Court ruling could cost California high speed rail project $15 billion, four years in delays

california high speed rail
Construction of the Fresno River Viaduct in January 2016. The bridge is the first permanent structure being constructed as part of California High-Speed Rail. The BNSF Railway bridge is visible in the background. (Wikipedia)

A recent California Supreme Court ruling favoring environmentalists opposing the state’s reopening of an abandoned lumber train may cost the state’s $46 billion over-budget high-speed rail project another four years, and $15 billion, Breitbart News reports.

The California Legislature formed the North Coast Rail Authority and completed acquisition of the railroad in 1992, “but then-Republican Gov. George Deukmejian vetoed the project’s spending to start rail passenger and freight operations as a boondoggle,” Breitbart reports. “The project took off anyway in December 2010, when the Obama administration diverted $616 million from states that canceled their high-speed rail plans to California.”

Friends of the Eel River and Californians for Alternatives to Toxics have successfully challenged the state’s position that the wildly expensive and massively time-consuming California Environmental Quality Act (CEQA) was preempted by federal law for approvals involving rail operations.

The report continues:

The Supreme Court concluded regarding railroads: “the application of CEQA to NCRA would not be inconsistent with the ICCTA and its preemption clause.” The court’s decision said: “we presume Congress does not intend to disrupt state self-governance without clear language to that effect.”

Real estate construction finance expert Bruce Lawrance told Breitbart News that fully-complying with CEQA will take at least four years and dramatically increase the high-speed rail’s estimated cost of completion, which has already ballooned from $33 billion (when it was approved by voters in 2008) to about $79 billion last year.

Lawrance’s estimates for construction inflation are between 5.5 and 7.5 percent per year. A 4-year conservative estimate of 5.5 percent construction inflation compounded will increase CHSR costs to $95 billion — over $15 billion more.

The California High Speed Rail Authority has not commented on possible revised cost or funding projections since the ruling.


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