Trump Administration Demands California Pay Back Over $2 Billion for Bullet Train

High Speed Rail FresnoThe Trump administration announced on Tuesday that it is exploring “every legal option” to reclaim $2.5 billion in federal funds spent by California on its now-defunct high-speed rail project, and also that it intends to cancel $928 million in federal grants not yet paid for the project to link Los Angeles and the San Francisco Bay Area.

The move was a dramatic escalation in the ongoing war of words and policy between California and the White House. California Gov. Gavin Newsom, a Democrat, declared during his State of the State address last week that he was shelving plans for the $77 billion rail project that had been championed by environmental groups, admitting that “as currently planned, [it] would cost too much and take too long.”

In response to the Trump administration’s legal threat Tuesday, Newsom vowed that he would not sit “idly by” as the White House engaged in what he called “political retribution” against California. …

Click here to read the full article from Fox News

Trump demands $3.5 billion back from ‘disaster’ high-speed rail project

donald-trump-2President Donald Trump is demanding California return billions of dollars to the federal government following Gov. Gavin Newsom’s decision to scale down the state’s costly high-speed rail project.

In a tweet on Wednesday, Trump called the project a “’green disaster.’”

California has been forced to cancel the massive bullet train project after having spent and wasted many billions of dollars,” Trump added. “They owe the Federal Government three and a half billion dollars. We want that money back now.”

Newsom at his State of the State Address on Tuesday put the brakes on the $77 billion high speed project, an endeavor that voters authorized at the ballot box in 2008 with a plan to connect Los Angeles to San Francisco. …

Click here to read the full article from the Mercury News

California to pull plug on billion-dollar bullet train

High Speed Rail ConstructionCalifornia Gov. Gavin Newsom announced on Tuesday he is pulling the plug on the state’s massive high-speed rail project from Los Angeles to San Francisco that was more than a decade behind schedule and billions in the red.

“Let’s be real,” Newsom said in his first State of the State address. “The current project, as planned, would cost too much and respectfully take too long. There’s been too little oversight and not enough transparency.”

Newsom added that while California has “the capacity to complete a high-speed rail link between Merced and Bakersfield,” “there simply isn’t a path to get from Sacramento to San Diego, let alone from San Francisco to L.A.”

The embattled $77-billion bullet train has been an embarrassment for the Golden State and has been plagued by problems almost from the start.

The idea, long championed by Newsom’s predecessor, Jerry Brown, is years behind schedule with the latest estimate for completion set for 2033. …

Click here to read the full article from Fox News

Gov. Newsom Will Face Intense Questioning on Bullet Train

High Speed RailWhen Gavin Newsom is sworn in as California governor on Jan. 7, he’s already indicated he will take criticisms of the state’s troubled $77 billion high-speed rail project seriously.

That’s in sharp contrast to outgoing Gov. Jerry Brown, who described project critics as “declinists” with no vision for what the Golden State could become. Brown only offered vague pronouncements when asked about giant cost overruns and the $50 billion or more gap between available funding and what’s needed to build the high-speed rail linking Los Angeles and San Francisco.

If Newsom lives up to his word, he’s going to need to respond to profound issues raised by project watchers in and out of the state government over the last two months.

In November, state Auditor Elaine Howle issued a harsh report on poor management practices in the California High-Speed Rail Authority, especially the billions in cost overruns due to the decision to launch construction of the project’s $10.6 billion, 119-mile first segment in the Central Valley before the authority was fully ready. Howle’s audit led Newsom to tell a Fresno audience that he might shake up the leadership of the rail authority.

Among the few specifically positive observations that Newsom has made in recent months about the project was that the first segment held promise to link Silicon Valley workers with less expensive housing in the Central Valley.

Project seen as ‘notoriously unpopular’ in Central Valley

But a Dec. 23 Sacramento Bee analysis found that even though the bullet train project was generating thousands of jobs in the agricultural region, it was “notoriously unpopular” among residents.

“They resent how construction has carved up their farms and scrambled their highways,” the Bee reported. “Completion of just a partial segment through the Valley is still years away, and residents doubt the project will ever get finished. They question the promises that high-speed rail will lift the Valley out of its economic doldrums.”

This skepticism is increasingly shared by elected Democrats both in the Central Valley and the rest of the state.

