Audit finds rushed plans cost state millions
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 con- tributed 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.
The Joint Legislative Audit Committee requested Howle’s report. The High Speed Rail Authority agreed with Howle’s findings and pledged to imrprove contract oversight.