[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]

CALIFORNIA'S HIGH-SPEED RAIL PLAN:
SKYROCKETING COSTS AND PROJECT CONCERNS

=======================================================================

(112-69)

HEARING

BEFORE THE

COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

----------

DECEMBER 15, 2011

----------

Printed for the use of the
Committee on Transportation and Infrastructure

CALIFORNIA'S HIGH-SPEED RAIL PLAN:

SKYROCKETING COSTS AND PROJECT CONCERNS

CALIFORNIA'S HIGH-SPEED RAIL PLAN:
SKYROCKETING COSTS AND PROJECT CONCERNS

=======================================================================

(112-69)

HEARING

BEFORE THE

COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

__________

DECEMBER 15, 2011

__________

Printed for the use of the
Committee on Transportation and Infrastructure

Available online at: http://www.gpo.gov/fdsys/browse/
committee.action?chamber=house&committee=transportation
?

U.S. GOVERNMENT PRINTING OFFICE
71-740 WASHINGTON : 2012
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing Office,
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Printing Office. Phone 202�09512�091800, or 866�09512�091800 (toll-free). E-mail, gpo@custhelp.com.

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

JOHN L. MICA, Florida, Chairman

DON YOUNG, Alaska NICK J. RAHALL II, West Virginia
THOMAS E. PETRI, Wisconsin PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina JERRY F. COSTELLO, Illinois
JOHN J. DUNCAN, Jr., Tennessee ELEANOR HOLMES NORTON, District of
FRANK A. LoBIONDO, New Jersey Columbia
GARY G. MILLER, California JERROLD NADLER, New York
TIMOTHY V. JOHNSON, Illinois CORRINE BROWN, Florida
SAM GRAVES, Missouri BOB FILNER, California
BILL SHUSTER, Pennsylvania EDDIE BERNICE JOHNSON, Texas
SHELLEY MOORE CAPITO, West Virginia ELIJAH E. CUMMINGS, Maryland
JEAN SCHMIDT, Ohio LEONARD L. BOSWELL, Iowa
CANDICE S. MILLER, Michigan TIM HOLDEN, Pennsylvania
DUNCAN HUNTER, California RICK LARSEN, Washington
ANDY HARRIS, Maryland MICHAEL E. CAPUANO, Massachusetts
ERIC A. ``RICK'' CRAWFORD, Arkansas TIMOTHY H. BISHOP, New York
JAIME HERRERA BEUTLER, Washington MICHAEL H. MICHAUD, Maine
FRANK C. GUINTA, New Hampshire RUSS CARNAHAN, Missouri
RANDY HULTGREN, Illinois GRACE F. NAPOLITANO, California
LOU BARLETTA, Pennsylvania DANIEL LIPINSKI, Illinois
CHIP CRAVAACK, Minnesota MAZIE K. HIRONO, Hawaii
BLAKE FARENTHOLD, Texas JASON ALTMIRE, Pennsylvania
LARRY BUCSHON, Indiana TIMOTHY J. WALZ, Minnesota
BILLY LONG, Missouri HEATH SHULER, North Carolina
BOB GIBBS, Ohio STEVE COHEN, Tennessee
PATRICK MEEHAN, Pennsylvania LAURA RICHARDSON, California
RICHARD L. HANNA, New York ALBIO SIRES, New Jersey
JEFFREY M. LANDRY, Louisiana DONNA F. EDWARDS, Maryland
STEVE SOUTHERLAND II, Florida
JEFF DENHAM, California
JAMES LANKFORD, Oklahoma
REID J. RIBBLE, Wisconsin
CHARLES J. ``CHUCK'' FLEISCHMANN,
Tennessee

(ii)

CONTENTS

Page

Summary of Subject Matter........................................ vi

TESTIMONY
Panel One

Hon. Dennis A. Cardoza, a Representative in Congress from
California's 18th District..................................... 45
Hon. Devin Nunes, a Representative in Congress from California's
21st District.................................................. 45
Hon. Jim Costa, a Representative in Congress from California's
20th District.................................................. 45
Hon. Kevin McCarthy, a Representative in Congress from
California's 22nd District, and Majority Whip.................. 45
Hon. Loretta Sanchez, a Representative in Congress from
California's 47th District..................................... 45
Hon. Dana Rohrabacher, a Representative in Congress from
California's 46th District..................................... 45

Panel Two

Joseph C. Szabo, Administrator, Federal Railroad Administration.. 67
Roelof Van Ark, Chief Executive Officer, California High-Speed
Rail Authority................................................. 67
Hon. Jerry Amante, Mayor of Tustin, California, and Member, Board
of Directors, Orange County Transportation Authority........... 67
Hon. Ashley Swearengin, Mayor of Fresno, California.............. 67
Gregory R. Gatzka, Director, Kings County Community Development
Agency......................................................... 67
Elizabeth Goldstein Alexis, Co-Founder, Californians Advocating
Responsible Rail Design........................................ 67
Kole Upton, Vice President, Preserve Our Heritage................ 67

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Hon. Joe Baca, of California..................................... 111
Hon. Russ Carnahan, of Missouri.................................. 113
Hon. Anna G. Eshoo, of California................................ 117
Hon. Barbara Lee, of California.................................. 118
Hon. Zoe Lofgren, of California.................................. 120
Hon. Laura Richardson, of California............................. 121
Hon. Adam B. Schiff, of California............................... 126

PREPARED STATEMENTS SUBMITTED BY WITNESSES

Hon. Dennis A. Cardoza........................................... 127
Hon. Devin Nunes \1\.............................................
Hon. Jim Costa \1\...............................................
Hon. Kevin McCarthy \1\..........................................
Hon. Loretta Sanchez............................................. 132
Hon. Dana Rohrabacher \1\........................................
Joseph C. Szabo.................................................. 136
Roelof Van Ark................................................... 233
Hon. Jerry Amante................................................ 249
Hon. Ashley Swearengin........................................... 255
Gregory R. Gatzka................................................ 258
Elizabeth Goldstein Alexis....................................... 270
Kole Upton, Vice President....................................... 278

SUBMISSIONS FOR THE RECORD

Hon Gary C. Miller, a Representative in Congress from the State
of California, request to submit the following letters with
questions to the California High-Speed Rail Authority about the
California high-speed rail plan:

Letter to Michael Rossi, Board Member, California High-
Speed Rail Authority, from the following members of the
California State Legislature: Assemblywoman Diane
Harkey, Assemblyman David Valadao, Assemblyman Brian
Jones, Senator Doug LaMalfa, Senator Bob Huff, and
Senator Bob Dutton, December 8, 2011................... 5
Letter to Bonnie Lowenthal, Chair, and Kevin Jeffries,
Vice-Chair, California Assembly Transportation
Committee, from Assemblywoman Diane L. Harkey, 73rd
District, November 29, 2011............................ 12
Hon. Laura Richardson, a Representative in Congress from the
State of California, request to submit the following letters:

Letter to Hon. John L. Mica, a Representative in Congress
from the State of Florida, and Chair, Committee on
Transportation and Infrastructure, from the US High
Speed Rail Association, December 15, 2011.............. 27
Letter to Ray LaHood, Secretary, U.S. Department of
Transportation, and Joseph C. Szabo, Administrator,
Federal Railroad Administration, from 94 members of the
California State Legislature, October 19, 2009......... 29
Hon Devin Nunes, a Representative in Congress from the State of
California, request to submit the following:

``Review of `Bay Area/California High-Speed Rail
Ridership and Revenue Forecasting Study,' '' Research
Report UCB-ITS-RR-2010-1, by David Brownstone,
Professor of Economics, UC Irvine; Mark Hansen,
Professor of Civil and Environmental Engineering, UC
Berkeley; and Samar Madanat, Professor of Civil and
Environmental Engineering, UC Berkeley; Institute of
Transportation Studies, University of California,
Berkeley, June 2010.................................... 293
``High-Speed Rail Authority: It Risks Delays or an
Incomplete System Because of Inadequate Planning, Weak
Oversight, and Lax Contract Management,'' Report 2009-
106, by the California State Auditor, April 2010....... 352
``High-Speed Rail is at a Critical Juncture,'' by the
Legislative Analyst's Office, May 10, 2011............. 404
Marc Scribner, Land-use and Transportation Policy
Analyst, Center for Economic Freedom, Competitive
Enterprise Institute, Freedom of Information Act
Request to: (a) Office of the Secretary of
Transportation, Department of Transportation, June 21,
2011, and (b) Federal Railroad Administration,
Department of Transportation, June 21, 2011............ 432
Hon. Jeff Denham, a Representative in Congress from the State of
California, request to submit letter to Members of Congress
opposing funding for California high-speed rail, from State
Senator Doug LaMalfa, Fourth District, and attachments:
``Editorial: The Train to Neverland,'' Wall Street Journal,
November 12, 2011; and ``California High Speed Rail: The
Facts''........................................................ 63
Hon. Ashley Swearengin, Mayor of Fresno, California, request to
submit the following:

Letters in support of California high-speed rail to Hon.
John L. Mica, a Representative in Congress from the
State of Florida, and Chair, Committee on
Transportation and Infrastructure, and Hon. Nick J.
Rahall II, a Representative in Congress from the State
of West Virginia, and Ranking Member, Committee on
Transportation and Infrastructure, from the following:
Al Smith, President and CEO, Greater Fresno Area
Chamber of Commerce; John Hernandez, Executive
Director, Central California Hispanic Chamber of
Commerce; Dora Westerlund, CEO, Fresno Area Hispanic
Chamber of Commerce; Tate Hill, President, Fresno Metro
Black Chamber of Commerce; Steve Geil, President/CEO,
Economic Development Corporation; Amarpreet Dhaliwal,
Chairman, Fresno Council of Governments and Mayor, city
of San Joaquin (all aforementioned letters dated
December 13, 2011); Ronald E. Brummett, Executive
Director, Kern Council of Governments, December 14,
2011; Amy Shuklian, Mayor, city of Visalia, December
12, 2011............................................... 440
``Case for High-Speed Rail Grows Only Stronger,'' by
Edwin Lee, mayor of San Francisco; Kevin Johnson, mayor
of Sacramento; Chuck Reed, mayor of San Jose; and
Ashley Swearengin, mayor of Fresno, U.S. Mayor
Newspaper, reprinted from Sacramento Bee, June 7, 2011. 449
``Now is the Ideal Time to Make High-Speed Rail Work,''
FresnoBee.com, December 13, 2011....................... 451
Joseph C. Szabo, Administrator, Federal Railroad Administration,
responses to questions from the Committee on Transportation and
Infrastructure \2\............................................. 147
Roelof Van Ark, Chief Executive Officer, California High-Speed
Rail Authority, responses to questions from the Committee on
Transportation and Infrastructure.............................. 243

ADDITIONS TO THE RECORD

Hon. Russ Carnahan, a Representative in Congress from the State
of Missouri, request to submit written statement entitled,
``Japanese Corporate Use of U.S. POWs as Slave Labor,'' from
Joseph A. Vater, Jr., President, Descendants Group, an
Auxiliary of the American Defenders of Bataan and Corregidor,
Inc............................................................ 114
Aaron Fukuda, Co-Chairman, Citizens for California High Speed
Rail Accountability, letter regarding Central Valley concerns/
opposition to California high-speed rail, to Hon. John L. Mica,
a Representative in Congress from the State of Florida, and
Chair, Committee on Transportation and Infrastructure, December
8, 2011........................................................ 452
James T. Callahan, General President-Elect, International Union
of Operating Engineers, letter to Hon. John L. Mica, a
Representative in Congress from the State of Florida, and
Chair, Committee on Transportation and Infrastructure, and Hon.
Nick J. Rahall II, a Representative in Congress from the State
of West Virginia, and Ranking Member, Committee on
Transportation and Infrastructure, December 20, 2011........... 456

----------
\1\ Reps. Nunes, Costa, McCarthy, and Rohrabacher did not submit
written statements.
\2\ On page 150, Mr. Szabo indicates that the response to
question 7 was submitted on January 23, 2012. The response that
he is referring to is the response to question 1 on page 206.

[GRAPHIC] [TIFF OMITTED] T1740.001

[GRAPHIC] [TIFF OMITTED] T1740.002

[GRAPHIC] [TIFF OMITTED] T1740.003

[GRAPHIC] [TIFF OMITTED] T1740.004

[GRAPHIC] [TIFF OMITTED] T1740.005

[GRAPHIC] [TIFF OMITTED] T1740.006

[GRAPHIC] [TIFF OMITTED] T1740.007

[GRAPHIC] [TIFF OMITTED] T1740.008

[GRAPHIC] [TIFF OMITTED] T1740.009

[GRAPHIC] [TIFF OMITTED] T1740.010

[GRAPHIC] [TIFF OMITTED] T1740.011

[GRAPHIC] [TIFF OMITTED] T1740.012

[GRAPHIC] [TIFF OMITTED] T1740.013

[GRAPHIC] [TIFF OMITTED] T1740.014

[GRAPHIC] [TIFF OMITTED] T1740.015

CALIFORNIA'S HIGH-SPEED RAIL PLAN:
SKYROCKETING COSTS AND
PROJECT CONCERNS

----------

THURSDAY, DECEMBER 15, 2011

House of Representatives,
Committee on Transportation and Infrastructure,
Washington, DC.
The committee met, pursuant to notice, at 10:02 a.m. in
Room 2167, Rayburn House Office Building, Hon. John Mica
(Chairman of the committee) presiding.
Mr. Mica. Good morning. I would like to call this hearing
of the House Transportation and Infrastructure Committee to
order, and welcome everyone this morning.
The topic of today's hearing is, ``California's High-Speed
Rail Plan,'' and its subtitle is, ``Skyrocketing Costs and
Project Concerns.'' This is the second in a series of hearings
on the national high-speed rail program.
And we are pleased to have, as the order of business, first
of all we will hear opening statements from members of the T&I
committee. And then we have a Members panel, and we have very
active interest from Members of the California delegation who
have been invited to testify. And then we have an additional
panel with Mr. Szabo and others, officials Federal and local,
and stakeholders in the California project.
So, with that as the order of business, we will go ahead
and proceed, and I will start with an opening statement. And
then we will yield to Members as they arrive.
Well, let me say, first of all, I consider myself a strong
advocate of high-speed rail. We worked on the PRIIA, the
Passenger Rail Investment and Improvement Act, which President
Bush signed. And one of the provisions of that bill was to set
some parameters for high-speed rail. And within that
legislation there were a number of corridors identified, and
the California corridor was one of those corridors identified
as having potential for high-speed rail.
I have done everything I can to support high-speed rail. I
was pleased when President Obama initially signaled and
actually worked and got some substantial funding, $8 billion,
for high-speed rail, and included that in the American Recovery
and Reinvestment Act. Congress additionally appropriated
another $2.5 billion. So we had a total of $10.5 billion, a
fairly significant amount of money, which you could actually
have at least launched, hopefully, a successfully model for
high-speed rail in the country.
Instead, what we saw take place is that Amtrak, who sort of
dominated the process, and FRA, who went along with overseeing
the distribution of funds and grants, ended up getting nearly
98 percent--Amtrak ended up getting about 98 percent of the
projects.
Unfortunately, the entire high-speed rail program has
turned into sort of a bait and switch operation. And most of
the projects that we have and nothing of the 70-some projects
that were approved, and Amtrak has say over, none of them
really achieve, either by U.S. standards or international
standards, high speed, and most are snail-speed trains.
We heard last week a rundown of other projects touted as
high-speed, some in the Midwest and other locations, which
achieve--the highest speed, I think, is about 80 miles an hour,
on average, which does not classify anywhere near 110 or today
150, which is common in Europe and Asia, and the President also
often cites as models.
So, the one hope for high-speed rail of all the projects
that were chosen was California. And California seems to be
imploding every day. The California project is turning out to
be an additional disaster in a long list of projects touted for
high-speed rail. The major problems that we see with
California--and I will just summarize them--these are just some
of the headlines that we picked off the Internet. In fact,
there were so many of them, I said to the staff, ``Just put up
a sampling.'' But all of them clearly demonstrate that the
California project is in dire straits. And the problems are, as
I identify them, pretty simple.
First, any project, particularly for transportation, mass
transportation, has to start with what they call an initial
operating section--IOS. And they, unfortunately, chose a
location that doesn't serve many people. There are more cows
and vegetables, I guess, along the corridor that they chose
than riders. And by picking the wrong location, I think they
set off on the wrong foot.
The second thing that we have found with this project is--
and it isn't something that we came up with, but the State came
up with--was just within the last month. The cost is--the
projected cost has doubled from $42.6 billion to $98.5 billion,
or could be as high as $117 billion, depending on future
alignments. That is--the cost overruns aren't bad enough by
itself, but the completion date is pushed back 13 years, from
2020 to 2033, which means that you would have a huge
operational subsidy for a very weak ridership passenger route
until, again, you completed the system. And even then the
numbers for ridership are questionable.
And finally, I am told that because of this situation with
the way the project seems to be imploding, that we will not
have vehicles that will be able to achieve high speed, even in
this first segment. So what we will have is another snail-speed
train at extremely expensive infrastructure cost.
So, those are my concerns. And again, our committee tries
to be responsible for looking out for the taxpayer interest in
these projects. This project, by itself, consumes, I think, 36
percent of all the high-speed rail funds. It may be as high as
40 percent. And so, it is a very serious concern to the
committee that, in fact, we have a huge amount of the money
that Congress has designated in a project that will not show
success.
I would like to see success. I have been a strong advocate
of the Northeast Corridor, since we own that right of way.
Amtrak operates service and we have 20 percent of the
population density of the United States and all the intermodal
connectors.
Finally, I have been out to Fresno and looked at the route
and heard from some of the folks. Unfortunately, some of the
communities do not have either the population or the fixed
infrastructure connections or service available to make the
project a success.
So, those are some of the basic concerns that I have. We
want to hear from Members of the California delegation. First
we will hear from them on our panel, and then those who have
joined us and will provide their testimony today.
So with those comments, I am pleased to yield to the
ranking member, Mr. Rahall.
Mr. Rahall. Thank you, Mr. Chairman. I have no opening
statement, just an observation. For the past 10 years I have
served as ranking member and then chairman of the House Natural
Resources Committee. And I watched you guys fight over water.
Now I am coming over here to Transportation and Infrastructure,
and you are fighting over trains. It is like a never-ending TV
reality show. That is the end of my comments, Mr. Chairman.
Mr. Mica. Let's see. We have--in order of seniority, let me
go now to Mr. Miller, who is a Member of the California
delegation, and a member of our committee.
Mr. Miller of California. Thank you. Thank you, Mr.
Chairman. I enjoyed the ranking member's comment about
fighting. I think we have some disagreement here without a
problem. I appreciate my colleagues from California coming here
today. And Chairman Mica, I really appreciate the time you have
taken to go to California to look at our cow patch. That is the
proposed link of the first part of this system.
But, you know, the problem we have is California is about
37 million people today. And by 2030, it is going to increase
by another 25 percent to 46 million. And transportation is a
huge issue, without a doubt. And many of us here on the panel,
a few on the right here, we all represent an area that knows
what Long Beach and the LA County harbor can do to our areas,
because it is tremendously impactive on us. About $250 billion
worth of trade goods come through our districts.
And the high-speed rail proposal has two options. It could
become a debt-laden drag on the California and U.S. economy, or
it could lead the way to an--employment, fiscal responsibility,
and innovation. But the facts that have been presented in the
past and we look at in the future raise tremendous concern. We
have to look at ridership, the route, risk mitigation, and
where the high-speed rail fits in to the future of California.
Just 3 years ago, they proposed it would be $33 billion to
draft it and complete it, and now we are talking about $98.5
billion, money that California clearly doesn't have. And some
of the projections are using funds that, clearly, Congress
doesn't have to give, either.
Current ridership forecasts they are still using 2007
models. I don't know why that is. It is 2011. So we are using
outdated ridership numbers already.
We are looking at high-speed rail building on an interstate
system comparing to the 1940s, 1950s, and 1960s, where
significant revenue streams and major Federal participation
occurred.
But we are looking at $50 billion in Federal monies that is
not there to do this project. When you look at qualified tax
credit bonds, thinking about $12.4 billion. If we are going to
get 2 percent of that $50 billion, that is a billion dollars.
That leaves us about a $11.9 billion shortfall.
Recent polls, about two-thirds who have voted believe
California should vote on the State high-speed rail project.
Nearly two-thirds say that they would vote no. Main reason is
due to the changes in the estimated cost and completion dates.
Now, I would like to submit for the record a letter from
California State Legislature and the information requested in
the letter from the California High-Speed Rail Authority, that
it may be a part of the record.
Without objection, Mr. Chairman?
Mr. Mica. Without objection, so ordered.
[The information follows:]

