California bullet train costs soar to $77B; opening delayed

Among the challenges in the latest plan: A lack of money and the difficulty of weaving through mountain passes between Silicon Valley and the inland Central Valley, which rail executives hope to complete by 2029.

Doing so will require a fresh infusion of cash from the Legislature or the private sector, said Brian Kelly, the project’s new chief executive. If completed, it would be the nation’s fastest train, carrying people between the two major cities in less than three hours.

“You cannot build a mega-project of this magnitude on a pay-as-you-go basis,” he told reporters Friday.

While $77 billion is the baseline cost estimate, the plan estimates total costs could be as low as $63.2 billion or as high as $98.1 billion.

It brought fresh fire from critics who doubt the high-speed train will ever be built. The last plan, presented in 2016, estimated the project would cost $64 billion and be open by 2029.

“Let’s cut our losses and use the billions not yet wasted on (high-speed rail) to instead improve freeways, highways and roads and perhaps improve existing rail systems throughout California,” Republican state Sen. Andy Vidak said.

The project is currently under an audit that could expose more management and cost issues when released later this year.

Kelly has promised to be more transparent about the project’s challenges, including by assigning costs to every potential risk, such as trouble acquiring land or securing environmental clearance. Lawsuits over land have bogged down construction in the Central Valley and driven up costs. While 119 miles of track is under construction, the state has just 1,300 of the roughly 1,800 needed parcels in that area, Kelly said.

The ultimate goal is to connect San Francisco and Los Angeles — and eventually Sacramento and San Diego — but the immediate focus is opening track between San Francisco and the Central Valley, an agriculturally dominant, less-populated portion of inland California.

Rail proponents say linking the two areas would be an economic boon, as housing costs are exploding in the San Francisco Bay Area and the Central Valley is in need of jobs.

That portion of track is now set to be finished by 2029, also marking a four-year delay, and significant challenges remain.

Dan Richards, chairman of the rail agency’s board of directors, said it wants to work with private investors to tackle that portion of the project.

“The highest risk in terms of uncertainty and cost is the tunnels, and that is an area where we really feel preliminary discussions with the private sector are promising,” he said.

Rail executives need more legislative buy-in too.

A major source of rail funding is the cap-and-trade program, under which the state auctions permits to release greenhouse gases. Rail planners are currently using the money as it comes in but say they’d need the ability to take on debt that would be paid off with future cap-and-trade dollars.

That would require the Legislature to extend the program until 2050. That’s a difficult task for a Legislature that struggled just last year to muster the two-thirds votes needed to extend the program from 2020 to 2030.

The state has spent $2.5 billion in federal stimulus money and has an additional $930 million in federal money on the table. That’s on top of a $10 billion bond from voters.