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

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.