Governor Says Critics Are Wrong About High Speed Rail
January 19, 2012 5:19 p.m.
Tom Umberg, Board Chair, California High Speed Rail Authority
CAVANAUGH: This is KPBS Midday Edition. I'm Maureen Cavanaugh. It's Thursday, January 19th. Our top story on Midday Edition, in his state of the state speech, Governor Jerry Brown put his full support behind the man to build a high-speed rail system in California. And he urged the legislature to get on board. But the critics of the project point to the growing price tag and risky financing as a reason to pull the plug on the idea. Joining me now is Tom Umberg, he's chairman of the board of the California high-speed rail authority. Thank you for joining us.
UMBERG: Well, thank you, Maureen, pleasure to be here.
CAVANAUGH: You can give us a call. The number is 1-888-895-5727. Tom Umberg, can you first remind us about the scope of this project? The high-speed service is planned variable I believe to link San Francisco with San Diego. How long would a trip like that take on high-speed rail?
UMBERG: Well, when the system is built out, to get from San Diego to San Francisco should be approximately 3.5 hours.
UMBERG: From downtown Los Angeles to downtown San Francisco, by law, it has to be less than two hours and 40 minutes.
CAVANAUGH: By law because that's what the project basically presented to the voters?
UMBERG: Right. Proposition 1A, which has a number of different components to it and requirements, one of them is a time requirement that from the transbay terminal in San Francisco to union station in Los Angeles, the transit time has to be less than two hours and 40 minutes. And by way of review, proposition 1 A was passed by the voters in 2008, and then after the election of President Obama, President Obama made high-speed rail one of his signature initiatives. And California has benefited from that because -- not just because it's one of the signature initiatives, but other states have turned down the funding. So the federal government has provided about $3.5†billion of funding to begin the project.
CAVANAUGH: Now, are the plan that voters approved in 2008, I believe it had a projected cost linking San Francisco roughly with the LA area of $42 billion. Now, the high-speed rail authority projects the cost now at about $98 billion. Why such a dramatic increase?
UMBERG: Well, Maureen, several reasons. No. 1, the 98 budget deficit figure is in 2033 dollars. Assuming there's a 3% inflation rate, and also providing for a 16 budget deficit contingency in the year 2033, it should cost approximately $98 billion. But if you look at it in $2,010, that's $65 billion. Of I realize that's still quite a bit of money. But to break it down even further, to have what we call an operational segment, which means a segment where people can get on a high-speed rail train and go from point A to point B, most likely the central valley, like Fresno to Los Angeles, that's about $30 billion of which we have 12 right now.
CAVANAUGH: Right. Now, I want to ask you more about the money, but we do have a couple of callers on the line. Richard is calling from San Marcos. And welcome, Richard to the program.
NEW SPEAKER: Yeah, I'm acquainted with an engineer in his '80s who worked on a special study program back east. Studying mag lev rails.
CAVANAUGH: Magnetic levitation.
NEW SPEAKER: And he and his committee came up with a recommendation to use them on the eastern sea board mainly because they had less track noise, less accident prone, less susceptible to earthquakes, and cheaper to build.
CAVANAUGH: So I guess your question Richard is why are we not considering magnetic levitation in this high-speed rail project that we have? Or are we, Mr. Umberg?
UMBERG: Well, mag lev or magnetic levitation is another concept in high-speed rail. And it's actually more expensive than the high-speed rail systems that exist other places in the world today. It's -- well, it's not untested technology, but it's never been used on a system like we're proposing here in California. It is perhaps some day a viable alternative. But today, given the technology and the experience of the other 12 nations that have built high-speed rail, it's our view that it would be more efficient and more economic to go with systems that have already been tried and tested.
CAVANAUGH: Got it. Okay. Another one of our listeners wanted to know why not wait until this mag lev technology center to build a better train?
UMBERG: Well, every year that we delay building the system, we add about $2†billion to the price tag. There are currently no projects in the United States , and I'm not even sure in the world, where they're proposing this magnitude magnetic levitation system. But the caller poses a good question: Why not wait? California right now is fiscally stressed beyond the limits, and the reason is because right now is the best time to begin. Interest rates are low, construction costs are low, land values are low, unemployment is high. And so now is actually the best time to build the project.
CAVANAUGH: I want to tell everybody that I am speaking with Mr. Tom Umberg, he is actually outgoing chairman of the board of the California high-speed rail authority, and we're talking about the high-speed rail project in California. I said I would return to money, and indeed I have to. You made the case that you have money to start this project, but a lot of critics are saying where is the remaining money going to come from not only to complete the entire project with that price tag of $98 billion but even the first link, which is going to be costing somewhere around -- what is it up to now? $14 billion?
UMBERG: Well, we actually have $6 billion to built the first 130 miles of track, and we don't need any additional resources. I suppose we would certainly take donations, but we don't need additional resources until after the year 2015 or 2016. After that, we will need additional funding, whether that comes from the federal government or comes from other sources is not yet determined. But there are options. The federal government, for example, has a very low interest loan program that has $36†billion now available of which about only $1 billion has used so far. And the president has proposed that there bye-bye a transportation trust fund for this kind of a project. So like other large infrastructure projects, the building of the aqueduct ownership the golden date privilege or the various campuses of the university of California, we don't have all the money in the bank to build this project out through 2033, but we have enough to certainly begin a large portion of the first 130 miles.
