$8 million paid to rail contractors...for nothing!

(2/6/13) – IE Transit Talking Points Short

A Better Inland Empire was shocked to hear that four construction firms who submitted losing bids to the California High Speed Rail Authority received a total of $8 million in taxpayer high speed rail transit money...for nothing! HSR officials argued that this “stipend” of $2 million each was necessary to attract bidders, but such a wasteful payout is virtually unheard of according to those who work in the construction marketplace. This example of government waste shows why support for high speed rail continues to fall.

The Transit Coalition supports high speed rail, but it must be done right. The Coalition’s vision is a cost-efficient statewide intercity high speed rail system that would allow the first of high-speed trains to use existing upgraded commuter and intercity rail corridors--using a combination of electrification, separated grade crossings, positive train control, and/or upgraded rail cars--while improving speeds and travel time for existing train routes. The approved $9.95 billion in public seed money combined with awarded federal funds is more than enough to design and build these upgrades throughout the state which would have allowed private capital to invest in the remainder of the project. However, CHSRA has proposed what is essentially a second rail system for the Central Valley, duplicating existing usable infrastructure and potentially disrupting the agricultural sector. To make matters worse, the agency isn’t prepared to break ground later in July.

According to various sources, CHSRA has yet to acquire ownership of any of the land it needs to build the starting segment in the Central Valley which is very discouraging. Why would any private contractor want to bid on this project when the public agency has yet to purchase the land? Without the $2 million in government "runner-up" giveaways, the risk would be too great in the marketplace.

Moving forward, the state must accept the fact that high speed rail transportation projects need to be both cost-effective and non-disruptive to the communities they serve. There are plenty of opportunities to solicit market bids without handing out stipends: Upgrade the existing San Joaquin Rail Corridor. Connect Los Angeles and Bakersfield with a direct rail line. Separate the grade crossings for the LOSSAN Rail Corridor between LA and Anaheim. Amend the law so high speed rail can be done right. Stop handing out $8 million worth of stipends for nothing.


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