[GRAPHIC] [TIFF OMITTED] T1740.016

[GRAPHIC] [TIFF OMITTED] T1740.017

[GRAPHIC] [TIFF OMITTED] T1740.018

[GRAPHIC] [TIFF OMITTED] T1740.019

[GRAPHIC] [TIFF OMITTED] T1740.020

[GRAPHIC] [TIFF OMITTED] T1740.021

[GRAPHIC] [TIFF OMITTED] T1740.022

[GRAPHIC] [TIFF OMITTED] T1740.023

[GRAPHIC] [TIFF OMITTED] T1740.024

[GRAPHIC] [TIFF OMITTED] T1740.025

[GRAPHIC] [TIFF OMITTED] T1740.026

[GRAPHIC] [TIFF OMITTED] T1740.027

[GRAPHIC] [TIFF OMITTED] T1740.028

[GRAPHIC] [TIFF OMITTED] T1740.029

[GRAPHIC] [TIFF OMITTED] T1740.030

Mr. Miller of California. Thank you, sir. I am just
concerned by the 2012 draft business plan. I don't think many
of the issues have been addressed. We might agree or disagree
on whether high-speed rail will answer California's
transportation needs. But under the current fiscal climate we
have out there, it doesn't make sense to me. It doesn't make
sense where the first leg would go. I don't know how you would
get this system in place in a viable way. And once it is there,
how do we fund it? The revenues generated by it are not going
to be sufficient, including California, based on the current
fiscal situation, and it cannot afford to continue to fund the
shortfall that is in it.
So, I am looking forward to the witnesses and your
opinions. And I know we have different parts of California
here, so I am looking forward to what the different parts have
to say. And I thank you for your time, Mr. Chairman, and yield
back.
Mr. Mica. Well, thank you. I am going to switch--Ms. Brown
wasn't here, and I need to hear from our ranking members. I
will go to Ms. Brown, and then we will go back to Mr. Shuster,
and then we will go back to the California delegation.
Ms. Brown, you are recognized. Welcome.
Ms. Brown. Thank you, Mr. Chairman, and here we go again.
The Republicans didn't vote for high-speed rail funding. They
cut future funding. Yet, we are holding our second full
committee hearing on this subject in 2 weeks. We are ending a
year of work, and still there is no surface transportation
bill, no FAA bill, no water resources bill. This committee is
fiddling, while the United States transportation and
infrastructure is burning.
I am glad that the current leadership of this committee and
the House were not in charge when Eisenhower developed the
interstate highway system. We would have had hearing after
hearing, talking about what a mistake it was to connect the
States, how the roads would lead to nowhere, how nobody would
ever drive from State to State, and how we just couldn't afford
it. We would also be a third world country, instead of the
leader of the free world. Thankfully, we had elected officials
with visions in those days. Our committee used to build
infrastructure projects and put people to work. That is why I
have served on this committee for 19 years.
This week the House and Senate passed a bipartisan pipeline
bill that improves safety while allowing the industry to
continue serving its customers.
If this committee is going to hold hearings about the
infrastructure in California, we should be holding a hearing to
find out why the State is building the San Francisco Oakland
Bay Bridge with 5,300 tons of inferior Chinese steel. Maybe
some of the people testifying today can explain why the State
of California's largest public works project in history will be
stamped ``Made in China,'' while steel workers right here in
America go without work. We certainly can't blame the EPA for
that one.
According to the United States Census Bureau projection,
the population of California will reach 60 million by the year
2050. This explosion in population will result in the crippling
of the aging public transportation infrastructure already
strained under the weight of its own capacity. California, 170
miles of roads, are the busiest in the Nation.
As a result, the statewide cost of the time lost and fuel
wasted in traffic congestion is estimated at $18.7 billion
annually. Travelers on California's interstates are increasing
five times faster than capacity. This is a formula for
disaster, and anyone who has driven in California's major
cities knows this all too well, and I was recently there, and I
can attest to that.
Looking at air travel, the busiest short-haul air market in
the country is between Los Angeles and San Francisco, with 100
daily flights, and more than 5 million passengers annually.
This is larger than the New York to Washington, DC, market. In
fact, the LA-San Francisco air route is one of the most
delayed-prone in the Nation, with approximately one out of
every four flights delayed by an hour.
What is the solution to the congestion? According to the
California High-Speed Authority, to achieve the same capacity
as the San Francisco-Los Angeles high-speed rail system,
California would need to construct 2,300 new lane miles in
highway, 150 additional gates at the California airport, and 4
new airport runways, to the tune of $114 billion over the next
20 years, which is equivalent to $171 billion, with inflation,
far more than it would cost to develop the planned high-speed
rail system.
I hope that during today's hearing the panelists and the
Members who oppose the development of the high-speed rail in
California will give us some details regarding how they intend
to finance and address the critical needs of moving people,
goods, and services in the State that is growing in population
each year.
With that, I welcome all of the panelists, and I am looking
forward to hearing their testimony.
Mr. Mica. I thank the gentlelady. The chairman of the rail
subcommittee, Mr. Shuster.
Mr. Shuster. Thank you, Mr. Chairman, and thank you for
holding this hearing today. I also would like to welcome my
five colleagues from California. Welcome today. Look forward to
hearing your testimony on a subject that we have had two
hearings--this is our second hearing--and the reason is because
some of us believe this is a extremely poor investment in the
transportation system.
And I would like to remind my partner on the railroad
subcommittee that 4 years ago when you were in the majority you
didn't pass out a highway bill. I believe we are going to pass
one out of this committee early next year. And I would also
like to remind her that there were $800 billion--I believe most
of it squandered--that we could have used for a highway bill
instead, I think it was somewhere around $68 billion--we could
have spent $200 billion, $300 billion. The needs in this
country are $500 billion or $600 billion strong.
So, again, when you want to criticize our side, I think you
need to take a step back and look what that stimulus bill
didn't produce.
And now here we are today, talking about a project in
California. I think the chairman has laid out all the
statistics, and I am sure we will hear from Mr. Denham on those
statistics, so I won't go over those. But I will offer an
alternative.
Well, first of all, I just saw a recent poll that said that
59 percent of Californians would reject the bond package that
they passed some time ago. And Secretary LaHood was just here a
week ago saying that this is what the people of California
want. Well, it appears this is not what they want. They are
reassessing. And looking at the escalation in cost, that is a
wise thing for people to do when they see something going out
of control.
But also, I would like to offer an alternative solution.
There are tremendous needs in California in the transportation
system. I have traveled to southern California on a few
occasions, and become well acquainted with the problems in
southern California. I met with the folks there and been
briefed a couple of times about the needs of rail in southern
California. We really should be starting on high-speed rail or
higher speed rails, improved passenger rails in San Francisco,
the Bay Area, and also in southern California, not starting in
the center of the State, where there are no congestion problems
at this time.
I have a list of 30 projects here that are half of the
money that would fund these projects from San Diego to Los
Angeles. It would probably, estimates are, double ridership in
southern California. It would reduce the trip time from 2 hours
and 40 minutes to 2 hours if these projects were put in place.
And these projects can all be completed thereabouts--around
2017, which falls in line with the timing on the stimulus money
for these projects.
And you have tremendous congestion. As my colleague from
California said, 37 million people, there are almost 20 million
or a little over 20 million in southern California. So when I
look at the need for improved passenger rail in this country,
that is one of the places. The Northeast Corridor has
tremendous population density, and of course, southern
California, with high population density.
So, you know, if we are going to invest money, let's invest
it wisely. Let's invest it in places that are going to have
significant benefit by that investment. And again, I think that
looking at southern California first makes a lot more sense
than to spend $3 billion of Federal taxpayer dollars added on
to whatever the ending number is going to be. I am sure--it is
$90 billion today. By the time this thing gets completed it
will probably be $120 billion, $130 billion.
So, this is a timely hearing. I look forward to hearing
from my colleagues and, of course, the other panelists today.
And, Mr. Chairman, thank you much. Thank you for having this
hearing.
Mr. Mica. Thank you, Chairman Shuster. We will now
recognize--we will go back to the California delegation on the
committee. Mrs. Napolitano is next.
Mrs. Napolitano. Thank you, Mr. Chair. And thank you for
holding this second meeting on this important topic. And I
associate myself with the remarks of Ranking Member Brown's
statement, and also with the last statement made by my
colleague, Mr. Shuster, in regard to being in southern
California, the need where southern California has, I would
say, 13 million, about maybe a third of California's
population. And that is just LA County, not counting San Diego,
and the rest of the counties around there, San Bernardino and
Riverside.
My concerns are with the initial investment of the
California high-speed rail project. They spent initial
investment in urban projects that assist high-speed rail, the
commuter and rail congestion. That approach would immediately
solve major transportation problems in California, as we work
towards a full high-speed rail system. Get me. I am not against
the high-speed rail. I am against the projects funding being
inadequate, one.
Two, it will take away from local projects of
transportation, eventually. And we all know California has a
great distinction for taking money from bond monies and
everything that was supposed to be squirreled away for a
specific topic. I can name a few, but I won't go into that.
The high-speed rail separation should be made first,
because that will help not only speed the delivery of services
to the rest of the Nation, but will create less impact on the
local, well, environment, on the road rage, on having to sit at
rail separations. It is going to use the urban rail corridors
that need to be grade separated, and that is a priority. They
will alleviate current problems of congestion, pollution,
safety hazards. And if it is delayed due to budget concerns, we
will at least have the grade separations in place.
My other worry is that, at the current cost, the high cost
of increase of going from $48 to $98 billion, is who is going
to pay for it? Most Californians will not be able to ride the
high-speed rail, if it is projected at $150 1-way ticket to go
to southern--from southern California to, say, San Francisco or
Sacramento. Why are we all paying to build high-speed rail if
only the wealthy can afford a ticket? My constituents need more
mass rail transit, safer, faster, and cheaper commute. This is
where we should be focusing our initial investment.
The Rail Authority has in the past, since its inception,
done a very, very lousy job of being transparent to the cities,
to my voters, and of course, to the California delegation. All
my cities have concerns. We have held meetings with the High-
Speed Rail Authority. And yet I don't believe there has been
any follow-up, nor has there been satisfaction to be able to
allay some of the fears my communities have.
The issues associated is eminent domain, being next to
homes, businesses, demolishing of current transit centers and
passenger rail service. They--not quite the thing that you
would expect of an authority that is trying to get favor of
passage.
I am in favor, again, of high-speed rail, just not at the
expense of the working-class rail transit services delivery in
a county of over 12 million people. That is a third of the
population of California, and that is just the county, again.
I hope issues are addressed before they start building the
system, and that there will be more transparency in regard to
breakdown of the actual cost of the faces themselves.
Thank you, Mr. Chair, and I yield back.
Mr. Mica. Thank the gentlelady and now recognize another
California member of the committee, Mr. Denham.
Mr. Denham. Thank you, Mr. Chairman, and thank you for once
again being willing to discuss this issue. When I was first
appointed to this committee, this was one of the issues that I
talked to you about, and asked you to come to Fresno and take a
look at our transportation needs. You did that, as well as
holding a field hearing.
And I also want to thank Chairman Shuster, who chairs the
rail committee, also willing to do the same, coming to Fresno,
seeing our local needs, seeing our farming situation, seeing
the high volume of traffic that we have coming in--out of our
ag community. So, thank you both for holding this hearing, as
well as previous times that we have held things within my
district.
I believe in a balanced approach to transportation. We have
to have a highway bill. We need to improve our highway, as well
as our goods movement. We need to improve rail, as well as look
towards the future of high-speed rail.
Ms. Brown, I will correct you that there are Republicans
that vote for high-speed rail. I was one of them. The bill went
through the House, went through the State Assembly, came over
to the State Senate, and had 26 votes, needed 27.
And there are some of you in this room that reassured me
time and time again that if I was that 27th vote to get the
bond on the ballot, that we would have safeguards in place. No
ongoing subsidies. The project would be fully funded with
guaranteed funding. We would also have guaranteed investors,
which aren't here today.
And lastly, and more importantly from me, the final thing
was to make sure that farmers, our number one industry in the
Central Valley, would be protected.
Now we are in a situation where the LAO has come out and
said the bonds would not be sold. And I want to make sure that
that doesn't happen if those reassurances aren't met. So I
would like to put a few things up here on the screen right now.
Dealing with Prop 1A, the $9.95 billion that California
voters are now on the hook for. Starts off with ``The plan
shall include.'' Part A, ``A usable segment.'' The initial
segment right now that we are talking about is north Fresno to
south Fresno, $5.2 billion: $3.3 billion coming out of the
stimulus package that was supposed to be shovel-ready projects;
$1.9 billion coming from Prop 1A, which is yet to be sold.
The operating segment, which is the real segment, is
actually $30 billion without any guaranteed funding. Part C
talks about ``The plan shall include full cost of constructing
a useable segment,'' which again is $30 billion. Last week we
had Secretary LaHood here talking about the cost. That was one
of things, was that I wanted to see a guaranteed funding. He
was unable to not only present that to me, but his quote was,
``The costs are today's costs. The $98.5 billion that is
projected today are today's costs. And those costs could
continue to change.'' That is his quote.
Next slide, the sources of all funds to be invested in the
corridor for the usable segment. Again, we are talking about
$9.95 billion, the $3.6 billion that came out of the stimulus
package for shovel-ready projects 3 years ago, still no shovels
in the ground. That leaves $83 billion missing. Where are the
private investors to pick up that cost?
Now, if the President is worried about the 15--is
guaranteeing the $53 billion over this next 6 years which he
has in his package, that has to come through Congress as an
appropriation.
``H, the corridor for the usable segment thereof, would be
suitable and ready for high-speed train operation.'' Again, the
construction segment would not be suitable for high speed. And,
``K, the authority has completed all necessary project level
environmental clearances.'' Is the President willing to waive
NEPA? Is the Governor ready to waive CEQA? And are there any
environmental processes already cleared? They have not.
And finally, prior to committing any proceeds of the bonds
described, we have to have identified sources, private parties,
other assurances received from Government agencies which
haven't yet arrived.
Mr. Mica. Thank the gentleman. And I guess the last Member
of the California delegation on our committee, Ms. Richardson.
Ms. Richardson. Thank you, Mr. Chairman. I had an
interesting experience last night. I attended a bipartisan
dinner. So I am going to put a little, I think, calm hopefully
in this meeting today.
First of all, I think to call the Central Valley cowpatch
fruits and vegetables, you know, it is the largest agriculture-
producing State in the United States. It also produces, I
believe, 40 percent of the food for this United States country.
And I think it has also produced a great Member in Mr. Denham,
Mr. Cardoza, Mr. Costa, and my own former boss, Lieutenant
Governor Cruz Bustamante, and 4 million Americans. So let's,
first of all, keep the Central Valley in perspective.
I had an initial briefing. I am looking forward to the
presentations today. And I think many of us, instead of the
hype, will find very good answers to the questions.
I do want to say, though, for the record, that to claim
speed as a question in California, when the Northeast Corridor
currently only averages 83 miles per hour, it is really not
right. So let's tone down, I think, the rhetoric and really
look at the fairness of the project in this country.
As a member of the Railroad, Pipelines, and Hazardous
Materials Subcommittee and cochair of the Congressional Caucus
on California High-Speed Rail, and vice chair of the
Congressional Bicameral Caucus, I think right now, when we look
at the fact that China is operating 13 high-speed railways with
more than 20 under construction, and by 2020 their network will
cover nearly 10,000 miles, we must re-evaluate our
conversations.
The United States didn't develop a space program or a
national highway system with the words ``can't,'' and some of
the words I have heard this morning.
The recently released California High-Speed Rail Authority
draft business plan found that without high-speed rail, it
would cost in California $171 billion to address the needs of
California's growing population. To achieve the same capacity
as high-speed rail of what it would provide, California would
need to construct 2,300 new lanes of--2,300 new miles of
highway, 115 additional gates at California airports, and 4
airport runways. Let's talk about CEQA and NEPA with that.
There have also been many concerns echoed by my colleagues
about the cost of where the funding would come from. Well, just
last week I didn't hear many people talking about how we were
going to pay for that cost with the Northeast Corridor. In
fact, my colleague--and I won't use any names--in July in Roll
Call said that the Northeast Corridor is expected to cost $117
billion. So why is the sudden concern and attack with
California?
You know, when I think we are bickering about east coast
and west coast, it seems like we have stepped back to the
1920s. This committee has tried hard and has made a case for
the Northeast Corridor, and I will support you with that. But
to turn around and kick to the curb California is really only
doing half of the tail.
The Northeast Corridor serves the sixth largest economy in
the world with a GDP of $2.5 trillion. California alone--
Northeast Corridor is more than one State--California alone has
the ninth highest GDP in the world of $1.9 trillion.
So, when we talk about winners and losers, east coast, west
coast, let's not take a step back. We have an opportunity to
leave this generation with a world-class high-speed rail
system. And we should really be playing with the American
people, and not politics.
And with that, Mr. Chairman, I ask unanimous consent to
submit statements from my fellow California colleagues who
could not be here today, as well as a letter from the High
Speed Rail Association, and the California Assembly.
Mr. Mica. Without objection, the----
Ms. Richardson. Thank you sir, I yield back the balance of
my time.
Mr. Mica [continuing]. Identified items will be made part
of the record.
[Please see the table of contents section entitled,
``Prepared Statements Submitted by Members of Congress'' for
statements from the following Members of Congress from the
State of California: Hon. Joe Baca, Hon. Anna G. Eshoo, Hon.
Barbara Lee, Hon. Zoe Lofgren, and Hon. Adam B. Schiff, as well
as Hon. Laura Richardson.]
[The letters from the US High Speed Rail Association and
the California Assembly follow:]

[GRAPHIC] [TIFF OMITTED] T1740.031

[GRAPHIC] [TIFF OMITTED] T1740.032

[GRAPHIC] [TIFF OMITTED] T1740.033

[GRAPHIC] [TIFF OMITTED] T1740.034

[GRAPHIC] [TIFF OMITTED] T1740.035

[GRAPHIC] [TIFF OMITTED] T1740.036

[GRAPHIC] [TIFF OMITTED] T1740.037

[GRAPHIC] [TIFF OMITTED] T1740.038

[GRAPHIC] [TIFF OMITTED] T1740.039

[GRAPHIC] [TIFF OMITTED] T1740.040

[GRAPHIC] [TIFF OMITTED] T1740.041

[GRAPHIC] [TIFF OMITTED] T1740.042

[GRAPHIC] [TIFF OMITTED] T1740.043

[GRAPHIC] [TIFF OMITTED] T1740.044

[GRAPHIC] [TIFF OMITTED] T1740.045

[GRAPHIC] [TIFF OMITTED] T1740.046

[GRAPHIC] [TIFF OMITTED] T1740.047

Mr. Mica. Now, if we have short statements from any other
members on the committee, we will go to the Republican side
first. Mr. Bucshon? OK. Anyone on our side? Any quick--Mr.
Boswell? And we are trying to get to the panel, but you are
welcome.
Mr. Boswell. I will be very short. I have no prepared
statement, I just have a feeling. And I feel strong about it.
And Ms. Brown and Mr. Shuster, I commend you both for your
working to get what you have done. You are both capable, you
are committed, and dedicated, and I thank you for it. And let's
keep working together.
I often say--because I am from the Midwest--we are a United
States. We are connected from New York, California, we got to
go--you know, we got to stay together. It works all ways, it
works both ways.
Now, we think we are sort of the corn belt, and so--in
livestock, and so on. I continue to say that California is the
leading agriculture State, fruits and vegetables. We talk about
that a lot, and we have got to think about those--I have a son-
in-law that is an over-the-road trucker, and he tells me about
what it is like to be out in California. It is tough. We all
know that. So, we need to really do something. And I want to be
supportive of it. I think we all do.
And I am tired of the fact--and maybe you can tell us about
it, because I don't have any issue with anybody on our panel,
none of you. You know, we have got to make things--jobs
America. We all know that. We talk it to death. But we have got
to put our trades, our steel workers, our machinists, our
carpenters are available, and get those materials, and--you
know, it needs to be made in America. So I hope you can help us
in your comments about some of that, and why--so on.
But you know, we have got to put our people back to work.
And I don't make no apology, and I don't think any of us do,
you know. If we are going to do projects like this, why can't
we require that? I am sure the Chinese do, if you are spending
Federal money. In fact, you know they do. So let's do the same
thing. You know, fair is fair. And let's do that.
So, I yield back, Mr. Chairman, and thank you for having
this hearing. And we need to respond to these things. These are
investments with a known return. Read the facts. And let's do
the things that will pay us back, and let's put Americans back
to work in the process. Thank you very much. I yield back.
Mr. Mica. Thank the gentleman. And now, what we will do is
go to our panel of Members who have joined us who are not on
the committee, and have requested to testify today. And we will
do it in order of seniority.
And I will recognize Mr. Cardoza, who represents the 18th
District first.
Welcome, and you are recognized.

TESTIMONY OF HON. DENNIS A. CARDOZA, A REPRESENTATIVE IN
CONGRESS FROM CALIFORNIA'S 18TH DISTRICT; HON. DEVIN NUNES, A
REPRESENTATIVE IN CONGRESS FROM CALIFORNIA'S 21ST DISTRICT;
HON. JIM COSTA, A REPRESENTATIVE IN CONGRESS FROM CALIFORNIA'S
20TH DISTRICT; HON. KEVIN MCCARTHY, A REPRESENTATIVE IN
CONGRESS FROM CALIFORNIA'S 22ND DISTRICT, AND MAJORITY WHIP;
HON. LORETTA SANCHEZ, A REPRESENTATIVE IN CONGRESS FROM
CALIFORNIA'S 47TH DISTRICT; AND HON. DANA ROHRABACHER, A
REPRESENTATIVE IN CONGRESS FROM CALIFORNIA'S 46TH DISTRICT

