Why California High-Speed Rail is Over Budget And Delayed — And What We Should Do About It
The California High-Speed Rail (CAHSR) project has been in the national news this year, and not for good reasons: It was (and still is) in the crosshairs of Donald Trump and Elon Musk as the latest project they want to kill.
Their logic is simple enough. It’s over budget and delayed by years. Why continue a project that can’t seem to get itself together?
But the political opponents of CAHSR have shown little interest in investigating why the project is so delayed. They have shown little interest in making it more efficient or speeding it up. They only show interest in killing it.1
By removing funding, they ensure their critiques are a fulfilling prophecy. If they delay it, there’s a 100% chance it’ll be more delayed, giving them more reason to complain about why it’s delayed and further justification to kill it.
A Better Strategy is to Speed it Up, Not Slow it Down
Instead, I want to look at this with a curious eye. If it’s over budget and over the timeline, let’s look at why.
I’m a layperson. I didn’t study any of this in school. I have no engineering degree. No project management experience. No law experience. I’m in here trying to make sense of the complex along with you.
My goal in this article is to break down why California High-Speed Rail is delayed and over budget, so we can all understand it better.
The Transit Costs Project Examined What Has Gone Wrong — And What We Can Do
Academics have looked at the exact problems with California High-Speed rail. A team of researchers at New York University’s Marron Institute came together to create the Transit Costs Project. In it, they address a key question:
”Why do domestic subway and light rail projects cost more and take longer to construct than similar projects in Italy, Sweden, Turkey, Korea, Chile, and Spain?”
In this article, I draw on their research.
These Lessons We Can Often Broaden Out to All U.S. Transit: Why Is It So Expensive to Build Here?
From New York’s 2nd Avenue Subway to California High-Speed Rail, coast-to-coast, it costs more to build transit in the U.S. than in any other country.
These inefficiencies mean we need more money to build less transit.
That’s not a good recipe for transforming American transportation to give us all more options and fight against car dependency, which hurts our health, our communities, and our wallets.
Here are my thoughts after reading the Transit Costs Project.
The Current State of California High-Speed Rail
In 2008, California voters voted to approve nearly $10 billion in bond funding to construct a true high-speed rail from Los Angeles to San Fransico.
The original cost estimate was $30 billion in 2006 dollars.
Initial plans were ambitious: connect San Francisco to Los Angeles by 2020 in under three hours. Construction began in 2015 in the Central Valley to connect the first phase between Merced and Bakersfield. It’s 2025, and no part of the train is close to opening.
The current estimate is that the initial operating segment between Merced and Bakersfield might open by 2029.
That’s a bad look.
Let’s Cut Through The Talking Points About CAHSR’s Problems
I’ll try to touch on the main critiques, but within the context of the big problems, as identified by the Transit Costs Project.
I will draw from two sources in particular, the Transit Costs Project Executive Summary and their report on How to Improve Domestic High-Speed Rail Project Delivery.
(If I missed anything, please leave a comment. I like it when my articles become living resources we improve together.)
Summary: The three main reasons for CAHSR’s failure are…
- No national vision and economies of scale for high-speed rail
- No clear plan at the start of the project
- No expertise and experience building high-speed rail
1) No Unified Vision, Standards, and Political Will
As the Transit Costs Project mentions, countries with successful high-speed rail have a national vision, standards, and political will.
The United States has none of those. California, aside from a few federal grants, has been on its own. This is about more than funding.
It’s Not a National Priority
No U.S. Congress or president has made reshaping our transportation network for the future a true priority.
This contrasts with countries that build lots of high-speed rail at a great price.
The Transit Costs Project writes, “When speaking to high-speed rail experts who have worked in Spain, France, China, Taiwan, Germany, Turkey, and Japan, all mentioned that there was uniform agreement that high-speed rail was a national priority.”
It sounds obvious, but in countries that want to build high-speed rail and dedicate themselves to it, build it and build it well. Like anything in life, if you want to succeed, you have to commit.
Why does this matter beyond some vague sense of commitment?
No Standards, No Economies of Scale
Successful countries take lessons and resources from one rail project and apply them to others.
For non-rail projects, this is true in the U.S. too. We have blueprints and standards for bridges and parking lots.
But building rail projects in the United States requires a unique design every time.
Transit Costs Project writes that a national entity “should create national high-speed rail design standards… For new construction, in particular, this will speed up design and bring greater certainty to the emerging supply chain.”
In Spain or Italy, they don’t have to reinvent the designs. They borrow from previous projects. In contrast, with CAHSR, “this mixing and matching approach also leads to time consuming design, coordination, and testing efforts.”