A Dec. 28 Los Angeles Times report quoted Assembly Speaker Anthony Rendon as saying problems with the bullet train are so widespread that it should “be paused for a reassessment.” Rendon said the prospect that the project would run out of money before ever reaching the Los Angeles region left voters in the area feeling deceived.

Assembly Transportation Committee Chairman Jim Frazier, D-Oakley, has made clear that he will work to have rail authority chairman Dan Richard ousted because of cost overruns and management issues.

The bullet train’s image has also deteriorated among state pundits.

When California voters approved $9.95 billion in bond seed money for the then-$45 billion project in 2008, the ballot initiative was broadly supported by newspaper editorial boards.

“Americans who visit Japan or Europe and hop a bullet train get a stunning reminder of how far behind much of the industrialized world we are in swift, clean, efficient transportation,” the San Jose Mercury-News editorial page declared on Oct. 18, 2008. “Californians can change that by approving Proposition 1A, a bond to begin construction of a high-speed rail system that would whisk passengers from Los Angeles to the Bay Area through downtown San Jose in a mere 2 1/2 hours. It will be a catalyst for the economic growth of California and this region over the next 100 years.”

An editorial printed last month in the Mercury-News showed a 180-degree swing in opinion: “The incompetence and irresponsibility at the California High-Speed Rail Authority are staggering. … It’s time to end this fiasco to stop throwing good money after bad.”

Decision on cap-and-trade funding may signal Newsom’s intentions

An early sign of Newsom’s level of enthusiasm for continuing on Brown’s path is likely in coming weeks as initial work is done on the 2019-20 state budget. The California Air Resources Board reported pulling in $813 million from its Nov. 14 auction of cap-and-trade air pollution credits – a heavy haul.

If Newsom opposes diverting 25 percent of cap-and-trade revenue to the bullet-train project – as has been done since 2015 – that will be the clearest indication yet that he is ready to back away from the troubled project.

Gavin Newsom Inherits California’s Troubled Bullet Train Project

High Speed Rail ConstructionGov. Jerry Brown has devoted half a century of political knowledge and power to advance the California bullet train construction project, but he leaves office with its future badly damaged by cost overruns, mismanagement and delays.

It hands incoming Gov. Gavin Newsom a tough decision: delay indefinitely the goal of a statewide bullet train system and salvage something useful out of the billions of dollars already spent, or stick with the original vision and find at least $50 billion in new money to keep it going.

Either option will probably lead to a clash between the project’s die-hard supporters and its skeptics. Almost every major engineering and construction firm has a big stake in the project, as do unions, small businesses and city governments. The outcome will depend on how much fiscal pain and risk Democrats are willing to accept.

So far, Newsom has only hinted at what he will do, saying at times the effort must continue in some form — though with less gusto than Brown exhibited as he championed what has grown into the nation’s largest infrastructure effort over the last eight years. …

Click here to read the full article from the Los Angeles Times

What the High-Speed Rail Audit Really Means

Gov. Jerry Brown, Anne GustAlthough the midterm election was held on November 6th, the news media was absorbed for several weeks with undecided close races and the strength of the “blue wave,” especially here in California. Perhaps that is why a report from the Auditor of the State of California on the High Speed Rail Project issued the following week did not receive as much attention as it would otherwise warrant.

To understand just how damning the HSR audit was, just consider the subtitle:  “Flawed Decision Making and Poor Contract Management Have Contributed to Billions in Cost Overruns and Delays in the System’s Construction.”  But like many government documents, the audit is couched in bureaucratic language that ordinary citizens may not understand.  For that reason, below are the summary points as provided by the state auditor with accompanying translations.

Auditor: “Although the Authority has secured and identified funding of over $28 billion that it expects will be sufficient to complete initial segments, that funding will not be enough to connect those segments, or finish the rest of the system—estimated to cost over $77 billion.”

Translation: The Authority has succeeded in talking both the federal government and the state of California into providing billions of dollars on a failed project and yet still has no idea where the rest of the money will come from.

To read the entire column, please click here.

California’s Mismanaged High-Speed Rail Project Must End

High Speed Rail ConstructionIn 2008, California voters approved a bond for a high-speed rail line connecting San Francisco and Los Angeles with the fast-growing cities in the state’s Central Valley. With trains running at 220 miles per hour on dedicated tracks, California High-Speed Rail (CAHSR) would be the first true high-speed rail line in the U.S. The project’s backers, including Governor Jerry Brown, promised that CAHSR would cost just $33 billion and be finished by 2022, including extensions to Sacramento and San Diego. It would whisk passengers from San Francisco to Los Angeles in two hours and 40 minutes—fast enough, if European experience is a guide, to convince most air travelers on that route to take the train instead.

