Quentin Kopp is no ordinary project executive. The superior court judge worked as a trial attorney and a trial court judge, spent 12 years in the state senate and did a stint as a weekly radio talk show host in his spare time. These days, he's chair of the California High-Speed Rail Authority, the government agency responsible for planning, constructing and operating an 800-mile (1,287-kilometer) train system to serve the state's major metropolitan areas. With a price tag between US$42 billion to US$45 billion, the 20-year project hasn't been an easy sell—especially in today's gloomy economy. But Judge Kopp was instrumental in getting California voters to pass a US$9.95 billion bond to fund the initiative and has instituted rigorous governance to ensure it stays on track.
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“My name is prominently associated with this project, and I have a strong record of fiscal responsibility in the 28 years that I spent in elected office,” Judge Kopp says. “So it is important to me that the contractors conduct themselves responsibly.”
I've always focused on performers and performance more than most board chairs I've observed over the years. I want detailed information on project progress to avoid misappropriation and waste. This kind of oversight is the best way to enforce contract obligations.
How has the economic downturn affected the project?
One of the most interesting decisions was in the financing. In 2006, I was urged by the governor and a couple of my board members to utilize a public-private partnership approach. I was dubious at first, but I became convinced in early 2008 by our state treasurer, who advised me that there are 37 known funds designed specifically to invest in public infrastructure.
I realized that it's a new world of infrastructure development.
By mid-2008, we issued a request for expression of interest to 69 firms, and 28 of them responded in writing, including five interested in investing private capital. Today our business plan calls for US$6.5 billion to US$7.5 billion from private capital toward the first phase. The rest of the money will come from the bond, local public agencies and private developers, and federal funds.
What kinds of strategies do you use to control costs on such a massive, long-term project?
This project is subject to the most rigorous strictures and requirements of any project I've ever observed. For example, no more than 50 percent of construction money can come from California taxpayers. And no more than 10 percent of bond proceeds can be spent on non-construction activities, with no more than 2.5 percent of that on administrative activities.
In addition, before construction on any section commences, the director of the department of finance must certify that all the money required to build that section is currently available.
Each participating group, including the engineers, the finance management firm and the project managers, must also report in advance at least once a year to the government on any forecasted overruns.
Given the difficult economic climate, how do you keep your team motivated and focused on the end-result?
We've had some naysayers who opposed the bond issues because of the economy. They forget that the Golden Gate Bridge and the Bay Bridge were built during the Great Depression.
You just need to make the time to communicate—to conduct community meetings, to develop sound scoping processes, and to have constant conversations with your staff and the project leaders. Communication is important so that there are no surprises. PM