In January, two top executives from the California High-Speed Rail Authority, Chairman Tom Umberg and CEO Roelof van Ark, stepped down amid a brutal run of negative reports by government watchdog agencies -- assessments that lent ammunition to charges by HSR critics that the entire project is a gigantic boondoggle. There have been other setbacks as well.
The California Report's Rachael Myrow recently interviewed Dan Richard, who took over as chairman in February, and who made his case that California high-speed rail project is not just -- literally and figuratively -- a fast train to nowhere.
RACHAEL MYROW: You've been making early rounds in Fresno County. Is that an attempt to repair relations with people in the Central Valley?
DAN RICHARD: I've also been in the L.A, San Diego, and San Francisco areas. In a number of areas, the High-Speed Rail Authority needs to reset or re-begin relationships with people who are going to be important partners.
Certainly in the Central Valley, there are a lot of issues, because that's where we're going to commence construction, and there's a lot of uncertainty and concern. So we're meeting with civic leaders, farmers, dairymen and so forth to get a better sense of what's happening there so we can work more positively with people.
RACHAEL MYROW: You've been quoted as saying the agency has a lot of damage to undo to restore its credibility. What do you see the agency needing to do?
High-speed rail should be an integral part of our transportation system, tying in with BART and MUNI and Valley Transit.
The other thing that's important: For too long high-speed rail has been looked on as a separate, insular entity. The way I look at it, high-speed rail should be an integral part of our transportation system, tying in with BART and MUNI and Valley Transit and other regional authorities.
RACHAEL MYROW: It's been a number of years now, there have been numerous updates to the cost of this project, but it seems that many, many years into this discussion, years past the time that voters even approved this project – approved bond money for this project, that we're still talking about whether high-speed rail should happen at all.
I believe, having come onto this board as somewhat of an agnostic on the question of high-speed rail, that it, in fact, absolutely makes sense for California..
RACHAEL MYROW: As far as you understand it, what are the latest cost and ridership estimates?
DAN RICHARD: We're updating the cost estimates and it's very important to note that we deliberately did something in the last report, which was to not just express the cost in terms of what it would have cost to build it in 2010, which is the numbers that people had been using, and it's valid to use those for comparative purposes, but in fact we wanted to be honest with people about what it would cost to build this over the next 25 years in fully inflated dollars. And that's where the $98 billion number came from.
Now, one third of that cost is inflationary effects, so to the extent that we can build the project more quickly, it's going to cost much less. On the ridership, the shorthand answer is that under all the conditions we can forecast, using very conservative assumptions for fuel cost and population growth and things like that, we generate enough revenue to break even and to operate the system as all these high-speed rail systems are around the world operating at a profit. Now, that's after the capital cost has been expended and we believe that will be the case in California as well.
RACHAEL MYROW: So what kind of ridership numbers are you envisioning?
DAN RICHARD: If you look out to 2040, it's about 38 million riders a year, which is actually a pretty modest number compared to similar systems around the globe.
RACHAEL MYROW: 38 million riders a year, that sounds like the population of California.
On ridership... under all the conditions we can forecast...we generate enough revenue to break even and to operate the system.
RACHAEL MYROW Some changes to High-Speed Rail's business plan have been mandated by the federal government, including the string attached to federal funds that the first leg of the system has to be Merced to Bakersfield and back. It could be a potential economic spur for the Central Valley but it also seems a potential existential threat to the success of the entire project.
DAN RICHARD At this point I've become convinced that, regardless of the federal requirements, it is in fact the right place for us to start. It is the only place where we can test the trains at their ultimate speeds of 220mph. We can't do that by putting trains between San Francisco and San Jose or Los Angeles and Anaheim. So we need a place where we can show that these trains can operate safely at those speeds under the train control systems we're putting in place.
The other thing is the shared use of tracks like on the Peninsula. That means that we already know the corridors and the rights of way that we would be using in areas like San Francisco to San Jose or Los Angeles to Anaheim.
We don't have any right of way at this point in the Valley, and the value of acquiring that right of way is around $400 million. The Valley is a very fast-growing part of our state, so the longer we wait to build there, the more difficult it's going to be to acquire the land that we need. So there are a number of reasons why it does make sense to start in the Valley.
The real issue for people has been the concern that if we couldn't get any more funds, well, what is left there. And that's one reason why we’ve also been engaged in recent discussions about getting early advanced investments in Cal Train upgrade and in similar systems in Southern California so that we'll be doing more than just working in the Valley.
RACHAEL MYROW: You used to serve on the board of the Bay Area Rapid Transit System and right around the time they were trying to connect the city with the San Francisco International Airport. Do you see similarities with that experience and the challenge you see now?
DAN RICHARD: Very much so. I served on the BART board for 12 years, and there are a couple of really important parallels between high-speed rail and BART. First is, we almost did not have BART. It came down to one vote of one county supervisor in Contra Costa County in the 60's, but for that one vote, the whole Bay Area would look different than it does today if we didn’t have BART.
The second thing was that I was very involved in the construction of BART to the San Francisco Airport and getting the funds for that. We heard many of the same things like 'Where are you going to get the money? Why don't you do it this way or that way?' So I have really been through this before in a smaller scale and my view is that if the fundamentals make sense then it's really important to have civic leaders come together and persevere to get things done.