Passenger Trains > Bloomberg CA HSR Article

Author provides a history of CA HSR funding and funding estimates, and predicts that a bill passed in the CA house is the first step towards the plug getting pulled.  Sounds like the bill is essentially telling the HSR authority they have to report cost and route plan changes (we really need a law for that to happen?)

http://www.bloomberg.com/view/articles/2016-06-28/california-hits-the-brakes-on-high-speed-rail-fiasco

 

The top photo of the article shows ex-CA Governor Arnold Schwarzenegger standing next to the Shinkansen E5 set, which is capable of 320 km/h (199 mph) in revenue service... except he rode the slow section (130 km/h or 81 mph) within Tokyo/Saitama urbran area ONLY, then went to China to ride the faster-than-design-speed German or Japanese designed copies.

To a Train Stupid politician, it makes the Chinese trains look faster!

My hypothesis is that there's a member within the CA HSR Authority who's already committed to asking China for "help." Seems current Governor Jerry Brown has been seeking China more than he should.

Anyway, thanks for the link to the article. 

Most damning is how the California High Speed Rail Authority has been caught "manipulating the truth."

> Now, courtesy of Los Angeles Times reporter Ralph Vartabedian, comes
> yet another damning revelation: When the Spanish construction company
> Ferrovial submitted its winning bid for a 22-mile segment, the
> proposal included a clear and inconvenient warning: “More than
> likely, the California high speed rail will require large government
> subsidies for years to come.” Ferrovial reviewed 111 similar systems
> around the world and found only three that cover their operating
> costs.
>
> This research should surprise no one who pays attention. Even
> advocates acknowledge that almost all high-speed rail systems need
> ongoing subsidies.
>
> But the California High-Speed Rail Authority steadfastly maintains
> that its trains will be the exception: “HIGH-SPEED RAIL IN CALIFORNIA
> WILL NOT REQUIRE OPERATING SUBSIDIES,” a 2013 fact sheet declared, in
> all caps. The authority has to keep up the charade or admit to
> breaking the promises that persuaded voters to back the project in
> the first place.
>
> At an April state assembly hearing, the authority’s chairman asserted
> that “virtually all” the world’s high-speed rail operations make
> operating profits. Not true. “It is very easy to falsify a claim like
> ‘Every HSR system in the world collects revenues that cover their
> cost,' ” Bent Flyvbjerg, a professor at Oxford’s Saïd Business School
> who studies infrastructure cost overruns, told Vartabedian.
>
> The truly damning revelation, however, isn’t just that Ferrovial’s
> research flatly contradicts the California authority. It’s that the
> company's warning on subsidies disappeared from the version of the
> bid posted on the state’s website. The Times obtained a copy of the
> full document on a data disk under a public records act request.

When an entity slurping from the public trough has to hide the truth in order
to continue slurping, there's trouble.

 

So if the the "plug is pulled" what happens to all the money already spent on construction in place? Do taxpayers get a refund? 

Bloomberg represents the business elite. It supports the status quo because its subscribers have invested in projects that may be negatively effected by a change of philosophies like California going pro-rail in lieu of pro-air and pro-highway industries that its readers own.. No business person wants the government to invest tax money (their tax money) in projects that won't improve their bottom lines. Check out Eisenhower's goodbye speech where he warned the country--to no avail--of the dangers of public/private partnerships like the military-industrial complex where fiscal waste is der rigour. I just returned from the UK, France and Switzerland where, even back country MU trains of the 1970s, blew down the excellent track at +100MPH and their big brothers at 200MPH, all day long and on time to the minute. The argument that high speed trains are Buck Rogers stuff is simply a big lie to cover the big boys cabooses. The CAHSR has probably done nothing that the military industrial-complex doesn't do every day and is rarely called upon to explain. $600 toilets seats in bombers anyone? 



Edited 2 time(s). Last edit at 06/28/16 22:13 by railwaybaron.

andersonb109 Wrote:
-------------------------------------------------------
> So if the the "plug is pulled" what happens to all
> the money already spent on construction in place?
> Do taxpayers get a refund? 

