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APNewsBreak: Plan says total Calif. high-speed rail system to cost $98B but will make money
SACRAMENTO, Calif. (AP) ' The new business plan for California's high-speed rail system shows the nation's most ambitious state rail project could cost nearly $100 billion in inflation-adjusted funding over a 20-year construction period but also would be profitable even at the lowest ridership estimates and would not require public operating subsidies, according to a draft copy of the plan shared late Monday with The Associated Press.
The report estimates the actual cost at $98.5 billion if the route between San Francisco and Anaheim is completed in 2033. The plan assumes private investment will account for roughly 20 percent of the total cost, with much of the rest coming from additional borrowing.
The initial estimate to build the system when voters approved bond funding for it in 2008 was $43 billion. In non-adjusted, 2010 dollars that amount is now $65.4 billion, showing the costs have risen significantly.
"This is us telling it like it is to the public ' no sugar-coating, no baloney," said Dan Richard, one of two appointees Gov. Jerry Brown made to the California High-Speed Rail Authority last summer.
The business plan will be publicly released Tuesday during a news conference at the California State Railroad Museum in Sacramento.
It also calls for retaining the most controversial aspect of the proposed rail line ' starting construction in the Central Valley. Critics want to start in more populated areas of southern or northern California in case money runs out before the full system is finished, which they worry would create a "train to nowhere."
But $3.5 billion in federal funding is contingent upon the Central Valley route, and construction must begin before October 2012. That does not leave enough time for new engineering proposals and environmental reviews to be conducted elsewhere, the plan says.
The new business plan says the system will be built in sections than can operate independently and make money, even if no more track were ever built, Richard said. Planners hope each new section will generate momentum ' and private investment ' to complete subsequent sections.
The business plan also says the high-speed rail system will use existing rail lines to carry passengers on the final legs into San Francisco and the Los Angeles basin. Doing so instead of building new high-speed lines not only saves money but makes the project more politically palatable by reducing neighborhood objections.