Thursday, January 12, 2012

Breaking News: There's trouble in River City. The High-Speed Rail dam is breaking up. Run, run.

We have three articles about the same thing.  Yes, it's that important. The Sacramento Bee, The Los Angeles Times, and the San Jose Mercury News.  This is big stuff.

Let's see if we can chronologically line up the situation today and provide some history of how we got there. 

Not long ago, Brown added Mike Rossi and Dan Richard to the CHSRA Board.

Soon thereafter, the CHSRA comes out with a newly revised business plan that explains a lot of new changes, including raising the project cost projection from around $45 billion to around $100 billion. 

Then, Brown announces his budget and administration reorganization plans, including putting HSR beneath a new Department of Transportation, along with Caltrans.  In effect, HSR would report to Caltrans.  This is what State Senator Alan Lowenthal had attempted to create with his legislation. It failed. 

Now, Senator Diane Feinstein writes a public letter to Brown, endorsing this reorganization of the CHSRA by moving it under Caltrans jurisdiction.

Today, CEO of the high-speed rail project, Roelof Van Ark resigns.  That is, he was fired so that he could "spend more time with his family." They'll keep him on as "consultant;" that is, maintain his connections with Siemens and Alstom.

Also today, Tom Umberg is removed ("resigns") from chairmanship by Governor Brown and replaced by one of Brown's appointments, Dan Richard. It's really all about power and control.  Brown has his right-hand man taking over the Board and kicking the CEO/head staffer off the project and taking tighter reigns of the Board. 

What's this all mean? First of all, it means turmoil, but turmoil at both the state and federal levels.  This project has been a political disaster from the beginning.  That it survived to get on the state ballot in 2008 was miraculous and not so much stupid as it was venal.  There was no meat on the bones.  There weren't really any bones.  It was nothing more than an outline, a concept.

It was poorly conceived and designed even in the rough. It was politically driven and when professional advice was offered, that was ignored. 

The whole real purpose of the project was for a bunch of back-room politicians to get their hands on a lot of money for an infrastructure project that sounded sexy, glamorous and futuristic. Much of the activity around this concept was the cooking up of rationales and justifications for its existence, well before there was any firm notion of what it would be like, where it would go and how much it would cost.  The politicians driving this effort weren't interested in facts; they would invent those themselves.

It should have died long ago, such as during the last millenium. But it survived into this century and finally, aided and abetted by that brainy governor, Schwarzenegger, it got on the ballot in 2008 and, lo and behold, the equally brainy California voters passed it.  Not by much, but passed it nonetheless.  (Nobody does any homework any more, apparently.)

So, now the CHSRA is sitting on a bond issue of $10 billion but can only spend a fraction of it that doesn't have to be matched. It's enough for more marketing; that is, public relations and "outreach" but certainly not enough to start digging holes in the ground.

Then, miracles happen. The Obama Administration, seeking to create jobs in a hurry, attached $8 billion to the ARRA Stimulus Fund legislation, which became law.  This saves the CHSRA's behind.  There was now federal funding to lobby and scramble for to start construction, somewhere.

To make a long story short, the CHSRA now is awarded around $4 billion from Washington which it can match with state bond funds.  In the course of granting this award, the FRA, the granting authority, insists that they start construction in the Central Valley.  The rationale for that is multi-fold.  It's supposed to be the cheapest per mile to start there.  Supposedly, there will be far less objection than there has been on the Peninsula coming from trouble-makers such as ourselves. And, it contains a Democratic district represented by Congressman Jim Costa who was seeking re-election and was in trouble.  Funds going there first to create "jobs" would help him get re-elected, and it did. 

Well, the Central Valley suddenly recognized the handwriting on the wall and became highly angered.  There would be eminent domain land takings in the richest farm land in the US, businesses and farms would be disrupted and destroyed.  Homes would be plowed under.

Meanwhile the incompetent and mismanaged CHSRA and their minions are cranking out one lie after another, these being swiftly dismantled and shown for the lies that they are.  The press, most of whom had been avid supporters of the project and had persistently parroted the press releases of the rail authority, finally woke up to the truth and the realities behind all the 'late night TV informercials' pouring out of the press office. Now the media pile on, criticizing each and every dumb and arrogant behavior and statement from the rail authority. California and the Nation wake up to this impending disaster.

Indeed, there was internal turmoil with major public relations firms being hired for gobs of money and then quitting.  We can only guess at the chaos behind the scenes. The CHSRA became an embattled, floundering organization. And it is even more so right now.

But, wait, there's more.  There's the federal role.  The Obama Administration has looked to California as not only the only real high-speed rail project, the other Amtrak projects in the other states only being pretend high-speed rail.  But, after the embarrassment of three Republican Governors turning down the free federal Stimulus high-speed rail dollars in their states, California was pretty much all that was left for the Administration to hang its hopes on.

Furthermore, the California Democratic caucus, both Senate and House, were fully aware of the financial plight of their state and appreciated that the $4 billion from Washington was a great bail-out opportunity, regardless of its purpose.  And that's how it was seen by Governor Brown and the Democrats in the Legislature.

And that's where we are at this point in time. The Democrats are really desperate for California to get these funds; that's both at the national and state levels.  

If the Central Valley becomes an embarrassment with a "Train to Nowhere," then they will simply have to bend all the existing rules to get those dollars, but spend them elsewhere in the state, preferably in the two population regions intended to be connected by this high-speed train.  That means, funds should become available to build stuff in the Bay Area and in the LA Basin that could still qualify as high-speed rail, especially if you stretch that meaning to the utmost. After all, that's where most of the voters are.

That's why there's so much turmoil right now.  Major changes are coming. I expect more heads will roll.  I imagine that the phones are ringing in the White House with their political team, working on an election campaign strategy that meets all the Democrats' various purposes.  High-Speed Rail, so embattled for all these years, and so miserably conceived and developed, has become just another victim in the political election cycle for the rest of this year. 

What we're watching; that is, allowed to watch, is only the tip of the iceberg.
January 12, 2012
California high-speed rail head Roelof van Ark resigns
David Siders
Roelof van Ark, chief executive officer of the California High-Speed Rail Authority, announced this afternoon that he is quitting, the latest setback for the state's beleaguered campaign to build a nearly $100 billion rail network in California.

His resignation, announced at a board meeting in Los Angeles and effective in two months, comes at a critical point for the project, with rail officials bidding for Legislative approval to start construction in the Central Valley this fall. Public opinion about the project has fallen sharply, according to a recent Field Poll, and the Legislature is highly skeptical.

Minutes after van Ark's announcement, Tom Umberg announced that he is stepping down as chairman of the rail board, though he will remain a member of the board. Umberg is to be replaced next month by Dan Richard, an adviser Gov. Jerry Brown appointed to the board last year.

Brown, a Democrat, became a vocal supporter of the project last year and appointed two advisers, Richard and Mike Rossi, to the rail board. This month, Brown proposed folding the authority into a new state agency, the Transportation Agency, a measure rail officials support.

Van Ark was hired in 2010 and oversaw the authority's creation of an updated business plan that raised the estimated cost of the project to almost $100 billion over 20 years. Lawmakers said the plan was more credible than before, but many lawmakers remain critical of the project's management and cost.

Van Ark cited personal reasons for his resignation.

"I need to focus myself more on my family, and maybe some other interests," he told board members. He said he may continue on the project as a consultant.

Van Ark used his resignation announcement to reiterate his support of the rail authority's decision to start construction in the Central Valley, controversial because it is far from California's population centers. The administration signaled no change of course.

While Richard said he was "very skeptical of that notion" when he joined the board, he said, "I sit here today as somebody who's been fully convinced."

Van Ark told The Bee last year that he considered it a personal challenge to ensure implementation of the project.

"I really believe that California should have a system like this," he said. "This state is so well positioned for high-speed rail."

Editor's note: Updated at 3:05 p.m. to include comments from the meeting in Los Angeles.

California bullet train CEO, chairman stepping down
January 12, 2012 |  2:57 pm
The chief executive of the state’s high-speed rail agency resigned Thursday amid growing criticism of the $98.5-billion bullet train project and declining public support for the proposal.

