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California High-Speed Rail Authority

Bullet train bidder has history of cost overruns

SACRAMENTO – The lowest-bidding partnership for the first segment of California’s high-speed rail line includes a firm with a history of cost overruns and costly lawsuits.

The California High-Speed Rail Authority on Friday announced that the American joint venture of Tutor Perini/Zachry/Parsons was the “best apparent value” with a low bid of $985 million – below the $1.09 billion bid by the next-lowest bidder.

On construction projects in California, the lowest bidder has a strong advantage in the eventual selection process. Rob Wilcox, a spokesman for the authority, declined to comment on bidders as the matter is finding its way to the authority’s board of directors.

“Five world-class teams competed for this opportunity, and the process is ongoing,” Wilcox said.


The first segment of the estimated $68 billion system is proposed to run 28 miles from Madera to Fresno in the San Joaquin Valley.

According to an August report by The Bay Citizen, sister site of California Watch, 11 major projects in the San Francisco Bay Area completed by Tutor in the last dozen years cost local governments $765 million more than they expected, or 40 percent above the initial bids.

A company spokesman did not return a message seeking comment. CEO Ron Tutor said in the August report that attacks against him were unfounded and overruns were caused by contracting agencies changing the projects in midstream.


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Winning bid to start high-speed rail far below estimates

A trio of American companies outbid four other teams of contractors vying for the contract to build the first segment of California's proposed high-speed train system in the San Joaquin Valley – and for several hundred million dollars less than state engineers estimated.

The consortium of Tutor Perini Corp. of Sylmar, Zachry Construction Corp. of Texas and Parsons Corp. of Pasadena offered the low bid of less than $1 billion. Five construction teams submitted bids in January to the California High-Speed Rail Authority for the first stretch of the rail line from east of Madera to the south end of Fresno.

Engineers for the rail authority – the state agency in charge of developing the statewide train system – had at one time estimated that the 28-mile portion would cost between $1.5 billion and $2 billion to design and build. More recent estimates suggested the bids would likely come in at $1.2 billion to $1.8 billion.


The Tutor Perini/Zachry/Parsons bid of $985,142,530 was deemed the "apparent best value" by the rail authority, based on a total score that considered both the price and the technical expertise of the competing companies. While Tutor/Perini/Parsons had the lowest technical score of the five bids – 20.55 out of 30 possible points – it also racked up 70 out of 70 points in the financial assessment.

The other four bids were:


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Rail authority says revised report won’t slow construction

The California High-Speed Rail Authority says it’s still on track to start construction in early 2013 on the first stretch of its proposed line in the Fresno area – even though it essentially reset a major portion of its approval process.

A revised draft environmental report issued Monday for the authority’s Fresno-to-Bakersfield section will endure two months of public comment and hearings. After that, consultants will prepare responses and write a final version, which is not likely to be certified by the authority’s board until at least January.

Agency spokeswoman Lisa Marie Burcar said the authority anticipates getting bids from would-be contractors in September, and hopes to pick the winning bid and award a contract in late 2012 for its first construction package – from southern Madera County to American Avenue south of Fresno.


Burcar said that because the agency approved its Merced-to-Fresno environmental documents in May, construction could begin north of downtown Fresno soon after a contract is awarded. Until the authority certifies the Fresno-Bakersfield stretch, however, the contractor won’t be able to do any work south of downtown.

The first construction package is expected to be worth $1.5 billion to $2 billion. The project includes building 12 street overcrossings or underpasses, two elevated viaducts, a tunnel and a bridge across the San Joaquin River. Laying the tracks will be done later under a separate contract.


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Governor backs away from bullet train fight

Gov. Jerry Brown backed away from a fight with environmentalists yesterday, abandoning a plan to exempt the $68 billion California bullet train project from environmental laws.

Brown had hoped to fast-track construction of the controversial project by sidestepping key provisions of the California Environmental Quality Act.

But the idea had put him at odds with most of the state’s green groups.

