Confidential Report Says First Construction Segment of California High-Speed Rail May Cost 50% More Than Expected
Somehow, Los Angeles Times reporter Ralph Vartabedian was able to get a document “for internal use only” that top Federal Railroad Administration officials reportedly gave to top California High-Speed Rail officials at a December 1, 2016 meeting in Washington, D.C. He reported on this “confidential” document today (January 13, 2017): California’s Bullet Train Is Hurtling Toward a Multibillion-Dollar Overrun, a Confidential Federal Report Warns.
This report claims that the Initial Construction Segment of California High-Speed Rail (apparently identified as Merced to Shafter rather than Madera to Shafter) would cost $9.5 billion to $10 billion instead of the assumed $6.4 billion. It also will not be completed until 2024 instead of the planned 2018.
Finally, the report concludes that the California High-Speed Rail Authority may not be able to achieve the conditions required to qualify for federal American Recovery and Reinvestment Act (ARRA) stimulus grants awarded in 2009 and 2010. This means California taxpayers would be alone in paying for it.
Presumably this report only refers to the laying of track in the San Joaquin Valley and does not include electrification. At this time the California High-Speed Rail Authority had not even begun the bidding process toward Construction Package 5 – laying track on the Initial Construction Segment. Contractors for “Construction Package 1” are now working on demolition and civil engineering, including a viaduct near Madera.
Aaron Fukuda, co-chairman of Citizens for California High Speed Rail Accountability (CCHSRA) was a guest on the Ray Appleton Show (with substitute hosts Blake Taylor and Michael Reed) on KMJ News/Talk 580AM/105.9 FM in Fresno on January 13 to talk about the boondoggle. Also calling in to decry the insufficiency of state oversight on the project was California State Senator Andy Vidak. And a statement from California Congressman Jeff Denham criticizing the project was referenced during the show.
This cost overrun and delay is not surprising to Citizens for California High Speed Rail Accountability (CCHSRA). Nor is it surprising that the California High-Speed Rail Authority is downplaying the report. That state agency continues its quest to take land from San Joaquin Valley farmers, homeowners, commercial and industrial businesses, places of worship, non-profit groups, and even homeless shelters. It wants to lock up the land for a time when state tax increases provide enough funding to pay for completion of the San Joaquin Valley track.
What Californians may end up getting for their $10 billion is a winding dedicated track for Amtrak diesel engines to cart passengers between Madera to Shafter. Is this what 53% of California voters envisioned when they voted for Proposition 1A in November 2008?
KMJ Podcast: 2:04:36 Blake Taylor & Michael Reed fill in for Ray Appleton – January 13, 2017
Congressman Jeff Denham: Denham Statement on Latest Report of California High-Speed Rail Overruns – January 13, 2017
State Senator Andy Vidak: Now Governor, Will You Finally Support an Audit of High-Speed Rail? – January 13, 2017
Congressman Kevin McCarthy: Statement on reports that California’s high-speed rail would cost taxpayers 50% more than estimated, or an extra $3.6 billion – January 13, 2017
The Hunt for Dollars to Build the $64-Billion Bullet Train – Los Angeles Times – December 24, 2016
On May 16, 2016, the Federal Railroad Administration and the California High-Speed Rail Authority revised their agreement for $2.6 billion in federal funding from the American Recovery and Reinvestment Act of 2009 (ARRA) for the High-Speed Passenger Train for the 21st Century.
The revised agreement can be found here: FRA Grant/Cooperative Agreement for ARRA Funding (Amendment, FR-HSR-0009-10-01-06)
In a California High-Speed Rail Authority press release dated May 18, 2016, the Authority CEO claimed that “High-speed rail construction is underway in California and this agreement is consistent with our efforts to connect Silicon Valley and the Central Valley by 2024, and then move forward with connecting San Francisco to Los Angeles.” Those “efforts” were just adopted by the Authority board on April 21, 2016 as the California High-Speed Rail Authority 2016 Business Plan.
This revised plan anticipates high-speed passenger trains running on electrified track between the Central Valley and San Jose by 2025. The 2014 Business Plan had anticipated high-speed passenger trains running on electrified track running between the Central Valley and the San Fernando Valley by 2022.
