While the California’s high -speed railway authority awaits the word of the Trump administration on its future train support, the leaders who oversee the project sounded the alarm on its financial viability.
The Board of Directors of the Authority voted on Thursday to approve contracts for the development of conceptions of the Central Valley station and to solicit and approve construction offers for the Fresno station. Before the votes, the member of the board of directors James Ghielmetti raised concerns concerning the potential loss of funds from the Ministry of Transport and the risk of progressing on payment commitments when federal funding is in danger.
“I am very nervous with the idea of receiving federal funding,” said Ghielmetti. “I want to make sure that my colleagues members of the board of directors are aware that if federal money does not take place, someone must be supported by these contracts.”
The authority staff said that contracts include termination clauses if there is not enough money and that emergency funds existed to compensate for a deficit if funding fell. Ghielmetti argued that the termination of any contract would only move the project further and stressed that if the objective was to return on time, these funds must exist.
The Board of Directors is made up of nine members, each, of the four -year mandates, responsible for approving policies related to companies, finance and project strategies. The member of the Board of Directors, Martha Escutia, echoes Ghielmetti’s concerns and said that a financial plan was to be cemented while the board of directors continues to vote on the way the money will be spent.
“We are obviously in difficulty,” she said.
The Ministry of Transport launched an examination of the compliance of the project in February following calls for a survey by republican legislators on delays and costs. The examination focuses on a promise of $ 4 billion made under Biden administration for Construction in the central valley.
The project, which initially decided to connect Los Angeles to San Francisco via the train by 2020, is $ 100 billion on its original budget and late years – a problem which, according to rail experts, will only worsen if the financing pool is narrowed. Transport Secretary Sean Duffy described it as a “shit project” and said that the reports would analyze if the expenses were aligned with the Authority’s agreements on the US government.
The authority has provided documents and soon expects conclusions.
About 14 billion dollars were spent on the project, said Chairman of the Board of Directors Tom Richards. Most of this funding – 82% – was provided by the State; The remaining 18% was granted by the federal government. About $ 4 billion is at the bank, said Richards.
Despite uncertainty about federal funding, CEO Ian Choudri said the immediate objective was to finish construction along a 119 trend between Madera and Shafter in the Central Valley. Choudri, who took the role of CEO last year and reports to the board of directors, also said that private sector investment will be the key to the future of the project. Pending state approval, he hopes to have a financial plan in place by the end of the summer which would include this relationship.
The idea of the need for the project of public-private partnerships and dependence outside the government is a person who was launched during meetings of the Board of Directors and was regularly raised by members of the Committee appointed by the State which advises the Board of Directors.
Even with this support, Choudri said it could take about two decades before the end of the train.
California Daily Newspapers
