California Choo-Choo (Cont’d.) — There’s Trouble Ahead.

We recently noted that the press reports on the recent trial court’s ruling, mostly against the high speed railroad promoters, cast a menacing cloud over that project. In a nutshell the ruling put a serious block in the path of its funding, on several grounds. One reason was that the trial court thought the voters were misled when the state got their approval on some $8.6 billion worth of state bonds in 2008,  but it turned out that the project, even in its reduced shape, will require a budget of  some $86 billion. As we noted, this is a complex story as are the court’s rulings. So if you are interested in this tale we recommend that you read a more thorough, yet more readable account of this fiasco, which you can find in a front-page story in today’s Los Angeles Daily News.

The bottom line is that those on the side of the project’s promoters are arguing that they can still spend some $3.3 billion in federal funds, and get started on the construction, whereas the challengers disagree and contend that the federal funds may not be spent until the promoters’ financial house is put in order. “In a separate lawsuit, [the judge] also ordered the rail authority to redo its $68 billion funding plan before continuing construction.”  In any event, as things stand, even under the optimistic scenario, there would be only enough money to build a railroad segment between Fresno and Bakersfield — the proverbial middle of nowhere in the Central Valley. So we will have to stay tuned on that one and await the outcome of the appeal which now appears inevitable.

See Jessica Calefati, California High-Speed Rail: Judge’s Decision on Bullet Train Funding Also Endangers $3.3 Billion in Federal Funds, [Los Angeles] Daily News, 11/29/13, at p. A1.  Click on http://www.dailynews.com/technology/20131129/california-high-speed-rail-judges-decision-on-bullet-train-funding-also-endangers-33-billion-in-federal-funds.

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