The Japanese government is prepared to lend California a large sum of money to build the high speed rail network. Lest you think Japan’s intent is altruistic, the loan is conditional upon Japanese firms getting the contracts to build the trains and operate the system. China and Germany are also expected to offer similar loans contingent on their businesses being chosen to build and operate the high speed rail system.
Chris Cooper and Kiyotaka Matsuda, Japan Offers California Loan for $40 Billion High-Speed Train, Bloomberg News, September 14, 2010
“The state-owned Japan Bank for International Cooperation is prepared to lend funds for California’s rail project, [Japanese] Transport Minister Seiji Maehara told reporters late yesterday in Tokyo. He declined to comment on the amount of the possible loan. “By exporting Japanese technology we can strengthen ties with another country and help Japanese companies,” Maehara said.
Schwarzenegger also met with Japan Prime Minister Naoto Kan, Maehara said, without elaborating.”
Note that the highest level of Japan’s government is lobbying for the high speed rail project. Schwarzenegger met with the prime minister. The loan offer was made by a cabinet level official, not some bureacratic underling.
Bottom line: Assume the project will be fully funded. On its own, California is one of the ten biggest economies in the world. Business is business and the lure of green project$ is too much to resist.