Denham still skeptical of high-speed rail plans

The Fresno BeeMay 28, 2013 

A train travels through a wind farm in an illustration from the California High-Speed Rail Authority.

NEWLANDS AND COMPANY INC.

— Rep. Jeff Denham came to the Madera Community College Center on Tuesday with plenty of questions about plans to start building a high-speed train system in the San Joaquin Valley.

The Turlock Republican, who is the chairman of the House subcommittee on Railroads, Pipelines and Hazardous Materials, left his committee hearing just as skeptical as he arrived, decrying the lack of private investment in the California High-Speed Rail Authority's proposed bullet train and declaring his intention to continue blocking federal money for the project.

"I'm going to work with my colleagues to make sure that money is held up until there's a full business plan and a private investor," Denham said after he and Reps. David Valadao, R-Hanford, and Jim Costa, D-Fresno, listened to a panel of six witnesses for about two hours Tuesday.

Denham and other Valley GOP congressmen, including Valadao, Devin Nunes of Visalia and Kevin McCarthy, the House majority whip from Bakersfield, all oppose providing federal funds for the project beyond the more than $3 billion already pledged by the Obama administration and the Federal Railroad Administration.

Denham pointed to the gap that has evolved between Prop. 1A, a $9.9 billion bond measure approved by California voters in 2008, and the project's current incarnation.

"What was sold to voters was a $33 billion project that would receive equally as far as financing from the state and federal government and private investors," Denham said. "The project has changed significantly since 2008, so much so that it is unclear if it conforms to the requirements of Prop. 1A."

Too much uncertainty

Denham's concerns include not only the inflated cost of statewide project -- now estimated at $68.4 billion to connect San Francisco and Los Angeles -- but uncertainty about other issues: where the money will come from, how many farms and businesses will be affected, how much it will cost to acquire right-of-way property, and how frequently the state will have to resort to eminent domain or condemnation to get the property it needs.

The witnesses offered a mixed bag of opinions about the high-speed rail project. Dan Richard, chairman of the rail authority's board, and Al Smith, president and CEO of the Fresno Chamber of Commerce, spoke in favor of the rail plan's potential to improve the state's transportation system and to create jobs in the San Joaquin Valley, where construction could begin this summer.

Doug Verboon, chairman of the Kings County Board of Supervisors, repeated his complaint that the rail authority ignored his county's concerns and excluded officials from discussions on where the route should run between Fresno and Bakersfield.

Anja Raudabaugh, executive director of the Madera County Farm Bureau, and Chowchilla farmer Kole Upton, vice chairman of the grassroots organization Preserve Our Heritage, said the authority has made considerable efforts to address the concerns of agriculture. But each remains wary about the authority's ability to live up to its commitments or pursue route options that are least disruptive to farmers.

Louis Thompson, who heads a peer review group appointed by the California Legislature to evaluate the high-speed rail project, said that while his panel still has concerns, the business plan developed by the rail authority in 2012 "presents a much improved view of how to initiate the project and how to better integrate it into California's overall transportation system."

Project changes

In his statement, Richard acknowledged the project's changes since Prop. 1A was approved in 2008 with the idea of a dedicated high-speed line between San Francisco and Los Angeles -- a plan that in 2011 was estimated to cost more than $98 billion. By sharing existing train corridors and systems in the Bay Area and Southern California in what is now called a "blended system," the rail authority estimates shaving about $30 billion off that bloated cost.

"The blended approach does not degrade ultimate high-speed rail service times," Richard said, responding to assertions by Denham and Valadao that high-speed rail money should not be used to improve existing passenger rail systems.

Valadao was unmoved, saying he believes the money would be better spent elsewhere. "We've seen so many cuts and so many things that have affected people in their everyday lives, and now we're spending all this money on this project," he said.

Valadao added that Prop. 1A -- which mandated trains capable of traveling at 220 mph and able to make nonstop trip between Los Angeles and San Francisco in 2 hours 40 minutes -- was "flawed from the first day it was put on the ballot."

"When you set an ideal that the train has to go a certain speed, that it has to go between certain communities in a certain amount of time," he said, "you define it in a way that was going to be tough to live up to."

Richard told Denham that it is premature to expect private investment now in the high-speed project.

"In the absence of completion and revenue guarantees, the private sector will want to see a proven revenue stream from a completed project prior to their willingness to invest," Richard said.

He added that in addition to taking bids for licensing the right to operate the passenger trains on the state-owned tracks, additional revenue could be generated by real estate development at station sites across the state and by licensing companies to use the railroad right of way for communications systems including fiber optic lines.

Costa supports, but Denham unconvinced

Costa, a longtime supporter of high-speed rail from his time in the state Senate in the 1990s, said California needs high-speed rail as an alternative to clogged highways and congested airline routes. "California obviously has a transportation system today that most experts agree is inadequate to serve our long-term needs," he said. "The question is not, 'Should we invest?' The question is, 'How should we invest?' "

He also spoke about the project's economic potential.

"From the time the first shovel hits the ground this summer, the project will be an economic game changer for this Valley," Costa added. "With the high unemployment we have, we desperately need the thousands of jobs that this system is going to create over the long-term."

Denham, however, remained steadfast, saying after the hearing that he heard nothing to give him reason to support the project.

"I believe we need to get back to a plan that the voters voted on, and if not, then we need to go back to the voters," he said. "Right now this initial construction segment will not be electrified, will not be high speed, and will be operated by Amtrak. That is far from what Prop. 1A was. So it leaves a lot of questions for Valley residents."

The rail authority expects to authorize awarding a $985 million contract next week to a contractor to design and build a 29-mile stretch between Madera and Fresno. That would represent the first segment of high-speed rail construction in the state, part of a 130-mile, $6 billion "backbone" between Merced and Bakersfield, from which extensions would reach southward into Los Angeles and northwest toward San Francisco.

The reporter can be reached at (559) 441-6319, tsheehan@fresnobee.com or @tsheehan on Twitter.

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