Dive Brief:
- The California High Speed Rail Authority has postponed awarding a key, $30 million operations and management contract for the first leg of its new rail line through the state's Central Valley region, according to Courthouse News Service. CHSRA was scheduled to award the contract at its monthly meeting Thursday.
- The CHSRA had planned to tap DB Engineering & Consulting USA, a subsidiary of German rail company Deutsche Bahn, for the project, but Spain-based bidder Renfe protested the decision at the last minute. Renfe objected based on its scoring process, during which the company said it received high marks in two out of three categories.
- The CHSRA's reluctance to move forward with an operations contract led some meeting attendees to suggest that the authority was dragging its feet at a "critical time" in the bullet train's schedule. The agency, which is already late in delivering the first segment of the high-speed rail by eight years, will address the contract award issue at its next meeting in November.
Dive Insight:
Earlier this month, the Los Angeles Times published a June CHSRA report that said the 119-mile line through the Central Valley cost $1.7 billion more than originally forecast, which raised the total price tag to $8 billion. The CHSRA chalked up the increases to the rising cost of land, the cost of utility relocation and negotiations with freight companies over the logistics of running high-speed trains near their tracks. It is unknown whether this add-on will raise the entire projected cost of the rail past its current budget of $64 billion.
The rail was dealt another blow back in August when the U.S. 9th Circuit Court of Appeals issued a ruling similar to that of the California Supreme Court, which decided that the high-speed rail line must comply with the strict rules contained in the California Environmental Quality Act (CEQA). This decision makes the rail line more vulnerable to lawsuits that could delay completion even longer.
The advocacy group Mission Bay Alliance used CEQA laws to successfully snarl the construction process for the $1 billion Golden State Warriors arena in San Francisco for more than one year. Those protesting the $17.1 billion Sacramento-San Joaquin Delta tunnel have also said they will use CEQA to try to scuttle that project as well.
