Four years ago, the California High-Speed Rail Authority planned its first operational segment from the San Joaquin Valley to Los Angeles – a Southern California connection that the agency believed was most likely to produce enough ridership to at least break even and cover its operating costs without requiring public funds.
Now, that south-first strategy for the statewide rail project could be in for a major shake-up. The agency’s leaders are contemplating a north-first option to link the San Joaquin Valley to San Jose and the Bay Area instead of the San Fernando Valley – a move that could be billions of dollars cheaper, and get at least a partial system operating faster than punching tunnels through the San Gabriel Mountains.
Until the rail authority releases a draft version of its 2016 business plan – expected sometime in February – rail board Chairman Dan Richard is being coy about the details. The plan will go through a 60-day comment period before it is approved by the authority and sent to the Legislature.
“We’re not afraid to re-look at things that we’ve looked at in the past,” Richard told an Assembly budget subcommittee last week. “What we’re looking at is, how do we get a high-speed train … up and running as fast as possible.”
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Such a change would have little bearing on construction work underway in Madera and Fresno counties on the first portion of the rail route in the Valley. Contracts have been awarded for developing the high-speed infrastructure from northeast of Madera to Shafter in Kern County. Whichever direction the rail authority chooses to go – Merced south to Burbank or Bakersfield north to San Jose – the segments under construction in the Valley would provide the backbone through Central California.
We’re not afraid to re-look at things that we’ve looked at in the past. What we’re looking at is, how do we get a high-speed train
Dan Richard, California High-Speed Rail Authority board chairman
But the difference in cost between the two options could be substantial. Given that the estimated $68 billion price tag for the Phase 1 system from downtown San Francisco to downtown Los Angeles and Anaheim is a key driver of concern over the practicality of the project, the rail authority is acutely aware of the need to show something for its efforts, and to do so as quickly as possible.
For the rail authority – confronted with a finite amount of money and a considerable gap between available funds and the cost of burrowing through two Southern California mountain ranges to get to Sylmar or Burbank – connecting the Valley with the Bay Area could well prove a more cost-effective route for the first stage of a true statewide network.
One end or the other?
Among the conditions set in Proposition 1A, the $9.9 billion high-speed rail bond measure that was approved by California voters in 2008, was that a high-speed train system must be able to cover its operating costs without any taxpayer support or subsidy. A key to that will be the ability to attract enough riders to make the system at least break even.
Now that contractors have been selected to design and build the first 116 miles of the route through the Valley and construction is happening, “our next effort is to really articulate what happens next after this initial segment in the Valley,” Richard told The Fresno Bee editorial board in November. “Do we go north? Do we go south? What do we do to accelerate the program?”
He said the bond act says high-speed rail cannot operate with a subsidy. “So as we look at this, we have to look at what is the segment that we can open, and how can we open it so we can meet that criteria of the bond act that’s so important.”
The authority has about $6 billion available for its initial construction segments in the Valley, a combination of federal transportation money, stimulus funds from the American Recovery and Reinvestment Act and bond money from Proposition 1A. The agency also is receiving a share of money from the state’s greenhouse-gas reduction program, estimated to be about $500 million a year, through at least 2020.
In its 2014 business plan, the agency projected that it would cost an additional $21.8 billion in current dollars to complete a proposed first operational portion of the system from Merced to the San Fernando Valley by 2022. By contrast, the business plan forecast that extending the system from the Valley to San Jose would cost about $14.7 billion by 2028.
Richard told legislators last week that any decision to change the initial operating segment would not be at the expense of the other end of the state. “Nobody’s going to be left behind, no matter what we do,” he said. “We will be laying out for you in the next couple of weeks with this draft plan how we build the entire system in California, not just part of the system.”
One group that’s had its eyes on the high-speed rail program for years is the Rail Passenger Association of California and Nevada, or RailPAC. Its president, Paul Dyson of Burbank, said his organization supports the idea of heading to the Bay Area first before tackling the more technically challenging task of reaching into the San Fernando Valley.
“Going north opens up some very good markets from the San Joaquin Valley into the Silicon Valley,” he said. Because the rail agency is working with CalTrain to electrify the commuter rail system that runs on the San Francisco Peninsula between San Jose and San Francisco, “reaching San Francisco International Airport could be significant for the Valley.”
