Monday, March 9, 2009

California High-Speed Rail Agency Faces Cash Crunch

Despite passage of a $9.9 billion bond initiative last November and $8 billion for high-speed rail in President Obama's economic stimulus package, the California High-Speed Rail Authority could come to a crashing halt. The agency is facing a cash crunch, according to a Fresno Bee editorial, because state spending on infrastructure projects has been frozen.

It has pegged its hopes on a $29.1 million bridge loan to sustain its operations through June in hope that it can access some of the federal funds and bond sale proceeds. If the agency is forced to shut down and suspend its planning activities, California could lose out on tapping the federal high-speed rail money pool: it needs federal funds to build its rail line, which has a $30 billion pricetag just for the Los Angeles - San Francisco mainline.

"California is currently ahead of the rest of the states in planning its high-speed system. We're the only state whose voters have approved spending our own money on such a project, and the environmental and engineering studies required for the massive project are already well begun.

"But that lead could evaporate quickly if California's efforts are stalled by money woes. Not a day passes without news of the enthusiasm that's rising in other states and regions to build high-speed systems -- the Midwest, the Northeast corridor, Texas, Florida."

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