A court in California has reversed a decision which was stalling funding for the state’s planned $68 billion high-speed rail project.
In November 2013, a Sacramento Superior Court judge invalidated bonds, which were approved by voters in November 2008, worth more than $8 billion to fund the initial phase of construction after it found that it was not “necessary and desirable” for the authority leading the line’s construction to authorise the bond issue.
California High Speed Rail Authority was also told it would need to rewrite its preliminary funding plan after the court adjudged that the original document didn’t meet certain planning rules.
The court has now gone back on both decisions.
In February, the high-speed rail authority released a revised business plan which reduced the initial capital costs and increased the route’s passenger predictions. However, although predicted ridership was up overall, the average distance passengers were travelling was lower, resulting in reduced revenues.
Phase one of the line will connect Los Angeles and San Francisco. The full 800-mile route could eventually extend the corridor to link to Sacramento in the north and San Diego in the south.
The Authority never has revised a funding plan, the original one stands from November 2011 and the July 2012 appropriation. They released a new business plan in May 2014 but the costs are being debated by their own contractors. The route today, the only route they are working on is 520 miles from San Francisco Transbay Terminal to LA Union Station. Regarding the ridership, they lowered long term trips and increased short term trips.
The bonds cannot be used by the Rail Authority until they get the second funding plan approved to allow them to begin construction. The only thing the reversal of the bond validation case does, is if these General Obligation bonds are sold, it tells any investors who buys the bonds that the state of California stands behind them regardless of what goes on in the rail project.