At lawmakers’ urging, agency reveals report on growing bullet train costs

The California high-speed rail authority bowed to pressure from California legislators and members of Congress late Tuesday and released a copy of a 2013 report showing a large estimated increase in the cost of building the initial segment of the bullet train project.

The report, disclosed by the Times in a story Oct. 25, said Parsons Brinckerhoff had briefed state officials in October 2013 that the projected cost of the first phase of the bullet train system had risen 31%. The state did not use the increase, however, in its 2014 business plan four months later.

A dozen members of Congress and four members of the California assembly had written to the state and to Parsons Brinckerhoff asking for disclosure of the report.

Rail authority chairman Dan Richard and CEO Jeff Morales released the document and said the cost estimates it contained are part of an iterative process and that the numbers were “preliminary, still in development and subject to review clarification and refinement.� They say initial contracts have come in below budget.

“The authority under the present leadership has always been forthcoming about the costs and risks of the program,� Richard said.

Assembly Speaker Toni Atkins said rail authority officials have agreed to appear at an upcoming hearing.

Rep. Jeff Denham (R-Turlock), chairman of the House rail subcommittee, wrote to Parsons Brinckerhoff on Tuesday asking for the document. “Given the magnitude of the project, we have questions regarding the stewardship of federal funds by the California High Speed Rail Authority,� said the letter, co-signed by 11 Republicans from districts across the state.

The report shows that the cost of building the first segment from Burbank to Merced had grown from $27.3 billion to $35.7 billion, not including future inflation. The state publishes most of its public cost figures with future inflation included, which would translate the cost of the initial segment from the current $31 billion to about $40 billion, based on the Parsons Brinckerhoff estimates.

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The document also shows the cost of the entire project would increase by about 5%, going from $54.4 billion to $56.9 billion without inflation. If future inflation is included, based on the Parsons Brinckerhoff inflation estimates, the total project cost would go from $68 billion to more than $71 billion.

The Parsons Brinckerhoff cost estimate projected that some of the initial cost increases would be offset by later savings, though that may come too late to help the program.

The authority asserted that the Times misrepresented the nature of the document, because it was a PowerPoint that was marked draft. The 22-page document, however, contains a vast amount of specific cost data, broken down by geographic segments, specific type of construction activities and phases of the project.

The Richard letter also disputes The Times’ analysis of tunneling challenges through the San Gabriel and Tehachapi mountains, saying that the authority has some of the world’s best tunneling experts and that their consultants “have reiterated their comfort level with our schedule and our approach.�

The Times quoted geologists and engineers who said the plan to complete about 36 miles of mountain tunnels by a 2022 deadline for starting rail operations was unrealistic.

The Times requested the Parsons Brinckerhoff report under the California Public Records Act, but was turned down under a provision of the law that exempts disclosures that are not in the public interest. A senior rail authority executive, Dennis Trujillo, signed the denial letter.

The Times subsequently obtained the report from an individual close to the project.

The letter from the House Republicans was addressed to Gregory Kelly, chief executive of Parsons Brinckerhoff. Asked for a response, a company spokeswoman said, “We are proud of the service Parsons Brinckerhoff has delivered on the California High-Speed Rail project. Please contact the media relations office at the Rail Authority directly for a response to your inquiry.�

Members of the California Assembly had asked the speaker to subpoena the cost document. Assemblyman Jim Patterson, whose district includes Fresno, took the lead in a letter to Atkins. Patterson said he has lost confidence in the project.

“They have failed to disclose huge cost overruns and after they boasted private firms were interested in funding this project, we now know these firms are unwilling to put up any private money,� Patterson said. “What’s worse, we have learned that the [rail authority] ordered its own experts to keep their findings secret from the public.�

Richard, speaking on a Fresno radio talk show Tuesday, said the state is working to reduce the cost of the project below the current $68-billion estimate and that it has not withheld critical information from the public.

“The thing that offended me most about the [Times] article is that we have the most transparency of any agency,� Richard said.

Denham, however, said on the show that the state “continues to hide the facts.�

Denham has evolved into a potent critic of the project, as the Republican Party gained control of the House and then the Senate. He has vowed to cut any future funding for the project, which is facing at least a $16.3-billion shortfall to complete the initial operating segment by 2022.

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Twitter: @rvartabedian

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