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California Dumps $600+ Million On Environmental Reviews For High-Speed Rail Line Not Built Yet

The state of California has spent more than $600 million on environmental reviews for a high-speed rail project that has not yet been completed, according to documents obtained and reviewed by the Daily Caller News Foundation.
TFP File Photo. By Nick Pope, DCNF.

The state of California has spent more than $600 million on environmental reviews for a high-speed rail project that has not yet been completed, according to documents obtained and reviewed by the Daily Caller News Foundation.

The state shelled out a total of $618,038,924.01 for numerous companies involved in construction to conduct environmental reviews for the state’s high-speed railway project, the records show.

California voters approved the funding of the undertaking to connect Los Angeles to San Francisco and the Central Valley with high-speed rail in 2008, but it has encountered delays and budget overruns in the 15 years since California voters initially approved issuing bonds to finance the project.

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“With the amount of regulatory paralysis the project confronts, it’s no surprise that almost nothing has been accomplished in over 15 years since voters approved it,” Edward Ring, senior fellow for the California Policy Center, told the DCNF. “The state owes it to the taxpayers to either dramatically streamline the process or cut their losses and cancel the project” because “at the current rate, the project will not be completed in our lifetimes,” Ring continued.

The state Legislature created the California High-Speed Rail Authority (CHSRA) in 1996 to begin assessing the project, according to CHSRA. When voters first approved about $9 billion in bond financing for the project in 2008, CHSRA officials assumed that the full railway system would be in place by 2030, according to CHSRA’s 2008 business plan for the project.

The project’s early proponents reasoned that a major high-speed railway would ease congestion on the state’s roadways and help counter climate change, providing $11 billion worth of benefits, according to the 2008 business plan.

An initial capital cost estimate for the entire railway projected that it would cost about $33 billion in 2008, according to the 2008 business plan. The Los Angeles to San Francisco segment of the project now is projected to cost about $128 billion, according to ConstructionDive.

The railway’s projected ridership along the densely-populated coastal corridor would help the state to recoup some of the costs, according to the 2008 business plan. The CHSRA plans to forge ahead with the project to completion, a CHSRA spokesperson told the DCNF.

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However, the coastal corridor of the railway has not yet received full environmental clearance. About 78 miles of the 500 mile-long Los Angeles to San Francisco path have not yet received full environmental approval and clearance, the CHSRA spokesperson told the DCNF.

The cost and timeline overruns prompted Democratic Gov. Gavin Newsom in 2019 to propose focusing on a pared-down blueprint for the project, which would have a 171-mile segment in the Central Valley be the starting point of the overall project, connecting Bakersfield and Merced, according to the Los Angeles Times. The initial projection for that segment stood at around $22 billion, but that figure has grown to around $35 billion as of March 2023.

The most recent cost estimate for the segment in the Central Valley that Newsom proposed in 2019 is now greater than the CHSRA’s 2008 projections of the cost for the entire project.

The railway has already received more than $3.5 billion in federal funds, according to a 2023 CHSRA funding summary. The CHSRA is also pursuing further federal funding via the 2021 bipartisan infrastructure law, as it has submitted applications for $1.3 billion worth of grants from the legislation and expects to apply for more.

The overall project faces several key problems, according to a letter sent to state lawmakers by the California High-Speed Rail Peer Review Group, an independent oversight council for the project. “Project costs, schedules and ridership estimates are uncertain and subject to significant risk of deteriorating, a typical experience for mega-projects,” a problem compounded by the fact that “the project is underfunded and its financing is unstable, raising costs and making effective management difficult if not impossible,” the letter states.

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The HSRA is committed to its “aggressive goal” to connect Merced to Bakersfield, two cities in the less-densely populated Central Valley, by 2030, the CHSRA spokesperson told the DCNF. There is a built-in risk period of three years to the timeline to account for uncertainties in the permitting and construction processes, meaning that the smaller segment may not be ready until 2033, according to the CHSRA spokesperson.

Connecting those two Central Valley communities will require considerable work in the coming years to meet the 2030 target, including “the extensions north and south to Merced and Bakersfield, track, systems, and trainset procurement and testing and certification of the same, as well as completing our stations,” the CHSRA spokesperson said.

“There are no plans to end the project, as we have obligations to our federal partners via the billions in grants they’ve allocated, as well as to the millions of Californians living here and who mandated this project,” the CHSRA spokesperson added.

Additionally, there is some concern that its construction could negatively impact wildlife in the railway’s path. The project’s alignment through Coyote Valley and the Pacheco Pass could put some animals, such as mountain lions, at further risk because the project will likely fragment their habitat further, according to a 2020 report by Green Foothills, a California-based environmental group.

Additionally, the project may not immediately assist the state in achieving its climate goals, according to a 2021 report by Marc Joffe, senior policy analyst for the Reason Foundation. The project would need to operate for 71 years at medium ridership levels to offset the greenhouse gas emissions generated by its own construction, according to a University of California, Berkeley study published in 2010.

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The CHSRA calls suggestions that high-speed rail does nothing to decrease greenhouse gas emissions now and that California could make better investments in its transportation infrastructure to meet the state’s climate goals are myths, according to its website.

The California Environmental Quality Act (CEQA) is one of the driving factors behind the cost overruns and is “a magnet for litigation,” Ring explained to the DCNF.

“The state legislature has repeatedly expanded the scope of this 50 year old law to the point where even small projects require thousands of pages of reporting and take years to complete,” Ring told the DCNF about CEQA.  The law, “along with the Global Warming Solutions Act of 2006 and subsequent add-on legislation, demand absurd levels of analysis and predictions, right down to how many molecules of [carbon dioxide] each phase of the project will generate or offset, from initial construction to decades in the future,” he continued, adding that “countless local, regional, and state agencies are monitoring the project, each of them with regulations that frequently change or are expanded, and often are in conflict with each other.”

It is important “to consider the cost of not delivering California high-speed rail,” the CHSRA spokesperson said. California’s existing highway system and airports are in a “capacity crisis,” the spokesperson asserted.

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