New Geography: World High-Speed Cost Increase Record :
“California’s high-speed rail project is setting speed records, not on tracks, but rather in cost escalation. Last week, the California High Speed Rail Authority (CHSRA) announced that the Bakersfield to Merced section, part of which will comprise the first part of the system to be built, will cost between $10.0 and $13.9 billion. This is an increase of approximately 40 percent to 100 percent over the previous estimate of $7.1 billion, an estimate itself less than two years old.”
Pedestrian Observations: Cost Overruns: How I Learned to Stop Worrying and Hate Bent Flyvbjerg:
“Let me preface this post by saying I have nothing against Bent Flyvbjerg or his research. My problem is purely with how it’s used in the public media, and frequently even in other academic studies, which assume overruns take place even when they do not.
Stephen Smith sent me a link to an article in The Economist complaining about cost overruns on the California HSR Central Valley segment. The article gets its numbers wrong – for one, the original cost estimate for Merced-Bakersfield was never $6.8 billion, but instead was $7.2 billion in 2006 dollars and $8 billion in YOE dollars, according to CARRD, and as a result it portrays a 25% overrun as a 100% overrun. But the interest is not the wrong numbers, but the invocation of Flyvbjerg again.”
Whatever the numbers and the basis on which percentages are calculated, the costs are higher than they were before, as we all knew they would be.
A reader (CP) writes:
“The race is on. That’s the race between the rail boosters who are trying
desperately to get construction started and the skeptics/opponents who
are using delaying tactics to hold up the project. As you know, for huge
speculative projects delay is a killer because while the months go by
the cost estimates keep growing and getting more believable. It will be
interesting to see if this project is still alive after new cost
estimates come out in October. I suspect the combination of higher
costs and the economic downturn will bring the project to a halt. We
can expect the usual attempts at resuscitation in the form of proposed
congressional and state bailouts, but given the dire circumstances of
both the Federal and California state budgets I just don’t see any light
at the end of the tunnel for this project.”
At this point I am about 60:40 that construction won’t begin, i.e. it will be canceled before it is started. I am almost certain it will never be finished (i.e. downtown SF to downtown LA as HSR, though they might run the trains on conventional rail at slow speed to have complete service).