How Does CA HSR Project Move Forward Amid Challenges?

Wounded but far from dead, the WSJ examines the many problems plaguing California's formidable HSR project. With federal funding likely to be pulled by House Republicans, the Journal reports on the courses the project could take.
October 18, 2011, 8am PDT | Irvin Dawid
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To be sure, it's not just high speed rail-hostile House Republicans that the California High Speed Rail Authority must confront. Opposition in the Central Valley has forced unexpected increased costs for the Bakersfield to Fresno 140-mile stretch. The Authority's revised business plan, already delayed, is due by Nov. 1 and will be scrutinized by a wary state legislature, though the Democratic majority and the governor remain backers of the $45 billion project.

"The California troubles reflect the difficulty of shifting a country that mainly relies on the automobile and airplane. The federal government and states have for decades built and maintained roads using a dedicated revenue stream, the federal gasoline tax of 18.4 cents per gallon. There is no such source of cash for high-speed rail, putting rail proponents at the mercy of political winds."

California has to-date received $3 billion in federal funds, and matched it from the 2008 $9 billion bond measure. The remaining $6 billion can only be applied as matching funds.

"Roelof van Ark, chief executive of the California rail authority, said private investors, including rail operators and construction companies from Europe and Asia, have voiced interest in high-speed rail. The catch: Investors want to see a link to San Francisco or Los Angeles closer to completion before they put in billions, he said. It is precisely that link for which the state needs money."

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Published on Monday, October 17, 2011 in The Wall Street Journal - Business
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