State Auditor: Rail Plan Has Gone from Bad to Worse

State Auditor’s findings unlikely to help Rail Authority’s drive for legitimacy.

A blistering new audit of the California High Speed Rail Authority released Tuesday has found the project’s business plan to be “increasingly risky” due to skyrocketing costs, shaky ridership projections, and lax oversight.

Building on a , the State Auditor today reported that the Authority has still been unable to detail where it intends to get all the money it needs to pay the cost of the first phase of the program, now expected to total as much as $117.6 billion.

“It relies heavily on securing tens of billions of dollars of federal funding,” the report says,” yet fails to present specific steps for acquiring these or other funds.”

And if the money can’t be raised, the report says, the Authority hasn’t presented a viable alternative plan for what to do with whatever it may have already built at that time.

This lack of detail, and a failure to clearly present operating and maintenance costs the Authority’s transparency, according to the report.

Elizabeth Alexis, co-founder of  watchdog group CARRD, said the new draft business plan, released a few months ago, was a step in the right direction but left many important issues unresolved.

“The report highlights new issues with the Business plan, oversight, contracting, Parsons Brinckerhoff (the Program Manager) and ethics violations,” she said. “It brings to light new information about concerns we have had in the past with inadequate conflict of interest disclosure and the independence of the ridership peer review committee.”

The report also again honed in on the perennial Achilles’ heel of the project: ridership projections.

“The Authority has not fully addressed questions about the accuracy of the model’s long-term projections,” the report says, upon which the plan’s revenue projects, and ability to solicit private investment, are founded.

The Auditor also took issue with the project’s oversight, which it says has been compromised by being placed in the hands of contractors. This led to more than 50 errors or inconsistencies in monthly reports examined by the Auditor.

“It presents a picture of an agency that is simply not ready to move forward with construction,” said Alexis.

The Auditor recommended that the Authority quickly staff up in order to decrease its reliance on contractors for project oversight, as well as other recommendations. A summary of the report is attached in the sidebar.


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