Mr. Cardoza. Thank you, Chairman Mica, Ranking Member
Rahall, members of the committee. I would like to thank you all
for allowing me the opportunity to testify. I would like to
thank Ms. Richardson for her kind words. And I would like to
start off by also acknowledging what Mr. Rahall said about the
disagreements that sometimes look like reality shows in
California.
Mr. Rahall, this will be my last act this year--because I
have decided to end my tenure on the ``reality show,'' as you
put it. But I will tell you that I am very proud of our cows
and our crops and our students that we produce in our
universities and the good work that we do. We have been
devastated in our area by the home foreclosure crisis and the
economy. And I would like some attention to those questions, as
well as to some of the things for which we get criticized.
You know, before I start my opening statement, I am going
to just mention that this week I cast one of 10 votes in this
House from the Democratic side of the aisle for a Republican
bill to build the Keystone pipeline. I did that because I
thought it was the right thing to do. I took a tough position
against my own party because I thought it was the right thing
to do. And I am going to tell you here today that I think
building the high-speed rail is the right thing to do.
Sometimes we need to get outside of our partisan comfort zones
and do what is right.
Can you imagine, ladies and gentlemen, where we would be if
no one had had the courage to build the Transcontinental
Railroad? We would still be riding the Pony Express. This
country is bigger and better than not having the vision to do
what is right for the future. It is time to step up and do what
is right. And I expect the members of this committee to do
exactly that--what I feel like I did this week, in taking on my
own President on the pipeline, because we should be able to
build things in America.
We have to make this country as great as it should and can
be again. We built the water infrastructure in the State of
California, because we had a visionary Governor who thought
outside the box. He built universities, he built roads, and he
built a water infrastructure that our State is still relying
on.
Ladies and gentlemen, California and our Nation face
challenges related to the economy and our quality of life.
There is incredible congestion on California's highways, in its
airports, costing California's economy--the ninth largest in
the world; it used to be the fifth--over $14.5 billion each
year. Travel on our interstate system is increasing at the rate
of five times faster than the capacity it is being added.
California, particularly the San Joaquin Valley, where my
district is located, has some of the worst air quality in the
Nation. One in six children in Fresno have asthma. My wife is a
family doctor. When she practiced in Merced, 40 percent of her
practice had asthma.
And exacerbating all these other problems are the
challenges that are presented by our rapid growth. California
is projected to add 20 million people by 2050, and the Central
Valley is expected to more than double in size.
You can't hardly get from my part of the Central Valley to
the rest of the State--I have to travel an extra 2 hours to get
to the airport. Mr. Denham does, as well. Mr. Costa is lucky,
he has an airport in Fresno, but you have to go to a different
airport before you can really get far out of the area. Same
with Mr. Nunes.
We have transportation difficulties. We are faced with
these simple facts, and it is clear that investment is needed
to improve our mobility, our quality of life, and our economy
in the State.
In both our Nation's and California's history, tough times
have led to bold, innovative solutions. The opportunity
presented by high-speed rail today is a continuation of that
legacy of visionary leadership. From a practical standpoint, if
we don't construct high-speed rail in order to meet our State's
needs, we would need to build much more expensive highways. As
it was said before, new airports, new runways, all require CEQA
and NEPA permits.
Ladies and gentlemen, my time has expired, and I have about
four more pages of testimony. I will submit it to the record. I
just ask you to think about what is right. Think about the
vision and future of our country. Are we going to move forward
or are we going to continue to tolerate the fact that our
economy is languishing and we are not investing what we should
be investing in America?
I think it is time to quit building roads as we have done
today in Iraq, in Afghanistan, and start investing in
patrolling our streets, and investing back in the United States
of America.
Mr. Mica. Thank the gentleman, recognize the Representative
of the 21st District, Mr. Devin Nunes.
Thank you.
Mr. Nunes. Thank you, Chairman Mica and Ranking Member
Rahall, for the opportunity to testify today.
No doubt we will be hearing from each proponent that high-
speed rail means jobs, thousands of jobs, tens of thousands of
jobs, even hundreds of thousands of jobs. The reality is that
these jobs claims are part of a fantasy. The more you
investigate California high-speed rail, the greater you will be
convinced that California's bullet train is a boondoggle.
It is ironic that the most strident high-speed rail
advocates, people claiming to care about the San Joaquin
Valley, are the very people who refuse to resolve our water
crisis, as Mr. Rahall referred to earlier, refuse to help our
dying timber and mining industries that continue to shed jobs,
and support more rules and regulations that drive business out
of the Valley and California every day.
Today I would like to make three points. It is clear that
high-speed rail is not about jobs. It is about political
corruption, public deception, and bureaucratic experimentation.
First, let's discuss political corruption.
Dan Walters, a columnist for the Sacramento Bee, was one of
many to observe that the initial phase of California's high-
speed rail, the segment between Merced and Bakersfield, was
based on politics, not planning. This conclusion is justified,
based on several factors, not the least of which was the
election eve announcement of a $700 million stimulus grant,
which was the subject of certain conditions. Among those
conditions was a requirement that high-speed rail construction
begin in the rural central California congressional district of
an incumbent who was facing re-election.
Thanks to the stimulus grant, the Golden State's high-speed
rail project has become nationally recognized as the Train to
Nowhere. And since few objective observers believe it will
never be completed, the probability is high that this slogan
will become reality.
Consider these basic facts. High-speed rail was originally
projected to be $15 billion in 1996. Today it is $118 billion.
My estimation is it will be closer to $200 billion than $100
billion. In 15 years, they have spent $800 million. Not a
single inch of track has been laid. California is broke. The
State is in a perpetual budget crisis. And the outlook is red
ink as far as we can see.
The second point I want to make is about public deception.
Mr. Chairman, high-speed rail's popularity has diminished. And,
as stated earlier, two-thirds of Californians want this
referendum back on the ballot to re-vote. Since 2007, no fewer
than 20 PR firms have been hired and have spent millions of
dollars on TV, radio, and print campaigns to convince
Californians to support high-speed rail.
Moreover, the High-Speed Rail Authority has bankrolled a
vast array of political consultants to curry favor with elected
officials. If high-speed rail were widely supported, a
multimillion-dollar PR campaign would not be necessary.
Californians are growing weary of the promises made by rail
advocates, the elusive green jobs, the supposed clean air, the
shorter commutes, all are part of the fantasy.
You don't have to take my word for it, Mr. Chairman. I
would like to submit these reports from the State auditor and
the legislative analysts who have questioned the assumptions to
sell this project.
Mr. Mica. Without objection, they will be made part of the
record.
[Please see the table of contents section entitled,
``Submissions for the Record'' for the documents submitted by
Hon. Devin Nunes.]
Mr. Nunes. The third and final point is taxpayer-funded
bureaucratic experimentation. $800 million have been spent on
studies, public relations, and staff salaries.
Here is an important point. The chief of this Rail
Authority makes $375,000 a year. By way of comparison, the
president and CEO of Amtrak, who has the responsibility for our
entire country's passenger rail system, rail that actually
exists today, is paid $350,000.
Despite the $800 million and 15 years studying the project,
they came up with an average rider fare of $162 for a round
trip. Now, I spent zero dollars, got on the Internet, and
within three clicks found to ride the Acela train, our fastest
train in the country, the Northeast Corridor, it costs $350. It
stretches credibility to the breaking point to suggest that
California will achieve greater efficiency and lower cost than
that of the northeast system which connects Washington,
Baltimore, Philadelphia, New York, and Boston. This is the
busiest rail line in the country.
I did a couple more clicks on the Internet. Remember, $800
million versus my study that cost zero dollars. They promote
that they are going to get 29 to 43 million passengers on this
train. Last year the Acela train carried 10.3 million
passengers. We are being led to believe that the fantasy train
will carry more than twice as many riders at half the cost of
the existing system here, in the northeast.
Mr. Chairman, in conclusion, it has become clear that the
entire California high-speed rail experiment is a case study in
how not to run a government program. And with that I yield
back.
Mr. Mica. Thank the gentleman and recognize now the----
Ms. Richardson. Mr. Chairman?
Mr. Mica [continuing]. The California----
Ms. Richardson. Mr. Chairman? Mr. Nunes, with--was
respectfully allowed additional time to complete his comments,
and Mr. Cardoza, who is leaving this Congress, wrapped up.
Would he be extended, after the other Members have an
opportunity----
Mr. Mica. If he----
Ms. Richardson [continuing]. To give their comments,
another minute or two?
Mr. Mica. If he would like and if we have time. I did----
Ms. Richardson. Thank you, Mr. Chairman.
Mr. Mica. Thank you. We will recognize now the
Representative from California's 20th District, Mr. Costa.
Welcome, sir.
Mr. Costa. Thank you very much, Chairman Mica and Ranking
Member Rahall, and other members of the committee. It is a
pleasure to be here with you today.
America has always attempted to be a Nation of bold,
visionary leaders who dared to think big in times of
difficulty. We are in difficult times, clearly.
And I would like to add a positive note on this because,
frankly, if we--it is important to be transparent. It is
important to be investigative. And this is the appropriate role
of this committee. However, if the attitude that I hear from
some of our colleagues here is to prevail, we would never have
put a man on the moon. Neil Armstrong wouldn't have landed
there. We would not have built the tremendous infrastructure in
the 20th century that made America the number one Nation in the
world.
President Lincoln, Roosevelt, and Eisenhower, Republicans
and Democrats alike, faced difficult challenges when they were
in office. But without these leaders--think about it--we
wouldn't have had the Transcontinental Railroad. We wouldn't
have had the Hoover Dam that was built. We didn't need the
water at the time, and we certainly didn't need the electricity
at the time. And we were in the midst of the Depression. We
wouldn't have had the interstate highway system, if it were not
for President Eisenhower connecting the entire Nation, as was
stated before.
But you want to know tough times? I will recommend you
tough times. Read this book. Nothing like it in the world. By
Stephen Ambrose. It depicts the construction of the
Transcontinental Railroad. You want to know difficult times?
The Civil War. Our Nation was being torn apart. Inflation was
running rampant. The first issuing of paper money. The
President was trying to figure out how to finance the Civil
War. And--but what did he say? ``We are going to build a
railroad across the Nation to bind the Nation.'' That is
vision. That is boldness. That is saying we can do things in
America, not like some of you, who are saying we can't do
anything. If that attitude, that negativism--we can't afford to
be short-sighted.
And so, the task at hand is this: The problem in California
and around the Nation is investing in our infrastructure,
specifically our transportation infrastructure, but also our
water infrastructure. The negative consequences of not
investing in our infrastructure, which engineers across the
country estimate of over $1 trillion, is losing our status as
the number one Nation in the world.
It has been said that the busiest air corridor in the
Nation is the Bay Area and Los Angeles, southern California.
For every four flights, one is delayed an hour. You heard the
numbers, in terms of what it would take to, in fact, address
that: 115 new airport gates, 4 new runways, and 2,300 miles of
new highways. That is at a cost of $170 billion. The cost of
this, factored with inflation over 30 years, is $97 billion.
Don't look at this in a vacuum, look at the comparative
analysis.
More of the same, that is what--we have a choice here. We
have a choice in California, we have a choice across the
country. And that is why it is appropriate to have this debate
and the discussion.
The new draft business plan--and I say the new draft
business plan, and other witnesses will talk about it--answers
some of the critical questions that the chairman and others
have raised, legitimately. Read the new business plan.
Jobs. Jobs are critical. You know, Mr. Chairman, I won't
take umbrage to your description of the San Joaquin Valley. My
family has farmed there for three generations. We are very
proud of it. It is also the fastest-growing region in
California, and we are proud of the fact that we are the number
one agricultural region in the country.
But we also have the same traffic congestion problems, Mr.
Shuster, that you have in southern California and the Bay Area.
You get on 99 and you stand behind those truck convoys, and you
are in their fog in December through January and February, and
the mass accidents, unfortunately, that occur. We have the same
congestion problems in the Valley, and the air quality problems
that they have in other parts of California.
So, this is also a jobs effort, not just in California but
around the country. With unemployment in my area as high as 20
percent, this is an opportunity to create hundreds of thousands
of jobs, good-paying jobs, real jobs that are made in America.
Because the California bond measure has a made-in-California
provision. And we would insist on a made-in-America provision.
Now, let me close by saying--some say, ``Well, it is not
the right time. It is not the right time. We have a deficit. We
have economic problems.'' Those are all true. But I say it is
the right time, not only in California but across the Nation,
to invest in our infrastructure. When borrowing rates are at an
all-time low, when construction and labor costs are at an all-
time low, now is the time to be investing in our
infrastructure. Because the dollars will go further today than
10 or 20 years from now. If they had not invested in Hoover Dam
in the 1930s, think of what it would cost today. If we had not
invested in the interstate highway system in the 1950s and the
1960s and the 1970s, think what it would cost today. You know
what those projects cost in your respective congressional
districts.
Let me say that many members of this committee have said
recently--as recently as last week and today--that they believe
in high-speed rail in the United States. And then, when I hear
some of you say, ``But just not in California,'' I don't get
that. I believe in the Northeast Corridor. I think some of the
criticisms that were raised about this project and other
projects are fair to debate and to address and to resolve. But
don't hold California's high-speed rail proposal to standards
that you are not holding to your own freeway projects or to the
Northeast Corridor. There is an initial sum of funding, there
is a State match, and you complain about not having a long-term
revenue source, but where is the long-term revenue source for
the Northeast Corridor? Where is the long-term revenue source
for any of these projects?
Unless you come up with a transportation plan in this
committee, we are going to have no long-term source for funding
any transportation projects. That is the bottom line. And we
look to this committee to come up with some good decisions,
well-reasoned decisions. And I look forward to working with all
of you.
Thank you very much, Mr. Chairman.
Mr. Mica. I thank the gentleman.
I recognize the California 22nd District Representative,
also the majority whip, Mr. McCarthy.
You are welcome.
Mr. McCarthy. Well, I thank you, Mr. Chairman. And I
appreciate you for holding this hearing. I have a longstanding
concern about the viability of the California high-speed rail
project. I know you have got a group of Members here from
California, and some with different opinions.
The thing I want this committee to look at is what went
before the voters of California. Because what went before the
voters of California for the high-speed rail is totally
different than what is before the voters today.
It is our responsibility and our stewardship to make the
decisions of where our tax dollars go. Because this isn't a
one-time investment. If you look at the project more than
doubling to $100 billion, if you analyze that people are going
to take this rail, and you read the project that more than
twice as many people who ride all of Amtrak is projected to
ride in this by that study, and that study also says $11
billion will come with private money, you have to look to
yourself and also say, ``Does that measure, or is that even
true?''
An interesting thing happened, especially in listening to
my good friend, Mr. Costa from up the road, about the need and
investment. In my district, just yesterday it was announced for
space travel venture Microsoft co-founder Paul Allen, aerospace
designer Burt Rutan fully to go to space with private money.
They are projected, in their plan, to be able to recoup it.
They didn't ask for Government money. They did it on their own.
I also measure an idea that a plan says that the private
sector will come because this will be profitable. There hasn't
been any private sector money come. The plan that done the
research on this says that $11 billion will come after we build
it. That may make for a very good Hollywood movie, ``Build it
and they will come,'' but I don't think that is what the
taxpayers say when they sent us here.
I believe, when you look at this project from the
beginning, when you put the accountability to it now, it is
fundamentally different. And if you do build it and they do not
come, that means what are you going to give up to subsidize
everyone who is on that train. That is a responsibility we all
have to look to.
That was one of the fundamental reasons why I introduced
3143, which will freeze all unspent Federal dollars through
September of next year, while the GAO studies is done on the
project viability. That is not extreme. That is not taking it
and saying no. What that is doing is saying we have a
responsibility to the taxpayers. There is not one person on
this committee that can say that plan that started out is
exactly the same. So what you are saying is stop for a minute.
Let's put accountability to this, and let's actually know. If
we are just going to put money in, it is not the idea to keep
throwing bad money after bad money. If it is never going to be
built, and the project of what you projected to be--that
private sector money would be there, and it is not there.
We should hold the standards to this like any other project
you do. If they said there would be private money in and it is
not, they shouldn't be rewarded. If they said twice as many
riders as all of Amtrak is going to ride this--just in our
Valley, what they predict to ride, the millions of people, if
you look at actual numbers only 700-some-thousand people take a
train or a plane right now. The population does not mix and
match the numbers of what they say.
That is our job every day, as a Member of Congress. That is
our job every day to follow back through. High-speed rail is a
great idea. But what are you going to give up for everybody
that rides it? In a world where we live with a $15 trillion
deficit and a State in which I come from that has a deficit
each and every year, I think we have a different responsibility
here. That is why I introduced the bill I did. Let's stop,
let's get the actual accountability to it, and let's make a
decision that is viable.
If you ask the California voter today, they want to vote on
this again. And they want to vote on it again because they want
to change the vote that took place before. Because they do have
a right to do that, because the whole plan changed from what
was before them.
So, I appreciate having the hearing. It is the right thing
to do to look into this, and it is right to ask the questions.
And I yield back.
Mr. Mica. I thank the gentleman. And let me recognize now
the gentlelady from the 47th District, Ms. Sanchez. I want to
rotate, because we just heard from a Republican.
Ms. Sanchez. Oh.
Mr. Mica. And Mr. Rohrabacher, being a gentleman, said to
go to you first.
Ms. Sanchez. Thank you, Mr. Chairman. I would just say that
in the beginning you said you would go by seniority.
Mr. Mica. Well----
Ms. Sanchez. And I might remind you that if that would be
the case, Mr. Rohrabacher would have gone first, and I would
have gone second. So we were a little confused at the end of
this table.
Mr. Mica. Well, I did it only because we want to rotate
Republican/Democrat, majority/minority.
Ms. Sanchez. Mr. Chairman, you and I have worked on a lot
of transportation issues together, and I know that you do
believe in high-speed rail. And I appreciate that your
committee is taking a look at this project, as we should. All
of us are responsible for the monies that we spend on behalf of
the American people.
You know, I have heard some people be very straightforward
here today about, ``Let's take a look at this project, and
let's figure out how we get it done.'' And I have heard others,
quite frankly, throw out a lot of rhetoric, from both sides. I
just would like to say to my good friend, Mr. Shuster, who
complained that we had spent over $800 billion on the stimulus
package, I will remind you that a third of that was for tax
cuts, which was a requirement in order for us to pick up the
votes here in this Congress.
So, let's really talk about what we need to hear today, and
that is whether we really need a high-speed rail in California
or not. I believe we do.
I mean it really--last night in Los Angeles County--and I
am not from Los Angeles County, I am from south of there,
Orange County, I represent the Anaheim area, where we would
hope the terminus to that, at least one of the phases of that
project would be, Anaheim--we are preparing in Anaheim, with
our multimodal interchange there, to receive the high-speed
rail. There are some local communities who really want this
project, and we are putting our own monies in to make sure that
we are ready to get that project when it comes in. We are
looking forward to the jobs in Orange County.
The Orange County Business Council, I might add, have--
somewhat Republican-leaning council, did a study of this and
said that there would be, just in a phase between Anaheim and
through Los Angeles, 50,000 jobs that would work on this
project. They are very in favor of this project.
Last night in Los Angeles County on the 60 Freeway we had a
big rig turn over and burn to a crisp on that 60 Freeway. And
it happened to turn over underneath an overpass bridge, which
disintegrated also in that accident. Because of that--and I
believe that it happened early in the morning, maybe about
10:00 in the morning--the freeways were tied up, and nobody
could move, probably not even for the commuter hour today. I
saw people on television saying they were trying to get their
child to school in the morning, and at 6:00 p.m. they were
still in the same spot, not on that freeway, on a different
freeway. But one accident tied up all of Los Angeles County.
And what every person said was that there was no alternative
way, but to be on the freeways.
This high-speed rail is an alternative way. And that is why
we need it. Some say, well, we have air. Well, you know, before
I became a congresswoman, when I used to take my flight tests
as a private pilot, I would fly out of Orange County Airport,
the highest general aviation traffic airport in our Nation. And
I would have to wait sometimes 45 minutes to be able to get in
queue because of the planes that got to go ahead of me, the
commercial ones. And we were all burning fuel. That is a cost
nobody ever thinks about, unless you're paying for it as a
student pilot. And now we have increased the capacity, and it
is still not enough at that airport. And we are projected to
have a majority of the new flights for the next two decades to
come out of South County, Orange County. And we will have to go
up to LAX. And there is a fight, because Maxine Waters's
airport has to be increased, and people's homes get taken away,
and the whole thing goes on.
This problem of aviation, this problem of aviation. Why are
there so many flight delays? The weather in San Francisco. Why
are there so many flight delays? The tule fog in Sacramento.
Why is it that when a big rig or somebody has a crash, the
whole freeway stops and people can't come into the Basin? We,
as Californians who use the system, understand we need an
alternate.
And we need to invest. It is never an easy thing to invest
in the beginning. People get voted out of office because we
decide to invest in a railroad, in a new airport, in a new
highway, because we take people's homes. But we must have the
courage to say that we need high-speed rail. And it makes sense
for the backbone of California to have that in place. And it
will cost money. And we need to look at it and figure out how
we make it work.
Before I came to the Congress I worked in transportation.
Before I came to the Congress I was an investment banker who
did infrastructure projects. It is never easy to do these
projects. But if you want to, and you have the guts to do it,
you can get it done. And I say that California needs a high-
speed rail.
Thank you, Mr. Chairman. And I would love to submit my
written testimony for the record.
Mr. Shuster. [presiding.] Thank you very much. I appreciate
that.
And with that, Mr. Rohrabacher.
Mr. Rohrabacher. Thank you very much. You know, when I was
a young person, my father used to tell me that if I was going
to get anything done I had to face reality. And I remember
someone compared this delegation to a reality show. And I think
it is much better to be compared to a reality show than perhaps
compared to ``Fantasy Island.'' And it is on ``Fantasy Island''
that we can keep spending money that we don't have, borrowing
money from China, and expecting that our economy is going to
continue even on an acceptable level.
If we continue with the direction we are going, we know
even with projects that really make sense, we are having to
question them and cut some of them. But if we continue to even
seriously consider projects that don't make economic sense in
the long run, look with Lincoln--and I respect Mr. Costa, he
has spent a lot of time on this project, and perhaps 10 years
ago, when he first started, it would have been easier for us to
make a decision to go ahead compared to the times----
Mr. Shuster. Is your microphone on?
Mr. Rohrabacher. What was that?
Mr. Shuster. Your microphone, could you----
Mr. Rohrabacher. Oh, pardon me. So, let me just suggest
that when Lincoln went forward with the railroad across the
country, he had at his disposal enormous assets in land. And
they used the land for the railroads to actually serve as the
capital for the railroads. And when Eisenhower went forward
with the interstate highway system, he taxed, what, the
gasoline, the people who would then be using the interstate
highway system, in order to pay for the project. That made
sense. That was reality in those days.
Our reality is we are spending $1.5 trillion a year more
than we are taking in, and we are borrowing it from China. And
for us to have a project that continues to go up in price--this
project used to be--I think it was first guesstimated at $41
billion or $43 billion and now it is up to $100 billion. Well,
one wonders how much it was going to be--it will be in the
future. And we cannot afford to continue borrowing from China
for projects that continue to escalate, when we have other
things that are so necessary in California.
We are a water-shortage State. Mr. Nunes and Mr. Costa both
know that their area of the State is really suffering from a
lack of water. Well, the whole State is going to suffer from
lack of water, unless we invest about $30 billion more in water
in California over the years. Well, that makes much more sense
than spending $100 billion on a train--well, as Mr. Nunes says,
the Train to Nowhere.
And let us also take a look--I have been, with Laura
Richardson's help and support, advocating that we build a
container movement system from the ports of Los Angeles and
Long Beach to--inland to the rail heads near San Bernardino,
which would take 10,000 and 20,000 trucks a day off of our
roads--Ms. Sanchez has detailed how crowded they are. We
haven't been able to afford that. And that--by the way, and
that project would have paid for itself with a container fee.
And we cannot move forward.
Our country cannot move forward now with projects like this
that are well intended and, yes, visionary. Some people say
that if your eyes are on the stars, you are likely--and that
is--if you keep your eyes in the stars, you may end up falling
into a ditch. Well, this could put us into that situation,
where we have vision in the future, but we have to look and
solve this problem today. Or otherwise, by the time we build a
train like this at the cost we are talking about, and the
condition of our economy and our budget, we won't call it the
train from nowhere, we will call it the Orient Express, because
that is the people who will own this country, if we do not
start acting responsibly.
Thank you very much.
Mr. Shuster. Well, I thank the gentleman, and I thank all
of you. It is typically the custom we don't ask other Members
of Congress questions. I don't want this to erupt into a full-
fledged debate between our panelists and members of the
committee. That is the debate that will occur in this
committee, and then it will occur on the House floor.
But I would--if some folks have some questions, again, I
want to make sure we don't get into full-fledged debate with
our panelists. We save that for the administration folks, when
we are holding their feet to the fire. Again, typically, we are
trying to get information and viewpoints from our panelists.
I would like to say, for the record, though, that a couple
of people have mentioned my name, which is fine. I do support
passenger rail. I do support higher speed rail. But I believe
we have to do it in a sensible way.
At some point in time California may decide that they have
the money to spend. I am not going to talk for Californians. I
think the polls are clear that Californians want a re-do. I
think they want a Mulligan on this one, because it seems that
these costs are getting out of hand. And the estimates are
completely off from where they started.
I would also like to mention to my friend from California,
Mr. Costa, that if you have congestion on the highways, maybe
the better use of this money would be to expand I-99 in the
Central Valley, and I have heard people talk----
Mr. Costa. May I respond, Mr. Chairman?
Mr. Shuster. Certainly. Just let me make--I think that is
my final point.
Oh, and it was also said that I said that the Northeast
Corridor would be $117 billion. That is not my number, that is
Amtrak's number. My number is I have no idea what the Northeast
Corridor is going to cost, because I--we want to bring the
private sector, and there are people interested in investing
and operating the Northeast Corridor. We want to bring them in
and let them take a view of it and put bids out there, or
requests for information, request for proposals as to what they
think it will be, because Amtrak has really no idea how much it
is going to cost. That is my view of it.
But with that----
Mr. Costa. Thank you. Thank you for raising important
issue. I support the funding of Highway 99, supported a measure
that provided $1 billion for that. The trouble is we need more
funding for that.
I carried legislation in 1986 and 2002 that provided
billions of dollars to build the Fresno Clovis transportation
freeway system. Now, that dislocated hundreds of homes and
businesses. That was over 20 years ago. I submit today to tell
you that if it had not been for that multibillion-dollar
construction project, we wouldn't have the benefits of that
transportation plan. I don't think Fresno and Clovis want to go
back to what it was in 1986.
But it is, I believe, a canard or a bait-and-switch to say
that the money that we are talking about here can be
transferred to Highway 99, because it can't. We know what
happened in Wisconsin, Ohio, and Florida when Governors
attempted to take Federal high-speed rail money and spend it
for road projects. It got taken away. And that is what will
happen with this money.
And as far as whether or not the voters approve today or
would disapprove a bond measure, in the financial crash in
2008, 52.5 percent voted. Now, maybe they wouldn't support it
today. You may be correct. But we have school bonds, we have
water bonds, and we have other types of bond measures which the
voters in California approved. If we are going to wait 2 years,
4 years down the--when a water project is unpopular, say,
``Well, we ought to put it back up there, maybe they will
disapprove it,'' that is an important policy question.
And so, it seems to me that we--there isn't a silver bullet
here, in my view. We have to use all the transportation tools
in our transportation tool box, and high-speed rail is a part
of it. It is going to happen in this country in the 21st
century. The question is sooner or later. But it is part of our
transportation long-term solutions.
Mr. Shuster. But--again, I don't want to engage in debate,
but I still say you have got problems in southern California.
That money would be much better spent to improve transportation
from San Diego to Los Angeles, where you have 20 million
people. I just think that--and as Mr. Nunes has pointed out--
this thing is going to be a boondoggle. California, I don't
believe, is going to be able to afford it.
And again, that is going to be the debate. Again, I don't
want to engage in that----
Ms. Sanchez. Mr. Chairman, may I just say something?
Mr. Shuster. Yes.
Ms. Sanchez. At the southern tip of my district, again, in
Orange County--and I have supported every transportation bill,
I have--you know, I understand the construction of highways,
believe me, from my prior work--at the southern tip of my
district, at the ``Y''--at the El Toro ``Y,'' as we call it in
Orange County--the freeway is 23 lanes wide. You can see it
from the moon. There is not a lot wider we can go in a lot of
areas. So we do need an alternative.
Mr. Shuster. That is why I say spend the money in the
southern California area, instead of----
Ms. Sanchez. I would be willing to build it from Anaheim
through Los Angeles to begin with.
Ms. Brown. Mr. Chairman?
Ms. Sanchez. I am all for that. Thank you.
Mr. Shuster. Mr. Cardoza?
Mr. Cardoza. Thank you, Mr. Chairman.
Ms. Brown. Mr. Chairman, I did raise my hand.
Mr. Shuster. I am going to let them go through, give them
all an opportunity to say something else.
Mr. Cardoza. If I could just say very briefly--I think both
sides have made some relevant points today, and you have to
acknowledge both sides' points.
But I would like to correct one thing that I think is
misleading the committee, and that is that this segment, as it
currently exists, sir, is the fifth busiest train segment in
the country. And it serves over 6 million people a year. And,
frankly, it doesn't do it very efficiently, because it does it
with a short train segment from south Stockton to Bakersfield.
Then you have to take a bus north to Sacramento or you have to
take a bus south to Los Angeles.
If you had the kind of situation that we're talking about
and we would like to have in the State of California, I would
tell you you are going to get exponential numbers of riders,
because there are no alternatives to get our people to where
they want to go in the major metropolitan areas.
We have populations much greater than the size of many
States in this country, and that do not have access, ready
access, to alternative transportation venues. And so you have
to drive a long way to get to where you need to go.
Mr. Shuster. Mr. Nunes, I think, is----
Mr. Nunes. Mr. Chairman?
Mr. Shuster [continuing]. Eager to answer, or respond.
Mr. Nunes. Well, I am not going to--I think you are headed
in the right direction, as to focus the dollars where they can
do the most good.
However, I would encourage this committee to look at two
projects that are rail, but not passenger rail. One is what Mr.
Rohrabacher referred to, which is some way to get freight from
the ports out to the larger rail lines to move products that
come into this country east. That would be the first thing.
The second thing, if you want to help out the San Joaquin
Valley, would be to look at expanding the freight rail system
along existing right-of-ways. So one of the major problems that
we have in the San Joaquin Valley is at the southern tip--we
are congested. You have to go out of the Valley, you have to go
up the Tehachapis that are in Mr. McCarthy's district.
It has been looked at. Although it is a very expensive
project--I think into the hundreds of millions of dollars to
add another line along existing corridors to help alleviate
that traffic--that would help the entire San Joaquin Valley.
That would help all of California. There have been studies out
here on this. But in order to get to that point, this committee
would have to allow California to use that money for rail, but
perhaps not high-speed rail. Yield back.
Ms. Brown. Mr. Chairman?
Mr. Shuster. One second. And most likely it would help the
Nation if you improve the movement of goods and produce and
what you--the foodstuffs you----
Mr. Nunes. Absolutely. It would help out for commerce, it
would help out for air quality. It would get trucks off the
road, all the things that I think would improve the economy.
Mr. Shuster. Yes. Yes, Ms. Brown?
Ms. Brown. Let me be clear.
Mr. Shuster. Well, hold on a second. You have a question? I
am going to----
Ms. Brown. I do have a question.
Mr. Shuster. OK. Well then, I will recognize you at the
appropriate time. I am going to give Mr. Rohrabacher one last
shot, if he cares to say anything else. Each panelist----
Ms. Brown. A question----
Mr. Shuster. I will recognize you in due time.
Mr. Rohrabacher. I would yield to the gentlelady, that is
fine.
Ms. Brown. Thank you. First of all, let me just say this is
the transportation and infrastructure committee.
Now, freight rail is number one in the world. So we--when
you travel around the world, they ask us about our freight
rail. So the freights can afford to fund--if they thought it
was a viable project, they would fund it. We have a problem
with passenger rail in this country.
Now, for every billion dollars we spend, it generates
44,000 permanent jobs. Now I know we don't need to confuse
anybody with facts, but I have been on this committee for 19
years. I have been involved with transportation for over 30
years. Transportation is the engine that puts people to work.
So don't come to this committee telling us, ``Well, you know,
we have this problem in this country.'' We didn't create this
problem in Transportation. This committee is the committee that
puts people to work.
Now, not one of you voted against the Bush tax cut that got
us in this mess. Reverse Robin Hood, robbing from the poor and
working class to give tax breaks to the rich. That is how we
got here. Transportation is the engine that will regenerate
this country.
Now, let me tell you something surprising. I agree with
you, that we need to look at this project. It is not acceptable
to double the cost of the project. We need to look at it. We
need to have a different plan. You all need to come up with a
different plan.
And don't tell me anything about if you put it on the
ballot or you ask the question. Listen. I know that you are
going to answer the question based on how you asked the
question. So if you change the way you ask the question, you
can get a different answer to the question. I am a social
scientist, I know that.
So the question is--I have been to Anaheim--we need to look
at whether or not we need to, you know, make sure what happened
to California is not the same thing that happened to Ohio and
Florida, where we sent billions of dollars back that would have
generated 60,000 jobs in Florida. Yes, we need to look at it.
One of the things we need to do is we need a one-stop
permitting process. If not, in California 20 years from now we
going to be talking about high-speed rail----
Mr. Shuster. Mr. Rohrabacher's time is about ready to
expire.
Ms. Brown. So there are many things we need to do to work
together to----
Mr. Rohrabacher. I would----
Ms. Brown [continuing]. Move people and keep freight and
passenger rail separated.
Mr. Rohrabacher. I think my time has been consumed, but I
yield it back. Thank you.
[Laughter.]
Mr. Shuster. I thank the gentleman. With that, let me go to
Mr. Rahall, if he has a--and what I am going to do----
Mr. Rahall. Just----
Mr. Shuster. One second. I am going to reduce the amount of
time for questions to this panel to 2 minutes, so----
Mr. Rahall. Just a couple of softball questions, if that is
possible.
To Mr. Nunes, we have all heard the figures--this panel has
testified to them and they are common knowledge--about the
expected 20 million people increase in California's population
over the next 30 or 40 years. My question is, what would your
alternative to high-speed rail be, and how would you pay for
it?
Now, I know you mentioned freight rail a minute ago. But as
far as I have been able to discern, the freight rails aren't
too--they aren't jumping up and down to accept passenger
traffic over their lines. So I don't think we can put it all on
the freight lines.
Mr. Nunes. Thank you, Mr. Rahall. Going back to the point I
was making about freight rail, one of the problems we have with
congestion on the freeways is that there are too many trucks.
They go a different speed than the cars. They create a lot of
the congestion problems that we have. I am not against trucks.
The problem is when we have freight rail that gets to the
southern tip of the Valley. Because you have to climb up to an
elevation, I think, of around 3,000 or 4,000 feet, those trains
are only going 15, 20 miles an hour up the hill. And that is
the problem. It creates a congestion that then requires us to
put more trucks on the road that then creates congestion on the
freeways. If we could alleviate--if we could just double the
number of freight trains that we could get on that line, I
think it would make a big difference.
Now, with that said, I didn't come here to talk about
taxes, but I know that the gentlelady did discuss taxes. That
is the committee that I am on. We refer to the Bush tax cuts in
our committee as the Bush-Obama tax cuts. Because I just want
to state clearly for the record that President Obama has
supported to extend the Bush-era tax cut.
Mr. Rahall. Well, in answer to my question, it appears your
sole solution, then, is to reduce congestion by putting more
freight on the tracks.
Mr. Nunes. Yes, because the tracks can handle----
Mr. Rahall. Thank you.
Mr. Nunes [continuing]. The extra freight.
Mr. Rahall. I yield back.
Mr. Shuster. Thank the gentleman. With that I will
recognize again for 2 minutes Mr. Denham.
Mr. Denham. Thank you, Mr. Chairman. Often times when the
facts don't go your way, words like ``courage'' and ``guts''
get thrown out there.
Look, I just want to see this project on time, on budget,
and off of ag land. If it is a $33 billion project that can do
those things, absolutely. But, Mr. Costa, when you talk about a
bait and switch, sure, switching the money to $3.6 billion--or
the $3.3 billion that is left--switching that to Highway 99,
absolutely it would be a switch. But sending $3.6 billion of
stimulus dollars for shovel-ready projects and then letting it
sit for 3 years is not stimulus. And I would consider that a
bait and switch.
I would also consider it bait and switch when you send
something out to the California voters and say, ``This is a $33
billion project, you are on the hook for $9.95 billion of it,''
and then it goes to a $98.5 billion project. That is also a
bait and switch.
So, if we can get this project back under control and get
it on time, on budget, and off of ag land, I would love to
support it. I would like to see a balanced transportation
proposal.
And I just want to correct one thing for the record. We
need to have big ideas. We need to have bold solutions. We need
to look at the future and create jobs. But when you are
throwing out projects like the Hoover Dam, that cost us $50
million in 1931, which by today's numbers would be a $700
million project, or the Boulder Canyon project, which included
the Hoover Dam, the Imperial Dam, the American Canal cost $165
million in 1936, which is roughly $2.5 billion today, that you
have to have the facts and the numbers on your side to be able
to promote those.
So, we have exempted CEQA on projects like LA Earthquake.
Governor Davis exempted CEQA for the jobs in the Bay Area for
the Pac Bell Park. You know, it has been done by Republicans
and Democrats. If you want to get this project back under
control, then look at the environmental side of things. NEPA,
the same way. The President has waived NEPA for important
projects. If this project is that important, then get it back
under control.
Mr. Shuster. I thank the gentleman. Mrs. Napolitano is
recognized for 2 minutes.
Mrs. Napolitano. I won't take that long, Mr. Chair. And I
am for mass transit, mass transit of the working class, of the
people. We have New York, you have it in Washington, DC, you
have it in other major cities, but not in California. That is a
priority for me.
In Spain and China and France, the Government owns the land
that those transit systems are on. They control it. They
determine who gets on it and who runs the systems.
There has been very little mention about the railroad being
able to allow transit on their freight lines. I understand that
they are now willing to do that. Great. Maybe more of that can
be found.
And, Mr. Rahall, you brought up the trucks on the road. In
Long Beach, the Alameda Corridor was supposed to take trucks
off the road, and they are still on the highway, polluting and
being able to not get on the Alameda Corridor itself, because
it is cheaper to get it on the truck. And until that changes,
it is going to continue.
Thank you, Mr. Chair.
Mr. Shuster. Thank you. And with that, I will recognize Mr.
Miller for 2 minutes.
Mr. Miller of California. Thank you. Some interesting
things have been said, one about how you present the question,
and I think that is how they got the first bond passed in
California. But when the people of California looked at the
facts, they want to vote it down today.
But the comment has been made the Republicans don't really
care about high-speed rail. But if you had asked Chairman Young
and then Ranking Member Oberstar, I put $75 million into the
2005 transportation bill for Maglev, and politics has played
games with that money, and it is still sitting there unused.
So--and the money has tended to go from Anaheim out to the
Ontario Airport.
And we talk about lack of capacity? If we stop playing
games in Los Angeles and utilized Ontario, Burbank, and
Palmdale Airport, you could really carry a tremendous amount of
people. What has happened in Ontario specifically is you have
an airport that was half developed, and then we sucked all the
gate traffic out of it and moved it to LA. And the airport is
ready to go double capacity from what they used to have, so
there is absolute capacity in the region.
The other problem is we talked about freight rail. The
problem you have in Orange County and LA County is there is no
right-of-way for the high-speed rail, unless you take the
right-of-way away from freight. So you are going to offset one
with the other, and neither one of those are to our benefit.
And I don't know of any of the rail companies that are willing
to give their freight capacity on rails--which we should
double--to passenger. And that is going to be another huge
problem.
Money. We talked about--and my good friend, Loretta, you
talked about the wide freeway on the I-5. And that is a
beautiful area. But north and south of there we stop. And we
tried to go to the 241, which was totally funded by private
sector dollars, and the Coastal Commission shut it down. So we
had a project that was totally privately funded, and California
Coastal Commission shuts it down, thereby putting more traffic
back on the I-5 Freeway.
If you just go downtown Los Angeles, where the 5, the 10,
and the 101 intersect, that interchange is over 60 years old.
It goes to two lanes. And we don't have the money to fix that.
So, are there things we should be doing in California? Yes.
Are we prioritizing our dollars for the benefit of commuters? I
think not.
But at that, I yield back the balance of my time.
Mr. Shuster. I thank the gentleman. Ms. Brown, are you
requesting 2 minutes?
Ms. Brown. Yes. I have a question for Ms. Sanchez.
Ms. Sanchez, we are looking at how the State--and I know
the next group will talk about it--how they came up with the
doubling of the money, and how they determined where the
different areas would go and why the decision was not made to
go with LA, or that area where the population is, and northern
California. Do you--can you give me some insight as to why that
decision was made?
And basically, I do want to say something about Maglev.
When I do projects or transportation, I let the area decide on
what is the most feasible. I don't say that you have to spend
$75 million for Maglev, because that cost may be more than
using other systems. You just put it out there and let people
bid on it, and see what the bid come back with as opposed to
saying it needs to be this, that, or the other.
Ms. Sanchez. Well, Ms. Brown, let me just say that that
would be a long conversation, and I would certainly love to sit
down with you and sort of walk you through the history of this.
I am very well familiar with it. As I said, I was an
infrastructure investment banker before, and my job was to,
before, sell bonds on behalf of a municipality or a State or a
county to make sure that the project was actually viable.
And there were plenty of projects that I shut down. In
fact, one--there was a particular project where my life was
threatened because I shut it down. It was such a big project,
and I said it wasn't financially viable.
So more than anything else, to my good friend from
California, I would love to sit down and--I mean I would love
to head that agency and get this project done, because I know
how to get it done. But that is not my job. My job is to
entrust it to the panels that will come and talk to you, and
hopefully they can, you know, get the reports together and we
can feel more confident that our monies are being spent
correctly.
One of the reasons that the cost of the project has gone up
is----
Ms. Brown. Double.
Ms. Sanchez [continuing]. Is because there is no right-of-
way that is owned by the Federal Government. So you have to pay
for right-of-way. You have to get right-of-way. When you go
through places, you have to buy that up. Land is expensive in
California. People have ``not in my backyard'' mentalities,
too.
And so, when you say I need to sit down with the
jurisdiction and discuss with them what they want, that is a
long process. The cost has been going up because everybody has
a different idea. Some cities don't want it going through
there, others are dying to have it go through their area.
This is a give-and-take as you go through the process, and
it is a long process. Some of it is environmental. There are a
lot of issues behind it. But first and foremost is that you
have to have buy-in from the agencies, the cities and the
counties, where you go through for this line. And it is a long
process, and an expensive process.
Ms. Brown. Thank you.
Mr. Shuster. Well, thank you, Ms. Sanchez. And thank all of
our colleagues for being here today. This is certainly an issue
that we will continue, I am sure, to debate not only here in
this committee, but maybe even on the House floor.
You know, we do have serious transportation problems in
this country. Funding is a huge issue. And we need to continue
to explore how we are going to do it in a reasonable and
responsible way, and make those investments that really make
sense, and will have a big impact on not only California, but
the entire Nation.
So again, thank all of you for being here. I appreciate you
spending your time. And we will let you guys leave, and our
next panel will assemble.
Mr. Nunes. Thank you, Mr. Chairman.
Mr. Costa. Thank you, Mr. Chairman. And clearly, all is
possible if we can only work together, which often times is in
short supply around here. That is how we built things in the
past.
Mr. Shuster. And I have read the book. It is a good read. I
recommend it to anybody.
Mr. Denham. Mr. Chairman?
Mr. Shuster. Yes?
Mr. Denham. While the panel is coming up, I would like to
submit for the record Senator Doug LaMalfa from California has
a statement to add.
Mr. Shuster. Without objection, so ordered.
[The information follows:]

