Dive Brief:

• The California High Speed Rail Authority has opted to build the first 250-mile stretch of its now-$64 billion bullet train system in the San Francisco Bay Area rather than in Southern California as originally planned, according to The Los Angeles Times.
• Rail officials said the change will allow the system to open by 2025 and will delay the expensive and time-consuming task of tunneling through the Tehachapi and San Gabriel Mountains. Analysts have also said that completion of at least one segment will help the authority draw private investors necessary to finish the system.
• Aside from the logistical challenges facing the two-years-delayed rail system, the authority still must secure adequate funding for the project, as evidenced by its announcement that it will seek an additional $2.9 billion in federal funding, The Times reported.

Dive Insight:

Rail officials have also reported that the bullet train price tag has been reduced by $4 billion to its current estimate of $64 billion. Although significantly higher than the original $40 billion estimate, it is well below the worst-case scenario estimate of $98 billion they estimated a few years ago.

Southern California government and agency officials said that while it’s disappointing they will have to wait even longer for the rail to reach the area, they plan to continue investing billions of dollars to ready local rail systems for the bullet train.

Aside from funding shortfalls, The Times reported that the project also faces significant administrative, political and legal difficulties as well, such as completing land acquisitions along the planned route of the system.

Rail officials have spent significant time in recent months defending the project against allegations raised in a Times investigative report in which the newspaper suggested that rail officials had not been upfront about the cost or even the feasibility of the project. In fact, legislators were so incensed about the issues raised in report that they have already called at least one hearing related to the rail project, with the promise of more to come.