Will L.A. Times’ Irresponsible Coverage of High Speed Rail Doom the Project?

Times' Big Scoop on CAHSR Was Overblown Coverage of a Routine Report

A rendering of the project. Image: CaHSRA
A rendering of the project. Image: CaHSRA

On Monday, the Los Angeles Times published a bombshell article, outlining the details of a “confidential Federal Railroad Administration risk analysis,” in an attack on the competence and ethics of the California High Speed Rail Authority. Reporter Ralph Vartabedian claims the report shows cost overruns and delays, although the Times does not provide readers a chance to read the report for themselves.

The California High Speed Rail Authority is given little space in the story to defend itself. Much more is given to critics who have been seeking to kill the project for years.

Jerry Brown has shown unwavering support for the High Speed Rail Project. But if the federal government turns its back, will that support be enough? Photo: NPR
Jerry Brown has shown unwavering support for the High Speed Rail Project. But if the federal government turns its back, will that support be enough? Photo: NPR

The story went viral with conservative news websites that are read by decision makers in Washington, D.C. Breitbart, the news website that was once edited by incoming senior adviser to President-Elect Donald Trump, summarized the article with the headline “CA High-Speed Rail: Over Budget, Behind Schedule.” Even less-reputable website PJ Media took a harder swing in “Train Wreck: California High-Speed Rail in Worse Shape Than Anyone Thought” charging corruption and incompetence at the highest levels.

With today’s report at The Hill that the administration plans massive cuts to the Department of Transportation for unnamed programs, the timing of the piece couldn’t have come at a worse time for the High Speed Rail Authority. In a critique of the article at the pro-High Speed Rail website CAHSR Blog, Robert Cruickshank writes. “I will bet money that the Trump FRA finds a way to claim that the Authority missed this deadline and must repay that $220 million. I would not be surprised if they also make a play to try and clawback much more of that stimulus money, though I doubt it can go very far.

Of all the obstacles I described above that the Authority has weathered, they may be about to encounter the largest one yet: Donald Trump.”

Of course, if the article is true, that there are cost over-runs and major delays and the FRA did publish a secret report slamming the project, the Authority deserves whatever is coming next.

And that’s where things start to fall apart. The Times’ critique isn’t a fair one, using partial truths to create doubt. While it is factually true to state that the report is “confidential,” Vartabedian uses the term without providing any context, leaving readers to imagine why the report’s findings would be withheld from the public.

First, the FRA conducts risk assessments of every project that receives federal funding. In response to an email asking why the FRA completed this study, Deputy Director of Public Affairs Marc Willis responded somewhat cheekily, “Risk analysis is a standard oversight tool used on major capital projects—not just California.”

So why is the report marked “confidential?” Simply put, because the FRA and its local and regional partners want to be able to have a frank conversation about the status of the project without fear of the report being misunderstood by political opponents and the local press. The High Speed Rail Authority, in its response to the article in the legislature, outlines many complaints with the article, but seems especially exasperated about the characterization of the report.

“Risk analysis is an ongoing iterative process; factors are discussed, assessed for their potential impact, and determinations are made as to whether they are applicable and to what degree,” the letter states. “It was marked deliberative because it is just that – part of that ongoing work among staff to determine what risks might be applicable and how to manage them.”

So how about the damning critique Vartabedian outlines from the routine deliberative report draft? Turns out their are plenty of holes in the report as well.

First claim : The project could cost $3.6 billion more than the budget announced to the public. The Authority announced a $6.4 billion budget. It could now cost $10 billion.

The key word here is could. There are a lot of things that could increase the budget of the project. But at the moment, the budget for the project is $7.8 billion, not $6.4 billion. Why is that number higher than the $6.4 billion estimate? $900 million of the $1.4 billion difference is contingency funds should other parts of the project go over budget.

Currently, only the route through the Central Valley is under construction. Construction should be completed by 2025.
Currently, only the route through the Central Valley is under construction. Construction should be completed by 2025.

