The Project California voters will be asked to approve a nearly $10 billion bond issue in the November election as the beginning of funding for the a high-speed rail system intended to serve San Francisco, Los Angeles, San Diego, Sacramento, Fresno, Riverside-San Bernardino and points between. Promoters claim that the remaining necessary funding (from $45 billion to $71 billion, depending upon who you believe) would come from the federal government and private investors. There is no federal program to provide such massive funding and private investment seems highly unlikely given the overwhelming prospects for financial failure.
The Issue The CHSRA lacks a comprehensive financing plan. The proposed state bonds would be insufficient to build Phase I, much less the rest of the system. Little appears firm about potential matching funds from federal and local governments and from potential investors. The state Senate Transportation and Housing committee has issued cautionary statements about the availability of matching federal funds. Also, CHSRA advisor Lehman Brothers has outlined risks that can be a barrier to private investment, including cost overruns, failure to reach ridership and revenue projections and political meddling. Meanwhile, the cost of the project continues to grow.
In the final analysis, it will be most difficult for CHSRA to obtain sufficient financing to complete the Phase I San Francisco–Los Angeles–Anaheim route. This Due Diligence report concludes that commercial revenues from that route are unlikely to be sufficient to pay operating costs and debt service, much less finance Phase II and other extensions. As a result, it seems highly unlikely that the Inland Empire-San Diego, Sacramento, East Bay San Jose to Oakland and Altamont Pass routes will be built. Further, in the worst case, funding shortfalls could require greater use of modestly improved conventional rail infrastructure in Phase I, which could add hours to the promised travel times.
All of this could lead to negative financial consequences, such as substantial additional taxpayer subsidies, private investment losses, and commercial bond defaults.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
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Showing posts with label California High Speed Rail. Show all posts
Showing posts with label California High Speed Rail. Show all posts
2008/10/01
California High Speed Rail: State Agency Misleads State Senate & Public
The Project California voters will be asked to approve a nearly $10 billion bond issue in the November election as the beginning of funding for the a high-speed rail system intended to serve San Francisco, Los Angeles, San Diego, Sacramento, Fresno, Riverside-San Bernardino and points between. Promoters claim that the remaining necessary funding (from $45 billion to $71 billion, depending upon who you believe) would come from the federal government and private investors. There is no federal program to provide such massive funding and private investment seems highly unlikely given the overwhelming prospects for financial failure.
The Issue Emerging public opposition will likely spread as site-specific urban, suburban and rural impacts become better understood. It is unlikely that the California HSR program will find smooth sailing among impacted communities. This finding is based in part on nascent opposition to the project. Opposition to prior HSR projects has been based on underestimated costs, overestimated ridership, eminent domain and environmental impacts. Also, the credibility of HSR promoters has waned as pledges of “no subsidy” or “only low subsidies” turned into calls for high subsidies. This Due Diligence Report identifies such factors as weaknesses in the CHSRA planning process.
In prior cases opponents have shown great resourcefulness in sustaining campaigns to oppose HSR construction. Opposition could spread, particularly in communities where train speeds and noise would be considered excessive, where massive elevated railways would create a “Berlin Wall” effect that divides communities—a prospect that has caused Menlo Park and Atherton to join in a lawsuit against the CHSRA’s environmental review process—or where a history of staunch opposition exists, such as in Tustin or San Diego County.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
The Issue Emerging public opposition will likely spread as site-specific urban, suburban and rural impacts become better understood. It is unlikely that the California HSR program will find smooth sailing among impacted communities. This finding is based in part on nascent opposition to the project. Opposition to prior HSR projects has been based on underestimated costs, overestimated ridership, eminent domain and environmental impacts. Also, the credibility of HSR promoters has waned as pledges of “no subsidy” or “only low subsidies” turned into calls for high subsidies. This Due Diligence Report identifies such factors as weaknesses in the CHSRA planning process.
In prior cases opponents have shown great resourcefulness in sustaining campaigns to oppose HSR construction. Opposition could spread, particularly in communities where train speeds and noise would be considered excessive, where massive elevated railways would create a “Berlin Wall” effect that divides communities—a prospect that has caused Menlo Park and Atherton to join in a lawsuit against the CHSRA’s environmental review process—or where a history of staunch opposition exists, such as in Tustin or San Diego County.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
California High Speed Rail: Big Losses & Huge Taxpayer Subsidies
The Project California voters will be asked to approve a nearly $10 billion bond issue in the November election as the beginning of funding for the a high-speed rail system intended to serve San Francisco, Los Angeles, San Diego, Sacramento, Fresno, Riverside-San Bernardino and points between. Promoters claim that the remaining necessary funding (from $45 billion to $71 billion, depending upon who you believe) would come from the federal government and private investors. There is no federal program to provide such massive funding and private investment seems highly unlikely given the overwhelming prospects for financial failure.
The Issue There is little likelihood that the passenger or revenue projections will be met, that the aggressive travel times will be achieved, that the service levels promised will be achieved, that the capital and operating costs will be contained consistent with present estimates, that sufficient funding will be found, or that the system will be profitable.
It is likely that these circumstances will represent an expensive and continuing drain on the state’s tax resources. Under three of the four scenarios outlined in this report, an early bond default, taxpayer bailout, and investment losses by private funding participants could occur.
To address a fiscal shortfall, past and present proposals to finance HSR’s construction and operation through general obligation state bonds and sales taxes—along with matching funds from the federal and local governments—could be futile. Hence, the HSR system is unlikely to be completed in any form consistent with the current plan and that even the delivery of a recognizable Phase I could be most difficult.
The outcome could mean investors in the project will see no financial returns and the HSR system as proposed could require significant subsidies from California taxpayers in perpetuity.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
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The Issue There is little likelihood that the passenger or revenue projections will be met, that the aggressive travel times will be achieved, that the service levels promised will be achieved, that the capital and operating costs will be contained consistent with present estimates, that sufficient funding will be found, or that the system will be profitable.
It is likely that these circumstances will represent an expensive and continuing drain on the state’s tax resources. Under three of the four scenarios outlined in this report, an early bond default, taxpayer bailout, and investment losses by private funding participants could occur.
To address a fiscal shortfall, past and present proposals to finance HSR’s construction and operation through general obligation state bonds and sales taxes—along with matching funds from the federal and local governments—could be futile. Hence, the HSR system is unlikely to be completed in any form consistent with the current plan and that even the delivery of a recognizable Phase I could be most difficult.
The outcome could mean investors in the project will see no financial returns and the HSR system as proposed could require significant subsidies from California taxpayers in perpetuity.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
California High Speed Rail: Projections Attacked by Senator Mills & UC Berkeley Professor
The Project California voters will be asked to approve a nearly $10 billion bond issue in the November election as the beginning of funding for the a high-speed rail system intended to serve San Francisco, Los Angeles, San Diego, Sacramento, Fresno, Riverside-San Bernardino and points between. Promoters claim that the remaining necessary funding (from $45 billion to $71 billion, depending upon who you believe) would come from the federal government and private investors. There is no federal program to provide such massive funding and private investment seems highly unlikely given the overwhelming prospects for financial failure.
The Issue Even before the much higher 2030 ridership projections were released, the CHSRA’s forecasts had come under unusually provocative criticism. University of California professor and transportation textbook author William Garrison characterized claims of massive ridership and low fares as “outrageous statements and lies,” which echoed the evaluation of the world infrastructure research previously cited.
