Lodi News-Sentinel

California bullet train cost jumps by $2.8B

- By Ralph Vartabedia­n

LOS ANGELES — The estimated cost of building 119 miles of bullet train track in the Central Valley has jumped to $10.6 billion, an increase of $2.8 billion from the current budget and up from about $6 billion originally.

The new calculatio­n takes into account a number of intractabl­e problems encountere­d by the state rail agency. It raises profoundly difficult questions about how the state will complete what is considered the nation’s largest infrastruc­ture project with the existing funding sources.

The new estimate was presented Tuesday by Roy Hill, who leads the main consulting firm on the project, WSP (formerly Parson Brinckerho­ff). Hill said the cost increases were mainly driven by problems including higher costs for land acquisitio­n, issues in relocating utility systems, the need for safety barriers where the bullet trains would operate near freight lines and demands by stakeholde­rs for the mitigation of myriad issues.

“The worst-case scenario has happened,” Hill bluntly told the rail authority’s board at its regular monthly meeting.

The board also voted Tuesday to name Brian Kelly as its new chief executive. As secretary of the California Transporta­tion Agency, he had been deeply involved in the project. Kelly said in an interview that highspeed rail remains crucial to the future transporta­tion and economic needs of the state, but acknowledg­ed that it is facing tough challenges that must be addressed.

As the project’s lead proponent, Gov. Jerry Brown, serves the final year of his term, it will be crucial, Kelly said, to “dive in, stabilize it and restore its credibilit­y.”

The sharp increase in projected costs could require the California High Speed Rail Authority to return to the state Legislatur­e for a supplement­al appropriat­ion from the bonds that voters approved in 2008. The remaining bonds probably would cover the cost increases, but partly deplete funds for further constructi­on beyond the Central Valley.

The sobering news about the cost increases was long forewarned, though rail authority Chairman Dan Richard has consistent­ly rejected those warnings. About a year ago, the Federal Railroad Administra­tion issued a secret risk analysis that said costs were rising sharply and could hit $9.5 to $10 billion.

When the Los Angeles Times disclosed the warning, Richard downplayed the analysis. In 2012, WSP briefed a cost analysis for the 2014 business plan, showing sharply higher costs in the Central Valley. The cost estimates were not adopted in the 2014 business plan. Richard was not available for an interview.

It remains unclear how the Central Valley cost increases will affect the total program, which under the 2016 business plan is supposed to cost $64 billion. But the jump in the Central Valley — a 77 percent increase above the original estimate — suggests the authority and its consultant­s have vastly underestim­ated the difficulti­es of buying land, obtaining environmen­tal approvals, navigating through complex litigation and much else.

Outside critics saw the rail authority’s defense of lower cost estimates as part of an effort to politicall­y protect the project.

“When it comes to large infrastruc­ture investment­s, it is not unusual for public authoritie­s trying to justify their effort to understate the costs and overstate the benefits,” said James Moore, director of the transporta­tion engineerin­g program at the University of Southern California. “It is in my opinion overly deceptive. We have seen on transporta­tion projects this militant defense that is meant to cause the public to remain calm.”

Moore said the surge in costs is likely to foreshadow even greater future increases. On the horizon are more difficult segments, such as the long undergroun­d passage through the Tehachapi and San Gabriel Mountains and the route into the urban San Francisco Bay Area.

The appointmen­t of Kelly and the disclosure of the higher cost together create an existentia­l moment for the massive effort.

“It is an ‘are you in or are you out?’ point,” said Elizabeth Alexis, who co-founded a watchdog group focused on the project. “The cost increases are forcing us to commit to completing or not.”

The challenges will apply to the next governor, though in the current campaign the leading candidates are doing their best to avoid talking about the project. Lt. Gov. Gavin Newsom has declined requests for an interview on the subject for more than two years, for example. The repayment of the existing bonds will cost about $18 billion in principle and interest over the next 30 years, money that is coming out of the state highway improvemen­t fund.

Assemblyma­n Jim Patterson, a Fresno Republican, said the cost estimate “shows the program is in increasing difficulty” and raises the need for an audit that he has been pushing for unsuccessf­ully. He said he plans to renew his request for an audit at the end of the month.

Brown did not address the new cost estimate, but said in a news release about Kelly, “Brian has ably led the California State Transporta­tion Agency since its inception and is uniquely qualified to move the nation’s first highspeed rail project forward.”

Kelly’s appointmen­t fills a vacancy that has lingered since last June when the prior chief, Jeff Morales, left. Kelly will earn a salary of $384,984 — more than he did while at the California Transporta­tion Agency.

Kelly said he plans to bolster the state staff, relying less on outside consultant­s. He added that the project needs greater transparen­cy, saying the disclosure of the price calculatio­n was a step in that direction.

 ?? MARCUS YAM/LOS ANGELES TIMES FILE PHOTOGRAPH ?? Left: Constructi­on workers at a 3,700-foot viaduct that is being built to extend over Highway 99 and North and Cedar Avenues in Fresno County, near the terminus of the high-speed rail line through Fresno on Jan. 30, 2017.
MARCUS YAM/LOS ANGELES TIMES FILE PHOTOGRAPH Left: Constructi­on workers at a 3,700-foot viaduct that is being built to extend over Highway 99 and North and Cedar Avenues in Fresno County, near the terminus of the high-speed rail line through Fresno on Jan. 30, 2017.

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