On June 5th, the California Assembly co-sponsored a resolution to have the California High-Speed Rail Authority defer a $20.5 billion stretch of high-speed rail construction between Bakersfield and Merced.
Deferring $20.5 billion
The contract, roughly 1/3rd of the amount California had passed in favor of a Los Angeles to San Francisco high-speed rail system, was to have been awarded this year. In addition to construction costs, the contract was to have also awarded a maintenance contract good for 30 years.
While the resolution will not stop the the California High-Speed Rail Authority from awarding the 171 mile stretch across central California, the Authority could get into a protracted legal and fiscal battle if it ignores the Assembly.
The deferment itself would only last until the California Legislature both reviews the Bakersfield-Merced project and signs off on the remaining $4.2 billion in high-speed rail funds that have been languishing since being approved via a state bond vote in 2008.
“California lawmakers have always been so-so on high-speed rail,” noted German passenger railroad consultant Horst Bauer. “They’ve been more progressive than most of the rest of the continent, but they are slow to making a rail line like this a reality.”
“And now they’re trying to hold it up even more.”
“Funds are tight. I understand California has a [$54.3 billion] deficit, and even though the money was approved, they’re obviously stalling. Once that contract goes through, they’re bound to fund it. Money could be tight for years, and that’s $20 billion that could go to children, housing people, and helping those who lost their job.”
“I’ve consulted for many railroads around the world, and contracts are always bound for better or for worse. California just can’t commit right now, even after they said yes years before.”
More time needed to review high-speed rail system
In addition to the deficit, the Assembly and Senate have said that they have not had the time to properly review the system and that the contract can’t be put into effect before decisions over major parts of the rail system are made.
“The only remaining opportunity for the Legislature to weigh in on the direction of the high speed rail project occurs when the HSRA asks us for the remaining $4.2 billion in bond funds,” noted Assemblyman Jim Frazier (D-Discovery Bay) in a statement.
“We cannot allow HSRA, or any department, to enter into contracts that bind the Legislature’s approval of future appropriations. The Legislature’s role in approving the budget must be respected before key decisions on the state’s largest infrastructure project are made.”
The State Legislature has been battling both the HSRA and labor unions since last year over the Bakersfield-Merced corridor project. Changes, such as connecting other Bay Area cities, removing some electrical components in favor of diesel trains, and a focus on Southern California and the Bay Area sparked a fight. Lawmakers still wanted a say in plans rather than leaving the entire project in the HSRA’s hands, while the HSRA and unions wanted to keep the plan in place and continue with contracts as usual, citing job creation and a much sooner opening date.
And with other high speed rail projects, such as the Las Vegas to Southern California high speed train, getting state funding less than two months ago, the HSRA has only further pressed the budgetary question.
Democrats and Republicans join together in resolution
The Assembly itself has drawn a line in the sand over the contract, with Democrats and Republicans coming together for a rare bipartisan agreement. Both Speaker of the Assembly Anthony Rendon (D-Lakewood) and Assemblymen including Jim Patterson (R-Fresno) and Vince Fong (R-Bakersfield), have joined together on this issue of deferral along with most members of the Assembly whose districts are affected by the rail line.
As of Monday, both the Assembly and the HSRA remain at odds. If the HSRA issues the contract and the Assembly hasn’t agreed on the funding, then the project could be terminated. California would have to absorb all the losses and contract terminations, with the rail line itself being unable to connect the state. The Assembly may also simply agree to pay no matter what, but any future funding for the HSRA could be denied based on how they were treated over the contract.
“The best solution is to allow the state to review and pass everything needed, and once that is sorted, then the rail company can resume,” added Bauer. “Delays are frustrating, but this way it is done properly.
“I know many Californians can’t wait for this, and I know many others would rather have that this did not happen. But, based on legislation and voting, it is happening no matter what. The best for everyone is to make sure this is done right but also in a way where California doesn’t have to allocate any more money and the project stays on budget.”
“It is wishful thinking for a U.S. rail line, but we have to hope, yes?”
The HSRA’s decision over the resolution is expected soon.
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