The conclusion from the California High-Speed Rail Peer Review Group yesterday, a group formed by the State Legislature and headed by former Caltrans chief Will Kempton:

In [the report below], we have discussed a number of considerations under which the [California High-Speed Rail] Funding Plan and the Business Plan can be improved. Some of these suggestions can also reduced project risk and improve financial feasibility. We do not discuss a number of additional comments on the draft 2012 Business Plan than have less bearing on the feasibility of the project or the reasonableness of going ahead. With this said, we cannot overemphasize the fact that moving ahead on the HSR project without credible sources of adequate funding, without a definitive business model, without a strategy to maximize the independent utility and the value to the State, and without the appropriate management resources, represents an immense financial risk on the part of the State of California.

Until a final version of the 2010 Business Plan is received, we cannot make a final judgment on the Funding Plan. Therefore, pending review of the final Business Plan and absent a clearer picture of where future funding is going to come from, the Peer Review Group cannot at this time recommend that the Legislature approve the appropriation of bond proceeds for this project.

The full text of the Peer Review Group’s report:

UPADTE: The response from the California High-Speed Rail Authority:

While some of the recommendations in the Peer Review Group report merit consideration, by and large this report is deeply flawed, in some areas misleading and its conclusions are unfounded.

Unfortunately, many of the most egregious errors and unsupported assertions would have been avoided with even minimal consultation with the CHSRA. Although some high-speed rail experience exists among Peer Review Panel members this report suffers from a lack of appreciation of how high speed rail systems have been constructed throughout the world, makes unrealistic and unsubstantiated assumptions about private sector involvement in such
systems and ignores or misconstrues the legal requirements that govern the construction of the high speed rail program in California.

The full text of the Rail Authority’s response: