At the last High-Speed Rail Authority board meeting, on Oct. 6, a presentation was given by CEO Jeff Morales, who had been ballyhooing that 36 private party organizations had responded to the Authority’s “Request for Expressions of Interest” invitation which was sent out a couple of months ago.
Mr. Morales would have you believe that there is now intense interest on the part of private investors to become a part of the project. Private party funding was always envisioned to be a major source of capital to build the project, along with Prop. 1A bond funds, and federal government grants. According to Morales, the now approved addition of state funding from cap-and-trade funding in the amount of around $500 million per year, was going to push private investors to invest their funds, which they had been thus far, now about 8 years into the project, been unwilling to contribute.
Well the board discussion of these responses clearly did nothing to convince the board that such funding was on the horizon.
Director Rossi, made the flat-out statement, “The section that pertains to finance … there is absolutely nothing new in all the conversations we have had since day one.”
Chair Dan Richard was more reserved, saying another source of funds (around $20 billion) would be obtained from the operating profits generated from operation of the train. His optimism is pretty amazing. Operation of the many HSR around the world has shown only two systems, a line in Japan with ridership of 150 million passengers per year, and a line in France, operate without a subsidy, much less generate profits.
Richard added, that to get private funding, “two ways either you give them a guarantee or they see enough ridership history that they’re willing to take that risk and we’re not there yet and what I’m seeing from these proposals does not put us there yet in terms of a revenue concession model that adds twenty billion dollars of new money that we’ve estimated could be supported from the projected revenues of this project we’re getting in that direction but we are not there yet so I just want to be careful because when people start to sit down …”
The project has become a nightmare. Original cost estimates of $32 billion for Phase I from San Francisco to Anaheim have now grown to $68 billion, not including Anaheim at the southern end. The Authority is also proposing to share the use of CalTrain tracks in the north, rather than the needed for safety and speed, fully dedicated and grade separated tracks everywhere. The Federal government, once counted on to contribute $12 to $15 billion, after its initial grant of about $3.2 billion, has said no more funds from us.
The key to any private party investment would be a guarantee their investment would be secure, and any failure of the project would result in the state repaying them for any capital they have lost. Thankfully, when Prop. 1A was drafted, such a guarantee was forbidden.
Now being again rebuffed by the private sector, at what point is this project going be abandoned? The sooner the better.
The video of this discussion can be viewed here.
Morris Brown is a resident of Menlo Park and Founder of DERAIL, a grassroots effort against the California high-speed rail project.
The article was originally published by Fox and Hounds Daily
Wake up – If this high speed rail was in any way viable it would have many investors… it is a brain dead idea being pushed by brain dead democrats and other thieves who want to get rich building this project which will never, ever make a single dime in profit.
Now moonbeam wants to put a tunnel the length of the SJ Valley….. Yeah that is a great Idea except for the San Andreas…. One shake and all that crop land will be a GIANT MUD PUDDLE….
How in hell do we keep electing morons to public office…..
“…a single dime in profit…”
It would be nice if it made enough to pay-off its cost of construction.
Paying for its operation would be a fantastic achievement.
Making a profit is another one of Moonbeam’s Pipe-Dreams.
Dump this dumb idea of a high speed train, this could never be profitable. What a waste of money and effort to make it go no matter what.
“CEO” Jeff Morales, typical politician, completely baffled as to why private investors wouldn’t jump at the chance to dump $500Million a year down a bottomless rat-hole.
Investment Jeff, that’s it right there. See, every CEO knows that investment is only to be embarked upon when profit is reasonably sure. NOT when there is nothing to show for prior “investments”, and NOT after even the Feds pull out.
So easy to spend money that isn’t earned…
Only a dumbassed democrack would be stupid enough to invest other
peoples money into a screeching train wreck. I’m certain it’ll get done.
Engineer, gubner Moony needs that high speed derailment full of illegals for delivery to the polls in a hurry on election days.
This deal needs to CRASH ==BIG TIME. LIBERALS SPENDING OTHER PEOPLE’S MONEY
The “high speed train”, if ever built, will be a bleeding finantial would on California forever. Consider:
It will never be as fast as flying, but will have all the problems of flying, such as first driving to the point of embarkation, security checks, baggage handling, etc…
It will never be as convenient as your car to travel on your own schedule, have transportation at the destination, and no security checks …
So, the “high speed train” will always lack ridership to pay for itself andwill be one more thing requiring constant taxpayers’ support.
If the high speed rail were a viable idea, it would already be under construction by private industry with a completion date next year. But, it is not a good idea! And they know it, but it is currently providing high paid salaries to folks with questionable character values, because if they had any integrity or honor they would shut this down and stop wasting taxpayers money.