California’s High-Speed Rail Project to Cost Nearly $10 Billion More

Cement is laid on the San Joaquin River viaduct portion of the high-speed rail line being built in Fresno, Calif., on May 8, 2019, amid ongoing construction of the railway in the state's Central and San Joaquin Valleys. Photo by Frederic J. Brown/AFP via Getty Images

High inflation and supply chain issues are some of the reasons California’s long-delayed high-speed rail system will cost up to nearly $10 billion more to complete, agency officials reported (pdf) this week.

The California High Speed Rail Authority now estimates the bullet train will cost up to nearly $128 billion, according to the report published March 1. Officials said they also expect fewer riders on the 500-mile system from San Francisco to Los Angeles/Anaheim.

“The impacts of the COVID-19 pandemic on global supply chains and the resulting market instability and inflation have impacted prices for construction commodities like concrete and steel as well as labor,” Brian Kelly, the authority’s CEO, said in the report.

“Large infrastructure projects all over the world have felt the impact of this market instability.”

Reaction to the higher price tag has prompted calls to abandon the controversial project.

A full-scale mock-up of a high-speed train is displayed at the Capitol in Sacramento, Calif., on Feb. 26, 2015. AP Photo/Rich Pedroncelli

The larger budget means the project will now cost about $206.4 million per mile, a 57 percent increase in just one year, according to State Senate Minority Leader Brian Jones (R-Santee).

“It’s time to pump the brakes on the hot mess express and defund the [high-speed rail],” Jones posted on Twitter March 1.

California Republican Party Chairwoman Jessica Millan Patterson also panned the project.

“Only under Democrat one-party rule will we keep spending BILLIONS of taxpayers’ dollars and continue to push back the completion date on a project that for years has made little to no progress,” Patterson wrote on Twitter Feb. 27. “Absolutely embarrassing.”

The San Jose Mercury News and East Bay Times also criticized the rail system for delays and increased costs last month in an editorial.

“The reality is that the project has never been realistic. Fifteen years after it was put before voters, there’s still no path to completion. Costs keep rising, and now ridership projections for the system, if it ever opens, are declining sharply,” the news organizations wrote Feb. 23. “It’s time for state and federal officials to cut their losses, to stop throwing money at a project that probably will never be finished.”

More Funds Needed

Project officials have secured about one-third of the funds needed to complete the system, the high-speed rail agency said.

In 2008, Californians approved Prop 1A, giving the state the go-ahead to build the electrified high-speed rail. At that time, voters were told the project would be finished by 2020 and cost $33 billion. Project builders have completed a bridge and other structures but have yet to lay down any tracks.

The fast train is expected to transport passengers in 2.5 hours between the Bay Area and Los Angeles using environmentally friendly clean energy.

The project was first given $9.95 billion from the state for planning and construction. A year later, the agency received another $2.5 billion from the American Recovery and Reinvestment Act of 2009. In 2010, federal funding provided another $925 million.

In 2014, the state Legislature approved a plan to give the project 25 percent of the annual proceeds from the Cap-and-Trade program, a state policy to reduce greenhouse gasses, which adds 23 cents to the price of each gallon of gas.

The total federal and state funding for the rail project will provide up to $23 billion, according to the agency.

Project officials applied for $1.3 billion in federal grants last year but that was denied in February. Regardless, the agency will continue seeking federal assistance and investment, High Speed Rail Authority spokeswoman Katta Hules told The Epoch Times.

“We remain optimistic that our strong partnership with the Biden-Harris Administration will result in continued joint investment from the Infrastructure Investment and Jobs Act (IIJA), from which we already have received grant funding,” she said in an email.

In this aerial image, vehicles drive past farmland and part of the California High Speed Rail Authority San Joaquin River viaduct construction project alongside US Highway 99 through the Central Valley between Madera County and Fresno County, Calif., on Aug. 26, 2021. Patrick T. Fallon/AFP via Getty Images

Ridership Drops

Fewer people are using public transit in California after the COVID-19 pandemic. As a result, the railway could see 25 percent fewer riders than first expected. The state’s lower social and economic growth has contributed to the decrease, the agency said.

“Preliminary ridership estimates are more conservative in light of stagnant population growth, revised travel behavior data, [and] reduced ridership … on existing services,” Hules said.

According to new estimates, 31.3 million riders are expected to take the train from San Francisco to Los Angeles in 2040. That’s about 7.3 million fewer than previous estimates.

The drop is a result of the state’s slower population and economic growth, the agency said. California lost another 700,000 residents last year for a multitude of reasons, including high taxes, the tough business environment, and hefty environmental regulations, according to Orange County’s Chapman University.

Remote working and the COVID-19 pandemic also added to the drop.

Despite the latest estimates, the high-speed rail agency still expects to complete a 171-mile segment between Merced and Bakersfield by the end of 2029.

The California State Assembly’s transportation committee has scheduled a hearing on the project in April, a committee assistant told The Epoch Times.

Correction: A previous version of this article misstated the estimated total cost of the project. The Epoch Times regrets the error.