High-speed rail’s cost is likely to increase

Project faces new scrutiny after state fails to disclose higher budget projections

The Los Angeles to San Francisco bullet train is headed for new federal and state scrutiny after disclosure that the project’s lead contractor forecast significant cost increases that were not made public.

U.S. Rep. Jeff Denham, RTurlock, chairman of the House rail subcommittee, said he plans to call hearings early next year to examine the project’s cost and the state’s failure to disclose the higher budget projections.

“We know it is going to have a significant increase in cost,” Denham said.

“It is doomed to be a failure,” Denham added. “California has always had the philosophy of build it, and they will come. That is no way to run a business.”

Denham and 11 other House members demanded this month that the state’s main project management contractor release a 2013 cost estimate that shows a 31 percent increase for

the project’s initial operating segment from Burbank to Merced.

State Assembly Speaker Toni Atkins, D-San Diego, said in a letter this month that her chamber “will be undertaking a broader range of oversight activities in 2016” that would subject the bullet train to an “enhanced process” and a public hearing.

Kristin Olsen, the Cali- fornia Assembly Republican leader, said she is expecting a hearing early next year, the first legislative oversight of the project in several years. The timing is crucial because Olsen said she expects the rail authority to ask for additional funding, given that it has not secured enough money to build even a partial system.

The Los Angeles Times reported Oct. 25 that a 2013 report by Parsons Brinckerhoff, the project’s main management contractor, projected a 31 percent cost increase to build an initial segment from Burbank to Merced and an overall 5 percent increase in the full Los Angeles to San Francisco system.

The California HighSpeed Rail Authority has dismissed the cost projection. Rail authority Chairman Dan Richard said in a letter to Atkins that a $68 billion estimate, which the authority used for its 2014 business plan, was backed up by scores of documents and analyses.

But a separate letter the rail authority issued last week contains a different explanation. It says the $68 billion estimate was essentially based on projections made in 2012.

In responding to a Public Records Act request from Bay Area attorney Jason Holder for documents substantiating the $68 billion estimate, the agency wrote: “The capital cost source document for the 2014 Business Plan is the 2012 Business plan. For the 2014 Business Plan, dollar amounts from the 2012 Business Plan were adjusted for inflation.”