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California's high-speed rail forces seek big slice of stimulus pie

California's long-delayed dream of a high-speed train zipping up and down the state is in line for a hefty – and much needed – slice of a federal stimulus pie.

The American Recovery and Reinvestment Act approved by Congress in February contains $8 billion to be doled out to states for development of high-speed rail service and passenger rail service among cities.

California wants half.

"As of now, we have close to $4 billion worth of things we can show can be done within the time limit" of the act, said Mehdi Morshed, executive director of the California High-Speed Rail Authority, the agency charged with building a speedy rail line connecting Northern and Southern California through the Central Valley.

Morshed and other California boosters are trying to make the case with federal transportation officials that when it comes to high-speed rail in the United States, the Golden State is king.

"All factors considered, we are at the top," Morshed said. "We are the only ones with a real high-speed rail project. Everyone else is just improving their current (conventional) rail service."

There is little argument that compared to other states, California's project – which could wind up costing up to $85 billion, depending on whom you ask – is closest to reality.

Project boosters contend it eventually will connect all of California's major population centers with 800 miles of high-speed track and trains that will carry more than 100 million passengers a year and hit speeds of 200 mph-plus.

For most of its 13-year existence, the rail authority has scuffled along on shoestring budgets. Last week, in fact, the authority got a short-term $29 million loan from the state's Pooled Money Investment Board to carry it through the rest of the fiscal year that ends June 30.

Last November, voters approved a $10 billion bond issue that is supposed to serve as seed money for the system. But because of the dreary economic climate and the protracted state budget battle last fall and winter, none of the bonds have been brought to market yet.

The rest of the $35 billion that rail authority officials estimate is needed for the first phase of the project – a line through the Central Valley connecting San Francisco with Anaheim – is supposed to come from the federal government and private investors.

And therein lies the importance for California scoring a significant chunk of the federal dough.

"Private investors are very interested in the project," Morshed said, "but because it takes so long, they want us to do the initial items, the environmental work, acquisition of the rights of way, building some pieces … so they don't have to wait 10 years to get some return on their investment.

"So you have to initially spend the public money, and then they will get excited and come in and do the rest. Anything we can do to expedite construction is important, and for that we need all the public money we can get."

California's chances are augmented by having some heavy political hitters in its corner, including House Speaker Nancy Pelosi, D-San Francisco.

In a recent letter to Transportation Secretary Ray LaHood, Pelosi and 20 other California congressional members outlined criteria they said should be taken into account when awarding the stimulus funds. Not coincidentally, the only project that meets the criteria is California's.

But other projects also have heavy hitters. A Midwest proposal that would tie Chicago to St. Louis and other major cities in the area is a favorite of President Barack Obama's.

A plan to tie the Los Angeles area to Las Vegas with a bullet train is smiled on by Senate Majority Leader Harry Reid of Nevada, although it's unclear whether the project is eligible for the federal funds because it is being promoted by a private group.

There are also serious proposals from Texas and Florida, where previous efforts to get high-speed rail projects out of the barn flopped, in part because of opposition from then-Texas Gov. George W. Bush and then-Florida Gov. Jeb Bush.

And California's recent budget problems and incessant partisan squabbling also might affect its share.

"The only reason you wouldn't spend $2 billion or even $3 billion or more on California is if you had doubts about the state's commitment or ability to do the high-speed rail project," said Ross Capon, executive director of the National Association of Railroad Passengers. "California has the lowest bond ratings of any state … and there are some doubts about its political leadership."

Critics also contend that California's proposed system is riddled with greatly inflated ridership estimates and greatly understated cost projections.

"The California authority has ignored the lessons of Florida and Texas, and has repeated all the mistakes," said Joseph Vranich, a former Amtrak official and former president of the High Speed Rail Association. "It hasn't produced a single number or report or prediction that is true."

For example, Vranich argues, California should be disqualified from receiving federal rail aid because its environmental impact statements are outdated and inaccurate.

Morshed, who denied the state's project lacks accurate EIS documents, said a bigger fear is that federal transportation officials will adhere to political expediency and disburse the money in widespread, but tiny, amounts.

"If they decide to spend the money all over the place, that's a big problem," he said, "but we're hoping they will focus on just three or four projects."

Federal transportation officials are scheduled to issue initial guidelines for formally applying for the money next week and final rules in June.

In the meantime, authority officials are acutely aware that the best way to grab a big share of future federal and private investments is to get dirt moving.

"The groundbreaking goal is as soon as we can," Morshed said. "Depending on how much money you can give me and what (political) leverage you provide me, we can break some ground. … It's quite conceivable that it could be next year."

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