Despite the California high-speed rail project being scaled down to a more manageable — and cheaper — scale, the agency governing the project still had to deliver bad news to California lawmakers on Wednesday via its latest project update.
The 119-mile Merced-to-Bakersfield (Central Valley) line, previously estimated to cost between $16 billion and $18 billion, now has a $20.4 billion price tag. Those costs, said California High-Speed Rail Authority board chair Lenny Mendonca in the report, could rise in the future in the event of unforeseen circumstances.
This latest estimate includes $16.3 billion for construction of the line; $700 million for trains; $800 million for work on the Phase 1 (San Francisco to Anaheim) NEPA (National Environmental Policy Act) Record of Decision; $1.3 billion for bookend investments; and $1.3 billion for other costs. The increases from previous projections break down into $477 million for cost increases, $362 million for a wider scope of work and $990 million for additional risk contingencies.
Also in the report, Mendonca said the initial budget for the rail project and schedule were unrealistic and that the authority will now focus on allocating its “limited resources” on achieving a working segment in the Central Valley. Anything less, he said, would leave taxpayers with $5 billion spent and nothing to show for it. The ultimate goal, Mendonca said, is to complete the scaled-down line, demonstrate the potential success of high-speed rail and draw investment to complete the full, original Northern California to Southern California route.
Not long after California Gov. Gavin Newsom took office, he announced that all but the Central Valley segment of the over-budget $77 billion bullet train projects were suspended.
In one attempt to curb costs, Mendonca said many functions that had been contracted out to consultants would be transferred to state employees. Critics of the rail’s management thus far contend that turning over a large share of the planning and management of the bullet train to consultants is one of the reasons the project is in the state it is now. A review of internal authority documents by NBC Bay Area, for instance, takes aim at consultant WSP, which has allegedly missed its own deliverable deadlines 30% of the time. However, a rail official told NBC that both the authority’s and WSP’s performance has improved over time.
But there’s another problem facing the project. The Federal Railroad Administration notified the authority in February that an internal review indicates the CHSRA will not meet a major 2022 construction deadline and that it intends to cancel a $929 million funding agreement. The authority has rejected the FRA's conclusion.