Potentially fatal flaws are threatening California's proposed high-speed rail system, according to a new report by a panel of "peer group" experts.
The six-member panel called for a "thorough reassessment" of key engineering, financial, economic and managerial issues, and urged agreement between the Legislature, the governor and the California High-Speed Rail Authority as to how to resolve the issues.
Major flaws include "totally inadequate" authority staffing, uncertain funding, questionable ridership assumptions, poor risk assessments and no viable business plan, the experts warned in a new report unofficially leaked to the media starting late last week.
The report, by a six-member California High-Speed Rail Peer Review Group, echoes previous findings by State Auditor Elaine Howle and the Legislative Analyst's Office and adds fresh critiques of project. The report calls on the authority to create a better business plan and do a more thorough analysis of risks.
Under the present plan, the system would stretch from San Francisco to Los Angeles by 2020 and relay passengers from the Bay Area to Southern California in less than three hours. Last week, the authority's board of directors approved a stretch between Borden and Corcoran in the Central Valley as the starting point for the line, but stressed that its objective remains a statewide system.
But the authority's business plan for an 800-mile system remains riddled with uncertainties, the report states. Among the biggest obstacles is a lack of a "business model" (different than a "business plan") that would make the system viable.
"The proposed business model for the HSR project has not received enough attention and yet is probably the critical organizing principle around which most issues will need to be resolved," the group said. Selecting a business model for the system "may be the most difficult of the decisions the Authority now faces," it said in the report.
The peer group specifically calls on the authority to decide whether high-speed rail should operate as a public entity (much like BART), as a mostly private enterprise, or as a combination.
"The Authority's actual decision must be the result of a careful balance of finances, private and public costs and benefits, and risk sharing, among other factors," the report stated, noting that neither a fully public nor a fully private model are likely. "What the group does strongly believe, though, is that the progress on the HSR system is critically dependent on action by the Authority to identify the business model option it will pursue or, at least, to start the process of selecting the preferred approach.
"It will not be possible for the group to reach a judgment on the viability of any plan or request for use of bond funding without a much better understanding of the authority's proposed business model."
The new report, like previous audits, also expresses concern about the lack of funding for the project, which has an estimated price tag of $43 billion. California voters approved a $9.95 billion bond for high-speed rail in 2008.
Will Kempton, chair of the group, wrote in the report's cover letter that building such a system would be a "daunting task under the best of circumstances" and that meeting the challenge would "require a thorough re-assessment of a number of crucial engineering, financial, economic and managerial issues, and will require agreement among the Legislature, the Governor and the Authority on what the resolution of those issues should be."
The report calls the lack of a "clear financial plan" a "critical concern." The report particularly takes issue with the rail authority's projection that it will receive between $17 billion and $19 billion in federal funding for the project. This projection, along with the authority's expectations of local and state funding, gives the financial plan an "air of unreality," the report states.
"For these reasons, the project, as of now, has only limited credibility with private investors," the report states. "The demonstration of firm public sector financial commitments will be an absolute necessity, prior to approaching sources of private capital."
The cost of the rail system could go up further, the report notes, because of community opposition, most notably on the Peninsula, where Palo Alto, Menlo Park and Atherton are suing the rail authority over its environmental study. The authority should "conduct more detailed and transparent sensitivity analyses of the impact on the expected outcomes of variations in demand, revenues, investment costs, operating costs and project timing."
"All 'mega projects' such as High-Speed Rail carry significant risk and uncertainty," the report stated. "Community opposition to the project's proposed alignment between San Francisco and San Jose, as well as the early stage of the system's overall design status (among many other issues) will cause the cost of the project to fluctuate."
The peer group also acknowledges that the rail authority remains grossly understaffed and states that its current staffing level "is inadequate to oversee a project of this magnitude, no matter what business model is ultimately chosen." It calls on state legislators to ensure that the agency has the staff necessary to manage the project because "anything less will ensure major problems of budget control, accountability, and schedule."
