Bullet train’s risk of cost overruns reduced, rail chief says

Dan Richard, chairman of the California high-speed rail authority, said Wednesday at a congressional hearing in Madera that the agency had reduced the risk of future cost overruns, but the project’s price tag could increase in the future.

“I am not going to sit here and promise that there will not be [cost growth],� Richard said.

Richard was one of six witnesses called by the House rail subcommittee chairman, Rep. Jeff Denham (R-Atwater), who has been harshly critical of the agency’s plans and what he contends is lack of compliance with a voter-approved measure that provided $9 billion for the system.

Denham said voters were told that the system would cost $33 billion and be operational by 2020. The current plan carries a $68-billion price tag with a start date of 2028. Deham noted that the 130-mile segment of construction in the Central Vallley, which is to start construction in July, will not be electrified or operate profitably, as required by the bond measure voters approved in 2008.

The rail authority is expected to approve a $985-million contract at its board meeting next month with a construction team led by Sylmar-based Tutor Perini Corp. Denham said that he had a number of questions about the methodology the authority used in tentatively selecting the company to build the first 29 miles of the system, but that those questions would be submitted in writing for later answers.

Richard said the authority’s use of a design build contract, in which Tutor Perini would design the majority of the project and then build it, will relieve the government of most of the risk in the project.

Asked about progress on the project, Richard said the agency is discussing Central Valley land purchases needed for the first segment of the system, but could not say for sure whether the agency has actually completed any deals. “I am not completely sure,� Richard said.

Doug Verboon, chairman of the Kings County Board of Supervisors, said that his county’s relations with the rail authority have continued to deteriorate since 2011 and that they have not heard from the agency for 11 months.

Anja Raudabaugh, executive director of the Madera County Farm Bureau, said the authority’s handling of relations may have improved but there still exists “an insurmountable amount of mistrust.�

The initial construction will affect 500 agricultural operations in her county and 80% of land owners have told her that they will not voluntarily sell their land. She said the authority has budgeted land purchases at a small fraction of the actual market value of agricultural land.

Al Smith, president of the Fresno Chamber of Commerce, said his group supports the project that would pump millions of dollars and thousand of jobs into one of the “neediest� places.

“It would be a shame if we didn’t make it work,� Smith said.

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