Whether people realize it or not, California’s high-speed rail system is too important to emissions-reduction in state. It is a key component in the state emissions-reduction effort. And it is critical the high-speed rail project is built correctly.
In fact, it was in the “Restoring unity, order, smarts, meaning, sanity and balance in the space we call travel – 2: Growth” post of Oct. 20, 2018, that pointed out was the lengthy weekday commutes that some in California’s San Francisco Bay Area endure.
“The congestion that hampered Bay Area travel and that the industry that created the jobs that contributed to corresponding congestion, it was all anyone could do to try to avoid the peak-hour traffic snarling there,” I lamented. “It is not unheard of for workers to drive an hour-and-a-half one way. Many said employees were forced to relocate to places even beyond the Silicon Valley’s periphery. Long travel times for these folks became the order of the day, at least during the workweek, anyway.”
These drivers and motorists like these facing similar circumstances are alternatively known as the “megacommuters.”
It is with these circumstances in mind, exactly, that high-speed rail could fit the bill in terms of it filling in for and eliminating many of these long car commutes.
Being that California high-speed rail is a first-of-its-kind project anywhere in the United States, it has been a definite learning curve in constructing the initial 520-mile Phase 1 section connecting San Francisco and Los Angeles/Anaheim. It is to be expected that where its construction is concerned, not everyone with some connection to it is going to be satisfied with every facet of its building, budget, management and materials-procurement aspects all of the time. This is the reason for conducting audits.
Okay, so I’m totally in favor of the project being built correctly. And, if that means that audits are conducted to ensure that outcome, if that’s what it takes, then that’s what it takes and I have no problem with that – none.
Cost overruns, time constraints and other considerations
So you know where I’m going with this, an audit was conducted, the corresponding report (California State Auditor Report 2018-108) released this month, in fact. In it indicated was that the California High-Speed Rail Authority (Authority) has a secured sum in the amount of $12.7 billion. As much as $15.6 billion in potential future monies has been identified.1 The 119-mile section to connect Madera and Shafter in the central and southern San Joaquin Valley, respectively (Construction Packages 1-5), the Authority estimates will cost $10.6 billion. That leaves a surplus of $2.1 billion. Three construction contracts have been awarded so far – CP1, CP2-3 and CP4.
The cost of CP1, initially, was $985 million. The named section between Madera and American Avenue in south Fresno extends 29 miles. Once the contract was awarded, it was only later determined that an additional 3 miles on the north end was going to be added. This caused the cost to rise to over a billion dollars. I call this so-called “add-on” as an unforeseen expenditure – others have termed such an overrun.
Then discovered were other unforeseen expenditures related to such, like subsurface utility relocation work etc., and with all of these things combined, the price got jacked up on these 32 miles to $1.6 billion.
Next the State Auditor has pointed out that the Authority could stand to get its sustainability house in better order, that is, where construction is concerned.
From the report “Summary”: “Construction of the high-speed rail system is not only a major undertaking in terms of its costs, but it also affects the State’s environment. Although the Authority is aware that it needs to manage the environmental effects of construction, we identified ways it could improve its monitoring and measurement of these impacts. For example, the Authority intends for the system to be a model for future rail infrastructure, but it has not sufficiently identified key objectives in its sustainability policy to ensure that its active construction projects follow sustainable practices. Further, an expert we retained determined that although the Authority appropriately estimated the environmental impacts of its current construction before beginning work, it has not comprehensively evaluated its performance against those estimates.”2
More now on the monitoring, tracking and record-keeping aspects. “In addition, the Authority will need to do more to control the soaring costs of its contracts by improving its contract management.3 … The Authority has 56 contract managers throughout its organization, but these individuals generally do not serve in contract management roles full-time. Moreover, the Authority has in essence placed portions of its oversight of large contracts into the hands of outside consultants, for whom the State’s best interests may not be the highest priority.”4
“ … The Authority designed its contract management procedures, as well as the related tracking requirements, to ensure that it identifies the need for contract changes in a timely manner and that it appropriately ensures the justification of those changes before adopting them as amendments. However, we found little documentation demonstrating whether or how the Authority independently evaluated the validity and size of the amendments to contracts we reviewed. In some instances, we noted that the Authority approved the amendments based wholly on the information the contractors reported to it.”5
So, there is still some work to be done.
The railroad ahead
It is my firm belief that as outlined in the report each and every one of these identified issues can be properly attended to and remedied. That’s perhaps the easier part.
More importantly, maybe most importantly, and with respect to CP1-5 timeline, all sections must be completed by the end of 2022 or the Authority will have to hand back over to the federal government the federal grant of $3.5 billion earlier given to California high-speed rail. Moreover, it is a stated opinion of the Auditor that the pace of construction needs to pick up; in fact, at a pace double what it is currently to achieve that end. As I see it, if more employees are needed, then so be it.
In addition, some of what may slow the building-machine advance down is remaining land and property acquisition. What I can tell you is that a goodly proportion of land and property has already been secured.
These are not insurmountable obstacles to try to overcome, not by a long shot.
Hopefully, with this latest audit and with its recommendations, the Authority is now well-positioned to achieve greater efficiencies with respect to spending, oversight, record-keeping and tracking of contract work and more – the more here referring to matters related to air quality and environmental sustainability – all in the name of moving the project along.
- “California High-Speed Rail Authority: Its Flawed Decision Making and Poor Contract Management Have Contributed to Billions in Cost Overruns and Delays in the System’s Construction,” California State Auditor Report 2018-108, “Summary,” November 2018, p. 1
- Ibid, p. 4
- Ibid, p. 2
- Ibid, pp. 2, 3
- Ibid, pp. 3, 4
Image (middle): California High-Speed Rail Authority
This post was last revised on May 30, 2020 @ 6:29 a.m. Pacific Daylight Time.
– Alan Kandel