What are the implications of starting a project based on tenuous projections that may or may not
Question:
What are the implications of starting a project based on tenuous projections that may or may not come true 10 years from now? California’s High-Speed Rail Project With the announcement that California would be committing
$4.3 billion to the construction of a 29-mile rail link between the cities of Fresno and Madera in the state’s Central Valley, California’s 20-year-old quest for a high-speed rail line was finally coming true. The California High-Speed Rail Authority (CHSRA), first established in the mid-1990s, had long pursued the goal of linking the San Francisco Bay metropolitan area in the north to the cities of Los Angeles and San Diego in the south. Under the administration of President Obama, the federal government set aside money from a stimulus package to fund high-speed rail initiatives in several states, including Wisconsin, Florida, Ohio, Illinois, and California. The election of Republican governors in Ohio and Wisconsin led to a rethinking of the projects in those states, and they ultimately refused the seed money grants from Washington, harboring suspicions that the rail projects were both unnecessary and likely to be subject to huge cost overruns, for which state taxpayers eventually would be held responsible. As a result, Transportation Secretary Ray LaHood reclaimed $1.2 billion from these states to be presented to 13 other states.
One of the states that stood to benefit most from this redistribution of federal money was California, with its ambitious and, as many argue, ultimately foolhardy decision to support a massive transportation project to link its cities with high-speed rail. The history of the CHSRA’s drive to create high-speed railways is a fascinating one, with supporters and critics in equal measure.
As part of its initial pitch for the project, the CHSRA argued that the system would lead to multiple benefits.
For a one-way $55 ticket, passengers in Los Angeles would be able to travel to the Bay Area in less than 3 hours or reach San Diego in 80 minutes. Estimating that 94 million passengers would use the rail system each year and that its development would generate hundreds of thousands of permanent jobs, the CHSRA used these projections to help convince state voters to approve a nearly $10 billion bond issue and support the project in a 2008 referendum. Other advantages the organization cited included the reduction of pollution and fossil fuel use by diverting millions of people to the rail line who otherwise would use automobile or air travel between cities.
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Project Management Achieving Competitive Advantage
ISBN: 9780134730714
5th Edition
Authors: Jeffrey K. Pinto