January 16, 2012
WALTER RUSSELL MEAD: California Rail Fail: Captain Brown and the Great White Train.
California’s bullet train is going off the rails, and the overseers are running for cover. The WSJ reports that Roelof van Ark, the chief executive, and Thomas Umberg, the chairman of the High Speed Rail Authority, announced they will step down from their posts as the odds against the project grow longer.
The highly indebted, cash strapped state has commitments of $3.3 billion of federal money in hand against the roughly $100 billion that the train is now estimated to cost (the price will certainly go even higher). Voters authorized almost $10 billion in bonds in a referendum, but that was when the train looked much cheaper and more federal funding was available. Since then the cost estimates more than doubled to $99 billion, ridership estimates have been slashed indicating that the completed system will require unending subsidies, and Congress has stopped voting new funds for high speed rail.
To make matters even worse, the federal funds that are available can only be used for a “spur” out into the Central Valley, rather than the main line from Los Angeles to San Francisco. The “spur” is the least needed, least wanted and least useful part of the system and will never generate significant traffic. There are, in other words, federal funds to help with the part of the system that nobody really wants, and the heavily indebted state must find at least $70 billion to fund the rest.
In other words, the usual story. Mead’s conclusion: “The blue social model can’t produce great results anymore. If you want to think big, you can no longer think blue.”