California HSR review panel recommends halting project

The California Legislature should not authorize the sale of about $2.7 billion in bond funds for the initial construction of the state’s high-speed rail project, according to a report issued yesterday by the California High-Speed Rail Peer Review Group.

The state-appointed review panel was created under Proposition 1A and charged with analyzing the feasibility of building and financing the high-speed rail system for the Legislature. CHSRA plans to use the bond funds to match $3.5 billion in federal dollars it’s received for the initial construction segment.

The panel supports the concept of high-speed rail, but believes it would be best for the state to halt work on the project to “reevaluate the overall goals, routes, financing and phasing,” according to an article published Jan. 3 in the Los Angeles Times. The California High-Speed Rail Authority’s (CHSRA) plan to begin building a $6 billion initial segment in the Central Valley later this year — without any assurance of additional federal dollars — is not sound, the review panel said, according to the LA Times.

“We cannot overemphasize the fact that moving ahead on the [high-speed rail] without credible sources of adequate funding, without a definitive business model, without a strategy to maximize the independent utility and value to the state, and without the appropriate management resources, represents an immense financial risk on the part of the state of California,” wrote Will Kempton, chairman of the California High-Speed Rail Peer Review Group, in the report.

However, CHSRA officials say the report is “deeply flawed” and misleading, and some of the panel’s conclusions are misleading.

“The report suffers from a lack of appreciation of how high-speed rail systems have been constructed throughout the world, makes unrealistic and unsubstantiated assumptions about private-sector involvement in such systems, and ignores or misconstrues the legal requirements that govern the construction of the high-speed rail program in California,” according to a CHSRA press release.

If the Legislature follows the panel’s recommendations, it would put at risk the federal dollars CHSRA has received for the project and “undermine extensive outreach efforts on the part of the authority to develop greater integration with regional rail systems,” CHSRA said.