Second claim : The California High-Speed Rail Authority originally anticipated completing the Central Valley track by this year, but the federal risk analysis estimates that that won’t happen until 2024, placing the project seven years behind schedule.

This is true, but hardly news. The route for the Merced to Bakersfield wasn’t approved by the Board until last October. In fact, when the plan for the Initial Operating Segment was approved last year, the estimate for the opening date was 2025.

Third claim : The Federal Railroad Administration is tracking the project because it has extended $3.5 billion in two grants to help build the Central Valley segment. The administration has an obligation to ensure that the state complies with the terms, including a requirement that the state has the funding to match the federal grants. 

This is true. This routine report is put together because the state received a federal grant. And good news, the Authority is on track to meet its goal, including the matching funds and the requirement that all funds be spent in the grant timeline. A statement released by the FRA, and quoted in the CAHSR article, clearly states, “Is California on track to spend the Recovery Act Funds at this moment? Yes. Will it? With continued focus and hard work, yes.”

Fourth claim : Staff morale is low.

I wonder why that is? Probably because the project is a political hot potato and is often pilloried in the local press, including the nation’s fourth largest newspaper?

Vartabedian clearly has an ax to grind with the Authority. Roger Rudick, now editor of Streetsblog SF, wrote a scathing takedown of his coverage in 2014. Perhaps that explains the many pieces of good news left out of his article, news that is outlined in the Authority’s response. Or maybe it explains why much of the background for Vartabedian’s article is from anonymous sources, without any context for who is providing the information and why anonymity was granted.

But the sad reality is that even though the Times’ article is sloppy and unprofessional, it could have negative consequences for the California High Speed Rail project. A hilariously terrible article by the Reason Foundation on the then newly-opened Phase I of the Expo Line, lamented that ridership for the completed Expo Line hadn’t reached it’s 30-year ridership projections–in its second week of being half-open. That terrible article was cited in private meetings between transit advocates and capitol hill staff about rail funding in Southern California.***

Let’s hope Vartabedian’s article has even less impact than Reason’s. But in these uncertain times, it seems likely High Speed Rail will remain a partisan issue.

*** – Anonymity was granted because said activist doesn’t want to burn bridges in Washington, D.C. Even though these meetings took place five years ago.

  • Wiching

    HSR as public transportation should fund by Gov. than issue funding solved.
    than HSR ticket collection use to operation and future development.also like advertisement income from station, possible packages with transit-Oriented-Development (TOD) can provide more income to operator.

  • DennisinOhio

    The original concept did NOT include all the beltways and extra freeways added much later to the 1950’s plan not to mention the exceedingly high impact of inflation along the way. No one would claim the interstate system was not needed – find some empty freeways now that are not being utilized.
    .

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  • Perhaps, but I think that any abandonment should include completing the Tehachapi double-tracking project to at least allow Amtrak to provide through service to LA from the Central Valley. Also, there is another plan in the works to extend the Pacific Surfliner all the way up to SF by 2030, so there will be trains available between SF and LA. They just will unfortunately, not be operating at the under three hour time threshold provided in Prop. 1A.

  • In that case, the state should dump the LA segment of the project and just go to the Central Valley.

  • Many people have made the connection between the living conditions there and the fact that housing is so unaffordable in the Bay Area. One of the key goals of HSR is to open up the Central Valley to be within reasonable commuting distance of the Bay Area. As it is, tens of thousands of people already commute in from areas like Stockton and even Modesto because that’s where they can afford to live. HSR adds Fresno, Merced, and other cities to that list.

  • Not clear what your reference to the Ghost Ship is about. Those artists should consider moving to the Central Valley because of this project?

  • The winning construction bid was for $350mn, so $250mn isn’t an unworkable figure, though it will obviously explode the timeline. But at this point, the State should have access to enough funds to get to San Jose. Barring any outrageous circumstances, the IOS should produce the revenue to continue the project. Also, the Stae could always allocate funding away from expanding highways in the corridor to finishing this project.

