Congressman Denham Questions Transportation Secretary about Viability of California High-speed Rail

Dec 6, 2012 Issues: Government Waste, Transportation

Opening Remarks

WASHINGTON, DC — U.S. Representative Jeff Denham (R-Turlock), member of the House Transportation and Infrastructure Committee, today called on U.S. Department of Transportation Secretary Ray LaHood to address growing concerns regarding the viability of the proposed California project in the Administration’s high-speed rail program during a House Committee hearing.

“There are a lot of things we would like in California, and a new shiny train would be one of them,” said Denham, Chairman of the Economic Development, Public Buildings and Emergency Management Subcommittee.  “It would be fun to have, but the question you have to ask yourself is ‘can we afford to have something fun, can we afford to have a luxury right now, and can we afford to do it with no viable plan and no private investment?’”

Serious criticisms of the California project were leveled by members of the Committee and witnesses, including the U.S. Government Accountability Office (GAO) and the Department of Transportation Inspector General. California Congressman and House Majority Whip Kevin McCarthy also testified at the hearing, joining Denham to highlight their continued concern about the lack of a realistic plan for the project.

“From skeptical independent analyses of the California high-speed rail business plan to the lack of committed private funds to ever-changing cost and rosy ridership projections, it is clear there are serious questions about this project’s viability and when, if ever, it will be completed,” McCarthy said.  “While we face a fiscal cliff, I will continue fighting to oppose new federal subsidies for this project.”

Rep. Denham has always believed that there needs to be a concrete business plan to prevent taxpayer money from being squandered on this idea. The House passed an amendment to H.R. 5972, the Transportation, Housing and Urban Development, and Related Agencies Appropriations Act of 2013, introduced by Denham earlier this year to prevent funding from being used on California High-speed Rail. During questioning at today’s hearing, Denham prompted Transportation Secretary LaHood to justify moving forward with this project without a concrete business plan that ensures accountability for taxpayer dollars and instills confidence in private investors.

“I’m a businessman too,” said Denham. “I know that I can’t go out there and borrow money and expand my business or sell a new product until I have a business plan to sell to investors.  You’re trying to sell me on a plan so I won’t put any more amendments out there, but I just want to see the numbers; my district wants to see the numbers. And I think the State that has obligated state dollars needs to see a plan as well.”

Susan Fleming, Director of Physical Infrastructure Issues for the U.S. Government Accountability Office (GAO), also provided testimony addressing problems with the High-Speed Intercity Passenger Rail Program (HSIPR) and the project overseen by the California High Speed Rail Authority.         

“The California high-speed rail project faces many challenges,” said Fleming in her statement.  “Chief among these is obtaining project funding beyond the first 130-mile construction segment.  While the Authority has secured $11.5 billion from federal and state sources, it needs almost $57 billion more.  Moreover, the HSIPR grant program has not received federal funding for the last 2 fiscal years, and future federal funding is uncertain.  The Authority is also challenged to improve its ridership and revenue forecasts.  Factors, such as limited data and information, make developing such forecasts difficult. Finally, the environmental review process and acquisition of necessary rights-of-way for construction could increase the risk of the project’s falling behind schedule and increasing costs.”

For more information from today’s hearing, including video, written statements from the witnesses, and background information, click here.