They continue, “A lack of design standardization leads to fewer economies of scale, the inability to replicate station designs quickly without incurring more design costs, and makes it difficult to apply lessons learned from one station to another during the construction process.”
As a result, we may end up with Frankstein’s monster of a rail project. This also means we’ll have an even more janky rail network, which will lead to cost overruns in the coming decades.
No National Testing Area
They also mention how other countries have a high-speed rail testing area. “The Federal Railroad Administration should develop a high-speed rail testing area at its Transportation Technology Center in Pueblo, Colorado. This facility currently does not support testing beyond 165 miles per hour. These types of facilities and research centers exist in China, Japan, Germany, England, and elsewhere.”
Instead, California is on its own, without existing supply chains, resources, expertise, and more.
At the Whims of Who’s In Office: Stop-and-Start Funding
California High-Speed Rail is partisan. Sadly, all passenger rail has become partisan.
This frustrates me because we all benefit from better rail transportation: less traffic, cleaner air, less reliance on cars, in addition to the new service option. I touch on the crux of the issue in this short article.
This partisan divide has meant that federal-level funding has come and gone. Obama supported it, Trump cut funding, Biden restored some support, and Trump wants to withdraw already allocated funding.
The stop-and-start nature of funding and the constant need to defend the project’s existence make efficient planning almost impossible.
Each delay increases costs further.
No High-Speed Rail Trust Fund
Unlike highways, which benefit from the dedicated Highway Trust Fund established in 1956 that provides consistent federal funding, high-speed rail in the United States has no equivalent dedicated funding mechanism.
This absence of something like a High-Speed Rail Trust Fund forces projects like California’s HSR to rely on unpredictable funding.
Almost None of This Is California’s Fault
In other countries, the benefit of having many rail projects under their belt, knowing what designs work, what parts to buy, and who to hire make it more efficient.
2) No Plan
Okay, now we can blame California.
When California first put this to voters in 2008, they didn’t have a plan. They only had concepts of a plan.
Instead of having a clear design and sound cost estimates before constructing, they just started.
Here’s a quote from a California State Auditor in 2018:
“The [CAHSR] Authority did not complete many critical planning tasks before beginning construction… such as not securing the property on which it intended to build. In other instances, the Authority did not sufficiently account for the costs arising from issues it knew it would eventually need to address, such as relocating utility infrastructure.”
They Started Building Before They Finished Designing
The countries that build for low costs and finish on time have a complete plan first.
Here’s how this played out against CAHSR
They Did an Environmental Review Before The Design
For example, they conducted a full environmental review without deciding on the route and plan. TCP writes, “Internationally, experts prefer to conduct environmental review with 50% of engineering complete, for 2 or 3 alternative routes, each capable of performing peak speeds for services, ridership, and associated revenues.”
They spent time and money on a review they weren’t ready for.
TCP recommends that high-speed rail choose the best, most cost-effective project first before focusing on reviews.
They Sought Money and Grants Before The Design
In 2008, when California Voters approved the bonds to finance the beginning of the project, they hadn’t narrowed it down to a few routes, and they didn’t know which phases they would build it in.
They got money before they were ready. It should also be no surprise that the estimated costs turned out to be a pipe dream.
They Did Not Secure The Property
The State of California also did not own the land they planned to build on before starting.
This continues to be a problem for the project.
While countries with successful high-speed rail systems have strong frameworks for acquiring necessary land, California’s approach was comparatively disorganized.
A big piece of this is the CAHSR Authority’s fault.
This comes back to not having the full design. Without the design, they didn’t know which land they would need.
A 2019 Los Angeles Times piece on CAHSR reported that the CAHSR Authority “has had to go back to landowners hundreds of times for additional land or to discuss unforeseen effects on farms.”
CAHSR is like the writer who started drafting and spent years on a novel that just isn’t working. They should’ve had their plan first.
Other Unique U.S. Challenges to Acquiring Land
This challenge is harder in the U.S. and California for several reasons.
First, because U.S. development patterns are more sprawled than countries like Spain and Italy, there’s more developed land to buy. This sprawl in wealthy Connecticut suburbs has been a challenge for decades in improving rail infrastructure from New York to Boston.
Second, California land values are extraordinarily high, making acquisitions extremely expensive.
Third, the American legal system makes it easy to challenge eminent domain proceedings.
That’s a recipe for spending an astronomical amount of money just to get the land to build the train.
