Add another half-billion dollars to the pile of overrunning costs for California’s incomplete and currently useless High-Speed Rail project.
The state is preparing to shell out a record-breaking $537 million to a key contractor over a costly lawsuit related to work delays.
The California High-Speed Rail Authority greenlit the highest payout in the project’s history to contractor Dragados-Flatiron Joint Venture to resolve a bitter fight over hundreds of change order requests that they say cost them money and time as the project dragged years past an initial launch date.
Gov. Gavin Newsom’s project only entered the “track-laying phase” for a limited Central Valley segment this year.
Critics were also irate over an effort by Newsom and Assemblymember Lori Wilson that would allow the rail project’s Inspector General to withhold reports from the public if they describe or reveal “weaknesses” about the project.
Newsom’s office argued the move to hide records would only bring the rail watchdog in line with other agencies in the state.
“The limited instances in which something would be deemed confidential would include information security and physical security — which could be exploited by individuals attempting to harm the interests of the state or inappropriately benefit from the project,” a spokesperson wrote in an email.
“I think its interesting that the governor left out of his press conference [last week] that perhaps one of the largest settlements ever, $500 million, was paid to a construction company because we failed to comply with our contract — delay related,” said Assemblymember Alexandra Macedo, who has blasted the fast rail project as a expensive boondoggle.
Dragados Flatiron Joint Venture oversees the design-build for a 65-mile route located within Fresno, Tulare and Kings counties, according to KCRA.
The contractor has claimed that land acquisition issues, design changes and other problems have cost them a fortune — submitting 597 “change orders” requesting revisions to their roughly $1.2 billion original contract since the project got started, per KCRA.
The rail authority’s board quietly approved a settlement on Jan. 21 that increases the contract value by $537 million to resolve many of the contractor’s claims.
Newsom visited the Central Valley last week to “celebrate” what he described as a milestone for the rail project — and was quickly blasted by critics who call the troubled rail project a boondoggle that’s costing taxpayers $215 million per mile with no end in sight.
Newsom and legislators last year committed $1 billion annually through 2045 to the project through the state’s cap-and-trade program.
“Taxpayers continue to be swindled. Out of control costs, delays and mismanagement, it is time for the governor to redirect the billion dollars he committed to the high-speed FAIL to pay for projects that actually improve people’s lives in the Central Valley,” Macedo added in a text message.
The High-Speed Rail Authority did not immediately respond to a request for comment about the $537 million settlement.
