In order to meet the ambitious service and electrification goals in the State Rail Plan 2050, California will need to seriously re-think the shape and flow of design and capital investment. High-frequency intercity and regional rail service will require more resources but also more stable and predictable investment.
To this end, Californians for Electric Rail has published the policy brief Against Patchwork Funding: How Multi-Year Investment Frameworks Can Deliver Rail Infrastructure Cheaper and Faster.
Against Patchwork Funding discusses the status quo for rail funding in California, best practices in Low and Medium Cost Countries (LMCCs) and ways California could re-orient its funding practices to better implement the State Rail Plan.
In brief, California’s current funding program environment is highly unstable and discretionary. Unlike highway funding, there is no guaranteed funding for design and engineering for intercity and regional rail service and infrastructure development. As a consequence, many project sponsors must patch together funding for design over many years. This delay in funding pushes out final project design and capital construction for years. It also encourages project sponsors to apply for and win construction funds at conceptual design when project scope is not fully defined – which provides 3rd parties with leverage to demand costly design changes and often results in much higher costs as design is completed.
Similarly California does not guarantee capital funding for intercity and regional rail projects – even if they are identified in the State Rail Plan. Intercity and regional rail projects must compete against a variety of other projects such as rolling stock, renewals, EV charging at stations, mobility hubs and the like through competitive, discretionary grant programs like Transit and Intercity Rail Program (TIRCP). In order to meet all these demands for discretionary construction dollars, funding agencies make partial awards. These partial awards force project sponsors to fill remaining gaps with further competitive grant programs – which further pushes out full funding and construction.
Low and medium cost countries handle investment in their rail networks in a different way – more akin to the stability associated with highway programs. First, design is fully-funded through state engineering departments or publicly-owned engineering firms. Second, awards for construction funding aren't committed till designs are near or fully complete. Third, construction funding is planned, tracked, evaluated and granted through 4-6 year investment frameworks. These frameworks provide a stable and transparent pipeline for both project sponsors and funders. Project sponsors know exactly how and when they can be expected to receive full funding. Funders have clear visibility on how projects are being developed and can provide early feedback to manage scope, costs, schedule and risks. Fourth and finally, multi-year investment frameworks provide full construction funding awards for projects.
The good news is that California has a visionary State Rail Plan, a strong service-led planning culture at Caltrans, and the FRA’s Corridor Identification Program as a model for workflow. It just needs to re-structure its current investment structure to prioritize full funding of design and multi-year investment frameworks that provide full construction funding of priority projects.
Read the full report here: