Interesting that the Calif HSR site listed the cost of the San Francisco to Anaheim as $98B. They list $100B as the saving in traffic lanes, airports gates and runways if the passengers are moved to the rail. The politicians had to spend $100B in the next few years, it was just a matter of whether they are going to change the way they move people or whether they were going to continue to build highways and airports.
I think the Calif legislature should be commended. Now if we can get the other states to join the trend!
I too have been following HSR in CA, I am sure you know the reasons, but from what I have read one key is “Spend a little now or a lot more later”. That is, once it is built it will be far cheaper to expand with more trains and cars than it would be to pour more concrete. The environmental factors, time savings, and the prestige that comes from getting one first, were just icing on the cake.
First of all, even the breathtaking $98B budget (in this, a virtually bankrupt state!) is a lowball, and the $100B figure for alleged savings (to justify the project) is even more absurd.
But we mustn’t worry, the president of the state senate just assured us that the whopping interest payments on all this debt won’t come from future state operating budgets, but will be paid with the weight fees which are annually assessed on commercial vehicles here. Oh, goody!
So, how will we pay for the potholes and ongoing major repairs on our still-needed and still-deteriorating state highways? Don’t ask.
I think they made a mistake selling it also as a jobs program. That just invites waste. Look what happened in Wisconsin when it was sold as a jobs program. Those Talgo trainsets Wisconsin ordered will never be used and might even be scraped. Talgo is shutting down in Milwaukee, millions of misspent money there. Really states should sell these systems as Economic/RE development and transportation projects and nothing else. On top of that there should be significant involvement by private industry in the management and design of the project. I would be all for the Private Sector taking these projects over completely and given the RE Development rights to as well as land rights to go along with them. It would be controversial but I think more efficient then an all government approach.
There are things that are done for the Public Good regardless of whether or not they meet the profit motives needed for the free market.
We can argue about whether or not the California HSR project meets the public good, or whether it is being designed to make the most of the money’s assigned to it, but the notion that the private sector would even begin to think about building it from the ground up is not reasonable.
The private sector might have thoughts on it, can be brought in as a contractor, may operate it, but at its core, something like this cannot be anything but a public works project.
The legislature approved the sale of almost 4 billion in bonds to start the process.
Moodies, meanwhile has been tracking their debt, and tripled the amount of unfunded pension and health benefits for California retirees. That may sink their already low credit rating to junk status, and sink the whole project. (It’s obvious that they are moving in that direction.)
After all … if it comes in with a 20% interest rate, California won’t be able to move forward. The numbers were all set up for a super low interest rate. The state is already almost $20 billion in the hole in this year’s budget.
Adding to the problems, I understand that they ‘forgot’ to bypass the EIP requirements, and at least 1 city has sued saying that they must do the 3-5 year study before they can start. Gentlemen, start your lawyers.
Just getting it through the court will take more than a year, and that’s all they have to get things done, spending $2+ million per day for the next year.
Although there are no provisions in the bankruptcy code for accomodating a state financial problem, the reality is that California is moving toward that point. In those circumstances is it reasonable to assume there is ANY “arms length” bond buyer out there? I have doubts.
The state of Michigan just took control of Detroit’s city government. They can do that; city goverenments are, after all, creations of their state. However, no mechanism exists to put an entire state under the supervision of adults. As was demonstrated in the auto company bailout, when an ad hoc quasi-bankruptcy solution is put together on the fly. the bondholders take the majority of the haircut.
How many of us are so sold on the necessity of high speed rail that we would put our IRA’s and 401’s into such bonds?
As to the presenting question, why did the California legislators approve California’s commitment to the HSR project, I may see part of the reason through the actions of the Texas Legislature. I don’t know anything about the California
Yes, if you can believe it, coming from people who want to spend the money on rail as a starting proposition.
Serving the public good, spending money now to avoid spending more in the future, buying rail to save money on highways—these things can be platitudes to serve as pretexts to keep the ever-expanding government gravy train rolling forward.
The people who are served by these platitudes have even been able to convince themselves that spending money is the way to accumulate wealth. They tell us they will spend their way out of financial burden.&n
Yes, if you can believe it, coming from people who want to spend the money on rail as a starting proposition.
Serving the public good, spending money now to avoid spending more in the future, buying rail to save money on highways—these things can be platitudes to serve as pretexts to keep the ever-expanding government gravy train rolling forward.
The people who are served by these platitudes have even been able to convince themselves that spending money is the way to accumulate wealth. They tell us they will spend their way out of financial burden.
Yes, if you can believe it, coming from people who want to spend the money on rail as a starting proposition.
Serving the public good, spending money now to avoid spending more in the future, buying rail to save money on highways—these things can be platitudes to serve as pretexts to keep the ever-expanding government gravy train rolling forward.
The people who are served by these platitudes have even been able to convince themselves that spending money is the way to accumulate wealth. They tell us they will spend their way out of financial burden.
California had it’s credit rating upgraded in February. It currently has a credit rating of A-.
By what possible logic can anyone conclude that these bonds are going to drop it from A- to junk?
That is not a logical statement at all.
And in a world where US debt is returning a rate that is under inflation and is still the most sought after debt in the world, I’d say California likely won’t have too many problems.
Hey, they managed to get a budget implemented before the deadline for once.
My understanding of the North Star Rail project was that it was intended to be built to St. Cloud which is a bigger city and has colleges that are proven passenger generators. They quit before it was complete. Even so there are bound to be some duds, no human institution is perfe
The NorthStar line in Minnesota stopped at Big Lake due to Federal Regulations. The regulations require commuter rails must be faster than the available highway. North of Big Lake there was too little traffic congestion to slow down the commuters. These are rules created to insure that the highways are severely clogged before rails are built to bypass them.
Every highway department has now realized they are not getting enough funds to maintain the roads they have. The stimulus money was a shot in the arm for upgrading the highway infrastructure. That money must be spent by August 2013. After that the fuel taxes will have to increase or highway improvements will grind to a halt. California saw this coming and decided that starting on rail now was the only answer.
The minneapolis bridge collaspe had nothing to do with a need to spend more on roads and bridges. But it was dishonestly exploited for that charge by the people who cannot stop spending public money. The bridge collapsed due to a design error, which had nothing to do with maintaining the bridge.
The California legislature (like all legislatures) is wired to spend money. That is how they empower themselves and the institution. The belief that they can solve every problem by spending money courses through their veins. Naturally, they will defend their spending by saying that doing nothing is not a good option. But they exaggerate by suggesting that anybody is advocating they do nothing.
Tripling the unfunded retirement benefits means they aren’t just 30 billion in the hole (on top of the current budget deficit of 20 billion.) - It means they are now (for just that one line item) over 100 BILLION in the hole.
To quote a snippet of the article: “Moody’s Investor Services, who was expected to provide the credit rating to justify selling the debt, may have just torpedoed California’s credit rating by tripling their estimate of the state’s unfunded public pension liability from $38.5 billion to $109.1 billion liability and raising the annual cost of state pension funding by $7.3 billion.”
That tells me that they are now another 7.3 billion in the hole next year. That is a VERY bad place to be. Where are they going to cut? They’ve already started releasing a mass of criminals from the prisons to save money. They have problems paying for Children, and will have power problems going forward. (Shutter the nukes, knock down the coal plants… Someone will give me wind…)
I wonder if they have thought about how many megawatts the thing will need if it gets finished.
Of course, the 113 or whatever miles in the central valley, connecting nothing to nowhere will not be carrying any significant passenger loads. If the suing cities get their way, there won’t be any sign of track work, however.
Keep in mind I’m on the other coast. I’m watching the incremental effort in NC, which has produced a limited improvement in performance of the trains from Raleigh to Charlotte. (500 million got us about 15 minutes of improvement.)
Freeways in urban areas are maxed out, widening would take years if not decades of legal battles to do.
Airports in most major cities are also maxed out real estate wise, expanding? see above.
More people are using light rail and commuter rail, if you build it they will ride it.
Aside from the costs, the biggest issue with HST is when and where, because its is a logical choice. I dont agree with starting its first leg being between a gopher hole and a tumbleweed but it does have to be built somewhere and sometime. I have to admit I get darn sick and tired of hearing people in this country grumble about public infrastructure projects, while watching Japan (which also has a terrible economy) Europe, China, Russia and even Taiwan adding first class HST rail service while we gripe and moan and crumudgen about something every other first world country can clearly see as vital to their transit needs.At the rate were going with all the naysayers, Cuba will have a better HST network than the US.
Actually, since 2001 NCDOT has improved the trip by 35 minutes. They are working on ANOTHER 15 minutes. That said, the improvements are not just speed improvements. The money is increasing CAPACITY for both freight and the growing passenger service. Many miles of double track have been added, signaling has been improved, and grade level RR crossings are being sealed and in some cases eliminated. A noon passenger round trip has been added, and they hope to add another train in the future. Two more engines and some passenger cars were recently purchased and grade level crossing safety is being studied.
It is simplistic to say “$500 million for 15 minutes”.
True, it used to be almost 2 hours longer than when I drive it… Not it is a lot closer. (well, other than the other day when 74 hit a trespasser…) I was referring to the latest round of spending, which added improved cross overs between Raleigh and Cary, and improved/eliminated grade crossings, and started on the double tracking. That was just the most recent update.
NS loves the state dropping money on its railroad. The main line from Greensboro to Charlotte was virtually all double tracked, but that got single tracked back in the 60’s and 70’s to save on maintenance. NS expects the state to pick up the extra maintenance, I suspect.
It runs with one heck of a subsidy. (Thank goodness the NC RR has real income from NS. If NS pulled out, that would be one lightly used chunk of rail.)
In just a couple of years, it will be back to double track from Greensboro to Charlotte. That will help NS far more than the 6 passenger trains per day. (well, 8 when you throw in the Crescent.)
Figures I’ve seen have NC throwing in 70-100 per ticket worth of subsidy. That’s one heck of a benefit for the people that use it.