California Bullet Train Audit: Expect More Cost Overruns

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I know I’m probably trying your patience, but the state auditor’s report of California’s LA-San Francisco bullet train was released on Thursday:

[Elaine] Howle suggested that much of the spending so far may have been an outright waste….The audit, ordered by the Legislature this year, found extensive mismanagement, including serious problems tracking contracts, reviewing invoices for payment and monitoring construction progress….The project is 13 years behind the schedule set in the bond act approved by voters in 2008 and has grown in cost by $44 billion over its original $33-billion price target.

….Shortcomings in the agency’s ability to monitor progress on its existing $5.6 billion of construction, engineering and environmental contracts have been well known to the authority. Howle noted that the authority’s in-house audits in 2014 and 2015 identified those problems but that the authority was unable to implement corrective action….For five years, rail authority executives have told The Times that they recognize a need for bolstering the ranks of state managers and relying less on outside advisors. The authority reiterated a plan to the auditor to rely less on consultants.

Gov. Jerry Brown has been an ironclad supporter of the bullet train, but he leaves office in January and Gavin Newsom will take over. Newsom has been pretty lukewarm about the project, which produces my favorite paragraph in the story:

The 87-page audit gives Newsom the basis for almost any kind of restructuring he would want to make, though support for the train remains high among its key constituencies: construction companies, labor unions and Californians who have traveled by bullet train in Europe or Japan.

Construction companies and labor unions, sure. Of course they support it. But if the best you can dig up for #3 is folks who have traveled on bullet trains once or twice on vacation—well, you’re in trouble, aren’t you?


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