Roelof van Ark, 59, announced his departure in a major shakeup that included the replacement of attorney Thomas Umberg, a former state legislator, as chairman of the California High Speed Rail Authority Board of Directors.

Umberg will recommend that Dan Richard, who was recently appointed to the board by Gov. Jerry Brown, assume his leadership role. Van Ark said he will  leave in two months, while Umberg will step down in February.

The departure of the chief executive comes a week after an independent review panel issued a scathing critique of the project and refused to recommend that the state issue billions in  bonds to help fund the first leg of the 520-mile project in the Central Valley.

The panel raised serious doubts about almost every aspect of the project and concluded that the current plan “is not financially feasible” at this time.  The original cost of the project also has tripled from $33 billion to $98.5 billion and two recent public opinion polls indicate that voters would turn down the project they approved in November 2008. 

Van Ark’s resignation represents a serious blow to the management of the authority as it hustles to start construction of the project’s first 130 miles in the Central Valley, a segment that has  run into increasing opposition from major agricultural interests and some cities along the route.

Van Ark, a senior business manager with extensive experience in high-speed rail systems, replaced Mehdi Morshed in June as head of the authority. He had been  president of the North American division of  Alstrom SA,  a French conglomerate that makes high-speed trains and built the the  TGV bullet train system in France.

Van Ark also headed other major divisions of Alstrom as well as units of Siemens AG, a German firm that also develops high speed rail systems.

The rail company executive took over the rail authority at a critical juncture. After years of quiet planning, the authority began moving rapidly to develop the 520-mile link between the Bay Area and Los Angeles, but faced a multitude of challenges and a growing array of skeptics.

Head of High-Speed Rail Authority quits as agency undergoes shake-up
By Steven Harmon
Bay Area News Group
© Copyright 2011, Bay Area News Group
Posted: 01/12/2012 03:06:41 PM PST

SACRAMENTO -- In a shake-up of California's high-speed rail project, Roelof van Ark stepped down today as the CEO of the High-Speed Rail Authority, while Tom Umberg announced he will step aside as chairman to make way for Gov. Jerry Brown's appointee, Dan Richard.

The exodus of the authority's top officials came as criticism of the project has reached a peak and the prospects for its survival appear dim.

Van Ark, who took over as CEO in 2010, was the architect of the business plan that revised its cost estimate from the $33 billion that voters approved to the widely panned 20-year $98 billion estimate earlier this year.

He bowed out at the rail authority's board meeting this afternoon in Los Angeles by insisting that the controversial plan to start laying tracks in the Central Valley was sound.

"It is the correct way to achieve true high-speed rail in California," he said.

Umberg, who will remain on the board, said the chairmanship "requires daily, if not hourly, attention. I've decided that while I'm not leaving, there should be new leadership. ... It's time now to have someone with time, capacity, expertise and leadership to take over as chairman."

Richard and Mike Rossi were part of Brown's first shake-up of the rail authority when he brought them in as advisers last year.
"Roeloef Van Ark and Tom Umberg spearheaded California High-Speed Rail through its earliest stages of planning and development, and I thank them for their service," Brown said in a written statement. "Dan Richard has the knowledge, experience and vision to guide the project at this critical time, and I applaud his selection as chair of the High-Speed Rail Authority Board."

Richard's appointment was an early signal that Brown would remain committed to the project. Richard served under Brown as his deputy legal affairs secretary and deputy assistant for science and technology in the late 1970s and early 1980s.

Richard has Bay Area ties. He served on the BART board of directors from 1992 to 2004 and as senior vice president of public policy and government relations at PG&E from 1997 to 2006.

Despite criticism coming from all corners -- from Republicans to the High-Speed Rail Authority's peer review group -- Brown has remained dogged in his defense of the project.

"I'm of the view that this is a time for big ideas, not shrinking back and looking for a hole to climb into," he told reporters recently. "I think we've got to move forward."

Earlier this week, U.S. Sen. Dianne Feinstein, D-Calif., urged Brown to merge the High-Speed Rail Authority with CalTrans, a move she said would help ensure the state doesn't lose $3.5 billion in federal dollars.

Contact Steven Harmon at 916-441-2101. Follow him at Read the Political Blotter at

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