CA Audit Criticizes High Speed Rail Authority of Mismanagement

Tehachapi_image_small.jpgImage: CAHSRA

The California State Auditor released an unflattering report yesterday that accuses the California High Speed Rail Authority (CAHSRA) of mismanagement of the nation’s largest high speed rail project, a move that put the CAHSRA and other supporters on the defensive yet again.

Bay Area news outlets have long given a large soap box to Peninsula residents and policy makers who don’t want the rail alignment to go through their cities unless it is built into deep, expensive tunnels. The new report will likely arm opponents to high speed rail in California and beyond with new ammunition they hope will ultimately kill the project before it goes to construction.

Among the findings of the report, the State Auditor argued:

  • The CAHSRA’s 2009 business plan estimates it needs $17 billion to $19 billion in federal funds. However, the Authority has no federal commitments beyond $2.25 billion from the American Recovery and Reinvestment Act of 2009 (Recovery Act), and other potential federal programs are small.
  • The CAHSRA’s plan for spending includes almost $12 billion in federal and state funds through 2013, more than 2.5 times what is now available.
  • The CAHSRA does not have a system in place to track expenditures according to categories established by the Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century, its largest source of committed funding.
  • The CAHSRA has not completed some systems needed to administer Recovery Act funds, for example, a system to track jobs created and saved.
  • Some monthly progress reports, issued by the CAHSRA’s contracted Program Manager to provide a summary of program status, contain inconsistent and inaccurate information.
  • CAHSRA staff paid at least $4 million of invoices from regional contractors received after December 2008, without having documented written notification that the Program Manager had reviewed and approved the invoices for payment.
  • The CAHSRA paid contractors more than $268,000 for services performed outside of the contractors’ work plans and purchased $46,000 in furniture for one of its contractor’s use, based on an oral agreement contradicted by a later written contract.

The CAHSRA’s response to the report was tepid: It acknowledged that it could do better with some of its management, but contended that the State Auditor repeated a number of findings that the Legislative Analyst Office had already brought up and that the CAHSRA was already addressing.

We note that many of the findings in your draft audit are similar to those outlined earlier by the Legislative Analyst’s Office (LAO). As a result, in many instances the Authority has already taken action to address issues raised in your report. In particular, the Authority earlier this month approved an addendum to its 2009 Business Plan that clarified our efforts to address funding for system construction, risk management, and alternatives for securing the private capital investments necessary to bring this important project to fruition. We appreciate that in many cases the draft audit takes note that the Authority is already taking steps to improve its operations based on recommendations made earlier by the LAO, as well as on findings in your draft audit. 

The CAHSRA goes on to criticize the title of the report as being "inflammatory" and the findings of the report failing to be equally as "scathing," but doesn’t defend any of the individual contentions made by the State Auditor. Perhaps their strategy is to batten down the hatches and hope for better weather?

The strongest defense of the high speed rail project comes from the ever incisive Robert Cruikshank at the CAHSR blog, who writes that the State Auditor is wrong in her assumptions about federal funding for California’s project and the project’s competitiveness compared to other high speed rail lines. Cruikshank notes that a House subcommittee has already voted to appropriate $50 billion to the national high speed rail network in the new Transportation Act and California could reasonably expect to receive a large portion of that money.

As one of only two true bullet train projects in the country — and with the other one, Florida, facing growing questions about its route choices and short intro line — we’re much further along than most other states, and can turn around federal money relatively quickly after we receive it. If $50 billion over 6 years is indeed approved, I do not foresee any problem whatsoever with California getting $17-$19 billion of that, and nor should anyone who has been watching the federal government’s HSR actions the last two years. California’s powerful Congressional delegation, including Speaker Nancy Pelosi, also count in our favor.

As Cruikshank notes in his post today, the State Auditor’s report has predictably led to a round of stories in the press that give the impression California high speed rail is limping toward death.

Beyond complaining about the tone of the report’s title, I find it dispiriting that the CAHSRA leaves the task of managing its public relations work to a blog, albeit a
very well-informed blog.

