California’s high-speed rail was a fantasy from its inception
- April 1, 2023: Vol. 10, Number 4

California’s high-speed rail was a fantasy from its inception

by Lee Ohanian

In 2008, California voters approved $9.95 billion of state bond funding as seed money to build an 800-mile high-speed rail (HSR) network connecting Los Angeles and San Francisco, and the Central Valley to coastal cities, at speeds of up to 220 miles per hour, with an expected completion date of 2020.

But now, 15 years after the bond issue, three years after the expected completion date, not one train has left the station. Not one route has been completed, even though nearly all the $9.95 billion seed money has been spent. And the original budget of about $33 billion for the entire 800-mile system is now inadequate to build just one route (Bakersfield to Merced), whose cost pencils out to $207 million per mile — a cost that will almost certainly rise in the future, and for a route that may not be ready for 10 years. Or more. Or perhaps ever.

California’s HSR is perhaps the greatest infrastructure failure in the history of the country. And the reason it failed is because of a gross failure of state governance, one on such a grand scale that it is nothing short of a betrayal of Californians.

The betrayal dates back to the project’s inception. Imagine a business plan without discussion of future funding, project capacity, demand at the product (segment) level, how costs would be allocated, or how risks would be mitigated. The 2008 business plan was anything but a business plan. Voters approved $9.95 billion in bond financing for a dream, not a vetted project. And like most dreams, California high-speed rail has turned out to be a fantasy.

If the plan had been submitted by the required date — more than two months before the election — then these deficiencies would have come to light. Instead, voters trusted those whom they elected and voted to tax themselves to fund a project that was never going to be feasible. They trusted that California’s state government was capable of spending their tax dollars effectively. At one time, California governance was among the best in the country. Our state government created and built capital projects efficiently and quickly. In the 1960s, such trust was warranted. It no longer is.

The state government’s betrayal has continued ever since the incomplete and deficient 2008 business plan was not submitted on time. The project continued without adequate planning, supervision, or oversight. Not surprisingly, it continued to go south.

There is no path to completion for the fantasy rail system that was falsely sold to voters 15 years ago. Finishing the Bakersfield-Merced route, which will cost in excess of $35 billion, and which won’t be operative for 10 years, doesn’t come close to penciling out. The only reasonable decision is to end a project that should never have begun.


Excerpted from an article written by Lee Ohanian, adjunct senior fellow at the Hoover Institution. Read his complete report here.


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