Peer review critical of California's HSR plan Jan 2012
Paula Wallis, TunnelTalk
California's high-speed rail program is coming under increasing fire with the release of a damming report from a respected and independent review panel.
The California High-Speed Rail Peer Review Group, created by State law to guard the public interest, recommends California postpone its proposed $98.5 billion bullet train saying it poses "an immense financial risk."

California's high-speed rail route

Tuesday's (January 2) report recommends the State Legislature not take up $10 billion in voter-approved bonds for construction of the initial section of the rail line. Work on the first phase of the 220 miles/hour San Francisco-Los Angeles high-speed rail line is set to begin this year with completion set for 2030 or beyond.
Will Kempton, former Director of Caltrans (California Department of Transportation) and current head of the Orange County Transportation Authority, chaired the independent review panel and said: "We cannot overemphasize the fact that moving ahead on the project without credible sources of adequate funding, without a definitive business model, without a strategy to maximize the independent utility and value to the State, and without the appropriate management resources, represents an immense financial risk on the part of the State of California."
The report adds to a number of negative assessments from the State auditor, the legislative analyst, the University of California, Berkely Institute of Transportation Studies, as well as the transportation committee in the US House of Representatives.
Other members of the panel include, John Chalker, Managing Director of LM Capital Group; Walter Bell, PE, Senior Advisor of The UBS Global Asset Management Corp; Frieder Seible, Dean of UC San Diego Jacobs School of Engineering; Louis Thompson, Principle, Thompson, Galenson and Associates; and Diane Eidam, Strategic Policy Advisor to San Diego Association of Governments.
The expert panel took issue with many aspects of the proposed project from ridership estimates to questioning the ability of the State agency charged with overseeing the project.
The biggest worry however, is what happens once the $9 billion in bonds and the $3.3 billion in Federal grants are exhausted and with no long-term dedicated funding source in place. Congress has eliminated future funding for high-speed rail and the Republicans in Congress are trying to freeze funds already granted.

Vision for a high-speed rail station

The report says the State Legislature could resolve the issue by enacting a dedicated fuel tax or some other form of added user charge that would not aggravate the existing State budget deficit. "Lacking this, the project as it is currently planned, is not financially feasible."
The panel also charged that the California High-Speed Rail Authority does not have the resources to manage adequately a construction project of this scale and larger than any currently managed by Caltrans.
Ridership forecasts, the panel argues, have not been subject to external and public review and are therefore not verified.
The report also contends that the conventional approach of multiple contingencies, plus adding 'fat' to the schedule, may not be appropriate. The panel said that capital budgets would be improved by the development of a risk-based, cost-loaded construction schedule, allowing for a broad range of outcomes in cost and schedule.
In response, the California High-Speed Rail Authority called the independent report "deeply flawed, in some cases misleading and its conclusions are unfounded." The Authority argued that many of the problems cited have already been addressed.
"It is unfortunate that the Peer Review Committee has delivered a report that is deeply flawed in its understanding of the Authority's program and the experience around the world in developing high-speed rail," said Roelof van Ark, CEO of the High-Speed Rail Authority. "As someone involved in many of the successful high-speed rail programs internationally, I can say that the recommendations of this Committee simply do not reflect a real world view of what it takes to bring such projects to fruition."
"What is most unfortunate about the report is that it erroneously creates a cloud over the program that threatens not only Federal support but also the confidence of the private sector necessary for them to invest their dollars," added Thomas J. Umberg, Chairman of the Authority Board.
California Governor Brown's office indicated that the panel's report will not erode his support of the project. The Governor's spokesman, Gil Duran, said in a statement: The peer review report will be evaluated by the Legislature, but it does not appear to add any arguments that are new or compelling enough to suggest a change in course."
Other independent analysts argue that the level of scrutiny may be too intense. "If the transcontinental railroad or interstate highway system had been subject to this level of scrutiny, they never would have been built," said Robert Stern, former President of the Center for Government Studies. "A high-speed train system built in California shows that the Golden State is once again leading the nation in new technology and innovation."
Costs balloon for California's high-speed rail - TunnelTalk, Nov 2011
California calls for high-speed rail collaborators - TunnelTalk, Feb 2011
California high-speed rail Peer Review Report

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