The proposed high-speed-rail system faces weak oversight and will cost much more than initially anticipated, according to a report released by the state Legislative Analyst’s Office. The controversial project was approved by voters in November 2008 but has since faced mounting criticism and great financial uncertainty, especially in light of the ongoing state budget crisis.

Although the project was projected to cost $43 billion, new estimates put the price tag at $63 billion, with the segment between San Francisco and Los Angeles slated to cost much more than the initial proposal had anticipated.

The report called for either shifting the project to the California Department of Transportation (Caltrans), which has more expertise in this field, or to a newly created state department dedicated to the project. Under the current system, the project is headed by the California High-Speed Rail Authority (CHSRA), a group of nine appointed board members, several paid staffers and hundreds of consultants. This arrangement, the report argued, gives CHSRA too much autonomy and not enough accountability to the state government.

CHSRA was also sharply criticized for its “flawed business plan,” and the report predicted that most of the revenue that the agency hopes to reap would fail to materialize. A cited example was the agency’s gamble that it would receive $17 billion to $19 billion in federal funds — so far, only $3.6 billion has been granted and the majority in the House of Representatives has opposed any further funding.

The report also recommended that the state legislature reject the rail authority’s 2011-12 budget request for $185 million to fund project development and instead allocate only $7 million to the agency. That amount would be used to identify the best two options to begin construction. Unless federal deadlines are renegotiated and the project’s governance structure is revamped, the report argued that the project should be halted altogether.

— Ivy Nguyen