Bids Show Public True Price For Bullet Train

News4Jax.com ^ | February 14, 2003 | The Associated Press

[Willie Green]

ORLANDO, Fla. -- As the tedious work of planning Florida's high-speed rail network inched forward over the past two years, Gov. Jeb Bush has always been nearby with chastening words.

If the state has to pay too much, he said, these trains will never leave the station.

Now that the public could be on the hook for as much as $2.7 billion to help build the route's first leg, Tampa to Orlando, Bush finally has his answer on the project's cost.

 

The Four  
  Bidders For  
Florida's  
Proposed  
  Bullet Train  

ET3.com

• CEO: Daryl Oster.
• Location: Crystal River, Fla.
• Proposal Finances: Bid of $1.2 billion; did not provide breakdown of public vs. private money.
• Proposal Highlights: Claims that vacuum tubes and magnetic-levitation technology could whisk capsules containing passengers at speeds up to 3,000 mph
• Web sites: www.et3.com

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Fluor-Bombardier:

• Company/companies: Bombardier Transportation; Fluor Corporation.
• Locations: Montreal, Canada (Bombardier); Aliso Viejo, Calif. (Fluor).
• CEOs: Laurent Beaudoin (Bombardier); Alan Boeckmann (Fluor).
• Proposal Finances: Asking the state for $75 million, capped and not escalated, annually over 35 years to build infrastructure; companies will spend between $945 million and $1.3 billion during that period. Also claims that enough people could be riding the train by the second year of operation to send at least $35 million in ticket revenue back to the state annually.
• Proposal Highlights: "JetTrain" locomotive, powered by a jet engine, can reach 150 mph without needing overhead electrical lines.
• Web sites: www.bombardier.com; www.fluor.com

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Georgia Monorail Consortium, Inc.

• Company/companies: Owen Transit Group, Inc., system technology provider; Kilpatrick Stockton, legal representation; WBQ Design & Engineering, construction management (Orlando, Fla.); BRR Architects, architecture; Controls Corporation of America, controls and power equipment; Tindall Corporation, concrete technology; MACTEC Engineering, civil engineering; AAR Composites, vehicle bodies manufacturing; Construction Service Companies, general contracting; ATI Technologies, vehicle assembly; Transit Operating Services Co., system operations management.
• Location: Marietta, Ga.
• CEO: Bill Owen (Owen Transit Group).
• Proposal Finances: Total cost of $1.5 billion to $2.6 billion, with $404 million to $644 million coming from taxpayers.
• Proposal Highlights: Touts shorter waiting time between departures (7 minutes vs. 1 or 2 hours), realistic fare structures (25 cents per passenger-mile) and faster transport (full route in less than 34 minutes).
• Web site: www.otg-inc.com

---

Global Rail Consortium.

• Companies: Arcadis; Korean Railroad Technical Corp.
• Location(s): Highlands Ranch, Colo.; Arnhem, The Netherlands (Arcadis).
• CEOs: Joe A. Hastey, Luck M. van Leeuwen (Arcadis).
• Proposal Finances: Total taxpayer cost of $2.1 billion to and $2.4 billion, depending on where the stop in Orlando is located.
• Proposal Highlights: Would used electric trains capable of reaching speeds of 185 mph and would include dual tracks so trains could be coming and going at the same time.
• Web sites: www.arcadis-us.com; www.krtc.co.kr/english/subpage1-1.htm

But the question remains: How much is too much?

"This little choo-choo could cost a lot of money," Bush said Tuesday.

Four years ago, $6.3 billion - the cost of a similar project that would've linked Tampa, Orlando and Miami - was too much for Bush and he ended Florida Overland EXpress (FOX) shortly after taking office. It was the second time in a decade that a Florida governor had derailed bullet trains.

The Florida High Speed Rail Authority opened bids on Monday from four conglomerates hoping to construct the rail network. Whether Bush tries to kill the current project, which would be the largest public works project in state history, will be determined over the following weeks as state officials pore over the massive documents. Voters approved the project as a constitutional amendment in 2000.

The companies were required to submit bids for two routes: one that would connect Orlando International Airport directly with Walt Disney World en route to Tampa; the other including an intermediate stop at the Orange County Convention Center. All but one of bidder broke down the expected public-sector cost - which would go to build the line - and the private-sector investment -- which would go toward operations and maintenance.

Depending on the contractor selected and the route taken, the estimated total cost could exceed $4 billion - more than half of which would come out of taxpayers' pockets.

"The prices were higher than I was expecting," said Bill Dunn, a member of the authority.

Even worse for those wishing bullet trains could be bought at a bargain, submitting the highest bids were the two top contenders.

Global Rail Consortium, a group led by a Korean company and the Arcadis design and engineering firm, had the largest total bid at $4.1 billion. And Fluor-Bombardier, a joint effort by two firms with practical experience in both bullet trains and Florida politics, submitted a $3.6-billion bid that would hit up the public for almost three-quarters of the cost.

Sen. Jim Sebesta, chair of the Senate Transportation Committee, said that simply wouldn't fly.

"The private sector is really going to have to put up some upfront cash before anybody in the state government is willing to write a check," said Sebesta, R-St. Petersburg.

Both companies -- knowing that Bush has opposed high-speed rail from the time voters approved it -- have pointed out how the public's contributions would be limited.

Fluor-Bombardier and Global Rail each said the state would be reimbursed for most of the construction cost over 30 years. Based on the state's ridership estimates, Flour-Bombardier said Florida would get back $2.1 billion while Global Rail estimated the amount at $1.7 billion.

"Even though they want the state to put up a big chunk of cash on the front end, which is not good news, they will pay us back on the back end," Sebesta said. "I was not expecting that. So, that is very good news."

Also, the companies said they would pay for all operation and maintenance costs while assuming liability of ridership is lower than forecast.

"It's what we call a financially self-sustaining proposal, and it puts the risk where it belongs - with the private sector," said Lecia Stewart, Bombardier's vice president for high-speed rail. She added that enough people could be riding the train by the second year of operation to send at least $35 million in ticket revenue back to the state annually.

But Sebesta wondered how the companies' promises could be guaranteed.

The other bids were submitted by Georgia Monorail Consortium, about which Dunn and Sebesta admitted little is known; and ET3.com, the brainchild of a Crystal River man who claims that vacuum tubes and magnetic-levitation technology could whisk capsules containing passengers at speeds up to 3,000 mph.

Georgia Monorail, which is also trying to build a bullet train system in Vietnam, said the line would cost $1.5 billion to $2.6 billion, with $404 million to $644 million coming from taxpayers; ET3.com's bid came in at $1.2 billion, with no breakdown of public vs. private money.

The previous two efforts to build a high-speed rail network in the state were doomed by their high costs.

In 1984, then-Gov. Bob Graham established the Florida High Speed Rail Commission. A heavy emphasis was placed on real estate development rights providing funding, but a crash in that market was too much to overcome and Lawton Chiles, elected governor in 1990, killed the project shortly after taking office.

But Chiles didn't let the idea die and resurrected high-speed rail in 1992, this time within the state Department of Transportation. However, high-speed rail backers again faced disappointment when Bush canceled FOX in early 1999.

The Fluor-Bombardier partnership had been selected for FOX, and those companies were highly disappointed when Bush pulled the plug. Since that setback, Bombardier has gone on to build Amtrak's Acela line in the Northeast. Acela remains the nation's only high-speed rail system.

Although that previous experience would make many companies leery of getting involved again - especially with Bush still running the state - Bombardier believes Florida has grown to where the potential payoff is too great to ignore.

"We have a state where the population has grown and the density is increasing," Stewart said. "The market really is there."

On The Net:

Florida High Speed Rail Authority

[Willie Green]

ping

[John Jorsett]

I object to the term 'Bullet' Train; it frightens my child. I want the name changed to Diversity Train.

[ijcr]

Gov. Bush should say "NON!" to Flour-Bombardier, let the
Canadian weenies reap the reward of non support.

[11th Earl of Mar]

"The prices were higher than I was expecting," said Bill Dunn, a member of the authority.

What else is new?

A public project that costs more than officials expect? Just wait until the final bill comes in. It will be several times this projection.

Look at the projections for Social Security, welfare or any other government project. They are all ten or twenty times the initial projections.

And wasn't Amtrack supposed to be self-sustaining by now?

[dinodino]

I am hoping that our legislators come up with a way (perhaps another amendment?) to eliminate this. I didn't vote for this, and nobody I know (believe me, I've asked) voted for it. This is an absolutely sickening boondoggle.

[SAJ]

Two possibiities, take your pick.

Two words: black hole, or, two words: boon doggle. :^)

[roderick]

It is way too easy in Florida to get a voter initiative on the ballot. "Voter initiative" is just another word for democracy, a hideous form of government. Our state constitution is now loaded with dubious amendments that rightly belong in the deliberative, legislative vein such as bullet trains, school class sizes and the size of commercial fishing nets.

[B-Chan]

The state uses tax dollars to capitalize, finance, build, and maintain the critical infrastructures used by the road, air, and marine industries -- but when someone proposes that the state do the same for rail, it suddenly becomes "socialism" or a "boondoggle".

If motor and marine freight carriers had to capitalize, finance, build, and maintain all their own highways, canals, and ports, they'd never turn a dime of profit. If the airlines had to pay for, build, and maintain their own airports, traffic control, and navigation infrastructure they'd go broke. (Oh wait -- they ARE broke.) Rail carriers capitalize, finance, build, and maintain their own infrastructure -- and still pay dividends and taxes from the profit they make.

