California bullet train contractor slams state delays

Jan. 12, 2021 5 AM PT

One of the state’s top bullet train contractors has sent a scorching 36-page letter to California high-speed rail officials, contradicting state claims that the line’s construction pace is on target and warning the project could miss a key 2022 federal deadline.

The letter, obtained by The Times, alleges that a multitude of problems have remained unresolved for years, including rapid turnover of state officials, continuing delays in obtaining land for the rail and the state’s failure to secure agreements with outside parties, including utilities and freight railroads. The delays will result in idled work sites and layoffs of field workers, says the letter, by construction giant Tutor Perini.

As of mid-November, construction teams can not build on more than 500 parcels in the Fresno area because the California High Speed Rail Authority still lacks possession or proper documentation, according to the Jan. 4 letter. The company has completed all the work that could be done efficiently and as a result is now operating at other sites at a slower pace.

“It is beyond comprehension that as of this day, more than two thousand and six hundred calendar days after [official approval to start construction] that the authority has not obtained all of the right of way…” wrote Tutor Perini Vice President of Operations Ghassan Ariqat to Garth Fernandez, the contracting chief at the state rail authority.

Ariqat said his company “anticipates that it will have to lay off a significant number of its field workers in the very near future” and that it has already let 73 field workers go in recent weeks.

The conditions described by the letter jeopardize the project’s long-range goals, because it is already struggling to complete even a portion of its original vision of a Los Angeles-to-San Francisco bullet train. The letter indicates that delays and cost overruns are poised to grow worse.

In response, rail authority Chief Executive Brian Kelly essentially dismissed the letter, saying in a statement that it “attempts to set out why project challenges are everybody else’s fault.”

“As we do with all contractor claims, our commercial and legal teams will evaluate the letter and provide a full response, including an articulation of where the contractor’s claims are mistaken or otherwise in error.”

Kelly said the authority has worked with Tutor Perini over the last 18 months to achieve a number of benchmarks, including having an average of 344 workers on job sites as of the end of October and completing 92% of the design work for the Fresno segment.

Authority spokeswoman Annie Parker said, “There is little in this letter that we agree with.” In response to questions, she said over the last 18 months the number of workers on the overall job is increasing and “we expect job growth to continue.”

The authority has been insisting for several years that the project’s setbacks were created years ago under prior management and that it was on a path to operating more effectively, but reports of continued problems have never stopped.

Tutor Perini, along with the rail authority’s consultants, share some of the responsibility. Last year, The Times revealed that the company had installed steel cables to support a major bridge under construction, and those cables had rusted and snapped, requiring installation of temporary supports to prevent a collapse.

The letter makes no mention of such setbacks and instead focusing on the state’s role. It asserts that the delays caused by the state rail authority will push completion of the 31-mile segment around Fresno to at least November 2023, nearly a year past a federal deadline under a grant agreement and some six years behind the original deadline. The delays inevitably drive up costs.

And the company is only building about half of what is necessary to achieve completion by November 2023, based on its rate of expenditures, the letter said, and it “is anticipated that the monthly billings will diminish further in the months to come.”

The implication is that additional delays on the Fresno segment will be measured in years, according to a project official who is not authorized to speak to the news media. The other two construction segments in the project are also facing delays.

The letter lists 318 prior communications between the contractor and the state that have sought to highlight or resolve problems. In December, Ariqat called on the state in a brief letter, which The Times obtained, to address structural glitches, saying, “Absent of the authority’s commitment to resolve conflicts and change orders, followed by action, the project will come to a standstill in the very near future.”

The company, which leads the contractor team Tutor Perini Zachry Parsons, did not respond to a request for comment.

The letter clearly presents a different picture of the project than state officials have offered in recent weeks. At its December finance and audit committee meeting, authority officials said the project was making good progress.

“We keep increasing the number of workers on site, which is a good indication of the amount of real work that is taking place,” said Chief Operating Officer Joe Hedges. “It just keeps increasing.”