Jeff Barker, deputy director of the rail authority, said the agency "continues to make progress on addressing the challenges that go along with a project of this size and scope, which have been well documented in previous reports."
Barker told the Palo Alto Weekly, the Voice's sister paper, in an e-mail that the authority's staff will work with the board of directors on development of a business model in the middle of 2011 and that it is moving ahead with its plans to refine the ridership projections. As part of the latter effort, the authority will create a five-member Ridership Peer Review Committee to vet the latest forecasts.
Barker acknowledged the challenge of attaining more than $11 billion in federal funding, but noted that the state has secured almost $3 billion in federal funds in less than a year.
"California has been more successful than any other state in garnering federal support for its high-speed train project, but today's report should be a wake-up call that a commitment of ongoing federal support for the project is still crucial to its future," Barker said in an e-mail
Comments
Cuesta Park
on Dec 7, 2010 at 2:29 pm
on Dec 7, 2010 at 2:29 pm
Incessant reviews will delay the building of these railway lines further and further. US has had railway lines for over a hundred years, and in addition can draw upon experts and experience from major rail countries of Europe, Japan, Korea, Russia etc, where railway travel is a major mode of transportion and travel. Rail travel is very safe and reliable and has a good accident-free record. Reviews and delays will also raise costs in times when funds are scarce. Ridership is bound to increase with time.
Cuernavaca
on Dec 7, 2010 at 2:46 pm
on Dec 7, 2010 at 2:46 pm
"Independent peer-review panel urges rail authority to select a business model, refine ridership numbers and review financing projections"
In other words, all the info you tricked voters into believing is utter bullshirt and now its time to get real, despite the fact that the TRUTH about cost and ridership numbers will expose the fallacy of the current HSR plan. I for one would have NEVER voted for it if the truth had been presented to me instead of the lies that have now been exposed.
Cuernavaca
on Dec 7, 2010 at 2:56 pm
on Dec 7, 2010 at 2:56 pm
@Vijay Kumar,
I appreciate your opinion and desire to push fwd on HSR, but I liken this issue to a house builder who said "We can build you an "x" sq house for x dollars." If suddenly an independent review said there were serious doubts about the final size and costs, I don't expect you would say "This will just cause delays, build it anyway"
The sad truth is we were duped into believing something that we wanted to believe in, but now the truth has come out and we need to act responsibly.
Cuernavaca
on Dec 7, 2010 at 3:00 pm
on Dec 7, 2010 at 3:00 pm
To any legal experts out there: If the fundamental details in question were found to be false, would it be grounds for nullifying the proposition? I think a new vote on the real numbers would be in order.
Cuesta Park
on Dec 7, 2010 at 3:21 pm
on Dec 7, 2010 at 3:21 pm
The proposition only provides a fourth of the "estimated" cost of this project. Bearing in mind that previous public projects, like the Bay Bridge, routinely generate actual costs much larger than their estimates also suggests this project will cost much more than advertised.
Now is the time to make a full assessment of the viability, design, and costing for this project, before construction starts.
This is not the "Field of Dreams". Just because we build it, doesn't necessarily mean anyone will come.
Willowgate
on Dec 7, 2010 at 3:40 pm
on Dec 7, 2010 at 3:40 pm
Please review this thing and figure whether it makes sense or not, and please be up front about the findings.
Sylvan Park
on Dec 7, 2010 at 4:32 pm
on Dec 7, 2010 at 4:32 pm
This project is a classical boondoggle, It needs to be put before the voters again at which time it will be put to rest.
We don't need to build high speed rail which will end up being a tax supported way to slowly get to LA. Right now today we have several airlines that can get us to LA in 1/3 the time. Why have a government system to compete with the airlines, it will cost this bankrupt state dearly. Why use foreign rail technology and hardware when we have best aircraft research, technology, and hardware in the world.
Stop this project!
Sylvan Park
on Dec 7, 2010 at 4:33 pm
on Dec 7, 2010 at 4:33 pm
This project is a classical boondoggle, It needs to be put before the voters again at which time it will be put to rest.
