Change Orders and Cost Savings In the Central Valley

Feb 7th, 2016 | Posted by

So far, the costs of building high speed rail have come in under budget, going by the contracts issued so far for construction segments in the Central Valley. That’s a very good sign for a project that critics deride as a costly boondoggle.

But many of those critics think the real bill is yet to come. If we just wait, they say, we’ll see costs soar once change orders roll in from the contractors.

The Fresno Bee’s Tim Sheehan took a look at this issue and found that, so far, the predictions of change order doom haven’t materialized:

For the first chunk of construction on California’s ambitious high-speed train program, a 29-mile section between the south end of Fresno and the northeastern edge of Madera, the authority established a contingency allowance of about $160 million for unforeseen costs over the awarded contract of about $1 billion to design and build the segment.

Through late January, about $14.1 million in change orders submitted by the contractor have been approved by the agency – and that includes some $5.3 million already included in the budget for dealing with asbestos and other hazardous materials along the route.

Leaders with the rail authority assert that they’re doing everything they can to keep a lid on costs, and that they’re confident in their ability to minimize the effect of change orders on the project’s budget and schedule. They point out that almost $11 billion is embedded in the statewide project budget as a contingency allowance.

So far, everything is going as expected. The change orders are well within the budget – and more importantly, not all of them are being accepted. It’s not as if the contractor can just submit a change order and it’s automatically adopted. The California High Speed Rail Authority is being very assertive in how it deals with them:

Others, however, have been rejected by the authority. “For instance, on a viaduct, we wanted the contractor to design them to accommodate the future installation of (sound-buffering) walls,” Morales said. “The contractor said that wasn’t specified in the contract and submitted it as a change order.” The dispute went to a three-member arbitration panel – a provision of the contract – which ultimately ruled in the state’s favor.

This all strikes me as a well-designed, well-planned, well-managed project that is likely to come in at or under budget, especially considering the contingency funds that have been set aside. Most of the delays facing the project stem from legal proceedings initiated by project opponents, and I’ll have more on that later this week.

But not everyone is convinced things are going smoothly. Our friends at Californians for Responsible Rail Design, a group of Palo Alto-based project critics, read Sheehan’s article a bit differently:

While I suppose that’s possible, there’s no actual evidence to support this speculative claim.

Building HSR in the Central Valley is, from a technical perspective, the easy part. The more challenging sections come in tunneling under the mountains to get from the Valley to the coast. If any part of this project is going to have major cost overruns, it’ll be in those tunnels.

But if the CHSRA can continue doing a good job managing project costs and change orders in the Central Valley, that is a good indicator that they will indeed be able to bring this project in on budget. Dan Richard has already signaled that it may not come in on time, but that’s largely due to political and legal factors outside their control. When it comes to things they do control, they’re doing an exemplary job.

Obama Proposes $10 Fee on Every Barrel of Oil for High Speed Rail

Feb 4th, 2016 | Posted by

Well this certainly is an out of the blue yet incredibly welcome surprise:

President Barack Obama is about to unveil an ambitious plan for a “21st century clean transportation system.” And he hopes to fund it with a tax on oil.

Obama aides told POLITICO that when he releases his final budget request next week, the president will propose more than $300 billion worth of investments over the next decade in mass transit, high-speed rail, self-driving cars, and other transportation approaches designed to reduce carbon emissions and congestion. To pay for it all, Obama will call for a $10 “fee” on every barrel of oil, a surcharge that would be paid by oil companies but would presumably be passed along to consumers….

The biggest chunk of Obama’s proposed new spending, about $20 billion a year—roughly equivalent to the EPA and Interior Department budgets combined—would go to “enhanced transportation options,” especially alternatives to driving and flying. That would include subways, buses, light rail, freight rail modernization projects, and a major expansion of the high-speed rail initiative that Obama launched in his 2009 stimulus bill.

That’s more than enough to complete high speed rail from San Francisco to Los Angeles, even if California got just $1 or $2 billion of that each year.

