Wednesday, January 18, 2012

High Speed Rail Too High Costs

As you are aware I have not been a fan of the current administrations push for a linked network of a High Speed Rail (HSR) systems across the USA. I have outlined many of the issues (Click on the High Speed Rail category to review if you wish) over the past year.

One of the most significant issues is where is the funding going to come from. Currently there are no provisions in the federal budget for a dedicated slice of the federal pie, nor are there any plans in place, other than to put it the general fund, to earmark or set aside a funding line for the HSR.

In the past, when MAJOR construction projects were funded, special taxes were put into place that went directly to the construction and care of said projects. When the Interstate Highway system was to be built, Congress passed a national gas tax to fund the construction.  Since trying to fund the HSR system through the general fund would a daunting task at best due to the very nature of the general fund, the funding of the HSR system would have to come about through a special tax of fee. And since the country is in no mood for higher taxes, this is most likely a non-starter.

Part of the goal for those who support the construction of the HSR system was to bring in private funding in some manner. This too is not going to happen. In a catch-22, private funding is going to be in short supply as long as there are no matching federal and state dollars. And as long as the country is in no mood for higher taxes (fees?), the ability of the governments involved to get the dollars flowing is going to be severely curtailed.

And let us not forget about cost overruns. Already there are projections that could triple the costs of the California segment of the HSR system. The current plan for the California HSR segment is for it to be built in phases over a considerable period of time (20-25 years). The first segment is a stretch between Fresno and Bakersfield. Already cost estimates have increased more 50%, from $7 billion to $10-13 billion. This is one a section that is going to pretty much straight and level, with relatively small costs in real estate acquisitions. The sections leading into the LA Basin and the Bay Area are going to be considerably more when real estate costs and construction costs are factored in.

If you are in anyway familiar with the geography of these two areas, you know that the costs to build these segments are going to be higher than through California’s Central Valley. Other than a few rivers and stream, building the rail line will most consist of laying track on flat and level grounds. Not so the case getting into the Basin or the Bay Area. To the south is the southern end of the Sierra Nevada Mountains forms a barrier between the San Joaquin valley and the LA basin. The lowest point of crossing is the “Grapevine” at just over 4,000 feet. To get over or through these mountains is going to up the cost per mile considerably. And while the mountains ringing the Bay Area aren’t as daunting, the waters of San Francisco Bay pose their own problems, which will raise costs also.

In this day and age of ever increasing national and state debts, asking the American taxpayer to fork out trillions to build a HSR system might very well be a bridge too far.

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