California High-Speed Rail Doomed
But the California High-Speed Rail Authority steadfastly maintains that its trains will be the exception: “HIGH-SPEED RAIL IN CALIFORNIA WILL NOT REQUIRE OPERATING SUBSIDIES,” a 2013 fact sheet declared, in all caps. The authority has to keep up the charade or admit to breaking the promises that persuaded voters to back the project in the first place.
At an April state assembly hearing, the authority’s chairman asserted that “virtually all” the world’s high-speed rail operations make operating profits. Not true. “It is very easy to falsify a claim like ‘Every HSR system in the world collects revenues that cover their cost,' ” Bent Flyvbjerg, a professor at Oxford’s Saïd Business School who studies infrastructure cost overruns, told Vartabedian.
The truly damning revelation, however, isn’t just that Ferrovial’s research flatly contradicts the California authority. It’s that the company's warning on subsidies disappeared from the version of the bid posted on the state’s website. The Times obtained a copy of the full document on a data disk under a public records act request.
The high-speed rail project is a classic example of how concentrated benefits and diffused costs shape public policy, even when the general public has a direct say. Back in 2008, the bond referendum faced no organized opposition. Voters might have preferred that the money go to schools, parks, roads, social services or even local trains, but those alternatives weren’t on the ballot. It was an up-down vote on whether to let a tiny bit of tax money per person go to fund a really cool train -- and all the companies that would work on building it. Voters looked at the streamlined concept images and thought, Wouldn’t that be great? Whoosh!
But a closer look even back then would have made it clear that, barring a miracle, the rail project wouldn’t keep its promises. To do so, it would have to be the fastest, most popular bullet train in the world, with many more riders per mile and a much greater percentage of seats occupied than the French and Japanese systems -- a highly unlikely prospect. Yet only the most determined wonk would have discovered these comparisons.
Some of those who knew better still succumbed to the glamour of the idea. “There's something undeniably alluring about a bullet train -- the technology is so powerful, the speed so breathtaking, it makes quotidian trips seem exotic,” opined the Times's editorial board in October 2008. Admitting that “it seems close to a lead-pipe cinch that the California High-Speed Rail Authority will ask for many billions more in the coming decades, and the Legislature will have to scrape up many millions of dollars in operating subsidies,” it nonetheless concluded that “we still think voters should give in to the measure's gleaming promise.” Give in they did.
Eight years later, the legislature is getting antsy. Last month, the state assembly unanimously passed a bill requiring that the authority provide clearer statements of route changes and projected expenses, including borrowing costs. The state senate will hold a hearing on the bill Tuesday.
The measure sounds like basic democratic hygiene. But it’s a big deal. "It is the awakening of the magnitude of the issue in front of us,” the bill’s sponsor Jim Patterson, a Republican from Fresno, told the Times. "The project has moved from spotty opposition in the legislature to growing concern.”
Lieutenant Governor Gavin Newsom, the first announced candidate for governor in 2018, has said that barring something “really significant,” he can’t see taking the money from other infrastructure projects. The officials who have to make the budget tradeoffs that weren’t on the ballot in 2008 are finally pushing back. The question now is when they’ll have the guts to pull the plug.
Virginia Postrel at email@example.com