CHSRA Solicits Private Sector Input on HSR Construction and Management

Jun 24th, 2015 | Posted by

Today’s Bakersfield Californian has a good, in-depth article on the latest effort by the California High Speed Rail Authority to issue a “request for expressions of interest” for international companies and potential private sector partners.

While this is certainly not the first time the CHSRA has solicited responses from the private sector, the Bakersfield Californian article points out that this comes at an important moment in the project’s development. The nature of private sector involvement could determine how much money is needed to get the project built – and how much the private sector plans to contribute.

This process is driven by decisions made way back in the Schwarzenegger Administration (remember him?) that emphasized high speed rail would be built in California not on the model of BART or Metro Rail, where government owns and operates the system and contracts with the private sector to build it – but that HSR would be a public-private partnership, an opportunity for the private sector to do much more and potentially reap greater profits.

I’ve never been a fan of this approach, and one of the very first posts on this blog back in 2008 was about my deep skepticism of using public-private partnerships on the HSR project. But Schwarzenegger wanted it to happen as a condition of his support for the $9 billion in bonds to go to the ballot, and so the deal was cut, though the decisions about what exactly the private sector’s role would be were kicked down the road.

And so here we are, seven years later, with the CHSRA starting to give serious thought to this all important question. The Bakersfield Californian lays out the various options like this:

As the rail authority tries to bring in the private sector, and to a large extent diminish its own central role, many options are on the table. For example, it could hand over much of the rest of the construction, train manufacturing and operation to a single company willing to pay for the privilege. Or, it could set up a series of smaller agreements with different companies…

One option, he said, is to proceed as do major European high-speed rail systems: Have the agency own everything and operate the system itself. Another is to contract with a private company to run the trains but leave ownership to the rail authority.

Or, he said, the authority could build the system and then line up a franchise operator who would get some say in “setting fares, estimating demand, providing capacity, etc.,” like the British do. This gives the government greater control than do other models, but at a cost of retaining commercial risk, which the state may not want.

Another possibility Thompson cited was to give an operating company a full concession to operate the system, including providing the trains. Although this would garner private investment, he said it’s “not a silver bullet since the arrangement can never be any better than the fundamental business performance of the system. He noted that Taiwan tried this and failed.

Otherwise, the system could be fully privatized, as happened in Japan in 1987. The problem with that model, Thompson said, is that payments from the private company might never amount to what taxpayers paid to build the system.

I would strongly prefer the first option, but given the need for private funding to help close the gap and get the system built, I am guessing that some of the other options are more likely.

The key is that whatever the private sector’s role is, it has to be subordinate to the effective operation of the system, including maximizing ridership so that the system can play as large a role as possible in meeting the state’s transportation and carbon reduction needs. A private operator, for example, would be strongly tempted to maximize revenue from fares even if this has the effect of reducing ridership or making the trains unaffordable to working-class Californians.

It will certainly be interesting to see what responses CHSRA gets.

Wednesday Rally to Support Funding the Downtown Extension

Jun 23rd, 2015 | Posted by

Friends of Caltrain is mobilizing to push for completion of the Downtown Extension tunnel, which would connect Caltrain and high speed rail to the new Transbay Terminal. They’re holding a rally on Wednesday to demand a solution to the funding challenges that have delayed the DTX for years.

The rally will take place at San Francisco City Hall at 11:00 AM on Wednesday, June 24. More information is available at a Facebook event page set up for the rally.

Here’s how Friends of Caltrain explains the reasons for the rally:

The “Downtown Extension to Transbay” will connect Caltrain to downtown SF with 3x the amount of jobs as the rest of the line combined. But the plan to fund this critical project is still up in the air. At 11:00 a.m. on Wednesday June 24th there will be a pro-DTX rally on the steps of the SF City Hall. Come encourage San Francisco and regional leaders to move forward getting Caltrain extended into downtown San Francisco.

