Plagued by years of funding shortages and spiraling costs, California’s beleaguered high-speed rail project suffered another unexpected hit this month in a new report that more than tripled the cost estimate for the San Francisco-San Jose segment at a staggering $5.3 billion.
The new price tag is part of a report that completes a years-long environmental clearance process for the 48-mile corridor that would carry high-speed trains around the peninsula on electrified Caltrain tracks 110 miles away. hour and possibly as far south as California. It describes three stops, a controversial rail yard in Brisbane and funds allocated for everything from protecting monarch butterflies to restoring the habitat of the curved-flowered violin.
But the environmental document released last week also includes the new price for the recommended route across the peninsula, which is more than three times the figure penciled in the High-Speed’s 2022 business plan. Rail Authority.
These jaw-dropping budget revisions are in part due to inflation, real estate costs and supply chain issues plaguing megaprojects across the country. But they also underscore the High-Speed Rail Authority’s tenuous grip on the beleaguered rail project’s cost projections, a vision that has already turned into one of California’s costliest and most controversial undertakings. .
Brian Kelly, CEO of the High-Speed Rail Authority, said the agency is at an impasse on cost estimates because without funding it is unable to structure budgets to a specific timeline.
“I don’t really think it’s fair to ask us ‘Gee, what are your cost estimates to get somewhere’ when no one is providing us with funding to get there,” Kelly said. “It just puts us in a guessing position forever.”
Even with considerably higher costs, the San Jose-San Francisco route is relatively inexpensive and less disruptive compared to other segments of the project because it relies on existing Caltrain tracks and stations. Unlike the line connecting the Central Valley to Silicon Valley, there is no massive tunneling operation.
Louis Thompson, head of a state-mandated peer review group, said some estimates in the budget proposal have been out of date for years, just as lawmakers haggle with Gov. Gavin Newsom over whether he must commit the remaining $4.2 billion in voter-approved money to complete construction of the Central Valley segment of the rail line from Bakersfield to Merced, often dubbed the “train to nowhere.”
“There is no official update of the [budget] numbers due through 2023,” Thompson said. “So what is the Legislature buying into?”
When voters gave the green light to the project in 2008, they were promised a two-hour, forty-minute trip from Los Angeles to San Francisco, with connections to Sacramento and San Diego at a cost of $45 billion. Since then, the estimated price has more than doubled.
The 2022 business plan — approved in April without the inflated costs from San Jose to San Francisco — has already added another $13 billion, bringing the highest cost to $113 billion for the entire project. In an interview, Kelly, CEO of HSR, said it could be up to $120 billion.
The Bay Area segment would include stops at three expanded Caltrain stations – Diridon in San Jose, Millbrae and 4th and King in San Francisco. Eventually, rail officials hope the line will extend further to the Salesforce Transit Center. The project would straighten track, improve crossing safety and modify at least eight Caltrain stations to make way for high-speed trains along the Caltrain corridor.
Still, high-speed rail in the Bay Area is going to have to overcome opposition from cities across the peninsula that are already threatening lawsuits. They say a high-speed train is abandoning much-needed new property developments in favor of a rail project that may never see the light of day.
“It’s like a two-year-old with a train. I’m just building his train from point A to point B,” said Brisbane City Manager Clayton Holstine, who is looking to build housing on land desired by the High-Speed Rail Authority. “From my point of view, they are in a silo.”
A train through the Bay Area is unlikely to start operating in the next decade. The authority only has the funds to build the 119-mile Central Valley Link at a cost of $23.9 billion. Even this segment, championed by Governor Gavin Newsom as a critical testing ground for high-speed rail, will likely need a new source of funding.
“They barely have the potential funding to bring Merced to Bakersfield,” said Helen Kerstein, a bullet train expert with the nonpartisan Office of the Legislative Analyst. “There is definitely a risk that additional funds will be needed to even make this piece.”
The main source of funding for high-speed rail currently comes from revenue from California’s cap and trade program, which requires companies to buy greenhouse gas credits based on their level of pollution.
Now the rail authority is looking to Washington in hopes that President Joe Biden’s $1 trillion infrastructure bill will give the ailing rail project a new financial boost. But unlike some East Coast rail plans, there’s no dedicated funding for California’s mega-rail plan, leaving high-speed rail to compete for dollars alongside mass transit projects across the country.
“It’s still a lot cheaper than trying to get the same mobility benefits with expanding highways and airports,” HSR manager Kelly said. “So it’s still a good deal and it’s still worth doing.”