Irredeemable money-loser: TRANSDEF president condemns high-speed rail disaster

In what universe is a $5.3 billion price tag (more than three times the original estimate for SJ–SF and likely to further escalate) a bargain? In an exclusive Opportunity Now interview, David Schonbrunn—president of the Transportation Solutions Defense and Education Fund (TRANSDEF)—provides perspective on CEO Brian Kelly’s recent claim that the SJ–SF HSR project is a fiscal “bargain.” TRANSDEF has spearheaded litigation against this project since 2008 and continues to advocate for effective Bay Area transportation solutions.

Opportunity Now: The High-Speed Rail Authority CEO Brian Kelly recently claimed that the Bay Area HSR project is a worthwhile “bargain,” as it is still cheaper than expanding existing transit options. How does TRANSDEF respond to this statement?

David Schonbrunn: They’ve been saying that this is an affordable project from the very beginning. There’s a famous quote that goes, “Patriotism is the last refuge of the scoundrel.” In the case of Brian Kelly and this high-speed rail project’s proponents, the last resort is the cost-effectiveness argument. It’s weak because the economics don’t work.

First, they’ll never get enough money to actually build this thing. Even in the authority’s own documents, it’s clear that they have no realistic hope of getting funded to go outside the Central Valley, and that’s why this project right now is so completely ridiculous.

These politicians continue to trade on the name of high-speed rail as if that is the key to opening the door to endless money. However, this Californian high-speed rail project is not a business that anyone from the private sector will invest in because it’s a money-loser, and everyone from the professional rail sector recognizes this. The fact that there are no private sector investors in this project tells you everything you need to know about how it’s evaluated by the industry. Everybody knows that this is a loser; that’s why there’s no money in it. This project’s proponents are sitting there, hoping to get enough money.

We are rail advocates. We believe that high-speed rail is needed in California. The problem is this project and the politicians who have controlled this project.

Second, despite not having sufficient funds, we’re digging ourselves deeper in expenses all the time. This is a project that I fully believe has been engineered by the consultants to be insanely expensive to benefit them and their connections. For instance, the route that they’ve chosen isn’t what any high-speed operator would choose; it has huge detours, which were clearly built into the project for land speculators close to these politicians.

So this is money that has been wasted, not to benefit the public but to benefit several private sector interests. This high-speed rail project is making a lot of money for people who are connected, so it lives on.

ON: Do you think this project can be redeemed, or is it fundamentally doomed to fail?

DS: To us, it just looks like the authority wants to keep running as long as it possibly can, to blow every cent that’s available, and then disappear. I’ve never believed that they were intending to provide service. What’s going on is all about spending money and has nothing to do with benefiting the taxpayers and residents of California.

We believe the only option is to shut it down and throw away everything they’ve created. I see it as irredeemable.

We at TRANSDEF are bitterly opposed to throwing any more money at this project, convinced that this project has been a huge mistake from the very beginning. We did everything we could in the public interest to shut it down. The state fought back. Earlier this year, the Supreme Court chose not to review an appellate decision. It’s not a happy picture.