cahighspeedrail.ca.gov

California’s $43 billion high-speed rail project may be doomed to failure unless its management and finances are revamped, a strongly worded report from the state’s nonpartisan analysts has found.

In the report, released Tuesday, the Legislative Analyst’s Office recommended that the Legislature strip decision-making power from the High-Speed Rail Authority board and transfer day-to-day responsibilities to the state Department of Transportation, Caltrans.

“We have concluded that the current governance structure for the project is no longer appropriate and is too weak to ensure that this mega–project is coordinated and managed effectively,” author Eric Thronson wrote. It also fails to ensure that the state's best policy and fiscal interests are taken into account, the analysts found. “A new and separate division of Caltrans dedicated to the high–speed rail project would be better positioned, if equipped with the appropriate project delivery tools, to manage the development of the system in this phase,” the report said.

The analysts also issued a stark assessment of the project’s finances: the initial phase connecting San Francisco to Anaheim is likely to cost much more than the $43 billion initially estimated; the availability of funding necessary to complete the new system is “highly uncertain”; and there are too many restrictions on how and when the rail authority can spend the $3 billion in federal funds it has already received for construction.

If those problems aren’t addressed, the report suggests the state would be better off ditching the project altogether.

“We believe the state must obtain relief from the current federal restrictions on the project if it is to be developed successfully, and therefore that the Legislature should proceed with the project only if this flexibility is obtained from the federal government,” the report said.

The analysts also recommended that the Legislature pare down expenses during the present, early phase of the project by rejecting a proposed $185 million in spending on public outreach and project management in the 2011-2012 budget, instead allocating only the $7 million needed for administration.

California voters in 2008 approved Proposition 1A, authorizing the sale of $9 billion in general obligation bonds to pay for the high-speed rail system.