We didn't pay extra for the "extended warranty" and no "money back guarantee" was advertised by the CA HSR Authority. SOL is the word. :-)

I would suspect that non of the construction that has taken place could ever be used for conventional rail.

mundo Wrote:
-------------------------------------------------------
> I would suspect that non of the construction that
> has taken place could ever be used for
> conventional rail.

I think Allen (bradkleymckay) asked this question in another thread, if the San Joaquins can use some of the HSR ROW as Plan B. It's still too early to jump to conclusions but for the sake of California, I hope so. 

railwaybaron Wrote:
-------------------------------------------------------
> Bloomberg represents the business elite. It
> supports the status quo because it subscribers
> have invested in projects that may be negatively
> effected by a change of philosophies like
> California going pro-rail in lieu of pro-air and
> pro-highway industries that its readers own..

(snip)

Hope you took the time to read the article, because your comments sound like a non-sequitur. I think GenePoon did a good job highlighting the most troubling aspects of what's going on with the project.

Let's go along with your theory that pro-air and pro-highway elements are conspiring against anything pro-rail. That means this project should have never been started, because defeating that industrial complex would have been futile, which you seem to imply in your rant.

I commented YEARS before this article was published, right here on TO, that I found the lack of organized opposition against Prop 1A to be suspicious, as if the opposition felt it didn't need to spend any resources to kill the project. It remains to be seen if I was prophetic.

There are some very interesting aspects of the Shinkansen project in Japan, which involved the military in an indirect way, but I'll stop here. The pro-rail folks need to do some research instead of ranting the standard line, and figure out why they succeeded.

In fact I did read the story and it is almost identical to dozens of other rants in the conservative and business media. No arguments are forwarded that high speed trains don't work, only that CAHSR didn't follow the writer's narrow legal opinion of propriety, a test that does not get asked of road and air lobbies. Incidentally that empty space between Bakersfield and the Bay Area contains 6 million people and is the only large space left open for the population expansion that no one questions is coming. It seems to me that the augments against  CAHSR program are as specious as those against gun control. "Follow the money" as Deep Throat told Woodward and Bernstein.

You can't believe everything you read. Nobody's pulling any plug. If anything, the plug is being pulled on the highway program, with no funding increase package likely of being passed in California due to lack of sufficient votes in the Legislature. Meanwhile, construction on HSR continues in the Central Valley, with plenty of funding on hand.

Posted from iPhone

railwaybaron Wrote:
-------------------------------------------------------
> It seems to me that
> the augments against  CAHSR program are as
> specious as those against gun control. "Follow the
> money" as Deep Throat told Woodward and Bernstein.

Uh huh... so the firm that is mentioned in the Bloomberg article, and which GenePoon mentions above (Ferrovial Agroman), what is their role in the CA HSR project?

Did you also "follow the money" on who's doing "Construction Package 1" of the CA HSR? Let's stick to specifics about the project instead of political hyperbole here. 

Your "All the President's Men" analogy is actually appropriate for the LA Times writer Ralph Vartabedian (mentioned in the Bloomberg article), who seems to be doing what Woodward and Berstein did, investigative reporting.

Bloomberg writes for "the business elites" as you describe them. And also for people who manage pension plans, college endowments, and other entities which have to look beyond the next election. They hold the bonds issued by CAHSR. Thirty year time horizons are common. Lots of good ideas in Puerto Rico that process sewage, purify water, or teach kids are selling for 50 to 60 cents on the dollar. That's a huge loss.

Anybody who knows as much as most of the people on this board knows that the 19th century was filled with railroad bankruptcies. Good ideas ahead of their time, bad items slickly packaged, and everything in between. Some of them eventually became winners, others are barely a footnote in a dusty financial tome.

You pay your money, you take your chances. But when the avenue is a slickly packaged referendum that mis-represented a lot of basic issues, that's a problem.