Additionally, Former State Senate President James Mills, who is also considered the “father” of the San Diego Trolley, served on the CHSRA board. He expressed similar views. It is reported that Mills resigned from CHSRA at least partially because he “couldn’t get the truth” out of staff. He is reported to have “described the entire project as ‘based on a fallacy’ of wildly exaggerated ridership projections. It stems, he said, ‘from hiring a consulting firm (and) letting them know what you want them to say.” This is an extraordinary statement from a long-time and continuing rail supporter, who nonetheless, points to a significantly flawed planning process.
Both of these statements were made on the basis of earlier ridership projections, which were far less aggressive than are being currently used by CHSRA.
There are multiple indications that the CHSRA ridership projections appear to be absurdly high. Ridership inflation is consistent with the experience of demand exaggeration that has been identified in the world infrastructure research. As a result, it can be expected that CHSRA fare revenue will be far less than anticipated, leading to financial difficulties.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
The Project California voters will be asked to approve a nearly $10 billion bond issue in the November election as the beginning of funding for the a high-speed rail system intended to serve San Francisco, Los Angeles, San Diego, Sacramento, Fresno, Riverside-San Bernardino and points between. Promoters claim that the remaining necessary funding (from $45 billion to $71 billion, depending upon who you believe) would come from the federal government and private investors. There is no federal program to provide such massive funding and private investment seems highly unlikely given the overwhelming prospects for financial failure.
The Issue Even before the much higher 2030 ridership projections were released, the CHSRA’s forecasts had come under unusually provocative criticism. University of California professor and transportation textbook author William Garrison characterized claims of massive ridership and low fares as “outrageous statements and lies,” which echoed the evaluation of the world infrastructure research previously cited.
Additionally, Former State Senate President James Mills, who is also considered the “father” of the San Diego Trolley, served on the CHSRA board. He expressed similar views. It is reported that Mills resigned from CHSRA at least partially because he “couldn’t get the truth” out of staff. He is reported to have “described the entire project as ‘based on a fallacy’ of wildly exaggerated ridership projections. It stems, he said, ‘from hiring a consulting firm (and) letting them know what you want them to say.” This is an extraordinary statement from a long-time and continuing rail supporter, who nonetheless, points to a significantly flawed planning process.
Both of these statements were made on the basis of earlier ridership projections, which were far less aggressive than are being currently used by CHSRA.
There are multiple indications that the CHSRA ridership projections appear to be absurdly high. Ridership inflation is consistent with the experience of demand exaggeration that has been identified in the world infrastructure research. As a result, it can be expected that CHSRA fare revenue will be far less than anticipated, leading to financial difficulties.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
California High Speed Rail: Projections Attacked by Senator Mills & UC Berkeley Professor
The Project California voters will be asked to approve a nearly $10 billion bond issue in the November election as the beginning of funding for the a high-speed rail system intended to serve San Francisco, Los Angeles, San Diego, Sacramento, Fresno, Riverside-San Bernardino and points between. Promoters claim that the remaining necessary funding (from $45 billion to $71 billion, depending upon who you believe) would come from the federal government and private investors. There is no federal program to provide such massive funding and private investment seems highly unlikely given the overwhelming prospects for financial failure.
The Issue Even before the much higher 2030 ridership projections were released, the CHSRA’s forecasts had come under unusually provocative criticism. University of California professor and transportation textbook author William Garrison characterized claims of massive ridership and low fares as “outrageous statements and lies,” which echoed the evaluation of the world infrastructure research previously cited.
Additionally, Former State Senate President James Mills, who is also considered the “father” of the San Diego Trolley, served on the CHSRA board. He expressed similar views. It is reported that Mills resigned from CHSRA at least partially because he “couldn’t get the truth” out of staff. He is reported to have “described the entire project as ‘based on a fallacy’ of wildly exaggerated ridership projections. It stems, he said, ‘from hiring a consulting firm (and) letting them know what you want them to say.” This is an extraordinary statement from a long-time and continuing rail supporter, who nonetheless, points to a significantly flawed planning process.
Both of these statements were made on the basis of earlier ridership projections, which were far less aggressive than are being currently used by CHSRA.
There are multiple indications that the CHSRA ridership projections appear to be absurdly high. Ridership inflation is consistent with the experience of demand exaggeration that has been identified in the world infrastructure research. As a result, it can be expected that CHSRA fare revenue will be far less than anticipated, leading to financial difficulties.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
The Issue Even before the much higher 2030 ridership projections were released, the CHSRA’s forecasts had come under unusually provocative criticism. University of California professor and transportation textbook author William Garrison characterized claims of massive ridership and low fares as “outrageous statements and lies,” which echoed the evaluation of the world infrastructure research previously cited.
Additionally, Former State Senate President James Mills, who is also considered the “father” of the San Diego Trolley, served on the CHSRA board. He expressed similar views. It is reported that Mills resigned from CHSRA at least partially because he “couldn’t get the truth” out of staff. He is reported to have “described the entire project as ‘based on a fallacy’ of wildly exaggerated ridership projections. It stems, he said, ‘from hiring a consulting firm (and) letting them know what you want them to say.” This is an extraordinary statement from a long-time and continuing rail supporter, who nonetheless, points to a significantly flawed planning process.
Both of these statements were made on the basis of earlier ridership projections, which were far less aggressive than are being currently used by CHSRA.
There are multiple indications that the CHSRA ridership projections appear to be absurdly high. Ridership inflation is consistent with the experience of demand exaggeration that has been identified in the world infrastructure research. As a result, it can be expected that CHSRA fare revenue will be far less than anticipated, leading to financial difficulties.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
2008/09/30
California High Speed Rail: The Exorbitant Cost of Greenhouse Gas Reduction
The Project California voters will be asked to approve a nearly $10 billion bond issue in the November election as the beginning of funding for the a high-speed rail system intended to serve San Francisco, Los Angeles, San Diego, Sacramento, Fresno, Riverside-San Bernardino and points between. Promoters claim that the remaining necessary funding (from $45 billion to $71 billion, depending upon who you believe) would come from the federal government and private investors. There is no federal program to provide such massive funding and private investment seems highly unlikely given the overwhelming prospects for financial failure.
The Issue The inconsequential contribution of high speed rail (HSR) to the California greenhouse gas (GHG) reduction goal would be achieved at great cost.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
The Issue The inconsequential contribution of high speed rail (HSR) to the California greenhouse gas (GHG) reduction goal would be achieved at great cost.
• Assuming the most optimistic figures (Scenario 1), the HSR cost per ton of CO2 removal is nearly 40 times the IPCC ceiling of $50 per ton and nearly 200 times the price of carbon offsets now for sale and being purchased by leading California political officials.
• Assuming the least optimistic figures (Scenario 4), if the HSR cost per ton of CO2 removal were used for the entire 169,000,000 metric ton California objective, the total cost would be more than the current California gross state product ($1.8 trillion). If the nation were to reduce CO2 emissions by 3,000,000 tons (consistent with the McKinsey report) at the same cost per ton as HSR, the total annual cost would be 2.5 times the present gross domestic product of the United States ($33 trillion). Obviously, reducing CO2 emissions at this cost would decimate the economy and increase both unemployment and poverty.
• HSR’s impact on CO2 emissions is so inconsequential that a similar reduction would be achieved by a statewide 0.5 mile per gallon improvement in car and SUV fuel economy in 2030. This is less than the apparent improvement in national new auto and SUV fuel efficiency between the first six months of 2008 and 2007, based upon an analysis of the 20 leading vehicle models (10 autos and 10 SUVs).