Now would be a pretty good time to impose such a fee. The price of oil has collapsed over the last year, currently trading just above $30/bbl. Impose a $10/bbl fee now and drivers won’t notice – especially since this would be phased in over time.

There’s really nothing else to say here except two things:

1. Why didn’t they propose this in 2009 when it actually could have passed – and when prices were already low?

2. Sweet glorious god, this proposal is amazing and even if it is 7 years late, I’ll take it.

Sure, the Republican Congress won’t pass it. But there’s no guarantee that they’ll be in control in 2017. And even if they were, this is still a good thing to propose. We need big, bold ideas to solve our oil dependency and transportation needs, and in his final year in office, Obama has delivered.

Acton Resident Installs Fake Cemetery along HSR Route

Feb 2nd, 2016 | Posted by

This is taking NIMBYism a bit far, if you ask me:

A cemetery — which some residents called fake — popped up on an Acton property right in the path of where a high-speed rail was proposed, which raised eyebrows of residents who said they believe the entire thing is a ruse to stop the rail project.

Google Satellite Map images of the property from 2016 did not show any tombstones as of Monday.

As the story explains, the property owner originally got the tombstones from the Whittier Historical Museum, and that they came from an old cemetery in Whittier that had been abandoned since the 1950s. The property owner seems to have originally installed them as either a prank on his kids or as a way to get film producers to the area.

But when he realized that one of the proposed HSR routes between Palmdale and Burbank went through his property, he decided to use the “cemetery” as a way to try and stop the project.

It won’t work, of course, since the “cemetery” is fake. This guy is nothing but an attention-seeker. But I wouldn’t be surprised if other HSR opponents try to run similar scams in their desperate attempt to prevent the project from being built.

Two New Members Appointed to CHSRA Board

Jan 28th, 2016 | Posted by

The California High Speed Rail Authority got two new board members this week. Lorraine Paskett was appointed to fill a vacancy created when Jim Hartnett stepped down nearly two years ago, and former Assemblymember Bonnie Lowenthal was appointed to fill a vacancy created when Thea Selby was elected to the City College of San Francisco board this past November. (Congratulations, Thea, though you’ll be missed on the CHSRA board!)

Some background on each, courtesy of the CHSRA’s news release:

Lorraine Paskett is an attorney and CEO of Cambridge LCF Group, and Paskett Winery. She brings over 25 years of experience on water, energy and environmental issues. She is also currently serving on the Board of Directors for the Metropolitan Water District of Southern California and was previously a Senior Assistant General Manager of Sustainability Programs and External Affairs at the Los Angeles Department of Water and Power. In addition, she was previously a director for a private electric and gas utility, and served as vice president for a large solar energy company developing business, market, environmental and energy regulatory compliance plans for California.

Paskett was the Senate’s appointment to the board, and her background at the DWP and MWD gives her a lot of experience in big government bureaucracies – which I see as a plus for the CHSRA board.

Former Asm. Lowenthal probably needs less of an introduction, but you’re getting one anyway:

Bonnie Lowenthal was elected to represent Assembly District 54 (subsequently Assembly District 70) in 2008 after serving two terms on the Long Beach City Council, two terms on the Long Beach Unified School District, and on the Alameda Corridor Transportation Authority and the Metropolitan Transportation Authority. Ms. Lowenthal was appointed chair of the Assembly Committee on Transportation in 2010 by then-Speaker John A. Perez, becoming ex-officio member of the California Transportation Commission, where she oversaw public investment in highway, passenger rail and transportation projects. Ms. Lowenthal termed out of the Assembly in 2014.

She was appointed by outgoing Assembly Speaker Toni Atkins. Lowenthal did some great work in support of the HSR project while in the Assembly, killing a GOP anti-HSR bill and passing a bill to speed up land acquisition. Lowenthal had run for mayor of Long Beach in 2014, but did not get elected. Her service on the board should be particularly helpful to the Authority’s relationships with the Legislature.