The California Legislative Analyst’s office has issued a 28 page report today that is highly critical of the current high-speed rail program. Among other suggestions is that California renegotiate with the federal government what they do with the $3Billion they have received. It is suggested that the project should be redesigned and rerouted. Here is the link to download the report: http://www.lao.ca.gov/laoapp/PubDetails.aspx?id=2475 The LAO seems to forget that the criteria to obtain this money was pretty clear from the beginning;some of the high-speed rail funds from the federal government are a part of the ARRA, i.e. stimulus bill. In order to stimulate the economy one of the criteria is that the money actually be spent. Given that the FRA has shown some flexibility with environmental clearances on one segment of the project, the LAO argues that asking for large redesign and rerouting in the interests of perhaps saving money is likely to be successful with the feds. Asking for more time and perhaps rerouting and redesigning the project may well be unlikely to be successful with the feds. Ask Chris Christie who thought that the federal government would welcome him aborting a project 20 years in the making, ARC, and let him use the money for highways.
Second, a strange bias noted is that the use of consultants as opposed to CALTRANS seems to suggest either venality or incompetence and a preference for doing everything possible in-house. (Yet at another point the LAO argues the money will not stay in the state because out of state consulting firms will have to be hired for this type of project.) I realize that there are firms that are not ethical but it is pretty hard to become big enough and respected enough to be shortlisted on such a huge project and not be honest and the state is the client who has oversight of the process. The quality of the engineering work might dictate using a firm known for their track record of success and quality as opposed to a “bottom line firm”, but even the lowest bidder is unlikely to be bilking the state of California, because projects are awarded in phases. There is no incentive to do a lousy job or to seriously underestimate costs for an engineering consulting firm. The engineering and construction firms likely to be shortlisted are working on projects all over the world, and thus can maintain the staff with the various expertises necessary to complete this project. The states are likely stretched to their limit in their oversight role to the consultants and contractors. This particular section of the report is very confusing, because it seems instead of analysis leading to a conclusion, a conclusion is supported by conflicting analysis.
Redesign of the project and rerouting would cost a lot of extra money and cause many delays. None of these projects are likely to get cheaper by delaying. To think that starting over from the beginning of study will result in cost savings on design and construction of the project seems highly suspect.
The project is currently being supervised by the HSRA, High-Speed Rail Authority and the Legislative Analyst suggests that because the HSRA is understaffed oversight might be shifted to the DOT. The HSRA is supposed to have 40 staff members, and due to hiring freezes at the state, it is unable to expand beyond the current staff of 19. In addition, it is suggested that CALTRANS has other expertise for which the HSRA has to pay. An example is in-house legal counsel.
The concerns about finding private partners to operate the system seem to be well founded. PPP is the new buzzword, but public private partnerships are still not the norm, and the partners have conflicting priorities in these deals. The private party may place an emphasis on profit over consumer satisfaction, and while loss is what the state fears the size of the profit is not the first concern of the state. Worry about whether this project could end up costing more money than anticipated is understandable, but the assumption that the feds are not running out of patience with endless delays not just on rail but other infrastructure projects too (see Seattle tunnel) is a large one. But while the Legislative Analyst includes the airports and highway projects that will have to be funded if the project is eliminated, that seems to be dismissed by the report.
Frankly, a lot of the report seems to be driven by the very real fears that continued federal commitment to high-speed rail is uncertain. In the current atmosphere, it has become unpopular in some political corners. But the report also seems to reflect that the LAO works for a state legislature, and that state legislatures these days are all about kicking the can down the road rather than getting something done.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/05/05/BA8S1JCGBA.DTL
Posted on May 12, 2011
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