California's High Speed Rail Project: Business Plan Released
On November 1, 2011, the California High Speed Rail Authority (the “Authority”) introduced its long awaited Draft Business Plan (the “Plan”). A 60-day comment period now commences. The Plan must also be submitted to the state Senate and Assembly Transportation and Budget Committees. Although the legislature does not have a strict legal obligation to “approve” the Plan per se, the legislature does have critical appropriations and funding authority that effectively give it veto power over the Plan. The legislature will likely hold hearings before providing any appropriations for the year 2012. Governor Brown remains supportive of the project. The cost of the project has doubled, to more than $98 billion, with an extended timeline for final completion in 2033. This is therefore a key moment for California's ambitious plan for high speed rail.
Various officials spoke at a press conference on November 1, 2011, in Sacramento, California. The Authority's Chairman, Tom Umberg, led the press conference, and other Board members and transit and labor leaders spoke in favor of the Plan as "reasonable."
Mike Rossi, one of two recent Governor's appointees to the Authority and a former Vice Chair of Bank of America, spoke to the funding, financials, ridership numbers, operating expenses and capital costs and other financing numbers and determined the "model is reasonable."
The Authority is taking a "blended approach" working with existing train tracks, and will construct "segments in pieces" (beginning in the middle of the state and going north and south from there).
The Initial Operating System will be constructed in the Central Valley and the Authority remains confident in private investment, with anticipated net operating profits and a potential 30-year concession arrangement.
Labor supports this as a way to get "a million jobs" for California. Federal and state funding is in place.
Now the real efforts begin to reassure state legislators, the public and private investors that this is a viable Plan.