Ten years later, supporters have ample cause to reconsider. CAHSR’s costs have severely escalated: the California High-Speed Rail Authority (CHSRA) now estimates that the train’s core segment alone, from San Francisco to Los Angeles, will cost from $77 billion to $98 billion. Promises that private investors would cover most of the costs have fallen through. Forecasts for the project’s completion date and travel times have also slipped. The fastest trains in the CHSRA’s current business plan have a running time of over three hours, and the first segment of the line—San Jose to Bakersfield, almost 200 miles short of completion—won’t open until 2029.

The project’s troubles have been largely self-inflicted, starting with poor route choices. At the south end of the line, from the Central Valley to Los Angeles, rather than proceeding in a direct route from Los Angeles to the northwest through Tejon Pass, roughly along Interstate 5, the planned line takes a detour to the northeast through Palmdale, a rapidly growing exurb, and enters the Central Valley through Tehachapi Pass. The CHSRA justified this choice by arguing that the Tejon route would require more tunnels and slow curves and be more vulnerable to earthquakes.

But in a convincing independent analysis, aerospace engineer and transportation activist Clem Tillier has called the CHSRA’s study of the Tejon alternative “a finely crafted web of distortions.” The study, Tillier wrote, used skewed assumptions guaranteed to produce a poor Tejon route. Most notably, the CHSRA supposed that no route could cross a planned residential development in a key portion of Tejon Pass. The CHSRA instead produced a Tejon alignment that veered around the development with sharp curves and six extra miles of tunnel, even though the additional tunnel would cost more than buying the entire development outright. Tillier concluded that a better Tejon alignment would save 12 minutes of travel time and $5 billion in construction costs over Tehachapi. These 12 minutes could make a critical difference to ridership, as most studies have found that trains rapidly lose riders to airplanes for journeys longer than about three hours. Speculation that the interests of real-estate developers rather than riders motivated the Tehachapi detour is hard to dismiss.

The CHSRA has also wasted large sums of money through poor management. Tillier has detailed how the Authority plans to spend billions to outfit Bay Area stations with unnecessary tunnels and viaducts, rather than making elementary improvements to operations. A state audit has shown that the CHSRA knowingly incurred massive additional cost risks by starting construction prematurely; desperate to show progress and to meet a deadline for federal funds, the CHSRA began construction in the Central Valley without buying all the land it needed, or even completing negotiations with the freight railroads whose rights-of-way it planned to use. The state auditor also criticized the CHSRA for hiring expensive consultants, over the objections of its former CEO, to do routine budgeting work.

Some of the worst revelations in the state auditor’s report concern basic failures of contract management. The CHSRA paid contractors without inspecting their work, and contract managers’ review of the quality and cost of finished products was often so shoddy that the auditor could not even conclude whether the CHSRA’s spending was justified. In one especially egregious case, in 2017, the CHSRA hired an external consultant to check the work of Parsons Brinckerhoff (now WSP USA), which had been paid $666 million for engineering consulting. The external consultant found that the CHSRA had not received finished work for 145 of 184 tasks that Parsons Brinckerhoff had called “complete.”

It seems clear that the CHSRA is too incompetent to manage a project of California HSR’s complexity. The Authority has promised to consider the audit’s recommendations, but as CHSRA has already been criticized for its lax management for years, such promises are scant comfort. Possibly the best chance to salvage the project would be to turn it over wholesale to a European or Japanese railroad with prior experience managing high-speed rail projects, but CHSRA’s work has been so slapdash that it’s hard to imagine a competent foreign entity wanting to take over the mess. (In 2009, the French national railroad SNCF offered to build the project along a slightly different route, and even lined up private funding. The CHSRA rebuffed the offer and kept silent about it for years, until the California legislature authorized public construction funds.)

