One can find this report at:
www.auditor.ca.gov
I copy below a letter from the Auditor to the Governor and the State Legislature.
For those of us who have been following this boondoggle of a project, I hope eyes will be opened to reveal just how bad this project has really been implemented.
morris brown
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Elaine Howle State Auditor Nov 15 2018
The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
State Capitol
Sacramento, California 95814
Dear Governor and Legislative Leaders:
As requested by the Joint Legislative Audit Committee, the California State Auditor presents
this audit report regarding the California High-Speed Rail Authority’s (Authority) contracting
and cost control practices. This report concludes that the Authority’s flawed decision making
regarding the start of high-speed rail system construction in the Central Valley and its ongoing
poor contract management for a wide range of high-value contracts have contributed to billions
of dollars in cost overruns for completing the system.
The Authority began construction in the Central Valley in October 2013 despite being aware of the
risks associated with beginning construction early—the fact that the Authority had not acquired
sufficient land for building, had not determined how it would relocate utility systems, and had
not obtained agreements with external stakeholders. These unmitigated risks have contributed to
$600 million in costs overruns thus far for the three active Central Valley construction projects,
with another $1.6 billion in additional costs needed to complete the projects. The Authority has
cited the terms of a 2010 federal grant—which originally required construction to be complete
by 2017—as the primary factor in its decision to begin construction when it did. However, we
determined that even with a grant deadline extension until December 2022, the Authority could
miss the new deadline unless Central Valley construction progresses twice as fast as it has to
date. Missing the deadline could expose the State to the risk of having to pay back as much as
$3.5 billion in federal funds.
The Authority has partially offset Central Valley cost overruns, as well as those projected elsewhere
in the system, by planning to share existing rail infrastructure where possible. However, the
Authority acknowledges that it has identified every feasible option to do so and therefore cannot
continue to use this approach to offset costs. Moreover, despite its challenging financial situation,
we determined that the Authority has failed to implement sound contract management practices.
As a result, it cannot demonstrate that the large amounts it has spent on its contracts have been
necessary or appropriate.
Respectfully submitted,
Elaine Howle
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