We don't need to build high speed rail which will end up being a tax supported way to slowly get to LA. Right now today we have several airlines that can get us to LA in 1/3 the time. Why have a government system to compete with the airlines, it will cost this bankrupt state dearly. Why use foreign rail technology and hardware when we have best aircraft research, technology, and hardware in the world.
Stop this project!
Blossom Valley
on Dec 7, 2010 at 4:57 pm
on Dec 7, 2010 at 4:57 pm
Also, isn't/wasn't there some urgency about getting to a certain point in this proposal in order to guarantee receipt of an amount of federal funds by a certain date? And, as I recall, a deadline date of commitment that is fast approaching? Is panic setting in, folks? There's WAY too much concern for this "probable monster" to proceed in light of what we, the public, have been fed by the HSR group. I suggest that the "commited" money for this project(fiasco?) be returned to the Feds where it can be utilized in a more responsible genre.
And, we could eliminate the prospect of a massive scar in our state. Additionally, we aren't Japan or Europe. Some things just aren't appropriate for every situation of our existence. Think about it!
Blossom Valley
on Dec 7, 2010 at 4:57 pm
on Dec 7, 2010 at 4:57 pm
Also, isn't/wasn't there some urgency about getting to a certain point in this proposal in order to guarantee receipt of an amount of federal funds by a certain date? And, as I recall, a deadline date of commitment that is fast approaching? Is panic setting in, folks? There's WAY too much concern for this "probable monster" to proceed in light of what we, the public, have been fed by the HSR group. I suggest that the "commited" money for this project(fiasco?) be returned to the Feds where it can be utilized in a more responsible genre.
And, we could eliminate the prospect of a massive scar in our state. Additionally, we aren't Japan or Europe. Some things just aren't appropriate for every situation of our existence. Think about it!
Blossom Valley
on Dec 7, 2010 at 4:58 pm
on Dec 7, 2010 at 4:58 pm
Also, isn't/wasn't there some urgency about getting to a certain point in this proposal in order to guarantee receipt of an amount of federal funds by a certain date? And, as I recall, a deadline date of commitment that is fast approaching? Is panic setting in, folks? There's WAY too much concern for this "probable monster" to proceed in light of what we, the public, have been fed by the HSR group. I suggest that the "commited" money for this project(fiasco?) be returned to the Feds where it can be utilized in a more responsible genre.
And, we could eliminate the prospect of a massive scar in our state. Additionally, we aren't Japan or Europe. Some things just aren't appropriate for every situation of our existence. Think about it!
another community
on Dec 7, 2010 at 9:43 pm
on Dec 7, 2010 at 9:43 pm
HSR is a must for the State of California. The issue of public support ignores the fact that airlines and highways could not exist without government support. Airlines do make the trip in 1/3 the time from take off to landing, but if you factor in the time to and from the airports, check in, security and such, 2 and half hours downtown to downtown sounds pretty good to me. Horse and buggy approaches are not going to secure a viable future for our State and the infusion of money and jobs into the economy will be enormous. My only fault with the plan is that the first construction ought to be out of Los Angeles. HSR will not at all be a scar. We've got those with our freeways. Noise, we've got that with our airports. Environment? Hey we can run that whole system on California sunshine!
Blossom Valley
on Dec 7, 2010 at 11:45 pm
on Dec 7, 2010 at 11:45 pm
There is no reasonable question as to whether the state needs HSR. It does. There is no alternative: with oil prices easily reaching $500/bbl by 2020, you'd need cars with 300mpg to keep driving the length of the state affordable. And airlines will only be for the super-rich, given that most of the cost of a ticket is already fuel today, so by 2020 we can expect a ticket to LA to cost $500 as well. An electric rail system with appropriate feeders is the only alternative that will allow the state's economy to function, running on solar, hydro, and geothermal power.
