SAN FRANCISCO, April 11 While California
Governor Jerry Brown rode a bullet train in China, the
libertarian Reason Foundation released a report on Thursday
saying the state's planned high-speed rail system will likely
need between $124 million and $373 million a year in operating
subsidies once its core line is completed.
Brown, on a trade mission in China, is a champion of his
state's ambitious project, which has been a magnet for
controversy and critical reports since California voters in 2008
approved roughly $10 billion in general obligation bonds to help
California officials last month approved the sale of up to
$8.6 billion in bonds to help build the system, which has a
price tag of $68 billion and will take decades to complete.
Planners at the California High-Speed Rail Authority aim to
break ground later this year on the system's first leg in the
state's Central Valley with the help of state and federal funds.
They expect future funds from the U.S. government, along
with private-sector investment, to help finance expanding the
rail network across the most populous U.S. state to connect its
far-flung metropolitan areas.
The Los Angeles-based Reason Foundation's report said
assertions regarding the system's financing are "virtual
fantasy" and cast doubts on the authority's forecasts for travel
times on its planned lines, saying the times will be longer than
anticipated and discourage riders, who will have to be lured
from their in cars in any case.
Fewer riders would push ticket prices up, which would
further reduce ridership and turn the rail system into a
money-loser whose day-to-day costs California taxpayers would
have to pick up, the report said.
"The California high speed rail project cannot be delivered
at the cost promised to taxpayers, is based upon a business plan
incapable of delivering on its legal requirements, and is
justified by proponents based upon unachievable benefits," the
report said. "The taxpayers and the state of California would be
best served by its immediate cancellation."
California High-Speed Rail Authority spokeswoman Lisa Marie
Alley criticized the report, noting the authority had not been
contacted by the Reason Foundation.
"The non-partisan U.S. Government Accountability Office
released an audit last month that gave the Authority high marks
and found our ridership, revenue and cost estimates reasonable,"