You'll miss the point. I think that the Spaniards are right. The question of subsidies is moot. Every transport mode (and a good many other industries) get a subsidy from the freeways to the airport to "public" transit. It's who will get what subsidy and who will not that's at issue. If the gov't subsidizes HSR then there be less money to subsidize the "horse" I am backing in the race. Public pension director? Seen what those guys bring home? They are also the business elite--only its the industry of handling some body else' money.

It will be like the NEC. "Profitable above the rails"

railwaybaron Wrote:
-------------------------------------------------------
> You'll miss the point. I think that the Spaniards
> are right. The question of subsidies is moot.
> Every transport mode (and a good many other
> industries) get a subsidy from the freeways to the
> airport to "public" transit. It's who will get
> what subsidy and who will not that's at issue.

That point has been made already, that subsidies exist, direct or indirect, for many things in this country. Give credit to TO membership - the irrational amateur accounting rants against passenger rail, for the most part, have subsided.

I'll further mention that our auto industry's "privator sector creds" were bogus due to the government bailouts, and the airline industry needed government assistance in many forms (bailouts + stealth "reorganization" by shifting the cost of providing security to the TSA) to maintain its perception of profitability. In the same spirit, CA HSR Authority is being VERY shifty with its so-called business plan, flip-flopping on SoCal or NorCal for its initial operating segment, and now Ferrovial's revelation about the subsidy covered up.

If you like being bait-and-switched, that's OK by me, but that's what happened to the CA voters with Prop 1A. The bigger problem, which the media hasn't discussed, is the competency problem within the CA HSR Authority. Unless Governor Jerry Brown cleans it up instead of taking advice from these folks, CA HSR may fail even if people don't mind paying subisidies for the project. 

Lackawanna484 Wrote:
-------------------------------------------------------
> Bloomberg writes for "the business elites" as you
> describe them. And also for people who manage
> pension plans, college endowments, and other
> entities which have to look beyond the next
> election. They hold the bonds issued by CAHSR.
> Thirty year time horizons are common. Lots of good
> ideas in Puerto Rico that process sewage, purify
> water, or teach kids are selling for 50 to 60
> cents on the dollar. That's a huge loss.
>
> Anybody who knows as much as most of the people on
> this board knows that the 19th century was filled
> with railroad bankruptcies. Good ideas ahead of
> their time, bad items slickly packaged, and
> everything in between. Some of them eventually
> became winners, others are barely a footnote in a
> dusty financial tome.
>
> You pay your money, you take your chances. But
> when the avenue is a slickly packaged referendum
> that mis-represented a lot of basic issues, that's
> a problem.

The HSR bonds here are general obligation bonds backed by the full faith and credit of the State of California, and are first in line for payment before virtually any other state expenditure obligations, other than public education.  There is no risk of any consequence.

The HSR Authority has not issued any bonds.  It's the State of CA that is issuing the bonds, and the General Fund of the state stands behind the bonds.

In any case, the project right now is spending federal funds and other state funds (cap and trade).

Construction is well underway, with hundreds of property parcels acquired.

reindeerflame Wrote:
-------------------------------------------------------
(snip)
>
> The HSR bonds here are general obligation bonds
> backed by the full faith and credit of the State
> of California, and are first in line for payment
> before virtually any other state expenditure
> obligations, other than public education.  There
> is no risk of any consequence.
>
> The HSR Authority has not issued any bonds.  It's
> the State of CA that is issuing the bonds, and the
> General Fund of the state stands behind the
> bonds.
>
(snip)

being a general obligation bond holder of full faith and credit is often not as good as it sounds.

I'd doubt that any court would hold that payments to HSR bond holders have precedence over hospital payments, welfare, prison maintenance, or any of the many "rights" conferred by the courts over the years.

But, we'll have to see where that goes.


 

reindeerflame Wrote
>
> Construction is well underway, with hundreds of
> property parcels acquired.

I have been curious about this. How many miles of track have they laid since I would assume they acquired the property at least,for the initial segment.

CAHSR is building bridges at this time.



Edited 1 time(s). Last edit at 06/29/16 13:57 by railwaybaron.