  • i’m getting more and more interested in the possibility of low-speed rail. we can probably get a lot more coverage with low speed rail than we can with high speed rail, and it’ll make a much bigger difference on the whole.

    i might actually have to take up that comparison — though, i have zero knowledge of the types of costs involved.

    it kinda seems like that ‘subway vs. streetcar’ debate — build 1 mile of subway, or 20 miles of streetcar.

    i’d argue ‘streetcar’.

    at this point, we don’t have a functional passenger rail system — how bout we build one? SF TO LA in 6 hours — awesome!

  • JohnB

    Peter

    The rest of the planet is building 200 mph rail systems and you want to build a steam railroad?

    Help me out here. We have an opportunity to skip a generation. Why wouldn’t we take it?

    Sometimes I despair that people here love filthy, crime-ridden urban bus services but hate slick, fast, efficient inter-city transport like HSR and planes.

  • Brandon

    I am with JohnB on this one. Which would you rather ride, a metro you have to walk a few blocks to get to, or horrible light rail (which, in SF, you still have to walk to get to… and its not any faster than the buses!)

  • The rest of the planet is building 200 mph rail systems and you want to build a steam railroad?

    Help me out here. We have an opportunity to skip a generation. Why wouldn’t we take it?

    well, not steam — electrification would be awesome, but there’s no need to build a ‘SUPERTRAIN’ when we don’t even have ‘regulartrains’.

    i mean, let’s just skip the fact that Amtrak doesn’t roll into SF except by bus, and let’s imagine we just want to go from San Jose to Los Angeles — it basically can’t be done in a reasonable amount of time, and you might not even be able to do it by train alone at all.

    i’d love to claim i was original, but i’m just building on what a few other folks have said — things that just seem to me to be common sense to me, but still, for various reasons, requires some bravery to put out there.

    Atrios has not so much bagged on high speed rail as he’s intimated the high risk involved with it (while pointing out the sh*t state of our current system).

    James Howard Kunstler, of course, is (in)famous for saying “We (Americans) have a railroad system the Bulgarians would be ashamed of.” He’s often directly made the case that we need a working passenger rail system before trying to build high speed rail. To me, it makes sense — like telling someone to try to run a 10k before they try to run a marathon.

    And sustainability prof, Patrick Condon, has upset quite a few people by suggesting the obvious — that high-speed services of all types — cars, planes, trains, whatever — are all bad for sustainability. it’s obvious and common sense, which is why it provoked such an angry backlash. sometimes, we actually are just stupid, and there’s really no way to gloss over that fact.

    i voted for the HSR tax, but only because I thought it would help kick-start rail in the US again. i didn’t have any realistic expectation we could accomplish it — we’re too corrupt and incompetent. but i think we could re-put together a passenger rail system. and i think it could help us break the Peninsula impasse, and really get everyone onboard and possibly even energized to see this project to completion in less than a generation.

    and, i’m just a pretty practical person. i enjoy the idea of taking baby steps towards progress/success, when it’s called for — and this is one case where i think it’s called for.

    imagine being able to get to every major and midsized city in California by rail. we could probably do that if we take our HSR money and reappropriate it to LSR. absolutely everyone would benefit from such a move, where HSR would only benefit the relatively-well off.

    i also read how most European high speed rail systems weren’t built that way from scratch, but were just existing systems that were improved, incrementally, over time. First comes electrification. Then comes straightening some sections of track. Then some hardware upgrades. Etc. This process makes sense to me for a bunch of reasons — lower-risk, shorter and more-predictable improvement timelines, helps to build valuable political support for further improvements, etc.

  • JohnB

    Peter

    You are absolutely wrong about how HSR developed in Europe (and Japan)

    They didn’t upgrade existing track. They built new tracks through compulsary purchase of land. Which is a lot harder to do in crowded Europe than here, but they did it anyway.

    Existing permanent way is generally too bendy and too narrow guage to allow HSR. And it interferes too much with freight traffic which, particularly in the US, owns the land rights.

