Imagine walking into a state of the art train in
downtown San Francisco and traveling at speeds of more than 200mph and arriving in Los Angeles less
than three hours later. No airport security lines, no traffic
jams. This is what California voters envisioned back in
2008 when they voted yes on high-speed rail. But here we are 15 years later. At the time it was estimated to cost $33 billion
and would be complete by 2020. What happened? At that time when we went to California voters,
you know, that was for a portion of the funding. And I think that's something that we're
trying to be very clear about, is that we've never had the full funding to construct and complete
high speed rail in California. Progress has been made. We have one segment that's going to be completed
this year. We're working very hard to get the other two
segments done, and we're also doing a lot of the design work for Merced and into Bakersfield. But there is not enough money left to complete the
project. Not even close. The latest estimates show it will cost up to $128
billion to connect San Francisco to L.A. The project has spent to date about $9.8 billion. We knew we've had a funding gap ever since the
project started. What I know is this the earlier we build it, the
cheaper it will be. CNBC visited California's Central Valley, where
construction is underway to find out what it will take to complete what would be
the nation's largest infrastructure project. High-speed rail dates back nearly 60 years. The world watched in awe as Japan displayed its
newly built bullet train during the 1964 Tokyo Olympics. Japan's Shinkansen has since carried more than
6.4 billion passengers without a single accident. Talk of high-speed rail in California started in
the 1980s, right as Europe was starting to build out its high-speed rail network. The California High Speed Rail Authority was
established in 1996, but things didn't really start happening until California voted yes on a
$9 billion bond authorization. The real turning point came about 2008, 2009. However, it was very controversial at the
beginning. I mean, it still is, of course. But but we did get it off the ground and we got
the construction going. The plan is to build an electric train that will
connect Los Angeles to the Central Valley and then San Francisco in two hours and 40 minutes. Phase two of the plan will eventually extend from
Sacramento to San Diego, totaling 800 miles, with up to 24 stops. Why does the train go through the Central Valley? You know, I look at a map and I'm like, well,
what if it went along Highway Five? Was that ever considered? We were never on the five corridor. And there's a reason for that. The bond bill that
passed in 2008, it required the high-speed rail authority to connect the cities of the Bay Area
with the cities of the Central Valley and then back to the cities of Southern
California. Brian Kelly became CEO of the California
High-Speed Rail Authority in 2018. And Dan Richard, the former chairman of the
California High-Speed Rail Authority Board of Directors, said that just connecting L.A. And San Francisco was never part of the plan. There's been a lot of controversy about why the
Central Valley. But here's the reality, in the lower part of the
Central Valley, from Sacramento down to Bakersfield, there are about 4 million people. If it were its own state, it would be bigger than
half the states in the United States. That region has historically been
underinvested and left behind. What is the most challenging part of the project
as far as the construction goes? Ultimately, if you talk about the entirety of the
project from San Francisco to L.A. it's probably the tunneling segment. That'll be challenging work and it won't be cheap,
but tunnels are built for rail all over the world. They go through the Swiss Alps, if they
can go through there. We can figure out how to get them to Tehacapi. That's why the cheapest section from Bakersfield
to Merced will be completed first. So far, 119 miles are under construction. We are working very hard to have some kind of
segment between that section ready to go by 2030, between 2030 and 2033. What do you say to the critics that say it's a
train to nowhere? I chuckle because even the initial operating
segment between Merced and Bakersfield connects three of the fastest growing cities in
California. I think that's been a common mindset for a lot of
other projects, including Golden Gate Bridge. Years ago, that was the same
comment. It was a bridge to nowhere, and I don't think any
of us can imagine what it would be like to not have that bridge connecting us to
San Francisco. Yeah, it looks close. It looks like you're close
to ready to put the rails down. Right. This is one of our signature structures. You can see that with the arches behind us. And then eventually, once we're done with all of
the finishing touches on this structure, we'll be ready hopefully by next year to start the
planning process of putting down track and system. CNBC also visited the high-speed rail construction
site near Fresno back in 2019 and there has been noticeable progress since then. More bridges have been built, land has been
cleared, roads have been moved and certain sections are now ready for the track to go in. From the last time you were here, a lot of
different areas that we had started some utility relocations, some more preliminary work at our
construction sites, going from 30% design to now 100% design in the Central
