SACRAMENTO, Calif. – The California High-Speed Rail Authority lowered its estimated future revenue based on new ridership projections in a report released Friday that also slightly lowered the project’s $68 billion price tag.
Despite legal setbacks, the agency is leaving unchanged its timeline for completing the entire 520-mile system by 2028. Rail authority officials have warned that the protracted court battles over the bullet train’s financing could cause serious delays, but the updated business plan does not reflect that concern.
More robust analyses of population, traffic and other factors show the system will have more riders taking shorter trips than previously forecast, the rail authority report said, bringing in revenue that is lower than originally projected — 5 per cent lower in 2025 and 10 per cent lower in 2040. Nevertheless, the report says the system will still be able to operate without a taxpayer subsidy.
The shorter trips also will push operations and maintenance costs higher, the report said.
The overall cost to build the train system is now forecast to be $67.6 billion, down from the $68.4 billion projected two years ago.
The rail authority is required by law to update its business plan every two years, and the latest draft largely projects a rosy picture for a project that has suffered repeated setbacks in recent months. After saying construction would begin last summer, officials now are projecting a spring start for work in the Central Valley.
“The Authority is staying focused on delivering its commitment to implement a statewide high-speed rail system that will tie together northern, central and southern California cities in a way that they have never been connected before,” the report said.
The plan released Friday is separate from a financing plan that was thrown out by a Sacramento County Superior Court judge in a case now on appeal. The judge ruled that the rail authority violated the terms of Proposition 1A, which voters approved in 2008, by failing to identify how it will pay for the entire first segment, which is projected to cost $31 billion.
The judge’s rulings also have prevented the state from selling $8.6 billion in bonds to help pay for the project and raised concerns that the state will not be able to meet its commitments to match some $3.3 billion in federal funding.
In one scenario presented in Friday’s plan, the system would have a $50 million operating deficit in 2022, although revenue would climb sufficiently to cover costs in future years, the report said. It recommends a multiyear operating contract to even out revenues or a short-term capital reserve loan as backup.
The Legislature previously asked the rail authority to improve its ridership numbers. Rail planners now expect more trips of shorter duration, although the report does not explain why that is the case. It forecasts from 7.4 million to 14 million riders on the initial 130-mile segment in 2025, rising quickly to 18.1 million to 31.7 million riders in 2030.
It also notes that many so-called “millennials” born between 1983 and 2000 are eschewing cars in favour of public transportation and urban living.
“As high-speed rail becomes part of California’s transportation network over the next several decades, the largest and most public transit-oriented generation will be getting into its prime travelling years,” the report said.
The report also cites progress by the rail authority in building a new leadership team that is focused on “building new and better relationships” with those affected by the project.
Those who have sued to try to block the project include a group of Kings County farmers and landowners in the case that prompted the Sacramento County Superior Court judge to toss out the financing plan, and San Francisco Bay Area Peninsula residents.