Congressional investigation into California’s $128 billion high-speed rail project

Congress is currently conducting an investigation into California’s high-speed rail project, which has a budget of $128 billion. They are specifically requesting the California High-Speed Rail Authority to provide them with information regarding the U.S. Department of Transportation’s reasoning for continuing to fund this project.

California’s high-speed rail project has successfully obtained environmental clearance for the entire phase connecting downtown Los Angeles to downtown San Francisco. This significant milestone sets the stage for the upcoming board vote. However, the project’s future greatly depends on securing funding from both the state and federal governments. With California currently facing a $7 billion budget deficit, despite the governor’s proposed spending cuts, the challenge lies in determining how to finance the $128 billion project.

The estimated cost for the initial 171-mile segment that connects Bakersfield and Merced in California’s sparsely populated Central Valley is $33 billion. However, the recent $3.1 billion grant from the Department of Transportation only covers less than half of the $7 billion funding gap for the Bakersfield to Merced segment. The state-funded Legislative Analyst’s office, which is a nonpartisan entity, projects multiyear budget deficits due to continued spending and taxation levels. This raises uncertainties regarding the remaining funding needed for this segment, especially considering the projected number of passengers at just 6.61 million trips per year.

The decision to construct the initial section from Bakersfield to Merced was based on the objective of maximizing ridership and providing the greatest benefits in terms of mobility, environment, and economy, all while keeping costs at a minimum.

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The cost of the 218-mile privately-built Los Angeles to Las Vegas route is estimated to be $12 billion, with an expected annual passenger count of 11.1 million. However, it remains unclear why this particular segment justifies such a high cost, considering the similarity in terrain and expected passenger volume.

The CHSRA Peer Review Group, responsible for overseeing the project, pointed out that completing this small section alone, with a price tag of up to $35 billion, may not be justifiable. Instead, it would only make sense if there is a commitment to constructing the entire system.

In simpler terms, the Bakersfield-Merced segment serves as a crucial component of a comprehensive high-speed rail system in the state. However, Senator Ted Cruz from Texas and Congressman Sam Graves from Tarkio have expressed reservations. They believe that funding this segment alone would not be wise unless the state also commits to an additional $100 billion to construct the entire system.

In a letter requesting a briefing from CAHSR, federal legislators expressed their concerns about the California High Speed Rail project. According to them, the project faces critical issues that cast doubt on its successful completion. The legislators highlighted the significant unfunded gap, which could amount to as much as $99 billion. They described the prognosis for the full system as bleak.

The legislators have asked CAHSR to provide answers about projected ridership, funding, and costs by June 12th.

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