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发帖数: 29846 | 1 Why California’s high-speed rail project is an even greater waste of
federal tax dollars.
21 March 2012
The national media have devoted plenty of skeptical attention to California
’s bullet-train boondoggle—from the ballooning cost of the California High
-Speed Rail Authority project to its shoddy management to the baffling
decision to build the first segment in the lightly populated Central Valley.
But the press has yet to focus on a crucial fact: the bullet train isn’t
just some quirky Left Coast fiasco; it’s also a grotesque waste of federal
money. The project serves as a powerful reminder of the Obama administration
’s mishandling of the $787 billion stimulus that Congress passed in
February 2009 with solemn assurances of prudence and accountability. The
bullet-train project, in fact, can be thought of as “Solyndra times seven”
—that’s how far its costs outstrip those of the much-touted Bay Area solar
panel manufacturer that burned through $528 million in federal loans before
declaring bankruptcy and folding last September.
In California, the federal government is committed to spending $3.5 billion
—with most of those dollars coming from the 2009 stimulus—for a project
whose problems are glaring. State officials are trying to remake the bullet
train on the fly, promising at a legislative hearing in Silicon Valley to
implement changes that would bring down the cost and speed up construction.
But none of those changes alters the fact that the bullet-train project
appears clearly to violate federal regulations governing stimulus spending
on transportation. The rules, published in the Federal Register on June 23,
2009, require that applications for stimulus funds to build high-speed rail
projects would be approved only after “rigorous analysis,” factoring in a
careful examination of the proposed project’s “financial plan (capital and
operating),” “reasonableness of financial estimates,” and “quality of
planning process.” Grant recipients would make regular progress reports,
corroborated by Federal Railroad Administration audits. Even the most
cursory analysis shows that the California bullet train falls far short of
compliance with the rules.
State auditors, the University of California’s Institute for Transportation
, and an ad hoc peer-review committee appointed by the legislature all
lambasted the project’s financial plan as incomplete, overly ambitious, and
based on unverifiable numbers. In January, the peer-review group issued its
assessment: “We cannot overemphasize the fact that moving ahead on the HSR
project without credible sources of adequate funding, without a definitive
business model, without a strategy to maximize the independent utility and
value to the state, and without the appropriate management resources,
represents an immense financial risk on the part of the state of California.
” The peer review followed a damning analysis published in November by the
state’s nonpartisan Legislative Analyst’s Office, perhaps the most
respected agency in Sacramento, which concluded that rail officials had yet
to address how to fund the (at least) $98-billion-system linking Los Angeles
and San Francisco.
California has about $13 billion on hand to begin the first phase of the
project. The rail authority and its boosters claim that the federal
government and private investors will supply the remaining $85 billion.
Those additional federal dollars are almost certainly not coming.
Congressional budget cutters have targeted discretionary domestic spending,
and the $260 billion transportation bill currently winding through Congress
expressly prohibits California from diverting any highway funds for high-
speed rail. Meanwhile, Wall Street isn’t enamored with the project, and
private investment funds have shown zero interest in partnering with
California unless they receive revenue or ridership guarantees. But
guaranteeing a certain return on investment would amount to promising
subsidies if the rail authority’s immense ridership forecasts don’t pan
out—taxpayers would be making up the difference. And Proposition 1A—the
2008 state ballot measure providing $9.95 billion in bond money for the
project—explicitly bans taxpayer-funded operating subsidies.
Rail authority executives and prominent California Democrats, including
Governor Jerry Brown, Senate President Pro Tem Darrell Steinberg, and former
HSRA chairman Quentin Kopp, continue to talk up the chances for substantial
private investment. But the record of the last two governors, both ardent
champions of the project, suggests the obstacles to such investment are
larger than they first appear. Arnold Schwarzenegger explored outsourcing
the construction and operation of the train to the Chinese. He failed. And
in January, Brown suggested that the tens of billions of dollars that
companies will pay for pollution rights in coming years under the state’s
nascent cap-and-trade program could fund the project—assuming, of course,
he can find a way to pry those dollars from the clutches of the California
Air Resources Board, which already has plans for the uncollected funds.
The bullet train’s “reasonableness of financial estimates” is
questionable, beginning with the project’s revenue forecasts. The LAO noted
a projection of 44 million riders a year when the L.A.-Bay Area line is
complete. That’s down from the hallucinatory claim of 117 million
passengers that proponents of Prop. 1A offered in 2008, but it’s still
ridiculous. In reality, 44 million passengers would be 50 percent higher
than the number of people Amtrak carries to and from more than 500 stations
in 46 states and three Canadian provinces each year.
How was the estimate derived? Elizabeth Alexis, a Palo Alto finance expert
and co-founder of Californians Advocating Responsible Rail Design, delved
into the methodology and discovered, among other things, that the rail
authority assumed that the future cost of gasoline would top $40 a gallon.
Alexis also noted that the public-opinion polls that bullet-train backers
crafted to gauge potential passenger interest were heavily biased. For
example, 96 percent of commuters surveyed were already train riders. But
unlike commuters in other states, only a tiny percentage of Californians
rides the train.
Which brings us to the last element that a “rigorous analysis” must
confirm before federal funds can flow: the “quality of planning process.”
More than three years after voters approved the $9.95 billion bond measure,
the HSRA still hasn’t determined who will operate the train once it’s
built. A contractor? An existing state agency? A private-public partnership?
Nobody knows. Adding to the chaos is a lack of leadership. Until Brown
purged the rail authority’s management earlier this year, bullet-train
officials assumed they were doing a great job, and that their public-
relations firm was to blame for the project’s sinking support.
This ugly story could soon take a welcome turn. The U.S. Government
Accountability Office confirmed on March 8 that it plans to launch its own
audit of the California High Speed Rail Authority. The GAO would do well to
begin its inquiry with Volume 174, number 19 of the Federal Register,
specifically Federal Railroad Administration Docket 2009-0045. If those
federal regulations truly have the force of law, then “Solyndra times seven
” must die.
Chris Reed is an editorial writer for U-T San Diego (formerly the San Diego
Union-Tribune) and proprietor of calwhine.com. |
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