High-Speed Rail

High-speed rail board awards third San Joaquin Valley construction contract

Photo illustration of a high-speed-rail train cruising through downtown Fresno.
Photo illustration of a high-speed-rail train cruising through downtown Fresno. Fresno Bee Staff Photo

The California High-Speed Rail Authority board Tuesday awarded a three-year contract valued at $444.3 million for design and construction of the third segment of the rail line in the San Joaquin Valley.

Tuesday’s 6-0 vote by the rail agency’s directors authorizes CEO Jeff Morales to negotiate and finalize a contract with California Rail Builders for a 22-mile stretch of the bullet-train route from the Tulare-Kern county line to Poplar Avenue in Shafter, northwest of Bakersfield. California Rail Builders submitted the lowest-cost bid among four proposals by firms competing for the job.

California Rail Builders is led by Ferrovial Agroman US Corp., an American subsidiary of Spain’s Ferrovial S.A., and augmented by Eurostudios, a Spanish engineering company, and Othon Inc., a Houston engineering and environmental consulting firm. Ferrovial has extensive experience in infrastructure construction in the United States and around the world, including work on high-speed rail lines in Spain, Turkey, Algeria and Columbia.

$347.5 millionLow bid submitted by California Rail Builders

$444.3 millionContract value, including money for utility relocation

The California Rail Builders/Ferrovial Agroman bid came in at $347.5 million, well below engineers’ estimates of $400 million to $500 million. The rest of the contract value comes from an estimated $107 million to cover the costs of protecting or relocating utilities owned by Pacific Gas & Electric Co., AT&T and Level 3 Communications.

The contract covers construction of the route up to the railbed in both at-grade and elevated areas, as well as relocating four miles of existing freight tracks, crossings for waterways and wildlife, and some road overpasses to carry traffic over the new line.

Once a contract is executed, it will extend work being done by construction teams that have contracts for nearly 100 miles of rail line in the San Joaquin Valley, stretching from Avenue 17 northeast of Madera to the Tulare-Kern county line.

The first contract, for just under $1 billion, was awarded in mid-2013 to Tutor Perini/Zachry/Parsons for a 29-mile segment from Madera to the south edge of Fresno. The second contract, for about $1.4 billion, was awarded a year ago to Dragados/Flatiron, a joint venture of two construction firms, and covers about 65 miles from American Avenue south of Fresno to the Tulare-Kern county line.

Construction will start later this year on the second contract south of Fresno. Work is under way on the Fresno-Madera segment, but is running well behind the original schedule. Scott Jarvis, the rail authority’s chief engineer, said delays in buying or acquiring the land needed for the railroad right of way has meant slow progress.

But, he added, the authority is slowly catching up on delivering the land needed by the contractor for substantial construction to happen.

We are getting to a point where we have a critical mass to start construction at multiple locations (in the Fresno-Madera area).

Scott Jarvis, chief engineer, California High-Speed Rail Authority

“We are getting to a point where we have a critical mass to start construction at multiple locations” in the Fresno-Madera section, Jarvis told the board’s finance & audit committee before Tuesday’s board meeting. “Right of way is no longer hindering (the contractor’s) capacity to start construction.”

The anticipated completion date for the Fresno-Madera section remains mid-2018, said Jarvis. But that date could be pushed back into 2019 as the rail authority and the contractor negotiate possible changes to address the late start in construction caused by the slow pace of land acquisition.

Land purchase for the section between Fresno and the Tulare-Kern line is ahead of schedule, Jarvis added, keeping the schedule on pace for completion of construction in mid-2019.

One final construction package is expected to include laying rails along the entire Madera-Shafter route through the Valley. Lisa Alley, an authority spokeswoman, and Jarvis said that contract could also include other components needed to test and operate a train system, including the electrical system to power the trains, signal and safety systems and communications. Jarvis said the authority may be able to seek proposals for that contract by the end of this year.

So far, the winning bids for all three design/construction contracts in the Valley have all come in significantly below engineers’ estimates. Cumulatively, the authority estimated that the three sections would cost between $3 billion and $4 billion; the total of the winning bids for the three contracts add up to less than $2.6 billion, not counting add-ons allowed for hazardous waste cleanup or utility relocation work.

The project continues to face considerable obstacles, however, from legal challenges to political opposition to questions about its ongoing financial resources. The rail authority has about $6 billion for construction in the Valley, including about $3 billion in federal stimulus and transportation funds and $3 billion from Proposition 1A, a high-speed rail bond measure approved by California voters in 2008. It is also receiving a share, estimated at about $500 million a year, from the state’s greenhouse-gas reduction program funded by the sale of industrial pollution credits.

But the available money is a far cry from the $68 billion that the agency forecasts as the cost to build Phase 1 of its statewide system linking San Francisco and Los Angeles with trains capable of traveling at up to 220 mph through the Valley.

Bidding competition

The California High-Speed Rail Authority received five bids for its Construction Package 4, a 22-mile section from the Tulare-Kern county line to Shafter. One proposal was disqualified for not providing required financial documentation.


Technical score (30 max.)

Proposed price

Price score (70 max.)

Total score (of 100)

California Rail Builders


$347.5 million



Salini Impregilo/Security Paving Joint Venture


$377.1 million



Dragados/Flatiron Joint Venture


$461.9 million



Tutor Perini/ Zachry/Parsons


$581.9 million



Central Valley Connection Builders

Disqualified - not scored