Tuesday, February 28, 2012

For High-Speed Rail, there's Trouble in River City

This article, by Tim Sheehan, a HSR watcher, suggests some of the sand that appears to be slowing down the machinery of high-speed rail progress.

There are two funding forces at work here. The first is the state, which has committed itself to selling $9.95 billion in high-speed rail general obligation bonds. Those funds, when sold, will provide state funds if they are matched by any other funds.  As it happens, the federal government, per the Federal Railroad Administration, has awarded the California project with $3.5 billion in Stimulus funds, contingent on their being matched with the state bond funds. 

The state can't, obviously, go it alone without the federal bailout funds to at least get the project started.  And the feds. can't give the state money if the state doesn't come up with the promised matching funds.

What Kienitz, the DOT undersecretary, means is quite specific.  If the state withholds it's own GO bond funds, for whatever reason, it will become legally impossible for the FRA to sustain its award commitment, since that match is the basis for the award.

That will be a lawsuit worth pursuing, as will getting the Attorney General of the DOT involved in stopping this federal award.  It would be accompanied by a request for a federal court-ordered injunction suspending the project immediately until a resolution is found. Which it never will. 

In addition to the legal scandal, if the FRA were to ignore the absence of those promised state fund matches, it would bring the house down around their and the Administration's heads. Imagine what the media and the Republicans will make of the DOT continuing to push billions of federal dollars into a state that has retracted its own promised funding. 

You can see what the burden on State Senators Simitian and Lowenthal's shoulders would be if they actually decided to recommend funding suspension or termination. And, you can see why Governor Brown cannot, under any circumstances, turn around and ask for project closure.  There's a great deal more riding on what happens with this project over the next 12 months than the impact within California.

It would appear that if California were to pull out of the HSR agenda so aggressively pushed by the Administration -- which is already having to live with the fact of three governors rejecting the project for their states -- it would end HSR ambitions in the US for the foreseeable future. 

And, it would be a devastating disappointment for all the international high-speed rail developers and manufacturers, as well as countries, who have come to see the US as the next great potential market place for their trains.

"Withholding these matching funds would put California's high-speed rail project in serious jeopardy," Kienitz told state officials last year.

"Serious jeopardy" indeed!

High-speed rail construction likely to be delayed
BY TIM SHEEHAN The Fresno Bee | Tuesday, Feb 28 2012 07:03 PM
Last Updated Tuesday, Feb 28 2012 08:25 PM

Construction of a high-speed train line in the central San Joaquin Valley was supposed to start late this year. Now, officials say, it's not likely to start until early 2013, even if state legislators approve billions in bond money this spring.

At its meeting Thursday in Sacramento, the California High-Speed Rail Authority will learn about an updated schedule for the $6 billion construction project.

The slowdown in the schedule is the result of revisions to environmental reports for the 120-mile Fresno-to-Bakersfield section of the rail line -- part of the backbone of a proposed 520-mile system of electric trains connecting San Francisco and Los Angeles. Later extensions would add lines to Sacramento and San Diego.

About $3 billion in federal stimulus and transportation funds earmarked for the project in 2010 and 2011 were based on construction starting by September 2012. But a 2013 start isn't expected to endanger the funds because the more important deadline is having the work completed by late 2017.

An environmental report for the track segment was issued last fall, but two months of comment and public hearings across the valley attracted a slew of objections, including opposition in Kings County to a route that would take trains through farmland east of Hanford.

That uproar prompted rail authority engineers to withdraw the environmental report in order to revise it with a new alternative that bypasses Hanford to the west. The authority expects to issue the revised draft report this summer, triggering another round of public hearings and comment, months after the authority originally expected to have a final version approved.

Now, a final report is not expected to be ready until this fall, said Jeff Abercrombie, the authority's regional director for the Central Valley. But, he added, a board vote approving the report and making the final choice on route options "is still anticipated before the end of 2012."

Local officials hold out hope for construction starting this fall. Fresno County Supervisor Henry R. Perea, in Washington, D.C., this week to meet with the Federal Railroad Administration, said that "all efforts are focused on awarding contracts and turning dirt by the end of the year."

But as delays mount, that seems more and more unlikely.

A memo to the state rail authority board for Thursday's meeting suggests that a contractor likely won't be chosen nor contracts awarded until early 2013 for the first construction segment -- a stretch through the city of Fresno from north of the San Joaquin River south to American Avenue. That work is expected to cost between $1.5 billion and $2 billion. Later contracts would extend the work north past Madera and south to nearly Bakersfield.

When the Obama administration announced it was awarding federal funds to California for the high-speed rail program, the money came with several strings. In addition to requiring that the money be used to start construction in the valley, where high unemployment created a need for economic stimulus, the grant agreements were based on a project schedule that called for environmental reviews to be finished by fall of 2011 and the start of construction by Sept. 30, 2012.

While there is flexibility for when construction must start, the state faces a firm deadline for the work on its Merced-Bakersfield sections to be completed by September 2017.

"We believe the time allowed is more than reasonable," said Roy Kienitz, undersecretary for policy with the U.S. Department of Transportation, in a letter to the California rail authority last summer. "Deadlines are necessary to ensure that (stimulus) funds are used with all due speed."

Awarding contracts and meeting deadlines will be moot, however, if the state Legislature refuses to authorize the sale of Proposition 1A bonds to match the federal contributions. Prop. 1A, approved by California voters in 2008, provides up to $9 billion to build a high-speed rail system in the state.

"Withholding these matching funds would put California's high-speed rail project in serious jeopardy," Kienitz told state officials last year.

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