May 11, 2014

LAT Buries the Lede: Calif. Rail Authority Tried to Intimidate Consultants to Hide $1B Cost Overrun

The estimated cost of the initial segment of California’s bullet train project, Golden State Governor Jerry Brown’s pet project, has (excuse the pun) just shot up from $6.19 billion to $7.13 billion. If this is the only overrun encountered in this opening phase, which would be atypical, and if the California High Speed Rail Authority has similar experiences during the remainder of the project, assuming it’s ever completed, its cost will rise from a currently estimated $68 billion to about $78 billion.

Obviously a big cost overrun is news. But normally, evidence of an attempted government coverup of such an overrun is even bigger news. But not at the Los Angeles Times. The paper’s Ralph Vartabedian kept it out of his headline and waited until his story’s ninth paragraph to note it. Even then, his description was needlessly vague. Excerpts follow the jump (bolds are mine throughout this post):

Estimated cost of key bullet train segment rises $1 billion

CalforniaBulletTrain

The estimated cost of building a key Central Valley segment of the California bullet train has increased by nearly $1 billion from the original estimate, based on figures in an environmental impact statement approved by the rail agency Wednesday.

The estimate, prepared for the state by a team led by San Francisco-based engineering firm URS Corp., includes higher costs for tracks, structures, land purchases, signals and electrical systems in a segment that would run from Fresno to Bakersfield.

The lowest cost estimate for the 114-mile segment in a 2011 environmental report was $6.19 billion. The comparable figure increased 15% to $7.13 billion in the new report.

The California High Speed Rail Authority said in a statement that it believes the cost will be lower than URS is projecting. In a March report to the Legislature, the authority’s budget showed smaller increases totaling $222 million for the section, although that estimate included a different set of assumptions.

The authority still forecasts that the entire Los Angeles-to-San Francisco line can be built for about $68 billion. Some critics and experts noted that the prospect of higher costs is arising before construction has begun.

That final sentence is just plain dumb. You don’t have to be a “critic” or “expert” to observe “that the prospect of higher costs is arising before construction has begun.” All you need is a pair of eyes.

Continuing, while moving to Paragraph 9:

Cost estimates for the Fresno-to-Bakersfield segment have been the subject a dispute between URS and state officials, records show. In a March progress report to the rail authority, the consulting firm complained that it had been “instructed” by the authority to hold cost estimates for the project’s business plan at a “baseline” that was set in 2012. URS wrote that “in its professional opinion” the authority was incorrectly assigning projected cost increases to a contingency account.

URS appeared to be taking a strong stand. Under the state’s code of conduct for licensed professionals, engineers can “only express professional opinions that have a basis in fact or experience or accepted engineering principles.”

“The URS statement that uses the words ‘in our professional opinion’ is not a casual remark,” Ibbs said.

UBS is “taking a strong stand” because the authority attempted to intimidate the firm into producing a report not in accordance with their professional opinion. This is what corrupt government bodies routinely attempt to do upon encountering bad news which would outrage taxpayers.

Sadly, as Chris Reed at Cal Watchdog noted on Friday (HT Instapundit), this $1 billion overrun and the accompanying coverup attempt doesn’t even crack the top five of bullet train outrages. Here’s Reed’s list (links are in original):

If you think I’m crazy for not considering this a major outrage, you’re getting me wrong. It IS a major outrage. But when it comes to the bullet train, there are a ridiculous number of outrages. As bad as a $940 million cover-up is, I don’t think it cracks the top 5.

My list:

5. Gov. Jerry Brown’s juvenile and unprofessional defamation of people who are deeply skeptical about the bullet train as being dumb “declinists” who dislike progress — as opposed to people who can read what the LAO, the state auditor and independent experts have written about the project’s managerial incompetence and its likelihood of failing.

4. The passage of the $9.95 billion in 2008 Proposition 1A bond funds was accomplished with the political-gangster tactic of the Legislature writing the insanely dishonest ballot language for it — something that later led to a state appellate court’s harsh rebuke of lawmakers, a sweeping ruling that banned them from even considering any such future mendacity.

3. The Obama administration completely ignoring the federal guidelines published in June 2009 that required stimulus funds only go to capital projects with viable business plans that had identified the funding sources that would be necessary to complete those projects. More than $3 billion in federal taxpayer dollars remain committed to a $68 billion project that has what amounts to this for its current business plan: A prayer that Congress and the White House give the state $55 billion more in federal taxpayer dollars, because no one else will give the project a dime.

2. The $68 billion project as now proposed isn’t remotely a bullet train from downtown L.A. to downtown San Francisco. It’s a bullet train from San Jose to the distant northern edges of L.A., with transfers to much slower trains for 50-mile additional slogs on both ends. It easily will take four hours or more — not the legally mandated 160 minutes — to get from downtown L.A. to downtown S.F. This is why the “father of the bullet train” now calls it a farce.

1. Before the November 2008 vote on Prop. 1A, the rail authority — pleading a lack of time because of delays in passing the state budget — never produced a business plan for the project, breaking a state law that required the plan be released before the election. Within days after 1A’s passage, it released the plan.

Gosh, other than that, things are going just great. (/sarcasm)

Furthering the LA Times’s own obfuscation of the cover-up, its “Share Lines,” representing what are supposed to be the key takeaways from the article, don’t even mention that there was even a dispute between the authority and UBS, only telling readers in a hurry that:

The higher cost estimate is for a segment from Fresno to Bakersfield.
The rail authority believes the cost will be lower than projected.
The authority still forecasts the entire L.A.-to-San Francisco line can be built for about $68 billion.

Vartabedian’s “coverage” is more like a coverup of an attempted coverup to protect Governor Brown’s pipedream.

Cross-posted at NewsBusters.org.

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1 Comment

  1. Whether it is high speed rail, mass transit, global warming, abortion, gay marriage or any other liberal endeavors billions of dollars of public & private money are up for grabs by lib elites are there to profiteer.

    Divorce lawyers are ready to make billions on gay marriage, the rubes don’t even see what’s coming… Gay relationships are very tenuous at best which makes legalizing marriage for them to be a money making bonanza.

    James Madison warned about their greed in Federalist paper 62.
    https://giovanniworld.wordpress.com/page/28/?title=Gara_LaMarche

    Comment by dscott — May 11, 2014 @ 1:49 pm

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