[GRAPHIC] [TIFF OMITTED] T1740.048

[GRAPHIC] [TIFF OMITTED] T1740.049

[GRAPHIC] [TIFF OMITTED] T1740.050

[GRAPHIC] [TIFF OMITTED] T1740.051

Mr. Shuster. I want to welcome our second panel here. Thank
all of you for coming today. Some of you have testified before
in front of us. Mr. Szabo is a regular participant in these
things. So--but again, all of you, appreciate you making the
trip, many a long distance, to be here today.
Unfortunately, I am going to have to step out after I
introduce the panel, and Mr. Denham is going to chair the
hearing. And with that, I want to introduce all of our
panelists.
First, as mentioned, the Honorable Joseph Szabo, who is the
administrator of the Federal Railroad Administration. Next, Mr.
Roelof van Ark, CEO of the California High-Speed Rail
Authority. Next, the Honorable Jerry Amante, who is the mayor
of Tustin, California, and a member of the Orange County
Transportation Authority Board of Directors.
If I am not mistaken, you are the chairman now, is it? Vice
chairman. Thank you.
Mr. Greg Gatzka--I guess I got you switched up here, I am
sorry--the Honorable Ashley Swearengin--thank you--the mayor of
Fresno. And Mr. Gatzka is from the Kings County Community
Development Agency. Next we have Ms. Elizabeth Alexis, co-
founder of Californians Advocating Responsible Rail Design. And
finally, Mr. Kole Upton, vice president of Preserve Our
Heritage.
Again, I welcome all of you here today. And with that, I am
going to go and pause until Mr. Denham--is he out there? He is
still debating with his colleagues in the anteroom, a lot of
work gets done in the hallways and the waiting areas of
Congress.
But with that, while he is coming, we will go ahead and get
started. Mr. Szabo, you can proceed.

TESTIMONY OF JOSEPH C. SZABO, ADMINISTRATOR, FEDERAL RAILROAD
ADMINISTRATION; ROELOF VAN ARK, CHIEF EXECUTIVE OFFICER,
CALIFORNIA HIGH-SPEED RAIL AUTHORITY; HON. JERRY AMANTE, MAYOR
OF TUSTIN, CALIFORNIA, AND MEMBER, BOARD OF DIRECTORS, ORANGE
COUNTY TRANSPORTATION AUTHORITY; HON. ASHLEY SWEARENGIN, MAYOR
OF FRESNO, CALIFORNIA; GREGORY R. GATZKA, DIRECTOR, KINGS
COUNTY COMMUNITY DEVELOPMENT AGENCY; ELIZABETH GOLDSTEIN
ALEXIS, CO-FOUNDER, CALIFORNIANS ADVOCATING RESPONSIBLE RAIL
DESIGN; AND KOLE UPTON, VICE PRESIDENT, PRESERVE OUR HERITAGE