The only question is whether we the people and our elected representatives have enough wisdom to see this and act, rather than hoping that fuel will stay cheap in an era with ever increasing world demand and decreasing supply. There's a reason that Europe and China are building HSR as fast as they can. They want to put us out of business.
Cuesta Park
on Dec 8, 2010 at 8:28 am
on Dec 8, 2010 at 8:28 am
"Airlines do make the trip in 1/3 the time from take off to landing, but if you factor in the time to and from the airports, check in, security and such, 2 and half hours downtown to downtown sounds pretty good to me."
----------------
Um, you need to apply these same factors to rail travel as well, or did you assume the train was going to stop at your front door, and not require a security screen?
Cuesta Park
on Dec 8, 2010 at 8:30 am
on Dec 8, 2010 at 8:30 am
"There is no alternative: with oil prices easily reaching $500/bbl by 2020, you'd need cars with 300mpg to keep driving the length of the state affordable. And airlines will only be for the super-rich, given that most of the cost of a ticket is already fuel today, so by 2020 we can expect a ticket to LA to cost $500 as well."
------------------
Links, please.
Blossom Valley
on Dec 8, 2010 at 10:15 am
on Dec 8, 2010 at 10:15 am
The difference between going to the airport and going to downtown, is that from their inception our downtowns are the focus of all means of transportation, public and private. Both LA and San Francisco have excellent subways to the train terminals already, and LA is catching up to San Francisco in other public transportation, plus there are other stops along the way that may be closer to the traveler's origin. With air travel, it's point to point with no stops in between. Yes the cost of auto fuel is major looming problem. Sunshine and wind to produce electricity will not go up, and the cost of manufacturing the equipment is plunging and will continue to do so. Since electricity is used most efficiently when used locally, the entire rail right of way should be paneled to feed the system all along the route.
Cuesta Park
on Dec 8, 2010 at 11:15 am
on Dec 8, 2010 at 11:15 am
You can't have it both ways. If HSR offers more stops than air travel, it loses its effectiveness as a high speed alternative.
OTOH, if HSR is centralized to the major city downtown areas, then time to get to a downtown needs to be considered. There's a good majority who don't live in the major cities, so either you end up driving/busing to a downtown, or to an airport.
I would argue that the design and flow of traffic to an airport is better than that of a downtown of any city, currently.
All this goes to show that building a massive new rail project may solve one problem, but it also introduces/exposes many other problems that need to be addressed incrementally, before mass transit becomes attractive from a convenience and cost standpoint for mass adoption.
Spend the money strategically and precisely to gain tangible benefits and that eventually lead to an intelligent mass transit system. Don't waste it on a Hail Mary, one shot deal.
Monta Loma
on Dec 8, 2010 at 12:18 pm
on Dec 8, 2010 at 12:18 pm
Wayne, nothing you wrote after, "HSR is a must for the State of California", explains why HSR is a must.
Do you realize, by the way, that the State of California is on the verge of bankruptcy because of massive unfunded pensions for public employees? Seems like if we must do something, it would be to solve that crisis.
Monta Loma
on Dec 8, 2010 at 12:22 pm
on Dec 8, 2010 at 12:22 pm
Seer,
re: "There is no alternative: with oil prices easily reaching $500/bbl by 2020..."
As the price of fuel increases, the most realistic projection is that we will start manufacturing hydrocarbon fuels from raw energy sources such as coal.
Also, high-speed rail addresses only a small segment of commuters. You don't address how high-speed rail does anything for local commuting or transportation of goods. Nor why the "high-speed" part of high-speed rail is necessary, as opposed to old-fashioned moderate-speed rail.
Blossom Valley
on Dec 8, 2010 at 12:23 pm
on Dec 8, 2010 at 12:23 pm
No it's not both ways, the planned 2 and half hour time between downtowns includes the time for other stops at places like Burbank, Sylmar, Bakersfield, Fresno, San Jose, Redwood City etc. As for flow to the airports, there is an extension to LAX, and the Burbank stop is next to the Burbank Airport parking lot and the same for the San Francisco Airport. Rather than seeing this as a one time Hail Mary, it ought to be the first stroke of a 21st century transportation system in our Golden State.
