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Calif. Senate report pokes holes in bullet train plan

(The following story by Erik N. Nelson appeared at Inside Bay Area.com on June 6.)

SACRAMENTO, Calif. — A state Senate panel issued a stinging report Thursday questioning the financial assumptions made by the California High-Speed Rail Authority and urging significant changes to its plan to develop a 700-mile bullet train system.

"Neither the authority's 2000 business plan nor any of the agency's subsequent documents discuss the risks that might be associated with the project," charges the 27-page report by the Senate Transportation and Housing Committee.

It said the authority needs to inform voters of those risks before they vote on a $10 billion bond measure slated for the November ballot. Those include construction cost increases, less-than expected ridership or revenue, difficulty attracting private financial backers or acquiring land and the possibility that the state might have to subsidize the service.

The president of the authority's governing board, Quentin Kopp, said the report would not affect the project and dismissed its findings.

The report, ostensibly based on a Dec. 7 hearing in Los Angeles and a Jan. 11 hearing in Oakland, also acknowledged the program's benefits. They include contributing less of the gases that contribute to global warming per passenger than motor vehicles or commercial jets, and providing additional capacity for the state's transportation grid.

But after spending $58 million over a decade planning the system of 200-plus-mph trains, the authority had failed to clearly spell out how it would cover the project's steadily increasing costs.

The bond measure, originally scheduled to appear on the ballot in 2004, was put off by the Legislature at the request of Gov. Arnold Schwarzenegger in favor of other borrowing measures. It was put off again in 2006, but it appears that the measure will remain on the ballot this year.

But the support of the governor and other state leaders likely would be contingent upon a variety of changes to the measure's language. Those changes are contained in a bill passed by the Assembly and scheduled to be considered by the Senate committee June 17.

"A lot of unanswered question still remain," said the committee's chairman, Sen. Alan Lowenthal, D-Long Beach. "I would like to see those questions answered before it goes on the ballot, so Californians will know what they're getting."

One of the key questions is just how the authority intends to raise $33 billion for the first phase of the project, connecting Anaheim and San Francisco, via Los Angeles, Fresno and San Jose. The authority predicts that first segment would be open by 2020.

The project's second phase, with an estimated cost of $7 billion, would extend the service to Sacramento and to San Diego via Riverside.

While the authority says one-third of the Phase 1 money will come from the bond measure, one third will come from federal contributions and one-third will come from private investment in a partnership with the state, the report said there are few details to back that up.

"To date, no federal program has been established to underwrite the construction of high-speed rail in California," the report said.

It also said that it's too early to determine what form private investment in the project might take.

In a statement accompanying the report, Lowenthal said that in a year when the state is facing a major budget shortfall, the authority needs to assure voters that they "will not be stuck with a massive bill in future years."

The release of the report came just a day after reports surfaced in the media that Union Pacific Railroad had balked at selling its right of way for high-speed rail routes.

This, Lowenthal said, was an example of both unknown risks faced by the project and of a lack of transparency in the process.

Kopp called the charge "utter nonsense" and insisted Union Pacific's refusal would have no effect on the project.

Monday, June 9, 2008

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