Congress investigates California’s $128 billion high-speed rail project

Congress is investigating California’s $128 billion high speed rail project, demanding the California High Speed Rail Authority provide information on the U.S. Department of Transportation’s “justification for continuing to fund the California High-Speed Rail project.”

California’s high speed rail project has completed environmental clearance for the entire downtown Los Angeles to downtown San Francisco phase, pending a board vote in the coming days. Now, the question remains whether the state and federal governments will fund the $128 billion project and how, especially as the state faces a $7 billion budget deficit this year even with the governor’s current proposed spending cuts.

The initial 171-mile segment connecting Bakersfield and Merced in California’s sparsely populated Central Valley will cost an estimated $33 billion. DOT’s recent $3.1 billion grant fulfills less than half of the Bakersfield to Merced segment’s $7 billion funding gap. With the nonpartisan, state-funded Legislative Analyst’s office projecting multiyear budget deficits at continued spending and taxation levels, it’s uncertain where the remaining funding for this segment — which is expected to carry passengers on just 6.61 million trips per year.

The rationale for building the first segment from Bakersfield to Merced over the more dense Northern California and Southern California corridors is that it “will carry more riders and deliver the most mobility, environmental and economic benefits for the lowest cost.”

However, with the 218-mile privately-built Los Angeles to Las Vegas on similarly even terrain expected to cost $12 billion and carry 11.1 million passengers per year, it’s unclear why, on a cost-basis alone, this segment is worth the cost.

The CHSRA Peer Review Group, which provides oversight for the project, noted, “there are few who would argue that completing this short section, by itself, at a cost of up to $35 billion, can be justified. Rather it would make sense only in the context of a commitment to building the complete … system.”

In other words, the Bakersfield-Merced segment makes sense in the context of providing a “backbone” to a larger state high speed rail system, but Sen. Ted Cruz, R-Texas, and Congressman Sam Graves, R-Tarkio, have serious concerns “it would not be prudent to [fund that segment] unless the state could also commit to an additional $100 billion to build the entire system.”

“The California High Speed Rail project has critical issues indicating there is no reasonable path forward for successful completion of the project,” said the federal legislators in their letter requesting a briefing from CAHSR. “The prognosis for the full system is bleak, with an unfunded gap as high as $99 billion.”

The legislators requested that CAHSR provide answers regarding projected ridership, funding, and costs by June 12.