The largest construction project in the country

 The largest construction project in the country and the first high speed rail is now expected to be a whopping cost of $130 Billion dollar boondoggle. California High Speed Rail Authority (HSR) has become a debt trap. The amount of projected cost is running in the Billions. The goal of expanding the HSR lines to run from San Francisco to San Diego is becoming a pipe dream. With the figure only expected to grow, concerns over Further Employee law suites that are expected, hidden debt, cost overruns along with operating costs loom over its economic outlook.

HSR construction costs nearly three times more than a conventional rail line. Given its operational costs it will hinge on the viability of investors. The future looks deem.

HSR story has dazzled California’s for the past several years. But its growing domestic financial woes have exposed its risky underbelly.

The 2008 HSR construction estimate cost was originally 33 billion dollars and would be finished by 2020 now the estimated date is 2035. But trouble raising capital, complicated land purchases, environmental concerns, employee’s quitting and filing law suites and litigation over the last several years overruns that amount to now $130 billion.

 According to the Legislative Analyst’s Office, the non-partisan adviser to the state Legislature says the high cost of inflation; construction, labor and materials all put the real cost to be unknown.

“This project is big and complex and complicated and difficult and needs oversight,” said Laura Friedman, a Glendale Democrat and chair of the Assembly Transportation Committee. “It seems like there’s pressure being put on us to very quickly give them their money and just move on. ‘Legislature, get out of our way,’ which to me is really, really committing legislative malfeasance.”

According to upper end estimates in the HSR business plan the real question is can HSR make the costly connections to the coasts? This will involve costly lengthy mountain tunnels near seismic faults and new rail right ways. Just Bakersfield to Los Angeles is priced at $50 billion and San Francisco to the Central Valley tie-in at Chowchilla $22 billion. 

There is a very significant outstanding question of where that money will come from and how to proceed at this point.

According to Cal Matters a state-appointed peer review group raised serious concerns about the future of the project in a letter to legislative leaders. It praised progress on environmental clearances and acknowledged the impact of COVID, but it faulted out-of-date cost estimates, law suites, lack of technical experience for upcoming contracts and legislative oversight.

“The cost and schedule experience so far does not yet support optimism about future performance,” wrote the author, Louis Thompson, the longtime chairman of the panel and a former Federal Railroad Administration executive and World Bank railroad expert. 

Thompson went on, “Despite the possibility for additional federal funding, overall project funding remains inadequate and unstable making effective management extremely difficult. In addition, the authority has no clear guidance from the Legislature on the next steps in the project.” 

Three current contracts cover only 119 miles of the 171 miles of the route that Newsom says he wants to build. Difficult new contracts and land acquisition would be needed for 52 additional miles. It would also include new tracks, a complex signaling system and a high voltage electrical system this will all have to come after bridges, track bed and viaducts are completed. 

A series of lawsuits focused on the disparity between the rail authority's latest iteration of the project and the promises made to voters in 1A.

In an attempt to do what many to derail the project have suggested.

To help make a $9.95 billion project palatable to voters, the rail system's backers offered guarantees within the wording of the initiative. The rail system would, for instance, originally go from L.A. to San Francisco in a nonstop trip taking 2 hours and 40 minutes at over 220 miles per hour. There would be no government subsidies for the operation of the system. The measure promised private investment, low fares and optimistic ridership projections. Yet the latest plan is unlikely to live up to its core promises.