March 9, 2018

Press Fails to Disclose 70 Percent California Bullet-Train Cost Overrun

Friday, California’s High-Speed Rail Authority published its draft 2018 Business Plan. Its 800-mile bullet-train project’s estimated cost is now $77.3 billion, up from $64 billion two years ago, and its final completion has been pushed out another four years to 2033. The current estimate is now more than 70 percent above the $45 billion presented to voters in 2008.

The related Associated Press story failed to disclose that original cost estimate, as did three leading California newspapers.

The Authority’s draft discloses that “More than $3 billion has been expended to date on construction in the Central Valley and planning for the wider system,” so genuine progress towards theoretical completion is still well under 10 percent. The plan also presents a range of estimated completion costs from $63.2 billion to $98.1 billion.

The latest news confirms, as I wrote in a 2013 post, that this project will “make the $22 billion (make that $24.3 billion) ‘Big Dig’ in Massachusetts look like a petty cash disbursement.”

The Los Angeles Times did recount much of the horrid cost-estimate history, though not completely accurately:

The disclosure about the higher costs comes nearly a decade after voters approved a $9-billion bond (it was actually $9.95 billion. — Ed.) to build a bullet train system. The original idea was that the federal government would pay about a third of what was then an estimated $33-billion project, with private investors covering another third.

But those assumptions proved faulty on numerous counts. In later business plans the projected price went to $43 billion, somewhere between $98 billion and $117 billion, down to $66 billion, and then $64 billion in 2016.

The San Francisco Chronicle incorrectly reported that voters were originally promised a $32 billion cost.  The first paragraph at the San Jose Mercury News gave readers erroneously report that the 2016 estimate, at “roughly $13 billion more than planners anticipated,” represents the overrun from the original forecast.

Voters who barely approved the 2008 $10 billion bond proposition were told:

  • The entire system’s cost “would be about $45 billion.”
  • The rail lines would run “generally along existing rail corridors.” Much of the project’s cost will be incurred digging tunnels through “mountain passages in Southern California and Northern California” in “the most ambitious underground transportation construction in the nation’s history,” as well as “other costly tunnels” in LA and San Francisco.
  • In uppercase letters, it would get done “WITHOUT RAISING TAXES.” Over $1 billion from the state’s carbon tax has already gone into the project.
  • Most importantly, “Matching private and federal funding (are) to be identified BEFORE state bond funds are spent.” A year ago, “the Authority successfully received permission to access $3.3 billion” for the project’s opening phase, even though it has admitted that future funding for the project is uncertain.

One opponent characterized the Authority’s release as a “going out of business plan.”

AP coverage failed to disclose the ballot measure’s original quoted cost, or the full extent of the project’s cost overrun. Of the four outlets reviewed, only the Chronicle mentioned Governor Jerry Brown, the project’s stubborn champion.

Cross-posted at NewsBusters.org.

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2 Comments

  1. And who is getting this extra $13 billion? The thin veneer of justifying a public works project is tearing off. There comes a point when implication of sheer incompetence (Hanlon’s Razor) ceases to explain the results, sometimes it really is malice. It’s time for the FBI to reclaim it’s reputation and start taking a bite out of crime.

    Comment by dscott — March 11, 2018 @ 7:44 am

  2. There was a report of the Authority failing to disclose a $1 billion overrun on just the opening phase about 4 years ago:

    https://calwatchdog.com/2014/05/09/63423/

    Comment by Tom — March 11, 2018 @ 12:06 pm

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