The cost to build a high-speed rail line between San Francisco and Los Angeles by 2028 is predicted to drop slightly from the previous forecast to a grand total of about $67.6 billion, the California High-Speed Rail Authority said Friday.
The authority released a new draft business plan that also forecasts more riders but lower ticket revenue than its previous plan, while continuing to predict that the system can at least break even and operate without a subsidy.
The revised construction cost estimate is down by about 1% from the $68.4 billion that was forecast in the agency's previous business plan, which dates to April 2012. The draft 2014 plan, written by the agency's management staff, will be presented to the rail authority board at its meeting Tuesday in Sacramento. It will be subject to public comment and criticism for a couple of months before a final version is due May 1.
The rail agency hopes to begin construction on its first section, a 29-mile stretch between Madera and Fresno, this summer. It awarded a contract of just under $1 billion to a contracting consortium of Sylmar's Tutor Perini Corp., Zachry Construction of Texas and Parsons Inc. of Pasadena, to complete the design of the segment and build it. The Madera-Fresno portion is part of the "initial construction segment" from Merced to Bakersfield, estimated to cost about $6.2 billion.
The federal government has put up $3.3 billion in stimulus and transportation money for construction in the San Joaquin Valley. The authority must put up almost $3 billion starting this year. But the state's ability to raise the matching funds is stalled by court rulings last fall, potentially jeopardizing the project and threatening to reduce the business plan to an academic exercise.
Despite the meager dip in capital costs in the new business plan, the price tag remains well above the $33 billion touted when Proposition 1A, a $9.9 billion high-speed rail bond measure, was approved by California voters in 2008.
High-speed rail cost estimates, always a subject of close scrutiny, have been something of a roller-coaster ride for the authority and its critics in recent years:
• The 2008 version of the business plan predicted that it would cost about $33 billion, in 2008 dollars, to build the 520-mile Phase 1 from San Francisco to Los Angeles/Anaheim using fully dedicated tracks.
• By 2009, in a report to the Legislature, the authority revised its cost forecast to $34.9 billion in 2008 dollars, or $42.6 million adjusted for inflation.
• A draft of the 2012 business plan, released in November 2011, caused whiplash for many observers when it predicted construction costs of $65.4 million in 2010 dollars -- or an eye-popping $98.1 billion adjusted for inflation through 2033.
• The revised April 2012 business plan scaled down both the plan and the cost. It proposed sharing existing and upgraded commuter-train tracks in the Bay Area and the Los Angeles basin. The price shrank to $68.4 billion in inflation-adjusted costs, or $53.4 million in 2011 dollars.
The plan released Friday forecasts more people riding the high-speed trains if or when they begin operating in the early 2020s between Merced and the San Fernando Valley.
By 2025, predicted by the rail authority to be the fourth year of operation for the 220-mph electric trains, ridership is expected to be between 7.4 million and 14 million riders annually.
The money generated by ticket sales for those riders is projected to be between $417 million and $773 million in today's dollars -- or $577 million to $1.07 billion in dollars adjusted for inflation through 2025.
The range of revenue forecasts is down by 5% to 10% from the 2012 business plan -- the result of new analysis models that predict more riders taking shorter trips.
But the plan suggests that ticket sales will be more than enough to cover the system's operating costs, which are estimated at between $317 million and $403 million in 2025.
The new business plan comes at a time when the project faces skepticism over its funding and its construction schedule.
Rail opponents are suing to prevent the rail authority from using money from Prop. 1A. Rulings in two court cases are being appealed by the state, and a hearing is set for Feb. 14 in Sacramento County Superior Court in the rail agency's bid to avoid a trial in Kings County's lawsuit on whether the "blended" system can live up to financial and operational performance promises made in Prop. 1A.
The authority is also facing time crunches. Its grant agreements contain a couple of deadlines -- one on April 1 for the state to begin matching its federal grant, and one for substantial completion of its Merced-Bakersfield construction by September 2017.
A memo prepared for the authority's board meeting Tuesday reported that as of Jan. 20, the agency has secured nine right-of-way parcels and acknowledged that parcel acquisition is behind "and continues to be a schedule risk."
How far behind? There are more than 400 parcels that the agency needs to acquire, in whole or in part, in the Madera-Fresno section. The authority identified 75 of those that it wanted to have in hand by last September, and 130 more that it needed by the end of 2013.
How to comment on the latest draft business plan
The draft 2014 Business Plan released Friday by the California High-Speed Rail Authority will be subject to public review and comment for two months. The plan is available online at www.hsr.ca.gov/About/Business_Plans/Draft_2014_Business_Plan.html
Comments can be submitted:
• Through an online comment form on the rail authority's website at www.hsr.ca.gov/About/Business_Plans/Draft_2014_Business_Plan_Comments.html
• By email to firstname.lastname@example.org
• By mail to: California High-Speed Rail Authority, Attn: 2014 Business Plan, 770 L St., Suite 800, Sacramento, CA 95814
• By telephone message at (916) 384-9516
• In person at the rail authority's board meetings on Feb. 11, March 11 or April 10.
The reporter can be reached at (559) 441-6319, email@example.com or @tsheehan on Twitter.