The March 13 High Speed Rail (HSR) meeting organized by Senator Simitian examined many critical issues related to the project and revealed improved schedules, as well as the identity of two investors willing to pay for rail upgrades on the Peninsula.
HSR Authority (HSRA) Chair Dan Richard and board member Jim Hartnett proposed improving existing rail service by upgrading and electrifying tracks between San Jose and San Francisco, and in the Los Angeles area shortly after work is begun in the Central Valley. A new business plan will be issued soon showing faster completion and lower cost. Richard acknowledged that HSR still hasn’t identified the essential private investors needed to complete the project.
Thursday, sources were identified to provide $1.456 billion to electrify and upgrade Caltrain along the peninsula, with $1.206 billion from HSR bonds and Federal grants. Another $250 million would come from local sales taxes, bridge tolls, and state grants. That still leaves the total project short by about $10 billion.
I have contacts with informed sources that believe investors have been found and billions will be committed soon. Goldman Sachs was hired to secure investors. They will be paid to find suckers willing to invest $10 billion or more. Since the fee will be taxpayer money Goldman Sachs assured the HSRA that they will minimize charges and expect it to be under $200 million.
One investor that seems convinced HSR is a wonderful opportunity expects to invest $5 billion in the next year. He is very busy now, but should have resources available this summer. Goldman Sachs assured the HSRA that the Easter Bunny is totally on board and will invest billions.
There are several potential sources of the other $5 billion in 2013. Right now the best bet seems to be Santa Claus, who also is eager to invest in such a high-return project as HSR. Most of the elves also are fully committed to invest. Dopey signed on at once and brought most of the other elves along, but Grumpy has been resisting and hasn’t agreed to participate yet. The reindeer have been holding out. Donner and Blitzen raised many concerns about the HSR business plan. They pointed out that they have been providing transportation for centuries and really understand the operations and business issues, and they have very little faith in the HSR business plan. Santa Claus thinks he can win them over in a few months, but if not his investment will be less than $5 billion.
Goldman Sachs apparently doubts the HSR business plan. If Santa Claus does make a significant investment, Goldman Sachs will invest heavily in coal futures, expecting that with little if any return on his investment, Santa Claus won’t have the resources to stuff stockings with his normal gifts, and will have to substitute coal lumps.
Considering the lack of agreement and commitment by the Santa Claus organization, Goldman Sachs has lined up an alternate investor who appears ready to invest at least $2 billion, and maybe as much as $3 billion. The Tooth Fairy will invest if Santa Claus provides less than $5 billion. HSRA expects to soon be funded fully by these investors.