California High Speed Rail Dispute

Democrat lawmakers in California are embroiled in one of the most contentious battles in modern state history over the fate of the high-speed rail link connecting Los Angeles and San Francisco, which has been dogged by delays and other problems for the better part of a decade.

If completed, the project would be the greatest single investment in state history, the most ambitious civil works effort nationwide, and a symbol to many experts of what not to do when building a railroad. The stakes in the current standoff are defined by these factors.

Since Gov. Gavin Newsom requested a $4.2 billion appropriation from the Legislature in early 2021, the conflict has festered for 16 months. Requested funds from 2008’s high-speed rail bonds have sparked an impasse with Assembly Democrats, who have refused to pay over the remaining monies.

Disputes about who will be in charge of the project’s future, how to make it more efficient, and how to make the most of the remaining cash is raging, and they may prove tough to resolve.

A business specialist in mega projects at Oxford University’s Said Business School and IT University of Copenhagen, Bent Flyvbjerg, says the project isn’t moving along according to a solid plan, which leads to wasted resources. According to one analyst, “given the lack of a strong future revenue stream, lack of political divisions, cost escalation, scheduling delays, and the graveyard of legendary boondoggles, this project is destined to die.”

Proponents of high-speed rail argue that the project is sound, notwithstanding these scathing assessments.

The U.S. Transportation Secretary under President Obama and proponent of high-speed rail Ray LaHood said, “The skeptics are always going to be the doubters. “Construction is currently in progress. More than a thousand people are involved in the project, all of whom are in high-paying jobs. The trip to Bakersfield is now set in motion. The outlook for the future is positive. There is no end in sight.”

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An impasse in Congress

The construction of a new high-speed rail line in the Central Valley has been delayed again because of a fresh set of utility relocation challenges.

It was anticipated in 2008 that the train line would cost $33 billion and be operational by 2020 when voters approved $9 billion for it. However, throughout the last 14 years, delays in land purchases, environmental document delays, staff change, and litigation have all contributed to furthering the project’s impossibility.

“There is no faith in the project,” said Los Angeles Democrat Speaker Anthony Rendon. “We used to have a deadline of 2020, but now we don’t.”

Learn more about this lawmaker by reading the full profile.

The most recent estimate put the cost at $105 billion, published earlier this year. According to the Legislative Analyst’s Office, the non-partisan consultant to the Legislature, the new price tag is based on some estimates made in 2019 that do not account for the recent surge in construction materials and labor costs. The danger is that we don’t know how much it will cost.

Newsom has offered several billion dollars in incentives to metropolitan areas as part of his negotiations with the Legislature to obtain the $4.2 billion. There have been no bites from the Assembly so far.

The office of Newsom did not reply to a request for comment.

With this backdrop, Rendon and most Democrats in the Assembly want to explode Newsom’s train plan.

During a recent interview, Rendon stated, “I think this tight dedication to the current idea is not exactly what we’re interested in..”

As part of his “current project,” Newsom has proposed an electrified 171-mile partly functioning system from Bakersfield to Merced, which he trimmed back from the ambitious intentions of his predecessor, Jerry Brown. According to the 2022 business plan, which was released earlier this year, it would cost $23 billion, leaving the state approximately $2 billion to handle any hiccups.

Laura Friedman, a Glendale Democrat and leader of the Assembly Transportation Committee, said, “This project is large and sophisticated and complicated and difficult and needs oversight.” Pressure is exerted on us to immediately hand up the money and move on,” he says. To say ‘Legislature, get out of our way,’ is to commit legislative malpractice in my opinion.

As of this writing, the Senate’s silence on the rail project has remained unbroken. Senator Lena Gonzalez, the chair of the Senate Transportation Committee, turned down an interview request and refused to respond to written questions. During a statement, she stated that she is working on a “strong transportation spending plan.”

Conflicting viewpoints hold that the viability of a 220 mph rail link between downtown Los Angeles and San Francisco, an aspiration that has persisted for more than four decades, rests only on their strategy.

Plans for high-speed rail in California are being developed by two different groups.

Proposals for a $1 billion appropriation for impending development and $1.5 billion to cover cost overruns were made in a letter to Newsom on October 15. Additionally, they requested a more comprehensive strategy for connecting the Central Valley to the Bay Area by high-speed rail, as well as an increase in funding for the Southern California legs of the system.

Negotiations between legislators and the governor’s office continued recently, but no agreement was achieved. It is expected that the fiscal year’s budget will be finalized by July 1, with an August modification conceivable.

According to the rail authority spokesperson, Annie Parker, Newsom had suggested a $9.1 billion “complete transportation plan” for transit and climate targets in a press release. She said it contains $4.9 billion for public transportation and other environmentally friendly transportation projects, in addition to the $4.2 billion allocated for the bullet train. she added.

“It has been an engine for the economy,” he said.

The urgent requirement for $4.2 billion by the train authority is unknown. According to its financial filings, the rail authority has around $1.5 billion in cash on hand, indicating that it could continue the project for at least one year.

For the sake of the long-term viability of the high-speed rail project, Helen Kerstein, the Legislative Analyst’s Office’s high-speed rail monitor, says the current deadlock must be resolved.

