Several top administrators working on the bullet train tell NBC Bay Area that the state is on the verge of potentially losing billions in federal grants for unrelated infrastructure projects like pothole maintenance and public transit upgrades due to mismanagement of high speed rail.
When the state accepted $3.5 billion in federal grants to start construction in the Central Valley, that money came with a catch. The High Speed Rail Authority must make significant progress by December 2022 or the feds can withhold funding for future grants until the grant for high speed rail is repaid.
High Speed Rail Construction along Highway 99 near Fresno
A PROJECT IN CRISIS
The NBC Bay Area Investigative Unit reviewed years of internal emails and construction progress reports that show the Authority is building at a rate three times slower than needed to avoid violating their agreement with the Federal Rail Administration. According to a November state audit, "If the Authority continues to work at its current rate, it will not complete all anticipated work until 2027."
This graph shows the construction budget (orange line) versus the actual spending (blue line) and the trend of construction/actual construction spending going down over the last year (dotted line). The gap between the orange line and the dotted line is the under performance showing construction at a third of what it should be.
Lou Thompson serves on an independent peer review group that oversees the high speed rail project for the governor and Legislature. Thompson told NBC Bay Area he believes the entire project is in crisis.
"The truth is that the pace of construction really will have to pick up rapidly if in fact it's going to be finished before the 2022 deadline," Thompson said. "Can this be done? … Well, we need to ask [the Authority] and we need to make them make a full solid enforceable commitment about what they can do."
Thompson believes the only way the project can continue as designed is for the state to raise more taxes and drastically increase construction.
FAILURE TO DELIVER
Other internal documents show that WSP, a consulting firm hired in 2015 to help facilitate construction, has also had trouble meeting deadlines. A September performance review found that WSP failed to complete tasks, known as deliverables, 30% of the time.
One contract manager at the Authority described WSP’s performance as "dismal," in an internal email.
At an April board meeting, WSP Chief Program Officer Roy Hill acknowledged his team is more than a year behind schedule but assured they are working to close the gap.
"We are slowly pulling ourselves out of a very deep trench," Hill said.
But the feds aren’t convinced. In February the Federal Rail Administration sent a letter to high speed rail officials saying the agency "has materially failed to comply with the terms of the Agreement and has failed to make reasonable progress on the Project."
COO CONFIDENT IN HIGH SPEED RAIL
Despite the delays, High Speed Rail Chief Operating Officer Joe Hedges told NBC Bay Area he is confident the Authority will finish laying tracks in the Central Valley by 2020, and the state will have a functioning high speed rail line in 2030.
Hedges blames most of the construction slowdown on obstacles like weather, utilities, and endangered species living along the rail line.
"We’re starting to remove all the issues, clearing the alignment, project by project, literally mile by mile," Hedged said. "What you’re going to see as we go through the summer, you’re going to see construction coming back up."
High Speed Rail Chief Operating Officer Joe Hedges is confident the Authority will finish constructing a 119-mile segment of the rail line in the Central Valley by December 2022.
Even though WSP consistently underperformed under its contractual agreements (Workplan 1, Workplan 2, 2a, 2b and 2c), failing to fully complete any of those workplans over the years, last year officials at High Speed Rail awarded yet another contract and agreement (called Workplan 3) to WSP worth about an additional $700 million.
When asked which official signed off on that new agreement awarding WSP Workplan 3, COO Hedges said “that would be me.”
Hedges said the Authority has also seen improvement from WSP in recent months.
"If you look at their current performance right now under new contract administration and leadership, you see the deliverables are right on track. They’re performing . Their turnaround is pretty amazing to be truthful," Hedges said.
On Wednesday, the Authority is scheduled to deliver an update to the state Legislature detailing all the construction and funding issues with the project. At that point, it will be up to lawmakers to introduce new legislation that would keep high speed rail alive.