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
California High Speed Rail: Only Gilroy to Palmdale May be Affordable
The Project California voters will be asked to approve a nearly $10 billion bond issue in the November election as the beginning of funding for the a high-speed rail system intended to serve San Francisco, Los Angeles, San Diego, Sacramento, Fresno, Riverside-San Bernardino and points between. Promoters claim that the remaining necessary funding (from $45 billion to $71 billion, depending upon who you believe) would come from the federal government and private investors. There is no federal program to provide such massive funding and private investment seems highly unlikely given the overwhelming prospects for financial failure.
The Issue Should insufficient funding be available, the Phase I San Francisco-Los Angeles line could be scaled back to new HSR infrastructure limited to the section between Gilroy and Palmdale (a skeletal system). This would make it possible for high-speed trains to complete the downtown San Francisco to downtown Los Angeles route by operating at lower speeds over the existing-but-upgraded commuter rail and freight tracks between San Francisco and Gilroy and between Palmdale and Los Angeles (and perhaps to Anaheim).
Given the difficult financing situation, and considering how HSR construction costs vary for different segments, such a skeletal system could well emerge. For example, it appears that approximately one-half of Phase I construction costs are attributable to the San Francisco–Gilroy and Anaheim–Los Angeles–Palmdale segments. Hence, it is possible that the Gilroy–Palmdale section of the line could be built for between $15 billion and $22 billion, depending on the extent of capital cost overruns. It would be possible to fund such a truncated line from the currently hoped-for financing sources (state bond, matching federal funding and private investment). However, as indicated in Due Diligence Financial Projections obtaining this even this amount of funding is likely to be difficult.
Further, the Authority has indicated that the earliest segments to be built will be in the San Joaquin Valley. The first segment includes “development of a test track from Bakersfield to Merced, regardless of whether the Altamont or Pacheco Alignment is selected. Thus, the Central Valley is served between Bakersfield and Merced for either alternative.”
Consequently, events could develop in such a way that genuine HSR service would operate only between the peripheries of the Los Angeles and Bay Areas, namely Gilroy and Palmdale, meaning that California would have the form but not the substance of high-speed rail. The speeds on such a skeletal system would be faster than current rail services, but would fall far short of HSR standards and would provide little or no competition to airlines between the two major markets.
Because the existing Bay Area and Los Angeles rail lines are heavily utilized, the CHSRA would need to add track capacity, electrify the lines, and enhance grade-crossing protections. Even with such upgrading the HSR trains would need to mesh with the operating schedules and travel times of the commuter trains.
The skeletal system would be able to provide service between San Francisco and Los Angeles on a non-stop schedule of up to 5 hours and 30 minutes and between San Francisco and Anaheim with a stop in Los Angeles on a schedule of up to 6 hours and 15 minutes.
Another factor relevant to the Palmdale–Los Angeles segment is that the Southern California Association of Governments (SCAG) envisages construction of a maglev train system. Plans include maglev lines from the Los Angeles International Airport to the Palmdale airport. Such a development could exacerbate financial challenges for the HSR line, resulting in truncating even the Phase I operation into Los Angeles. This could result in Palmdale being the southern terminus for the HSR system with passengers transferring between it and the maglev system.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
The Issue Should insufficient funding be available, the Phase I San Francisco-Los Angeles line could be scaled back to new HSR infrastructure limited to the section between Gilroy and Palmdale (a skeletal system). This would make it possible for high-speed trains to complete the downtown San Francisco to downtown Los Angeles route by operating at lower speeds over the existing-but-upgraded commuter rail and freight tracks between San Francisco and Gilroy and between Palmdale and Los Angeles (and perhaps to Anaheim).
Given the difficult financing situation, and considering how HSR construction costs vary for different segments, such a skeletal system could well emerge. For example, it appears that approximately one-half of Phase I construction costs are attributable to the San Francisco–Gilroy and Anaheim–Los Angeles–Palmdale segments. Hence, it is possible that the Gilroy–Palmdale section of the line could be built for between $15 billion and $22 billion, depending on the extent of capital cost overruns. It would be possible to fund such a truncated line from the currently hoped-for financing sources (state bond, matching federal funding and private investment). However, as indicated in Due Diligence Financial Projections obtaining this even this amount of funding is likely to be difficult.
Further, the Authority has indicated that the earliest segments to be built will be in the San Joaquin Valley. The first segment includes “development of a test track from Bakersfield to Merced, regardless of whether the Altamont or Pacheco Alignment is selected. Thus, the Central Valley is served between Bakersfield and Merced for either alternative.”
Consequently, events could develop in such a way that genuine HSR service would operate only between the peripheries of the Los Angeles and Bay Areas, namely Gilroy and Palmdale, meaning that California would have the form but not the substance of high-speed rail. The speeds on such a skeletal system would be faster than current rail services, but would fall far short of HSR standards and would provide little or no competition to airlines between the two major markets.
Because the existing Bay Area and Los Angeles rail lines are heavily utilized, the CHSRA would need to add track capacity, electrify the lines, and enhance grade-crossing protections. Even with such upgrading the HSR trains would need to mesh with the operating schedules and travel times of the commuter trains.
The skeletal system would be able to provide service between San Francisco and Los Angeles on a non-stop schedule of up to 5 hours and 30 minutes and between San Francisco and Anaheim with a stop in Los Angeles on a schedule of up to 6 hours and 15 minutes.
Another factor relevant to the Palmdale–Los Angeles segment is that the Southern California Association of Governments (SCAG) envisages construction of a maglev train system. Plans include maglev lines from the Los Angeles International Airport to the Palmdale airport. Such a development could exacerbate financial challenges for the HSR line, resulting in truncating even the Phase I operation into Los Angeles. This could result in Palmdale being the southern terminus for the HSR system with passengers transferring between it and the maglev system.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
California High Speed Rail: Exaggerating the Impacts on Modal Alternatives
The Project California voters will be asked to approve a nearly $10 billion bond issue in the November election as the beginning of funding for the a high-speed rail system intended to serve San Francisco, Los Angeles, San Diego, Sacramento, Fresno, Riverside-San Bernardino and points between. Promoters claim that the remaining necessary funding (from $45 billion to $71 billion, depending upon who you believe) would come from the federal government and private investors. There is no federal program to provide such massive funding and private investment seems highly unlikely given the overwhelming prospects for financial failure.
The Issue One of the most eggregious exaggerations in a planning process rife with exaggeration and over-promotion has been the California High Speed Rail Authority's estimates of the cost of accomodating the future rail customers by highways and airports if the system is not built.
If the system were built, diversion of traffic from the highways and airports would be imperceptible. On average the CHSRA-developed Highway Alternative (calculated by this Due Diligence Report would reduce traffic congestion five times as much as HSR. Meeting the demand that would otherwise be switched to HSR would require much less alternative investments compared to the cost of HSR. The costs of the CHSRA’s asserted Highway and Aviation Alternatives to HSR cost of $82 billion is highly inflated due to dubious assumptions and fundamental flaws. Examples include the CHSRA proposing far more highway construction than is necessary to accommodate the demand.
Moreover, the CHSRA treats the commercial aviation system as if it is static—as if efficiencies to enhance capacity are impossible.The diversion of passengers from aviation is over-estimated. The CHSRA assumes that airlines will cancel a large share of the flights within California because passengers will have switched to HSR—and the diversion will free up airport capacity and make it possible to avoid costly airport expansions. This is not the experience even on the premier Japanese and French systems, which show that strong air markets remain after HSR corridors are in operation. The CHSRA’s created Highway and Aviation Alternatives is of no value in genuine cost analysis or in evaluating future roadway and airport expansion needs.
Call it cheerleading.
The Issue One of the most eggregious exaggerations in a planning process rife with exaggeration and over-promotion has been the California High Speed Rail Authority's estimates of the cost of accomodating the future rail customers by highways and airports if the system is not built.
