SAN FRANCISCO - This month, California voters issued a mandate for a high-speed passenger train system linking the southern part of the state with the San Francisco region.
Now the action moves to the nation's capital, where the fate of the proposed system lies largely in the hands of Congress.
The voters, by a margin of 52% to 48%, approved Proposition 1A, a $9.95 billion state general obligation bond authorization. The measure authorizes $9 billion to help finance construction of a high-speed train system linking San Francisco and Anaheim, with provisions for future extensions to destinations like San Diego and Sacramento. The balance of the bond authorization is for other passenger train projects.
The vision calls for an electrified train system - similar to Japan's bullet trains or the TGV trains in France - operating at speeds of up to 220 mph largely on its own new trackage.
It's a vision that is projected to cost $33 billion in 2008 dollars, according to a new business plan the California High-Speed Rail Authority released last week. The plan calls for about $7 billion of funding through public-private partnerships, and about $3 billion to $4 billion from local authorities - leaving the project dependent on $12 billion to $16 billion in federal funds.
Even in an era defined by talk of hope and change, California is hoping for a large chunk of change from the federal government.
"I am satisfied from my readings that enthusiasm has increased in Congress for high-speed rail," said Quentin L. Kopp, chairman of the rail authority's board.
While the quest for funds may well require the entire term of the incoming 111th Congress, that does not pose any immediate roadblocks to the rail authority, according to Kopp.
"Look, we're not ready until 2010 for construction," he said, adding that the full construction process would take eight years.
The rail authority's immediate focus will be to complete preliminary engineering and environmental reviews for the core of its planned system.
The High-Speed Rail Authority received about $46.7 million in the current state budget, Kopp said - $17.5 million from the general fund and $29.2 million from the bonds authorized last week.
"We will not need that money until, oh, January at the earliest," he said.
In California, the state treasurer's office typically sells bond on a reimbursement basis, using the state's Pooled Money Investment Board to provide upfront money for bond programs.
"We are therefore in the process of preparing and submitting an application for that," Kopp said.
He said the authority anticipates needing another $100 million in fiscal 2010, presumably from the bond authorization.
"That should enable us to finish the engineering by July 2010," Kopp said.
By then, backers of the project hope, federal funding will be in the picture, something that will be necessary in order to draw private investment that is also an integral part of the plan.
A harbinger, perhaps, was the recent passage of a combined bill on rail safety and reauthorization for Amtrak, signed by President Bush in October.
Among the provisions was an authorization of $1.5 billion for planning high-speed rail corridors over the next five years.
"That would be an initial funding source, but obviously it would have to increase beyond that," said Sasha Page, vice president at Infrastructure Management Group Inc., financial adviser to the California rail authority. "Obviously there's a lot of interest in rail. California demonstrated that, but nationally as well."
He said the authority expects to pursue funding sources that include straightforward federal grants, tax-credit bonds, and funding derived from carbon credits.
The rail agency will also look keenly at the coming bill to reauthorize federal surface transportation programs, after the current authorization ends in 2009, Page said.
Kopp, a veteran of 12 years in the California Senate and a decade and a half on the San Francisco Board of Supervisors, laid out the challenge in political terms.
"Now we have to fend off other states," he said.
In its business plan, the authority projected that its annual operating costs for the Anaheim-to-San Francisco system would be $1.3 billion, for a network that would generate $2.4 billion in revenue.
The authority projects that the $1.1 billion annual operating margin will leverage about $7 billion in investment from private participants in public-private partnerships. Officials believe that P3s could also help the authority mitigate construction, completion, and ridership risks.
Page said the California rail authority drew a strong response from potential private partners when it initiated a formal request for expressions of interest earlier this year.
But the nitty-gritty solicitation of partnerships is likely to wait until the authority overcomes initial hurdles, such as obtaining initial environmental approvals and securing the all-important federal funding.
But the first, most important hurdle was cleared on Election Day, Page noted.
"The private sector had to see that California was willing to make the investment, not just financial but politically as well, and that has clearly happened," he said.