California to Break Ground on High-Speed Rail by February

The California High-Speed Rail Authority may break ground for its $68 billion bullet-train system between San Francisco and Los Angeles in January or February, Chairman Dan Richard said.

The state is buying land and rights-of-way for the first high-speed rail system in the U.S., with trains running as fast as 220 miles (354 kilometers) an hour.

“In the January or February timeframe is when we will see actual physical construction out there,” Richard told reporters today in Sacramento, where the board was meeting.

California voters approved $10 billion in municipal bonds for the project, initially set to break ground at the end of 2012. The latest in a series of delays came Dec. 3, when a federal regulator rejected early approval for a segment of the system. Last month, a judge said the state had to rewrite its business plan before it can issue $8 billion in bonds.

The high-speed rail authority signed a $1 billion construction contract in August for the first 29 miles of the system with a joint venture among Tutor Perini Corp. (TPC), Zachary Construction Corp. and Parsons Corp.

“This is a design-build contract, so when I say we are in the construction phase, I mean that the first contract has been issued and what that contractor is doing right now is the design,” Richard said. “That’s the first part of their contract, which is why you don’t see a bunch of people out there, but the work is under way.”

Project Review

The Surface Transportation Board in Washington, the chief economic regulator of railroads, has approved construction on 24 miles. Its refusal to speed up a review of the further 5 miles may force a renegotiation of the contract, which could increase costs and delay the project, the authority said yesterday.

California is the only state looking to build a high-speed rail network. Congress cut off funds for such projects in 2012. The federal government had already allocated more than $3 billion to the California authority.

Trains are slated to begin making three-hour trips between the California cities by 2029.

To contact the reporter on this story: Michael B. Marois in Sacramento at mmarois@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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