Strike Two for Calif. High Speed Rail: Setback by Surface Transportation Board

After suffering a major setback from a court decision that prevents the authority from selling $10 billion in voter-approved bonds, a key federal agency has ruled that the authority must comply with environmental regulations before laying tracks.

"In another key setback to the California bullet train project, federal regulators have rejected the state's request to exempt a large Central Valley segment of proposed track from a lengthy planning review," writes Ralph Vartabedian. 

The action affects part of a 29-mile rail section to be built near Fresno, where state officials have already awarded a construction contract. The decision is likely to complicate, delay and substantially drive up the cost on that initial $1-billion package of work.

The rejection from the Surface Transportation Board, the successor agency to the Interstate Commerce Commission, "marks the second time in nine days that the rail agency's planning process has been rejected by authorities". As we noted on Nov. 26 a Sacramento Superior Court's "invalidation of the project's financing plan has put its future in doubt".

Related to that court ruling, Vartabedian writes that "the federal board's vice chairman Ann Begeman issued a statement calling for a comprehensive analysis of the project's "financial fitness." She added, "Today's decision acknowledges the growing controversy regarding California's bond funding process."

The ruling potentially affects the California High Speed Rail Authority's construction contract with Tutor Perini Corp. (and the topic of a prior post). However, "(a)n authority representative said there was no plan to renegotiate the contract... because it has until July 2014 to get the clearance from the board without renegotiating the deal." 

The setback not only affects the authority, but also a broader goal: President Obama's "vision for high speed rail", the topic of a Dec. 5 piece by Sam Stein in The Huntington Post.

Full Story: California bullet train project handed another setback

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