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March 15, 2021 - Epoch Times
28:58
What’s Happening with California’s High Speed Rail Project? | Jim Patterson
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The promises were that for $30 billion or so, California could build a high-speed rail line that would go from San Francisco to Los Angeles in about two and a half, two hours, 45 minutes, maybe run at speeds of 250 miles an hour.
And all we're seeing is sort of like high-speed rail that might run between Merced and Bakersfield and in some way connect up to Amtrak going north up into the Silicon Valley.
You mentioned that the construction companies were working on this without acquiring the land.
How is that possible?
It gets perilously close to corruption.
And the people that actually gave their land, they haven't been paid for it yet?
These farmers and these small businesses should have been paid fair market value.
Business interruption and replacement value.
The fact is, we're the guinea pig.
The construction has started.
We've been ripped apart.
It's got to make us whole.
And they've got to leave us with something that is of value.
And you've got to clean up the property that you have purchased, let go to ruin, and you've got to be willing to give back the property that you overbought.
It's got to connect somewhere.
And it's got to at least carry passengers At a reasonable speed at an affordable price.
But that possibility, I think, is slipping farther and farther away.
In 2008, California residents voted on building a high-speed rail connecting San Francisco to Los Angeles.
However, the bullet train completion costs are estimated three times more than originally planned, and the completion date is now delayed over a decade.
My guest today is Jim Patterson.
He's a state assembly member representing California's 23rd District.
Today, he discusses The issues behind the high-speed rail and the likelihood of it happening.
Welcome to California Insider.
Thank you.
Good to be with you.
Thanks for the invitation.
We want to talk to you about the high-speed rail that has been promised for many years now.
And there's debates in the Congress whether we should keep, we should fund this project, and there's debates where they're saying that we should not allocate any more funding to it.
Can you tell us what's going on with this project?
Well, sure.
Let's take a step back.
Back in the middle 90s, late 90s, I was mayor of Fresno.
We were beginning to have conversations about it.
Fresno, California was a place that was selected as sort of the guinea pig in all of this, the starting place.
The promises were that for $30 billion or so, California could build a high-speed rail line that would go from San Francisco to Los Angeles in about two and a half, two hours, 45 minutes, maybe run at speeds of 250 miles an hour, and that we would be Competing with the airlines and therefore a lot of people would be not flying and a lot of people would be giving up their cars and they'd be riding.
Now that was the promise.
What do we have today?
I've been in the California legislature now for eight years.
I sit on the oversight budget committee that has to review and approve the business plans every two years that High Speed Rails puts forward.
Every single business plan that I have seen Costs more and more and more and the high-speed rail authority builds less and less and less.
So here we are with a rump railroad that's going to run from just outside Bakersfield to just outside Merced.
Right now the plan is to have a single track We're not even sure if the train sets are going to be very high speed or sort of high speed.
That technology that they're choosing is not MagLab.
It's not the Hyperloop possibilities.
It is an old approach where you have an engine, pulls the cars, and you try to get to those speeds.
And so here we are, Central California, we're making these Wonderful promises of connection and competition with airlines, other affordable ways.
The problem that we're seeing now is that here we are.
We've spent almost all the money that the high-speed rail has and the bonds that California spent.
And all we're seeing is a sort of like high-speed rail that might run between Merced and Bakersfield and in some way connect up to Amtrak going north up into the Silicon Valley.
What's the value proposition there?
I mean, Fresno now has...
The advantage of traveling on Southwest Airlines.
And you know what happens when Southwest Airlines comes in.
Ridership goes way up, fares go way down.
And so the question then becomes, are the ridership estimates that sold this to the California people to put billions of dollars of borrowed money into it still a rational, supportable, sustainable economy?
I am increasingly becoming skeptical over time because all I have seen is, as I've said, more and more cost and less and less building.
And so we're sitting here wondering, we have been...
Ripped up in central California and Fresno.
Over a thousand acres of prime ag land ripped up.
We have major streets in Fresno that have been ripped up.
We have overpasses and underpasses and concrete in the air, and it's not connected, but it's there and it's very expensive and creating some eyesores.
The high-speed rail...
Overbought property.
They have too much and yet they still aren't giving it back to the property owners and they're turning into very ugly eyesores.
One of the worst owners of property in Fresno, one of the worst owners that don't keep their property up and we're seeing them turn into homeless sites and garbage dumps has been high-speed rail.
