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EconomicsInfrastructureInsightsMarket InsightNewsRailroad

Commentary: Train to nowhere destroys valuable agricultural production

FreightWaves features Market Voices – a forum for voices with unique knowledge of numerous transportation/logistics/supply chain sectors, as well as other critical expertise.

For the past several years California has been preparing to construct a high-speed rail project through the Central Valley. The prime agricultural land appropriated by the state is now sitting fallow with no production, and now there is likely to be no high-speed rail service either.

In February, California Governor Gavin Newsom pulled the plug on California’s ambitious high-speed rail plan. Though he had been a proponent of the plan, he realized that the project was out of control. “Let’s get real,” he told the crowd gathered to hear the announcement, referring to the obscene cost, poor planning and lack of transparency that have plagued the project since its beginning.

To keep a spark of hope for the bullet train alive – and some say to justify not returning the $3 billion that the federal government gave California for the project – Newsom proposed trimming the project and constructing the part of the rail line that the state had begun through the Central Valley. “Abandoning the high-speed rail entirely means we will have wasted billions and billions of dollars with nothing but broken promises, partially fulfilled commitments and lawsuits to show for it,” he said. But opponents believe the scaled-back version of the rail line misses the point of the project.

Lee Brand, mayor of Fresno, California, stated “This will do no good if it’s only from Bakersfield to Merced,” he told Newsom at a conference in Fresno. The original plan was pitched as a project to bring convenience and fast travel between northern and southern California as well as to ease congestion on California’s overburdened infrastructure. But the project also was pitched as a way to bridge the urban/rural split that sharply divides the state.

Since just after the measure to fund the train passed there has been waning support for it. A 2018 poll conducted by the Los Angeles Times and the University of Southern California indicated that 64 percent of Central Valley residents and 49 percent of residents of the entire state want to end the project. But it’s too late for cities like Fresno. Brand’s city is right in the middle of the Central Valley; demolition work to prepare for the high-speed train has scarred the city. California used eminent domain to take some of the most fertile agricultural land in the world, and has also forced businesses in and around Fresno and other Central Valley cities to close or has given deadlines for when they must close.

The voters of California passed a bond measure in 2008 to fund the train. The measure allowed the state to raise almost $9 billion for the project. However, in late 2018 a state judge ruled that California cannot utilize the funds until it creates a new plan to raise more money in an amount that appropriately reflects the true cost of the project.

Initially the rail line was supposed to cost just over $10 billion. However, soon after the bond measure passed the projected costs rose to around $33 billion, which then quickly jumped to $66 billion and then to over $77 billion before Governor Newsome halted the project. And some insiders say the true costs for the line would likely be around $110 billion when all is said and done. These quick and sharp cost increases made some California voters wonder if the issue had been represented fairly and accurately before the vote. 

The fact that the governor cancelled or at least delayed the project is of little consolation to many Central Valley farmers. The state has yet to pay them for the land that it appropriated for the project. The growers are missing out on production cycles and some have had their farm infrastructure destroyed. This means lost income and no way to recoup it quickly in such a capital-intensive industry. They are completely at the mercy of the state and are having a hard time getting answers from the state railroad board. John Diepersloot, a peach grower who cut and cleared a large percentage of his trees, told the Los Angeles Times, “I am out a quarter-million bucks on infrastructure, and they haven’t paid a dime for a year. I don’t have that kind of money.”

Sacramento attorney Mark Wasser, who represents more that 70 farmers suing the state, said that even more troubling than not being paid the money is the project’s ambiguity and lack of transparency.

“The property owners are very frustrated that the high-speed rail authority doesn’t seem to know what they actually need. We have farmers who the authority has come back to four times to change what they want to take.”

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Ben Thrower, Contributor

Ben contributes to the FreightWaves website as one of its Market Voices. Ben was a financial analyst at Dole Fresh Vegetables in Monterey, California focusing on the company’s extensive supply chain. He holds a Master of Science in Finance from the University of Utah and a Master of Science in Logistics Management from Georgia College and State University. In addition to contributing to FreightWaves, Ben is an instructor of business statistics and computer applications at the Wright School of Business at Dalton State College in Dalton, Georgia. In his spare time, Ben loves to travel and spend time with his dog, Bodhi.

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