Hit the brakes on California's high-speed rail experiment

Tuesday, January 11, 2011; 8:49 PM

ON PAPER, California appears a promising venue for high-speed passenger trains like the ones that streak across Japan and Western Europe. It's got a string of urban centers from Sacramento to San Diego and lots of flat real estate in between. In 2008, its voters approved a $9.95 billion bond issue to pay about a quarter of the total projected $43 billion cost of a statewide high-speed system. Events since then, however, suggest that this grand plan is still a bit half-baked.

In November, the California High-Speed Rail Peer Review Group informed the legislature that the project suffers from an undefined business model and the "lack of a clear financial plan." Most damning, the report noted that official estimates of how many people might actually want to ride the system are so unreliable that they "offer little basis for proceeding." Ridership is a crucial variable, because the law authorizing high-speed rail bonds included a ban on state operating subsidies once the system is up and running.

The Peer Review Group's report was only the latest in a series of skeptical blue-ribbon documents. But, undaunted, the California High-Speed Rail Authority announced last month that it would at last begin construction - on a stretch connecting not, say, Los Angeles and Anaheim but two obscure locations in the state's rural Central Valley. The 120-mile segment would cost $5.5 billion. Critics quickly dubbed it a "train to nowhere" - a bit unfair, since some of the towns along the way have expensively redeveloped downtowns that may now suffer from the frequent noise and vibration of trains roaring through them.

This would be a matter of purely West Coast interest but for the fact that the U.S. government is paying more than half the cost of the new track, including $600 million newly diverted from Midwestern states that rejected the funds. Indeed, the Federal Rail Administration required that the money be spent in the Central Valley. It was the part of the state most likely to be ready to use it by a September 2011 deadline, because local property owners in more populated areas are stirring opposition, which drags out the environmental review process.

Given that California's system has attracted zero private capital and has been unable to guarantee any source - governmental or private - for almost half the cost of completion, the obvious risk is that the federal taxpayer will be on the hook for billions of dollars worth of railroad track that may never serve its intended high-speed purpose. But the Obama administration sought the funds, as part of the 2009 stimulus package, and Congress approved them - and so they must be spent.

The president has a vision of a national high-speed rail network almost as grand as the interstate highway system. We have our doubts about the ultimate feasibility of this vision, in part because in much of the country passenger rail can't compete with car travel by interstate highways. It's unclear that the public benefits attributed to high-speed rail - reduced carbon emissions and less airport congestion - would outweigh the inevitable operating subsidies, as Amtrak's experience suggests.

If federal high-speed rail investment makes sense at all, it's probably in the densely populated Northeast Corridor, where demand for passenger trains is highest. At the very least, California should have to fill in its project's economic and logistical blanks before any more money - from state taxpayers or the rest of us - is spent. Unfortunately, the rule right now seems to be spend first, answer questions later.

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