In another major blow to the struggling rail project, the High Speed Rail Authority has written the state legislature that private financing, which they had counted on to fund 1/3 the capital cost, may not be available until the train is running.
On Nov. 1, the authority is due to present the state legislature a revised business plan.
"The letter (written by the authority to the legislature) gives a preview of the authority's upcoming business plan, a critical document that is supposed to address long-standing concerns that it lacks a credible blueprint for building and operating the system... Originally, the authority hoped to build the system based on three sources of funding: federal, state and private money. The letter by the authority, sent Friday (Oct. 14), said for the first time that private investors are unlikely to put up cash before the system is operating."
If the House of Representatives approves the bill by House Majority Whip Kevin McCarthy, R-Bakersfield and nine additional House members, all California Republicans, the authority would receive no federal funding through September 2012. Without federal funding or private funding, the authority will not be able to spend the remaining $6 billion in the 2008 bond measure that authorized the project as those bonds must be applied as matching funds.
"One option appears to be a financing tool, being considered in a U.S. Senate subcommittee, in which the federal government would provide tax credits to holders of bonds used to help build the system, according to the authority's letter to the Legislature's budget committees."
Thanks to California League of Conservation Voters
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