Now a new blow to plans to start construction later this year in the Central Valley, a peer-review committee has recommended that state legislators not fund the project until major changes are made to the business plan for the increasingly controversial line. According to an article by Gennady Sheyner in this newspaper, the California High-Speed Rail Peer Review Group found that the business plan the High-Speed Rail Authority unveiled in November offers inadequate information about funding, fails to answer the critical question of which operating segment will be built first and features a phased-construction plan that would violate state law. The group recommends that the state Legislature not authorize expenditure of bond money for the project until its concerns are met.
The report deals the latest of several recent setbacks to the project, for which state voters approved a $9.95 billion bond in 2008. Since then, the project's price tag more than doubled and several agencies, including the Legislative Analyst's Office and Office of the State Auditor, released critical reports about the project.
Widespread objections were raised here when plans for the high-speed rail route showed elevated tracks running parallel to the Union Pacific tracks in Pleasanton, and then on southwest to an old railroad bridge that crosses the Bay next to the Dumbarton Bridge. Dropping that plan, but never abandoning it, the rail authority chose a southerly route to skirt the Bay and run its fast trains in the CalTrains corridor. That plan has become even more controversial on the Peninsula, where several grassroots groups have sprung up in the last two years to oppose it. Menlo Park, Atherton and Palo Alto had filed a lawsuit challenging the rail authority's environmental analysis and the Palo Alto City Council last month adopted as the city's official position a call for the project's termination.
In its letter to the Legislature, the peer review group highlighted some of the same flaws that local officials and watchdogs have long complained about, most notably a deeply flawed funding plan. The project currently has about $6 billion in committed funding and the rail authority plans to make up much of the balance from federal grants and private investments -- investments that would be solicited after the first major segment of the line is constructed. The peer-review group found this plan to be vague and insufficient.
"The fact that the Funding Plan fails to identify any long-term funding commitments is a fundamental flaw in the program," the report states. "Without committed funds, a mega-project of this nature could be forced to halt construction for many years before additional funding could be obtained. The benefits of any independent utility proposed by the current Business Plan would be very limited versus the cost and the impact on state finances."
The group also faulted the rail authority's business plan for failing to choose the "initial operating segment" for the rail line. Though the authority has decided to build the first leg of the line in Central Valley, this segment would not be electrified and would serve largely as a corridor for testing the new line. The first "true" high-speed rail segment would be built later and would stretch either north toward San Jose or south toward the San Fernando Valley.
The new report presents a potentially devastating blow to the rail authority, which is banking on getting $2.7 billion in Proposition 1A funds for construction of the Central Valley segment. The agency has also received $3.5 billion in federal grants, but these, too, depend on matching funds from the state which could be hard to come by given California's budget deficit.
The project, which could be a model for high-speed rail in the U.S., has its supporters, including Gov. Jerry Brown, Sen. Dianne Feinstein, labor leaders and cities in the Central Valley which would benefit both by the 100,000 jobs or so that could be created during the project's construction phase and, later, close connections to the state's major cities once station platforms are built. Remember, too, that the Pleasanton route through the Altamont and with a station here is still in play.