Despite this, rail authority chief executive Brian Kelly has claimed that his agency needs the money immediately for long-term purchases like trainsets, which take a long time to arrive.

Many supporters of the program are enraged by the opinions of Assembly Democrats, who voted last year in favor of a resolution supporting a reevaluation of the program.

Ex-rail authority chair Dan Richard predicted that “the urban lawmakers will never be happy.” For Union Station in Los Angeles and Caltrain’s electrification, I committed $470 million. “We weren’t even invited to speak at the dedication ceremony.”

The Assembly’s plan also delays the building of a high-voltage electrical system until the Central Valley tracks are connected in some way, which would take longer than expected. As a short-term solution, it wants the rail authority to investigate a new generation of battery-powered trains, which manufacturers claim might achieve speeds of 170 mph or more shortly. Kelly doubts that the battery trains will be able to go fast enough to meet regulatory standards.

What’s more, the state’s ability to fund the pricey coastal links, which would necessitate building long mountain tunnels near seismic faults, remains an open question. There are top-end projections of $50 billion and $22 billion in the 2022 draught business plan for Bakersfield to Los Angeles and the Central Valley tie-in at Chowchilla, respectively.

“There is a very major unresolved concern about where that money will come from and how to proceed at this time,” Kerstein added.

There are concerns that the 171-mile system may be left isolated.

According to Friedman, it’s a “very frightening business concept” to spend all of your money building a railway that doesn’t link to anything and then expect to make more money.

It’s possible that federal assistance isn’t enough.
A bipartisan infrastructure law enacted last year by Vice President Joe Biden, according to proponents of high-speed rail, might bring new funding. However, unlike the Acela train from Boston to Washington, D.C., the California project does not include a specific carve-out area. Grant experts estimate that California may expect no more than $5 billion, which is a good sum but not a game-changer.

In an April letter to legislative leaders, a state-appointed peer review board expressed grave worries about the project’s future. Environment clearances and COVID’s influence were lauded, but out-of-date cost projections, lack of technical competence for future contracts, and legislative supervision were criticized by it.

It’s too early to be optimistic, according to author Louis Thompson, a former FRA official, and World Bank railroad expert who has served on the panel for decades.

While new federal financing may be available, total project funds remain insufficient and uncertain, making effective management exceedingly challenging,” Thompson stated. There is also no clear legislative direction for the authority to follow.”

The bullet train was derailed by utility relocations.
In addition, development in the Central Valley has again failed to meet a rescheduled completion date. 119 miles of roadbed and structures are now under contract, which was initially scheduled to be finished by 2017.

Jeff Denham, a Republican almond farmer and former chairman of the House rail subcommittee, stated, “There is visually nothing happening in the Central Valley.” Denham initially voted in favor of the project but has now turned out to be an outspoken critic. There is no longer any equipment in the building.

Three officials working or consulting on the project, who asked not to be identified because they are not authorized under state contracts to speak to the media, indicated that construction had slowed dramatically. State’s plan to complete 119 miles by Dec. 2023 is unachievable, and completion is more likely to take place from Dec. 2026 to Dec. 30 of that year.

The train authority’s spokeswoman, Parker, said that the rail board will be presented with construction updates this summer. As far as she knows, “basically complete” is the current target for one of the three construction contracts overseen by the Spanish business Ferrovial.

Bridges and viaducts are being delayed because of utility relocations that are months behind schedule. The most recent progress reports of the train authority confirm the worries of the management.

57 percent of 1,850 utility relocation projects remain unfinished by three teams of contractors over ten years after construction began, according to the train authority’s April status report.

According to the three executives, the train authority has six months to begin work when utility owners accept design plans to shift wires or pipes. After that point, they said, they had to start the process over again. Many designs are re-evaluated for a variety of reasons.

As far as Parker is concerned, the authority has been open and honest about the underlying issues, which he says stemmed from commencing construction “out of sequence.” We are currently working through those hurdles and developing procedures to prevent similar problems from occurring in future contracts, she said. ” She noted that while some utility relocations have begun, there is still 28 percent of those that haven’t.

For more than a decade, the project has been dogged by sluggish land sales. According to the report, the state is short 222 parcels out of 2,291 needed. Four counties in all, just 28 structures have been finished.

It appears that the teams led by Tutor Perini and Dragados are significantly underspending on construction. These contracts’ remaining value will be completed in four years at current billing rates, according to progress reports. A completion date of 2026 would put it there.

Kelly was cited in the media two years ago as claiming the building will be at full pace and employ 1,700 to 2,000 craft workers. The number of people employed in April was 906. In Parker’s words, the estimate was set before the COVID epidemic ever broke out.

Only 119 miles of Newsom’s proposed 171-mile route is covered by the three contracts already in place. This expansion would require new contracts and land acquisitions. After the bridges, track beds, and viaducts are fully finished, the tracks, a complicated signaling system, and a high voltage electrical system will follow.

To meet Newsom’s deadline of 2030 and stay within the existing $23 billion budget the rail authority faces major obstacles.

Experts from Oxford and Copenhagen universities agree that the California project is a case study o how not to create a bullet train when they say that “Rail is challenged regarding economic return even under the best of circumstances.” “So, delays and cost overruns that further erode the economic return are the last thing train projects need.”

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