California’s biggest boondoggle just keeps breaking the bank.
Not only is the state’s massive high-speed rail project more than a decade behind schedule, it has also become an ode to overspending, a master class in mismanagement, and a complete misreading of what the public needs and what the state can deliver.
The Los Angeles-to-San Francisco high-speed rail system, pitched as one of the biggest public works projects in the nation, was supposed to cost $33 billion and be operational by 2020. As of 2021, the price tag has topped $100 billion and still doesn’t have a start date.
The newest misstep involves a 65-mile section through the San Joaquin Valley that a contractor assured could be constructed cheaper than original estimates with a few radical design changes.
CALIFORNIA BULLET TRAIN PROJECT TO SEEK ADDITIONAL $4.1B AMID DELAYS AND RISING COSTS
That didn’t happen.
Instead, the design changes turned into massive issues and led to busted budgets, becoming the latest troubling chapter for a public works project that has tested the patience and pocketbooks of Californians. The section in question runs through rivers, migratory paths for endangered species, and an ancient lake bed in Kings County, California.
A new investigation by the Los Angeles Times into the multiyear project shows that the state knew about these environmental constraints and prepared lengthy impact reports aimed at avoiding legal objections. However, when the rail authority awarded the contract in 2014, it went with the lowest bidder, a Spanish company Dragados, which promised it could shave off $300 million from the estimate by altering the design that the authority had proposed to regulators.
Those cost-cutting measures backfired, have largely been abandoned, and have contributed to soaring costs that now sit at more than 62% above the contract price — a hefty sum the rail authority has agreed to pay, the Los Angeles Times reported Monday.
What’s worse is that the rail authority signed off on Dragados without finishing an assessment of how sinking land in the area could affect the rail route. The sinking land is the result of decades of excess groundwater pumping, and the state is now paying millions of dollars to raise track embankments.
Calls to the California High-Speed Rail Authority for comment were not returned, but the group told the Los Angeles Times it was “making good progress on completing an initial 171-mile line through the San Joaquin Valley” and said it was “not required to finalize the study on land subsidence before construction began in 2015.”
“We continue to apply lessons learned to our current and future work to ensure issues of the past do not repeat themselves,” the authority said, adding that in the last two years, it has established 35 active construction sites across 119 miles of the Central Valley.
Dragados’s original deadline to complete the San Joaquin Valley portion was in 2017. Today, progress reports show the company hasn’t even started construction on half of the bridges and viaducts. By the end of 2020, the company had completed less than half of its work.
REST IN POWER. CALIFORNIA’S BULLET TRAIN TO NOWHERE
But it’s not just Dragados that bears the brunt of the blame.
The review found that the state failed to deliver 278 of 998 parcel land purchases needed for construction. Dragados was selected in 2014 because of its lowball bid of $1.23 billion. Its closest competitor, Tutor Perini, bid $1.74 billion, followed by Samsung E&C Americas at $2.07 billion.
Dragados’s bid came in well below the state estimate of $1.5 billion to $2 billion for the work.
Jeff Morales, the then-chief executive of the rail agency, heralded the low bid to “strong competition” and said picking Dragados was a “significant milestone” in the project. Morales, who pulled in a $395,000 annual salary, resigned in 2017.
Calls to Dragados were not immediately returned.
Bullet train planners have been under increasing pressure to make progress on the system many believe had no plausible way of living up to its goal of getting riders across the state in three hours or less.
But for critics, it has become a symbol of wasteful big government spending. Former President Donald Trump has labeled the entire high-speed rail project a “disaster” and called for Sacramento to return the funds given to the state by the federal government.
“California has been forced to cancel the massive bullet train project after having spent and wasted many billions of dollars,” Trump once tweeted. “They owe the Federal Government three and a half-billion dollars. We want that money back now. Whole project is a ‘green’ disaster!”