So the promises were grandiose.
Here we're going to have an affordable Wonderful, high-speed Disneyland ride.
And it's going to be affordable.
And it will be competitive.
And it will be terrific because it will connect Fresno North and South to the major metropolitan areas and high-speed rail.
And we just don't have that on the horizon.
What we have is this Rump Railroad that we're not really sure is going to be worth the billions of dollars that have been put into it.
How much has been put into it so far?
Well, I mean, we're looking at spending all of the money that's been out.
So the bond was about $9 billion.
The feds put in several other billion.
California turned around and basically decided that they were going to place sort of a Sort of a show game with gas taxes.
You know that California has some of the highest gas taxes.
That was supposed to go to roads and streets and highways.
Fully substantial amounts of a gas tax.
Is going to essentially backfill and pay the general fund back for the principal entertainment on the general obligation bonds that the state has to pay back.
So this has really been a project absolutely beset by failure.
And so all of the promises that were made are now promises that they have had to renege on.
And we're now seeing a project that probably is blown through, my guess is 30 billion, maybe more.
And yet the price tag to even get anything of value between LA and San Francisco is going to be 100 billion or more.
I mean, think about this.
They still have to figure out a way to tunnel through the Tehachapi Mountains and get into Southern California.
And, you know, go through the foothill mountains up north just outside of San Jose and San Francisco, worried about the Pacheco Pass and all of those things.
There is no budget, there's no money for this tunneling.
And so they're now talking about putting them on regular track, which means they slow down.
All of this means that the The Fairbox estimates, the ridership estimates, are just bogus.
And yet we're going to be stuck with a landscape, at least in Fresno, that has been torn up and lots of people in agriculture who still haven't been paid for the taking of their property.
So what we have is a huge disappointment.
In Fresno, we feel like we're the guinea pig that first we've gotten You know, ripped up.
And now we're getting ripped off.
So as the proposals are going, is this going to connect LA to San Francisco?
Or is it just going to stay?
That's a long way off, if ever.
What I think we will have...
And then there's a lot of us just pushing hard for this.
We're way past the politics of this, whether it's just a good idea or a bad idea.
The fact is, we're the guinea pig.
The construction has started.
We've been ripped up, ripped apart.
They've got to make us whole, and they've got to leave us with something That is a value.
I've been asking for the last eight years, what is your plan B? You're not going to get to LA and San Francisco.
Where are you going to have $100, $110, $120 billion?
How are you going to tunnel through mountains that have substantial fault lines for earthquakes?
All of these things...
I think that's going to be a myth and probably not reachable.
And by the time they reach it in a decade or more, if they do, the technology is going to be so old fashioned.
It'll actually in the realm of high speed rail would be laughable because it's so old fashioned.
So what are we left with?
We're left with maybe.
And that's what we're looking at right now.
Their business plan right now suggests that their plan B is using that infrastructure for essentially a multibillion dollar upgrade to Amtrak.
So we'll have Amtrak-like service.
It'll be much faster, but it certainly isn't, I don't think, going to get to the speeds of, you know, 250, 275 miles an hour.
They're going to only put one track down, so the two-way frequency convenience of it is going to be in question.
What do you think went wrong in this project?
We have a fantastic, independent, nonpartisan, fearless California state auditor.
Her name is Elaine Howell.
When Elaine Howell gets wrapped up in an audit, you better come clean.
She's going to go everywhere that the facts and the truth take her.
She is fearless.
And we finally got a high-speed rail audit by Elaine, and it was dammit.
A couple of things that came out of it.
Number one, the California High-Speed Rail Authority essentially turned over the operation to the very contractors and the very consultants that they are paying and the ones that are actually building the project.
So you ended up, you had the Fox company.
In the hen house.
And as a result, there were huge cost overruns.
There were no opportunity to really do any kind of streamlining or operational management because they didn't have the property to even build on.
And this was a damning audit.
That was number one.
Number two, the The estimates, the experts, the experienced people who were so good at high-speed rail and were going to take their expertise and bring it to California, look what's happened.
They have demonstrated that the contractors that they have chosen and the consultants out of those contractors that they have given authority to spend taxpayer money We found instances where there were individuals who were given state authority to actually approve spending taxpayer money.
They were consultants, and they were from the very construction companies that actually got money for the cost overruns and all of that.
And it got so bad that one individual we took to the Fair Political Practices Commission, that person was suspended, is now not working on the project anymore.
