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Panel says high-speed rail plan is still flawed

Updated Sunday, 3 June, 2012

An independent panel of transportation and finance experts says the latest business plan for California's proposed high-speed train system is a big improvement from last fall, but still gives cause for concern.

Uncertainty over money to finish the 520-mile system between San Francisco and Los Angeles after initial construction, and lingering doubts over what it will cost to operate the train line are among warnings to legislators by the High-Speed Rail Peer Review Group.

If the project falters after building a $6 billion section from Madera to Bakersfield -- where construction could start this year or early next year -- California would have a partial system of limited use, wrote Will Kempton, the panel's chairman and CEO of the Orange County Transportation Authority.

"It would be a poor use of resources and an embarrassment," he added, "but not a financial disaster."

The panel's sharpest criticism was aimed at the authority's ability to oversee such a big project.

California High-Speed Rail Authority - This artist's conception, done for the rail authority, depicts a high-speed rail car.


"We continue to believe that management resources are inadequate to supervise the enormous contracting effort," said Kempton, who is also a former state director of the California Department of Transportation, "and that attempts to launch a massive construction program in response to federal completion deadlines will only make the problem worse.

"We believe the project should not proceed until a plan for resolving this challenge is prepared" and accepted by the rail authority and Gov. Jerry Brown.

The review group was established by Proposition 1A, a $9 billion high-speed rail bond measure approved by voters in 2008. It is to evaluate the California High-Speed Rail Authority's business and financing plans and offer recommendations to the Legislature.

The authority's board chairman, Dan Richard, said Thursday that the agency takes the review panel's recommendations seriously and is working to address the management concerns.

Last week, the authority's board voted to offer its vacant CEO position to Jeffrey Morales, a former Caltrans director who now works as an executive with the authority's biggest contracting consultant.

In a response letter to legislative leaders, Richard said the authority has hired 23 new staff members over the past 11 months.

The agency also expects to fill its vacant chief finance officer and chief risk officer posts this month.

Richard added that Morales, whose contract is expected to be formally approved by the authority board this week, will fill other senior positions "as quickly as possible."

The April version of the business plan calls for building a "blended" train system that includes dedicated high-speed tracks through the San Joaquin Valley while sharing tracks with existing but upgraded commuter train lines in the Bay Area and Los Angeles Basin.

It estimates the cost of construction over the next 16 years at $68.4 billion -- about $30 billion less than building high-speed-only tracks for the entire length of the system, as proposed in a November draft of the business plan.

The plan calls for construction to begin late this year or early next year on a 120-mile stretch between Madera and Bakersfield, using $2.7 billion in Prop. 1A money and $3.3 billion in federal transportation and stimulus funds pledged by the Obama administration. That would become part of an initial operating system of electric trains that could carry passengers between Merced and the Los Angeles Basin by 2022.

The plan includes an expectation that the federal government would provide most of the money needed to extend construction north past Madera and south from Bakersfield over the next decade.


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