The Transit Costs Project highlights how differently this works in successful HSR countries: “In countries like Germany, Spain, Italy, and France, high-speed rail projects, once they are planned, financing is in place, and are deemed to have a public benefit, receive a ‘declaration of public utility’ or ‘project of national significance’ designation that eases local permitting challenges by authorizing these projects to move forward, while local jurisdictions adapt their plans accordingly.”
Without such protections, California’s HSR project is vulnerable to endless litigation.
As the Transit Costs Project notes, “Without state laws in place, federal jurisdiction, or financial commitments from cities, states, utilities, and freight railroads, large infrastructure projects will always provide an opportunity for municipalities, utilities, freight railroads, and other third parties to extract upgrades and improvements with impunity.”
These lawsuits can also lead to changes in the design and plan, making them go back to the drawing board, piece by piece.
The result has been a patchwork of expensive settlements, legal delays, and compromised routing decisions that have added billions to the project cost.
Eminent Domain Requires a Nuanced Conversation
Of course, we don’t want to be like China, which built its high-speed rail network quickly in part because it didn’t care about displacing people in the train’s path.
We made huge mistakes when using eminent domain to build highways through cities in the 20th century (and still today, as is happening in Austin, Texas).
We don’t want to let these challenges keep us from moving the project forward.
Trains do not destroy densely populated areas like highways do. Whereas highways ruin everything around them, train stations encourage development.
These Californians will be compensated for their market value, unlike when we built the highways.
Let’s look at how other modern democracies have done this successfully, and that means giving the builders more authority.
Otherwise, all our rail projects will continue to get sued and die by a thousand litigation paper cuts.
3) No Expertise and Experience
We’ve never done this. It’s no surprise we’re bad at it.
How can the U.S. build high-speed rail effectively if we have no workers, engineering professors, and urban planners who’ve gone through the process before?
TCP writes, “One of the key lessons from the California High-Speed Rail Authority is that creating a new organization to plan and deliver a new high-speed rail line is difficult. Finding the right leaders and staff takes time, and, with limited domestic high-speed rail experience, it is unlikely that there are enough people to credibly lead fifty different organizations in each state.”
This is in contrast to other countries that build high-speed rail efficiently.
No Links to Universities or Workforce Development
Across the entire labor spectrum, other countries are developing a workforce that has experience building high-speed rail. It’s no surprise they do it well. Everyone at CAHSR is learning on the fly.
TCP writes, “Germany, Spain, China, Japan, England, Hungary, and other countries have research institutes and university partnerships investigating how to plan, design, build, maintain, and improve high-speed rail.”
Where are the workforce development projects? The school within major universities? This goes beyond writing federal checks to projects.
Without this experience, CAHSR has turned to consulting.
Too Many Consultants
This is a common critique of CAHSR, and it’s a good one. Consultants working for private, for-profit companies charge a premium if they’re going to take on risk.
Hiring consultants offloads the hard work of developing workers. TCP writes that “project sponsors need to invest in and cultivate internal capacity to develop well-defined projects and manage consultants and contractors.”
In 2018, CAHSR had 190 staff members and 485 consultants.
TCP continues that “The California High-Speed Rail Authority has learned this lesson the hard way, and, to its credit, has reversed the proportion of consultants to agency staff.”
Again, we see California bearing the brunt of needing to learn on the fly and make mistakes, rather than having a national vision.
Workers Without Experience
How do you get workers with experience? One strategy to consider moving forward is to have a mobile workforce.
The Transit Costs Project provides the example of New York’s Second Avenue Subway (which also went way over budget) compared to other countries.
“Railway workers and construction workers in Europe are nationally mobile and often mobile across the entire EU. Spanish rail maintenance workers move between different parts of the country, staying in temporary worker housing wherever they are posted to.” This means they gain lots of experience.
In contrast, “New York laborers only have experience with New York projects; thus, they are a dedicated and driven workforce but also a low-productivity one, having never seen more efficient tunnel projects.”
One of the common talking points about why building in the U.S. is so expensive is because of labor costs. There’s an element of this, and TCP touches on various labor laws and how they differ and lead to inflated costs in some aspects.
But even high-cost-of-living, well-paid, and unionized countries like France come in at prices much better than the U.S.
The big difference is that our rail-building workforce isn’t getting it done because we don’t have experience.
It reminds me of the classic Gen-Z meme. “I need experience to get a job, but how can I get experience without a job?”
We need more links to workforce development at all levels.
None of These Reflects that California High-Speed Rail Isn’t a Good Idea
But we need national support for big projects of national significance to succeed.
Again, this is not about blank checks for passenger rail projects.
