Uncertainty surrounds California’s high speed rail project
Since 2014, the construction of California’s high speed rail project has been underway, in order to connect Los Angeles and San Francisco. However, there have been several setbacks, especially with regards to funding, where the $64 billion project is still in need of $44 billion in order to progress and complete by 2029.
However, the recent election of US President Donald Trump could prove advantageous for the US economy and future transport rail networks - Trump has pledged increased investment and financial support to develop the country’s infrastructures and create long-term benefits and boost economic growth.
The California High-Speed Rail Authority aim for the sophisticated high-speed rail to reach speeds of over 200 miles per hour, competing with China’s world-class rail networks in order to accommodate for the increasing population and need for sufficient transportation links.
The rail network would ensure commuters can reach their destination in under three hours, but will also connect with Sacramento and San Diego through the implementation of over 20 new stations.
Trump has pledged to develop existing infrastructures through his Presidential speech, “We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals. We’re going to rebuild our infrastructure, which will become, by the way, second to none, and we will put millions of our people to work as we rebuild it” and has estimated that Hillary Clinton’s approximate $275 billion figure would have to double in order to meet these needs.
On the other hand, however, is the issue of ballot Proposition 53, or the “no blank cheques initiative”, at which the outcome is yet to be confirmed, placing a strain on any future construction or infrastructure work in the pipeline. The proposition will affect any future or current projects over $2 billion, including the high-speed rail if such a change in the state’s constitution is passed.
A yes outcome to such change would provide increased transparency from politicians with regards to project costs and provide increased engagement with local communities on future projects, yet will create significant problems for the construction and building industry. Governor Brown has said to the WSJ that such changes would create “utter economic catastrophe for California”, and “more lawsuits and delays that California doesn’t need.”
With such measures in place, planned construction works would undergo significant delays. Construction firms, political and business corporations aim for future works to go ahead, and have therefore placed significant investment to oppose the initiative to prevent delays for future construction and infrastructure projects. However, parties which are currently backing the initiative have also placed investment, at which it is unclear what the end result will be.
Read the November 2016 issue of Construction Global magazine
G7 launches global infrastructure investment for China’s BRI
The G7 Group has launched an infrastructure investment push aimed at countering China’s Belt and Road Initiative (BRI). The launch took place during the G7 summit in Cornwall. While no extra state funding for infrastructure schemes had been confirmed, the “Build Back Better World” (B3W) plan, part of the G7’s infrastructure investment, looked to attract private finance.
The summit’s communiqué described the plan as a “step change” in nations’ approach to infrastructure financing, while the White House said the B3W plan would be able to cover Latin America, the Caribbean, Africa, and the Indo-Pacific.
What is China’s Belt and Road Initiative? (BRI)
The Belt and Road Initiative (BRI) is China’s programme to build both physical and digital infrastructure to connect several countries from Asia to the Middle East, Africa and Europe.
It was adopted in 2013 by the Chinese government as a way of expanding the nation’s global influence. China’s motives for the plan include state sovereignty, national security, territorial integrity, and the protection of its political and social stability system. China is also using the plan to ensure continued economic and social development.
Why is the G7 Group competing with China?
While the reason for countering China’s BRI plan has not specifically been stated, official documents have suggested that it could be due to transparency, good governance, and “values”. However, in the past, the US has criticised the BRI projects, saying that they lack these qualities. Other opposition groups in recipient countries have also criticised the plan.
“Until now, we haven't offered a positive alternative that reflects our values, our standards, and our way of doing business … [B3W] won't just be an alternative to the BRI, but we believe will beat the BRI by offering a higher-quality choice”, a senior administration official said in a news briefing.
However, a G7 spokesperson for the UK argued that there was more to the investment push than competing with China. He said: “This project stands on its own merits and is in line with the G7’s priorities on ensuring the world builds back better and greener from the pandemic”.
.Whether or not the G7’s investment initiative will be able to match China’s BRI is unclear, but a 2018 report from ICBC Standard Bank shows that after the first five years of the programme, some $330bn of transport and $266bn of energy projects were announced, underway or complete.