And yet the railroads are called "socialist".

Owning and operating a public carrier -- freight or passenger -- is not the proper responsibility of government. Building and maintaining the carrier's associated infrastructure is. From the ports to the National Road to the Erie Canal to the transcontinental railroads to the airports, navigational aids, and GPS satellites used by the airlines to the massive National Highway System, our state and federal governments have always shouldered the burden of transportation infrastructure -- the most important aspect of their constitutional mandate to promote the general welfare of the United States.

I support full and fiscally sound public financing of our state and national transportation infrastructure -- including generous funding for modern high-speed rail infrastructure.

[Normal4me]

"ET3.com, the brainchild of a Crystal River man who claims that vacuum tubes and magnetic-levitation technology could whisk capsules containing passengers at speeds up to 3,000 mph."

Seeing as how the state is only about 180 miles wide, this might be a wee bit excessive. That's like what, 18 times the speed of light!?! [/sarcasm]

This might have been feasible in some manner if the entire country wasn't facing state budget crisis'.

[NautiNurse]

It is way too easy in Florida to get a voter initiative on the ballot.

Amen to that---but we must also take responsibility to educate the public about these ballot boobytraps with at least half the energy we give to supporting our favorite candidates.

bullet trains, school class sizes and the size of commercial fishing nets.

the Pig Rights amendment makes me itchy and scratchy too.

[dinodino]

I think the ability to get these pieces of crap on the ballot should be removed. I believe that our State constitution has been amended something like 30 times since 1980 because of it. Just imagine if the U.S. Constitution could be amended by popular vote--what a f**king disaster that would be!

[dinodino]

B-Chan, first you say, "Rail carriers capitalize, finance, build, and maintain their own infrastructure," then you say, "Building and maintaining the carrier's associated infrastructure is." Which is it? If it's the first case, I'm for it; if it's the second, buzz off.

[B-Chan]

Opponents of rail argue that taxpayer dollars should not be used to create and maintain rail infrastructure, and that to use public finds for rail is a "socialist boondoggle".

They ignore the fact that road, sea, and air carriers do not create and maintain their own infrastructures, and that none of them could turn a profit if they were required to do so.

Rail carriers carry the weight of their own infrastructure and still turn a profit. The fact that rail carriers are profitable despite having to carry their own infrastructure burden demonstrates that rail is the most efficient form of transport.

Motor freight, air freight, and merchant shipping are would not be profitable industries if taxplayer funds were not used to capitalize, maintain, and improve the nationwide infrastructure networks (highways, signals, air traffic control systems, air and sea navigational aids, airports, seaports, etc.) they need to move the goods. Since opponents of rail have no problem with government funding for rail, sea, and air infrastructures, they cannot be opposed to using public funds for transport infrastructures in general.

My argument: Since we all agree that providing transport infrastructure is a proper function of government, I propse that rail carriers should get the same sweet deal that road, air, and sea carriers get: public funding of their infrastructure costs.

If rail carriers got the same generous public funding as air, sea, and motor carriers do, we'd see a renaissance in rail transportation in this country, including a rebirth of high-speed passenger rail service. I advocate public funding for modern rail infrastructure.

[SAJ]

>> full and fiscally sound

You give yourself away right there. There hasn't been any gov't project financed on a 'fiscally sound' basis in my lifetime nor yours.

Furthermore, I never used the term 'socialism' or any of its derivative terms. 'Black hole', obviously, refers to the noxious and persistent gov't practice of throwing ever more good money after bad, world without end.

'Boon doggle' has no denotative reference to 'socialism' (look it up). The term refers to the practice of the gov't (i.e. the taxpayers) overpaying WILDLY for goods and services. A perfect example of same is the (haha) 'progress' of Metro(K)link here in STL. ACTUAL cost figs are now sneaking up on SIX times the original estimates, which were, of course, deliberately lowballed in order to get the initial public backing for this turkey. And, of course, the project is years behind, stacking up even more costs for the foreseeable future and beyond.

Railroads make a nice profit moving freight. Good for them. They can't possibly profit moving passengers; the total costs can't be met when charging fares that the public will pay, and this has been proven over and over again, in many cities and Lord knows by Amcrap.

There are, perhaps, 3 or 4 high-speed lines that MIGHT turn a profit, maybe. The problem is that, once we establish these lines at taxpayer expense, every two-bit politician in every locality will be screaming for his/her own line from Widgetville to South Broken Glass, knowing that they'll be a drain on the public purse forever, and not caring. And, some of these losers WILL be built, if Sen. Foghorn or whomever has enough clout.

Bottom line: just say 'no'.

And, please, in future, do not misrepresent my words, whether deliberately or through ignorance. When I want to bash socialism, I know how to do so, thanks. This wasn't one of the times; I was bashing a completely inefficient use of public funds, esp. when administered by invariably incompetent 'modern' gov't.