If the system were built, diversion of traffic from the highways and airports would be imperceptible. On average the CHSRA-developed Highway Alternative (calculated by this Due Diligence Report would reduce traffic congestion five times as much as HSR. Meeting the demand that would otherwise be switched to HSR would require much less alternative investments compared to the cost of HSR. The costs of the CHSRA’s asserted Highway and Aviation Alternatives to HSR cost of $82 billion is highly inflated due to dubious assumptions and fundamental flaws. Examples include the CHSRA proposing far more highway construction than is necessary to accommodate the demand.
Moreover, the CHSRA treats the commercial aviation system as if it is static—as if efficiencies to enhance capacity are impossible.The diversion of passengers from aviation is over-estimated. The CHSRA assumes that airlines will cancel a large share of the flights within California because passengers will have switched to HSR—and the diversion will free up airport capacity and make it possible to avoid costly airport expansions. This is not the experience even on the premier Japanese and French systems, which show that strong air markets remain after HSR corridors are in operation. The CHSRA’s created Highway and Aviation Alternatives is of no value in genuine cost analysis or in evaluating future roadway and airport expansion needs.
Call it cheerleading.
California High Speed Rail: Service to Pomona Unlikely
The Project California voters will be asked to approve a nearly $10 billion bond issue in the November election as the beginning of funding for the a high-speed rail system intended to serve San Francisco, Los Angeles, San Diego, Sacramento, Fresno, Riverside-San Bernardino and points between. Promoters claim that the remaining necessary funding (from $45 billion to $71 billion, depending upon who you believe) would come from the federal government and private investors. There is no federal program to provide such massive funding and private investment seems highly unlikely given the overwhelming prospects for financial failure.
The Issue The CHSRA lacks a comprehensive financing plan. The proposed state bonds would be insufficient to build Phase I, much less the rest of the system. Little appears firm about potential matching funds from federal and local governments and from potential investors. The state Senate Transportation and Housing committee has issued cautionary statements about the availability of matching federal funds. Also, CHSRA advisor Lehman Brothers has outlined risks that can be a barrier to private investment, including cost overruns, failure to reach ridership and revenue projections and political meddling. Meanwhile, the cost of the project continues to grow.
In the final analysis, it will be most difficult for CHSRA to obtain sufficient financing to complete the Phase I San Francisco–Los Angeles–Anaheim route. This Due Diligence report concludes that commercial revenues from that route are unlikely to be sufficient to pay operating costs and debt service, much less finance Phase II and other extensions. As a result, it seems highly unlikely that the Inland Empire-San Diego, Sacramento, East Bay San Jose to Oakland and Altamont Pass routes will be built. Further, in the worst case, funding shortfalls could require greater use of modestly improved conventional rail infrastructure in Phase I, which could add hours to the promised travel times.
All of this could lead to negative financial consequences, such as substantial additional taxpayer subsidies, private investment losses, and commercial bond defaults.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
The Issue The CHSRA lacks a comprehensive financing plan. The proposed state bonds would be insufficient to build Phase I, much less the rest of the system. Little appears firm about potential matching funds from federal and local governments and from potential investors. The state Senate Transportation and Housing committee has issued cautionary statements about the availability of matching federal funds. Also, CHSRA advisor Lehman Brothers has outlined risks that can be a barrier to private investment, including cost overruns, failure to reach ridership and revenue projections and political meddling. Meanwhile, the cost of the project continues to grow.
In the final analysis, it will be most difficult for CHSRA to obtain sufficient financing to complete the Phase I San Francisco–Los Angeles–Anaheim route. This Due Diligence report concludes that commercial revenues from that route are unlikely to be sufficient to pay operating costs and debt service, much less finance Phase II and other extensions. As a result, it seems highly unlikely that the Inland Empire-San Diego, Sacramento, East Bay San Jose to Oakland and Altamont Pass routes will be built. Further, in the worst case, funding shortfalls could require greater use of modestly improved conventional rail infrastructure in Phase I, which could add hours to the promised travel times.
All of this could lead to negative financial consequences, such as substantial additional taxpayer subsidies, private investment losses, and commercial bond defaults.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
California High Speed Rail: Service to San Gabriel Valley Unlikely
The Project California voters will be asked to approve a nearly $10 billion bond issue in the November election as the beginning of funding for the a high-speed rail system intended to serve San Francisco, Los Angeles, San Diego, Sacramento, Fresno, Riverside-San Bernardino and points between. Promoters claim that the remaining necessary funding (from $45 billion to $71 billion, depending upon who you believe) would come from the federal government and private investors. There is no federal program to provide such massive funding and private investment seems highly unlikely given the overwhelming prospects for financial failure.
The Issue The CHSRA lacks a comprehensive financing plan. The proposed state bonds would be insufficient to build Phase I, much less the rest of the system. Little appears firm about potential matching funds from federal and local governments and from potential investors. The state Senate Transportation and Housing committee has issued cautionary statements about the availability of matching federal funds. Also, CHSRA advisor Lehman Brothers has outlined risks that can be a barrier to private investment, including cost overruns, failure to reach ridership and revenue projections and political meddling. Meanwhile, the cost of the project continues to grow.
In the final analysis, it will be most difficult for CHSRA to obtain sufficient financing to complete the Phase I San Francisco–Los Angeles–Anaheim route. This Due Diligence report concludes that commercial revenues from that route are unlikely to be sufficient to pay operating costs and debt service, much less finance Phase II and other extensions. As a result, it seems highly unlikely that the Inland Empire-San Diego, Sacramento, East Bay San Jose to Oakland and Altamont Pass routes will be built. Further, in the worst case, funding shortfalls could require greater use of modestly improved conventional rail infrastructure in Phase I, which could add hours to the promised travel times.
All of this could lead to negative financial consequences, such as substantial additional taxpayer subsidies, private investment losses, and commercial bond defaults.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
The Issue The CHSRA lacks a comprehensive financing plan. The proposed state bonds would be insufficient to build Phase I, much less the rest of the system. Little appears firm about potential matching funds from federal and local governments and from potential investors. The state Senate Transportation and Housing committee has issued cautionary statements about the availability of matching federal funds. Also, CHSRA advisor Lehman Brothers has outlined risks that can be a barrier to private investment, including cost overruns, failure to reach ridership and revenue projections and political meddling. Meanwhile, the cost of the project continues to grow.
In the final analysis, it will be most difficult for CHSRA to obtain sufficient financing to complete the Phase I San Francisco–Los Angeles–Anaheim route. This Due Diligence report concludes that commercial revenues from that route are unlikely to be sufficient to pay operating costs and debt service, much less finance Phase II and other extensions. As a result, it seems highly unlikely that the Inland Empire-San Diego, Sacramento, East Bay San Jose to Oakland and Altamont Pass routes will be built. Further, in the worst case, funding shortfalls could require greater use of modestly improved conventional rail infrastructure in Phase I, which could add hours to the promised travel times.
All of this could lead to negative financial consequences, such as substantial additional taxpayer subsidies, private investment losses, and commercial bond defaults.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
California High Speed Rail: Service to Ontario Unlikely
The Project California voters will be asked to approve a nearly $10 billion bond issue in the November election as the beginning of funding for the a high-speed rail system intended to serve San Francisco, Los Angeles, San Diego, Sacramento, Fresno, Riverside-San Bernardino and points between. Promoters claim that the remaining necessary funding (from $45 billion to $71 billion, depending upon who you believe) would come from the federal government and private investors. There is no federal program to provide such massive funding and private investment seems highly unlikely given the overwhelming prospects for financial failure.
