Wednesday, April 16, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Calif. lawmakers scrutinize high-speed rail plan

SACRAMENTO — California officials are using a standard bidding process for their plan to speed construction of the state’s $68 billion high-speed rail line, but there are still outstanding questions about the inspection process that the Legislature should investigate, lawmakers heard Tuesday at a hearing on the plan.

Tuesday’s joint Senate hearing was billed as an opportunity to safeguard the public’s interest as lawmakers evaluate whether the agency charged with building the nation’s first bullet train has addressed a series of organizational problems, including whether it has sufficient staff and expertise to handle the project.

The independent Legislative Analyst’s Office outlined questioned lawmakers “may wish to ask,” including whether the California High-Speed Rail Authority will “retain the ability to independently inspect construction in the manner of its choosing.”

The Associated Press reported last month that a union representing state engineers questioned whether the project would have sufficient independent inspection, since the firm being hired to design and build the first phase would hire the inspectors who test the work on it, which the union said could be a conflict of interest.

“There is no final quality program and no independent inspection process yet,” policy analyst Brian Weatherford told lawmakers. “… The extent to which there is a truly independent and direct inspection of the design builder’s work is unclear.”

Contractors submitted bids last month to design and build the first 30-mile stretch of track for the bullet train, a section that is expected to cost $1.8 billion. The first full segment of the system will run from Madera to Bakersfield, but the project eventually is supposed to link northern and southern California with trains traveling up to 220 mph.

The other outstanding questions include how the authority plans to assure the quality of construction materials, whether someone from the authority or project construction manager will be “present for each and every test and inspection conducted by the design-builder,” and how it will evaluate potential conflicts of interest, the LAO said in its report to the Legislature.

Rail authority Chief Executive Jeff Morales said the agency has hired more senior-level staff in an effort to have “strong public oversight of the process with state employees playing key roles throughout the process.”

“We can insert state employees at any point in the process if we believe there is any need to do so,” he said.

Lawmakers also heard from state Auditor Elaine Howle, who last year criticized the authority’s processes for monitoring the performance and accountability of its contractors as lacking oversight and said the agency’s contractors and subcontractors “outnumber its employees by about 25 to one.”

Howle told the joint hearing of the Senate Transportation and Housing and the Senate Budget and Fiscal Review committees that the rail authority has fully implemented 17 of its 23 recommendations and made progress on the others. That includes hiring senior-level staff and strengthening its policies and procedures.

“You’ve got to make sure that your staff follow them, that there’s proper oversight of the authority, but we think they’ve put some good structure in place,” she testified. “We just need to see that those are carried out.”

Among the biggest concerns is how the state will fully fund the project. Lawmakers approved the first phase of the planned 800-mile line last summer, allowing the state to begin selling $2.6 billion in voter-approved bonds for construction of the first 130-mile stretch.

That approval also allowed the state to tap $3.2 billion from the federal government, but it’s still not known where the rest of the money will come from. The state’s business plan calls for some backing from private investors and for a private operator to run the system without a state subsidy.

High-speed rail board Chairman Dan Richard said he still doesn’t know the answer, but officials believe the financing will come from a variety of sources. He said he remains confident that private investors will step up to service and operate the trains, sell tickets and perform other functions once the initial segment is built.

“At this point we don’t have answers for you, but we do have a mindset,” he said. “It’ll be a series of 10 percent solutions; it won’t be a silver bullet.”

Richard said officials also have committed that each segment will be built only as the money is available and will have “independent utility,” meaning they will be able to operate even if future extensions are never built.

Gov. Jerry Brown and most other Democratic lawmakers support the project, but it still faces intense criticism and a series of lawsuits.

The Associated Press

The Associated Press

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