Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Rail Regulator Deceived Congress, California’s Denham Says

The California High-Speed Rail station in San Jose, California is seen in this artist rendering. Source: California High-Speed Rail Authority via Bloomberg
The California High-Speed Rail station in San Jose, California is seen in this artist rendering. Source: California High-Speed Rail Authority via Bloomberg

Jan. 5 (Bloomberg) -- The top U.S. railroad regulator was accused by a House member from California of misleading Congress to promote the state’s proposed high-speed train network, which President Barack Obama’s administration supports as cost estimates escalate.

Representative Jeff Denham, a Republican, yesterday released a letter from California’s top legislative analyst to Federal Railroad Administrator Joseph Szabo saying the regulator “egregiously misstated the facts” in telling a House committee hearing Dec. 15 that his agency had “not one conversation” with analysts reviewing the rail project.

“This is one more example of how the administration wants this project at any cost,” Denham said in a news release on his website. “What else does the FRA know that they are hiding from taxpayers?”

California has been the largest beneficiary of Obama’s U.S. passenger-rail initiative, receiving $4.2 billion of the $10.1 billion handed out since the program’s creation in 2009. The Republican governors of Ohio, Wisconsin and Florida together gave back $3.6 billion, citing concerns their states would have to cover cost overruns.

A panel sponsored by the California legislature on Jan. 3 recommended the state not proceed with the sale of $2.7 billion in bonds to start building the 800-mile network, now projected to cost $98.5 billion.

Turning Over Records

The House Transportation and Infrastructure Committee on Jan. 3 asked the railroad administration to turn over all records of its communications with the California Legislative Analyst’s Office, a nonpartisan group that provides fiscal and policy advice to state lawmakers. In May, the office criticized the California High-Speed Rail Authority’s management of the project and raised concerns that the state hadn’t secured most of the needed money.

Szabo voiced concerns that legislative analysts didn’t consult with agency leaders as they worked on their report about the rail project, Michael Murray, a spokesman for the U.S. Department of Transportation, said in an e-mail yesterday.

While there were “staff-level conversations” regarding program guidance and environmental rules, the California analysts “never contacted federal FRA leadership for input on the project as a whole,” Murray said.

Europe, Asia

California’s proposed 220-mile-per-hour service connecting the San Francisco Bay area and Los Angeles is the only U.S. project that proposes to operate trains at speeds comparable to those in Europe and Asia.

The project is flawed by a lack of long-term funding commitments, the Jan. 3 report by the California High-Speed Rail Peer Review Group said. Demand forecasts haven’t been subjected to external review and management resources are inadequate, the report said. California’s legislature created the independent group to evaluate the rail plan’s feasibility.

The state’s rail authority in November more than doubled the project’s estimated cost, to $98.5 billion from $43 billion, and said construction would take 13 years longer than initial projections to finish.

U.S. Representative Kevin McCarthy, a California Republican, and 11 other Republican House members wrote to the U.S. Government Accountability Office last month requesting a study of the project’s cost, ridership projections and viability. Eleven Democratic representatives from California on Jan. 3 also requested a GAO study.

To contact the reporter on this story: Lisa Caruso in Washington at lcaruso7@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.