Group blasts high-speed rail plan

Adding to a growing chorus of experts sounding off against the California High-Speed Rail Authority's plan for the statewide bullet train, an independent review group said in a letter released Monday that planning and managing the project will be a "daunting task under the best of circumstances."

"Meeting the challenge will require a thorough re-assessment of a number of critical engineering, financial, economic and managerial issues," the letter states.

Addressed to California Assembly Speaker John Perez and Senate President Pro Tem Darrell Steinberg, the letter summarizes the California High-Speed Rail Peer Review Group's comments about the business plan the rail agency presented to the Legislature in December 2009.

Those comments include criticisms of authority staffing levels, business models, risk management, reliable funding sources, project costs, ridership forecasts, the train's need for an operating subsidy, right-of-way availability, and technical and safety issues, including seismic safety.

CHSRA Deputy Communications Director Jeffrey Barker said Monday that the feedback is productive and should serve as a needed incentive for Sacramento lawmakers to take stronger action.

"We appreciate the peer-review group's feedback to the authority and the Legislature, including its clear call to lawmakers to support the project by providing the authority the resources necessary to create the nation's first high-speed rail system." said Barker.

The peer review group, required by AB 3034, was established "for the purpose of reviewing the planning, engineering, financing and other elements of the authority's plans" and issuing related analyses. The group didn't have quorum until June of this year, and thus has been unable to function.

The group's analysis may do nothing to assuage concerns about the project following a string of critical reports by the legislative analyst's office, the state auditor, Berkeley's Institute of Transportation Studies and a recent economic analysis out of Stanford.

"The authors of this report matter as much as the information it contains," said Nadia Naik, co-founder of Californians Advocating Responsible Rail Design. "This Independent Peer Review Committee is responsible for giving the green light for funding, and right now the light looks red."

Palo Alto Mayor Pat Burt agreed. "They are the independent eyes and ears on behalf of the legislature and the governor to look over the shoulder of the high-speed rail program to ensure that it's on a solid foundation," he said. "As of now, they've concluded that it's not."

Barker, while not responding in detail to the merits of the group's comments, did agree that financial shortfalls are a serious concern.

"Today's report should be a wake-up call that a commitment of ongoing federal support for the project is still crucial to its future," he said.

Here are some key excerpts from the Peer Review Group's comments:

Authority Staffing: Though not an explicit part of the 2009 Business Plan, we are concerned after discussions with the authority that the staff level now permitted is totally inadequate to oversee a project of this magnitude, no matter what business model is ultimately chosen.

Business Model: The authority should focus immediately on selection of one of these fives "business models."

1) Fully public, mass transit model [using BART as an example].
2) Authority plans/finances/builds system; private entity operates/maintains.
3) Authority plans/builds; concessionaires set prices, estimate demand, furnish rolling stock and operate/maintain system.
4) Authority designs/finances/builds system; operator(s) provide rolling stock; authority charges operators fees.
5) Private consortium designs/builds/finances/operates/maintains based on a long-term contract.

Management of Risk and Uncertainty: Community opposition to the project's proposed alignment between San Francisco and San Jose, as well as the early stage of the system's overall design status (among many other issues), will cause the cost of the project to fluctuate. The transfer and allocation of risk is another issue, which the authority needs to assess ... the authority should investigate project risks and determine who will bear them.

Funding Sources and Project Cost: There is now considerable uncertainty and unreliability of federal funding. In light of the public concern over excessive government spending, how will the authority close the gap between any funding resources and the project's estimated cost? What will the authority's course of action be if the funding gap cannot be closed? The lack of a clear financial plan is a critical concern.

Demand Modeling and Estimating: The authority has come under increasing criticism regarding the project's demand and revenue estimates. The issues identified by the Institute for Transportation Studies at the University of California at Berkeley, the legislative analyst's office and the state auditor's office have raised sufficient concerns with the demand model so as to call into question the project's fundamental basis for going forward.

Other key concerns: According to Proposition 1A, which granted nearly $9 billion in bond sales to the authority, the system will have not operate independent of any government subsidies. But the lack of any guaranteed ongoing funding from the government will make it very difficult to attract private investment; freight trains and high-speed rail trains should not operate on the same track; the authority has done a poor job deciding on alignment (elevated tracks, at-grade or below-grade), but those decisions will have "significant cost implications"; and seismic issues have not been adequately accounted for and could result in higher system costs, "perhaps as much as 60 percent."