The Issue The CHSRA lacks a comprehensive financing plan. The proposed state bonds would be insufficient to build Phase I, much less the rest of the system. Little appears firm about potential matching funds from federal and local governments and from potential investors. The state Senate Transportation and Housing committee has issued cautionary statements about the availability of matching federal funds. Also, CHSRA advisor Lehman Brothers has outlined risks that can be a barrier to private investment, including cost overruns, failure to reach ridership and revenue projections and political meddling. Meanwhile, the cost of the project continues to grow.
In the final analysis, it will be most difficult for CHSRA to obtain sufficient financing to complete the Phase I San Francisco–Los Angeles–Anaheim route. This Due Diligence report concludes that commercial revenues from that route are unlikely to be sufficient to pay operating costs and debt service, much less finance Phase II and other extensions. As a result, it seems highly unlikely that the Inland Empire-San Diego, Sacramento, East Bay San Jose to Oakland and Altamont Pass routes will be built. Further, in the worst case, funding shortfalls could require greater use of modestly improved conventional rail infrastructure in Phase I, which could add hours to the promised travel times.
All of this could lead to negative financial consequences, such as substantial additional taxpayer subsidies, private investment losses, and commercial bond defaults.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
The Issue The CHSRA lacks a comprehensive financing plan. The proposed state bonds would be insufficient to build Phase I, much less the rest of the system. Little appears firm about potential matching funds from federal and local governments and from potential investors. The state Senate Transportation and Housing committee has issued cautionary statements about the availability of matching federal funds. Also, CHSRA advisor Lehman Brothers has outlined risks that can be a barrier to private investment, including cost overruns, failure to reach ridership and revenue projections and political meddling. Meanwhile, the cost of the project continues to grow.
In the final analysis, it will be most difficult for CHSRA to obtain sufficient financing to complete the Phase I San Francisco–Los Angeles–Anaheim route. This Due Diligence report concludes that commercial revenues from that route are unlikely to be sufficient to pay operating costs and debt service, much less finance Phase II and other extensions. As a result, it seems highly unlikely that the Inland Empire-San Diego, Sacramento, East Bay San Jose to Oakland and Altamont Pass routes will be built. Further, in the worst case, funding shortfalls could require greater use of modestly improved conventional rail infrastructure in Phase I, which could add hours to the promised travel times.
All of this could lead to negative financial consequences, such as substantial additional taxpayer subsidies, private investment losses, and commercial bond defaults.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
California High Speed Rail: Service to Modesto Unlikely
The Project California voters will be asked to approve a nearly $10 billion bond issue in the November election as the beginning of funding for the a high-speed rail system intended to serve San Francisco, Los Angeles, San Diego, Sacramento, Fresno, Riverside-San Bernardino and points between. Promoters claim that the remaining necessary funding (from $45 billion to $71 billion, depending upon who you believe) would come from the federal government and private investors. There is no federal program to provide such massive funding and private investment seems highly unlikely given the overwhelming prospects for financial failure.
The Issue The CHSRA lacks a comprehensive financing plan. The proposed state bonds would be insufficient to build Phase I, much less the rest of the system. Little appears firm about potential matching funds from federal and local governments and from potential investors. The state Senate Transportation and Housing committee has issued cautionary statements about the availability of matching federal funds. Also, CHSRA advisor Lehman Brothers has outlined risks that can be a barrier to private investment, including cost overruns, failure to reach ridership and revenue projections and political meddling. Meanwhile, the cost of the project continues to grow.
In the final analysis, it will be most difficult for CHSRA to obtain sufficient financing to complete the Phase I San Francisco–Los Angeles–Anaheim route. This Due Diligence report concludes that commercial revenues from that route are unlikely to be sufficient to pay operating costs and debt service, much less finance Phase II and other extensions. As a result, it seems highly unlikely that the Inland Empire-San Diego, Sacramento, East Bay San Jose to Oakland and Altamont Pass routes will be built. Further, in the worst case, funding shortfalls could require greater use of modestly improved conventional rail infrastructure in Phase I, which could add hours to the promised travel times.
All of this could lead to negative financial consequences, such as substantial additional taxpayer subsidies, private investment losses, and commercial bond defaults.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
The Issue The CHSRA lacks a comprehensive financing plan. The proposed state bonds would be insufficient to build Phase I, much less the rest of the system. Little appears firm about potential matching funds from federal and local governments and from potential investors. The state Senate Transportation and Housing committee has issued cautionary statements about the availability of matching federal funds. Also, CHSRA advisor Lehman Brothers has outlined risks that can be a barrier to private investment, including cost overruns, failure to reach ridership and revenue projections and political meddling. Meanwhile, the cost of the project continues to grow.
In the final analysis, it will be most difficult for CHSRA to obtain sufficient financing to complete the Phase I San Francisco–Los Angeles–Anaheim route. This Due Diligence report concludes that commercial revenues from that route are unlikely to be sufficient to pay operating costs and debt service, much less finance Phase II and other extensions. As a result, it seems highly unlikely that the Inland Empire-San Diego, Sacramento, East Bay San Jose to Oakland and Altamont Pass routes will be built. Further, in the worst case, funding shortfalls could require greater use of modestly improved conventional rail infrastructure in Phase I, which could add hours to the promised travel times.
All of this could lead to negative financial consequences, such as substantial additional taxpayer subsidies, private investment losses, and commercial bond defaults.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
California High Speed Rail: Service to Temecula-Murrieta Unlikely
The Project California voters will be asked to approve a nearly $10 billion bond issue in the November election as the beginning of funding for the a high-speed rail system intended to serve San Francisco, Los Angeles, San Diego, Sacramento, Fresno, Riverside-San Bernardino and points between. Promoters claim that the remaining necessary funding (from $45 billion to $71 billion, depending upon who you believe) would come from the federal government and private investors. There is no federal program to provide such massive funding and private investment seems highly unlikely given the overwhelming prospects for financial failure.
The Issue The CHSRA lacks a comprehensive financing plan. The proposed state bonds would be insufficient to build Phase I, much less the rest of the system. Little appears firm about potential matching funds from federal and local governments and from potential investors. The state Senate Transportation and Housing committee has issued cautionary statements about the availability of matching federal funds. Also, CHSRA advisor Lehman Brothers has outlined risks that can be a barrier to private investment, including cost overruns, failure to reach ridership and revenue projections and political meddling. Meanwhile, the cost of the project continues to grow.
In the final analysis, it will be most difficult for CHSRA to obtain sufficient financing to complete the Phase I San Francisco–Los Angeles–Anaheim route. This Due Diligence report concludes that commercial revenues from that route are unlikely to be sufficient to pay operating costs and debt service, much less finance Phase II and other extensions. As a result, it seems highly unlikely that the Inland Empire-San Diego, Sacramento, East Bay San Jose to Oakland and Altamont Pass routes will be built. Further, in the worst case, funding shortfalls could require greater use of modestly improved conventional rail infrastructure in Phase I, which could add hours to the promised travel times.
All of this could lead to negative financial consequences, such as substantial additional taxpayer subsidies, private investment losses, and commercial bond defaults.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
The Issue The CHSRA lacks a comprehensive financing plan. The proposed state bonds would be insufficient to build Phase I, much less the rest of the system. Little appears firm about potential matching funds from federal and local governments and from potential investors. The state Senate Transportation and Housing committee has issued cautionary statements about the availability of matching federal funds. Also, CHSRA advisor Lehman Brothers has outlined risks that can be a barrier to private investment, including cost overruns, failure to reach ridership and revenue projections and political meddling. Meanwhile, the cost of the project continues to grow.
