Analysis finds lots of interest in bullet train – interest payments, that is
July 23, 2008
• Californians would pay $647 Million a year to pay off bonds
• Bonds would finance just half of part of the system
A high-speed passenger train zipping through California at speeds up to 200 miles per hour would carry some financial baggage, according to a new analysis by the nonpartisan Legislative Analyst’s Office.
It says the state would have to find about $647 million a year every year for 30 years to pay off the high-speed rail bond that is on the Nov. 4 ballot.
If approved by voters, the measure would sell $9.95 billion in bonds to build a portion of the system. Assuming an interest rate of 5 percent, interest on the bond would be $9.5 billion, the LAO report says.
The bonds would pay about half the cost of the segment of the bullet train system from the San Francisco Transbay Terminal to Los Angeles Union Station.
The plan assumes there would be federal funds and money from other sources to pay the rest of the cost.
The LAO analysis says that after construction of the San Francisco to Los Angeles segment is fully funded, any remaining bond funds may then be used to plan and construct any of the following additional segments:
• Oakland to San Jose
• Sacramento to Merced
• Los Angeles to Inland Empire (San Bernardino and Riverside Counties)
• Inland Empire to San Diego
• Los Angeles to Irvine
The November bond total also includes $950 million for projects that improve other passenger rail systems to enhance capacity or allow riders to connect to the high-speed rail system. Of the $950 million, $190 million is designated to improve the state’s intercity rail services. The remaining $760 million would be used for other passenger rail services including urban and commuter rail, the report says.
To build the entire system, estimates are hovering around $45 billion.
What would not be included in the November bond issue would be any money to actually run the trains.
“When constructed, the high-speed rail system will incur unknown ongoing maintenance and operation costs, probably in excess of $1 billion a year. Depending on the level of ridership, these costs would be at least partially offset by revenue from fares paid by passengers,” the LAO report says.