    Even commuter rail and LSR is incompatible with HSR which relies on advanced signalling and electronics to operate.

    In Asia, they went from land mail to cell phones, bypassing traditional landline phone technology. If the same backwardness applies to the US in rail technology, then we need to leap not crawl.

  • You are absolutely wrong about how HSR developed in Europe (and Japan)

    i’ll take your word for it — i stand corrected.

    i hope high speed rail gets done here — i’ll continue to support it, and i’ll continue to think there’s a better way forward.

    i suspect between now and whenever we get our HSR, we’ll endure a seemingly-neverending series of ‘resetting expectations’ announcements that will effectively turn our high speed rail into low speed rail. i’m actually fairly convinced of this. there will be myriad reasons why this will happen, but ridership vs. ticket pricing will be one of the first to pop up — actually, it already has. and the neverending disappointments will serve to cut off political support, and funding, for continued railroad maintenance and expansion — we’ll hit a ‘death through planned obsolescence/deferred maintenance’. fun stuff.

    i still like the idea of having a functioning passenger railroad system before we build a brand new high speed rail ‘system’. talk to me about ‘average speed’ instead of ‘top speed’ — that’s what excites me. the highways between SF and LA are _packed_ with people in buses and cars and all sorts car-pooling arrangements — people want rail _right now_. it doesn’t have to be fast, it only has to be reasonably fast, and reasonably affordable — boom – that’d produce a ridiculous success, followed by exploding popular and political support for more and better rail, etc. But, we’re going HSR first. fine. so it goes. i’ll still support it.

    yeah — and stopping at the airport? whose idea was that? the airline industry in California needs to get a massive handout, apparently, to keep any mode shift from happening — brilliant.

    i suspect people don’t realize how costly a single stop on a high speed line is. they’ll find out eventually.

    i think the ‘Asia skipped landlines’ argument is interesting, but probably not applicable in any meaningful way to our high speed rail debate in Cali. by skipping landline tech, Asia saved incredible amounts of money — which they could then plough into cell phone tech instead. in the case of high speed rail, you still have to put all that money into ‘landline’ technology — it’s just a bit more advanced technology, and it probably comes at a *much* steeper price — I suspect.

    and when you look at the Acela Express (~3 million riders/year), our only high speed rail system in America, it’s still not the best-used line — the slower ‘landline’ Northeast Regional beats it (~7 million riders/year). if you care about ridership, better to connect more places at slower, more environmentally- and human-friendly speeds.

  • Jym Dyer

    =v= Low-Speed Rail is great and I’m all for it, but it’s not going to compete with air travel. We need to supplant air travel and its waste of petroleum. The only question will be whether we get an alternative in place before petroleum becomes prohibitively expensive.

  • Alexei

    Your ideas seem decent, Peter, but I wonder what form non-high-speed improvements would take. I get the impression that the major problem with Amtrak is the scheduling around freight trains that they have to do, and the safety regulations they have to follow to allow them to use the same lines. It might be that the best way forward is in fact to build new lines, and if you do that, why wouldn’t you make them high speed?

  • JohnB

    Peter

    Yes, there’s a need for low-speed rail too. In Europe the LSR routes feed into the HSR routes in much the way as our local air services here feed into hub airports. LSR and HSR can share the same stations although usually not the same platforms.

    The problem here really is the distance. A LSR averaging 60mph would still take 2 days to cross the US. Given that the journey by bus or train now takes around 3 days, and of course 5 hours by air, that doesn’t make the logic compelling. So LSR makes more sense within regions, with HSR linking the regions through largely sparse terrain.

    By the way, Acela isn’t a true HSR system. It tops out at 140mph or so which would be termed mid-speed rail in Europe. Because it uses conventional rolling stock and existing permanent way, its average speed is considerably lower, which is the valid criticism you made yourself. Too many stops, bends and speed restrictions.

    While the thing with true HSR is that it uses dedicated, new track with no freight or slower services, and it rarely stops. This enables consistent running at 200 mph and averages not much below that since acceleration times are rapid with multiple powered units. It also, as you appear to disdain, does stop at major airports. People seem to like that.

