Calif. high-speed rail report fuels critics and supporters

03/29/2013 3:12 PM

03/29/2013 3:39 PM

Top congressional Republicans are preparing new roadblocks for an ambitious California high-speed rail project that’s received both praise and caution flags from a long-awaited federal audit.

While auditors cite good work by the California High-Speed Rail Authority, including “reasonable” ridership and revenue forecasts, they also warn that long-term funding “faces uncertainty,” in part because of congressional skepticism. If hardened into permanent opposition, the doubts could seriously undermine the Los Angeles-to-San Francisco project, expected to cost $68 billion.

“Obtaining sustained congressional and public support for appropriating additional funds is one of the biggest challenges to completing this project,” the Government Accountability Office auditors noted in the new report.

Underscoring the political challenge, House Majority Whip Kevin McCarthy said the GAO study only stiffened his resolve to oppose the project.

“The authority’s plan is irresponsible and reckless, and that is why I am developing legislation to stop more hard-earned taxpayer dollars from being wasted on California high-speed rail,” McCarthy said in a statement.

The third-ranking Republican in the House, McCarthy led other lawmakers in requesting the GAO study. One of his allies and fellow skeptics, Rep. Jeff Denham, R-Calif., said Friday that he will be using his perch as chair of the House subcommittee overseeing rail operations to “conduct strict oversight” of the project.

“At a time when we’re overburdened by state and federal debt and already struggling to find ways to pay for existing programs, we should not be throwing federal dollars at a project that has spun so drastically out of control since it was first voted for by Californians,” Denham said in a statement Friday.

McCarthy and Denham both formerly articulated support for California high-speed rail, but have since joined a seemingly united GOP caucus in opposing one of the Obama administration’s top domestic priorities. Both lawmakers question whether the current project makes economic sense, and both focused on some of the uncertainties pointed out in the new audit.

High-speed rail authority officials, by contrast, point to the GAO’s praise, with Chief Executive Officer Jeff Morales calling the audit an “important validation” of work that’s been done and improvements that have been made.

The GAO’s audit report is extremely clear that the authority’s processes and methodologies in estimating its costs, revenue and ridership are sound,” Dan Richard, chair of the authority’s board of directors, said in a statement Friday.

The 520-mile project, which is getting its start in the San Joaquin Valley with a segment connecting Bakersfield to Merced, is “expected to be one of most expensive transportation projects undertaken in the United States,” GAO auditors noted in the report formally released Friday.

The 90-page document does not take a position on the merits of the high-speed rail project, in which trains are slated to travel at speeds up to 220 miles per hour. Instead, auditors focused on questions like the reliability and reasonableness of cost and revenue estimates, and the “comprehensiveness” of the economic impact analysis.

State and federal funds totaling $11.5 billion have currently been committed to the project.

Over the long haul, the high-speed rail authority’s business plan anticipates receiving an additional $38 billion in federal funds and $13 billion in private capital.

“Given that our past work on high-speed rail projects around the world has shown that projects’ cost estimates tend to be underestimated, ensuring the reliability of the estimates is critical to the success of this project,” the GAO auditors noted.

The auditors concluded that state officials “substantially met best practices” for making cost estimates, though they weren’t perfect. For instance, auditors noted that the project’s operations cost estimate was not as detailed as its construction cost estimate. Some costs were also better documented than others.

The auditors further determined that state officials were “reasonable” in estimating that the high-speed rail system would carry between 16.1 million and 26.8 million passengers per year, though they cautioned that the estimates will bear close watching.

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