Is California doing all it can to fund high-speed rail?

california high speed rail

The California Legislature’s budget proposal for the high-speed rail project has been finalized.

Gov. Jerry Brown and Democratic lawmakers have agreed to use 25 percent of future cap-and-trade funds, totaling $250 million, to continue construction of the $68 billion California High-Speed Rail Project (CHSR).

The California High-Speed Rail Authority continues battling multiple lawsuits, especially one that has essentially stopped voter-approved state bonds totaling $9.9 billion from being used.

A major blow to the CHSR funding plan fell apart recently when the U.S. House of Representatives voted to stop directing funds from the $52 billion federal transportation bill to support the project.  The Authority has not yet secured any private funding for the project and I’m not sure if they have even tried to attract any interest from foreign sources or private U.S. firms.

On numerous occasions I had outreached to the Authority on interest I had received directly from China to provide not only full funding for the CHSR project, but technology and equipment as part of a potential deal. The Chinese company that built 5,000 miles of high-speed rail across China successfully looks to deploy capital and high speed rail transportation knowledge all over the world. Unfortunately, not one phone call or email to the Authority was ever responded to even though the CHSR master plan calls for engaging with international partners.

Former Gov. Arnold Schwarzenegger approved a project delivery system called “Public-Private-Partnerships” known as “P3” in which the private sector would engage with government to bring funding and construction knowledge forward to much needed infrastructure projects sooner than later. In China they have a similar project delivery system called “Build-Operate-Transfer” known as “BOT.” British Columbia’s government owns Partnerships BC (PBC), an independent organization that evaluates and implements financing and construction of major infrastructure projects. PBC uses a number of financial models for projects, including traditional bond financing, vendor financing and public-private partnership financing.

Public-private partnerships have been a tremendous success in British Columbia, resulting in millions of dollars in additional benefits to more than 20 projects, including critical transportation and health care infrastructure. P3s take advantage of innovation and expertise of the private sector, while reducing risks and delays.

It appears that Gov. Brown and Democratic lawmakers find no issues with breaking ground on a project without securing all the required funding first. In the private sector if a company moved forward without fully securing funding and actually changing the approved use of funds as intended, most likely the private company would be facing bank fraud, wire fraud charges.


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