One response to “High Cost Rail – Part 74 Kafka Express”

1. jennifer

   May 21, 2012

   (This one is too good not to reprint-)
   The Wall Street Journal, May 18, 2012
   California’s Kafka Express
   Not even a busted state fisc can stop Jerry Brown’s train to nowhere. California’s budget deficit has grown by $7 billion in the last four months. Uh oh. The good news in this debacle is that the state’s fiscal woes will make it nearly impossible to complete Governor Jerry Brown’s runaway high-speed rail train. The bad news is that the Governor is going to try anyway.
   Transportation experts warn that the 500-mile bullet train from San Francisco to Los Angeles could cost more than $100 billion, though the Governor pegs the price at a mere $68 billion. The state has $12.3 billion in pocket, $9 billion from the state and $3.3 billion from the feds, but Mr. Brown hasn’t a clue where he’ll get the rest. Maybe he’s hoping Facebook will buy the train, though he’ll have a hard time convincing Mark Zuckerberg that it’s worth 100 Instagrams.
   In 2008 voters approved $9 billion in bonds for construction under the pretense that the train would cost only $33 billion and be financed primarily by the federal government and private enterprise. Investors, however, won’t put up any money because the rail authority’s business plans are too risky. Rail companies have refused to operate the train without a revenue guarantee, which the ballot initiative prohibits. Even contractors are declining to bid on the project because they’re worried they won’t get paid.
   Mr. Brown is hoping that Washington will pony up more than $50 billion, but the feds have committed only $3.3 billion so far—and Republicans intend to claw it back if they take the Senate and White House this fall. If that happens, the state won’t have enough money to complete its first 130-mile segment in the lightly populated Central Valley, which in any event wouldn’t be operable since the state can’t afford to electrify the tracks.
   None of which is stopping Transportation Secretary Ray LaHood, who is putting the squeeze on California lawmakers to appropriate $6 billion—now. “We can’t wait,” he says. The White House wants to get the money out the door before the election. It’s worried that even some Democratic legislators are getting cold feet as logistical challenges and public opposition mount.
   Polls show that voters by a two-to-one margin would kill the train, though Democrats refuse to put a referendum on the ballot. A number of municipalities are also challenging the train’s legality. Kings County in the Central Valley last year sued the authority for violating the ballot measure’s requirement that the first segment be operable.
   Environmentalists may even file suit if the state uses revenues from its new cap-and-trade program to finance the train. That’s the Governor’s back-up plan when Washington and Mr. Zuckerberg ignore his pleas. State law requires that the government spend cap-and-trade fees on activities that mitigate carbon emissions, but operating and constructing the bullet train would actually increase greenhouse gas emissions for the next 30 years.
   Mr. Brown and the White House are betting that the state will be in far too deep when the money runs out to abandon this mission on Camino Unreal. The Governor also figures that the $100 billion bill will seem smaller spread out over 30 years. What’s an extra $3 billion a year when the state’s already $16 billion in the hole?
   Here’s another idea. Maybe the state could pay contractors in Farmville currency.
   Copyright 2012 Dow Jones & Company, Inc.
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