An artist's rendering from July 2012 by the California High-Speed… (California High-Speed…)
In another key setback to the California bullet train project, federal regulators have rejected the state's request to exempt a large Central Valley segment of proposed track from a lengthy planning review.
The action affects part of a 29-mile rail section to be built near Fresno, where state officials have already awarded a construction contract. The decision is likely to complicate, delay and substantially drive up the cost on that initial $1-billion package of work.
The ruling marks the second time in nine days that the rail agency's planning process has been rejected by authorities.
A state court judge last week ruled the High-Speed Rail Authority could not use billions of dollars in voter-approved bond money because it failed to comply with legal requirements. Now, the powerful Surface Transportation Board has turned down a request for an exemption from review for the bullet train segment that runs from Fresno to Bakersfield.
The overall $68-billion project would run trains from Los Angeles to San Francisco by about 2028, starting construction in the Central Valley. The state originally said it would begin the construction in four different packages along a route from Madera to north of Bakersfield. Until earlier this year, the authority had not even sought the board's approval, even though the independent federal agency oversees most major rail projects. State officials argued — ultimately unsuccessfully — that the federal board lacked jurisdiction in this instance.
Raymond Carlson, a Hanford attorney representing Kings County Water District and a grass roots group opposing the rail, said the authority was seriously mistaken to believe that the federal board would even consider granting an exemption on a section that had not yet cleared environmental reviews.
"At a minimum, it shows the incompetence of the authority and at a maximum it shows a lack of integrity in their processes," he said.
In a potential signal of more trouble, the federal board's vice chairman Ann Begeman issued a statement calling for a comprehensive analysis of the project's "financial fitness." She added, "Today's decision acknowledges the growing controversy regarding California's bond funding process."
The authority's leadership repeatedly has failed to disclose its decisions, including its plan to seek an exemption from the federal board in September, Carlson said.
The rail authority's master plan involves breaking up construction into different segments for design and environmental reviews. But when the agency issued its first construction contract, it covered 29 miles that cut across two different segments: 24 miles in the Merced-to-Fresno section and five in the Fresno-to-Bakersfield section.
When it asserted jurisdiction over the project, the federal board exempted the Merced-to-Fresno segment from a full review. That section had already received a final environmental impact review. But the segment from Fresno to Bakersfield was still at issue until Wednesday's ruling. Its impact statement has been long delayed and is not expected to be final until next year.
So, the rail authority had an exemption that allowed construction on 24 miles, but not five miles running from downtown Fresno southward.
When the rail agency sought an exemption for the second section, it said it had already issued a $1-billion construction contract for the full 29-mile segment. And without receiving the exemption by July 12, 2014, the state told the federal board it would have to renegotiate the contract.
And having to renegotiate the contract could substantially raise the price and slow the construction.
But federal regulators rejected that argument Wednesday, saying it was not a valid reason to grant the exemption.
In a statement Wednesday, the authority's chief executive, Jeff Morales, said, “We will continue working with the Board as they consider the petition and continue work on the section already approved and underway.” An authority representative said there was no plan to renegotiate the contract with Tutor Perini because it has until July 2014 to get the clearance from the board without renegotiating the deal.
“Nothing suggests that today's ruling will not allow us to make that deadline,” the representative said. The federal board said its review is set for nine months, resulting in a decision by September 2014.