What I learned today about SNCF and California HSR
By Stephen Smith, on July 10th, 2012
If you’ve been following me on Twitter, you’ll know that I spent this afternoon on the phone with folks in California, looking into the recent SNCF-CHSRA bombshell. To summarize: SNCF, the highly experienced French national high-speed rail operator, apparently had a plan for California’s HSR network, but was turned off by the highly politicized routing. Namely, they wanted to make a straight shot from LA to San Francisco by running along the flat, government-owned I-5 corridor with spurs out to the eastern Central Valley, whereas the California High Speed Rail Authority (CHSRA) and state politicians wanted the main line to go through every little town in the Central Valley, directly. Now, all of this wouldn’t be a scandal, except for the fact that nobody at SNCF ever mentioned it to the public or the media.
That’s what the LA Times reported, but David Schonbrunn, a pro-HSR, anti-CHSRA activist, says there’s more to the story – SNCF not only advocated I-5, but they actually had private investors lined up! Here’s his letter to the LAT:
Your otherwise excellent story “High-speed rail officials rebuffed proposal from French railway” was far too kind to California High-Speed Rail Authority officials. At the time of its proposal, SNCF had the investment backing to actually build the LA-SF line, in a deal that sheltered the State from the risk of subsidizing an unprofitable project.
The Authority’s 2012 Business Plan covered up this offer, instead insisting that no private capital would be willing to invest until the first high-speed line showed a profit. The $6 billion Central Valley project approved last week by the Legislature thus exposes the State to unlimited operating losses. Worse yet, before that line can be completed, it will need an additional $27 billion from the federal government–quite unlikely in today’s political climate.
I’d sure like to understand the thinking behind the rejection of the French offer.
It’s unfortunate the story didn’t run earlier. It would have informed the Legislature’s debate.
Robert’s take-down of the messenger (LAT) misses the point entirely. SNCF presented a proposal in conjunction with a U.S. investment bank that was willing to finance the entire LA-SF line. This was a project that made enough business sense to them–it minimized costs while optimally serving the primary market–that they were willing to accept full ridership risk.
Had the Authority been seriously committed to building its project, it would have conducted a bidding process, hired an international consortium, and would now be using the ARRA funds to build an I-5 alignment.
For reasons that appear contrary to the public interest, The Authority covered up this offer in its 2012 Business Plan, instead insisting that no private capital would be willing to invest until the first high-speed line showed a profit. In other words, the entire plan is based on a lie. It calls for the State to take on the full cost of building a line to LA, without any private money and without a prayer of any additional federal support.
The $6 billion Central Valley project approved last week by the Legislature exposes the State to unlimited operating losses, and worse yet, no way forward to a statewide system. That’s just what a take-the-money-and-run scam would look like.
Go ahead and rant all you want. I can’t see how you can call yourself an HSR advocate if you'd rather have 130 miles of unconnected track in the Central Valley than a working HSR system.
Had the HSRA been operating in the public interest, it would now be under contract with an international HSR operator selected through an open bidding process, and be proceeding towards a fully funded LA-SF buildout (which, incidentally, would probably not have been challenged by the current litigants). Instead, if the project proceeds as planned, Californians will end up with a $6 billion track that can’t be used for HSR, and have no prospects of ever receiving a statewide system.
LA Times Story: High-speed rail officials rebuffed proposal from French railway
In response to today's article, TRANSDEF sent a letter to the Editor. Read More...
Senator Simitian of Palo Alto gave the speech of his life.
Although a long-time supporter of the concept of High-Speed Rail for California, Simitian’s conclusion was: "This is the wrong plan, in the wrong place, and at the wrong time." He was also concerned that voters would react to this vote by turning down the Governor's tax extension measures in November, with devastating consequences to education and social service programs.
Senators DeSaulnier and Lowenthal, Chair and former Chair of the Senate Transportation and Housing Committee, who have held countless hearings on High-Speed Rail, spoke out strongly against the measure. These three and Senator Pavley were the only Democrats voting against the funding measure.
According to press reports, a 2010 promise by the President to secure the vote of Representative Jim Costa on health care reform resulted in the federal insistence that its HSR funding go entirely to Costa's Central Valley district.
The three Senators were convinced that spending $6 billion in that area would put the State at great risk of being left with a very expensive piece of useless track.
They produced an alternative plan that would have spent most of the money on immediately useful track improvements in Los Angeles and San Francisco, including a $2 billion extension of Caltrain to the Transbay Transit Center. Read More...
After the Court sustained the Demurrer with leave to amend on June 22, Attorney Brady filed a Second Amended Complaint on July 6. Because the State Senate was debating a funding measure for High-Speed Rail that afternoon, he brought with him one version that included a reference to the Senate passing the measure, and a second one that did not. With the Clerk’s Office at the Court closing at 4:00 pm, and the Senate vote occurring at 3:59 pm, Attorney Brady filed the latter version. He will likely supplement the Complaint after the Governor signs the bill into law.
The Amended Complaint includes allegations that funds are currently being expended in support of construction, in violation of Proposition 1A and that adoption of the Funding Plan also violated Prop 1A. Now that the Legislature has actually appropriated bond funds, the Authority will have a hard time arguing that the suit is premature.
All the associated documents are available on this page.