[M II A II R II K]

Some fear California's high-speed rail won't deliver on early promises


February 28, 2010

By Rich Connell and Dan Weikel



Read More: http://www.latimes.com/news/local/la...,5686672.story

Despite a new $2.25-billion infusion of federal economic stimulus funding, there are intensifying concerns -- even among some high-speed rail supporters -- that California's proposed bullet train may not deliver on the financial and ridership promises made to win voter backing in 2008.

Estimates of ticket prices between Los Angeles and San Francisco have nearly doubled in the project's latest business plan, pushing ridership projections down sharply and prompting new skepticism about data underpinning the entire project.

"This just smells funny," said state Sen. Alan Lowenthal (D-Long Beach), a supporter of high-speed rail and chairman of the Senate Transportation and Housing Committee.

New inflation-adjusted construction figures show that outlays needed to build the first 520-mile phase of the system have climbed more than 25%, from $33.6 billion to $42.6 billion.

And some government watchdogs are concerned that a linchpin commitment to taxpayers in the bullet train's financing measure -- that no local, state or federal subsidies would be required to keep the trains operating -- may be giving way.

High-speed rail planners recently advised state lawmakers that attracting billions in crucial private financing will probably require government backing of future cash flow. "Without some form of revenue guarantee from the public sector, it is unlikely that private investment will occur at [the planned] level until demand for California high-speed rail is proven," project planners wrote in December.

That is feeding fears that a larger state commitment, beyond the $9 billion in construction bonds approved by voters, could be sought to complete the 800-mile project. "To now put in that we have to [give] some kind of revenue guarantee . . . is totally unacceptable," Lowenthal said. "That's not what we agreed to."

Financial risks and planning adjustments are inevitable in such a massive project, say officials with the California High-Speed Rail Authority. They insist that significant progress is being made, that there is cause for optimism and that they are keeping their commitments to voters. Opportunities for capturing more federal dollars are greater than ever, they say, because President Obama supports high-speed rail.

The city of Buena Park has learned that part of a transit-oriented residential project tied into its 3-year-old Metrolink station may have to be ripped out for the bullet train. Planners are reexamining the issue.