Blossom Valley
on Dec 8, 2010 at 12:32 pm
on Dec 8, 2010 at 12:32 pm
"Do you realize, by the way, that the State of California is on the verge of bankruptcy because of massive unfunded pensions for public employees? Seems like if we must do something, it would be to solve that crisis." is a bit off topic, and I agree it's a serious one. However, billions of dollars spent in our state on infrastructure helps, not hurts, our economy. Californians pay a huge part of the Federal tax bill, and as such we deserve the moneys set aside for rebuilding and upgrading our infrastructure. That's a lot of jobs and big infusion of spendable cash into our economy. And I think the problem is a lot more complicated than just pensions. Just sticking just to the transportation issue, should we cut back on other transportation expenses to solve our financial crisis? Let the highways deteriorate, wait for a bridge to fall before we replace it, end support of the airline infrastructures, changing our highways to turnpikes and charge by the mile?
Monta Loma
on Dec 8, 2010 at 1:19 pm
on Dec 8, 2010 at 1:19 pm
re: "However, billions of dollars spent in our state on infrastructure helps, not hurts, our economy."
That's just not true as a blanket statement. Each bit of infrastructure money is spent on may or may not help the economy, depending on how useful it ends up being, how much was spent on it, etc. In general, more state government spending hurts the economy by taking funds away from business development and personal wealth.
re: "Californians pay a huge part of the Federal tax bill, and as such we deserve the moneys set aside for rebuilding and upgrading our infrastructure. "
Maybe we deserve it, but we didn't get it. Should we still proceed with a huge, unfunded project?
re: "Just sticking just to the transportation issue, should we cut back on other transportation expenses to solve our financial crisis? Let the highways deteriorate, wait for a bridge to fall before we replace it, end support of the airline infrastructures, changing our highways to turnpikes and charge by the mile?"
Of course, where to spend the state's budget is a vastly complicated subject, but, as a general principle, it makes more sense to maintain current infrastructure than to pour the money into something new that is known to be unusable.
Cuesta Park
on Dec 8, 2010 at 1:32 pm
on Dec 8, 2010 at 1:32 pm
"Rather than seeing this as a one time Hail Mary, it ought to be the first stroke of a 21st century transportation system in our Golden State."
---------------
Let's assume for the moment your perception on this is realistic...
If a $43 billion HSR project is the FIRST stroke in a 21st century mass transit system for California, how do you propose to pay for the REST of it?
Cuernavaca
on Dec 9, 2010 at 5:30 am
on Dec 9, 2010 at 5:30 am
I hear people sat HSR is a must. So please explain why THIS particular
HSR plan is a must. Please reference the most important points: ridership estimates and costs. Oh, I forgot,those most important points of the plan were falsified to try and snek this terrible plan through.
Some seem blinded by the possible panacea of HSR in general, but I've yet to see someone claim that this particular plan, with its falsely inflated ridership estimates, is a great plan.
HSR yes, THIS HSR rail plan? Oh hell no, not if you're thinking clearly.Lets shut 'er down now. If it keeps going, the abject failure this plan is headed for will only sour voter's opinion when its time to
set forth on a realistic and monetarily sound HSR plan.
Rex Manor
on Dec 9, 2010 at 9:24 pm
on Dec 9, 2010 at 9:24 pm
If Caltrain is about to go bankrupt with existing tracks and high ridership, how the hell is the HSR going to possibly do better?
Monta Loma
on Dec 13, 2010 at 9:33 pm
on Dec 13, 2010 at 9:33 pm
Caltrain is San Francisco to San Jose . HSR is San Francisco to Los Angeles. Completely different scale of transportation. It's Calculated that 90% of the Californian population will be within 30 miles of the planned a HSR station.
If HSR is such a bad idea why do other countries investing in it so aggressively?