Mr. Szabo. Well, thank you, Chairman Shuster and Ranking
Member Brown, and to members of the committee. It is an honor
to be here today to discuss the California high-speed rail
project.
The State of California, if taken on its own, would be the
world's ninth largest economy. And it is known across the globe
for its entrepreneurial spirit, top tier educational
institutions, and thriving communities. And California achieved
this status because past generations recognized the importance
of infrastructure, and invested accordingly in ports, in
highways, water systems, railways, airports, and more.
Today, California's highways are amongst the most congested
in the Nation, costing residents and businesses in Los Angeles
and San Francisco alone nearly $13.5 billion last year. Delayed
flights at six of California's major airports had an economic
cost of more than $1 billion last year. Los Angeles to San
Francisco is the most delay-prone short-haul market in the
United States, with approximately one out of every four flights
delayed more than an hour.
The stress on the State's infrastructure will become even
more overwhelmed during the next 40 years. California's
population will grow by 20 million more people, ultimately
reaching 60 million by 2050. And that growth alone is larger
than every State in the Nation, with the exception of Texas.
But if you think highways and runways are crowded now, imagine
what they are going to look like if they are 60 percent more
crowded.
Today, highways in the State can have as many as 14 or 21
or, as we heard earlier, 23 lanes of traffic across. So how can
we possibly make them any wider? It is imperative that these
problems are addressed, and not just for the sake of
California, but for the sake of our Nation.
The airports in San Francisco and Los Angeles are among the
most important international gateways in the Nation, and the
effects of delays at these airports span far across
California's borders. American businesses rely on these
airports to sell goods and services to customers all over the
world, especially across the Pacific. If businesses can't reach
these markets from America, they will look to locate their
operations elsewhere.
Many regional trips can be made more efficiently through
high-speed rail, shifting valuable landing slots from short-
haul flights to more efficient and more profitable longer
journeys that connect the Nation to international markets.
Now, don't just take it from me. When asked about whether
he sees high-speed rail as a threat or a complement to the
airlines, JetBlue's CEO, Dave Barger, said, ``It is a
complement. I don't think we need hundreds of departures every
day from the Bay Area to Los Angeles.'' And Robert Crandall,
the CEO--former CEO--of American Airlines said, ``If I could do
whatever I wanted to, I would upgrade the rail system. Tracks,
equipment, and power. By doing so we would free airplanes, air
space, and airport facilities for flights to places that cannot
be conveniently reached by rail.''
This summer this committee proposed a re-authorization bill
that called on Government to better leverage its private
investment. The California high-speed rail project is exactly
that type of project. The system will generate net positive
cash flow from its operations, incentivizing private investment
in capital construction. And if you want to build it faster, if
you want to build it cheaper, you can make it happen. The
largest cause for delay on the project and escalation of cost
is attributed to congressional gridlock.
California's approach is based on lessons learned from the
international experience that existing assets can be used in
the urban areas. The Central Valley will more than double in
population over the next 40 years. Acquiring the right of way
now, building through the Central Valley, is the best
opportunity to save money during the course of this project.
Without this high-speed rail investment the State would
need to invest an additional $171 billion to acquire the
equivalent level of mobility: 2,300 miles of new highways, 115
new airport gates, and 4 new airport runways. California has a
choice. High-speed rail will provide substantial fast,
frequent, and reliable travel capacity more effectively, at
lower cost, and with fewer overall impacts to California's
natural resources than the alternatives.
And I will be happy to answer any questions the committee
has.
Mr. Denham. [presiding.] Thank you.
Mr. van Ark.
Mr. van Ark. Mr. Chairman, Ranking Member, members of the
committee, my name is Roelof van Ark, and I am the chief
executive officer of the California High-Speed Rail Authority
since 18 months. I come from the private sector, with 35 years
of rail experience, including high-speed rail, and have built
and been involved in such systems and PPP projects around the
world. I am truly appreciative of having the opportunity to
come before you today to talk about the progress of the
Nation's first real high-speed rail project.
I would like to also recognize that my chairman, Tom
Umberg, and a board member, Dan Richards, is with me here
today--they are with me here today.
Mr. Chairman, we in California are at a crossroad. We can
either continue to increase existing capacity on our highways
and aviation systems to meet the population growth, or we can
move into the 21st-century economy by doing what 24 other
countries in the world have done or are doing: namely,
implementing an efficient and effective high-speed rail system.
California stands ready to choose the latter, as witnessed
in the passage of Proposition 1A in 2008. Currently there are
38 million people, 12 percent of the national population, in
the State. Even relatively conservative estimates would have
this population growing to 50 to 60 million by 2015. Explosive
growth will bring with it increasing transportation
infrastructure demands that will need to be accommodated.
It is estimated that in order to accommodate such growth--
you have heard these figures before--2,300 lane miles of
freeway, 4 additional runways, and 115 airport gates are
needed. While many even question the feasibility of such
expansion in the State, the additional environmental damage
that that would result, due to automotive congestion, this will
all be totally unacceptable. And the damage to quality of life
that results from time lost sitting in traffic congestion,
whether from personal perspective or from an economic
productivity perspective, simply does not make sense.
So we stand at a precipice, poised to move high-speed rail
from the planning phase to the implementation phase, and we are
ready to start in 2012, less than a year from now, with shovels
in the ground.
This high-speed rail system will alleviate 3 million tons
of green gas emission spewing from tail pipes of cars which
clog our congested roads annually.
And if that were not compelling enough, the cost and
conservation in realistic terms of the California high-speed
rail system pales in comparison with the cost of the ``business
as usual'' approach. We will build a high-speed rail system
that will provide a one-seat ride from Los Angeles to San
Francisco by 2030, utilizing already existing local and
regional rail services in the cities for $78 billion, which
includes inflation. This does not take into account the
contributions from the private sector which we have calculated
to be in the magnitude of $11 billion to $20 billion.
Alternatively, to accommodate growing use of the ``business as
usual'' approach, the alternative cost to build the
alternatives would be $171 billion.
California represents the best case for bringing high-speed
rail to the United States. Connecting northern California with
southern California--in the north approximately 10 million
people, in the south 25 million people--is exactly right for a
high-speed rail system.
Starting construction in the Central Valley is correct. It
is the backbone of the system. It is a wise and prudent
decision. The Central Valley offers us the ability to start
construction at a place where we can purchase more miles of
track per dollar than elsewhere in the State. It allows us to
test the first real high-speed rail system--in excess of 220
miles an hour--in the United States, and will ensure the
connection between north and south.
I would like to just make some comments on the business
plan, because I was behind the business plan. I did the
business plan. The 2012 business plan represents a just plan.
It is predicated on realistic--some may say rather
conservative, but robust--economic assumptions and the
projections that provide for a transparent and brutally honest
assessment of the costs and a realistic approach required to
construct the largest public-private partnership effort in the
USA.
I can confirm that the costs, the ridership and revenue
predictions, peer reviewed by high-caliber international
experts, the phased implementation approach, the blended system
approach, as well as the participation of the private sector,
are all based on solid and realistic assumptions, and are based
on real-time experiences of high-speed rail systems developed
around the world.
Mr. Chairman, our infrastructure needs a rail, and the
demand of continually growing population will force us in
California to meet these demands in one of two ways. We can
build smartly, by employing lessons learned from countries
around the world, or we can continue to stagnate while building
systems that are less efficient, more environmentally damaging,
and cost more.
I thank you for this opportunity to testify, and I am ready
to answer questions. Thank you.
Mr. Denham. Thank you, Mr. van Ark. And just to clear one
issue for the record, the legislative analyst's office in
California just issued out their new report less than 2 weeks
ago. And in that it says alternative cost estimate overstated
the draft business plan--compares to the estimated $118 billion
cost of constructing high-speed rail, with an estimated $170
billion cost of adding equivalent capacity to airports and
highways. It then goes on to say this comparison is very
problematic because $170 billion is not what the State would
otherwise spend to address the growth in intercity
transportation demand.
Further, it says capacity to carry 116 million passengers
per year, but their highest forecasted ridership is
significantly less than that amount, 44 million riders per
year. That came from the leg analyst's office.
Ms. Brown. Mr. Chairman?
Mr. Denham. Ms. Brown.
Ms. Brown. Usually we let them finish, and then we ask them
questions so they can respond. So he may want to respond to
what you said. But I think the proper protocol would be to let
all of them make their presentations, and then we can ask
questions, and he will get a chance to finish his statement and
respond.
Mr. Denham. Thank you, Ms. Brown----
Ms. Brown. If you don't mind, sir.
Mr. Denham. I understand how to run a committee very well,
but I will correct the record when I see something that is
mistaken.
We will now go to the mayor, Mayor Amante from Tustin.
Welcome to the committee today.
Mr. Amante. Thank you, Chairman Denham. Chairman Denham,
Congresswoman Brown, honorable members of the committee, my
name is Jerry Amante. I am here representing the elected board
of directors of the Orange County Transportation Authority. I
also sit on the LOSSAN Corridor Joint Powers Authority, which
oversees service from San Luis Obispo through Los Angeles and
Orange Counties into San Diego. And I am the former mayor of
the city of Tustin, a major city along that LOSSAN corridor.
The Orange County Transportation Authority is a unique
multimodal agency. It represents 3 million Orange Countians and
Californians, and provides service to them through all strata
of transportation except aviation. And it is from that
multimodal point of view that we address our comments to
California high-speed rail project and its business plan.
We believe that the high-speed rail should be reviewed in
the context of investments in the LOSSAN corridor in general,
and specifically with respect to that portion between Los
Angeles and Anaheim, which would be part of the high-speed rail
program. We own some 42 miles of right-of-way and jointly fund
the operations of commuter rail through Metrolink in that
corridor. Today that LOSSAN corridor, as Chairman Shuster
alluded to, is one of the busiest in the Nation, second only to
the Northeast Corridor. It carries 2.7 million Amtrak
passengers every year, and a combined 4.5 million commuter rail
riders on Metrolink and the Coaster.
In 2007, our agency, OCTA, invested $7 million to advance
the environmental documentation for high-speed rail, the only
public agency to advance money for environmental clearance of a
segment to bring high speed. We believe that high-speed and
intercity rail passenger investment is key to California's
transportation future, connecting the northern sections of
California and the southern Los Angeles Basin, which are some
of the busiest Amtrak and passenger corridors in the State, are
important to a State which, as has already been recognized by
so many members, is about to explode in population to some 50
million or more by the year 2030.
Members like Richardson, Costa, and Sanchez have already
spoken to the intense amount of investment we would have to
make in ribbons of highway. And I live about 5 miles from that
El Toro ``Y,'' where those 23 lanes are, and the devastation to
communities from further widening would be significant, and it
needs to be acknowledged.
We are, therefore, grateful to the Federal Government for
the investment it has made, the matching investment by the
State of California of $1.8 billion in the last 35 years, and
what that has meant to rail improvements throughout the
corridor. We believe a strong Federal, State, and local
partnership, and private funding partnerships through public-
private partnerships to advance passenger rail are critical.
The latest California high-speed rail plan is a marked
improvement over the 2009 business plan. The plan now includes
a blended approach of providing service in our Orange and Los
Angeles Counties, as requested by my agency, OCTA, and by the
Los Angeles Metropolitan Transit Authority. It will provide a
key and critical link between population areas and those new
areas of track to be built. And specifically, we would call out
an important need to connect Bakersfield to Los Angeles, and
not have those big gaps in what we are providing in terms of
passenger service today.
Notwithstanding that concern, we have grave areas of
concern about the plan, itself. Many of them are detailed in my
comments before the committee, and you have them before you.
And some I am going to talk to other Members of this Congress
have already spoken to you about.
Most important to us is the phased delivery approach. We
believe that the introduction of this phased approach into the
business plan is important because it connects two major
population regions, and makes investments where you can attract
public-private partnerships, where you have ridership, and
where on most days there is standing room only on Amtrak
service between Los Angeles and Anaheim. There is ridership
there, and you can take advantage of it when connecting those
areas. We believe the blended approach is very important for
that reason.
We have already heard many people talk about project
schedule, what it does to cost increases. We heard you,
Chairman Denham, speak eloquently to the 1A issues of the State
of California and to the funding of the financial plan. And we
have been critical in our comments of the manner in which some
of the Federal funding for high-speed rail can compete with
CMAC, New Start, and other rail transit funding for programs
that we and other transportation agencies have. We believe that
that needs to be balanced.
Certainly there are operational concerns and cost
comparisons. Of all of them, though, the phasing is the most
important. Yet we believe that these approaches need to be
balanced.
In conclusion, while our board has serious concerns about
some of the specifics included in the business plan, we
recognize the importance of investing. We believe that should
include the bookends approach that we have recommended for the
San Francisco Bay and Los Angeles areas.
We are highly cognizant of the challenges this committee
faces as you try to do work to improve the transportation
system for all Americans. We stand ready to work with you. I
would be prepared to answer any questions.
Thank you, Mr. Chairman.
Mr. Denham. Thank you, Mayor.
At this time I would like to recognize the mayor of Fresno,
Ashley Swearengin.
Mayor Swearengin. Good morning, Mr. Chair, and members of
the committee. My name is Ashley Swearengin, and I am the mayor
of Fresno, California. I want to thank you for the opportunity
to address you this morning. And I am pleased to offer my
comments today in support of high-speed rail as a cost-
effective transportation mode that makes a profit and
drastically reduces travel times between regional destinations.
In reviewing the record of Congress, including this
committee, I am pleased to see that there has been bipartisan
support for high-speed rail dating back to the early 1990s,
through Republican and Democrat administrations and Congresses
alike. And as a Republican mayor and former economic
development professional, I applaud that position and I share
that view for three reasons.
First and foremost is high-speed rail's profitable business
model. No other transportation mode in the world makes a profit
and requires no public subsidies for operations. Yes, public
dollars are required for the upfront capital costs, just as
they are to construct highways or low-speed rail systems or
airports. But once those capital costs are provided for high-
speed rail, the operational costs are paid for by the fare box.
And you cannot say that about any other mode of transportation.
The second reason why I support high-speed rail is the vast
reduction in travel times it offers. Today, when Fresnans need
to travel to Los Angeles they have four choices. They can go by
car, they can go by plane, they can go by bus, or low-speed
passenger rail, which is pretty much just taking a bus. Of
those choices, the fastest option is to drive. And that is
going to take 4 hours if you do not run into traffic in the LA
Basin.
Well, what are the chances of not hitting traffic in Los
Angeles? Well, they are pretty good, if you are willing to
travel between 11:00 at night and 5:00 in the morning. With
high-speed rail, travel times to the LA Basin are reduced by
over 60 percent to about an hour and 20 minutes, and the same
is true when connecting to the Bay Area.
I was asked recently when the last time is that I chose to
take Amtrak. And my answer? I almost never take Amtrak, because
it takes so much longer to arrive at my destination than if I
just drove in my own car. I choose the fastest transportation
option that I can afford, which is what most consumers do.
Saying that Californians won't choose high-speed rail over
their cars because they are not currently riding Amtrak is like
saying, ``I didn't like my dial-up Internet service, so I am
not going to like a fiber connection to my home.'' It is the
wrong measuring stick. And these two are completely different
services.
The last major reason I believe we need to pursue the
development of high-speed rail in California is because of the
affordability of the ticket price. The business plan indicates
the fare on high-speed rail will be priced at 80 percent of
what an airline ticket costs between LA and San Francisco,
which is a tremendous cost savings for us, in the middle part
of the State. You see, a round-trip ticket from San Francisco
to LA is between $120 and $180. But if you are in Fresno trying
to fly to either LA or San Francisco, you have to be prepared
to pay at least $250, and that is if you buy your ticket a
month in advance. As much as $1,400 to $1,500 if you try to
book a flight just a few days in advance.
So, again, we are talking about a transportation mode that
makes a profit, requires no public subsidy for its operations,
and can be fully commercialized and operated by the private
sector. Reduces travel times by over 60 percent for regional
travel, and offers an affordable ticket price, especially for
Fresnans, who are paying in some cases 10 times as much for
regional air service as other cities in our State. This is
something worth pursuing.
No city will benefit more from high-speed rail than Fresno,
which is a city of 500,000 people--and yes, some cows and
vegetables--situated in one of the fastest-growing regions in
the country that already houses 4 million people.
Unfortunately, Fresno's distance from other major urban areas
has limited our economic opportunity. Unemployment rates today
range from 14 to 40 percent in Fresno County. Our region
struggles to gain access to the economic networks of the LA
Basin and the San Francisco Bay area. High-speed rail changes
that dynamic for a city like Fresno, which is why our local
business organizations endorse this project.
And with permission, I would like to submit today for the
record letters of support from the Greater Fresno Area Chamber
of Commerce, the Central California Hispanic Chamber of
Commerce, the Fresno Area Hispanic Chamber of Commerce, the
Fresno Metro Black Chamber of Commerce, and the Economic
Development Corporation serving Fresno County. The membership
of these organizations is comprised of literally tens of
thousands of businesses from throughout Fresno and the central
California region.
Also with permission I would like to submit letters of
support from the Fresno County Council of Government, the Kern
Council of Governments and the city of Visalia, also in support
of high-speed rail.
And finally, with permission, I would like to submit today
for the record a June 7, 2011, op-ed written by the mayors of
Los Angeles, San Francisco, San Jose, Sacramento, and Fresno.
Together, we lead cities with a combined population of 6.5
million people. And while there are differences between these
mayors when it comes to partisan politics, we recognize what a
smart solution high-speed rail can mean for one of the biggest
challenges our State faces: transportation and mobility.
And without solutions for California's transportation
challenges, our economy is hamstrung. And California's economy
being hamstrung does not bode well for the rest of the United
States.
And I would like to close now by just telling you a story
about a business called Commercial Manufacturing that is known
worldwide for the manufacturing of food processing equipment.
If you have ever popped one of those meal-in-the-bags kind of
bags into the microwave and eaten a meal, you know you have
eaten something from Commercial Manufacturing. It is a small
business that employs 41 people. They export their products all
over the world.
Well, their world headquarters are at 2432 Railroad Avenue,
which is in Fresno, California, right on the path of the high-
speed rail alignment. So, of all the people you would expect to
be upset about this proposed train, it would be Larry Hagopian,
the owner of this business that has been in his family for a
number of years. But his reaction to the project? He says this.
``I see this as an opportunity to upgrade our facility, which
will allow us to improve our manufacturing techniques, increase
our sales, and increase the number of employees that we employ.
``Also, as a lifetime resident of Fresno, I see this
project as a chance for Fresno to clean up its south and west
sides, and bring more people back to the core of downtown, not
to mention the positive economic impact on the community from
the jobs associated with high-speed rail.''
And I think his statement captures a sentiment that I wish
to convey to the committee today. I recognize it is not without
its challenges. Mr. Chair, you have made some very good points
today and things I also recommend that we take a look at. But I
urge this committee to support high-speed rail, and I urge your
help in clearing the way for high-speed rail in our Nation.
Thank you.
Mr. Denham. Thank you.
Mr. Gatzka?
Mr. Gatzka. Thank you and good afternoon, Chairman Denham
and members of the committee. I am here before you today to
share some of our experiences and/or observations on how
California high-speed rail is failing in California, in terms
of their planning.
I represent Kings County, which is a small, rural,
agricultural county located in the rich agricultural growing
region of central California.
Mr. Denham. Mr. Gatzka, can I ask you to pull your
microphone a little closer?
Mr. Gatzka. Absolutely. There we go. Is that better? OK.
I represent Kings County, which is a small, rural,
agricultural county in central California, also known as a
region of the San Joaquin Valley. And in that region and in
that county we are highly patriotic, as the county and our four
cities are also home to the western strategic defense base
called Naval Air Station Lemoore, one of the reasons we protect
agriculture.
High-speed rail plans to propose 28 miles to run through
our agricultural county, and we face the greatest agricultural
impacts along the first construction segment. As a result, that
project will potentially devastate our local communities. But
in trying to work with the California High-Speed Rail, we have
been treated with disregard and silence. And this is in
particular to Mr. van Ark and also Mr. Szabo. When it comes to
our legitimate concerns, our property owners are treated with
right-of-way consultant agents that come out and intimidate,
with the threat of taking away their land through eminent
domain.
In terms of specific impacts that have not been addressed
even to this day, some of those include 7,000 acres of farmland
in our county that will potentially be disrupted; 11 dairies
that will require repermitting and relocation; a critical cow
rendering facility that we have that serves 800 dairies
throughout the Valley; our very own Kings County Fire Station
number four, that also has our emergency medical helipad
SkyLife helicopter; also our fire search and rescue helicopter
that serves CAL FIRE; and also our sheriff's patrol helicopter.
In addition, that is also our regional firefighter training
grounds that is going to be impacted by this, and has not been
addressed.
Also, unanalyzed switch of Amtrak San Joaquin service has
not been addressed by the High-Speed Rail Authority, but yet
they allude to it in their business plan, which will also
devastate our local businesses.
Why aren't these issues and impacts being addressed by the
California High-Speed Rail? It is because of their faulty 15
percent design approach that does not give us the answers for
what they are proposing to come through our county. And how
that is going to be integrated with our existing infrastructure
and our communities.
In addition, the expedited public processes that they have
employed rushes to approve their project simply to spend
Federal funds at the expense and sacrifice of our local
communities. Their attitude is, ``We only need to listen to the
Federal Railroad Administration and we don't have to deal with
local impacted communities.''
In fact, their project EIR and EIS released for only a
minimum 45-day public review comment period--then extended for
a token 15 days--included 30,000 pages that we were forced to
have to review to find those answers. What we found was
deferred impacts, in terms of their analysis and mitigation for
impacts related to high-speed rail in relation to our
communities. After project approval, they will figure out those
answers. They rely on contracted right-of-way agents to take
care of business after the project approval process. Full
public disclosure has not occurred, and the impacts are not
addressed in any accountable manner.
Our county is not against enhancing transportation where it
makes sense. But we cannot accept the manner in which the
California High-Speed Rail Authority continues to carry out
business. And we are not alone. Communities along the proposed
route are also up in arms. Just to inform you, just even last
night, the Bakersfield City Council voted six to one to oppose
any high-speed rail coming through their community because of
the same issues that we are dealing with which are unaddressed
impacts.
So, in closing, I want to thank you for the opportunity to
speak, share what we are experiencing in Kings County in
relation to California high-speed rail, and I also wish all of
you the best in your endeavors to make sure that you bring
accountability to not only this project, but also the use of
taxpayer funds. Thank you.
Mr. Denham. Thank you.
Ms. Alexis?
Ms. Alexis. Mr. Chairman, thank you for the opportunity to
appear before you. My name is Elizabeth Alexis, and I am the
co-founder of Californians Advocating Responsible Rail Design,
also known as CARRD. I have spent 3 years analyzing the
business plans and ridership forecasts.
We believe in rail. But this project is on the wrong track.
It costs too much, it takes too long, and it delivers far, far
too little. If you liked the Big Dig, you will love California
high-speed rail. This is a project of the consultants, by the
consultants, and for the consultants.
For most of its existence, the California High-Speed Rail
Authority had been off on its own, operating as a small, poorly
funded organization disconnected from the regional
transportation authorities. Impacts had been downplayed to
secure support. Critical decisions about the route were made
without feedback on their feasibility or consequences.
The route was divided up into 10 different segments of
about 80 miles each. A different firm was hired to plan each
section. Each of these firms hired their own team of
consultants. Another firm was hired to oversee these
consultants. And their work was to be reviewed by yet another
engineering firm. No consultant was to be left behind. Four
layers of consultants overseen by seven staff members. You can
imagine the communication difficulties, the coordination
issues, and the limited flexibility.
Planning work, top-down, heavy-handed, one-size-fits-all.
Reminiscent of the worst aspects of highway-building, resulting
in designs that are both expensive and bad.
Things got worse when the project won stimulus funds. These
had deadlines that drove decisionmaking in California, and put
everything into high gear. The ridership model has flaws that
render it not just useless, but dangerous. Plans to redo it? No
time. Plans to reform the highly politicized governing board?
No time. Despite voter concerns with the cost, and legislators'
fears that the project will be a money pit, there are pressures
to continue moving forward without fixing the problems. Job
claims have been hyped, and legislators have been told they
need to act now, or there will never be high-speed rail in
California.
If the project moves forward as is, there is a good chance
that the State will be forced to spend more money trying to
salvage something useful from the initial construction. And in
California, this means there will be little money for other
infrastructure projects like water. Congressman Cardoza
mentioned devastating cuts to higher education. Well, there
will be more of the same.
The current route is so destructive to cities and
agriculture that there may not be any net jobs to show for it.
Respectfully, Mayor Swearengin, in cities like Fresno you could
not run over more businesses if you tried, and many will not
survive the move.
The $3 billion of Federal funds is the tail wagging the $98
billion dog. The project is now at a crossroads: 2 years ago,
costs were $43 billion, and today $98 billion. There will be no
private investment. And California will be looking to you for
another $73 billion to complete the project. Public subsidies
will be almost more than $100 for every passenger in the first
30 years of operation, which is higher than the ticket price.
The $171 billion figure thrown around ignores cheaper ways of
addressing congestion, like the congestion pricing in Los
Angeles, and the airport's plan to be more efficient.
The stimulus money, along with California's money, will buy
unelectrified tracks in the Central Valley that won't run high-
speed rail trains until an additional $25 billion is found to
extend the line to either the Bay Area or somewhere near LA.
These cost increases are blamed on design changes. But most of
these should have been anticipated, or had actually been made
prior to the low-ball December 2009 estimate. There have only
been excuses, not investigations. The cost per mile is two to
five times what it would cost to build this in Europe. And the
route is needlessly long, an extra 100 miles from San Francisco
to Los Angeles.
You have to ask yourselves, ``We may have only $6 billion
