Economic Downturn Affects California High Speed Rail Project
Another Negative Impact of the Economic Downturn
The global economic downturn has already contributed to a major deficit at the New York MTA, lowered the value of recycled materials, and of course hurt individuals and businesses around the world. Another victim, it seems, is now the California High Speed Rail Initiative, which Californians approved on November 4th. The ballot measure approved investing "nearly $10 billion in a statewide high-speed rail system," but unfortunately "the agency charged with getting it built is running out of money." Read on to find out why. The agency, known as the California High Speed Rail Authority, had a budget for this fiscal year for $29 million, some of which was to come "from the sales of high-speed rail bonds authorized by voters in November. But because of the state budget crisis, the credit crisis and the poor market for bonds, the state treasurer has not sold any of the rail bonds." As a result, the Authority has had to "[halt]payments on engineering and design contracts in progress and are holding off on awarding new contracts."
Fortunately, the future of the project still looks good, as "the governor's early state budget proposal for the 2009-10 fiscal year includes $123.8 million for high-speed rail, just a half million dollars short of the agency's request." Nevertheless, keeping the high-speed rail line on track (no pun intended) will be difficult, as the Authority will most likely be forced to take a loan from California's Pooled Money Investment Board just to be able to pay existing bills.
Still, Californians seem very committed to having the proposed 800 mile high-speed rail line, which will run the length of the state, completed on time. It would be the first true high speed rail system in the US, and could serve as a model for green job creation from infrastructure projects, something the incoming administration is talking a lot about.
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