    So if I were designing it, CA’s system would have stops at LAX, LA downtown, Burbank airport, San Jose airport, SFO and TransBay. But of course I’m not.

  • Warning! Book ahead…

    =v= Low-Speed Rail is great and I’m all for it, but it’s not going to compete with air travel.

    we hear about how much passenger traffic high speed rail in Europe has stolen from the airlines over there, but i suspect airlines don’t actually care much — they probably prefer longer-haul, higher-markup flights.

    of course, airlines are gonna make a huge stink about HSR — they’re corporations — there is much to be gained from whining — like a HSR stop at your hub airport.

    but if you want to get rid of the airline industry, one strategy is to starve the airports of access/passengers – that’s why i disapprove of HSR airport stops. force people to stay on the ground as much as possible – it’s more time-consuming, as long-distance travel should be.

    But Airlines know they’re not going anywhere. We need to clamp down on air travel, period — regardless of alternatives.

    we might also need to consider the ‘no build’ option. not sure i’m ready to go there just yet, tho. 🙂

    i checked a few Sierra Club websites, and they all seem to support HSR. i’m a bit disappointed in this, but maybe even moreso, surprised. it’s very possible they know something i don’t. i’m also more skeptical now of the national enviro groups — many, it seems, have been co-opted by their funders. blah.

    i think there’s a real argument against speed — namely, on the sustainability issue. planes are ridiculously fast — which probably has a lot to do with why they’re colossal polluters. faster planes are even worse — just as driving your car faster is worse than driving slower. the main exception (though, it’s not really) to this ‘rule’ seems to be the shipping industry — which is fantastically polluting. the explanation, i suppose, is that a fantastic amount of sh…stuff gets shipped. 🙂 and if it was shipped faster, it would cause even more pollution.

    and with all this HSR stuff, i keep thinking about The Jevons Paradox. this relates to the idea of, say, reducing how much we consume/waste rather than just worry about how our waste will be recycled.

    we need to think about how to consume less travel. one way to do that is to make ‘more (motorized) travel’ harder to do — more expensive, more time-consuming, etc. so, HSR does get more expensive, but it also gets less time-consuming. maybe a wash? no – because nobody is yet paying the full price of that one all-important externality — pollution-and/or-pollution-through-energy-consumption. if people had to pay the full cost of this externality, there’d be no airline industry, no car industry, no Walmart, and a whole lot more bikes.

    Portland as a commuter suburb for San Franciscans‘? yikes — with high speed rail, we might start hearing crazy stories like this.

    [telecommuting + convenient flights = people doing unsustainable things]

    of course, who knows what these folks’ actual carbon footprints are, but the point is illustrated — if you make something (in this case, distance) easier/cheaper to consume, then people will consume more of it — that’s the Jevons Paradox. (as far as i understand it, economists still don’t have consensus on this alleged effect.) and now that the North Pole is melting, a shipping channel has opened, allowing companies to ship less expensively, so now they’ll ship more junk. Jevons!

    i’m still a bit confused by it all, but sometimes i think the best thing GM ever did was killing the electric car. not happy about the trams, tho. 🙁

    I suspect the miles flown by airlines continue to go up every single year, and this will continue in spite of the rise of HSR. If and when gas prices start jumping all over the place, no doubt with the help, again, of Goldman Sachs, the airlines will respond with higher prices, etc. No biggie. Oil will never run out, it’ll just get more expensive, etc.

    I wonder what the ‘total human miles traveled by all motorized modes’ number looks like every year. It must just be absolutely exploding right now with so many countries around the world turning to some form of capitalism/market economy — their GDPs exploding — people getting richer — more people driving — everyone absolutely raping the earth and just barreling forward without a care to the externalities (namely, pollution).

    I suspect LSR can compete with flying to at least to a small extent. i know it would get all my dollars for any train ride i could do in 8 to 10 hours. people _hate_ flying, but there are no other decent options right now.

