On Monday afternoon, the Assembly Transportation Committee held an informational hearing to review the California High Speed Rail Authority’s recently revised Business Plan for a multi-billion dollar train network stretching from San Diego to San Francisco. The hearing was packed with elected officials and residents who are increasingly worried about the Authority’s ability to manage this complex project.
What they heard didn’t calm anyone’s nerves.
The Legislative Analyst’s Office (LAO) presented a scathing review of the business plan that questioned the legality of the Authority’s approach. Their analysis highlighted the Authority’s inadequate and incomplete discussion of risk associated with ridership and funding and its uninformative implementation timeline. Here are a few excerpts from the LAO’s analysis:
The plan contains no discussion of the authority’s plans or processes to (1) identify potential threats or (2) manage, respond, and mitigate those threats. The plan only states that the authority “believes it is aware of all existing threats and is taking the appropriate steps to prevent or mitigate those threats.” (p. 4)
Ridership Risk. The plan addresses the risk of incorrectly forecasted ridership with one sentence, stating the risk “would be mitigated by policies that continue to draw people to reside in California and encourage high-speed rail as an alternative mode of transportation.” (p. 6)
Funding Risks. To avoid the risk of failing to win credit approval from investors, the Authority’s strategy is “to clearly communicate the project and obtain up-to-date feedback.” (p. 6)
Overall Market Risk. To mitigate the risk that financial markets shut down and stop lending, the Authority “has to continually monitor the market and develop strong back-up strategies such as project segmentation.” (p. 6)
Government Funding Risk. The Authority plans to avoid the risk that governments are not able to follow through on their commitments “by carefully assessing how each government funding source affects the build-out of each segment.” (p. 6)
The LAO’s critique of the Authority’s risk analysis is particularly telling because it demonstrates that the Authority is still focused on promoting the project instead of creating the solid foundation to get it built. We’re hopeful that increased legislative oversight can help guide the Authority toward a real path for moving forward.