California’s High Speed Rail Loses Some Steam

The light at the end of the tunnel moved further away for California’s high speed rail project on Monday, as a California court’s rulings placed much of the project’s funding in limbo.

In one ruling, in an action brought by the High-Speed Rail Authority and High-Speed Passenger Train Finance Committee to validate the Finance Committee’s decision to authorize issue of over $8 billion in bonds, the court refused to validate the bonds. Two state agencies were involved in the issuance: the Authority, which is charged with building the project and requested the bonds, and the Finance Committee, which is responsible for authorizing the bonds and did so. The court held that the Finance Committee was required by law to rely on evidence other than the bald request by the Authority for the bonds. As noted by the court, “[a]n agency that is specifically assigned to the task of building a project . . . may have a very different view of what is desirable than the public officials who sit on the authorizing committee, whose responsibilities include taking a view of the State’s finances that is broader than a single project.” The court found no other evidence in the record than the Authority’s request and denied validation.

In the second ruling, the court issued a writ of mandate directing the Authority to rescind its funding plan because it had not obtained all required environmental clearances, but declined to order rescission of the existing construction contracts, including the Tutor-Perini-Parsons contract we last blogged about in June.

What these two rulings mean for the future of high-speed rail in California is open for debate. According to the Associated Press’s Juliet Williams, the Authority’s CEO said the Authority did not think that addressing the rulings “will have any material effect on the project.” On the other hand, Ms. Williams also notes the observation of Michael Brady, an attorney for parties suing to halt the project, that “[I]t’s taken them five years to [get environmental clearances for] 28 miles, so how long will it take them to do 300 miles?”