    …what form non-high-speed improvements would take. …build new lines, and if you do that, why wouldn’t you make them high speed?

    i know next to nothing about trains/tech, but i’ve been hearing about electrification of Caltrain for forever – that’d probably be a good place to start. shoot – i wish Caltrain riders could vote to raise at least part of the money for electrification by surcharging themselves a dollar or so per trip. i’d vote for that — those engines are crazy-loud. other than that – go ahead and build new lines if we need them – of course — buy the ROWs, etc.

    why not just make any tracks ‘high-speed’? i guess it would depend. i’m only guessing, but ‘high-speed’ is essentially a euphemism for ‘high-tech’ — which means ‘very-expensive’ — so, whether it’s the train sets or the the signaling systems, or the banked turns, etc. — it’s probably just very expensive stuff — probably exponentially more expensive. i could do with a PC for my trains, and HSR is basically a top of the line Macbook Pro. the main danger, here, is that, if you go with the Macbook (i.e. HSR), you’ll have an awesome new laptop that is wonderful, but you might not be able to make your rent payment.

    Beyond complaining about the tone of the report’s title, I find it dispiriting that the CAHSRA leaves the task of managing its public relations work to a blog, albeit a very well-informed blog.

    i was under the impression that that blog author was essentially working for CAHSRA — is he not?

    not that anyone made it down here, but i am curious what y’all would think about a compromise that would allow lots and lots of trains to roll through the Peninsula, but they would not necessarily be ‘high speed’ — not moreso than Caltrain, anyways. it’s probably a non-started for both CAHSRA and the opposition, but i’d be curious to know? i haven’t been following closely enough to know who’s winning right now.

    i was a witness in civil court a few weeks ago – the judge _implored_ people to go to mediation first – right there on that day. he said, “You may not like my decision, so see if what mediation offers you is acceptable to you, first. If not, come back and see me and roll the dice.” His tone of voice more said, “You will _for sure_ not like what my decision will be, so your best chance for an outcome that is not devastating to you is to head to mediation stat.”

    Maybe the opposition can’t be placated, and i don’t even know enough to take sides at this point. Maybe i’ll do some reading — sounds like a fun/interesting case. I’d have to think the opposition were fighting a losing battle, tho — they probably are more just hoping to slow things down and complicate them enough until our governing incompetence (malfeasance?) crumbles the project on its own.

  • JohnB

    Peter,

    “but if you want to get rid of the airline industry, one strategy is to starve the airports of access/passengers”

    I don’t believe that anyone truly thinks that is the purpose of HSR or any other venture. And anyway, the airlines do an excellent job of losing money all by themselves.

    In any event, HSR only out-competes with air for journeys of about 600 miles or less. Far less people fly between London and Paris now there is a train between both city centers that only takes around 2 hours. You can spend that waiting around CDG or LHR.

    And up to 1,000 miles, HSR is still better for many folks, maybe a 6 hour run.

    And of course a train is considerably more relaxing, and some in Europe even have great food.

    But HSR to airports is still a big plus. For instance, right now if you want to fly from Sacramanto to Stuttgart, Germany, that currently takes 3 flights. But if you could HSR it from Sac to SFO in an hour, fly non-stop on Lufthansa to Frankfurt Main and then take the ICE train from the wonderful FRA air-rail station there to Stuttgart, then you have only flown once.

    Of course anything that goes fast will use a lot of energy, whether jet, electric, gas or diesel. But HSR running on dedicated tracks that rarely has to accelerate will use less energy than other ways of transporting a similar number of people e.g. air, bus or car. And people are going to travel anyway so it is the relative energy use that is the issue here.

    By the way, electrifying CalTrain, while maybe worthwhile from a pollution POV, wouldn’t speed the existing trains up very much. You need to massively upgrade the track, leveling out curves and gradients, putting in advanced signalling (HSR travels too fast for drivers to rely on visual signals). I can’t see how it is worthwhile relative to a new permanent way.

