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Report casts doubt on forecasts for California high speed rail

In a review of California's high speed rail project, a panel of experts determines that ridership and revenue projections need to be more conservative.

July 29, 2011|By Dan Weikel, Los Angeles Times
  • How a futuristic depot might look in San Jose.
How a futuristic depot might look in San Jose. (California High Speed Rail…)

Fresh questions about the ridership and revenue projections that underpin the state's $43-billion bullet train project have been raised in a new internal report by the agency charged with building the system.

Among the key conclusions of a California High Speed Rail Authority panel of experts is that forecasts of up to 117 million annual riders by 2030 — which have helped support predictions that the system would generate billions in profits — need to be recalibrated to be more conservative and better reflect important factors that could affect ridership.

The new critique comes as the authority is racing to complete a business plan for the Legislature and break ground next year on an initial segment in the Central Valley.

The analysis echoes some of the concerns of transportation experts at UC Berkeley. They concluded last July that the patronage models were so unreliable that they could not accurately predict whether the train would be profitable or run severe deficits.

Within days of the Berkeley report, rail officials and their consultants went before the authority's board to defend the forecasts as realistic and state-of-the art.

The agency's five-member peer review panel has found that projections prepared by consultant Cambridge Systematics Inc. are well-founded in many respects but suffer from "important technical deficiencies."

Additional peer review reports are planned in the months ahead as part of an ongoing effort to reexamine the project's patronage and financial forecasts. Panelists said they cannot draw more definitive conclusions about the agency's forecasts until issues they have raised are resolved.

Ridership forecasts are crucial for the project's 500-mile first phase, which would link Los Angeles and San Francisco. They form the basis of calculating ticket income, the amount of public funding required, stations needed, as well as the size and number of trains to be purchased.

Rail officials said Thursday that the new study is no cause for alarm and that the forecasts would be revised in time to complete the business plan by October.

"The purpose of peer review is to identify issues," said Tom Umberg, a former Orange County legislator who chairs the high speed rail authority board. "If the peer review group is raising issues that we need to address, that is helpful. Do we need to refine our ridership figures? Yes, and we are doing that."

Critics of the project said the peer review report is another indication that the authority's forecasts are unreliable.

"Not only is it bad; there is so much missing information that the review panel can't fully give their opinion on the original study," said Elizabeth Goldstein Alexis of Californians Advocating Responsible Rail Design. "You should not rely on these numbers."

Among other things, the panel stated that Cambridge used a now-obsolete survey method, made unrealistic assumptions, failed to properly analyze what would happen to ridership for varying levels of train service, and did not consider the impact of airline competition.

"Generally, Cambridge is well thought of," said David Brownstone, a UC Irvine economics professor who worked on the Berkeley study. "But the bigger take away from all this is that there are now two independent reviews that show things are lacking here."

dan.weikel@latimes.com

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