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California’s $68.4 billion high-speed rail project faces pressure from GOP opponent

Dec 06, 2012 10:20 am

Skift Take

High-speed rail projects such as California’s are drawing fire from fiscal conservatives who have little appetite for allocating federal funding towards such initiatives.

— Samantha Shankman

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Robert Couse-Baker  / Flickr.com

An Amtrak train in California. Robert Couse-Baker / Flickr.com


California’s $68.4 billion high-speed rail project is looking for too much money from the U.S. government and should be reconsidered, said California Representative Kevin McCarthy, the U.S. House’s third-ranking Republican.

“Maybe it’s time when we cut our losses,” McCarthy said today at a House Transportation and Infrastructure Committee hearing in Washington.

An additional $38 billion sought for the project from federal coffers would be more than the $31 billion a year Congress is seeking in annual additional revenue from a deal to resolve the year-end deadlines for automatic spending cuts and tax increases, he said.

“California started this discussion when it had a surplus,” McCarthy said. “That is not the same perspective where California is today, and it is definitely not where the federal government is today.”

McCarthy criticized the project at a hearing called by the committee’s chairman, Florida Republican John Mica, who has said $10 billion in U.S. money designated for high-speed rail should have been concentrated in fewer projects.

California’s project, which would start with track in the state’s Central Valley before connecting with its biggest cities, is courting sovereign-wealth funds, pensions and endowments for more than $50 billion to fund the most expensive public-works project in U.S. history.

California is the only U.S. state working to lay tracks for trains running as fast as 220 miles an hour (354 kilometers an hour). It’s counting on $10 billion in bonds authorized by voters and $3.3 billion committed by the federal government so far.

Private Investment

The U.S. Transportation Department, which disbursed the high-speed rail money to California and other states, “absolutely” wants private-sector funding to be part of the California project, Transportation Secretary Ray LaHood said at the hearing.

“There are lots of private investors working with California,” LaHood said. “We know full well this project will not be fully funded by the federal government. California knows that.”

McCarthy also questioned the location of the start of the project because it’s in more lightly populated areas than San Francisco and Los Angeles.

“I know Hollywood happens to be in California, but this is not a Kevin Costner movie,” he said, referring to the 1989 movie “Field of Dreams.” “If we build it, I’m not sure they will come.”

With assistance from James Nash in Los Angeles. Editors: Bob Drummond and Bernard Kohn.

To contact the reporter on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net. To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net.

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