to spend, and this is what we choose to spend it on?'' There is
no more funding on the horizon, and there may not be any more,
given the challenges the Authority has had in executing. There
are so many other urgent transportation needs, like we have
heard about in Los Angeles, that could also help advance high-
speed rail.
The project needs flexibility from the Federal Government
so it can take a time-out. It needs to get an independent
ridership study. The current one predicts ridership from San
Jose to Bakersfield will be as high as the entire Northeast
Corridor. It is broken. The current relationship between the
Authority and its consultants is unhealthy. If the private
sector is driving planning, it needs to have skin in the game.
Mr. Chairman, supporters like to compare this project to
the Golden Gate Bridge. But this is fool's gold. Do we need
high-speed rail in our State? Absolutely. But the train we are
on is in the wrong place, it costs too much, and it delivers
too little. Thank you.
Mr. Denham. At this time the chair recognizes Mr. Kole
Upton, vice president of the Preserve Our Heritage, as well as
a local Valley farmer.
Mr. Upton. Thank you, Mr. Chairman, committee members. I do
represent Preserve Our Heritage. It is a group of citizens,
farmers, about 200 to 300 of us in Merced and Madeira Counties
that have concerns about this project.
We first received word that our land was impacted in
November 2009, with a letter from the Authority. What we did,
we went to the next Authority board meeting and expressed our
concerns that the route was not following the guidelines of
minimizing the impact of ag land and using existing corridors.
The chairman at that time was Mr. Pringle. He urged us to roll
up our sleeves and participate in the process. We thought that
was a good idea, so we have done that for 2 years.
In March of 2010 the route that we were complaining about,
A3, was taken off the table. I then got on some technical
committees as an elected official, two water districts. Prior
to that it was just city and county officials, but we got some
rural members on there.
In June of 2010 I made the question, ``Do you support any
`Y' north of the Chowchilla''--that is the ``Y'' section.
Unanimous opposition by every public agency. Yet, in July of
2010, the High-Speed Authority comes out with a route called
``The West Chowchilla Design Option.'' Yes, you guessed it:
north of Chowchilla. So I asked the question, ``Why would you
choose something that was unanimously opposed by everybody, if
this input process has integrity?''
``Well, the city of Chowchilla wanted it.'' Well, the city
of Chowchilla immediately said, ``No, it wasn't us. We don't
want it,'' and they are still actively opposed today.
So then they said FRA wanted it. So we did a Freedom of
Information request to the FRA December 3, 2010. Despite the
best efforts of Mr. Denham and Mr. Cardoza, we have received
nothing from the FRA. So, unless Mr. Szabo brought it with him
today, we still don't have any answer as to why FRA would
demand this particular route, which is the most abominable one
possible. It does not follow an existing corridor. Not even the
local wildlife use it as a corridor.
The impact to farmland. The problem is when it goes through
it impacts facilities that we have had in place for decades.
And Mrs. Napolitano is aware of this, because she has helped us
with the water district facilities that kind of thing. It takes
out an entire canal in my district, the pumps, the deep wells,
the transfer facilities. And it has taken decades for this to
develop. We are some of the most water-efficient farmers in the
world, but this is going to hurt us.
If you are going to do this project, it ought to be
integrated in with the infrastructure that exists now. And in
order to do that, we have to work together.
Now, these construction workers, there is a lot of them at
the meetings we go to. When we talk to them, they don't tell
you, ``We want a job, but it only can be high-speed rail.''
They just want a job. And there is plenty that can be done in
the Central Valley.
One, we can build Temperance Flat. Cost them about $3
billion, which would give us a much better water supply and
ensure that we could supply food and fiber for the people of
the United States. We are one of the only five Mediterranean
growing regions in the world.
Now, one place that it did create jobs was in the EIRs.
When the draft EIRs--as Mr. Gatzka pointed out--came out, we
had to hire EIR specialists and lawyers in order to get through
it. I personally went through the one through my area as we
divided it up with Preserve Our Heritage. The problem, one, the
roads were misidentified, the counties were misidentified, and
the rivers were wrong. In order to comment on it, I had to
rewrite it.
So we are going to challenge that EIR. And in so doing, we
want to make it clear that we support Kings County, because
Kings County is first up on this thing. And we know if they get
thrown under the train, we are next. So, it is important that
they start treating ag right, and they start going by the
guidelines that are in place.
We want to support our legacy and our heritage. My father
started my farm when he got back from World War II. He started
with 100 acres. He had spent 3 years in Europe. And I live on
my farm, my son lives on my farm, and my brother lives on my
farm. It is not something that we are going to give up easily.
So--I think Kings County is in the same position.
I assume you brought me here for my opinion. If the opinion
is of a taxpayer where to spend the money, you ought to do it
like Willie Sutton said. He robbed banks, because that is where
the money was. For goodness' sake, put this high-speed rail
where the people are. If it is the northeastern corridor, if it
is Anaheim to San Diego, if you insist on doing it in the San
Joaquin Valley, like the FRA apparently wants, then do it on
the west side. They don't have any water over there anyway,
there is not a lot of impacts, and it would be a straight shot
from San Francisco to LA.
But if you insist on doing it in the central part, on the
east side of the San Joaquin Valley, I am reminded of a story
back in the last century of an old farmer that took his mule to
town every day. And a salesman approached him and said he could
really improve on that situation, and convinced the farmer to
buy some roller skates for the mule. OK. The mule, yes, he
could get to town a lot faster, but it wrecked havoc all along
the way. That is like this high-speed rail. OK? If they don't
do it right, they are going to wreck havoc all along the way.
So, we are looking for you folks to help us with that, to
do it--if it is done right, let's do it and do not impact the
farmland. Thank you.
Mr. Denham. Thank you, Mr. Upton. I would just inform the
committee that Mr. Szabo, the administrator for the Federal
Rail Administration, does have an engagement at 1:00. And so
you may want to direct your first round of questioning with
that in mind. And that is exactly what I plan on doing first.
So, first of all, we had a hearing last week with Secretary
LaHood testifying regarding the California high-speed rail
project, that--``We won't be dissuaded by the naysayers and the
critics,'' was his quote. The critics here, however, are not
simply just individual citizens, but also the non-partisan
legislative analyst's office in California, the same as GAO,
which has said, ``It is increasingly likely that the ICS may be
all that is ever built,'' and also the peer review group, who
has also said, ``The Central Valley portion would yield an
asset of very little value.''
So, the question is, if that is the likely outcome, why
wouldn't the department of transportation re-evaluate whether
the project is worth more than $3 billion in Federal funding?
Mr. Szabo. Well, we continue to support the California
High-Speed Rail Authority in the efforts of Governor Brown. We
continue to believe that the need for the project is
indisputable. And we also believe----
Mr. Denham. Do you disagree with the findings----
Mr. Szabo. And we also believe that the work that has been
done with this most recent business study, which has gone
through a very, very thorough international peer review, is a
very, very conservative document that begins to address many of
the legitimate concerns that folks have had. But we continue to
believe that it is--from all analysis, continues to be a very
strong and very doable project.
Mr. Denham. Thank you. Mr. Szabo, you said, ``from all
analysis.'' I would just remind you that California has a--
almost a super-majority of Democrats in the Assembly, almost a
super-majority of Democrats in the Senate, and has a Democrat
Governor. You would not say that the non-partisan legislative
analyst's office is a conservative estimate by any means, would
you?
Mr. Szabo. What I would say is we find it interesting that
they have had no dialogue with us--none, not one conversation.
And, frankly, we believe that we can provide a lot of
professional technical analysis and assistance that is based on
our experience from looking at projects around the world from
decades of experience and, quite frankly, could probably
clarify a lot, an awful lot of the misconceptions that they
have.
Mr. Denham. So State and Federal Government are just not
communicating?
Mr. Szabo. The State government and our office is
communicating very effectively. California High-Speed Rail, we
are communicating very effectively. My point is that for some
reason the LAO has not chosen to engage us at all in any
discussion, not one, to better understand some of the issues
and some of the concerns that they raise.
Mr. Denham. Have you reached out to them?
Mr. Szabo. I can find that out for you. I don't know. I
have not, personally.
But again, if they are doing research and want to be
unbiased and accurate, isn't it incumbent on them, as they do
their research, to make sure they talk to everybody that is
appropriate?
Mr. Denham. I----
Mr. Szabo. I mean you don't limit your research to just
those sources that you want to hear from.
Mr. Denham. No, I would absolutely agree. But the
California taxpayers are on the hook for $9.95 billion. And in
that bond it was written in that the legislature could call
that back at any time with a majority vote.
So, before the Federal Government comes to this committee
and says, ``We need $50 billion for high-speed rail, all of
that going to California,'' I would assume that California's
commitment of $9.95 billion, at the minimum, would--there would
be a conversation there. I mean that would only seem likely.
And if California is not communicating with you, well, I don't
know why you would obligate the rest of the taxpayers across
the Nation on anything further. So my recommendation would be
to--I will recommend to them as well--but obviously, we need to
start some better communication.
Second question I have is you note in your testimony that
Amtrak's San Joaquin's service could be routed over the IC's
infrastructure. What is the likelihood that service would
ultimately be routed over the ICS, assuming that it stops right
there, which is what is covered under the current legislation.
If it stops there, what is the likelihood that Amtrak would
actually use----
Mr. Szabo. A couple of points. A couple of important
points. I mean first off, should there be a delay in
constructing the first operable segment, we very easily could
use this completed segment for operation in the San Joaquin's.
And it is important to note that that is the fifth
largest--fifth most utilized, most heavily used route on the
Amtrak system. That region is home to almost 6 million people.
The Central Valley, you know, people are calling it nowhere. If
taken alone, it would be larger than two-thirds of the States
in our Nation. So this isn't nowhere. It is an area that has
significant population. And that segment most assuredly would
be used.
Mr. Denham. And just to be clear, the construction segment
is the $5.2 billion segment, which is covered under the $3.6
billion from the stimulus dollars, with additional funds coming
from the State.
Mr. Szabo. Right.
Mr. Denham. The operating segment--so the construction
segment that we are talking about Amtrak using would be from
just north of Fresno to just south of Fresno. So----
Mr. Szabo. Yes. Again, assuming----
Mr. Denham [continuing]. That would actually----
Mr. Szabo. Assuming that there were some delay in
completing the first operable segment, the construction segment
could be put into use very, very quickly, very, very easily.
And that would provide immediate utility for that segment.
Mr. Denham. It is my understanding--and, Mr. van Ark, you
can clarify me, if you would--but the construction segment, the
$5.2 billion, does not connect with Amtrak. But the operational
segment which goes from Fresno to Bakersfield does connect, the
difference being about $25 billion, one is $30 billion, the
other is $5.2 billion. So we are going to have to come up with
not only the State obligation, but another $30 billion on top
of that.
Mr. van Ark. Mr. Chairman, the initial construction section
starts close to the ``Y.'' That means north of Fresno. It is
approximately 130 miles, and it stops just south of
Bakersfield. So it is a 130-mile section.
The initial operating section goes either to San Jose in
the north, or alternatively--that would mean from Bakersfield
all the way to San Jose, or from Merced all the way down to the
San Fernando Valley. That would be the first initial operating
section.
Mr. Denham. So the construction segment of--the $5.2
billion definitely would----
Mr. Szabo. Can easily----
Mr. Denham [continuing]. Would be usable for Amtrak.
Mr. Szabo. Can easily be usable.
Mr. van Ark. Correct, correct.
Mr. Szabo. Yes, yes.
Mr. Denham. Thank you. And what happens to Federal funds if
voters of California rescind the State bond, either through
going back to the ballot, or if the State legislature, on a
majority vote, decides to pull back the funds? What happens to
the Federal funds, Mr. Szabo?
Mr. Szabo. Well, I don't think I want to speculate on what
California voters may or may not do. We have made a commitment
to the California High-Speed Rail Authority and to the people
of California on this project. We are going to deal with the
facts that are at hand.
And, you know, we are committed to completing the first
construction segment. We believe that if the first operating
segment is completed, it will in fact turn a profit day one and
be the catalyst that we need to bring in the private
investment.
I think that is the most important thing to remember here.
We are truly talking about a public-private partnership. And
the worst thing that we can do is show uncertainty. Because if
you are showing uncertainty you are actually generating risk
for the private sector that is going to minimize their
willingness to come forward. And right now there is very, very
strong interest from the private sector in this project.
And so, we need to be taking all the steps that we can to
ensure the project's viability, and to present that foundation
for the private sector investment.
Mr. Denham. My question is, the same way that if I were
going to invest in something as a private investor, I would
make sure that there was certainty, as well. I would make sure
that if funds were not available, if the other side did not do
what they said they were going to do, that I would have an
ability to pull out of my obligation.
Now, I know that there is no obligated private investor out
there. But, from a Federal perspective, you are obligating
Federal taxpayer dollars. So there must be some type of
contingency to say if California does not come up with their
fair share, the Federal Government is able to rescind theirs.
Mr. Szabo. We are committed to the project. We have made
the obligation, and we stand behind our commitment.
Mr. Denham. So if there is no private investor and there
is--just want to be clear--no private investor, California
doesn't come up with their money, which they have not done to
date--which the attorney general or the Governor has not come
up with the money, neither has the State legislature--if that
money does not exist, you are still willing to put more Federal
dollars out there than what we currently have? That is the
Administration's----
Mr. Szabo. We are not talking about more Federal dollars at
this point. I am talking about the commitment that we have made
in this initial obligation. We have made it, we are committed
to the first construction segment, and we are not going to
flinch on that support.
Mr. Denham. OK, but there is no----
Mr. van Ark. And, Mr. Chairman----
Mr. Denham. Mr. Szabo, there is an important aspect here.
The initial segment is $5.2 billion. You can correct my math if
it is off anywhere. I believe it is $5.2 billion. Of that we
have $3.3 billion left in stimulus dollars.
So, are you saying we are going to go ahead and obligate
the $3.3 billion to this first part of the project, regardless
of whether or not the State ever comes up with their matching
dollars?
Mr. Szabo. That obligation has already been made. We have
legally obligated those dollars already, and we are prepared to
move into construction in spring.
Mr. Denham. You have obligated them with the $2 billion of
State dollars.
Mr. Szabo. They are obligated based on all of the
appropriate contingencies, of course, you know, to make sure
that California High-Speed Rail meets all their obligations.
So, you know, of course there is a list of contingencies that
ensure that that first construction segment goes forward in
accordance with the cooperative agreement That we have signed
with them.
But provided that all of those contingencies are met, you
know, we stand behind--the worst thing we could do is make
obligations to folks, and then start to renege on our word.
Mr. Denham. OK. Let me ask the question a different way.
We start obligating dollars, the money starts getting
spent. Shovels start getting put into the ground. If the State
government reneges, if the State government does not put their
money out there, do you continue to spend the $3.3 billion?
Mr. Szabo. Well, here. Again----
Mr. Denham. If there is a contingency in place, there has
to at some point be----
Mr. Szabo. Yes.
Mr. Denham. The money is not there today.
Mr. Szabo. I am not going to speculate on what the State
may or may not do. But certainly all conditions of the
cooperative agreement have to be met before we expend dollars.
Mr. Denham. Sir, I am not asking you to speculate. I am
just making sure that you have a safeguard to taxpayer dollars.
Mr. Szabo. Of course, through the cooperative agreement. So
all of the conditions--we sign an agreement. We sign a
cooperative agreement with the California High-Speed Rail. It
outlines all of the requirements for that agreement to be
satisfied, and allow for the expenditure of the dollars.
So, you bet there are significant safeguards built into
each and every one of these agreements we sign with the State.
Mr. Denham. Thank you. This committee would request a copy
of those documents.
And, by the way, we are still waiting for the documents
that Secretary LaHood had promised that we would have before
this committee started. So just as an FYI.
I am way over my time. I will certainly be very lenient
with the time of other Members. And at this time I would like
to recognize Member Napolitano.
Mrs. Napolitano. Thank you, Chairman Denham. It is
interesting. As you know, most of you have already had
conversations with me at one point or another about how I feel,
and how I have questions. Not only have people stated that they
have to appease me--it is not me, it is the cities that I
represent who have concerns about the issues on the high-speed
rail moving forward.
Mr. Szabo, there is a couple questions. Well, first of all,
let me say to Mr. Denham that I am--and I did mention it to
him--that I am disappointed that nobody from the LA County--
only about 13 million people--are represented here. It is a
major community that is supposed to be a player, and it is not.
And again I go back to the fact that we have not had a
continuing dialogue with the High-Speed Rail Authority for
almost two--a year-and-a-half. And that is the last time that I
know that we have been asked to sit at the table to talk about
what is happening. And I hope that changes. Otherwise, you will
be hearing from me again.
There are assertions about the ridership of--that is going
to pay for itself, that is going to be a boost to the Central
Valley, the hardest hit on unemployment, that it is going to
create all these--and those facts, those figures, are coming
from somewhere. But we don't know whether they are viable or
not. Who is making those figures up?
And I agree with the gentleman from the Valley on the water
issue, because that is one of the biggest things that we try to
protect, is the delivery of the water for the farms to continue
to produce--the breadbasket of the United States and for the
rest of the world in many areas. Is that growth viable?
And then the other question that comes up--and this is to
anybody--who owns the major country high-speed rail abroad? Who
owns it? Who controls it, so that you don't have to pay for the
land, which--it is part of the biggest cost of this high-speed
rail issue.
And you talked, Ms. Swearengin, about public rail paying
for itself. Not even Amtrak pays for itself. So it is always
subsidized. This will continue to be subsidized.
Mr. van Ark. No.
Mr. Szabo. No.
Mrs. Napolitano. Well, that is only assumptions. Again, you
are saying don't use assumptions, but we are allowing you to
make assumptions. So unless you can really corner them and
State where those assumptions are made from, it is not usable.
Then there was an issue not too long ago of where analysts
were saying that the cost to build--the guesstimate cost to
build the high-speed rail would have been less than what is now
projected. Number one, because there was high unemployment, and
people were hungry to get to work. There was a lack of being
able to get materials, et cetera, but that became a non-issue.
Yet I have heard from others that this is--would have been
less, but the figures that are being used are blown up, they
are more than they should be. So, I mean, it brings a lot to
the--to--back into this fray.
And to Mr. Szabo, the monitoring and oversight, does that
also include the ability for High-Speed Rail Authority to work
with the communities, and ensure that they have not only the
right-of-way, the past resolutions--as you heard, many cities
have already passed resolutions banning it going from city--
because I was told by High-Speed Rail Authority in a meeting
with my three COGs--77 percent of the cities in LA County--that
there was no option for them, that it was going to, whether
they liked it or not. And I raised my hand and I said, ``Yes,
you do. You go to court.''
Mr. Szabo. Congresswoman, you have had so many questions in
there, it is hard to----
Mrs. Napolitano. And I can keep going, too, Mr. Szabo.
Mr. Szabo [continuing]. Work through them all. And I think
there are good answers to every one of them.
First off, let's talk about working through the
communities. And, you know, it comes back to something that
Congressman Denham said earlier, you know, Congressman, your
frustration with the NEPA and the CEQA process. But
unfortunately, that is the process that ensures that the
communities get a voice, a very, very necessary voice.
Mrs. Napolitano. Just for a second, Mr. Szabo----
Mr. Szabo. And that is why we have to work through that
process.
Mrs. Napolitano. Yes. But----
Mr. Szabo. If I can----
Mrs. Napolitano [continuing]. Let me clarify NEPA/CEQA. We
are trying to clarify that for California here in this
committee, trying to make sure that it is acceptable to use
NEPA and CEQA----
Mr. Szabo. Yes, yes.
Mrs. Napolitano [continuing]. Without having to go
through----
Mr. Szabo. But I would like to come back, you know, to the
frustrations and the concerns of the--that Kings County raised.
You know, it is one of the reasons why, you know, in October we
announced that we were going to do a supplemental environmental
study for them, you know, re-open the record. And it was a
matter of listening to the concerns that they have, and trying
to find a way through the process, to make sure that the
community has an opportunity to engage.
So, absolutely. You know, we monitor and work with the
California High-Speed Rail Authority through that environmental
process. It is a requirement of law and, you know, is an
important tool to make sure that a lot of these important
issues and frustrations, concerns that communities have, have a
process to get flushed through, and to make sure that there is
a good record from which the final determination is based.
Mrs. Napolitano. Have you been in contact with my COGs, my
councils of government in LA County?
Mr. Szabo. Certainly they have been a part of the
environmental process, yes.
Mrs. Napolitano. When? I am sorry, but I have not heard
from them, so I can't say that truthfully. I am sorry, go
ahead.
Mr. Szabo. No, but certainly I can allow, in a minute,
Roelof to comment on what their outreach efforts have been
through the environmental process. But I would really like to
come back to the ridership, because I think there is a couple
of very important points to be made there.
First off, if you take a look at the ridership analysis
that California High-Speed Rail did in their business plan--and
I will let Roelof drill down a little deeper on this in a
minute--but it is actually very conservative.
When it went through the international peer review--again,
by those that have built and operated high-speed rail around
the world for decades--it was found to be very, very
conservative and used as a ratio that is actually less than
one-to-one, population versus projected ridership. And if you
take a look at most of the systems around the world, it is
substantially higher, usually a three-to-one ratio, or--you can
correct the record if I am wrong--in France is it almost a
four-to-one ratio.
The comparison to the Northeast Corridor is a very, very
false comparison. It is not even apples to oranges. It is an
apples to bananas comparison, for a couple of reasons.
Mrs. Napolitano. OK, Mr. Szabo, we are running out of time.
Would you mind wrapping it up?
Mr. Szabo. OK. The biggest reason you can't compare the two
is, first off, the Northeast Corridor is capacity constrained
today. Ridership is stunted because virtually every train is
selling out. So we are not even measuring what the ridership
potential is there if there was sufficient capital to make
additional investments there.
Secondly, the type of service that California High-Speed
Rail is talking about is much different and far superior to the
existing Acela service that exists today. Acela would be
considered more what we call regional service under the new
high-speed rail vision.
Mrs. Napolitano. OK, thank you. And I have been to--with
Ms. Brown. She invited me to a CODEL to all these foreign
countries. I rode on them. We talked to the boards. We asked
questions. So I am aware of how they operate and where they
operate.
So--and you talk about apples to oranges. They travel at
almost--what, 225 miles per hour, Corrine?
What is the highest speed we are going to be able to
achieve here? Because the stretches are so small, in terms of
some of the--not the inner cities, but some of those areas. I
know my topography, too, a little bit. Not that well, but----
Mr. Szabo. No, the vision for the California project is 220
miles per hour.
Mrs. Napolitano. In some areas. But in my area----
Mr. Szabo. Substantial----
Mrs. Napolitano [continuing]. When they were looking at
going from LA to San Diego, they were going to destroy a built
transportation center because it had a curve in it, and build a
new one. And I think, ``Well, wait a minute. What--how sense
does this make--how much sense does this make?'' And to build a
curve over into Santa Ana area, to the Orange County instead of
all the way down to San Diego, doesn't make quite sense by
curving it or coming back and making two rail heads.
There is a lot of explanations that have not been
clarified. And we need to be able to say--if this is a second
phase and we are in it, then we want to be sure that the
Authority is working on the same----
Mr. Szabo. Right, right.
Mrs. Napolitano [continuing]. From the same plan that we
need, not that the Authority wants, but that the people who
represent those areas are able to determine that this is the
best for them, and that the ridership is there, and that they
can afford to be on it.
Am I correct? Anybody? Please answer real quickly, because
I got to get off.
Mr. Amante. Congresswoman, I will just venture out and say
you are right. We will take my area in Orange County, where we
own the right-of-way, and that would be part of the track that
would be shared track for high speed in those segments. It is
certainly not going to travel 220 miles an hour there. It won't
through most urban areas. But it is an area dense with riders,
it is an area that can provide ridership.
It is an area where it will attract private-public
partnerships, because the private sector has an opportunity for
the two things they need. One is the opportunity for
profitability so they would invest, and the second is the
certainty of ridership and the certainty of investment from
both the public and the private sector.
Where those areas exist, yes, you can have a profitable
system that operates and operates well. It won't operate in the
same way you have it in foreign countries. It won't be on
strictly straight tracks. And it won't move at speeds of 225
miles throughout the system. It can't. It may get you where you
want to go. Maybe not in 2 hours and 40 minutes. But when you
have connected all the segments over time, it will get you to
the places you want to go. In urban areas it will move at
greater speeds.
What is most important to the rider is that they have an
opportunity to have another option other than the car. In our
area in Orange County, people who ride public transit, buses,
rubber tire applications, generally are the working poor and
students, $25,000 a year and under.
Mr. Denham. Mr. Amante, thank you.
Mr. Amante. People who ride the trains choose to do it----
Mr. Denham. I have got to interrupt you. I know Mr. Szabo
is very close to leaving----
Mr. Szabo. Mr. Chairman, I have got my deputy here, and
Karen Hedlund is prepared to slide in. So don't worry, we will
continue to have representation here.
Mr. Denham. Thank you. And we will come back to a second
round of questioning.
But at this time I would like to recognize Mr. Harris for 5
minutes.
Dr. Harris. Thank you very much, Mr. Chairman. Thank you.
And I will direct my questions, earliest questions, to Mr.
Szabo.
But Mr. Upton, I just wanted to lead up to that. I read
your testimony and it says that you have sent an FIOA--FOIA
request to the Railroad Administration on December 2, 2010.
Mr. Upton. Yes, sir.
Dr. Harris. You still have not received a----
Mr. Upton. We have not received. We asked for Mr. Denham's
help and also Mr. Cardoza.
Dr. Harris. Now, Mr. Szabo, that is your shop, isn't it?
Mr. Szabo. You bet it is.
Dr. Harris. OK. Now, the chairman--you know, you had
suggested that, you know, when someone wants to do their due
diligence they ought to come to you and ask for information.
That was your testimony just 10 minutes ago, wasn't it?
Mr. Szabo. It is.
Dr. Harris. OK.
Mr. Szabo. It absolutely is. And if I may say----
Dr. Harris. Now, Mr. Upton's group came to you----
Mr. Szabo. Sir, if I may say for the record----
Dr. Harris. Sir, sir, it is my turn to ask the question.
Your turn to answer.
Mr. Szabo. OK, please ask it. I really want to----
Dr. Harris. I haven't asked the question yet. Is it true
that Mr. Upton's group sent a request 1 year and 12 days ago,
and your Administration has been unresponsive to that request?
That is a yes or no. You either responded----
Mr. Szabo. The answer to that is----
Dr. Harris [continuing]. Or you didn't.
Mr. Szabo [continuing]. No, we immediately----
Dr. Harris. Thank you. Now, let me keep on going.
Mr. Szabo. We immediately made----
Dr. Harris. Sir, sir, sir----
Mr. Szabo. We immediately--and, in fact, the documents----
Dr. Harris. Sir----
Mr. Szabo [continuing]. Are publicly available on the Web
site.
Dr. Harris. Sir, I ask the questions, you answer. You
answered no. That is very disturbing, because you are asking
the people in the First Congressional District of Maryland to
pay for this.
Mr. Szabo. My answer no was that we made the records
available.
Dr. Harris. Sir, I am still asking the questions. That is
disturbing to me, because the citizens in my district are being
asked to pay--in fact, what is interesting is you or I are the
