Beltway Confidential

Already months late, California still hasn’t purchased land for high-speed rail

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Beltway Confidential,Transportation,Conn Carroll,California,Analysis

California Gov. Jerry Brown may have promised back on Jan. 18, 2012, that the Golden State would “begin initial construction” on the state’s high-speed rail project “before the year is out,” but 18 months later the state’s High-Speed Rail Authority still has not closed on a single piece of property needed to begin the project.

Over 356 individual parcels of land must be acquired in order to complete just the first 29 miles of track between Fresno and Madera, but according to CAHSRA press secretary Lisa Marie Alley, while a “couple dozen” written offers have been accepted, not a single property has been completely closed on yet.

The federal government already gave California $3.5 billion for the project last September, and the state has approved another $8.6 billion in debt, but California has no idea where it will get the rest of the money for the $69 billion project.

CAHSRA has until Sept. 30, 2017, to spend the federal government’s $3.5 billion. If the money is still unspent by that time, California must give it back to Washington. As a result, CAHSRA has decided to spend Washington’s money as fast as possible, before they start relying on revenue from California taxpayers.

Alley stressed that the land purchased so far is not contiguous, but instead consists of “sporadic” plots spread throughout the entire project. “We are on the right track,” Alley told the Washington Examiner.

CAHSRA recently awarded the project’s first contract to Tutor Perini Corp. on June 6. Tutor Perini had the lowest technical rating for safety and design of any of the bidders, but their $981 million bid was also the cheapest. The Tutor Perini contract will not include any actual laying of track, just establishing the physical groundwork for later construction.

Tutor Perini was recently downgraded by Moody’s in Sept. 2012 based on the company’s “weaker than expected operating earnings and debt levels,” and the firm has a long and well established history of cost overruns.

Tutor Perini is also currently in litigation with MGM Resorts over a 26-story hotel in Las Vegas that never opened thanks to suspected construction defects that would cause it to collapse during an earthquake.

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