Officially, California's high-speed rail project is going ahead with construction, scheduled to start late next year. But in reality, the project is in deep trouble, amidst critical reports, escalating cost estimates, revelations of poor governance and the departures of key supporters from the board overseeing the project.
The project is a zombie -- still walking, but almost certainly dead. Here are five reasons why:
1. The state budget
Backers of high-speed rail thought they were doing a smart thing in 2008 when they convinced voters to pass $9 billion in general obligation bonds for the project. Such bonds are paid back out of the general fund, which gave high-speed rail priority and a measure of financial security. But the persistent state budget crisis has turned that logic on its head. The $20 billion necessary to pay off those bonds, if they are ever sold, will have to come from other programs or taxes. As a result, high-speed rail has political enemies across the spectrum among advocates for programs funded through the general fund, and among those who oppose higher taxes.
2. The federal budget
The project already has more than $3 billion in federal funds. But it needs at least another $17 billion in federal funds for completion, according to various reports. And the feds have no dedicated revenue source for high-speed rail. And the feds are cutting spending because of debt concerns.
3. Obama administration impatience and high-handedness
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The federal government has insisted on building the first stretch of the high-speed rail project in the Central Valley, instead of highly populated areas of California that would make more sense. The feds also want this done quickly, even though the funding plan and governance structure of high-speed rail are unsettled.
4. Poor governance
The board overseeing the high-speed rail authority has not proven itself up to the task of overseeing this project. There have been conflicts of interest. Many board members lack relevant expertise. The Legislative Analyst's Office recommended bringing the project inside Caltrans as a way of saving it.
5. Overpromising
Ridership estimates by the project are woefully inflated, according to independent assessments. The environmental and economic benefits of the project also have been overstated.
All that said, high-speed rail in some form might make sense for California. But the state first needs to kill the zombie project it currently has, and come up with a new plan.