Perhaps Trump and his transportation secretary Sean Duffy are (sort of) right. Perhaps the $3 billion the Biden administration awarded to CAHSR should have been spent elsewhere. Maybe it should’ve gone to national passenger rail research, university programs, and workforce development, rather than directly to CAHSR.2
California High-Speed Rail put the cart before the horse. They got money before clear plans. They hired too many consultants instead of developing internally.
But the failure of California High-Speed Rail is not, as Trump and Musk would like to say, a complete failure of California leadership or capacity.
As I read more about this issue, the more I felt that California taxpayers are doing the whole nation a huge favor.
They’ve volunteered to be the first monkey shot into space, and we’re all learning from their mess-ups.
Is There Hope?
In some ways, I think there is and there isn’t.
The good news is that the CAHSR Authority has learned from a lot of these mistakes. They have a clear plan for the Merced to Bakersfield phase. I’m optimistic that once that’s done, the benefits for everyone will emerge.
I hope that can create a snowball where we realize that flying short distances sucks, sitting in traffic is even worse, and that a housing crisis worsened by suburban sprawl is the worst of all.
We Don’t Have The Political Will
On the other hand, the core problems that we have, I don’t see getting solved anytime soon.
We do not have the political will to invest in high-speed rail nationwide and make funding it a priority.
I don’t mean that we can’t get grants pushed out to projects like this or Brightline West or even the Amtrak Texas Central project.
I mean, we aren’t building university connections. We aren’t talking about federal HSR testing grounds. We aren’t building a plan where we’ll have interoperable trains with the same supply chains. We aren’t taking the steps that successful countries like Spain, Turkey, and Sweden have taken to succeed in project after project.
This means that if we move forward with passenger rail, it will be piece by piece, with political attacks slowing each project down along the way.
And one major party in the country being beholden to the interests of the fossil fuel industry doesn’t help.
With the current process, I’ll be dead before we get high-speed rail in the Northeast.
When The Project Is Done, I Still Think It’ll be a Success
Despite all the setbacks, cost overruns, and political battles, I remain convinced that when California High-Speed Rail gets completed, it will be viewed as a transformative success.
Every time I’ve taken HSR, it blows me away.
Compare The Success of Boston’s Big Dig
The Big Dig was a project to undo the disaster of building several highways through the heart of Boston by moving them underground.
It ran 190% over budget, took nearly a decade longer than planned, and became a national punchline for government inefficiency.
Like CAHSR, the press and the public ripped it apart.
Yet today, few Bostonians would argue it wasn’t worth it.
The project reconnected neighborhoods, created beautiful public spaces, reduced traffic congestion, and sparked economic development that has more than paid for its $22 billion price tag over time.
California’s HSR may follow a similar trajectory.
When passengers travel from San Francisco to Los Angeles in under three hours and forget how they used to get there, the difficult path to completion will fade from memory.
The benefits will be substantial and long-lasting.
From a quality of life standpoint, it will give Californians transportation options beyond sitting in traffic or dealing with air travel.
Economically, it will connect the state’s major population and employment centers, allowing for commuting patterns and business relationships that are currently impractical.
It will create an alternative model of development for California, one that’s less car-dependent, less sprawling, and more centered around walkable communities near transit hubs.
These stations will become catalysts for transit-oriented development, addressing housing shortages while reducing overall transportation costs for residents. There’s no solution to the housing crisis without more dense housing development.
From a climate perspective, electrified high-speed rail will prevent millions of tons of carbon emissions annually. Yet, the new development and lower car dependence mean even more clean air and climate benefits.
Future projects across the country will benefit from California’s hard-earned lessons. Thank your friends in California for paying for this.
While we shouldn’t excuse the planning failures or minimize the financial impact of those mistakes, we also shouldn’t lose sight of the transformative potential that awaits.
When the trains are finally running, California will have accomplished something remarkable.
- Elon Musk owns two companies with a stake in CAHSR’s downfall. Of course, there’s Tesla. The second is the Boring Company, which wants to move Teslas at high-speed rail-like velocities underground, which won’t work at the efficiency of rail due to geometry and physics. Both directly compete against high-speed rail. Trump for his part, received hefty campaign donations from the car, highway construction, oil, and gas industries, all of whom oppose high-speed rail because it threatens their monopolies on American life. They have stake in the project’s failure. ↩︎
- Sadly, these aren’t the suggestions they’ll make. Given their tendency to tear apart government agencies and government-funded research, as well as their open hostility to Amtrak, I know we won’t see a national passenger rail plan from the Trump administration. ↩︎
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