Diesel trains may boost rail plan
whisk riders between Los Angeles and San Francisco in two hours and 40 minutes. He asked the rail authority to concentrate on getting trains running as quickly as possible in the Central Valley, where construction on the line began in 2015, and to worry later about building the service out.
The rail authority’s new plan for meeting the governor’s directive leaves little room for error when it comes to the foremost problem of financing.
The report projects that costs for the initial rail segment will increase $1.8 billion because of a combination of inflation, unexpected work and a contingency budget to manage risk. But the document says financing from voter-approved bonds, federal grants and the state’s cap-and-trade program, which charges businesses to pollute, will still cover the expected expense.
Some of these funding streams, though, remain uncertain. The Trump administration has threatened to cancel $929 million of federal funding that the project is counting on and claw back as much as $2.6 billion because of a lack of progress. California rail officials and the governor have said they intend to fight for the money.
Potential cost overruns in the future could also prove problematic.
“Any loss of funding is not good for the project,” Russell Fong, chief financial officer for the rail authority, said in an interview. However, he said that his financial estimates were on the conservative side and that cap-and-trade funding, for example, could turn out to be more than anticipated.
Additionally, moving existing passenger trains to the high-speed tracks temporarily could generate income. The rail authority expects it will need time to test the new fast trains before committing them to the line in 2028, and the line might be ready before then.
The new report also says that Newsom, in his revised budget proposal this month, will call for replacing pricey rail consultants with inhouse staff. The state auditor has said the rail authority could save money by scaling back its use of outside help.
Despite widespread doubts about the financial viability of the entire 520-mile project, the report reaffirms the rail authority’s commitment to finishing it. The document identifies the Merced-to-Bay Area segment as the next undertaking after the Central Valley stretch, followed by a line from Bakersfield to Los Angeles.
A timeline for the additional routes is not provided, though the rail authority said preparations for the lines will proceed while the Central Valley service is being built.
The price tag for the project remains around $77 billion, which is more than double the original estimate, the result of not only cost overruns but engineering challenges, lawsuits and additional land acquisition.
Critics, who include both Republicans and Democrats, have long called for the state to abandon the venture and cut its losses.
“It’s time for the governor to halt any more funding for this project,” Assemblyman Jim Patterson, R-Fresno, said Wednesday. “The bottom line is this project is running out of money and they know it.”
Patterson also criticized the proposal to run diesel trains on the line, if only for a short time, saying it was an underhanded way to produce revenue and meet state bond terms requiring the trains to operate without subsidies.