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High Speed Rail with High Costs: Still On Track?

The California High-Speed Rail Authority released a revised business plan last week, which projects that the total cost of the proposed bullet train could be $98.5 million over 20 years, exceeding previous estimates for the project. The new business plan describes a phased approach to construction that will allow the Authority to adapt to changing financial conditions as it moves forward, segment by segment. The plan also updates cost estimates, ridership figures and funding expectations to reflect current economic conditions. 

 As envisioned, the high-speed rail project is an important infrastructure component to California’s future, as the state’s population grows from 38 million people today to 60 million people by mid-century. It is estimated that without high-speed rail California will need as much as $171 billion to meet its transportation needs. That means an additional 2,300 lane-miles of highways, 4 runways, and 115 airline gates will need to be built.

Construction is planned to begin next year with a 130-mile segment stretching from just north of Bakersfield to just south of Merced. The funding for this piece, which will serve as the “backbone” of the system, has already been identified through federal funds and the voter-approved Proposition 1A. This initial Central Valley section is expected to create 100,000 jobs in the next five years.

In order to protect the taxpayer’s investment, the economic assumptions included in this plan, regarding inflation, cost of materials and ridership projections are realistic and conservative. It projected that the project will create 100,000 jobs in the next five years, and is expected to generate another 1 million jobs moving forward.  California’s high-speed rail system, the first in the nation, is also expected to reduce carbon emissions by 3 million tons annually.  For more information contact Kate Klimow, Vice President of Government Affairs.


Posted on November 7, 2011

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