The other concern here is that there are board members, and there's one board member presently that is still – we're still having the FPPC Fair Political Practices Commission.
Look at him.
Why?
Because Central California is now being wrestled over for the bones of what's left of the high-speed rail money.
And what does that mean?
It means that there are politicians up in Sacramento, politicians in L.A., politicians in San Francisco who say, forget about Central California.
That's been a bust.
Spend that money on the bookends.
And whether it connects or not, well, that'll be down the road.
We actually have the Speaker of the California State Assembly lobbying and pushing very, very hard to simply sort of leave us in the lurch and send a lot of money to Los Angeles.
He happens to represent an area there.
We have other members who think that this experiment has gone on long enough and they want to use resources that high-speed rail would be eligible to use on commuter rail, commuter trains, other things in the world.
And so the nightmare scenario that we're looking at is lots of promises for a connection of substance and of competitiveness that would be transformational for Central California, only to be left.
With a rump railroad partially built, and then we're going to have to fight like hell to get the ruling party of this state to recognize you can't just leave us in the lurch like this.
You've got to make us whole, and you have got to complete something of value, and you've got to clean up the property that you have purchased, let go to ruin, and you've got to be willing to give back the property that you overbought Too much of it.
You're not going to use it, obviously, for a ramped down railroad.
These ag folks better get their property back.
They better get paid for.
The small businesses need to be made whole.
And so we are on the verge here of not only being ripped up.
But being ripped off.
And so there's a lot of concern about from the City of Fresno, from the County of Fresno, my office, other people up and down Central California.
You leave us with this and you have now created a victim of high-speed rail, not anything of value.
That's how concerned we are with how this has fallen apart and has been one of the worst operated Worst overseen, worst public works projects in the state of California.
This is going to make the San Francisco Bay Bridge debacle look like they did a pretty good job.
That's how bad this is.
And I don't hold out a whole lot of hope that there's much future except another $50 or $60 billion out of the federal government in Washington, D.C., So here's where the proponents of this really want to, really say we're going to take this.
So when I ask the tough question, how much money are you going to need?
Where are you going to get it?
How long is this going to take?
This is the basic answer.
We're going to need all the money we can possibly get.
And we've got to get it.
Whether it's a good investment, bad, or whether it's over budget, we've got to build it.
We're going to put the good money after bad.
And then when you ask about the timeline, they basically will tell you when we get there.
When we build it and finish it, it may take a whole lot longer and be a whole lot more expensive, but what's the choice?
Well, that's a very iffy business plan.
And a very iffy set of circumstances that even if the federal government wanted to come in and bail it out, other states are going to look at that rail money and say, you're going to put all of that into this and you're going to starve our rail and other states of the union.
So there's going to be a wrestling match over that money as well.
My plea is...
You've ripped us up.
Please don't rip us off.
You've got to at least give us something of value.
And if it's an upgraded Amtrak between Bakersfield and Merced, then so be it.
It's got to connect somewhere, and it's got to at least carry passengers at a reasonable speed at an affordable price.
But that possibility, I think, is slipping farther and farther away.
So you mentioned that they've given the authority, that the authority was given to contractors.
How is that possible?
The authority was perfectly okay with the idea of using consultants to manage the very contractors that these consultants came out of.
And what we found was that some of these consultants who were making decisions On paying tens of millions of dollars to cost overruns actually had shares in some of the subcontractors that were getting that money.
Unbelievable that the state would give the authority To a consultant on the payroll of one of the subcontractors.
And as part of the authorization, that individual had to sign off on the project payment as well.
Now, that's simply the fox in the hen house.
And you ask, well, how did it happen?
It happened.
It gets perilously close to corruption, and that individual is no longer there, no longer employed, and is working on other projects and was suspended.
That came to light because we worked really hard, we were persistent, and we got the California State Auditor to look at it.
And that was how this was found out.
I don't think it was the only case.
The more we know, the more we realize that this has been organized in a way that simply invites Dealing with yourself.
Now, you mentioned that the construction companies were working on this without acquiring the land.
And that was kind of a complaint from a construction company that said, you know, we didn't have the land, that's why it got delayed.
And how's that possible?
Who made that decision?
How was that decision made?
First of all, high-speed rail One of the biggest things that Fresnans looked at in the beginning was probably 50 or 60 large-scale earthmovers simply sitting on the side of the road in a big field for over a year.