In addition, Hedges said utility relocations and work on structures were increasing, which was “very, very good news.”

Despite years of troubles, political support for the project remains largely steadfast, state courts have rejected suits seeking to stop the project, and many supporters of a statewide bullet train system are undeterred by the operational setbacks.

Ariqat said the rail authority had issued unreliable reports forecasting when land would become available, making it difficult for the company to plan construction. “The authority’s answer to its unsuccessful efforts to deliver right of way in a timely manner was stop transmitting” the forecasts. The last forecasting report was sent in October 2019, it said.

Tutor Perini won its initial contract in 2013 to build rail structures through Fresno, California’s fifth-largest city and the nation’s most prodigious agricultural county, with a bid of just under $1 billion and later won a small addition for an extension north to Madera. But it could not start building anything for about two years, because the rail authority did not own a single parcel. Equipment was parked at storage lots, while Tutor Perini’s billing meter was running.

Since then, authority executives have acknowledged the mistake and said they would not issue any future contracts for construction until all of the land is obtained beforehand.

Today, the contract amount has jumped to $2.2 billion, mostly because of delay claims and change orders. The current total does not include more than $500 million in change orders that Tutor Perini submitted last year to cover its costs for alleged state-caused problems, according to a senior project official not authorized to speak to the news media.

Parker said the authority does not “comment on contractors’ claims until we have reviewed them on their merits and approved them, at which point they’re also posted publicly on our website.”

The Ariqat letter notes that less than 50% of the 31-mile construction segment under Tutor Perini’s contract has been completed. The original contract anticipated completion by 2017.

The letter notes that the firm has completed 14 bridges, viaducts and other structures and has begun work on six more. But it has not even begun work on 32 structures, mainly because the state has not provided the land.

The 32 structures include 10 major bridges, trenches and viaducts in urban Fresno that would carry east/west vehicle traffic on major city highways over the bullet train tracks. The structures must be built sequentially, because they will shut down the highways and doing them all at once would strangle movement in the city, according to the official.

The letter details how project snags have cascaded. The state, for example, has failed to acquire a piece of land from Smart & Final, a grocery chain, at a city corner, delaying relocation of a gas line. The removal of the gas line in turn has delayed construction of temporary freight track, called a shoofly, for Union Pacific Railroad. The shoofly is necessary to allow construction of underpasses and bridges at three major streets near downtown, the letter said.

The state decided to begin the rail line in the Central Valley, because the flat geography and open farming plots would make it the easiest part to build. But after seven years of work, what was considered the easiest possible launch has turned into an administrative nightmare.

Along the north-to-south bullet train route in Fresno, isolated bridges soar above the city, separated by stretches with no visible construction activity. Graffiti is sprayed on long expanses of the structures. Vacant land on the ground has attracted vagrants. Empty buildings have been vandalized and burned.

President-elect Joe Biden can relieve some of the pressure the Trump administration placed on the project, such as amending the 2022 deadline for building structures.

And Biden could release $927 million in grant money that Trump terminated. But the project would still face the consequences of the delays.

The delays threaten Gov. Gavin Newsom’s 2018 plan to revamp the bullet train, in which he would build a 171-mile partial high speed rail system from Bakersfield to Merced by 2028 for $20.4 billion. Newsom has seldom, if ever, publicly discussed his rail plan since 2018.

Senior engineers and construction executives say that any partial operating system is unlikely until the 2030s, and the costs are likely to grow by billions of dollars above the current $20.4 billion.

The Ariqat letter spends considerable time detailing the problems of working with Union Pacific, whose tracks parallel the bullet train route through much of Fresno. It alleges that the railroad has made “preferential and unreasonable demands” in reviewing and approving work plans for sites adjacent to its property. The authority, the letter said, has failed to enforce a 2014 working agreement and failed to establish a coordinating committee that would meet monthly as required by the agreement.

Union Pacific did not respond to a request for comment.