High-Cost Rail - Part 116 Show Me the Money

The Daily Journal and the Daily Post had near identical articles about a the lack of private investors for high-cost rail and those investors' concerns as sleuthed out by the AP

Businesses that might bid to build a high-speed rail network across California are questioning whether there will be enough government funding to complete the complex and ambitious project.

That picture emerged from documents the companies submitted to the state rail authority overseeing the project, which solicited ideas for how it should approach building a first segment of 300 miles of track by 2022.

In response it received 36 submissions from firms including global construction and engineering giants AECOM, Siemens and Parsons. The rail authority released the documents to the Associated Press under a Public Records Act request.

This will not come as news to anyone reading the Voice, but this wrinkle is new

In the documents, many firms suggested breaking the project up into smaller contracts, typically in the $3 billion to $5 billion range. Anything much larger could scare off even the world’s largest construction and financing firms, the respondents said.

“The market cannot absorb a single $20 billion contract,” a group led by ACS Infrastructure Development, Inc. wrote, arguing that the risk to a construction firm would be too high and that “financial institutions would not invest into a project of such unprecedented scale and cost.”

This smacks of desperation all around.  And yet the SacBee is reporting

State high speed rail officials confirmed last week they plan to call for bids from high-speed rail companies in mid-2016 to build the sleek aluminum trains that will run at 200-plus miles per hour between San Francisco and Los Angeles. The state is expected to need about $3.2 billion worth of train “rolling stock” to serve the new system.

The cart would appear to way in front of the horse here.

 

Comments

[David]

Regarding the "rolling stock," HSR funding for Caltrain electrification, the renewed EIR process on the Peninsula and construction in the Central Valley: This is all part of what I believe is the Authority's strategy to build a sense of inevitability about HSR. Get enough money spent in enough places and enough construction underway so that politicians at the state and federal level have no choice but to keep funding it. We've all seen construction projects in the private sector sitting half built for lack of money, but how many times have we seen it in the public sector? Pretty much never.

This will be really interesting to watch during the next governor's election in 2018. On the Democratic side, Lt. Gov. Gavin Newsom, who has already declared his candidacy, has come out against HSR. Hard to imagine a Republican candidate supporting Gov. Brown's legacy project. Add all the opposition among voters up and down the state, when drought, local transportation and other issues are priorities, and it's going to be really interesting to see how the funding puzzle plays out in the next two years.

As the LA Times recently pointed out, the Authority has only about $15 billion of the $68 billion needed to build HSR - and that's before cost overruns.

[Joe]

In another twist to the "show me the money" theme here, John Horgan has highlighted the cannibalization of BART and Caltrain that high-cost rail on the Peninsula would cause:

If the California High Speed Rail Authority ever does, in fact, implement a route along the Caltrain corridor, doesn't it make some sense that, in essence, the two systems, sharing the same tracks, will be in competition with each other to some extent for a particular category of riders?

That would be people who need to travel quickly between San Francisco and San Jose (or one or two points in between).

The HSR setup, as proposed, would zip customers north and south faster and, in theory, more seamlessly than Caltrain.
It just seems logical that the planned HSR line, as a duplicative service along that same Silicon Valley-heavy right-of-way, would take at least some business away from the existing commuter railroad. And, what's more, we haven't even mentioned the BART line between San Francisco and Millbrae. That would be a total of three rail systems serving riders between those locations.
At some point, if the planned fast-train project does become a reality here, some sort of financial arrangement would have to be worked out between the competing parties.

We are talking about great gobs of taxpayers' dollars, after all.

http://www.mercurynews.com/john-horgan/ci_28996998/john-horgan-caltrain-and-hsr-potential-case-rail#insidebayarea

[Joe]

The LA Times is finally on the case:

Crews will have to cross the tectonic boundary that separates the North American and Pacific plates, boring through a jumble of fractured rock formations and a maze of earthquake faults, some of which are not mapped.