A May 18, 2016 article in Politico quoted the CEO as saying “Early on, there was a vision, but no clear sense of how to implement that vision…We have that now, and we’re moving ahead aggressively.” Central Valley residents are surprised to learn there had not been clarity in how to implement a vision, considering that the Authority has tried for several years via negotiations and eminent domain to acquire private property for the supposed implementation of a vision.
Proposition 1A was approved in November 2008. The federal grants were awarded in 2010. As of today (June 2, 2016), the Authority has not even issued a Request for Qualifications for track between Madera and Shafter (Construction Package #5) and there is no schedule yet for bidding on electrication or a heavy maintenance facility coveted by local governments in the San Joaquin Valley. Construction has been limited to a viaduct, the demolition of structures and a street bridge in the City of Fresno, and some token archeological investigation.
Who’s to blame for the delay? The Obama Administration and the California High-Speed Rail Authority have designated a villian, and it is YOU. The May 18, 2016 article in Politico reports the contention of the Authority that your quest for public accountability is to blame:
Federal Railroad Administration officials assigned much of the blame for the lags to the project’s vociferous critics, who have tied it up with a tangle of lawsuits, administrative challenges, and other red tape. They complained that the opponents, especially Central Valley farmers and other not-in-my-back-yard landowners, have gotten far more traction against the railway than they would have against a highway, reflecting a cultural and political bias in favor of traditional asphalt infrastructure. But while they described today’s agreement as a routine bureaucratic clarification, they said they expect an explosive reaction from opponents looking to score political points in Sacramento and Washington.
There will always be politicians and special interest groups who will blame any California High-Speed Rail failures on ordinary citizens who exercise their rights to bring public accountability to this boondoggle. Advocates of the high-speed rail often express resentment about being subjected to checks and balances inherent in the United States Constitution and the California Constitution.
But the truth is that the legislative branch and the executive branch have generally ignored opponents, and the judicial branch has mostly rejected legal arguments from opponents. The real cause of the delays is the flawed language in Proposition 1A approved by 53% of California voters in November 2008. That ballot measure made promises to voters that it could not possibly keep.
Since then, the California High-Speed Rail Authority and Governor Jerry Brown have used every trick in the book to keep the taxpayer money flowing and their patrons happy. (The funding comes from the annual state budget, particularly through cap-and-trade taxes.) Meanwhile, the self-declared author of Proposition 1A continues to receive awards and acclaim for putting out the bait while the switch goes on in Sacramento.
Federal Railroad Administration Cooperative Agreement with California High-Speed Rail Authority – California High-Speed Train Program ARRA Grant – Amendment No. 6 – May 16, 2016
High-Speed Rail and Federal Partners Realign Grant to Reflect Updated Business Plan – California High-Speed Rail Authority Press Release – May 18, 2016
U.S. House of Representatives Unanimously Passes Amendment Proposed by Congressman Jeff Denham to Nullify California High-Speed Rail Grant Agreement
Citizens for California High-Speed Rail Accountability (CCHSRA) received a press release this morning (June 10, 2015) from the office of U.S. Representative Jeff Denham, who represents many residents of the Central Valley concerned about the financial waste, ill-conceived route alignment, and relentless property takings of California High-Speed Rail.
You may thank Congressman Denham via email by going to this website:
Be especially sure to contact Congressman Denham if you live in his district. See the district map.
In a vote Tuesday evening (June 10, 2015), the U.S. House of Representatives unanimously passed Congressman Jeff Denham’s amendment to the Fiscal Year 2015-2016 Transportation, Housing and Urban Development appropriations bill nullifying the current grant agreement between the Federal Railroad Administration (FRA) and the California High-Speed Rail Authority.
“This amendment will finally hold California High-Speed Rail accountable for its finances,” said Rep. Denham. “The project is several decades behind schedule, nearly $70 billion over budget, and will not meet the speeds, travel times, or ridership levels promised to voters. No longer will they be able to accept a hamburger today for payment on Tuesday.”
Specifically, the amendment prohibits any appropriated federal funds from being used for high-speed rail in the state of California or for administering a grant agreement that includes a “tapered” match (described below).
When the Federal Railroad Administration initially awarded the Authority with nearly $3 billion in federal grant dollars under the federal stimulus package, it entered into a standard grant agreement with the Authority requiring a dollar-for-dollar match. This agreement stipulated that for every federal tax dollar spent, the Authority must spend a dollar from a non-federal source. California never came up with the money and subsequently missed payment deadline after payment deadline.