only ones between this panel and all the Members here who
actually don't come from California. But we are being asked to
pay for it.
Now, let me just ask a couple of things. A couple of pieces
of your testimony. You said this was going to turn a profit day
one. Sir, that is only in the way a person who works for the
Government can say ``turn a profit.'' Because, you know, if
this were a private enterprise, the capital expense would be
included in whether or not you turn a profit.
This is a yes or no question. When you say it turns it a
profit, does that include paying back the interest to China for
the stimulus money borrowing that is going to go to that--to
the segments of that rail?
Mr. Szabo. That is not an accurate question, sir.
Dr. Harris. Which part is inaccurate? Sir, is that--the
capital expense you are talking about----
Mr. Szabo. This system----
Dr. Harris [continuing]. Is stimulus funding capital
expense.
Mr. Szabo. This system will turn an operating profit from
day one based on----
Dr. Harris. Ah, but sir, I will go back----
Mr. Szabo [continuing]. Based on the way that these types
of systems are judged across the world, which is the above-rail
cost. And, as comparable to everything in Europe and Asia, it
will generate an operating profit.
Dr. Harris. Thank you. But your testimony before was ``turn
a profit.'' You didn't say turn an operating--I just want to
make sure that the people--you see, because you are asking my
citizens in my district to pay for that capital expense. So
don't you think they ought to--you ought to be more specific
and say it is the operating profit? Because the people in my
district are going to have to pay part of the capital expense--
--
Mr. Szabo. You talking about the value of the capital
investment?
Dr. Harris. Yes, sir, that is right.
Mr. Szabo. But there is value to the people of the Nation.
Again, take it back to the delays----
Dr. Harris. Well, sir----
Mr. Szabo. Take it back to the delays at the LA Airport and
the San Francisco airport.
Dr. Harris. Let me tell you something, sir.
Mr. Szabo. And right now it's----
Dr. Harris. The people in the First Congressional District
in Maryland very rarely travel through the San Francisco
Airport or the LA Airport.
Mr. Szabo. But it affects the economy.
Dr. Harris. They kind of stay near Salisbury and Baltimore,
to be honest with you.
Mr. Szabo. Congressman, it affects the----
Dr. Harris. Now, let me keep on going.
Mr. Szabo [continuing]. Economy of our Nation. It is very
important.
Dr. Harris. You said--to get to the chair's--you said you
are not going to flinch on the support. Now, we have evidence
that the California voters kind of indicating they might be
flinching on the support. In fact, I have got a polling--and I
know it is just a poll, it is not an election--that suggests by
a two-to-one margin they actually might want to go back on that
little $9 billion deal.
If they flinch--let me just confirm this--if they flinch--
because this was your answer to the chairman--you said that
that means that maybe we could retain some of that $3 billion
that we have to borrow.
Mr. Szabo. The $3 billion are fully obligated today. There
is a cooperative agreement. And based on the terms of that
cooperative agreement being met, we have a legal and binding
obligation to continue to move forward.
You know, the worst thing you can do is try and lead by
polls. There is no denying what the need of this project is for
the people of California and how it affects the economy of our
Nation.
Dr. Harris. Well, sir, I am going to suggest----
Mr. Szabo. And capacity constraints----
Dr. Harris. I only have a few seconds left. I am going to
suggest that, again, I only--you know, I am sent here to speak
for the people of the First Congressional District in Maryland.
The cost of this project ultimately could be $70 billion
transferred to the people of the United States. That is $300
for every man, woman, and child in my district. I bet if I take
a poll--even though you don't believe polls--the average person
in my district says, ``Over my dead body do I want to pay $300
in Federal taxes and borrow that money to build a railroad to
nowhere,'' because that is the testimony.
This first segment is truly--I mean this is almost--this is
stunning. Only the Federal Government could plan to build this
railroad, and start it in the least populated area of the
State. Furthermore, going back and saying, ``You know what? We
are not only going to build it where we have existing
infrastructure, we are going to build it somewhere else, where
apparently the local community doesn't want it.'' And the FRA,
a branch of this Government, doesn't even want to give the
information to that local jurisdiction.
Mr. Szabo. First off, sir, we made it available----
Dr. Harris. Sir, it is----
Mr. Szabo [continuing]. It is publicly posted on the
Internet.
Dr. Harris. There is no question, no question standing.
Mr. Denham. All time has expired.
Dr. Harris. Thank you, Mr. Chairman.
Mr. Szabo. It is publicly available----
Mr. Denham. Mr. Szabo, all time has----
Mr. Szabo [continuing]. Information posted on the Internet.
Mr. Denham. Mr. Szabo, all time has expired. The chair now
recognizes Ms. Richardson.
Ms. Richardson. Ms. Brown, if that is OK?
Ms. Brown. Yes. I would like it if the administrator could
answer--maybe another 10 minutes so she can ask her questions
and I can ask mine. And we won't be rude.
Mr. Szabo. I have got to meet with the Iraqi transportation
minister, but I will--until about 1:05 and then I will leave.
Ms. Richardson. Well----
Mr. Szabo. Karen Hedlund here----
Ms. Brown. Yes, sir.
Mr. Szabo [continuing]. Who is very, very capable of
handling----
Ms. Richardson. Well, Mr. Szabo, though----
Ms. Brown. No, I need you, though----
Ms. Richardson [continuing]. With all due respect, we have
sat here since 10:00 this morning----
Mr. Szabo. Yes, ma'am.
Ms. Richardson [continuing]. Waiting for an opportunity to
ask you these questions.
Mr. Szabo. Yes, sure.
Ms. Richardson. And I think our domestic policy far exceeds
anyone in Iraq.
So, we are asking for 10 minutes to ask you questions,
please.
Mr. Denham. Ms. Richardson, proceed.
Ms. Richardson. Thank you.
Mr. Szabo. Please.
Ms. Richardson. Mr. Szabo, can you tell me what is the
projected funding for the Northeast Corridor needed for their
project?
Mr. Szabo. The estimates that came from Amtrak right now
are $117 million in order to bring it to, you know, world-
class, 220-miles-per-hour speeds, which we think is a worthy
project.
Ms. Richardson. OK. And is that project fully funded at
this time?
Mr. Szabo. It is not.
Ms. Richardson. OK. So I think, for the record, we just--
you know, I understand the passion of everyone. But in all
fairness, the Northeast Corridor, you just heard for the
record, is not fully funded at this point, either, and
taxpayers may be on the hook for assisting in that process.
Number three, has the cost projections of the NEC included
inflation, et cetera, as the California plan before us?
Mr. Szabo. No. That is a key difference between the NEC
proposal at this time and in California. The California project
has already calculated in 3-percent inflation each and every
year. And so these are inflated dollars, where the NEC project
is in today's dollars.
Ms. Richardson. OK. So would you supply to this committee--
so, since everyone wants to compare apples to apples, let's
compare the inflation, all of the costs that we have included
in the California plan, if you could, supply to this committee
the same for the Northeast Corridor, so we can compare apples
to apples. OK?
Mr. Szabo. Absolutely.
Ms. Richardson. Last question, sir, and so I am going to
far exceed my time, and I think we can get you out, but we
need----
Mr. Szabo. OK.
Ms. Richardson. We need your help and you on the record for
these issues.
I asked Secretary LaHood last week when he was here if for
some reason there was a need or a request for a change other
than starting in the Central Valley, was that possible on the
Federal end. Because I was told that no changes could be made.
Is----
Mr. Szabo. And, Congresswoman, it is not. And this comes
back to the congressional mandates under PRIIA and ARRA. It is
not a matter of where we have been granted flexibility. There
is very, very clear criteria that this committee and Congress
set up by law that has to guide where the grants go, what are
required in order to be eligible. And the ability to shift the
dollars is--it is not there. It is not there.
Ms. Richardson. In ARRA was it noted funding generally for
high-speed rail, or was it specifically for the Central Valley
corridor?
Mr. Szabo. No, it was the requirements for high-speed rail.
And see, you know, it is important that the committee
understand that FRA doesn't just get to pick wherever we want
to invest the dollars. We have to sort through the applications
that the State makes.
Ms. Richardson. Sir, reclaiming----
Mr. Szabo. And only then can we make our decision.
Ms. Richardson. Reclaiming my time, because I am trying to
help you, and I hope you see that----
Mr. Szabo. OK, sure.
Ms. Richardson [continuing]. Through the questions that I
am asking.
My question is, it is my understanding, with what we voted
through with ARRA, I voted for funding for high-speed rail. I
didn't specifically say $700 million can go to the Central
Valley. So I am going to come back to my question. You said
that it is congressional authority that would have to allow a
change of a particular line.
See, to me, if I didn't originally vote for the line, I
don't see how that is congressional authority.
Mr. Szabo. Yes, it is the----
Ms. Richardson. I see that as being yours.
Mr. Szabo. It is the criteria that was established relative
to project readiness and, again, the process that we had to
follow in order to select the recipients of the grants, the
criteria that had to be met for the grant to be eligible, you
know, and there are several things.
And it is important to note that a key part of it was, in
fact--since this was part of recovery--unemployment was a key
part of it. You know, and the fact that the unemployment rate
in the Central Valley exceeds that in the other areas of
California was just one of those criterias.
But it also came back to project readiness, you know, how
advanced the engineering was, where they were at in the
environmental process----
Ms. Richardson. OK, sir. So if--and I am supporting the
project as it is, but I am trying to get at some of these
questions that have been out there--if it is found, for
example, given the more recent investment that was done in San
Francisco, for example, I believe a quarter of a----
Mr. Szabo. Yes.
Ms. Richardson [continuing]. A billion dollars, if it were
found that starting from the north would be appropriate, and
that was urged from this Congress, would that be considered? Or
if it was from the south?
Mr. Szabo. Well, here. Those projects that were ready we
did, in fact, make investments under ARRA in both the north and
south----
Ms. Richardson. No, I am speaking specifically regarding
high-speed rail. If it was determined that the initial segment
would be in a different place in California----
Mr. Szabo. Yes. We don't have the ability to shift these
dollars now and meet the requirements of the law. It just
simply is impossible.
Ms. Richardson. OK----
Mr. Szabo. What is helpful is the fact that they are going
with the blended approach now, and that California High-Speed
Rail is, in fact, prepared to start making some investments in
the LA and San Francisco regions.
But this initial $3.5 billion that we have invested, there
is no ability to shift it.
Ms. Richardson. OK, sir, so I would just----
Mr. Denham. Mr. Szabo, thank you. The chair now recognizes
Mr. Miller.
Ms. Richardson. Mr. Chair, I think----
Mr. Denham. Time has expired.
Mr. Miller of California. Thank you very much.
Mr. Denham. We are happy to come back around for a second
round, but Ms. Brown still wants to get some time in, too.
Ms. Richardson. Could I ask for information for the record?
Mr. Denham. For the record.
Ms. Richardson. Thank you, sir. Mr. Szabo, if you could
please submit for the record to this committee, since it has
been of much discussion, whether it can, whether it cannot, and
under what conditions it could.
Mr. Szabo. Very good.
Ms. Richardson. Thank you, Mr. Chairman.
Mr. Szabo. Thank you, Congresswoman.
Mr. Denham. Thank you. Mr. Miller.
Mr. Miller of California. Yes, thank you. I appreciate that
we look at the applications we have received from the State for
funding levels. But the facts of California keep getting in the
way of what we are talking about today, whether we like it or
not.
Mr. Amante, I think a good question for you--it is not my
numbers, but the California Transportation Commission. A recent
report said there is a $340 billion shortfall in highway
maintenance over the next 10 years, just in that alone. And
given the cost of project backlogs, how can we justify even a
discussion of this type of project, based on the reality of
California's bonding limits is at a questionable level. I mean
for them to sell more bonds, they are going to be junk rated,
because they are just far beyond the legal capacity they should
have.
How do we justify the discussion, based on the acknowledged
shortfall by CTC?
Mr. Amante. Congressman, I can't answer that any better
than you can. We come from the same State. We both recognize
where we are, in terms of the economy in California and,
frankly, nationally. So, you are right. We have an enormous
amount of deferred maintenance. And I will tell you that that
is true across the country, not just in its most populous
State.
There are issues in transportation about the color of
money. If the Federal Government is going to invest in high-
speed rail, I suggest that its investment ought to be in
corridors where you have got perhaps demonstrated ridership and
the ability to----
Mr. Miller of California. OK, let me expand on that.
Because Mr. Harris brought up a very good comment. And I happen
to agree with where we are starting the project makes no sense.
And the--my good colleagues and friends on the other side
of the aisle had said we don't support high-speed rail. And
based on the record, that is not true. In 2005 I put an earmark
in for Maglev, which basically started in the Anaheim
Convention Center to the most under-served airport in
California: Ontario. And the goal was north Orange County
absolutely needed an airport, there had been much debate, and
people had been thrown out of office because we didn't have
that. And at least the first phase of that would have paid for
itself in ridership, because it was a huge benefit in doing
that.
Mr. Amante. And, Congressman, that was visionary, and still
is. Ontario Airport has lots of room for expansion and gates,
they just don't want the ground transportation and the impacts
of their communities, nor do the communities along that
corridor. We all know what that means, when we----
Mr. Miller of California. But Ontario welcomes it.
Mr. Amante. They would welcome it if they had a rail
connection that brought passengers there----
Mr. Miller of California. And that is what they want.
Mr. Amante [continuing]. The plan that you had----
Mr. Miller of California. They are totally behind that
project.
But, Mr. van Ark, I guess the question I have--and it is on
the funding mechanism, because I think I was the only
Republican to chair the budget committee in California in the
last 70 years--I am an oxymoron to begin with--but you talk
about TRIP bonds. And I think that is probably the Federal
qualified tax credit bonds discussed in the Senate on S. 1436.
And you were relying on about $12.6 billion on a bill that is a
bill, not a law, I guess, is my first concern.
And you know, both last year's and the present Federal
fiscal year, we have zeroed out high-speed rail, so there is
nothing there to fall back on. So--and even if you could say
1436 was a reality, if--it is for $30 billion, not $50 billion,
but let's use the $50 billion level. You can only use 2 percent
of that per State. So, based on 2 percent, that is $1 billion.
And even the California State treasurer testified a week ago
that $1 billion can be leveraged into $1.5 billion. I am trying
to figure out how to leverage my dollar into 1.50. But let's
say it can happen. What do you do with the other $11.9 billion
you are short, based on your estimate given on that specific
fact alone?
Mr. van Ark. [No response.]
Mr. Miller of California. I mean it is a hypothetical
funding source----
Mr. van Ark. Congressman, it is a calculation that has been
done, that has been put into the business plan----
Mr. Miller of California. No, I understand----
Mr. van Ark [continuing]. As an example.
Mr. Miller of California. No, I understand it is a
calculation. But the reality is it is not a law, it is a bill.
If it were a law based on the bill, you couldn't count on more
than $1 billion of it by the bill's language in and of itself.
So, if you take the language within the bill, and it gives
you $1 billion, not $12.9 billion, you are--and I am not trying
to argue with you, I am just saying I am having trouble making
these numbers add up, based on the reality of what the bill
says.
Mr. van Ark. Again, the example in there is an example of
how the mechanism could work, rather than that being the
funding----
Mr. Miller of California. I didn't understand that. I am
trying hard.
Mr. van Ark. The calculation in the business plan is an
example of how that could work.
Mr. Miller of California. It is an example of how it could
work----
Mr. van Ark. An example.
Mr. Miller of California [continuing]. If the bill were
law, and if the bill did allow that, correct?
Mr. van Ark. Correct, yes.
Mr. Miller of California. But it is not law, and it doesn't
allow it. So why would you use something that is not law, that
is not allowed under the proposed law, as an example of how you
are going to fund it is my biggest concern.
There is $11.9 billion--the reason the people of California
have turned against this project--and when it passed
originally, I thought, ``How can you continue to bond
California at the level we are?'' And I know from the Federal
perspective on the rail side, that is none of our business. But
I live in California, so it is not a hit on the Federal
Government, but we are creating a disaster in California, and
we have done it for the last 10 years. We have a bonding
disaster.
But you are using funds in here that are not even a pipe
dream, because there is no way in the world. But--can I
conclude with one last question on here?
I guess it is the per-passenger mile cost that you have
come up with. You have $.20 per passenger mile, based on 520
miles from LA to San Francisco. But in 2007 we had another
hearing on high-speed rails, and we brought the best in:
France, Germany, Spain, and Japan. And we have patterned a lot
of our Maglev and other things after that whole concept. But at
their best, they found out that Government had to fund it,
which--it is not allowed under the California High-Speed Train
Act that was authorized. To begin with, we can't do that, but
we are doing it.
But at that, they are paying $.45 a mile for a very
efficient program. How in the world, in these countries who
really utilized high-speed rail, can we say we are going to do
it for $.20, when everybody else in the world--that is like how
can you cook grits for 3 minutes when everybody else in the
world takes 15? How do you do it for $.20 when everybody else
spends 45?
Mr. Denham. And, Mr. van Ark, I would ask you to hold your
response and I would gladly give you my time as it comes back
around to me to respond. But right now I want to make sure I am
respectful to Mr. Szabo's time. And I would just remind the
committee that if you have on-the-record questions that you
would like to submit for Mr. Szabo, we will compile those and
submit those after the hearing.
At this time the chair recognizes Ms. Brown for 5 minutes.
Ms. Brown. Thank you, Mr. Szabo. A couple of quick
questions. I think you cleared up part of my question. Does
the--do you, the Federal Government, put in the application, or
does the State put in the application? Because some of my
colleagues seem to be confused. They think that we actually go
to them, fill out the applications, do the studies, and then we
make the decision. Is this a partnership, or what?
Mr. Szabo. No. You are correct, Chairwoman. It is the
States that apply, and then we review those applications. And
then, based on the criteria that is established both in law and
in our guidance, we make decisions on what should be----
Ms. Brown. OK. There was a question. San Diego to Los
Angeles. Did the State apply or--they did not?
Mr. Szabo. No, there was never an application for that. You
know, and obviously it is something that may have some merit.
And if the State would, in fact, apply for it, it would be
something that, of course, we could consider.
Ms. Brown. There was also plenty of discussion--you know,
as I said often we are number one with freight in the world. I
don't care where you go, whether you go into Russia, China.
Everybody asks us about our freight rail. But we are the
caboose when it comes to passenger rail, and they don't even
use cabooses any more.
So, can you explain to us about if the project that the
Members want, freight rail, they are perfectly--they can--I
mean do they need anything from us? They have the money, they
have the employees. They are doing well. I mean I am--you know,
the rail is rolling in this country.
Mr. Szabo. Well, I think two things. I think, first off, it
is important to note that under our TIGER grant program,
freight rail has done exceptionally well. This Administration
has done more to support and advance freight rail as any
Administration in recent history.
But to your specific question on whether these dollars
could be used for a freight purpose, no. Again, under the
Federal law, the statute, and the criteria, the grant
criteria----
Ms. Brown. It says high-speed and intercity, is that
correct?
Mr. Szabo. Yes, it is. That is right.
Ms. Brown. OK, right. But can the freights do these
projects that we have been talking about, if they want to, if
they see it is a financial----
Mr. Szabo. Yes. Again, if you take a look at our vision,
you know, the program that has been put forward, shared with
this committee, it is three-tiered, you know, that you have the
core express high-speed rail, which is those speeds up to 220
miles an hour, like they are doing in California, like the
Northeast Corridor is doing. And then there is that regional
express service, which is similar to what the Acela is today,
that runs from speeds, you know, from 90 to 125 miles per hour.
That is what is going forward in the Midwest. And then you have
your feeder services, which----
Ms. Brown. Right. But when I travel around the world, in
the cities it doesn't go 200-some miles or 300 miles. In no
city. It slows down as it goes into the cities, and it is
intermodal. Can you just give us a quick----
Mr. Szabo. Yes. I think it is really important to note that
the blended approach the California High-Speed Rail is talking
about is very, very similar to what the TGV, you know, utilizes
in France, to where out in the countryside, you know, you can
go open throttle. They are doing 186 miles an hour there. But
they choose to use--for a lot of reasons, they choose to use
shared right-of-way in the urban corridors. It gets them to the
center of downtown, which is important. It saves tremendous
cost. And it saves an awful lot of these environmental concerns
that communities have.
Ms. Brown. And we can use existing tracks, and all of that.
But there has been some discussion about Maglev. And, you
know, I am looking in the audience at some of my people who
have supported Maglev in the past. One of the problems with
Maglev is--can you just tell us about the cost in comparison
with some of the other systems?
Mr. Szabo. Well, I would say this. Our program is actually
technologically neutral.
Ms. Brown. Right.
Mr. Szabo. And Maglev certainly is eligible. But one of the
challenges for those types of projects is, in fact, the
significant upfront capital cost.
Ms. Brown. All right. Is there anything else you want to
say in my 48 seconds?
Mr. Szabo. Just that, relative to the Freedom of
Information request, we did immediately make virtually all
those documents publicly available. They are available on the
Web site today. It is my understanding that there were one or
two pieces of paper that we need some clearance from both the
Army Corps of Engineers and the EPA, you know, so we have to
work through the sister agencies to get those, you know, from
them and make them available and go through their clearance
process.
But 99 percent of what was requested back in 2010 or the
date that was quoted was immediately made available, is public
record available on the Internet today.
Ms. Brown. I want to thank you for your service. And I have
to tell you, working with this Administration and with the
Secretary is a bright spot. Thank you.
Mr. Szabo. Thank you so much, Ranking Member.
Mr. Denham. Mr. Szabo, I would like to thank you for your
indulgence this morning. If you will have Ms. Hedlund continue
to stay and----
Mr. Szabo. And she is highly capable of handling just as
tough of questions as I am.
Mr. Denham. Thank you.
Mr. Szabo. Thank you.
Mr. Denham. And again, for the record, we will be
submitting you a list of questions. One of those questions, as
well, we will be resubmitting--Mr. Upton had a question that
has still not been--or the Heritage have not received an answer
from a year ago. This--we will be submitting that, as well.
Thank you.
At this time I would like to utilize some of my time to
allow Mr. van Ark the opportunity to respond to Mr. Miller. And
I thank you for your indulge, as well.
Mr. van Ark. Mr. Chairman, Members, the costs that we have
got in our business plan have been crossed-checked and are
based on international costs. All the infrastructure costs,
including the operationals, are--operations and maintenance
costs, including the ticket pricing, obviously based on the
different economic levels of the different countries, but
cross-referencing and cross-checking to all the systems in the
world has been done, including the Acela system on the
Northeast Corridor that the administrator has already referred
to.
Mr. Denham. Thank you. And I did want to clarify one other
issue. Mr. Gatzka, the issue came up about the first segment of
the ICS about San Joaquin's service, and how that would affect,
actually, Kings County. I understand you have two stations
within Kings County, Hanford and Corcoran. If the ICS was
connected back into Amtrak, if the--you know, going back on the
assumption that only one phase of this gets done, what does
that do to the two stations that would be within your county?
Mr. Gatzka. Well, the high-speed rail alignment if Amtrak
was switched over and shifted outside of those two stations,
which is the city of Corcoran and the city of Hanford, those
stations basically go away. One of our local groups, actually,
is the Hanford Business Association, which now has realized
that that may potentially be a major impact to them. They are
saying that is about an $11 million annual hit to their economy
by losing Amtrak service coming into their downtown Hanford
area. That is--those are probably the two key ones.
In the city of Corcoran, we also have one of the State's
major prisons there. Amtrak service going to that smaller city
and smaller community is a means of affordable transportation
to get families, residents, and other people back and forth,
and also to serve that prison facility, as well.
Mr. Denham. Thank you. And, Mr. Swearengin, I know you have
another comment. But with that I wanted to ask you, the initial
construction segment, if it is all built, what are the benefits
that that provides to the city of Fresno? And is it worth the
$6 billion that is currently projected?
Mayor Swearengin. You bet. And I appreciate the opportunity
to respond and then make a final comment.
Just want to relay a story of another business person that
just a few weeks ago--again, this is a property owner whose
property is impacted by the alignment, he is a major food
producer in the Fresno area. And I asked him, ``Are you
concerned what's happening with your property? What's going
on?''
And he said, ``I cannot believe that we will potentially
shoot ourselves in the foot and try to stop this train. I am
sending jobs to LA right now, because I can't get people to and
from Fresno in an affordable, fast manner. We have got to have
this train.'' He says, ``I am the one who is driving to LA
every week and San Francisco every week.'' And this is a very
conservative business operator in Fresno. If I said his name,
you would know him well.
So, I think that is just an example of--you know,
obviously, the construction jobs are a terrific impact for
Fresno and the entire San Joaquin Valley. But, frankly, I look
at this as the long-term connectivity of our subregion in
Fresno and the San Joaquin Valley to the mega-regions of
California. The economy operates when people and ideas and
goods connect. And right now, we are significantly hampered in
our ability to connect to the other mega-regions. It means our
businesses, our graphic designers, our lawyers, our creative
people are not eligible, and they are not seen as viable
business partners from the LA area or the San Francisco area,
because there is just not the proximity and the ability to
connect. So I think there is tremendous benefit.
And I want to just say, in the defense of the Valley,
because I think it is fair to say, we would not be here right
now if the dollars had gone somewhere else in California. All
of this started, based on what we have heard from the Members
today and some of the panelists, all of this started when the
dollars went to the Central Valley. Why the Valley? Why the
Valley?
So, let me just put a fine point on this. I believe, as I
think you have very eloquently put, as did Mr. McCarthy, we
have got to invest where we get the fastest path to private
investment. We could put $31 billion in southern California
and, yes, there is ridership and there is a vast need for
mobility. I understand that. But you would not attract private
investment with $31 billion going into the congested LA Basin.
The only point at which you attract private investment is when
you can connect two different regions.
So, while it is difficult for some in other parts of the
State to believe that there is value in putting dollars into
the backbone, it is the fastest path to private investment. I
support you continuing to focus on that point.
Really, the focus here is how do we get to $31 billion. We
have got $12 billion right now. So the gap is much smaller, and
then we trigger private investment.
Mr. Denham. Thank you, Mayor. And I would agree with your
points. Again, my concern continues to be if we have gone from
$33 billion to $100 billion, where does that money come from. I
want to make sure that we don't just start building something
without having the Federal obligation that is there, as well.
With that I recognize Ms. Brown for 5 minutes.
Ms. Brown. Thank you. I guess you answered part of my
question, because--and I want to ask this for also Mr. van Ark.
How did we decide not to start in southern California or
northern California, where the ridership is there? In all of
the hearings I have heard in the past, if you have the
ridership, then if the people in the area can see the benefits,
then they will--you know, it would encourage people that want
to use the system. They need to see some success.
And I was in California when we announced that we almost
doubled the amount. And it was really upsetting to a lot of
people. And basically, they talked about the study. But I do
know that, you know, it is how you frame the question.
So, Mr. van Ark, can you first answer? Then I--yes.
Mr. van Ark. Member Brown, yes, I can. And that is I
mentioned in my introduction I built these systems around the
world. This is my background.
Ms. Brown. What systems were you involved in building?
Mr. van Ark. For instance, the Hamburg to Frankfurt high-
speed rail system, the Holland high-speed rail, the high-speed
rail system--so I have been involved in high-speed rail and
rail systems, including public-private partnerships around the
world.
The thing about high-speed rail is it is about the
interconnectivity of people, of metropolitan areas, over long
distances. I know that people live in those extremities, they
live at the ends. But the high-speed rail system has lesser
value in those ends. It is expensive to build in the bookends.
But that is not where you really operate a high-speed rail
system. A high-speed rail system is that part, that backbone,
