The California High-Speed Rail Authority can’t seem to solve their most pressing problem, one that has hung over them since the conception of the project. The state doesn’t know where to find all of the $64-billion it will cost to complete the bullet train that will run from San Francisco to Los Angeles.
So, the California High-Speed Rail Authority quietly approached the U.S. Department of Transportation to discuss a federal loan of up to $15 billion that would help build the initial segment from San Jose to Shafter, northwest of Bakersfield.
“Such a loan — even the commitment for one — would also show potential private investors that the project was “creditworthy,” according to a briefing document for the meeting,” as quoted in the LA Times.
However, federal officials aren’t likely to make any new loans in the next month. Many believe that the election of Republican Donald Trump put the funding for the rail project in jeopardy. While few know Trump’s views on the project, many doubt that Trump will try to challenge the congressional Republican party, which has long vilified the project.
Earlier this month, the Authority has tried to unlock some of the $9-billion bond that voters approved in 2008. Their plan would provide $7.8 billion for a test track from Madera to Shafter and an additional $819 million to convert the Caltrain commuter rail system from diesel to electric power.
However, opponents have already filed a suit against the plan, declaring it unconstitutional. “Unless the bond act specifically granted the Legislature the power to make interpretations or amendments, [the Mullin bill’s] funding plans could be found unconstitutional,” said Richard Hasen, as quoted in the LA Times.
The Authority’s funding problems are putting the state of California in the exact position opponents claimed it would, increasing the state’s financial responsibility while the benefits of an actual train service move further into the future. Over the last year, engineers have cut the top speed inside tunnels from 220 to 200 mph.
So far, the Obama administration has provided $3.5 billion in grants. California lawmakers gave the project rights to 25% of the proceeds from the sinking greenhouse gas permit auctions.
All efforts to tap private investors for cash have proved futile, causing many to wonder where funding for the project will come from. The Trump administration plans on trying to use private capital for the project. It aims to make the project economically feasible, which could mean a train from Los Angeles to Las Vegas.
We will continue to follow this project as plans evolve. If you think your property or business may be taken for the high-speed rail project, you can learn more about your options by giving us a call at (866) EM-DOMAIN.