February 12, 2019 / 8:22 PM / 4 months ago

California to scale back $77 billion high-speed rail project: governor

(Reuters) - California Governor Gavin Newsom said on Tuesday the state will dramatically scale back a planned $77.3 billion high-speed rail project that has faced cost hikes, delays and management concerns, but will finish a smaller section of the line.

“Let’s be real. The current project, as planned, would cost too much and respectfully take too long. There’s been too little oversight and not enough transparency,” Newsom said in his first State of the State Address to lawmakers on Tuesday.

“Right now, there simply isn’t a path to get from Sacramento to San Diego, let alone from San Francisco to L.A. (Los Angeles). I wish there were,” he said.

Newsom said the state will complete a 119-mile (191 km) high-speed rail link between Merced and Bakersfield in the state’s Central Valley. In March 2018, the state forecast the costs had jumped by $13 billion to $77 billion and warned that the costs could be as much as $98.1 billion.

Newsom said he would not give up entirely on the effort and will continue to seek additional funding.

California planned to build a 520-mile (826.8 km) system in the first phase that would allow trains to travel at speeds of up to 220 miles per hour (354 kph) in the traffic-choked state from Los Angeles to San Francisco and begin full operations by 2033.

“Abandoning high-speed rail entirely means we will have wasted billions and billions of dollars with nothing but broken promises, partially filled commitments and lawsuits to show for it,” Newsom said. “And by the way, I am not interested in sending $3.5 billion in federal funding that was allocated to this project back to Donald Trump.”

U.S. House Transportation and Infrastructure Committee Republicans cited a recent Democratic clean energy proposal in noting the project’s demise, tweeting that “the plug gets pulled on the frequently delayed, over-budget San Francisco-LA (high-speed rail) project. Reality: 1, #GreenNewDeal: 0.”

A state audit issued in November said California’s High‑Speed Rail Authority’s “flawed decision making and poor contract management have contributed to billions in cost overruns and delays.”

The Obama administration awarded the state a total of $3.5 billion in 2010 and California voters in 2008 approved nearly $10 billion in bond proceeds. The U.S. Transportation Department’s inspector general’s office noted in August 2018 that the state had only identified $30.7 billion in funding, or less than half the project’s needs.

A spokesman for U.S. Transportation Secretary Elaine Chao did not immediately comment.

FILE PHOTO: California Democratic gubernatorial candidate Gavin Newsom speaks after being elected governor of the state during an election night party in Los Angeles, California, U.S. November 6, 2018. REUTERS/Mike Blake

Newsom said the state will finish environmental reviews from San Francisco to Los Angeles, “connect the revitalized Central Valley to other parts of the state, and continue to push for more federal funding and private dollars. But let’s just get something done.”

The governor also said he will name his economic development director, Lenny Mendonca, to chair the High-Speed Rail Authority, and vowed new transparency and to hold contractors and consultants accountable to explain how tax dollars are spent.

“I’m not interested in making the same old mistakes,” Newsom said.

Reporting by David Shepardson in Washington; editing by David Gregorio, Tom Brown and Bill Berkrot

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