Reference no: EM132974273

On November 4, 2008, California voters approved Proposition 1A authorizing the development of a high-speed rail (HSR) system from the Bay Area in Northern California to San Diego in Southern California. At the time, cost estimates for the project were in the 26-33 billion dollar range, and travel times between San Francisco and Los Angeles were estimated at just over 2 1/2 hours. Since the passage of Prop 1A, cost estimates for the original project have escalated to over 100 billion and estimated travel times have also increased. In response to objections over the escalating costs, plans for the project have been revised, bringing estimated costs down to under $70 billion, but eliminating most of the high-speed elements of the original proposal (i.e. it is no longer "high speed" for most of the proposed routes). According to an article in The Mercury News (Links to an external site.)
, "The first stage of California's costly high-speed rail project may be even more expensive -- $3.6 billion more -- than previously thought..."

• Because of the higher costs and decreased speed, many Californians who voted in favor of Prop 1A would now rather spend the money on other projects, like education or water storage.

Problem 1: What do you think? Should California proceed with the high-speed rail project or scrap it? If the project is scrapped, what should California do with the funds that would have been spent on the high-speed rail project?