California high speed rail: an exercise in constantly moving goalposts

The California High Speed Rail Authority has started construction in the Central Valley. How is it going?

Our own analysis says it is 3 years late and at least 20% over the original budget.  The Authority tells everyone that everything is coming in under bid. At first glance, this seems right. The contract bids are lower than engineer’s estimates. Great, except for one thing. The engineer’s estimates are for an entirely different scope of work than the actual contract bids.

In the case of “CP 1”, the first 29 miles of civil construction, the original estimate included all the utility work, the $200 million to move a 2 mile segment of highway 99 in Fresno and several other large projects. By the time the bids came in, these items had been taken out of the scope of the design-build contract and awarded to different vendors.

In a normal world, the engineers estimate would have been adjusted to account for the reduced work in the design-build contract. But this is no normal place – this is the land of California High Speed Rail where goal posts are moved every time anything doesn’t go according to plan.

The latest example of this can be seen in the update the agency provided to the legislature.

The construction spend rate for this fiscal year (important to make sure that federal construction funds are spent before they expire in 2017) looks okay.

arra burn rate

 

 

 

 

 

In reality, the Authority will spend less than half the money they had forecast at the beginning of the fiscal year (July 1, 2015).

They should be seriously in the red zone- and someone should be in trouble. They will not spend more than $1.6 billion which was the forecast – the number will be less than $800 million.

 

June funding plan

 

 

 

 

 

 

 

Instead of using the forecast from the beginning of the fiscal year as the baseline spending amount, the legislative update uses the December 31 forecast which was finalized at the same time as the actual spending figures they have for this metric.

Dec funding plan

 

 

 

 

 

 

 

It is easy to meet your forecast – when you change the forecast to meet reality. For the rest of us, however, it makes keeping score very difficult.

 

June 2015 funding plan

December 2015 funding plan

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