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Abstract: In January 2010, the California High Speed Rail Authority (CHSRA) was waiting to hear whether the Obama Administration would approve its application for $4.7 billion in federal stimulus funding to begin the construction of a $50-billion, 800-mile, high-speed rail corridor connecting all of the state's major regions and cities. In November 2008, California voters had already approved Proposition 1A authorizing the state to issue $9.95 billion in bonds toward construction of the system's initial segment running 465 miles from San Francisco to Los Angeles-Anaheim in Orange County. This case describes the Authority's planning efforts and the controversies that arose over the alignment, the demand projections, the financial plan, and the social benefit-cost analysis.
Learning Objective: The demand, financial, and benefit-cost analyses illustrate many issues that typically arise in project evaluation. Managing the project is also challenging because its enormous scale and complexity provokes controversy, increases risks, and makes it very likely that the project will have to be built and opened in stages, if at all.