In 2008, the state of California voted in favor of a $9 billion bond mandate to build America’s first high-speed rail. plan is to build an electric train that will connect Los Angeles to the Central Valley and then San Francisco in two hours and forty minutes.
But 15 years later, not a single mile of track has been laid, and executives say there isn’t enough money to complete the project. The latest estimates from the California High Speed Rail Authority suggest that it will cost $88 billion to $128 billion to complete the entire system from Los Angeles to San Francisco. Inflation and higher construction costs lead to high prices.
The project has so far cost $9.8 billion, according to Cal High Speed Rail Authority CEO Brian Kelly.
“We knew we had a funding gap since the beginning of the program,” Kelly said. “What I do know is: the sooner we build it, the cheaper it will be.”
But it’s unclear where the funding will come from. So far, 85 percent of the funding has come from the state of California.
“Obviously one of the biggest hurdles is funding,” said Toks Omishakin, the head of the California Department of Transportation. “We couldn’t have done this project without the support of the federal government. It’s not going to happen.”
The bipartisan infrastructure bill of 2021 does allocate $66 billion for railroads, but most of that will go to Amtrak And there is no specific funding for high-speed rail in California. But Speaker Emeritus Nancy Pelosi is optimistic that federal money is being spent on the project.
“I do believe that the infrastructure bill gives us access to resources at the federal level in California,” Pelosi said. “It doesn’t specify one thing or the other. It has categories, and we fall into those categories.” She Also added, “Biden, as you know, is a railroad man, personally, officially, politically, in every way. He’s a champion of railroads. And then this is the ultimate high-speed rail.”
Nancy Pelosi speaks in support of high speed rail at America’s High Speed Rail Conference in Washington DC May 16, 2023
Janice Pettit, CNBC
Despite funding challenges, made progress on the project. California’s Central Valley is building 119 miles. The project recently celebrated its 10,000th construction worker on the job. Infrastructure design work has been completed and 422 of the 500 miles have been environmentally cleared, a massive undertaking in California.
“By the time we’re done with the environmental cleanup process, the cost is about $1.3 billion,” Kelly said. “That’s because there’s no steel or no cement on the ground.”
Some have called for reform of the National Environmental Policy Act (NEPA) to speed up infrastructure projects that have a positive impact on the environment.
“It’s a good thing when the NEPA gets us serious about building a 14-lane highway because 14-lane highways are terrible for the environment,” said Rep. Seth More, D-Mass. Dayton said. “But when it makes it so difficult to build high-speed rail in the United States, which is fundamentally very good for the environment, then we have a problem. That’s where we need reform.”
A 119-mile high-speed rail project is under construction in California’s Central Valley.
One of the most expensive parts of the California project was the section of the tunnel that was needed outside of Los Angeles, so construction began in Fresno, CA first in mid-2015 because it was less expensive to build.
The project didn’t go well at first, Kelly said. “They started construction before they were ready to start construction,” he said. “Much of the good news is in our rearview mirror. We are getting the sequence and chronology of work right as we move forward, and I am confident in the future of this program.”
The railroad authority said the goal is to have the section between Bakersfield and Merced operational between 2030 and 2033.
CNBC visited California’s Central Valley, where construction is underway, to find out what it takes to complete the largest infrastructure project in the country. Watch the video for the full story.