Dive Brief:
- California bullet train officials are ready to start laying track for the first 54-mile segment, but The Los Angeles Times reported that two contractors are asking for nearly $300 million in change orders.
- California Gov. Jerry Brown's office has authorized the California High Speed Rail Authority to seek a $2.6 billion bond sale from the $10 billion of bullet-train bonds approved by voters in 2008, according to the Associated Press.
- Tutor Perini and Dragados-Flatiron claim that delays in land acquisition, project mismanagement and change orders have driven up costs to almost $300 million. In response to the claims for extra money, the CHSRA said it would review the requests but that it will have to determine if they are warranted.
Dive Insight:
CHSRA officials insist that the project's cost estimates and contingency allowances are sufficient, but the Times suggested that the contractor change orders could fall in line with a Federal Railroad Administration risk analysis published by the paper in January suggesting that the high-speed rail line could be in for as much as $3.6 billion in overruns. The CHSRA and the FRA have disputed the report cited by The Times, arguing that it was for discussion purposes only and filled with hypotheticals not representative of the rail's current status. However, the claims made by contractors
In June of last year, the CHSRA agreed to pay Tutor Perini almost $64 million in change orders — including $50 million of delay-related charges and almost $14 million to accelerate the schedule. Tutor Perini was originally scheduled to start the project in 2013 under a $1 billion contract.
This is the latest pothole in a very bumpy ride for the CHSRA. The project has been fraught with delays and legislative investigations, but the latest setback involves additional rail work that the CHSRA planned to help fund, the Caltrain Peninsula Corridor Electrification Project. The CHSRA expects the bullet train to share that line eventually, but the project was halted by the Federal Transit Administration when it decided to withhold a $650 million grant so that it could be reviewed later this year as a 2018 budget item. The California congressional delegation reportedly had a hand in the delay, insisting that the bullet train's reach be curbed pending a full audit.