In the final analysis, it will be most difficult for CHSRA to obtain sufficient financing to complete the Phase I San Francisco–Los Angeles–Anaheim route. This Due Diligence report concludes that commercial revenues from that route are unlikely to be sufficient to pay operating costs and debt service, much less finance Phase II and other extensions. As a result, it seems highly unlikely that the Inland Empire-San Diego, Sacramento, East Bay San Jose to Oakland and Altamont Pass routes will be built. Further, in the worst case, funding shortfalls could require greater use of modestly improved conventional rail infrastructure in Phase I, which could add hours to the promised travel times.
All of this could lead to negative financial consequences, such as substantial additional taxpayer subsidies, private investment losses, and commercial bond defaults.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
California High Speed Rail: Service to Stockton Unlikely
The Project California voters will be asked to approve a nearly $10 billion bond issue in the November election as the beginning of funding for the a high-speed rail system intended to serve San Francisco, Los Angeles, San Diego, Sacramento, Fresno, Riverside-San Bernardino and points between. Promoters claim that the remaining necessary funding (from $45 billion to $71 billion, depending upon who you believe) would come from the federal government and private investors. There is no federal program to provide such massive funding and private investment seems highly unlikely given the overwhelming prospects for financial failure.
The Issue The CHSRA lacks a comprehensive financing plan. The proposed state bonds would be insufficient to build Phase I, much less the rest of the system. Little appears firm about potential matching funds from federal and local governments and from potential investors. The state Senate Transportation and Housing committee has issued cautionary statements about the availability of matching federal funds. Also, CHSRA advisor Lehman Brothers has outlined risks that can be a barrier to private investment, including cost overruns, failure to reach ridership and revenue projections and political meddling. Meanwhile, the cost of the project continues to grow.
In the final analysis, it will be most difficult for CHSRA to obtain sufficient financing to complete the Phase I San Francisco–Los Angeles–Anaheim route. This Due Diligence report concludes that commercial revenues from that route are unlikely to be sufficient to pay operating costs and debt service, much less finance Phase II and other extensions. As a result, it seems highly unlikely that the Inland Empire-San Diego, Sacramento, East Bay San Jose to Oakland and Altamont Pass routes will be built. Further, in the worst case, funding shortfalls could require greater use of modestly improved conventional rail infrastructure in Phase I, which could add hours to the promised travel times.
All of this could lead to negative financial consequences, such as substantial additional taxpayer subsidies, private investment losses, and commercial bond defaults.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
The Issue The CHSRA lacks a comprehensive financing plan. The proposed state bonds would be insufficient to build Phase I, much less the rest of the system. Little appears firm about potential matching funds from federal and local governments and from potential investors. The state Senate Transportation and Housing committee has issued cautionary statements about the availability of matching federal funds. Also, CHSRA advisor Lehman Brothers has outlined risks that can be a barrier to private investment, including cost overruns, failure to reach ridership and revenue projections and political meddling. Meanwhile, the cost of the project continues to grow.
In the final analysis, it will be most difficult for CHSRA to obtain sufficient financing to complete the Phase I San Francisco–Los Angeles–Anaheim route. This Due Diligence report concludes that commercial revenues from that route are unlikely to be sufficient to pay operating costs and debt service, much less finance Phase II and other extensions. As a result, it seems highly unlikely that the Inland Empire-San Diego, Sacramento, East Bay San Jose to Oakland and Altamont Pass routes will be built. Further, in the worst case, funding shortfalls could require greater use of modestly improved conventional rail infrastructure in Phase I, which could add hours to the promised travel times.
All of this could lead to negative financial consequences, such as substantial additional taxpayer subsidies, private investment losses, and commercial bond defaults.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
California High Speed Rail: Service to Riverside-San Bernardino & Inland Empire Unlikely
The Project California voters will be asked to approve a nearly $10 billion bond issue in the November election as the beginning of funding for the a high-speed rail system intended to serve San Francisco, Los Angeles, San Diego, Sacramento, Fresno, Riverside-San Bernardino and points between. Promoters claim that the remaining necessary funding (from $45 billion to $71 billion, depending upon who you believe) would come from the federal government and private investors. There is no federal program to provide such massive funding and private investment seems highly unlikely given the overwhelming prospects for financial failure.
The Issue The CHSRA lacks a comprehensive financing plan. The proposed state bonds would be insufficient to build Phase I, much less the rest of the system. Little appears firm about potential matching funds from federal and local governments and from potential investors. The state Senate Transportation and Housing committee has issued cautionary statements about the availability of matching federal funds. Also, CHSRA advisor Lehman Brothers has outlined risks that can be a barrier to private investment, including cost overruns, failure to reach ridership and revenue projections and political meddling. Meanwhile, the cost of the project continues to grow.
In the final analysis, it will be most difficult for CHSRA to obtain sufficient financing to complete the Phase I San Francisco–Los Angeles–Anaheim route. This Due Diligence report concludes that commercial revenues from that route are unlikely to be sufficient to pay operating costs and debt service, much less finance Phase II and other extensions. As a result, it seems highly unlikely that the Inland Empire-San Diego, Sacramento, East Bay San Jose to Oakland and Altamont Pass routes will be built. Further, in the worst case, funding shortfalls could require greater use of modestly improved conventional rail infrastructure in Phase I, which could add hours to the promised travel times.
All of this could lead to negative financial consequences, such as substantial additional taxpayer subsidies, private investment losses, and commercial bond defaults.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
The Issue The CHSRA lacks a comprehensive financing plan. The proposed state bonds would be insufficient to build Phase I, much less the rest of the system. Little appears firm about potential matching funds from federal and local governments and from potential investors. The state Senate Transportation and Housing committee has issued cautionary statements about the availability of matching federal funds. Also, CHSRA advisor Lehman Brothers has outlined risks that can be a barrier to private investment, including cost overruns, failure to reach ridership and revenue projections and political meddling. Meanwhile, the cost of the project continues to grow.
In the final analysis, it will be most difficult for CHSRA to obtain sufficient financing to complete the Phase I San Francisco–Los Angeles–Anaheim route. This Due Diligence report concludes that commercial revenues from that route are unlikely to be sufficient to pay operating costs and debt service, much less finance Phase II and other extensions. As a result, it seems highly unlikely that the Inland Empire-San Diego, Sacramento, East Bay San Jose to Oakland and Altamont Pass routes will be built. Further, in the worst case, funding shortfalls could require greater use of modestly improved conventional rail infrastructure in Phase I, which could add hours to the promised travel times.
All of this could lead to negative financial consequences, such as substantial additional taxpayer subsidies, private investment losses, and commercial bond defaults.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
California High Speed Rail: Service to Oakland & East Bay Unlikely
The Project California voters will be asked to approve a nearly $10 billion bond issue in the November election as the beginning of funding for the a high-speed rail system intended to serve San Francisco, Los Angeles, San Diego, Sacramento, Fresno, Riverside-San Bernardino and points between. Promoters claim that the remaining necessary funding (from $45 billion to $71 billion, depending upon who you believe) would come from the federal government and private investors. There is no federal program to provide such massive funding and private investment seems highly unlikely given the overwhelming prospects for financial failure.
The Issue The CHSRA lacks a comprehensive financing plan. The proposed state bonds would be insufficient to build Phase I, much less the rest of the system. Little appears firm about potential matching funds from federal and local governments and from potential investors. The state Senate Transportation and Housing committee has issued cautionary statements about the availability of matching federal funds. Also, CHSRA advisor Lehman Brothers has outlined risks that can be a barrier to private investment, including cost overruns, failure to reach ridership and revenue projections and political meddling. Meanwhile, the cost of the project continues to grow.
