Tampa to Orlando High Speed Rail: More Evidence for the Potential $3 Billion Cost Overrun

Rachel Wall of the California High Speed Rail Authority told The American Spectator that the short Corcoran to Borden segment that has been approved represented “the most amount of infrastructure for the least amount of money." In other words, it is the least expensive segment of the system. The Corcoran to Borden segment will be built largely through rural land and little will be in urban areas.

By contrast, much more of the Tampa to Orlando high speed rail line is to be built in urban areas and there are other differences which should generally cause the line to be more expensive than this first California segment.

Despite these differences, the Tampa to Orlando high speed rail line is projected by promoters to cost one-half that of the easier-to-build California segment. Based upon these differences, our Reason Foundation report (The Tampa to Orlando High Speed Rail Project: A Florida Taxpayer Assessment) indicated that the cost overrun could be as much as $3 billion on the Tampa to Orlando route.

In addition, taxpayers of the public agency that would receive the proposed $2.4 billion federal grant for the project would be responsible for any cost overruns (such as the potential $3 billion cost overrun) and any operating subsidies. Further, should service frequencies not meet federal standards, the taxpayers would have to refund the money to the federal government. In fact, the state of Florida is already paying more than $10 billion additional each year to support an artificially higher level of service on the Miami area commuter rail system (Tri-Rail), to avoid repayment of one-quarter billion in federal grants under the same federal policy.

Ms. Wall’s statement contributes further evidence to support the conclusion that the costs of the Tampa to Orlando high speed rail line may be representative of the low-ball estimates that have been routine in similar projects around the world.

A number of public officials and project promoters have suggested that these obligations would be assumed by the private company receiving the contract to build the system. This view is both naïve and misleading. As we indicate in our Heritage Foundation blog article (The Tampa to Orlando High-Speed Rail Line: Protecting Taxpayers) last week, “Promises and statements from project promoters will not reimburse the taxpayers when the private consortium fails to pay. The inevitable statements of regret will do nothing to soften the blow.”

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