Costs rise for moving utility lines in construction of bullet train

The relocation of existing power and data wires to clear way for the California bullet train in the Central Valley is proving to be more risky and difficult than expected, costing tens of millions of dollars more than was projected only several months ago in Tulare, Kings and Kern counties.

The high-speed rail authority’s board approved a prospective $348-million contract Tuesday for a team led by the Spanish construction giant Ferrovial to build an additional 22 miles of rail structures.

But the amount does not include an estimated $107 million in additional work that was pulled out of the contract last year to relocate utilities along the route.

As recently as last October, the cost of those utilities relocations was estimated at $35.1 million, according to an addendum to state bidding documents. As of last May, the utility relocations were supposed to be fully included in the contract, the documents show.

The cost of building the 22 miles, including the utility work and hazardous material removal, totals about $450 million, which appears to fall in the middle of the $400-million to $500-million estimate that state officials made last May, the documents show.

So while costs for utilities have jumped, the overall cost for the 22 miles is not busting through estimates.

Rail officials have asserted, including as recently as Tuesday, that the Ferrovial bid came in below its estimate, part of a long-standing narrative that aggressive bidding by the construction industry is holding down building costs in the Central Valley.

Critics of the bullet train project, however, dismiss such estimates as irrelevant and say that the state’s accounting system is not providing a transparent picture of whether the overall cost of building the Central Valley segment is staying within the roughly $6-billion budget for the work.

In addition to the design and build contracts, the Central Valley work includes management fees, land purchases, utility work, legal fees and many other categories of expenses.

“I have seen nothing that shows how they are performing against their budget,” said Elizabeth Alexis, co-founder of a Bay Area group that has closely monitored spending.

At the same time, other metrics in the project are sending warning signals. The Central Valley work is falling behind schedule, as the state finds it far more difficult than expected to acquire land along the right of way for the future tracks.

A just-released operations report by the rail authority shows it has acquired 376 of the 711 parcels it needs for the first 29 miles of the route from Madera to Fresno, well below the 518 parcels that were expected to be in hand by now.

The vote to approve Ferrovial for the job will allow rail agency staff to negotiate a final contract. The Ferrovial team includes the Spanish engineering firm Euroestudios and the Houston engineering firm Othon Inc. Spanish firms are leading two of the three teams that have won contracts so far.

Exactly why the utility relocations are costing about 25% of the entire construction cost of the 22 miles of track structures in Kings, Tulare and Kern counties was not made clear Tuesday at the board meeting, but officials suggested that the authority had underestimated the difficulty of the job in other segments.

The decision to take the utility relocations out of the contract was based on a lack of information to accurately estimate the cost, not only for state officials but for companies bidding for the work, according to state engineering chief Scott Jarvis.

The newest construction segment, which runs just north of the Tulare and Kings county border to just north of the city of Shafter, shows some of the difficulty in predicting costs.

A San Francisco attorney representing SunnyGem, one of the state’s largest almond processing companies, told the board Tuesday that his efforts to set a meeting with senior state rail officials have been “ignored.”

Attorney Ivor Samson said the rail route would cut through crucial pieces a 200,000-square-foot almond plant in Wasco, which would cost tens of millions of dollars to replace.

Samson said that the decision by the state to open a supplemental environmental review of the segment to reconsider the route through urban Bakersfield should open up reconsideration of the rail’s impact on the almond plant.

Board Chairman Dan Richard acknowledged that he had meant to set up a meeting with Samson during December and would promptly schedule a meeting.