In the final analysis, it will be most difficult for CHSRA to obtain sufficient financing to complete the Phase I San Francisco–Los Angeles–Anaheim route. This Due Diligence report concludes that commercial revenues from that route are unlikely to be sufficient to pay operating costs and debt service, much less finance Phase II and other extensions. As a result, it seems highly unlikely that the Inland Empire-San Diego, Sacramento, East Bay San Jose to Oakland and Altamont Pass routes will be built. Further, in the worst case, funding shortfalls could require greater use of modestly improved conventional rail infrastructure in Phase I, which could add hours to the promised travel times.
All of this could lead to negative financial consequences, such as substantial additional taxpayer subsidies, private investment losses, and commercial bond defaults.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
The Issue The CHSRA lacks a comprehensive financing plan. The proposed state bonds would be insufficient to build Phase I, much less the rest of the system. Little appears firm about potential matching funds from federal and local governments and from potential investors. The state Senate Transportation and Housing committee has issued cautionary statements about the availability of matching federal funds. Also, CHSRA advisor Lehman Brothers has outlined risks that can be a barrier to private investment, including cost overruns, failure to reach ridership and revenue projections and political meddling. Meanwhile, the cost of the project continues to grow.
In the final analysis, it will be most difficult for CHSRA to obtain sufficient financing to complete the Phase I San Francisco–Los Angeles–Anaheim route. This Due Diligence report concludes that commercial revenues from that route are unlikely to be sufficient to pay operating costs and debt service, much less finance Phase II and other extensions. As a result, it seems highly unlikely that the Inland Empire-San Diego, Sacramento, East Bay San Jose to Oakland and Altamont Pass routes will be built. Further, in the worst case, funding shortfalls could require greater use of modestly improved conventional rail infrastructure in Phase I, which could add hours to the promised travel times.
All of this could lead to negative financial consequences, such as substantial additional taxpayer subsidies, private investment losses, and commercial bond defaults.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
California High Speed Rail: Service to San Diego Unlikely
The Project California voters will be asked to approve a nearly $10 billion bond issue in the November election as the beginning of funding for the a high-speed rail system intended to serve San Francisco, Los Angeles, San Diego, Sacramento, Fresno, Riverside-San Bernardino and points between. Promoters claim that the remaining necessary funding (from $45 billion to $71 billion, depending upon who you believe) would come from the federal government and private investors. There is no federal program to provide such massive funding and private investment seems highly unlikely given the overwhelming prospects for financial failure.
The Issue The CHSRA lacks a comprehensive financing plan. The proposed state bonds would be insufficient to build Phase I, much less the rest of the system. Little appears firm about potential matching funds from federal and local governments and from potential investors. The state Senate Transportation and Housing committee has issued cautionary statements about the availability of matching federal funds. Also, CHSRA advisor Lehman Brothers has outlined risks that can be a barrier to private investment, including cost overruns, failure to reach ridership and revenue projections and political meddling. Meanwhile, the cost of the project continues to grow.
In the final analysis, it will be most difficult for CHSRA to obtain sufficient financing to complete the Phase I San Francisco–Los Angeles–Anaheim route. This Due Diligence report concludes that commercial revenues from that route are unlikely to be sufficient to pay operating costs and debt service, much less finance Phase II and other extensions. As a result, it seems highly unlikely that the Inland Empire-San Diego, Sacramento, East Bay San Jose to Oakland and Altamont Pass routes will be built. Further, in the worst case, funding shortfalls could require greater use of modestly improved conventional rail infrastructure in Phase I, which could add hours to the promised travel times.
All of this could lead to negative financial consequences, such as substantial additional taxpayer subsidies, private investment losses, and commercial bond defaults.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
The Issue The CHSRA lacks a comprehensive financing plan. The proposed state bonds would be insufficient to build Phase I, much less the rest of the system. Little appears firm about potential matching funds from federal and local governments and from potential investors. The state Senate Transportation and Housing committee has issued cautionary statements about the availability of matching federal funds. Also, CHSRA advisor Lehman Brothers has outlined risks that can be a barrier to private investment, including cost overruns, failure to reach ridership and revenue projections and political meddling. Meanwhile, the cost of the project continues to grow.
In the final analysis, it will be most difficult for CHSRA to obtain sufficient financing to complete the Phase I San Francisco–Los Angeles–Anaheim route. This Due Diligence report concludes that commercial revenues from that route are unlikely to be sufficient to pay operating costs and debt service, much less finance Phase II and other extensions. As a result, it seems highly unlikely that the Inland Empire-San Diego, Sacramento, East Bay San Jose to Oakland and Altamont Pass routes will be built. Further, in the worst case, funding shortfalls could require greater use of modestly improved conventional rail infrastructure in Phase I, which could add hours to the promised travel times.
All of this could lead to negative financial consequences, such as substantial additional taxpayer subsidies, private investment losses, and commercial bond defaults.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
California High Speed Rail: Service to Sacramento Unlikely
The Project California voters will be asked to approve a nearly $10 billion bond issue in the November election as the beginning of funding for the a high-speed rail system intended to serve San Francisco, Los Angeles, San Diego, Sacramento, Fresno, Riverside-San Bernardino and points between. Promoters claim that the remaining necessary funding (from $45 billion to $71 billion, depending upon who you believe) would come from the federal government and private investors. There is no federal program to provide such massive funding and private investment seems highly unlikely given the overwhelming prospects for financial failure.
The Issue The CHSRA lacks a comprehensive financing plan. The proposed state bonds would be insufficient to build Phase I, much less the rest of the system. Little appears firm about potential matching funds from federal and local governments and from potential investors. The state Senate Transportation and Housing committee has issued cautionary statements about the availability of matching federal funds. Also, CHSRA advisor Lehman Brothers has outlined risks that can be a barrier to private investment, including cost overruns, failure to reach ridership and revenue projections and political meddling. Meanwhile, the cost of the project continues to grow.
In the final analysis, it will be most difficult for CHSRA to obtain sufficient financing to complete the Phase I San Francisco–Los Angeles–Anaheim route. This Due Diligence report concludes that commercial revenues from that route are unlikely to be sufficient to pay operating costs and debt service, much less finance Phase II and other extensions. As a result, it seems highly unlikely that the Inland Empire-San Diego, Sacramento, East Bay San Jose to Oakland and Altamont Pass routes will be built. Further, in the worst case, funding shortfalls could require greater use of modestly improved conventional rail infrastructure in Phase I, which could add hours to the promised travel times.
All of this could lead to negative financial consequences, such as substantial additional taxpayer subsidies, private investment losses, and commercial bond defaults.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
The Issue The CHSRA lacks a comprehensive financing plan. The proposed state bonds would be insufficient to build Phase I, much less the rest of the system. Little appears firm about potential matching funds from federal and local governments and from potential investors. The state Senate Transportation and Housing committee has issued cautionary statements about the availability of matching federal funds. Also, CHSRA advisor Lehman Brothers has outlined risks that can be a barrier to private investment, including cost overruns, failure to reach ridership and revenue projections and political meddling. Meanwhile, the cost of the project continues to grow.
In the final analysis, it will be most difficult for CHSRA to obtain sufficient financing to complete the Phase I San Francisco–Los Angeles–Anaheim route. This Due Diligence report concludes that commercial revenues from that route are unlikely to be sufficient to pay operating costs and debt service, much less finance Phase II and other extensions. As a result, it seems highly unlikely that the Inland Empire-San Diego, Sacramento, East Bay San Jose to Oakland and Altamont Pass routes will be built. Further, in the worst case, funding shortfalls could require greater use of modestly improved conventional rail infrastructure in Phase I, which could add hours to the promised travel times.
