The State Worker

Rushed construction cost high-speed rail $600 million and delays mount, audit finds

California’s High Speed Rail Authority is still paying for a costly decision five years ago to begin construction in the Central Valley without securing land and before it had completed key plans, according to a report published on Thursday by State Auditor Elaine Howle.

Howle’s office estimated that the rushed construction contributed to $600 million in cost overruns just for segments in the Central Valley. They may require as much as $1.6 billion more.

The auditor wrote that the project’s finances could worsen if it fails to accelerate its progress. It may have to repay as much as $3.5 billion to the federal government if it does not complete its Central Valley legs by 2022.

“The authority’s spending to date and future projections suggest that the risk of such additional cost increases is high,” Howle wrote.

California has been developing a high speed rail system for the state since the 1990s. Voters approved a $10 billion bond to begin funding it in 2008.

The latest projections suggest it will cost at least $77 billion to complete.

The authority has found some costs savings by revising its plan in such a way that it will link with existing rail systems in the Bay Area and Southern California. Those modifications limit its speed, preventing it from reaching the 220 miles per hour that had originally been planned.

The auditor found that high speed rail planners have failed to control the project’s cost by allowing unclear contract amendments and providing “weak” oversight of contractors.

“The authority will need to do more to control the soaring costs of its contracts by improving its contract management,” the auditor wrote.

Assemblyman Jim Patterson, R-Fresno, requested the audit a year. He said its findings demonstrate the project is “dead in the water.”

“There will never be a completed track from the Bay Area to Los Angeles,” he said. “This project cannot be revived in its current state and this audit is further proof that the best we can hope for is a rump railroad running from Bakersfield to Madera.”

The High Speed Rail Authority agreed with Howle’s findings and pledged to improve contract oversight.

In a written statement, the authority acknowledged that its decision to begin construction in 2013 carried risk. But, the authority insisted that moving forward at that time enabled it to use grant funding from the Obama administration that might have been unavailable had it wated.

“We are moving swiftly to fully implement the recommendations of the California State Auditor which will constitute important steps to assure that we effectively deliver the 21st Century high-speed rail system that Californians require as we grow to 50 million people by mid-century,” the authority said.