that is going to connect those cities with each other.
It is important that we, as Californians, understand that
we want to connect northern California--the 10 million-plus
people there--with southern California, through the Central
Valley, with their 4 million-plus growing population. That is
what high-speed rail is about. It is--so that is why it is so
important to build that backbone in the Central Valley, because
that is really how--you can--I can give you many references in
the world, whether it be Paris--they built the central portion
first--in Japan, they built the central portions first. The
portions in the cities, which we call this blended system, you
use the existing infrastructure, and you share the existing
infrastructure. But without the backbone you will never get a
high-speed rail system going.
So, if we want high-speed rail, which I have heard often
today, if we want high-speed rail in California, we are going
to have to build the backbone, because that is what high-speed
rail is about.
Ms. Brown. Yes, sir. You know, we are complaining about $8
billion, all of which did not go into high-speed rail, but the
Chinese are putting $350 billion. They understand the
importance of moving their people, goods, and services. And the
fact is you can live there and work anywhere. And you know,
downtown Brussels to downtown Paris, 200 miles, 1 hour and 15
minutes. I mean that is the future of this country. It is how
we get through it.
And Ms. Swearengin, can you tell us how many jobs do you
think the project will create?
Mayor Swearengin. Well, the estimate for the construction
phase is 20,000 jobs a year for 5 years. And, as I mentioned, I
believe the benefit is well beyond just the construction. I
think the value is that the permanent connectivity between a
major region of this country--by California's standards, you
know, the Valley is still very small, but when you compare the
Valley to virtually every other part of the country, it is a
big region--but connecting us to the LA Basin and to the San
Francisco Bay area, that is where the real value and benefits
comes.
And, you know, this is a 100-year asset. This changes the
way our local economy and our local dynamics operate
forevermore, in my opinion. So, we are certainly looking
forward to the immediate injection of jobs from the design
professionals, the construction jobs. But I am looking beyond
that, and I am seeing that our manufacturers, our producers,
our creative people, now we are eligible to compete for work in
other parts of the State, because they can finally get access
to us, and we can get access to them.
Ms. Brown. What about the problem that we are experiencing,
as far as the farmers are concerned? I mean do they not use
freight rail? Because----
Mayor Swearengin. No, they do. In fact, we will--I
personally will be meeting in just a couple hours with members
of the FRA, and talking to them about another rail project,
upgrading our short-haul rail in the Valley, which would have a
tremendous impact for the growers in our area.
So, you know, I think this is an all-of-the-above kind of
analysis that has to be done. There are freight rail challenges
in the Valley. The reality is our region has significantly been
left behind, in terms of infrastructure investment.
Mr. Denham. Thank you. Mr. Harris?
Dr. Harris. Thank you very, very much. And I am just going
to--I am sorry, I had to--from the FRA, I am sorry--oh, yes,
and Ms.--OK, they switched your name tag, OK.
I will give the FRA a little help on this, because I am
reading the initial FOIA request. And maybe it wasn't specific
enough. I mean what I am going to ask--and I will ask the
committee to submit it, you know, as a question that you can
answer later, because you may not have the answer--you won't
have the answer--is the documents that would describe whether
or not this decision was a decision made by the FRA to use that
route, the--and I am going to use the exact term here, the one
that goes north, the WCBO, or the--now called the West
Chowchilla Design Option, or the hybrid route, because there is
some confusion about whether the FRA insisted on that routing.
And that is--I think that goes specifically to the point of the
FOIA requests. So that is why my question will be. It should be
a very simple yes or no answer. I mean, and if it is an answer
that kind of evades that, we will go in a little further, then.
Now, let me just--and again, look. My concern is--because,
again, I am still the only person here on this side of that
table who is from outside of California. And the thing is I am
reading here, ``America is going to be asked''----
Mr. Denham. Mr. Harris, just for the record, Ms. Brown is
from Florida.
Dr. Harris. I am sorry, Ms. Brown. Sorry----
Ms. Brown. Not only am I from Florida, I am from the
disadvantaged Florida. Eighteen other States received 3 billion
of our dollars.
Dr. Harris. Ma'am, this time of year we think Florida has
advantages.
[Laughter.]
Ms. Brown. I am here supporting high-speed rail in the
country.
Dr. Harris. OK, thank you.
Ms. Brown. But I am not a participant.
Dr. Harris. Thank you very much. I am concerned because the
cost is going to be over $50 billion that is going to be asked
of the--and that is by the new draft report, is $50 billion. So
we already have a cost escalation. We are already asking our
citizens to pay well over--if that is all, the amount is over
$150 for every man, woman, and child in the United States.
But I have got to ask a couple things. First of all, Mayor
Swearengin, you know, we had some skepticism. And I wasn't here
when the stimulus bill was passed, but I was kind of out in the
real world. And there was some skepticism that this, you know,
$787 billion really was just kind of this little pot of money
that was going to be sprinkled around before the 2010 election,
perhaps maybe to influence the outcome.
And because of an article in, I guess the Sacramento Bee,
it has been brought to my attention there is some speculation
that this--the $700 million--was sprinkled around to effect an
election.
Is it true that the timing of that announcement was just
before the 2010 election of that award?
Mayor Swearengin. That is true.
Dr. Harris. OK.
Mayor Swearengin. And if I could----
Dr. Harris. People can draw their own conclusions.
Mayor Swearengin. Precisely. And----
Dr. Harris. They can draw their own conclusions from that.
But that is exactly why people in my district are so worried
about projects like this. Because that is more than
coincidental. You know, that has the Solyndra ring about it. It
is a use of hundreds of millions of dollars of taxpayer money
for what appears to be raw politics.
Now, the two mayors here. You run governments. Do you
really believe that this is going to make a profit? Do you
really--because I tell you, I just rode the train to New York.
It is true. The Acela ticket is $350, and it gets you there 15
minutes faster, $350 round trip from Baltimore--I am sorry,
from Washington to New York, it is about the same from
Baltimore. The regular train is $162.
We also in Maryland claim that, you know, all we have--if
we just supply the capital, don't worry, all the mass transit
is going to be paid out of the fare box. So we actually put a
50 percent rule in law that was lowered to 40 percent, to 35
percent, and now $.30 on every dollar is paid for out of the
fare box because, I have got to tell you, my impression, that
is just the way Governments work with public transportation.
And this is public transportation by any other name, because
the public has funded the capital.
Do you really believe it is--in your heart of hearts --I am
not talking about the other benefits--this is going to really
turn a profit, based on ticket sales?
Mayor Swearengin. Yes, sir, I do, based on the operating
model of every other high-speed rail system in the world.
And again, you--high-speed rail is inter-regional
connectivity, very different from commuter rail.
Dr. Harris. So, Mayor, you believe that the ticket price is
really going to be--that we are going to have that many riders
and that is going to be the ticket price, and we are going to
turn a profit, even though the Acela train----
Mayor Swearengin. Right, which is a different----
Dr. Harris [continuing]. In an established corridor, with
lower priced capital expenses, lower priced equipment expenses,
charges $350 round trip and loses money every day, as the
Secretary testified, with full ridership?
Mayor Swearengin. I couldn't pay $350 to ride it. So----
Dr. Harris. You are darn right.
Mayor Swearengin. So the--I think the difference----
Dr. Harris. And a lot of people won't be able to----
Mayor Swearengin. It is a fundamentally different service
and a different operating model. And based on the data, yes
sir, I do believe that.
Dr. Harris. OK, thank you. My time has expired. I thank
you, Mr. Chairman, for your indulgence.
Mr. Denham. Ms. Brown for 5 minutes.
Ms. Brown. Yes. You know, we keep talking about the
Northeast Corridor. But the key problem is that we have tunnels
that are 100 years old. We have bridges that need to be fixed.
And once we do that, once we improve the infrastructure, then
it will go.
But I can tell you that the mayor of Jacksonville, we had a
meeting in New York. He took the train and I took the plane,
and he beat me there to the meeting, because there are many
things involved in catching that plane, when you look at from
LA to San Francisco, how long you have to--the congestion,
the--you know, it is wasted time. So it is not apples to
apples, it is apples to bananas, as the Secretary said.
Would you further expand on--Mr. van Ark--how you all made
the decision to go to the mid-Valley, as opposed to the areas
that everybody feel you would have the ridership right away?
Mr. van Ark. So when you build a high-speed rail system,
you have to build the system where you are going to be
interconnecting the cities. And that is exactly what the
Central Valley is.
Central Valley also will offer the United States the first
place in the United States where we will be able to do an
integrated high-speed rail 250 miles an hour--you have to
overspeed--testing of the integrated system. This cannot be
done anywhere else in the United States.
So, unless you build that system first, and get that system
up and running while you are completing the initial operating
section, you will never get to a high-speed rail system in the
United States.
I think we have learned--and I was involved in the Acela
system--I think we have learned from the Acela system. You must
remember the Acela system has an average speed of around about
70 miles an hour. Our trains have an average speed of about 170
miles an hour. It is very different. The Acela service takes
7\1/2\ hours to travel from Boston to DC. And I have used it. I
have lived my last 5 years in New York. It takes 7\1/2\ hours.
Ms. Brown. And there are many factors why it takes so long.
I mean there is a lot we need to do to upgrade it. But it
doesn't take that long from New York to Washington, DC. But
that Boston area is what we need to invest in.
Mr. van Ark. It is----
Ms. Brown. I mean we understand we got to invest in the
system.
Mr. van Ark. Exactly. And investing in a system that is
operating is very much more complicated----
Ms. Brown. It is more complicated. The cities are already
there----
Mr. van Ark [continuing]. Than any system----
Ms. Brown. I mean I understand all of the factors. You need
to educate everybody else.
But your system, tell me how it is going to make a
difference.
Mr. van Ark. Our system is based on a competitive market
advantage. That is why it is so important that we have to be
able to get from northern California to southern California in
that 3-hour timeframe--2 hours, 40 minutes. Because, as you
correctly stated, it is the time for you to get to an airport
to check in to an airport, to check--all the flights that--
about a quarter of the flights in California between northern
and southern California are delayed, apart from the problem
that we cannot build more runways and gates.
But it is the convenient time to transport people from one
place to another. That is why it is so important that we cannot
drop the speed. We have to stay at this high speed. We cannot
compromise the system. Because, otherwise, we will not have a
competitive system which will cost $82 a ticket, not $300 a
ticket--$82 one direction--and it can make a profit, and the
ridership will be a completely different level to the ridership
in the Northeast Corridor, which is throttled because the
system is compromised.
And I don't want to blame the operator, it is not their
problem----
Ms. Brown. Right.
Mr. van Ark. It is just that the infrastructure is----
Ms. Brown. Absolutely. Let me just ask you one quick
question. Is there any system in the world that pays for itself
completely?
Mr. van Ark. Madam, all the high-speed rail systems in the
world, all of them, make an operating profit. Operating profit.
All of them.
Ms. Brown. But the infrastructure.
Mr. van Ark. So the operating profit covers all operating
costs, and it, in general terms, covers also the rolling stock
amortization and the depots. So ``everything above rail'' they
refer to sometimes, whereas there are also other PPPs that add
further private participation into the infrastructure. The two
lines in the world where they have done the calculation, that
is the Paris Lyon and the Tokyo Osaka lines, that they have
done the calculations that, incorporating the infrastructure,
the whole system has paid for itself.
But they do take environmental advantages as benefits to
the calculation. Generally, State--generally, the State owns
the infrastructure, and the operations are done by private
sector.
Mr. Denham. Thank you, Mr. van Ark. One area that we have
failed to address significantly at all today, the biggest issue
for the Central Valley, our agriculture industry, number one
industry in California, the largest ag industry in the world. I
would like to get a few questions in on that.
Mr. Upton, your testimony raised some concerns with a
proposed diagonal alignment through agriculture land. Why is
diagonal alignment problematic?
Mr. Upton. Well, one of the reasons is the impacts that it
has on ag.
For instance, so we have to use pesticides and herbicides
very carefully, and--because they could affect other crops,
they can affect people. HSR's own document says the indirect
biological impact when going through an ag area is a quarter
mile on each side of the track. When I showed that to the ag
commissioner and said, ``OK, am I going to be able to spray my
almonds or my corn,'' or whatever, he just laughed.
He said, ``There is no way that I am going to allow
spraying with this kind of document in front of me. It would be
a lawyer's paradise if anything happened.'' So we have to look
at that, and--when you are trying to farm.
The other thing is it puts a cloud on your land, as far as
your financing. The farm credit people said as long as these
proposed routes show up on your land, they are not going to
loan you the amount of money that they would, because they feel
the land has been considerably devalued from what it was
before.
So, if you take a half-a-mile as a route, that is about 300
acres a mile. That is a huge hit on a farmer's land. Also, when
you are going through the land at an angle, and there is only a
crossing maybe every 2 miles or 3 miles, as you know we have
huge equipment that it takes to go, and you would have to go
all the way around, clogging up the roads, increasing the
number of hours that you are using those engines, causing air
pollution.
And lastly I will point out on dairies, dairies require a
certain amount of acres to get rid of the effluent. That is how
they are--get a permit to do that. When these trains go through
there, some of these dairies are rendered inoperable. So you
lose the whole operation.
So there is a devastating impact on our culture, and it has
not been adequately addressed.
Mr. Denham. And the location for the Central Valley segment
of it, the location for the Merced to Fresno's westward turn
and the alignment to get from the Central Valley to San Jose
has not been determined, because it is dependant on additional
analysis of the San Jose to Merced section.
Is there a consensus among the Preserve Our Heritage
members about what would constitute the least disruptive route
for that westward turn?
Mr. Upton. Yes, there is. You make a good point. The Merced
to Fresno route, as you know, was just approved by the
Authority. But some of us in the 25-mile zone there are in the
Twilight Zone, because it is not considered. It will be
considered during the Merced to San Jose group.
And what we have been doing--and we have had some
cooperative meetings with the Authority, and I credit Mr. van
Ark and his staff for that, that somewhere along the 152 and 99
would be the preferred route, because that is an existing
corridor, if we could do that.
Our concern is the process. If, in fact, the FRA or EPA or
the Army Corps is demanding that a particular route has to be
done, then it really doesn't matter what I say, or what
Preserve Our Heritage says, and so we need to know who is
calling the shots, whether this input process is a sham, or if
they are really listening to us.
Mr. Denham. And has your organization provided
documentation to the Authority on the negative impact, negative
economic impacts of the project to the agriculture community in
Madeira County?
Mr. Upton. We have had more meetings than I care to
remember, and submitted more documents, appeared at high-speed
rail meetings. I am sure they are tired of seeing us, as we are
in going there.
Mr. Denham. Are you getting a response from the agency?
Mr. Upton. In----
Mr. Denham. Maybe the same thing we had with FRA earlier,
apparently you submitted questions to them over a year ago, but
it seems like you are, on many levels of Government, getting
ignored.
Mr. Upton. FRA, no response whatsoever. But with the local
people with the high-speed rail, yes. They have been meeting
with us. And with Mr. van Ark, yes, he has been meeting with
us.
Again, our concern is whether this will amount to anything.
Because we are not convinced on who is calling the shots on
this thing.
Mr. Denham. Thank you. And I yield back, Ms. Brown.
Ms. Brown. Thank you. Mr. van Ark, some witnesses and
Members, my colleagues, have raised concerns regarding
communications and working with the Authority. What are you all
doing to address those concerns? And I guess it is the same
concern that the gentleman just raised.
Mr. van Ark. Congresswoman, we are doing more every day,
but it is a mammoth task. It is a big State. It is an 800-mile
section. And in many areas of the State, there is more than one
alignment, because--the alternatives to meet the CEQA and NEPA
process.
So, of course, we have hundreds and hundreds--thousands and
thousands--of stakeholders. We have an organization in place.
We are just at the stage investigating how we can further
improve the organization.
I do believe certain improvements have happened. I think
Mr. Upton just mentioned, you know, we have been having
meetings with them. But not just there. We had a board meeting
on Tuesday of this week in Merced. And I must say there were
many, many organizations that came back and thanked us for the
outreach and communications that we had been doing with them.
So, there is still a way to go, I am not disagreeing with
that. It is a big task when you interface with that many people
in a big State like we have.
Ms. Brown. There has been a lot of discussion about the
funding source. How are you planning to get investors or
investment in the bonds, or the additional costs? Is this a
phased building? Can you explain that to me?
Mr. van Ark. So I think what we--when you look at the
business plan, you must consider that we should be targeting,
and are targeting, at the first operable segment. It is the way
that they built the systems in France or in Spain.
For instance, the Madrid to Seville line was the first
segment. It is their IOS. The line from Paris to Lyon was their
IOS. So we need to concentrate on the first segment for
funding----
Ms. Brown. Yes, I drove that segment from Paris to Lyon.
Mr. van Ark. Yes. I traveled it too, and I traveled it with
Chairman Mica as well. And I know he was very proud, and used
to say, ``This is what we need in the United States.'' Although
that was in my previous function in the private sector.
Ms. Brown. So we are going to be able, after we get the
first segment, to get those private investors?
Mr. van Ark. You see, when you cannot prove to a private
investor, firstly, the stability of a project----
Ms. Brown. The--that is right.
Mr. van Ark. The second thing is that there is going to be
a revenue stream that is going to come up. The private
investors will not be willing to come. They talk to us, they
have given us in writing they will participate. That happens.
But do not forget, you know, they are still hesitant
because we are hesitant. And we have to get over that. But
private investors will participate in this project, as I have
had private investors investing in projects around the world.
Ms. Brown. Would anyone else like to respond to that? Yes,
sir?
Mr. Amante. Congresswoman, I want to address this whole
issue of where we spend the dollars and how we attract the
private partnership.
It is clear; all of us know that--the chairman asked a
question of the two mayors. He said, ``All of you govern.'' We
know we have to make tough decisions, we know there are scarce
Federal and State resources, and that there is an increasing
demand in infrastructure in this country. But we are the most
populous State. I happen to live in the most populous region of
that most populous State. And as we go, goes the economy of
this Nation. If we do not invest in the movement of goods and
people in some fashion, we will choke in congestion. We will no
longer be competitive.
In my view--and I tell young people--there are only three
legitimate purposes for Government: to provide for the public
defense--at the national level the army, at the local level
police, and everywhere in between whatever is required of that
level of Government; the second is to invest in things that
people can't do for themselves, roads, bridges, aqueducts,
railroads, the kinds of things they can't build; and the third
is to jealously guard their liberties. Everything else we do is
whipped cream and sprinkles. That is the cake. And what we need
to do is wisely invest, guard the liberties of our people, and
spend their money wisely. That is why we have criticisms of the
business plan.
But we are not prepared to throw the baby out with the bath
water. In my region, we would like to fill the bath tub from
both ends, but we want to have the ability to move people and
goods, and to bring economic integrity back to this country.
And that is why the mayors fight for jobs, because they matter
to the people we see in the grocery stores. Thank you, ma'am.
Ms. Brown. Yes, ma'am.
Mayor Swearengin. And I would just like to go back to the
question from Mr. Harris, and just tell you that the dollars
came out a few days before the election. But what I didn't have
a chance to tell you is that 2 years leading up to that,
coalitions of business leaders and local government leaders
worked so hard to make the case to the High-Speed Rail
Authority and to the Federal Government to draw attention to
our region that it is the lowest cost place to build, and it is
the fastest-paced path to private investment.
We were getting bombarded by the interests of northern and
southern California indicating we wouldn't see any of those
dollars. Yet we fought hard, with local business in the lead,
and ultimately made the case. So there is merit behind that
decision. The political speculation I will leave to the
editorial newspaper writers.
Mr. Denham. Thank you. Mr. Harris?
Dr. Harris. Thank you very much. And you are right, we will
leave that to speculation. You make exactly my point. Here a
process goes along 2 years, and just coincidentally, a few days
before an election hundreds of millions of dollars.
And I don't mind, you know, if California wants to build
it. God bless them. I know you all are sixth largest economy in
the world--what is it, I forget the statistic. But you know,
California says, ``Oh, if we were a country, we would''--well,
that is exactly the issue here. And, Mr. van Ark, that is
exactly the issue.
Because, you know, California's economy probably is bigger
than France's, isn't it? It probably is bigger than all those
countries you named, with the perhaps exception of Japan, all
the countries you named. But California is coming to the rest
of the United States and asking to fund a project that starts
as a train to nowhere--and Mr. van Ark, I am going to ask you,
because the business plan, to be successful, does really depend
on an ultimate build-out, doesn't it?
It does. The business plan depends on an ultimate build-out
to be ultimately profitable, as a system. Is that right, or can
we stop 3 years into it and everything we built up to then is
profitable?
Mr. van Ark. The business plan is built up in phases, and
each one of the phases has got an added value and a benefit to
the State and to the Nation.
Dr. Harris. I am not sure that answered my question. Is it
profitable if it is not built out?
Mr. van Ark. The initial operating section would be
profitable.
Dr. Harris. Oh, OK. Once you get past the initial operating
section, is it profitable--now there is a reason my--let me
just skip to the--the total cost is now projected to be 90-
something. Let me see what it--$98.5 billion.
I am a doctor, I am not a mathematician. But if you take
the $9 billion in California bonds, and then you add the $52
billion in Federal spending, that comes to $61 billion; $98
billion from $61 billion is $37 billion. California just
announced that they were cutting their budget, what, $900
million because of a shortfall. I don't project California to
have a whole lot of money flowing around for the next few
years. Leaves a $31 billion gap. Call me skeptical--maybe that
is why the private partnerships that you are looking for are a
little skeptical--because the build-out is $98.5 billion, and
on a good day you have accounted for $61 billion. And you are
hoping that some private people are going to come out of the
woodwork.
And I have got to ask you, because you said--because I
think all the testimony is the operating profit, there is an
operating profit, but there is $30 billion of unaccounted-for
capital. Is that right? Are we assuming that that capital is
going to come at no cost to this build-out, ultimately? That it
is either funded by taxpayers of the United States or taxpayers
with California, with no realistic reason to believe that they
get a return on that?
Mr. van Ark. If I could just refer back to the initial
operating section, we are talking about just over $30 billion.
So, the $30 billion would be the----
Dr. Harris. I am----
Mr. van Ark [continuing]. Period where you would already
attract the private investment.
Dr. Harris. You hope you will attract the private
investment.
Mr. van Ark. You----
Dr. Harris. Because there is no private investor out there
who said they will do this.
Mr. van Ark. There are private investors that have
indicated their willingness to participate. But obviously,
there is no project well enough developed to be able to attract
and sign a contract on that basis.
Dr. Harris. So they are willing to participate. Do you
believe their understanding--will they be willing to provide
$30 billion toward the ultimate build-out of capital expense?
Mr. van Ark. The business plan indicates that the amount of
private investment would be--depending on how far we go, the
first phase would be $11 billion, and then we would go up to
about--just over $20 billion, private----
Dr. Harris. So $20 billion of private investment.
Mr. van Ark. That----
Dr. Harris. What happens if that private investment doesn't
materialize? What happens to my--my citizens in the First
Congressional District, what happens to their investment 2,400
miles away?
And look, believe me, I feel for your congestion at the
airports in Los Angeles and San Francisco. Flew through there a
few months ago. It is absolutely congested. But what happens to
my citizens' investment in that project if you don't get that
private investment?
Mr. van Ark. As I mentioned, the project is built up in
phases. And at every phase you can actually not continue beyond
that phase. But when you get to the IOS you will have an
operating section. So that means you will be able to operate
the system, but you may not necessarily then decide to expand
the system beyond that.
Personally, coming from where I am, I believe it will be
profitable. The market and the world says so. But----
Dr. Harris. But----
Mr. van Ark [continuing]. You can stop. That is why we have
the phases, where you can actually only build one IOS and stop
there.
Dr. Harris. But----
Mr. van Ark. And you are not expending----
Dr. Harris. But you do understand the situation is
different from European countries, where this exists in one
section of the country that is far away from other sections.
One could argue it is much more easy to derive a benefit of
every citizen in France from the French high-speed rail,
because everybody lives pretty close to that rail, by U.S.
standards, pretty close.
Again, I just have to go justify it to the people in my
district, because we are coming to ask them to participate in a
$52 billion buy-in. Thank you, Mr. Chairman.
Mr. Denham. Mr. van Ark, I will allow a very brief
response, if you have one.
Mr. van Ark. I think that response becomes more political
than my position, Mr. Chairman. I think you understand that.
Mr. Denham. At this time I will remind Members that votes
have been called. We have less than 10 minutes--actually, we
have 9 minutes left--on the first vote.
Before I close down the committee hearing, I would like to
allow Ms. Alexis, who sat very patiently, 1 minute before we
close.
Ms. Alexis. Yes, I mean I think we do need to really look
at the details of this plan. And we keep talking about initial
operating segment, and that should be understood, that that is
one of the--there is only two proposals. One is from San Jose
to Bakersfield. There is no other system in the world which
would have an initial starter line. You cannot say that Lyon to
Paris is Bakersfield to San Jose, where there are exactly
zero--zero--flights.
If you cannot attract those business travelers, the people
who like to pay for air flights, you are not going to have a
successful high-speed rail system. And so, to compare this $30
billion investment for Bakersfield to San Jose to the systems
around the world is just very faulty logic. And we really need
to step back and rethink this.
I mean there are things that make sense. There is a price
tag that would make sense for this project. There is a routing
that would make sense for this project. But we are really far
away from there. And we are getting ready to build. We are
nowhere close to that stage. Thank you.
Mr. Denham. And Ms. Brown?
Ms. Brown. I just want to say that the argument goes both
ways for Mr. Harris. The people of California have been asked
to foot the bill for Amtrak service to upgrade Maryland,
including tunnels and the Chesapeake Bay. And so, I mean, we
could argue this back and forth. This is the United States of
America. This committee is the infrastructure and
transportation committee. This committee is the committee that
actually put people to work. Jobs. We keep the goods separated
from the people, and we make it safe.
And so, what we need to do is to work with the people in
California and the rest of the United States to move us
forward. As I said all along, Florida--I mean you got our
money, you got $3 billion, 18 States got it. And so, I mean,
60,000 jobs. So the point is I want to make sure that we
utilize that, and that we put people to work with our money.
Because it is the United States. So, you know--of America.
And so, therefore, I am not--we are not competing with
Georgia and Alabama. And it is very important that we do what
we can to help you, so you can be competitive. Then we all do
well. Thank you very much.
Mr. Denham. Well, that sounds like a perfect note to end
on. We would like to thank the Floridians for their help in
this project.
[Laughter.]
Mr. Denham. I would like to thank each of the witnesses
here today that have been very gracious with their time.
The hearing record will remain open for 2 weeks to receive
materials for the record submitted by unanimous consent, and to
submit questions for the record to the witnesses.
The hearing of the House Transportation and Infrastructure
Committee is now adjourned.
[Whereupon, at 1:54 p.m., the committee was adjourned.]