All of this could lead to negative financial consequences, such as substantial additional taxpayer subsidies, private investment losses, and commercial bond defaults.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
California High Speed Rail: They Don’t Even have a Qualifying Train Design
California High Speed Rail: They Don’t Even have a Qualifying Train Design
The Project California voters will be asked to approve a nearly $10 billion bond issue in the November election as the beginning of funding for the a high-speed rail system intended to serve San Francisco, Los Angeles, San Diego, Sacramento, Fresno, Riverside-San Bernardino and points between. Promoters claim that the remaining necessary funding (from $45 billion to $71 billion, depending upon who you believe) would come from the federal government and private investors. There is no federal program to provide such massive funding and private investment seems highly unlikely given the overwhelming prospects for financial failure.
The Issue No existing HSR trains capable of meeting the speed and capacity goals of the CHSRA system can legally be used in the United States. The CHSRA’s intention to share tracks with commuter and freight trains complicates designing a train to meet Federal Railroad Administration safety standards that are considered the toughest in the world. Currently, no European or Asian HSR train meets U.S. crashworthiness standards. The necessary regulatory approvals of an overseas train are unlikely to be achieved without substantial changes in design and weight.
The CHSRA has yet to decide on basic design specifications for a train and has based studies on inconsistent seating capacities of 450-500, 650, 1,175, 1,200 and 1,600 per train. Also, a train redesigned for the U.S. will become much heavier and is thus unlikely to reach promised speeds. In short, the Authority does not have a usable train design and the eventually required modifications could substantially impair operating performance. Lower performance would negate the CHSRA’s assumptions on which it has based travel times, ridership projections, revenue forecasts and profits.
While builder specifications for the CHSRA’s train do not exist, because of the above circumstance it is fair to state that the CHSRA’s design may become the world’s longest and heaviest HSR train—yet be expected to operate at the highest speed current technology permits. It is likely that a series of designs, tests, prototypes and safety reviews never before achieved anywhere in the world must succeed for the CHSRA’s train to become a reality.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
The Project California voters will be asked to approve a nearly $10 billion bond issue in the November election as the beginning of funding for the a high-speed rail system intended to serve San Francisco, Los Angeles, San Diego, Sacramento, Fresno, Riverside-San Bernardino and points between. Promoters claim that the remaining necessary funding (from $45 billion to $71 billion, depending upon who you believe) would come from the federal government and private investors. There is no federal program to provide such massive funding and private investment seems highly unlikely given the overwhelming prospects for financial failure.
The Issue No existing HSR trains capable of meeting the speed and capacity goals of the CHSRA system can legally be used in the United States. The CHSRA’s intention to share tracks with commuter and freight trains complicates designing a train to meet Federal Railroad Administration safety standards that are considered the toughest in the world. Currently, no European or Asian HSR train meets U.S. crashworthiness standards. The necessary regulatory approvals of an overseas train are unlikely to be achieved without substantial changes in design and weight.
The CHSRA has yet to decide on basic design specifications for a train and has based studies on inconsistent seating capacities of 450-500, 650, 1,175, 1,200 and 1,600 per train. Also, a train redesigned for the U.S. will become much heavier and is thus unlikely to reach promised speeds. In short, the Authority does not have a usable train design and the eventually required modifications could substantially impair operating performance. Lower performance would negate the CHSRA’s assumptions on which it has based travel times, ridership projections, revenue forecasts and profits.
While builder specifications for the CHSRA’s train do not exist, because of the above circumstance it is fair to state that the CHSRA’s design may become the world’s longest and heaviest HSR train—yet be expected to operate at the highest speed current technology permits. It is likely that a series of designs, tests, prototypes and safety reviews never before achieved anywhere in the world must succeed for the CHSRA’s train to become a reality.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
California High Speed Rail to Operate Far Slower than Advertised
California High Speed Rail to Operate Far Slower than Advertised
The Project California voters will be asked to approve a nearly $10 billion bond issue in the November election as the beginning of funding for the a high-speed rail system intended to serve San Francisco, Los Angeles, San Diego, Sacramento, Fresno, Riverside-San Bernardino and points between. Promoters claim that the remaining necessary funding (from $45 billion to $71 billion, depending upon who you believe) would come from the federal government and private investors. There is no federal program to provide such massive funding and private investment seems highly unlikely given the overwhelming prospects for financial failure.
The Issue Based upon international HSR experience, it appears that the CHSRA speed and travel time objectives cannot be met. As a result, HSR will be less attractive as an alternative to airline travel and is likely to attract fewer passengers than projected. Notably, the CHSRA’s anticipated average speeds are not being achieved anywhere in the world, including on the most advanced systems. Incomplete consideration has been given to California’s urban and terrain profiles where HSR trains must operate more slowly than circumstances allow in, for example, France. This study, by assuming realistic speeds, estimates that a non-stop San Francisco–Los Angeles trip would take 3 hours and 41 minutes—59 minutes longer than the statutory requirement of 2 hours, 42 minutes. In the future, the CHSRA’s travel times may be further lengthened by train weight and safety issues and also by political demands to add stops to the system.
The proposed HSR system appears unlikely to provide travel time advantages for long-distance airline passengers. It is likely that HSR door-to-door travel times would be greater and there would be considerably less non-stop service than air service. Moreover, HSR would be unattractive to drivers in middle-distance automobile-oriented markets because little or no door-to-door time savings would be achieved and costly local connections would often be required (rental cars or taxicabs). Another convenience factor is that California urban areas lack the extensive local transit infrastructure that connects with HSR systems in dense Asian and European urban areas. The HSR system will experience disadvantages and commercial challenges in competing with air and auto travel that have been understated in CHSRA documentation.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
Additional information
The Project California voters will be asked to approve a nearly $10 billion bond issue in the November election as the beginning of funding for the a high-speed rail system intended to serve San Francisco, Los Angeles, San Diego, Sacramento, Fresno, Riverside-San Bernardino and points between. Promoters claim that the remaining necessary funding (from $45 billion to $71 billion, depending upon who you believe) would come from the federal government and private investors. There is no federal program to provide such massive funding and private investment seems highly unlikely given the overwhelming prospects for financial failure.
The Issue Based upon international HSR experience, it appears that the CHSRA speed and travel time objectives cannot be met. As a result, HSR will be less attractive as an alternative to airline travel and is likely to attract fewer passengers than projected. Notably, the CHSRA’s anticipated average speeds are not being achieved anywhere in the world, including on the most advanced systems. Incomplete consideration has been given to California’s urban and terrain profiles where HSR trains must operate more slowly than circumstances allow in, for example, France. This study, by assuming realistic speeds, estimates that a non-stop San Francisco–Los Angeles trip would take 3 hours and 41 minutes—59 minutes longer than the statutory requirement of 2 hours, 42 minutes. In the future, the CHSRA’s travel times may be further lengthened by train weight and safety issues and also by political demands to add stops to the system.
The proposed HSR system appears unlikely to provide travel time advantages for long-distance airline passengers. It is likely that HSR door-to-door travel times would be greater and there would be considerably less non-stop service than air service. Moreover, HSR would be unattractive to drivers in middle-distance automobile-oriented markets because little or no door-to-door time savings would be achieved and costly local connections would often be required (rental cars or taxicabs). Another convenience factor is that California urban areas lack the extensive local transit infrastructure that connects with HSR systems in dense Asian and European urban areas. The HSR system will experience disadvantages and commercial challenges in competing with air and auto travel that have been understated in CHSRA documentation.
Adapted from The California High Speed Rail Proposal: A Due Diligence Report By Wendell Cox & Joseph Vranich
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