That's because California High Speed Rail Authority was given several billion dollars by the Biden administration.
The Biden administration says, you've got to use it or you're going to lose it.
So what did they do?
They shoved that money out in contracts so that they wouldn't have it taken back because they'd missed the deadlines.
And they shoved it to contractors who didn't have the property upon which to build.
They sat around They were successful in gaining hundreds of millions, maybe billions of dollars in these cost overruns because they were up and ready.
They had their people and equipment there, but the High Speed Rail Authority could not deliver on the primary ground necessary to build it.
We didn't have the ground.
Without the ground, you don't have the railroad.
Without the railroad bed, you don't have the tracks.
That's what has happened.
And it has been a comedy of errors from the very beginning.
Now, you mentioned the Biden administration.
Was that Obama's administration?
Is that what you meant?
No.
The Obama administration gave several billions early on.
So that's the one that went into the...
Yeah, where they sent it out as fast as they could.
The best I think we can hope for is if Biden administration does send some additional money, you might see that connection between Bakersfield and Merced actually come to fruition.
It may have two...
Tracks going, you know, in each direction.
And maybe, hopefully, you can buy the kind of train sets that give you enough capacity to have the fare box and have the Ticket being purchased at the numbers that they need to demonstrate that this thing can work.
Tell us more about how can that happen when we have a construction company that we hire a construction company, we don't have a land for them to do the work, and we hire them and they're sitting there.
How is that possible?
This has been the astounding revelation that the auditor dug out, bless her heart.
Without her, this would still have been hidden.
I have come to the conclusion that I can no longer believe anything that the High-Speed Rail Authority says, and that they are, if not outright fibbing, they're so disingenuous that we can't believe them.
I believe that we're still in what amounts to a cover-up.
We've had to dig.
We've had to push.
We've had to have the auditor get in.
When, in fact, the High Speed Rail Authority should have been transparent, open, and told us.
But they hid the fact that they didn't have the property.
They sent the money out.
It was a big risk, and they got caught.
And you say, how does it happen?
It happens because, from the very beginning, this has not been a well-managed public works project using the standards and practices of historically well-done public works projects.
This has been a politically...
Originated and a politically managed project.
And we now have information from inside whistleblowers, even also from people who've talked with us that know, and implications from the auditor, that the insiders at the high-speed rail...
told their contractors and told others that were concerned about it look you don't understand this is a political we're in a political mess as well this is a political construction and so we're not going to tell everybody straight up we're going to hide this we're going to hide that and that's what they did finally we got the auditor to take a look and the auditor discovered and and it was a damning audit I still am unconvinced That this authority has learned the lessons
of all the mistakes prior to the audit.
They'll tell you that they do, but the proof's in the pudding.
What's the test?
The test is, show us the next business plan.
Every two years, they have to come before the legislature and demonstrate how they're going to build the timelines and how much it's going to cost.
And the people that actually give their land, they haven't been paid for it yet?
Well, some have, some haven't.
This was done by eminent domain.
Well over a thousand acres of absolute prime agriculture.
And there are at least a dozen large farming operations that were chopped up and still haven't been able to have a sympathetic High-speed rail authority that looks at what they've done to their operation merely made it almost impossible for them to even go into certain parts of their fields because they cut off the access.
All of these things have resulted in farmers in my neck of the woods, on the brink, right on the verge, Of having to sell off their property because the banks are asking, when are we going to get paid?
They say, when high-speed rail pays us.
And I have friends and people in agriculture I've known my entire life, and they have been relegated to being nearly bankrupted.
Large-scale operations of significance because high-speed rail has just Pushed and pushed and pushed and pushed.
They have the ability to have the state of California essentially pay for their legal fees.
And you know, California's a bottomless pit of lawyers.
And what happens?
Our farmers are getting close to being bankrupted by the taking of the property, the prime ag, but then they can't get whole because they're racking up large lawyer fees to continue to fight a battle.
These farmers and these small businesses should have been paid Fair market value, business interruption, and replacement value.
And they've been having to fight in court for this for a long, long time.
And so this has been a rogue agency, the High Speed Rail Authority.
It basically turned this over to unscrupulous consultants and contractors.
They got caught and now they're trying to fix the problem only to realize it's too late.
They've run out of money and the options for high-speed rail from LA to San Francisco at anywhere near a price tag anybody's willing to pay is slipping by day by day.
Well, thank you.
Appreciate it.
Thank you for the time.
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