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Government & Politics

POLITIFACT: Is The Private Sector ‘Unwilling’ To Fund California’s Bullet Train?

Califonia High-Seed Rail Authority
An illustratration showing how high speed rail may look adjacent to Shaw Ave in Fresno, CA (file photo)

California’s bullet train project has faced new criticism in recent weeks. Its leaders have been accused of hiding higher cost estimates and failing to win funding from the private sector.

One recent attack by a Central Valley state lawmaker caught the attention of Capital Public Radio’s PolitiFact reporter Chris Nichols.

Plans to build a high-speed rail network from LA to San Francisco rely heavily on private funding.

This summer, the California High-Speed Rail Authority asked private companies for advice on how to make its $68 billion bullet train plan more efficient -- and more appealing to investors.

More than 30 companies responded with ideas, and some concerns.

Soon after, Republican Assemblyman Jim Patterson of Fresno told the LA Times: “We now know these firms are unwilling to put up any private money."

He made a similar statement on a Central Valley TV show:

Jim Patterson: “We are now finding out that there really is no private money.”

Questions about the project’s huge cost and lack of funding have dogged the rail authority for years. But was Patterson right that the private sector has already written off the bullet train as a bad investment?

We decided to ask the companies themselves.

Stephen Polechronis: “I think a correct way to look at that is the project is too early for the private sector to have committed money.”

That’s Stephen Polechronis, a vice president with AECOM, one of the firms that responded to the rail authority’s request for advice.

Polechronis: “We’re only at that very first stage where the authority has asked for expressions of interest -- not proposals, but interest.”

Michael Cahill, a Siemens executive, also rejected the idea that his firm has given up on the rail network. He told the Sacramento Bee there wasn’t an opportunity to fund the project, which “doesn’t mean we wouldn’t be interested. Quite the opposite.”

Private firms have expressed many concerns about the project. None have stepped forward with funding to date. Several companies advised the rail authority that financial markets won’t be able to fund the huge venture, unless its contracts are broken into smaller pieces.

Lou Thompson: “What the private sector has said is that it is not willing to take many of the risks that the project would entail as of now.”

That’s Lou Thompson, head of the project’s independent oversight panel.

Patterson, for his part, told us he stands by his statement that the private sector is turning its back to high-speed rail, through his spokeswoman.

But after hearing directly from several private firms, it’s clear: They are playing a waiting game.

We rate Patterson’s claim that they are ‘unwilling’ fund the bullet train as Mostly False. The statement contains some element of truth but ignores critical facts that would give a different impression. 

You can read full versions of all our fact checks at politifactcalifornia.com.

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