Fortunately, only a small fraction of CAHSR’s projected cost—$1.4 billion out of nearly $100 billion total—has been spent so far. The question arises whether the remaining money, almost all of it coming from California taxpayers, could be put to better uses. Countless projects suggest themselves, ranging from road repair—the poor state of California’s roads is notorious—to shoring up the state’s precarious finances. Even within the narrow field of rail transit, some portion of CAHSR’s cost could be instead given to the Los Angeles County Metropolitan Transportation Authority, which has already demonstrated an ability to finish projects within reasonable budgets. A comparatively small amount of state aid to LA Metro would do far more for California’s environment and economy than CAHSR.

It’s hard to see why the project should continue. The CHSRA’s planning model has been to keep problems secret for as long as possible, then hope that all the money invested so far is enough to convince the public to keep throwing good money after bad. Fortunately, high-ranking officials—including the chair of the state assembly’s transportation committee, who recently called for the CHSRA chairman to resign—seem increasingly aware of the disaster that CAHSR has become. Incoming governor Gavin Newsom, unlike his predecessor, has at least questioned the project’s utility. More public pressure may persuade him to drop his support of CAHSR and put the money to better uses. Californians should demand the project’s immediate cancellation.

Elon Musk’s “Loop” Faces Trouble While the Bullet Train Rolls On

Hyperloop 1Call this a tale of two transit systems.

There is Elon Musk’s electric-powered platforms or skates called the Loop designed to shoot cars or mass transit vehicles holding up to 16 people through tunnels at 150 miles per hour throughout Los Angeles. Yet, a crucial piece of the network through the agonizingly crowded 405 Freeway in the Sepulveda Pass was scuttled because of a lawsuit dealing with state environmental laws. Then there is the state’s high-speed rail project that marches forward despite numerous environmental lawsuits and funding issues.

Whether Musk’s transit system would work as described is not proven. Maybe it will run into some of the same hurdles as the high-speed rail—cost overruns, skepticism that the train can reach both its passenger goals and promised speeds.

Yet, environmental laws disrupted the Musk project but have not knocked out the bullet train.

Make no mistake, we are told both projects are designed to help the environment. The bullet train will take travelers out of their automobiles while the Musk transit system is moving vehicles around faster so they are not idling, spewing pollutants.

The Loop fell victim to a state environmental law that says infrastructure projects cannot be approved in a piecemeal fashion. Musk had sought avoidance of environmental review on what he called a stand-alone project but a couple of neighborhood associations representing areas near Sepulveda Boulevard on the west side of Los Angeles sued. Musk settled the lawsuit and put aside the tunneling project. His Boring Company has other tunneling projects in the LA area in the works, including one to run from Union Station to Dodger Stadium.

In the meantime, the high-speed rail is facing up to seven lawsuits but has not yet been “de-railed” by any of them.

The train authority also must deal with a recent audit of the project by the state auditor critical of cost overruns and building delays.

Today in Sacramento, California High Speed Rail Authority leaders will respond to the audit before a hearing of the Assembly Transportation and Joint Legislative Audit Committees.

Assemblyman Jim Patterson of Fresno who called for the audit plans to examine the authority on a number of issues raised in the audit including whether contracts worth hundreds of millions of dollars were properly fulfilled; and whether the authority will complete it initial 119-mile segment of the track by December 2020 so as to avoid the loss of $3.5 billion in federal funds.

Despite the audit and the lawsuits based on environmental concerns, the high-speed rail moves on. However, an environmental laws disrupt the potentially more effective Loop plan dealing with the environment.

It helps to have a powerful advocate on the side of the bullet train. How the bullet train fares with Governor Jerry Brown letting go the reins of power is interesting to contemplate.

This article was originally published by Fox and Hounds Daily

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

High speed rail constructionCalifornia’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. …

Click here to read the full article from the Sacramento Bee

Time to hit the pause button on high-speed rail

High speed rail constructionJerry Brown did not invent the idea of a high-speed rail system to connect Northern and Southern California.

It was voted on by the state Legislature and ratified by voters years before he returned to the governor’s office in 2011. But for the last eight years, as cost estimates have skyrocketed and federal and private sector funding for the project has evaporated, Brown has become high-speed rail’s most persistent defender.

Only weeks away from the election to replace him, neither candidate for governor appears to share the depth of Brown’s commitment to a statewide rail system.

Fellow Democrat Gavin Newsom only talks about it under duress, and has indicated that he would adopt a much more gradual and incremental approach. Republican John Cox wants to scrap it altogether. Polling shows that public support has dropped considerably since Californians voted to authorize the project 10 years ago. …

Click here to read the full article from the Sacramento Bee