A last-minute bill in the state assembly may alter the California High-Speed Rail bond measure set for November's ballot to allow private investors the opportunity to buy up one third of the bond.
While the bond measure is for $10 billion, the first phase of the project is expected to cost $30 billion, and the full cost is projected at $42 billion. The other two thirds of the bill -- and presumably whatever the total cost turns out to be -- will be paid for by state and federal money, if the modifications are approved.
"Two weeks ago, we had a meeting that produced (dozens) of private investors" interested in purchasing high-speed rail bonds, Bay Area-based retired politician and train commission member Quentin Kopp told The Capitol Weekly, a political publication based in Sacramento. Kopp and members of the commission appointed by Governor Arnold Schwarzenegger have been pushing for the bill to specify the role of private investors.
"[Private involvement] was a concern I had when I first came on the [CHSRA] board," Kopp said. "Their financing plan called for $10 billion from the private sector but they hadn't paved a route for that investment." (Aside: Paved?)
The bill, put forth by Tracy Assemblywoman Kathleen Galgiani, has other compromises. It also makes concessions to some environmentalists concerned about the train's impact on protected grasslands in the Central Valley -- that's some single-minded focus on saving those grasslands. It also offers opportunities for local officials to set up regional funds, to help back the project. A number of VentureBeat commenters, including this contributor, believe the project will cost at least double the projected amount. These critics cite the many overbudget megaprojects that have occurred around the world.
Supporters believe the train will more than pay for itself. "Overall, for every dollar invested in this system," says Central Valley congressman Jim Costa, "we will see two dollars in return."