The California High Speed Rail Peer Review Group released a study Tuesday that urges lawmakers to withhold $2.7 billion in bond money that is needed to start construction of a high-speed rail system in southern California.
The state legislature appointed a team of eight transportation officials from around the world to evaluate the feasibility of plans for high-speed rail. Two seats on the group are open.
“We cannot overemphasize the fact that moving ahead on the HSR project without credible sources of adequate funding, without a definitive business model, without a strategy to maximize independent utility and value to the State, and without the appropriate management resources, represents an immense financial risk on the part of the State of California,” writes Will Kempton, Chairman of the California High-Speed Rail Peer Review Group.
The group reviewed the latest version of the high-speed rail project’s funding plan and business model, and has concluded that both are flawed.
The funding plan does not contain long-term funding commitments, which is a situation the group found problematic.
“Even if we optimistically assume that the ICS can be completed within the $6 billion cost estimate, the CHSRA has been very honest in making it clear that they do not have the additional $35 to $30 billion needed to complete either of the Initial Operating Segments, and there are no existing sources at any level of government that could credibly fill that gap," the statement says.
A study of the version of that was released late last year concluded that private sector interest in the project was unlikely. The group determined that the model would not produce the high profits investors like to see when contributing funds to a project.
Later that month, to halt the distribution of Prop 1 A funds, which are scheduled to be allocated toward the first segment of a statewide high-speed rail system in California.This litigation follows multiple to the environmental review of the project from Menlo Park, Atherton, and Palo Alto residents.
"We need to have credible ridership numbers and a credible business plan before we allow that to impact our city," said Council Member Kelly Fergusson, who is a member of Menlo Park's City Council High-Speed Rail Subcommittee.
Costs for the plan have to almost $100 billion from the initial $9.95 billion in general obligation bonds that voters approved in 2008.
The peer group also found managerial resources lacking.
To read the full text of the report, see the .pdf attached to this article.