The Sierra Club, the Natural Resources Defense Council and the Planning and Conservation League were among the organizations that in recent days had strongly criticized Brown’s plan.


The Sierra Club had called Brown’s idea “dangerous” and “a political mistake.”

Most of the state’s environmental groups backed Brown in his 2010 campaign for governor. Several green groups have been firm supporters of the rail project, which would link San Francisco and Los Angeles with trains traveling more than 200 miles per hour.

Environmentalists said they were informed that Brown was abandoning the plan by Ken Alex, director of the governor's Office of Planning and Research.

Brown’s press office referred questions to the state High-Speed Rail Authority, which declined to comment.

Brown’s decision removed potential roadblocks to environmental lawsuits aimed at stopping the bullet train.

But the move also might shore up legislative support for the project. For construction to begin, lawmakers soon must approve the sale of billions of dollars in state rail construction bonds.


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Judge's first ruling leaves door open for Kings County rail suit

A Sacramento County Superior Court judge's tentative ruling appears to lean against a legal challenge of California's high-speed rail plans, but also gives Kings County and two of its residents a chance to fix deficiencies in their lawsuit against the state.

"I guess you could say the court split the baby," said Michael Brady, a Redwood City attorney representing Hanford farmer John Tos, homeowner Aaron Fukuda and the county. "The worst news would be if the court (ruled against us) without leave to amend our complaint."

The tentative ruling doesn't take effect until after both sides present oral arguments in a hearing June 22 in Sacramento.

Tos, Fukuda and the county are suing the California High-Speed Rail Authority, Gov. Jerry Brown and other state officials in hopes of derailing the start of construction of the statewide high-speed train system in the central San Joaquin Valley. Unlike other lawsuits over the $68.4 billion project – which focus on whether there has been sufficient analysis of the system's environmental effects on cities, homes, businesses, farms and wildlife habitat – this case attacks the legality of the project under Proposition 1A, the $9.9 billion high-speed rail bond approved by voters in 2008.


The suit, filed last November, contends that the high-speed rail plan is ineligible to receive money from Prop. 1A because it fails to live up to the law's requirements.


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'No document exists' on bullet train's speed, lawsuit claims

California’s $68 billion bullet train is supposed to travel from San Francisco to Los Angeles in less than two hours and 40 minutes.

That speed – an average of more than 140 mph, including stops – is a legal requirement, written into the state voter initiative that gave the project the go-ahead in 2008.

Boosters continued to promise that the train would attain those speeds even after Gov. Jerry Brown cut $30 billion from the project’s budget earlier this year, forcing a reconfiguration that seemed likely to slow down the train.

But according to a lawsuit filed by project opponents, the state High-Speed Rail Authority has not done any studies or written reports to verify that the trains actually will go fast enough to follow the law. The suit, filed by the County of Kings Board of Supervisors, quotes a May 31 email from a project official as saying that “no document exists” to verify that the train can meet its travel time deadline.

Instead, the rail authority’s promises are backed up by “verbal assertions based on (the) skill, experience and optimism” of project engineers, the rail official wrote in response to a request for public information.

That statement “casts great doubt on the credibility” of the claims the authority is making about the bullet train, Kings County says in the lawsuit, which seeks a court order to cut off state funding for the project. The county claims constructing the rail line will wreck thousands of acres of prime Central Valley farmland.


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Experts say rail plan improved, but still flawed

An independent panel of transportation and finance experts says the latest business plan for California’s proposed high-speed train system is a big improvement from last fall, but still gives cause for concern.

Uncertainty over money to finish the 520-mile system between San Francisco and Los Angeles after initial construction and lingering doubts over what it will cost to operate the train line are among warnings to legislators by the High-Speed Rail Peer Review Group.

If the project falters after building a $6 billion section from Madera to Bakersfield – where construction could start this year or early next year – California would have a partial system of limited use, wrote Will Kempton, the panel’s chairman and CEO of the Orange County Transportation Authority.