    Finally, new HSR projects involve a lot of tunnelling to avoid widespread destruction of housing, natural places of beauty, road systems etc. That greatly increases the cost. But it does gresatly reduce the environmental impact of the trains. Of course, some of think they look spectacular in motion but not everyone shares that view.

    I think we should build HSR because only a glamor project like that will attract the funds. It’s that or nothing, most likely

  • Alexei

    I agree with JohnB. HSR, as currently planned, will electrify and speed up Caltrain dramatically (and reduce operational costs, I think). Could Caltrain be electrified without HSR? Sure, but it would make it even more difficult to add HSR later, and, anyway, if you wanted to do it properly, with straightened tracks and grade separation, it would cost almost as much. I don’t think it makes sense to take a half-measure like that.

    As far as the airlines and pollution are concerned, it seems inevitable to me that fuel costs will rise and rise in the coming years. The dollar has a long way to fall if the US loses its dominant position, supplies are dropping and demand is rising. That means expensive plane tickets, and fewer people traveling. Not much anyone can do about that, but HSR would be nice to have in that situation. I am in favor of increasing the gas tax to reflect the costs of pollution (and wars, too). Otherwise, forcing people to do one thing or another is a non-starter politically, I think.

    The ‘high-speed’ that is planned for the peninsula tops out at 125 mph or so. They won’t hit 200 until they’re somewhere south of San Jose. I don’t think 125 is excessive. Remember, higher speeds also mean lower labor costs and fewer trainsets required, since they’ll make their run and be back to pick up more passengers more quickly (imagine an infinitely fast train–you’d only need one.) Plus, they become more attractive for travelers. I think that more than offsets the increased energy requirements.

  • John Burrows

    The California High Speed Rail Authority has 4.5 billion available for use, plus 6.75 billion awaiting federal matching funds. While it is true that the expected expenditures by 2013 are 2.5 times what CAHSR could spend right now, it is also true that 3.75 billion in matching federal funds would be enough to pay the bills through 2013 (through June 30, 2014 if California is on a fiscal year). June 30, 2014 is more than 4 years away, enough time to secure continuing federal funding, hopefully from a dedicated source. Also enough time for outside investors (our governor I believe is talking to the Chinese) to join in.

  • Emma C

    California has a LSR option, Amtrak. The reason it hasn’t been extended is because it’s barely adequate. It operates in the red, it still uses diesel engines, it comes infrequently and was often late (has gotten better lately), and it takes a whole eight hours to get from SF to LA.

    I take the train to visit my parents in the central valley every so often. I don’t own a car and city car share’s extended freedom trips only allow for 200 miles a trip before they start charging per mile, and I need to go 250 miles round trip. So train it is. It’s $70 round trip–pretty pricey–and four hours to go what would take two and a half by car.

    There are benefits I could list, and I do enjoy taking the train, but there is a lot of room for improvement. My point is, what I described above is not a scenario that would get most people out of their cars and onto a train. Just because I’m convinced that train travel is best, I cannot force my way of thinking on other people, they need to be convinced. People need to be wowed, to be shown that rail travel is the way to go and HSR offers that prospect. If done right, and there are a lot of opportunities for this project to get derailed (ha ha ha…), people will use it AND demand more. Then we can expand both HS and LSR.

  • Jym Dyer

    =v= Amtrak is less in the red than what it competes with. The thing is, Amtrak was set up in the Nixon years with a “free market” ideology that it should turn a profit, so every year there’s a very public budget battle over its supposedly-awful subsidy. Meanwhile, roads and airlines are subsidized out the wazoo, often in subtle and hidden ways.

    The Texas Transportation Institute put the comparison in a memorable way: more Federal funds go to cleaning up roadkill than for the entire budget of Amtrak.

    This constraint has forced Amtrak to become very efficient and entrepreneurial, but the annual politicized battle takes its toll. This is the very thing that makes Amtrak so slow and unreliable. It’s time to stop pretending that Amtrak and Amtrak alone needs to turn a profit, and join the rest of the civilized world in funding it as a public benefit.

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