Valley is pretty significant. Construction started here in Fresno in 2015, but
before that, California's especially stringent environmental review process
slowed things down. We have some of the most advanced regulation in
the world regarding safety and environment in the United States and these other geographies. That's Bent Flyvbjerg, he's an expert on
infrastructure megaprojects and recently published a book, How Big Things Get Done. Now, one thing with High-speed rail and actually
any new rail project is that it's cutting across a lot of land. So you'll have a lot of landowners and neighbors
who will be upset for losing their land to the project. In America,we value private property rights and
that's okay, but it means you have to get into full negotiation and pay fair
market value for taking needed private property to build a public works
project. When we finish just the environmental clearing
process, that cost is about $1.3 billion and that's for no steel in the
ground or no cement. 422 miles out of the 500 miles from L.A. to San Francisco have now been environmentally
cleared. The environmental documents that are key to being
able to get the project done have finally moved forward. We're expecting that by the end of this
year, end of 2023, all 500 miles of the project will be cleared. One of the goals of the project was to connect six
out of the ten largest cities in the state and bring economic growth to California's Central
Valley, historically one of the poorest regions in the state. I think the greatest success that we've had is the
impact on the community and the workers in the Central Valley. The Rail Authority says the project has created
10,000 jobs so far and generated $13.7 billion for California's economy from 2006
to 2021. Since high-speed rail has never been built
in the U.S. before, it's been tough to find US workers with
the necessary skills. So California High-Speed Rail offers a training
program. Desrae Ruiz went through the apprenticeship. She used to work at jewelry chain Claire's, but
now has been an ironworker on the railroad for five years. Working on the high-speed rail has allowed me and
my family to grow. I had my second child in the beginning of my
years on the high-speed rail. Me and my husband bought our first home. I purchased my first car and now I'm able to go
back into college to continue my degrees in construction. Daniel Rodriguez was born and raised in
California's Central Valley. I feel like it puts a sense of pride for everyone
around here to work hard at this job and just whether it be for them or their kids or, you
know, just the Central Valley, you know. So it's nice to have a project to work on and be
a part of and also have job security around here to know that we're going to be working on this
project for at least 5 to 10 years maybe, you know and that's great. In 2008, the same year that California voters
approved high-speed rail, China began operating its first high-speed rail line. Since then, more than 25,000 miles have been
built in the country. But things worked differently in the U.S. We're not going to bulldoze people out of the way. I mean, we're just not going to do that in this
country. We're not going to bulldoze over endangered
species. You have to worry about environmental protection. You have to worry about historic structures. Governance is much more fractured in the United
States. So it's not centralized like so like France and
Japan and certainly China. The policy in the U.S. is so subdivided, which is great for many things. But of course the downside is that it becomes
difficult to make big decisions. In the U.S. local jurisdictions have a lot of say
in infrastructure projects. This has led to a lot of bickering about routes,
political compromises and lawsuits over environmental concerns or land rights causing
costly delays. It gives us everybody a voice, which is a good
thing. But when everybody has a voice, the effort to try
to harmonize all the different interests becomes
that much harder. At one time, on the first 119 miles of the
project, there were 12 outstanding lawsuits challenging whether we can spend money
on right of way, challenging, whether it was compliant with environmental laws, challenging
whether or not it was the right use of bond money. The High-Speed Rail Authority has won
every lawsuit that has been filed against it. We're down to 3 or 4 now. We're in settlement discussions on all of them. It kind of comes with the process here in
California. As you move through that environmental process,
it can be litigious. Early estimates vastly underestimated these
additional costs. And along with the rising cost of construction
materials and inflation, the price of the project has skyrocketed. Its latest expected cost of up to $128 billion
puts it $100 billion in the red and it's not clear where
the money is going to come from. One of the biggest hurdles, clearly is funding. That roughly a little over $100 billion number. It's a pretty fair assessment, and I think
probably the most accurate assessment that we've had on this project since its inception. California is funding about 85% of that through
the cap and trade and the bond dollars. The federal government is funding about 15% of
that with federal dollars we received mostly in 2009 and 2010. We're hoping to balance that out a little bit
more with our federal partner as we go forward. It's going to need to be sort of a 60 over 40
relationship, if you will, between us. As far as that that funding split, we can't get
