California officials now plan to outsource the production of high-tech trains for their hugely expensive fast-rail network, and have quietly dumped their commitment to buy American-made trains.
Gov. Gerry Brown released the news one day after the Nov. 8 elections, when the California High-Speed Rail Authority issued a request to the federal government for an exemption from the “Buy America” requirements of federal law. That law requires that taxpayer subsidies and funds be used to buy U.S.-made products, and the exemption would allow the taxpayer funds to be used to buy foreign trains from foreign factories.
California politicians and “choo-choo” advocates have touted high-speed-rail as the industry of the future. They promised there would be a global race to open up manufacturing plants in the Golden State that would create thousands of high paying jobs to build the first 16 trains at a cost of about $1 billion.
But CHSR filed for an exemption from the “Buy America” legal requirements, saying there are no U.S. passenger train manufacturers currently in existence.
The real reason for outsourcing the work appears to be the exploding cost of the program that is revealed in the “2016 CHSR Business Plan.” Originally estimated to cost $33 billion when voters approved Proposition-1A in 2008, the rail network’s expected cost has now skyrocketed to $64.2 billion.
Breitbart News reported that the new plan revealed in very small print that the project also added another four-year delay, further escalating costs. According to construction project finance expert Bruce Lawrence, he conservatively estimated that with the inflation rate for construction running at least 5.5 percent annually, the four-year-delay would add another $15 billion. That would bring the total project’s sticker-shock to $79.3 billion.
CHSR spokeswoman Lisa Marie Alley told the San Jose Business Journal that system is planning to issue a request for proposals to train manufacturers within the next eight months. They will ask companies for plans to produce two prototype trains and 16 trainsets of 10 cars each, capable of 220-mph service.
Alley claimed “6 to 8 percent of what we need for the trainsets” can’t be manufactured in America yet. She claimed that, “The whole idea is that we would then, during the process of having it all built and manufactured, transfer that knowledge and skill into America so that the industry will have been set up in America to do that here.”
Under the President Barack Obama’s administration, “Buy America” has become buy somewhere else. Amtrak got a similar “waiver earlier this year when they ordered 28 replacement trainsets” to buy from Alstom in France.
Critics speed rail claim that although Amtrak’s new trains are supposed to be assembled in New York State with about 95-percent U.S.-made components, once a “Buy America” waiver is approved, it will be easy to keep dropping the U.S.-made share.
The current subsidized Caltrain’s fleet of commuter trains were originally supposed to be purchased under the “Buy America” requirements. But the passenger cars were bought came from Japan’s Nippon Sharyo and Canada’s Bombardier. Even its new electric trains have been ordered from Stadler Rail of Switzerland.