When the Obama administration gave California several billion dollars for its proposed high-speed rail project last year, it attached an odd string.
The money had to be spent, the feds said, on a relatively short stretch in the San Joaquin Valley.
Why? The official explanation was that it would be the easiest and cheapest segment of a statewide system, could be a demonstration and test track, and could be used for ordinary train service if nothing else happens.
The real reason probably had much to do with building in the congressional district of a longtime bullet train booster, Democrat Jim Costa, who faced a tough 2010 re-election, although everyone denies that crass motive, of course.
The political calculus included an assumption that the transportation-starved and economically depressed region would embrace the project – a supposition that's proven to be very shaky, especially among farmers who would lose their land.
The High-Speed Rail Authority, however, is determined to get that $6 billion segment built, hoping it will generate more money, possibly some federally subsidized bonds if no more direct federal money is forthcoming, to continue building the system into something on which high-speed trains could actually operate, perhaps between San Jose and Bakersfield.
A new HSRA report to the Legislature – a preview to its revised "business plan" next month – implies that it must build an operational section without the much-vaunted participation of private or foreign government investors.
Previously, the commission had said that outside investors, who it hoped would provide the tens of billions of dollars for the system, would probably require "revenue guarantees," which official and private critics said implied operating subsidies that state law prohibits.
The Legislature demanded, as a condition of allocating more money, that the commission explain how "revenue guarantees" could be granted without violating the law. The commission's new report says, in effect, that the initial segment will be so popular – a "proven track record" – that investors will be eager to pony up, so no revenue guarantees are needed.
But would running trains between San Jose and Bakersfield show a profit big enough to attract investors? Its credibility depends on ridership projections, one of the most controversial pieces of the project's puzzle, that will be included in the new business plan.
The report lends credence to the suspicion that the strategy is to lay some track as soon as possible and thus create a moral-political commitment to building the whole system.
It smacks of a "Field of Dreams" approach – build it and they will come. But it could be folly to spend billions we can't really afford on what could be a train to nowhere.
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