New Setbacks for the Beleaguered California Bullet Train

A proposal by Senator Michael Rubio (SB 317) to loosen California's landmark environmental protection law commonly known as CEQA, has been shelved. The proposed legislation was intended to exempt the Central Valley rail construction project from CEQA requirements, thereby removing the threat of environmental litigation against the project. The bill, if approved,  would have likely led to the dismissal of currently pending lawsuits against the California High-Speed Rail Authority (CHSRA), and specifically the challenges filed by the Merced and Madera Farm Bureaus, according to Gary Patton, a California attorney who has been involved in environmental litigation. With environmental protections remaining in place, CEQA-based challenges could seriously  delay the start of construction and jeopardize the Authority's ability to complete the Central Valley project by the federally imposed deadline of September 2017. Missing the federal deadline would deprive the project of the balance of the $3.3 billion federal grant.

The unexpected cancellation of Sen. Rubio's bill is credited to the opposition of powerful environmental groups and local elected officials. The latter sent a letter to Senate President Pro Tempore Darrel Steinberg and Assembly Speaker John Perez opposing "any proposal to create significant new exemptions or otherwise re-write CEQA in the days ahead." The proposed bill, wrote the officials, contain major changes to the existing law that have not been properly vetted and are being pushed  by "special interests in an end of session power play." In the end, Sen. Steinberg chose to side with the objectors rather than with a fellow Democrat.   "This law for all its strenghts and faults," he said, "is far too important to rewrite in the last days of the session."

What Lies Ahead?

The announced schedule for the California HSR procurement process calls for proposals from the five qualified bidders due in September 2012, contract award in December 2012, and Notice to Proceed  (on the 60-mile Merced-to-Fresno section of the line) in January 2013. No schedule has been announced for the Fresno-to-Bakersfield segment whose final EIR/EIS is not expected until early 2013.  

However, before construction can begin (initially on a 29-mile line segment  from Madera to south of Fresno), the necessary rights-of-way for the HSR track must be acquired. The acquisition  process will include appraisals, acquisition offers, negotiations with land owners and relocation assistance (if any). These actions could be delayed by any potential legal challenges filed against the project by members of the Merced and Madera Farm Bureaus. 

"It's going to be a long battle for the Rail Authority, said Amanda Carvajal, executive director of the Merced County Farm Bureau. "There is going to be opposition every step of the way."  "We feel that the evidence against the Authority's environmental document being adequate or truthful is solid," echoed Tom Rogers, President of the Madera County Farm Bureau in announcing the filing of a class action environmental lawsuit against the Authority in early June. Anja Raudabaugh, executive director of the Farm Bureau added,   "...this lawsuit was necessary to protect the bedrock economy of agriculture in the Valley. ... We are actively seeking support from the community, local businesses and anyone who feels the rail project is to the detriment of their livelihood and way of life."    

The strength of opposition to the bullet train in the Central Valley has led some observers to conclude that the actual groundbreaking and start of construction on the initial segment of the line could be many months if not years away. 

New Operating Cost Analysis Casts Doubt on the Project's Profitability

New doubts concerning the financial viability of the California bullet train have been cast by the August 22 publication  of a report by William Warren and William Grindley, two prominent critics of California's HSR project. The report challenges the Authority's claim that the bullet train's revenues will cover its operating and maintenance (O&M) costs as required by the enabling Proposition 1A law. The 198-page report concludes that  the high-speed train "is in the untenable position of having to compete against the low costs of automobile travel  and intra-California airfares while simultaneously meeting AB 3034 (Proposition 1A) requirement to be profitable."    

To successfully compete with the low costs of driving and flying, the authors contend the bullet train must keep the per passenger mile (PPM) fares somewhere in the 20 cent/PPM range.  The average PPM fare for existing HSR systems is more than twice what the Authority projects ---47 cents versus 23 cents/PPM.

The authors used the Northeast Corridor's high-speed train Acela  for their comparison because its operating costs offer the closest equivalent to the California bullet train in terms of  labor, power, maintenance and employee benefit costs   The real life examples show that existing high-speed rail  operating costs exceed 30¢/ PPM, while the Authority claims operating costs of only 10¢/ PPM. 

The authors conclude: "The difference between the reality of high-speed rail’s operating costs and the fares CHSRA says they will charge can only be made up by subsidies which are  prohibited by law.   That means hundreds of millions to several billions of dollars  will need to be found from California’s taxpayers every year." 
The report has received  wide distribution in Sacramento and  can be found at  www.sites.google.com/site/hsrcaliffr,  It will be also available at www.cc-hsr.org.

Ken Orski has worked professionally in the field of transportation for over 30 years.