this project done without federal support. It's just not going to happen. It's not unprecedented for the federal government
to fund mega projects. To put it in perspective, the Federal Highway
Administration spent more than $72 billion on highways in 2022, and the F-35 program is
estimated to cost over $1.7 trillion to buy, operate and sustain the
aircrafts. But the support has been weak coming out of
Washington. The bipartisan infrastructure bill passed in 2021
did allocate $66 billion to rail, which was the largest investment
in passenger rail since the creation of Amtrak. But no money was specifically set aside
for high-speed rail. Critics of the project want to keep it that way. And I just don't want the federal government
getting involved in this. We shouldn't be subsidizing this program, not at
any level of government, and certainly not federal taxpayer money. And I just believe that this is a problem. I'm not anti-train, I'm not anti-worker, I am
anti-fraud waste and abuse and I'm anti-bad ideas. There was bipartisan support for high-speed rail. But, I will tell you that the day that President
Obama came out and announced that he foresaw an America where 80% of
Americans could be connected by their cities with high
speed rail at that moment, at that instant, the Republican support evaporated, which
was just ridiculous because, you know, there are no Democratic or
Republican trains, just like there are no Democratic or Republican potholes. But these obstacles to completing mega projects
are not unique to the United States. Britain is building a comparable high-speed rail
project that would link London to northern England. It's also faced controversy, delays and
costs that have skyrocketed to north of $100 billion. There's this stop go approach to delivering them. You know that that now, then you're doing it and
then you're not doing it. That's very bad for projects. If you decide to do a project like this, you need
to do it and you need to do it in as short a period of time as possible. Therefore, it's a really bad idea that both
high-speed two in the UK and California high-speed rail are doing exactly
this, taking a long time to deliver their projects. California's actively applying for grants from the
Federal Government to help complete the project, but competition is fierce. Brightline West, a private company, is another
high-speed rail project in the region. Which hopes to take passengers from Los Angeles
to Las Vegas and eventually connect to California's line. It has already received bipartisan support for a
$3.75 billion federal grant. So the question remains, will California
be able to finish this epic mega project? I'm concerned about where they put this
construction. California would have been better off if they had
started building from L.A. north and from San Francisco south, because if the
part that has been built turns out to be financially a disaster, you know, people are not
going to queue up for building the rest. But if you had built in San Francisco and L.A. And you could see a lot of people actually getting
on that train, then there would be more of a logic, you know, to actually finish the project. I don't have any question that it's possible to
finish it. And actually, when you look at projects around
the world, it's very rare that big projects like this when you've already spent like billions and
billions of dollars, that they actually get stopped. It's really easy to say, I don't want to spend the
money on this, but it's our kids and our grandkids and the future of the state and the
environment and our society. And every generation, I think has an obligation
to make those kinds of investments for the future. It's cool to be a part of this. I have two kids, so to see them and they're
hopefully they have kids later on and just be a part of it, Hey, my dad worked on that and maybe
they want to get into the trade and motivate them to do something like that. I feel it's a part of history. It's something that I'm able to to share and be
proud of. You can't build yesterday's transportation
projects for today's and tomorrow's challenges. You've got to build stuff that's
different. Electrified, renewable power, clean, fast rail is
part of that future. It's happening all over the world
and it needs to happen here, too.
Bulldoze the highway and build rail in its place.
And not in a "well yeah, some highway bulldozed some houses somewhere sometime" kind of way. Bakersfield demolished neighborhoods in the last 3 years to build a freeway extension.
Lmao they literally do that already for highways.
This video went through pains to explain that they are better than the highway projects of the past. And I appreciate that. But man, why do we have to live in a world where the thing that is bad for communities (cars and highways) is easy to build and disregards the community and the thing that is good for communities (0 emission transit) is hard, going on impossible to build?
Seattle light rail condemned a bunch of houses next to the highway to run track. The difference this time being that it wasn't sudden and it wasn't explicitly targeting minority communities. Mostly suburban housing this time.
What is the difference between eminent domain being used for freeways vs high speed rail?
Same in Europe. From what I heard from Germany a few years ago, the most expropriation they did was for highways. And then they turn around and say expropriation is ALWAYS bad!