However, a Times analysis of project documents, as well as interviews with scientists, engineers and construction experts, indicates that the deadline and budget targets will almost certainly be missed — and that the state has underestimated the challenges ahead, particularly completing the tunneling on time.

"It doesn't strike me as realistic," said James Monsees, one of the world's top tunneling experts and an author of the federal manual on highway tunneling. "Faults are notorious for causing trouble."

A confidential 2013 report by the state's main project management contractor, New York-based Parsons Brinckerhoff, estimated that the cost of building the first phase from Burbank to Merced had risen 31% to $40 billion. And it projected that the cost of the entire project would rise at least 5%.

Parsons Brinckerhoff briefed state officials on the estimate in October 2013, according to the document obtained by The Times. But the state used a lower cost estimate when it issued its 2014 business plan four months later.

Jeff Morales, the rail authority chief executive, said he was not aware of the Parsons Brinckerhoff projection. A spokeswoman for the authority declined to discuss the differences in the estimates.

http://www.latimes.com/local/california/la-me-bullet-train-cost-final-20151025-story.html

Is not that last admission of ignorance by Jeff Morales sufficiently damning for him to be fired?

[Bruce Dickinson]

Joe, Joe, Joe, I gotta tell ya, ya gotta stop! Not with the dynamite articles, exposés, and caustic commentary. Let Dr. Dickinson give you some advice: You have got to stop asking rational questions on HSR, because guess what? they demand rational answers. And guess what else? with this boondoggle, you're never gonna get 'em until this zombie project dies.

The people in charge of this, their entire careers and raison-d'être, if you will, is entirely staked on moving this thing forward, no matter what the facts, evidence, or rationality. It will only take someone pulling the plug, either the legislature, the courts, or worse, starving the project of money (because so much will be spent for nothing).

While most engineering and construction firms brag about being "on time and under-budget", Parsons Brinckerhoff's motto should be "5X" that is five times the cost and the time on anything they're involved in. They, my friends were in charge of the "Big-Dig" in Boston, which ended up being 4x-5x the cost of their own projection, including interest. So when they say something is over cost, you better believe it's gonna be 5x worse. There are other projects as well where their involvement involved huge cost overruns and shoddy construction. The Big Dig should be renamed the Big Sieve, as there are so many leaks in these tunnels, that the infrastructure is gonna crumble.

Our best hope is likely to delay this fleecing of public money as long as possible so that more constituents realize HSR is in fact a zombie that will need to be taken out once and for all, and let their state reps know this and elect a governor that will not have as much drug-induced brain damage as the current clown in office!

Just remember, this Halloween, the clowns, zombies, blood-sucking vampires and other characters playing in the "HSR is viable" masquerade are a lot scarier in real life than any nightmare or movie. They are not rational creatures and will only continue to draw the blood of public money until they are eviscerated!

[hillsider]

Where can I get a Jerry Brown mask for Halloween?

[see the light]

Bruce, finally you are fessing up that Jerry Brown and his team are a bunch of fraudsters. Let's hope that the zombies voting for Jerry, and the un-dead who just sit on the coach, don't understand the issues, and don't vote - see the light and come to their senses.

[Bruce Dickinson]

Listen little fella, Bruce Dickinson is not going to play into your feeble attempt at revisionist history, so don't take credit for your powers of non-persuasion, especially with someone of my caliber and legendary status. My history, page-hits, felicitations, support and fan base has a history:

http://www.burlingamevoice.com/2014/04/drumming-up-biz-in-china.html

http://www.burlingamevoice.com/2014/02/esseff-caltrain-changes.html#comments

http://www.burlingamevoice.com/2014/02/samtrans-investigation-part-1.html#comments

Folks, what Bruce Dickinson has yet to comprehend is why someone that lives two towns away cares so much about Burlingame!?!? Talk about an extremely low opportunity cost of time, ya know what I mean?

[Joe]

There is another wrinkle in the High-cost Rail soap opera:

On October 28, 2015 the California’s Republican Caucus sent a letter to the Speaker of the Assembly asking for a subpoena to obtain records discussed in the Los Angeles Times article.