Going north opens up some very good markets from the San Joaquin Valley into the Silicon Valley.
Paul Dyson, president, Rail Passenger Association of California and Nevada
Dyson said he expects a choice between north and south could be charged “with political pushing and pulling from different interests.” But, he added, “to the best of our knowledge, (going north) would be less expensive and quicker.”
One reason touted by the rail agency in 2012 and 2014 for a Merced-Sylmar initial operating segment was that it could close an existing gap in California’s passenger train service between Bakersfield and Los Angeles. Riders on Amtrak’s San Joaquin line now have to take a bus from Bakersfield to reach Union Station in Los Angeles.
“That’s an important gap that’s been in existence since 1978,” Dyson said. “Filling that gap has been one of the things we’ve campaigned for all these years. … Bridging that gap needs to be done, but it sounds easier than it is to do that.”
Dyson said he believes that even if the rail authority opts to start operations to the Bay Area first, the agency must make the necessary preparations to connect Southern California to the rest of the high-speed train system with station improvements and track electrification. (High-speed trains will be powered by electricity to minimize air pollution impacts.)
That concern aligns with what Richard described as the agency’s goals. “Right now we’re working simultaneously in three areas,” he said. In the Valley, construction is happening on the first sections of the system’s backbone. “We’re also working at the bookends, in Northern California where there are billions of dollars – including the upgrade of the CalTrain service, which will be part of our system – and also in Southern California” with planning for track improvements and grade separations, he testified last week. “You can expect to continue to see in our business plan simultaneous activities across the state.”
Money, politics remain issues
A stark reality facing the rail authority is that building anything beyond the Central Valley – no matter which direction is laid out in the new business plan – will require considerably more money.
The Republican-controlled U.S. Congress has staunchly refused to provide any additional federal money for the California project beyond the $3 billion already committed.
There is an effort underway to put an initiative on the ballot to redirect what is left of Proposition 1A money to build dams and water infrastructure instead of a bullet train. And last fall, private-sector companies in the realms of rail, infrastructure and financing all expressed concern about private investment or participation in the system until it can be proven financially viable through an initial operational line.
“The numbers are the numbers,” Richard said in November. “That becomes the focus of our business planning. What do we have, what are we likely to get? … How can we take the available resources and get to an operating system as quickly as possible?” That, he added, will be a key to getting the private sector involved through either capital financing or outright investment.
Congressional politics aside, the next election for governor also could weigh heavily on the future of the rail project. Gov. Jerry Brown has been a staunch supporter of the program, championing and shepherding budget allocations to keep moving work forward.
But Brown’s term ends in early 2019, and those lining up to replace him – including Lt. Gov. Gavin Newsom, who like Brown is a Democrat – have voiced degrees of opposition, concern or indifference to the rail project. A new governor, Richard acknowledged, could send the train off the rails by vetoing future legislative appropriations or directing his cabinet to block progress.
In the meantime, “we just need to build and build and build,” Richard said in November. By 2018, “we will hopefully have made enough progress so that (a future governor) isn’t faced with the decision of having to shut it down.”
When the federal government ponied up its grant funds for high-speed rail construction in the San Joaquin Valley, the money came with a significant string attached: If California failed to come up with what it needs to build beyond the Valley, the tracks between Bakersfield and Merced must have “independent utility” – the ability to be used for passenger rail transportation on its own, absent a completed statewide system. For the rail authority, that independent utility would call for Amtrak, which now pays to share the BNSF Railway’s freight tracks between Bakersfield and Merced, to use the tracks as a dedicated stretch for its San Joaquin trains.
“That’s a fail-safe. We retain that as an option, and there is money specifically reserved in the (federal) grant to do that,” rail authority CEO Jeff Morales said. “That’s Plan B. Obviously that’s not the goal we have in mind.”
But, Morales added, that prospect was one of the main reasons for Brown to push so hard to allocate an ongoing share of cap-and-trade money from the greenhouse-gas reduction program to the bullet train.
“Can the state move forward and drive this program as a state-funded program? That’s where the cap-and-trade commitment came from,” he said. “The goal is to move way past that idea of independent utility in the Valley ever having to become a reality. The point is to build out an operating system.”