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Price Tag For California High-Speed Rail Increases Again

California High-Speed Rail Authority / Facebook
Demolition work takes place in 2014 on a property whose land will be used for California's high-speed rail project.

In his first formal move to shape the future of California’s high-speed rail project, Gov. Gavin Newsom has released new cost estimates and plans to build track, trains and stations in the Central Valley.

The “project update report” released Wednesday by the California High-Speed Rail Authority — which Newsom told reporters hours before its release that he was still working on personally — estimates the cost of the Central Valley segment currently under construction has jumped by $1.8 billion.

The price tag for the 119 mile stretch of track from the town of Madera, north of Fresno, to the northern outskirts of Bakersfield, is now estimated to be $12.4 billion.

The High-Speed Rail Authority says that new estimate takes into account the risk of delays and cost overruns, and includes contingency funding.

The report also formalizes Newsom’s direction, which he first announced in his State of the State address this past February, to extend the Central Valley track by an extra 50 miles. It pegs the cost of the governor’s newly proposed, 171 mile initial operating segment from Merced to downtown Bakersfield at $18.3 billion.

“The Project Update Report demonstrates a clear path forward of what we can — and will — do in the next few years to make high-speed rail a reality in California,” High-Speed Rail Authority CEO Brian Kelly wrote in a statement. “This approach will help us ultimately connect a revitalized Central Valley to the Bay Area and Southern California.”

This latest commitment from the High-Speed Rail Authority that the project would connect the major population centers comes months after Newsom confused high-speed rail backers and critics alike when he said in his State of the State address that “the current project, as planned, would cost too much and, respectfully, take too long.”

“Right now,” he added in his speech, “there simply isn’t a path to get from Sacramento to San Diego, let alone from San Francisco to L.A.”

But far from killing the 520 mile, north-to-south project known as phase one, as many interpreted his words to mean, Newsom directed the High-Speed Rail Authority to continue its environmental reviews both in the Central Valley and elsewhere in the state. He also wants to continue work on the regional projects in the Bay Area and Southern California, known as “bookends,” which the state is continuing to fund.

After Newsom’s speech, President Trump criticized the project and demanded that California return its $3.5 billion in federal grant money.. And the Federal Railroad Administration, which issued the funding, said it would not send California $929 million in previously awarded but unspent funding, and insisted the other $2.5 billion be repaid.

Wednesday’s report estimates that the total cost for the 171 mile Merced-to-Bakersfield segment, along with the environmental reviews in the Central Valley and the state’s funding share of the regional projects, is $20.4 billion.

Coincidentally or not, the report also projects that the state will have at least $20.4 billion — and potentially as much as $23.5 billion — available to fund that work through 2030.

The projection range is dependent on how strongly California’s cap-and-trade program performs. That’s because — under a 2014 deal reached by then-Gov. Jerry Brown and Democratic legislative leaders — 25 percent of cap-and-trade revenues each year are set aside for high-speed rail.

“Our conservative estimate of funding shows we have the funding to deliver fully electrified, high-speed trains connecting 171 miles from Merced to Fresno to Bakersfield” Kelly said in his statement.

But legislative Republicans aren’t buying it.

“This report reconfirms what I have said before,” Asm. Vince Fong (R-Bakersfield) wrote in a statement. “The High Speed Rail project needs to be scrapped entirely because it will continue to be plagued with cost overruns, delays, and management failures.”

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