Senators Ask Tough Questions About High-Speed Rail

A California Senate committee got its chance today to take a closer look at the status of the state's high-speed rail project. The High-Speed Rail Authority recently released a draft business plan.

At the hearing, High-Speed Rail Authority Chair Dan Richard said construction on the first segment was shifted from a southern route between the Central Valley and Los Angeles to a northern route between the Central Valley and San Jose because it was less expensive and could generate significant private investment. But he says the train needs to be running to attract investors.

"They're looking for that first operating line," he says.

The Rail Authority estimates it will cost about $20 billion to build the northern route, which Richard says could generate $8 billion to $10 billion in private investment. He said the segment could be operational by 2025.

But while the Rail Authority was touting the progress being made on the project, senators of both parties expressed concerns about financing. Republican Jim Nielsen says the evolution of the project make him uneasy.

"There have been so many changes, how can we find comfort?" he asked. "It seems like it's almost careening down the tracks."

Democrat Richard Roth questioned what the Rail Authority will do if the cap-and-trade program is not extended beyond 2020. According to the Legislative Analyst's Office, the authority is counting on nearly $18 billion in cap-and-trade revenues through 2050.

"If in fact cap-and-trade goes away or is substantially changed to interfere with your ability to access the $17.8 billion or $18 billion that you need, what will we be left with at that point in time?" Roth asked.

Richard said that's a question the project has always faced. He says even if the first segment is the only one to ultimately get built, it would still serve a purpose by increasing passenger rail service and freeing up freight capacity.

The authority estimates it will take $64 billion to complete all of Phase I, which would run between San Francisco and Anaheim. The Initial Operating Segment -- the first part of Phase I -- would run between San Jose and Shafter. Phase II of the project is planned to connect the system to Sacramento in the north and San Diego in the south, but cost estimates and a schedule have not been released.