Peer report urges quick action by high-speed rail authority
BY JOHN COX, Californian staff writer
| Wednesday, May 11 2011 08:19 PM
Last Updated Wednesday, May 11 2011 08:20 PM
A new private-sector report aired in Sacramento Wednesday warns that the California High Speed Rail Authority has a lot of fundamental work to complete by mid-October if it hopes to keep the state's political and financial support.
The May 2 letter by the chairman of a peer review group commissioned by the Legislature is less critical than other recent analyses, such as Tuesday's high-level recommendation that the project be handed to CalTrans and overhauled. The chairman points to recent signs of progress by the rail authority and even lays some blame with federal and state authorities.
At the same time, the report urgently calls out significant hurdles to getting the project through critical early stages. It reiterates calls for plausible ridership projections and a better business model while noting that the rail authority continues to provide inadequate cost estimates and community outreach.
Critics of the project on Wednesday seized upon the report as evidence that the rail authority is pursuing a flawed plan, even as supporters said it demonstrates that the agency badly needs more staffing to ensure the success of what they consider a sound proposal.
The chairman of the state Senate Transportation and Housing Committee, Mark DeSaulnier, D-Concord, nodded to both sides, saying that the staffing shortage is real but that new employees may not save an agency that has for years failed to produce acceptable ridership numbers and a complete business plan.
DeSaulnier, who called himself a supporter of California high-speed rail, said he agreed with the peer review group's counsel that unless the rail authority addresses certain critical issues in its 2011 Business Plan, due in draft form Oct. 14, then it will have a tough time persuading the Legislature to give it the bond sale proceeds the project needs as it prepares to begin construction.
"It's very real," he said of the bond sale money's dependence on first resolving various fundamental issues. "I mean, if we don't get it fixed, we can't move forward."California's bullet train project, officially estimated to cost $43 billion, is proposed to link Los Angeles with San Francisco with 220-mph trains by 2020. Construction on an initial, $5.5 billion segment from northern Fresno County to about Bakersfield is expected to begin next year.
Senate hearing discussion
The peer review group letter by Will Kempton, chairman of the peer review group and CEO of the Orange County Transportation Authority, was written in response to a presentation made April 1 to the group by Roelof van Ark, CEO of the rail authority. Copies were sent last week to Gov. Jerry Brown, several California lawmakers and other state elected officials, though some said they had not yet seen the letter.
Kempton's letter was the subject of discussion Wednesday at a Sacramento hearing of the Senate Select Committee on High Speed Rail.
Committee Chairman Alan Lowenthal, D-Long Beach, who favors reducing the rail authority's power and giving the project to CalTrans, as recommended Tuesday by the nonpartisan state Legislative Analyst's Office, took the opportunity to grill van Ark and Kempton on the most pressing points contained in the letter as well as the LAO's report, which also advised starting construction not in the Central Valley as proposed but in either Northern or Southern California in order to bring in money sooner.
Van Ark said the rail authority is doing its best with limited resources and an uncertain financing and engineering picture.
Building up his staff's competencies through hiring "is actually the main thing we've got to concentrate on," he said.
Assemblywoman Cathleen Galgiani, D-Livingston, one of the project's biggest supporters in the capital, seconded that in comments after the hearing.
"We haven't given (authority staff) the resources they need in order to be successful," she said.
But the chairwoman of the Assembly Transportation Committee, Bonnie Lowenthal, D-Long Beach, saw the peer review report as reaffirming her doubts that the project is on the right track.
"This is one more note in a symphony that's telling us to make some real changes on this project," she said.
As the peer review group has done in past communications, Kempton's letter spells out uncertainties that could hobble efforts to attract private money to the project. Without strong financial commitment from government, the private sector won't risk its own money, and vice-versa. A related problem is that state law rules out subsidies to support the project, although the report noted that the definition of such subsidies is unclear.
Kempton noted that the rail authority has gone ahead with important decisions -- and expects to make more -- without input from a private operator, which has not been selected but which would benefit from a voice in such matters. That lack of input could limit future financing options, he said.
The project's cost estimates are problematic as well, he wrote. The rail authority has not updated its projected expenses even as it learns more about the challenges ahead, Kempton noted.
"There may be little that can be done about the problem at this stage, but the Authority should make every effort to state and qualify its estimates accordingly so that the public will understand that the $43 billion total is still a very preliminary estimate that could 'trend upward,'" the letter states.
Kempton also pointed to the "immensely complex" environmental review process that has great potential to guide or hinder the project's timely progress. Acknowledging the authority's insufficient staff, he nevertheless warned that inadequate public outreach has caused "more intense local reaction" than necessary.
The peer review group did not attribute all the problems to the rail authority. The report implies that adequate staffing for the authority is essentially the Legislature's responsibility, and that despite the $3 billion in federal grant money, the project's government funding falls billions of dollars short of what has been requested by the rail authority.
The rail authority did win some praise in the letter, which calls the hiring of a new staff member to handle difficult track right-of-way issues a "positive step."
Although Kempton was critical of some aspects of the latest business model, he noted that "some of the more unrealistic options" for setting up the project's operations, management and financing seem to have been dismissed.