Will a new watch post help California’s high-speed rail plans get on track? | New
After a decade of cost, schedule, technical, regulatory, personnel and legal issues, California’s high-speed rail project will soon receive an inspector general under an agreement between Governor Gavin Newsom and the legislature.
The new investigator position aims to step up oversight and improve the performance of the $105 billion rail project. Enthusiasm for change is high, but it is not certain that it will solve everything, even among heads of state.
“There are only problems on the draft,” said Chairman Anthony Rendon, a Democrat from Lakewood. “The Inspector General provides oversight and some insight into what’s going on with management. He’s been missing for a long time.”
But will it work?
“We don’t know,” Rendon said. “We have to be vigilant. The IG will provide what we need to achieve that.”
So far, various outside agencies have advised the Legislative Assembly and the Governor on the project, resulting in recommendations that have often not been acted upon. In some cases they required changes that no one had the power to make, and in other cases they came at too high a political price with outside interest groups.
In 2012, the Office of the Legislative Analyst ruled against an appropriation to begin construction, arguing that the California High-Speed Rail Authority was unprepared. Governor Jerry Brown lobbied the legislature for this and won. Now many agree that LAO was right. The Peer Review Group has long warned that the state needs a secure funding plan. But the project is progressing without.
These outside advisers lack the resources and mission to immerse themselves intensely in the day-to-day work of the rail project, its army of consultants and its stable of international contractors.
“The IG will bring a level of oversight that we didn’t have before,” said Helen Kerstein, the only bullet train expert in the legislative analyst’s office. “It’s very powerful.”
The law creating the Inspector General lists a wide range of authorities the new office will have: full access to all project records; authority to review contracts and change orders; and issuing subpoenas for witnesses and records, among other things.
“He’s not a person sitting in a basement,” said Laura Friedman, chair of the Assembly’s transportation committee, widely credited with pushing the idea of the inspector general. “It’s going to be staffed. It’s going to be real.”
This would include investigating waste, fraud and abuse, as well as working with law enforcement and prosecutors, she said.
What size organization will it take? For now, there is no budget. But the inspector general of the bullet train project would receive the same salary as the inspector general of the California Department of Corrections and Rehabilitation, who earns $192,382 and will have 212 employees next fiscal year.
Fred Weiderhold, a West Point civil engineer who served 20 years as Amtrak’s inspector general, said if he accepted the job in California, he would want to start with a team of at least 50 people, half auditors, 30% investigators and 20% inspectors and evaluators.
“It’s daunting work,” Weiderhold said of the California project. “You have to follow the money. I guarantee that on any project of this magnitude, you will have fraud, product substitution and waste.”
By the time Weiderhold left as Inspector General of Amtrak, he had helped put several hundred people in jail and get 2,000 fired.
The Inspector General of High Speed Rail will not have the power to control actual spending, a move which was considered and rejected by Newsom.
A more aggressive plan was followed by the Massachusetts Bay Transportation Authority in 2015, when it faced service outage in the Boston area and skyrocketing capital cost overruns. State lawmakers fired the authority’s existing board and installed a new public finance and management oversight board.
Estimated construction costs on a 4.3-mile extension of a light rail line have risen from $1 billion to $2 billion, said council chairman Joe Aiello. The council halted work, fired existing contractors and set up an independent team to assess what was wrong, he said.
“There was an outrageous scope slippage,” Aiello said.
By the time the council disbanded last year, the cost of construction had been reduced to $1 billion, he said.
Even increasing surveillance, the deal doubles the bullet train’s mission. an appropriation will release $4.2 billion from a 2008 bond fundbut only for completing a 171-mile segment in the Central Valley from Bakersfield to Merced.
“They have to deliver something soon that audiences will understand as a train,” Friedman said.
Newsom responded to another Assembly request by adding $3.5 billion for transit projects in the Bay Area and Southern California, as well as $300 million to repair an Orange rail County Amtrak that’s ready to drop into the Pacific.
“You can’t have enough oversight on a project like this,” Friedman said. “It’s not a minor change. It will be a very big change for the project.”