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High speed rail business plan: Hell or high water

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POSTED December 10, 2013 1:42 a.m.

HANFORD — Dairy farmers in these parts – and the rest of California for that matter – do not operate in a fantasy world.

They have bills to pay, families to feed. They’ve got to constantly worry about delivering a product on time and adhere to stringent regulations. Shortcuts are a cardinal sin and can put you out of business. 

They also have to have a thorough understanding of their customer, which explains why dairy cooperatives strive to produce milk-related product that reflect what consumers want and not what they think they need.

And they can ill-afford to go out on a financial limb making improvements without having a secure source of financing. And they certainly never would start building an expensive new milking barn if they only had the financial means at their disposal to complete just a third of the foundation.

It’s easy to understand why Kings County – the David taking on the Goliath known as the California High Speed Rail Authority – has the moral fortitude, conviction and courage to sue to try and stop the mutated monster spawned by passage of Proposition 1A five years ago.

Proponents dismissed Sacramento Superior Court Judge Michael Kenny’s ruling last month as bordering on inconsequential.

The high-speed rail authority didn’t just tweak the intent of the voters. They literally took what the voters approved, gutted it, and came up with a train system that is neither fish nor fowl and has about as much chance of securing private funding as a proposal to revive the original 15-pound, one-function mobile phones.

Proponents say the ruling is a minor road bump. That’s easy to understand given how they’ve accepted the hatchet job the CHSRA has performed on Proposition 1A. They are much like a kid living in an apartment in New York City who is so obsessed about Santa giving him a horse they don’t care about practicality, logic, or how much it will cost to obtain and maintain. They just want the horse. And in this case it’s a $68 billion semi-thoroughbred horse that will take a lot of high octane subsidizes to keep going once it is on the tracks.

Here’s what the judge had a problem with:

• High-speed rail was supposed to zip between Los Angeles and San Francisco in 2.5 hours and cost around $50 one-way. Now, depending upon who you believe, it will take anywhere from almost three hours and cost almost $90 one-way.

• High-speed rail was suppose to have its own dedicated tracks. The plan now is to share tracks with freight and other passenger trains along much of the route.

• The overall cost was pegged at $43 billion when it was sold to voters. Within months after the ballot’s measure’s passage the cost had jumped to $68 billion.

• Voters were promised in the ballot measure that additional funding sources would be identified before construction started. After five years, there is only the $10 billion in bond money plus $3.5 billion in federal grants. Not a single private investor has stepped forward to put up even a penny. Meanwhile, venture capitalists willingly put up billions of dollars every month for sublime things such as Tiddly-Wink apps that they obviously believe have a much better chance of turning a profit than high-speed rail.

• Voters were told there would be no new taxes or other government subsidies to cover operating costs once the trains are running. Now studies show the CHSRA would need between $200 million and $400 million a year in government subsidies to keep things running based on their rosiest ridership projections.

The judge also didn’t think it was smart business acumen to start a multi-billion project without first securing all environmental clearances.

If those are merely bumps in the road one has to wonder what the CHSRA would consider a pothole.

Hanford, besides being county seat for the David taking on the Mother of All Goliath government projects, is also home to an Amtrak station.

Some 225,708 people in 2012-13 boarded Amtrak trains in Hanford. The city is the county seat of Kings County and its 151,000 residents. That’s almost a 7.1 percent increase over the previous year. Even so, California spent $31 million in subsidies to run the San Joaquin corridor passenger service. Ticket revenues covered just a little over 55 percent of the cost.

To get people out of cars, trains have to be more cost effective and take you where you want to go. High-speed rail is neither for people in Kings County or much of California for that matter. As the system stands now, it only practical for business travelers between Los Angeles and San Francisco who don’t have to venture far into the suburbs of those metro areas.

Having high-speed rail stations in Merced, Fresno, Kings/Tulare and Bakersfield makes about as much sense as United Airlines scheduling jumbo jet service at airports in Stockton, Modesto, Fresno, and Bakersfield.

High-speed rail makes no sense for the San Joaquin Valley, financial or otherwise. And with each passing day it seems like the same argument can be made for California as a whole.

Too bad Gov. Jerry Brown wasn’t so blinded about leaving a legacy. He’s perhaps the only politician with the gumption to either set high-speed rail on the right track or sue to pull the plug before it creates the legacy it’s most likely to leave as the biggest financial train wreck ever involving state government.



This column is the opinion of executive editor, Dennis Wyatt, and does not necessarily represent the opinion of The Bulletin or Morris Newspaper Corp. of CA.  He can be contacted at dwyatt@mantecabulletin.com or (209) 249-3519.

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