Questions
- Why high-speed trains?
- What are the benefits of high-speed trains?
- Will high-speed trains promote clean air or reduce the emissions that cause global warming?
- How much does it cost and where will the investments come from?
- Who supports high-speed trains?
- Will high-speed trains reduce travel times?
Answers
How much does it cost and where will the investments come from?
The cost to build the 800-mile system is estimated to be about $40 billion. Once built, the system will not require operating subsidies and will generate $1 billion in annual profits.
The California High-Speed Rail Authority is actively pursuing a multi-track financing strategy for the planning, design and construction phases of the project, including three tiers: state and local funding, federal funding and “P3”- public-private partnerships.
State and Local Funding
A $9.95 billion general obligation bond is set on California’s November 2008 ballot, asking voters to make California the first state in the nation with intercity high-speed train travel. This bond measure is within the Administration’s current debt capacity guidelines and would fund the state’s portion of the construction cost of the project from Anaheim/Los Angeles through the Central Valley to San Francisco. The bond will also infuse local transportation agencies with nearly $1 billion for improvements to local and regional passenger rail projects that complement and connect with the high-speed train system.
Federal Funding
Federal funding sources are needed for 25% – 33% of the construction cost. The targeted federal funding would come in part from existing program funding sources, but would also require the creation of new grant allocation programs designed specifically for high-speed trains. On October 30, 2007, the United States Senate passed the Passenger Rail Investment and Improvement Act of 2007, a multi-year piece of legislation that provides increased funding for the nation's rail system. This bill creates a framework that would provide a direct means of funding high-speed trains that does not currently exist at the federal level.
Public-Private Partnerships “P3” Funding
The Authority’s finance team anticipates that the commitment of state and federal dollars will attract private sector funding. The Authority’s finance team has identified a broad array of public-private partnership opportunities, including project debt financing, vendor financing, system operations and private ownership.