CAVANAUGH: Again, critics say when we're talking about this project that indeed President Obama might be supportive of it, but the US House of Representatives is not. It's voted to rescind money for all high-speed rail projects. How confident can we be that federal dollars will be available for this project?
UMBERG: There certainly are challenges. But here's the reality. The reality in California is by the year 2030, we're going to be 50 million people. We're going to add the equivalent of the population of New York to the State of California. So to the extent that transportation infrastructure is already strained and certainly in the LA basin where I live it's beyond strained, the population is really going to break the system. So we have some choices. We can build additional freeways, about 2,300, other and airport gate, 115 airport gates, or add new runways. Places like Lindbergh field, unlikely that you'd be able to add an additional runway. So the voters have given us direction to build a high-speed rail transport system to help meet some of these needs. So back to your question, as the reality of our transportation needs here in California become apparent, I believe that government policy is going to follow. Otherwise, we're in trouble.
CAVANAUGH: We're in the soup.
UMBERG: Right, that's -- I'm glad you used that.
CAVANAUGH: That's my job. Sunny from Mission Hills is calling us. Good afternoon, sunny. Welcome to Midday Edition.
NEW SPEAKER: Thank you for taking my call. And I had a couple of questions quickly for my guest. A, knowing what we know now about costs, how much does he anticipate a round-trip fair would cost from San Diego to San Francisco? And what kind of ridership is he looking at? It's going to take a lot of people to get on that train every day to pass for $98†billion in 2033 dollars. And I'll listen off the air. Thank you so much.
CAVANAUGH: Thank you.
UMBERG: Those are good questions. First, in terms of getting from San Diego to San Francisco, are the parameters we're dealing -- parameters that we're dealing with that we will -- that the ticket price will be about 2/3 of what airfare would be. And we figured airfare is pretty low. We used leads to San Francisco, the average fare being if I have dollars for a one-way trip which is a pretty good ticket today. And that's what we're shooting at, and we recognize that it's got to be a couple things, one, less than airfare, and secondly, it has to be an efficient system to make it worthwhile for folks to ride. Right now, between the LA basin and the bay area, there's about 12 million passengers a year. That's air passengers. And so what we need to break even, we anticipate we'll have 36-34 million passenger ace year between LA and San Francisco, we need fewer than that to break even. By law, the system has to be operated and maintained without taxpayer subsidy. Not built, but operated and maintained without taxpayer subsidy. And we're confident that will happen looking at transportation patterns here in California and looking at how high-speed rail has functioned in other countries like -- I realize there's no place quite like California, but places like Spain.
CAVANAUGH: Now, you said that there are many challenges facing this project, and one of them I would imagine is that just this month, an independent peer review report recommended that California lawmakers don't issue the bonds for this project unless funding sources can be more clearly identified in the business plan. Now, how is the high-speed rail authority responding to that?
UMBERG: Well, they didn't -- I realize that's how it's been characterized. They said right now their recommendation is that the legislature not authorize the bonds. And we are revising the business plan. Although I wouldn't expect there's going to be any hugely dramatic revisions am but we do have, as I said, the $6 billion identified, we do have other sources that we can put down that may be available, but if you adopt the logic of the peer review group, basically there would not be an I-5 in California, there would not be an aqueduct, there would not be the campuses of the university of California, there would not be a Golden Gate Bridge, there would not be the subway system, there would not be BART, there would not be any of these things in California. To have that money in pocket when you begin the project is just not realistic.
CAVANAUGH: Construction I believe is scheduled to begin this fall on that first part that goes through the central valley I think from Merced to Bakersfield. Why was that area chosen to be first? Wouldn't it have made more sense to get people more supportive of this plan to start in a higher density region of population?
UMBERG: That's another good question, Maureen. And it does require some explanation. The reason the project is being started in the central valley, much like the reason that the interstate highway system was begun in Missouri is because you can build out the 130†miles much less expensively in the central valley, No.†1. No.†2, you need a very large section to test a train that will two times 220†miles an hour. NO.†3 is that you can then go from the central valley north or south, dependent upon technical and political advantages and impediments. And No.†4 is that the federal money, the $3.5†billion that was matched with our bond money requires that it go to, for job stimulus, that it goes to the central valley, which is the area of highest unemployment in the state. So for all those reasons, that's why the project is being begun there. If we were, for example, to just begin in the Anaheim to Los Angeles segment, and the San Jose to San Francisco segment, those two segments equal what the entire rest of the project costs.
CAVANAUGH: I see. And I look and I am out of time. I just want to squeeze in a really fast question. The CEO of the California high-speed rail authority, Mr. Van ark, announced his resignation. You are stepping down as board chair. I'm just wondering, does that reflect any uncertainty about this project?
UMBERG: Well, stepping down as board chair, this is a huge project, and it requires a full-time chair. And I am a practicing lawyer, the job pays $100 a month, and frankly, the job requires demands and deserves to have someone full-time, and the person I've nominated to be my successor, Dan Richard, will do this full-time and will be in Sacramento full-time. And have the confidence of the governor. And I think he's well-suited to continue where we've been. In terms of Mr. Van ark, he committed to finish our -- the planning stage, the business plan. That will be done before he departs. And this is it a transitional time where the whole authority is moving to a Department of Transportation in the governor's office. So while there's never a perfect time, this is a better time than later on in the year.
CAVANAUGH: Okay, well, I appreciate your time. I've been speaking with Tom Umberg, outgoing chairman of the California high-speed rail authority board. And again, thank you for speaking with us.
UMBERG: Thank you so much, Maureen.