  • Er, the 36 people who died at the Ghost Ship and many thousands of others who can’t find an affordable place in the Bay Area to live even on a banker’s salary would like to have a word with you. CAHSR isn’t just about ferrying people from LA to SF, it’s also about opening up the ability for more people to live in the Central Valley and work in either place in an affordable and timely manner.

  • Here’s a critique by Randal O’Toole of the Dallas to Houston project: http://ti.org/antiplanner/?p=12813#more-12813

    $75 million isn’t impressive for a project that may need $12 billion to build and a lot to operate if/when it’s built.

  • Exactly! But the Bay Bridge is absolutely necessary to the Bay Area, which can’t be said about this project.

  • The worst case scenario: The project limps along with the cap and trade money keeping it on life support. Even $250 million a year—an optimistic number, given the uncertainty of that source—isn’t nearly enough to finish this project.

    It’s the sheer expense of this project that doesn’t make any sense and can’t possibly deliver any comparable public benefit. If just the $9 billion in bonds authorized by voters in 2008 are all sold, it will cost the state’s general fund $647 million a year in payments!
    http://vigarchive.sos.ca.gov/2008/general/analysis/prop1a-analysis.htm

  • Vooch

    in the winter ?

  • Yea, it’s a real shame. Double-tracking Tehachapi would really be a game-changer for early support of HSR with feeder service to Bakersfield, Mojave, and Palmdale. And of course by running Amtrak all the way through, though that likely will still take longer than the Thruway bus over the Grapevine.

  • Vooch

    blame Obama for trashing the double track project which cost a mere $100 million ( about what 1 on ramp upgrade on the SD freeway costs )

  • Precisely. Also, the State was investing in a Tehachapi double-tracking project which should’ve involved a commitment to allow run-through passenger service over the pass, though I hear that it’s now scaled back a bit.

  • So you’re saying that because China is now building HSR to the equivalent of Montana or Wyoming, CA shouldn’t build it through some of its largest cities and along its most-used rail lines. That makes zero sense.

  • If the connection to SoCal never gets completed, then I’ll be right there with you crying foul. But current plans all intend for it to be completed, so it isn’t a broken promise yet.

  • bolwerk

    I’m starting to suspect I’m being trolled.

  • Nothing but a blow-up of this graphic. Nice try, phony!

  • CalTrans is a state, not a local agency. No evidence that it is spending any money on the HSR project. San Francisco is spending millions on its Transbay Transit Center, including facilities for high-speed rail, money for which it got from the HSR Authority itself. “Local” in this context clearly means city and county governments. Not going to happen.

  • bolwerk

    *eye roll*

    Here, I drew a red asterisk’s or cat anus next to the link for you. It has been there since I posted it. https://uploads.disquscdn.com/images/8e81e7024cdd0c79d098f5d1a044bfbbf1a9233956c5bfc43df6931191817ddd.png

    It’s from a consolidated financial report: income, cash flows, balance sheet, blah blah. The main purpose of these reports is to provide the stakeholders in a public entity summaries of its financial performance. Every publicly traded corporation must produce one, as do government agencies.

    Reading it should mostly be pretty straightforward, as such reports are produced for layman investors, but if you need deeper understanding than that I would suggest an introductory financial accounting text.

  • What exactly do you think “local grants” are if not money from counties and CalTrans?

  • O’Toole has shown a consistent pattern of opposing any transit project for some reason or another. Calling those actions out for what they are isn’t “calling people…names”, it’s noticing a pattern.

  • You still haven’t provided a link to where that graphic came from or what those numbers supposedly mean.

  • Counties and CalTrans are going to help for this project? Still no private investors have come forward. Pure fantasy! The HSR bond money is paying to electrify CalTrans, not vice versa.

    In its 2009 business plan, here’s how the HSR Authority proposed paying for the project:

    Federal Grants: $17-19 billion
    State of California: Prop. 1A bonds, $9.95 billion
    Local Grants: $4-5 billion
    Private Equity Funding: $10-12 billion

    The Feds have thrown $3 billion into the bottomless pit, but no more can be expected from that source. But billions from local governments? Not from San Francisco, where I live, since here in Progressive Land City Hall is already trying to deal with its own red ink. And there’s been no private investment at all. This bulletin just in: Private investors like to make money on their investments!

