If you were looking to take some easy shots at government waste and abuse, you’d have a hard time topping California State Auditor Elaine M. Howle’s recent assessment of the Golden State’s 14-year-old high-speed rail project. The California High Speed Rail Authority, she writes in a 47-page report issued at the end of April, “paid at least $4 million of invoices for which it had no evidence…that the contractors had performed the work invoiced” and “does not generally ensure that invoices reflect work performed by contractors.”
The Authority’s free-spending ways become even more clear in a spot-check by the auditor: “Of 22 regional contractor invoices we reviewed, the Authority paid 20, totaling $6.9 million, without documenting that the Program Manager had performed a required review.…It spent $46,000 on furniture for its Program Manager’s use based on an oral agreement.” The Authority’s plans also “lacked detail” about ridership projections for the train, about where its funds will come from, about whether state, local, or federal agencies or private partners will be paying for the project, and about how the Authority would manage risk.
As if to drive the point home, Howle singles out the leg of the bullet train line that is generally considered the simplest, cheapest, and shortest. “Creating a viable funding plan may be a challenge as matched funding for the least expensive corridor eligible for Recovery Act funds—Los Angeles to Anaheim—amounts to $4.5 billion, while projected costs total $5.5 billion,” Howle writes. She adds that “the regional contractor working on the Los Angeles-to-Anaheim corridor completed 81 percent of planned hours but spent 230 percent of planned dollars.”
The auditor’s report is full of such grotesque details. (Among other things, it appears the Authority has done no research on the project’s potential revenue, including such no-brainers as an analysis of ridership on existing high-speed trains.) If you want the short version, just read the audit’s title: “High-Speed Rail Authority: It Risks Delays or an Incomplete System Because of Inadequate Planning, Weak Oversight, and Lax Contract Management.”
And that’s just the bullet train’s most recent pan. Earlier in the year, the state’s legislative analyst’s office noted that the Authority’s plan contains no timeline and no specifics and that it “appears to violate the law” by using bond funds to subsidize its operations. (The Authority now claims to have corrected this problem, and it recently hired a $375,000-a-year CEO to help get the project on track.) Since 1996—twice as long as the Transcontinental Railroad took from approval to completion in the 1860s—the bullet train project has cost taxpayers more than $250 million, yet not one millimeter of track has been laid.
If all those taxpayers were in California, we could at least take comfort in knowing that only the guilty are being punished. But the bullet train is the centerpiece in President Barack Obama’s national rail plan, and this spring California became the recipient of $2.25 billion in federal funding. Together with $9 billion in bond funds that state voters approved in 2008, that takes care of a little more than one-fourth of the project’s projected $43 billion cost. (Comparisons with the Bay Bridge expansion and the Boston “Big Dig” suggest the final price tag will end up closer to $100 billion—and probably more, because the state’s dire fiscal situation and degraded credit status mean it will be paying higher interest rates in the future.) The good news is that the federal funds are contingent on the project being underway by September 2012, so they will probably end up not being disbursed.
The project is a high-decibel example of the magical thinking that takes hold when people talk about trains. A few years ago, when the rail bonds were being debated, I participated in the quaint ritual of an editorial board meeting at the Los Angeles Times in which we debated how to “weigh in” on this critical issue. While I, the team’s only mass transit rider, had the handicap of knowing what I was talking about, I was nonetheless pleased at the group’s readiness to acknowledge that the high-speed rail project offered only anemic ridership levels, endless subsidies, and a strong likelihood of never happening. But in the end, of course, we ran with an editorial titled “Believe in the Bullet Train.” The piece complained that “critics…base their arguments on the past, not the future.”
The bullet train also exemplifies the arrogance and Bourbon high-handedness with which grand plans get made. Several times the California High Speed Rail Authority has been caught mapping out bullet train alignments and then failing to notify homeowners whose properties would be slated for seizure via eminent domain. The current plan would have the 220-mile-per-hour train running through well-populated residential areas. It also pits the Authority against Union Pacific over track resources, meaning the bullet train would essentially replace freight—the one genre of rail transport that remains viable and important to the economy—with a passenger rail project that has no hope of ever becoming sustainable.
Finally, the bullet train is a case study in the immortality of a bad idea. While the train itself may never become a reality, sheer political will makes the train project impossible to kill. “The project has been fighting every year to stay alive,” says Elizabeth Alexis, co-founder of Californians Advocating Responsible Rail Design, a watchdog group that supports a rail project in principle but is critical of the Authority. “So they did what they had to do to stay alive, because that’s better than being dead.”
After 14 years of no life signs, how can you tell the difference? Amtrak used to try and lure riders with the slogan “There’s Something About a Train That’s Magic.” In reality, we know that magical trains exist only in cartoons.