Plagued by years of funding shortages and spiraling costs, California’s beleaguered high-speed rail project suffered another unexpected blow this month in a new report that more than tripled the cost estimate for the San Francisco-to-San Jose segment to a staggering $5.3 billion.
The new price tag is part of a report that completes a years-long environmental clearance process for the 48-mile corridor that would carry bullet trains down the Peninsula on electrified Caltrain tracks at 110 miles per hour and eventually on to Southern California. It outlines three stops, a controversial rail yard in Brisbane, and money allocated to everything from protecting Monarch butterflies to restoring Bent-flowered fiddleneck habitat.
But the environmental document released last week also includes the new price tag for the recommended route through the Peninsula which is more than three times the figure penciled into the High-Speed Rail Authority’s 2022 business plan.
These eye-popping budget revisions are partly due to inflation, real estate costs, and supply chain woes impacting megaprojects around the country. But they also underscore the shaky grip the High-Speed Rail Authority has on cost projections for the embattled rail project, a vision that is already morphed into one of California’s most expensive and controversial undertakings.
Brian Kelly, CEO of the High-Speed Rail Authority, said the agency is in a bind over cost estimates because without funding they are unable to structure budgets on an accurate timeline.
“I don’t really think it’s fair to ask us ‘Gee, what are your cost estimates to get somewhere’ when nobody is providing us funding to get there,” said Kelly. “That just puts us in a guess-forever position.”
Even with the dramatically higher cost figures, the San Jose-to-San Francisco link is relatively cheap and less disruptive compared to other segments of the project because it relies on existing Caltrain tracks and stations. Unlike the line connecting the Central Valley to Silicon Valley, there’s no massive tunnel boring operation involved.
Louis Thompson, head of a state-mandated peer review group, said some estimates in the budget blueprint are years out of date just as lawmakers are haggling with Gov. Gavin Newsom over whether to commit the remaining $4.2 billion in voter-approved money to finish building the Central Valley segment of the rail line from Bakersfield to Merced, often dubbed the “train to nowhere.”
“There’s no official updating of the [budget] numbers due until 2023,” said Thompson. “So what is the Legislature buying into?”
When voters green-lit the project in 2008 they were promised a two-hour and 40-minute ride from Los Angeles to San Francisco, with connections to Sacramento and San Diego at a cost of $45 billion. Since then the estimated price tag has more than doubled.
The 2022 business plan – approved in April without the inflated costs for San Jose to San Francisco – already tacked on an extra $13 billion bringing the higher-end cost up to $113 billion for the entire project. In an interview, Kelly, HSR’s CEO, said it could go up to $120 billion.
The Bay Area segment would include stops at three expanded Caltrain stations — Diridon in San Jose, Millbrae, and 4th and King in San Francisco. Eventually rail officials hope the line will further extend to the Salesforce Transit Center. The project would straighten track, improve safety at road crossings and modify at least eight Caltrain stations to make way for bullet trains along the Caltrain corridor.
Still, high-speed rail into the Bay Area is going to have to overcome opposition from Peninsula cities that are already threatening litigation. They say a bullet train forsakes critically needed new housing developments in favor of a rail project that may never come.
“It’s like a two-year-old with a train set. Just building his train set from point A to point B,” said Clayton Holstine, the city manager for Brisbane, which is looking to build housing on land desired by the High-Speed Rail Authority. “From my perspective, they’re in a silo.”
A train through the Bay Area is not likely to begin operating over the next decade. The authority only has funding to build the 119-mile Central Valley link at a cost of $23.9 billion. Even that segment, which is championed by Gov. Gavin Newsom as a critical testing ground for high-speed rail, is likely to need a new source of money.
“They just barely have the funding potentially to do Merced to Bakersfield,” said Helen Kerstein, a high-speed rail expert at the non-partisan Legislative Analyst’s Office. “There’s certainly a risk that additional funding may be needed to even do that piece.”
The biggest source of high-speed rail funding is currently revenue from California’s cap and trade program, which forces companies to buy greenhouse gas credits based on how much they pollute.
Now the rail authority is turning to Washington hoping that President Joe Biden’s $1 trillion infrastructure bill will give the struggling rail project new financial momentum. But unlike some East Coast train plans, there’s no dedicated funding for California’s mega-rail blueprint leaving high-speed rail to compete for dollars alongside transit projects across the country.
“It is still much less expensive than if you were trying to get the same mobility benefits with freeway and airport expansions,” said Kelly, the HSR head. “So it’s still a bargain and still worth doing.”