In order to avoid violating the Federal Deficiency Act, the Federal Railroad Administration quietly amended its grant agreement in December 2012 to allow for a tapered match – allowing federal dollars to be spent in advance of any matching dollars – despite having no assurances from the California High-Speed Rail Authority that the matching dollars would ever exist. The FRA’s Inspector General has subsequently criticized FRA for jeopardizing federal taxpayer dollars with this scheme. This amendment guarantees that the FRA must enter into an agreement that requires the Authority to match, dollar-for-dollar, federal tax dollars in current fiscal years.
Congressman Denham has repeatedly introduced legislation to stop the California High-Speed Rail Authority from continuing to waste billions in taxpayer dollars. In June 2012 and June 2014, he offered an amendment suspending federal funding for California High-Speed Rail. It passed each year. He also successfully added an amendment to the American Energy and Infrastructure Jobs Act (H.R. 7) in February 2012 ensuring that money in highway bills could not be spent on California High-Speed Rail. In January 2014, Rep. Denham introduced the Responsible Rail and Deterring Deficiency Act, which would suspend all federal funding to California High-Speed Rail.
Citizens for California High-Speed Rail Accountability (CCHSRA) Catches High-Speed Rail Authority Trying to Evade Buy America Law
UPDATE: Tim Sheehan of the Fresno Bee reported on this issue in his April 8, 2014 article State Seeks ‘Buy America’ Exemption for Prototype Bullet Trains.
Here is the text of a March 31, 2014 press release from Citizens for California High-Speed Rail Accountability (CCHSRA) about its March 28, 2014 letter asking the federal government to uphold Buy America requirements for assembly of the first two prototype trains for California High-Speed Rail.
FOR IMMEDIATE RELEASE
Central Valley Citizens Group Catches California High-Speed Rail Authority Trying to Evade Buy America Law
Asks Feds to Deny Waiver for Foreign Assembly of Prototype Trains
Hanford, CA — March 31, 2014 – Citizens for California High-Speed Rail Accountability (CCHSRA) asked the Federal Railroad Administration (FRA) last Friday (March 28, 2014) to deny a February 28, 2014 request from the California High-Speed Rail Authority (CHSRA) for a waiver from Buy America laws for assembly of two prototype trains.
“The California High-Speed Rail Authority routinely sends letters to federal agencies asking for waivers and exemptions without notifying the public,” Citizens for California High-Speed Rail Accountability (CCHSRA) co-chairman Aaron Fukuda said on Friday. “We were angry this week when we discovered this letter on the Federal Railroad Administration website.”
For four reasons cited in the letter, CCHSRA objects to the Federal Railroad Administration allowing the California High-Speed Rail Authority to contract for foreign assembly of the trains:
- The California High-Speed Rail Authority Evaded Public Scrutiny of This Waiver Request and Disguised Its Intentions through Deceptive Reports
- The California High-Speed Rail Authority Neglected Reasonable Planning to Comply with the Federal Buy America Requirement, Despite Plenty of Time to Do So
- A Buy American Waiver Undermines a Major Purpose of California High-Speed Rail to Create Manufacturing Jobs in the United States
- A Buy American Waiver Sets a Poor Precedent for Future High-Speed Rail Materials and Facilities
Also of interest to CCHSRA is making sure the California High-Speed Rail Authority fulfills its requirement in state law to “make every effort to purchase high-speed train rolling stock and related equipment that are manufactured in California.”
“If the Federal Railroad Administration grants the waiver without legally-required detailed justification, we will appeal the decision on behalf of the people of the United States and California,” Fukuda said. “It’s time for some accountability for California High-Speed Rail.”
A copy of the letter (March 28, 2014 Citizens for California High-Speed Rail Accountability [CCHSRA] Letter to Federal Railroad Administration to Deny Buy America Waiver to California High-Speed Rail Authority) is on the “>CCHSRA website at www.cchsra.org.
Citizens for California High Speed Rail Accountability (CCHSRA) is a nonprofit, nonpartisan advocacy group based in Kings County whose members reside in the city of Hanford and surrounding rural areas, along with other Californians who are affected by the high-speed rail. The group has been in the forefront since June 2011 attempting to get the California High-Speed Rail Authority (CHSRA) and its board to be in full compliance with Proposition 1A which the state’s voters passed in November 2008.