US DOT audits $3.5B grant for $77B bullet train

UPDATE: April 20, 2018: A $3.5 billion package of project grants overseen by the Federal Railroad Administration is facing an audit by the U.S. Department of Transportation’s Office of Inspector General, reported the Associated Press.

A detractor of the $77 billion high-speed rail project, Republican Rep. Jeff Denham, requested a “full and honest review” of the project’s finances in December.

The audit will specifically evaluate how the FRA oversees the state’s compliance with federal guidelines. Results will be published publicly when the audit is completed at an undisclosed date.

Dive Brief:

Despite uncertainty on the part of lawmakers, California High-Speed Rail Association (CHSRA) officials have asked for long-term funding for the $77 billion bullet train that will one day connect Southern and Northern California, according to the Associated Press.
Brian Kelly, CHSRA CEO, told the California Assembly's transportation committee during an oversight hearing that the association has up to a little more than 30% of the money it needs to finish the bullet train project by its target date of 2033. The $20 billion to $28 billion Kelly said the agency has in its coffers – made up of $10 billion in bonds approved by voters in 2008, federal dollars and revenue from California's greenhouse gas cap-and-trade program – is not even enough to fund the first leg of the high-speed rail from Bakersfield to San Francisco.
Kelly asked lawmakers to extend the cap-and-trade program to 2050 from its targeted expiration of 2030, and finance the bullet train's cost against the extra 20 years of revenue. Some legislators extolled the future benefits of the high-speed rail, but, according to the California Legislative Analyst's Office, "a complete and viable funding plan does not exist."

Dive Insight:

Despite its popularity elsewhere in the world, high-speed rail has yet to win much support in the U.S., and if the California bullet train fails, it could have a chilling effect on other projects, giving more ammunition to bullet train detractors.

The bullet train project has suffered delays and cost overruns, leaving some to wonder if the plan was too ambitious from the start. A Los Angeles Times investigation launched in 2015 suggested that the CHSRA had not been 100% forthcoming with the California legislature on details regarding costs and logistics for the rail, such as the timetable and price tag for drilling through mountain ranges north of Los Angeles. The CHSRA has denied that allegation.

At the time of the Times analysis, MIT civil engineer Herbert Einstein projected that crews could complete 10 feet per day of tunneling. At that rate, it would take more than one year to finish one mile. The length that rail crews must tunnel to get through the San Gabriel and Tehachapi Mountains is 36 miles.

Costs for the project have skyrocketed, rising to $77 billion, nearly double the $40 billion CHSRA officials estimated when California residents voted on the 2008 bond measure. The CHSRA has reprioritized routes, paid change orders due to the delay of land acquisitions and faced public relations pressures for years. Gov. Jerry Brown has come out in favor of the project as recently as the beginning of this year. However, with this latest request for more money and reportedly no clear path to completion by the 2033 deadline, the road ahead for the bullet train may not be a smooth one.