“It would be a poor use of resources and an embarrassment,” he added, “but not a financial disaster.”

The panel’s sharpest criticism was aimed at the authority’s ability to oversee such a big project.


“We continue to believe that management resources are inadequate to supervise the enormous contracting effort,” said Kempton, who is also a former state director of the California Department of Transportation, “and that attempts to launch a massive construction program in response to federal completion deadlines will only make the problem worse.

“We believe the project should not proceed until a plan for resolving this challenge is prepared” and accepted by the rail authority and Gov. Jerry Brown.


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Rail authority policy to purge e-mails draws critics' ire

A congressional committee is investigating California’s $68 billion bullet train project. The U.S. Government Accountability Office is investigating, too.

Meanwhile, this proposal for the largest public works project in California history is the target of a flurry of lawsuits filed by local governments and opposition groups.

All those investigators, lawyers and bullet train critics want to pore over the California High-Speed Rail Authority’s trove of documents, looking for evidence.

So it’s an unusual time to purge five years’ worth of bullet train project e-mails, critics say. Nevertheless, that’s what the agency is contemplating.

In February, the rail authority filed papers with the state saying it intended to enact a new policy to destroy its e-mails after 90 days.

Then, on May 1, in response to a request for information from a project critic, the rail authority said it could not produce e-mails that were older than 90 days, citing the new policy.

The rail authority’s lawyer downplayed the issue’s significance, but it has caused concern among high-speed rail critics, who say they fear the authority is jettisoning important information about how the expensive project is being shaped.

The new e-mail policy is “highly suspect,” said Kathy Hamilton of the Community Coalition on High Speed Rail, a San Francisco Peninsula group that opposes the bullet train. The project would link San Francisco and Los Angeles with trains traveling up to 220 mph.


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Bullet train's low operating costs are 'elephant in room,' experts say

By hitting the reset button, Gov. Jerry Brown bought some time for the embattled California high-speed rail plan.

In recent months, the CEO of the controversial project resigned. Brown installed Dan Richard, an official with political and transportation industry connections, as new board chairman.

More importantly, the California High-Speed Rail Authority dramatically revamped its business plan, slashing as much as $30 billion from the price tag for building the San Francisco-to-Los Angeles system – from $98 billion to as little as $68 billion.

But none of those changes addressed what a panel of outside financial experts has styled “the elephant in the room” for California’s proposed high-speed rail system – its extraordinarily low projected operating costs.

If the bullet train project is to pencil out, it must operate far more economically than any high-speed rail system in the world, according to the experts, who include former World Bank executive William Grindley.

Unless these extraordinary economies actually are achieved, the train will require alarmingly high annual operating subsidies “forever,” as the experts wrote in a report last month. The annual operating deficit could top $2 billion, they wrote.


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Final bullet train report out for Merced-Fresno

A 32-chapter report intended to be the final word on the effects of high-speed trains between Merced and Fresno was released last week by the California High-Speed Rail Authority.

It is unlikely, though, to change the minds of farmers and others who are worried about how high-speed rail may alter their farms, businesses, homes or communities.

“They’re looking at the potential for 30 road closures in my district,” said Madera County Supervisor David Rogers, who represents the Chowchilla area. “It’s going to be an emergency-access nightmare, and it’s going to be very difficult for a farmer to navigate his operation when he has to go six miles out of his way to get from one side of his farm to the other.”

The final version of the authority’s environmental impact report details the anticipated effects on farmland, habitat, residents, businesses and communities on the 60-mile stretch between Fresno and Merced. It also explains why the preferred route wanders between the Union Pacific Railroad/Highway 99 corridor and the BNSF Railway line a few miles to the east.


“Whatever selection we make, whatever the decision might be, we cannot avoid the impacts for the people who are opposed to this,” said Tom Richards of Fresno, the rail authority’s vice chairman and its only representative from the central San Joaquin Valley. “But it’s our job to try to get this done as economically and efficiently as we can, and as environmentally responsibly as possible.”


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