  • Calling people who disagree names isn’t a very convincing argument.

  • bolwerk

    Just like how they stopped using airplanes when cars came out?

  • bolwerk

    Where it has been since I posted it: at the bottom of the post.

  • Vooch

    building the section which can immediately be used by the San Joaquin is a big winner.

    Ridership will skyrocket on the San Joaquin.

    The Surfliner has huge ridership and it averages 30 MPH. Just fiesta show latent demand for even mediocre service is yuge

  • bolwerk

    DB + SCNF cover most of the HSR lines in western Europe. They’re both profitable. So is Japan, AIUI.

    Where are the unprofitable ones? China?

  • The current estimate of costs for the ~120 miles in the Central Valley, which have been coming in under budget, is around $8bn. Remind us all again how much the Bay Bridge cost for the five miles to Treasure Island.

  • Feel free to expound on the deficits as to date, all the contracts have come in under budget.

  • The State has the money it needs for the present and as stated, Trump’s priorities for infrastructure would actually be great for the CAHSR project.

  • “Rail’s best critic”? That’s laughable. Randy O’Toole is a full-on anti-transit fanatic.

  • Only because they don’t have the build the infrastructure that they run on.

  • Right, Barron doesn’t know what he’s talking about. Maybe the Times misquoted him? Come off it and show us some more of your “observable reality” showing how profitable HSR systems are around the world.

  • Why don’t you provide some context for your graphic? Where’s a link to wherever you found it and what exactly is it about?

  • The door-to-door issue is exactly why people in the US stopped using trains and bought cars. Hence, freight rail is the only rail operation that doesn’t require a subsidy. It will always be cheaper, for example, to drive to LA from SF than taking HSR, especially if you have more than one person in the car.

  • CeeTee55

    He’s a anti-urban hack, like Wendell Cox .

  • No, the point is China continues to build rail lines that don’t pay for themselves with enough passengers, which leaves that country with a system that has a massive debt problem.

  • Convenient for your argument that you automatically reject rail’s best critic.

  • bolwerk

    People in the U.S. abandoned passenger trains as hostile government policies undermined the practicality and viability of passenger trains while increasing their costs to operate. This included taxing private railroad ROWs to fund highways, which don’t pay taxes, a practice that continues today.

    The problems with passenger catchment have commonalities but are not exactly analogous. First of all, it’s trivially cheap to add a stop on an HSR route and have trains stop there, so HSR is viable in much smaller settlements. Second, downtown train stops tend to be more central to their conurbations than airports, which are often located on the periphery of the markets they serve, making them less accessible to many people.

    HSR is intended to be city-to-city, not door-to-door. The trip to the door needs to be provided by local transit or car. IMHO smart HSR should feed and be fed by airports. There is little room for competition.

  • bolwerk

    They are probably the cheapest way to provide the transportation they offer. Certainly providing airports in place of train stations on Amtrak routes would be an enormously expensive undertaking.

  • bolwerk

    “Suspect”? Are all your opinions so faith-based? It’s a GAAP-compliant report. It includes the cost of financing and depreciating the construction costs, and can be compared with similar ones from Amtrak.

    Except that I’d like to see American infrastructure spending reformed generally, I don’t give a tinker’s fuck about CAHSR. That comment from Barron just cannot be reconciled with observable reality in any way I can see. (I wasn’t blaming you for that, as you had reason to believe you were pasting from a reliable source.)

  • Joe R.

    I don’t have to supply evidence. You do. You’re the one who thinks every rail project is a waste of money because buses can provide a ready substitute for less. Show me how they’re cheaper to operate, can go 200 mph like HSR, don’t get stuck in traffic, offer more comfortable rides than trains, and so forth. If you can’t then STFU.

  • Of course you’d rather talk about Europe than about this particular project, which is indefensible. I suspect, by the way, that the profits you cite there don’t include original construction costs.

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