Today, Assemblyman Scott Wilk, R-Santa Clarita, joined members of the Assembly Republican Caucus in a letter to Speaker Toni Atkins calling for her to subpoena the California High Speed Rail Authority (CHSRA) to provide specific documents that are believed to show that the Authority presented the Legislature with false information. "The California High Speed Rail Authority was caught playing hide and seek with taxpayer dollars,” Wilk said. “The biggest public works project in mankind deserves oversight and we are committed to using the full power of the Legislature to hold them accountable.”

Earlier this week, the Los Angeles Times ran a story exposing the CHSRA’s inaccuracies. The documents featured in the story allegedly show that the CHSRA had projected two different cost estimates to complete the first phase of the project. The article claims that the more accurate, higher cost projections were intentionally withheld from the Legislature in order to secure continuous General Fund dollars.

[Peter Garrison]

I've heard that Gavin Newsom- who may run for Governor- is against high-speed rail. If he's governor can he stop it?

[ain't exactly church]

Peter, but Gavin Newsom has also been pushing for legalization of marijuana on his Facebook page recently...and he is one of the owners of The Balboa Café in the Marina, which ain't exactly church.

You get what you vote for (or fall asleep on the couch for), my friends.

To all:

If you didn't vote this time, or haven't in a while, then please stop acting involved on this website and in the community.

[Bruce Dickinson]

Guy, listen, does that make any sense?!? People take the time to post on the Burlingame Voice, some with very high quality content, primary information and astute observations. Some are quite articulate (and that is not including comments those from yours truly, Bruce Dickinson). Do you think these very people are sitting on their derrieres not wanting to fill out a couple of boxes and walk to their mailbox, especially something as important as a City Council election where 40% of our local government is at stake!?!

Bruce Dickinson bets that BV posters are probably at an over 80% voting rate, I wouldn't even bet big against 85% compared to probably about 33% for the general populace.

Talk about barking up the wrong tree on the wrong website in the wrong city! Looks like someone once again sold Burlingame short and is on the losing end of the wrong trade, ya know what I mean?

[Joe]

Agreed. I was going to posit 100% voting rate on BV posters.

[Bruce Dickinson]

Joe, I'll take the under on that 100%, but will wager no more than $1,000 dollars.

Note to the kids at home: the extremely small bet size is due to the fact that Bruce Dickinson may be wrong! The regulars on this site may be 100%.

[Jennifer]

Tree plantings to mitigate HSR construction?-- MORE BROKEN PROMISES FROM HSRA..
http://www.kcra.com/news/highspeed-rails-treeplanting-plan-slow-to-start/36864728

[Joe]

Here is an interesting little birdie chirp from Willie Brown as published in the SF Comical:

(Jerry Brown) has three years left in office, and Democrats are still solidly in command of the Legislature.

But change is in the wind here, too. There are a lot of indications that Brown will give ground — or give up on — his two big legacy projects, high-speed rail and the twin tunnels that would ship delta water south. Both of which, by the way, many of us still think should be built.

He will continue to push for the projects, but it is pretty clear that legislators — especially the newer ones, who can stay in one house for 12 years — are looking beyond Brown and will be a lot less likely to follow his lead.

Brown has been at this game much longer than most of the nation’s elected leaders, so he knows just how much political capital he’s got left. My hunch is that he’ll spend the next couple of years making sure the state stays the course on its finances. His legacy project is going to be keeping California at the forefront of fighting climate change. And his personal interests will increasingly turn toward his family’s ancestral ranch land in Colusa County.
------------

If only it were so. He can focus on climate change all he wants since any economic damage he does there can mostly be reversed, but if he builds much of the high-cost albatross that would be completely wasted money that cannot be recovered.

[Jennifer]

Very Interesting account of Friday's hearing- http://www.thehamiltonreport.com/ca-high-speed-rail-tos-court-case-part-2/