and we are all on the hook.
You have undoubtedly heard the news last week that the cost for the Central Valley segment is running over cost by nearly $3 billion.
It’s now going to take $10.6 billion to build the 119-mile segment, putting the entire cost of the project at about $67 billion.
All the way back in 2008, when voters approved bond financing for the project, it was projected to cost $40 billion.
Ralph Vartabedian, a columnist with the Los Angeles Times, aptly describes the situation as an “existential crisis” for the project.
Nothing about this project has been presented to the public in an accurate way. It wasn’t until last week’s news that the state has publicly discussed the project’s financial problems, with High-Speed Rail Authority Chairman Dan Richard continually disputing assessments that the project cost estimate was too low.
The Central Valley was supposed to be the easy part of this project. Long, flat and rural — this segment was chosen to establish momentum. Just wait until this project moves south, and they must figure out how to get through the Tehachapis.
The authority was too optimistic in its timeline, resulting in delays.
In fact, the Los Angeles Times reported that Dragados USA, part of a global construction firm performing work in Kings County, filed a $275-million claim against the rail authority for not delivering the land it needed for work. Tutor Perini, which is performing work in Fresno County, won its own multimillion-dollar delay claim.
Then there’s the money. At some point, proponents insisted that private investors would be clamoring to buy a piece of this project.
Where are we today? Short $21 billion, and no private investment in sight.
We are all on the hook.