In 2013, when the California High-Speed Rail Authority awarded its first contract for construction of the bullet-train route in Fresno and Madera counties, the cost to move AT&T, PG&E and other utilities out of the way was estimated at about $25 million.
In the five years since, that figure has proven to have been wildly underestimated. Now, the cost to relocate utility components, such as power lines, communication cables and the like, has ballooned to nearly $400 million.
The rail authority’s board, in its recent meeting in Los Angeles, approved adding $40 million to the Fresno-Madera construction contract to keep the work going through the end of June. “There’s critical path work, and this $40 million is a bridge … to allow that work to continue, and to incur delay costs,” said Joe Hedges, the agency’s chief operating officer who joined the authority earlier this year.
Hedges said that through a series of change orders and other developments, the latest estimate of the total cost for utility relocations on the 32-mile segment from north of Madera to south of Fresno is $396 million.
The agency has three active construction contracts for about 119 miles of its rail route through the Valley, from Madera to north of Bakersfield. The Valley segments are supposed to form the backbone of what is ultimately planned as a system connecting San Francisco and Los Angeles, by way of Fresno and the Valley, with electric trains traveling at up to 220 mph.
The $40 million addition approved last week for utility relocation approved is being pulled from the yet-to-be-spent budget for the future construction of the actual rail tracks for the entire 119-mile Valley section. Much of what Hedges described as critical work to ensure that construction isn’t delayed involves PG&E utilities in the Fresno area.
The original $1 billion contract award in mid-2013 to Tutor Perini/Zachry/Parsons, the prime contractor for the Fresno-Madera section, included an extra $53 million in “provisional sums” that a contractor could not be expected to predict in their bid. For utility relocation, that amount was tabbed at $25 million. Within months, however, that figure began to climb, and the rail agency increased its allowance for utility relocation to almost $69 million — $18.4 million to relocate AT&T communications equipment at 54 locations in Fresno and Madera, and up to $50.4 million to move gas and power lines at 85 locations.
Hedges, responding to a question from authority board member Daniel Curtin, said he wasn’t sure how the $69 million estimate from September 2013 was reached by the agency’s planners. “I’m assuming that of all of the relocations of the utilities, that the scope was significantly underestimated,” Hedges said.
“Yeah, I’d say so,” Curtin replied.
Former state Transportation Secretary Brian Kelly, who recently took over as the authority’s CEO, explained that the utility work is the responsibility of the prime contractor, but is subcontracted to companies that AT&T and PG&E have approved for such tasks. Between change orders, penalties for delays in acquiring needed right-of-way property for construction, and increases in the sums for relocating utilities, the budget for the Fresno-Madera construction section has grown from about $1.2 billion in 2013 to nearly $1.5 billion now.
Rising costs have been an ongoing challenge for the rail authority and provided fuel for critics such as Assemblyman Jim Patterson, R-Fresno, who say the program is out of control and careening off the rails. Earlier this year, one of the agency’s chief consultants said total costs to completion of the entire 119-mile Valley sections are estimated at $10.6 billion – a jump of $2.8 billion from the rail authority’s 2016 estimate of $7.8 billion.
In addition to higher utility relocation costs, Roy Hill — a consultant serving as chief program officer for the authority — said about $725 million of the cost increase is because of delays in right-of-way acquisition, having to buy more property than originally forecast, and paying more than expected for individual pieces of property. Rising prices for construction materials and a requirement to build intrusion barriers between the high-speed train line and adjacent freight rail routes are other factors adding to the cost.
Tom Fellenz, the authority’s chief legal counsel, said that of more than 1,900 land parcels that the agency has identified as necessary for construction in Madera, Fresno, Kings, Tulare and Kern counties, the agency has yet to acquire 607.