Time to get this project moving.

Measure R Renewal Looks To Have Massive Support in LA County

Jun 17th, 2015 | Posted by

The LA Times reports on a new poll taken by Metro in advance of a possible November 2016 ballot measure to extend the Measure R taxes. Their findings: it has massive support:

More than two-thirds of Los Angeles County residents would support raising the county sales tax by a half-cent to bring in about $120 billion for rail and highway projects, according to a new poll paid for by the Metropolitan Transportation Authority.

People who identified themselves as likely voters were asked whether they would vote in November 2016 for a ballot measure that would raise the county’s overall sales tax rate to 9.5%. The proposal would also seek to extend Measure R, the half-cent tax approved in 2008, for nearly two more decades.

The combined income from the so-called augment and extend taxation structure could raise $120 billion over 40 years, officials said. The poll hinted at how dramatically that money could bolster transportation infrastructure across Los Angeles County, including a rail and highway tunnel through the Sepulveda Pass, a rail connection from Los Angeles International Airport to the San Fernando Valley, and a Purple Line subway extension from Westwood to Santa Monica.

The rail connections would be game changers for Southern California. A train under Sepulveda Pass? Finishing the Purple Line to Santa Monica? Building rail along the old Pacific Electric branch line to Santa Ana? Bring it all on!

It would also get LA closer to this rail network:

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Thanks to the idiotic 2/3 rule for tax increases, this measure would require 66.7% support at the 2016 election. A similar measure just barely “failed” in 2012 with 66.1% of the vote – a landslide win in any other election not governed by the 2/3 rule.

Transit and sustainability advocates would rightly say that a Measure R renewal should not have all the road projects that are envisioned here, such as widening the 101 in the Valley or widening the 5 in Santa Clarita. I agree. At the same time, the poll is pretty clear that those things need to be in the package if it’s going to reach the magic 66.7% mark:

Nearly two-thirds of the respondents said improvements to streets or freeways were their top priority. About one-fourth preferred light-rail and bus projects.

While freeway widenings are a waste of money and don’t succeed at their own goals of making traffic move more quickly, it’s also not a fight worth picking. If a wider 5 and 101 is the price to pay of finishing the Subway to the Sea and getting a north-south rail corridor from San Fernando to LAX via Sherman Oaks then it’s a price worth paying.

This proposal matters a great deal for the success of California High Speed Rail. The more rail that gets built in Southern California, the more easy it is to get to or from an HSR station without needing a car. HSR ridership will be high anyway, but it’ll be even greater – and more useful – with more rail connections from the stations to destinations and neighborhoods. HSR advocates should welcome these polling results and hope that Metro goes to the ballot in November 2016 with this plan – and that this time, they get the 66.7% they need.

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Construction Begins on First HSR Bridge

Jun 16th, 2015 | Posted by

Construction began today on the first major, visible piece of high speed rail infrastructure – the viaduct over the Fresno River.

More from the Fresno Bee on the state of right-of-way acquisition and upcoming major construction projects:

As of last week, the authority has possession of more than 200 of the 536 parcels it needs in the Fresno-Madera section. It also has about 50 of the 543 parcels for right of way in its second construction segment, a 65-mile stretch from American Avenue at the south end of Fresno to the Tulare-Kern county line.

Gomez said that other major construction expected to get under way this summer are street over- and underpasses. Those include new underpasses at Tulare and Ventura streets in downtown Fresno and a rail crossing under Highway 180 just north of downtown Fresno.

Two more viaducts are part of Construction Package 1: a crossing over the San Joaquin River, Union Pacific Railroad and Golden State Boulevard at the north end Fresno; and a crossing over Golden State Boulevard, Cedar and North avenues and Highway 99 at the south end of Fresno.

Gomez said she expects work to begin soon on the Fresno-Tulare/Kern section, known as Construction Package 2-3.

Steel in the ground – at long last, it’s finally here!