Chinese HSR Delegation Visits Fresno

Jan 16th, 2011 | Posted by

The day after Japan’s Ambassador to the US pledged to pay half the cost of California HSR at a conference in Los Angeles, a delegation from China was in Fresno to look at the city and plans for HSR. Report from ABC/30 in Fresno:

From CBS 47:

Members of the China Railway Construction Corporation visited Fresno to take a tour of the area. The group out of Beijing built the high speed rail system in China and is one of several bidders that want to bring their construction skills to the Golden State.

The meeting between Chinese delegation and Fresno officials took place at Precision Civil Engineering, one of the companies heavily invested in bringing the railway’s maintenance yard to Fresno.

California Assemblyman Henry T. Perea says, “Today we’re giving them an overview of the project, timelines, the process, as well as what the Central Valley looks like.” Delegates got a good vantage point of that from inside the Fresno County Sheriff Department’s Helicopter.

A spokesman for the Chinese says they liked what they saw. Jeffrey Chang says, “They understand Fresno is going to be the beginning or the end of the high speed rail project and the Chinese are very eager to get their foot hold here in North America.”

This group did not pledge any money, but Ambassador Ichiro Fujisaki’s offer to fund half the project is a big, bold move that will force China to step up its own game and make their own pledge if they are to have a chance to build and operate what will be a lucrative HSR system here in California.

Fresno’s ABC affiliate story included this from Supervisor Henry Perea (father of Assemblymember Perea):

“I think the Chinese are going to be very competitive in the application they put forward, but they understand and embrace the fact that they are going to partner with local valley businesses and hire local labor to do the work, so it’s a win-win all around,” Henry Perea said.

High speed rail is expected to create more than 100,000 jobs in the valley.

The Chinese want to build the trains, the tracks and possibly a manufacturing facility in Fresno.

I’m sure the discussion of the merits of the various trainsets will continue in the comments, as well it should. And the reports suggest that teams from France, Germany, and Spain will come to Fresno soon to take their own tour and, possibly, to make their own offer.

Of course, the details of that involvement matter – as the Peer Review Report noted late last year, the California High Speed Rail Authority needs to choose a business model, which will then allow the Authority to determine exactly what foreign participation might look like. But the bigger picture is what is important here. None of these countries or delegations would be wasting their time if they did not believe that the California HSR project was sensible and made financial sense.

Someone ought to tell that to the Washington Post.

  1. Useless
    Jan 16th, 2011 at 17:16

    Well, Fresno officials are wasting Fresno tax payer’s money by giving a helicopter tour of Fresno sites to an ineligible bidder who cannot even legally bid in the US.

    Alon Levy Reply:

    According to you. What’s your expertise on the subject, again?

    jay taylor Reply:

    Do you have any tech to back this statement up “useless”?

    Useless Reply:

    @ jay taylor

    Read and learn.

    Alon Levy Reply:

    Since when does reading the WSJ count as learning?

    James Fujita Reply:

    “keep your friends close and your enemies closer” :)

    Alex2000 Reply:

    HaH! I was going to jump in here and ask: “Over/under on how long it takes Useless to post in this tread.” But what do you know.. first post ~ god.

    Yes yes yes. We know. You say the same thing a thousand times in every thread. we know we know we know. You don’t have to say it a thousand more times. We know. At some point one crosses the line between trying to make a point and just trolling.

    Victor Reply:

    The Sheriff Helicopters were probably the only one available in or near Fresno CA, It’s not like the Grand Canyon where there are Helicopters Tours. Besides these are people one would roll out the proverbial Red Carpet for, But then they have Money and If they can prove their not violating Foreign IP Rights and can operate HSR Trains in Mixed traffic, Then I have No objection to the Chinese coming to California again, After all the UPRR(CPRR/SPRR) without the Chinese back then would have had greater difficulty building the Transcontinental Railroad back in the 19th Century, As It may have taken many years longer to complete.

    @ Robert: Nice Video, Audio would only Mute or Unmute here, Beyond that I have no problems with the video.

    Useless Reply:

    @ Victor

    > If they can prove their not violating Foreign IP Rights

    They can’t.

    > can operate HSR Trains in Mixed traffic

    They can’t. Shinkansen E2 was never meant for a mixed traffic operation.

    > Then I have No objection to the Chinese coming to California again

    I wouldn’t, but the reality is that Chinese bullet train is neither legal or pass the FRA crash test…

    Peter Reply:

    “> If they can prove their not violating Foreign IP Rights

    They can’t.”

    You know, we have courts to determine these types of things. They’re quite good at sorting out these issues. That’s what they’re there for. Maybe we should let them take their course.

    It’s nice to know what your opinion is, but I think you’ve sufficiently made sure that we know what your opinion is. We don’t need to read it another 50 times in one day.

    bleh Reply:

    Useless, I agree with you in principle. Unless Kawasaki’s and Siemens’ lawyers were completely useless, there is no way that China can export its current crop of trains.
    But it would be a lot easier to support you if you didn’t resort to all those distortions in your anti-Chinese crusade.

    > If they can prove their not violating Foreign IP Rights

    I can’t see that happening. Perhaps with the successor of the current trains. Those would have to be developed first and would be the first with Chinese designed electronics and other advanced components. Expect lots of teething problems but from what we know China’s ready to offer 40bn good reasons to go along with them.

    > They can’t. Shinkansen E2 was never meant for a mixed traffic operation.

    BS. It wasn’t designed for mixed traffic as there is no mixed traffic for full-size Shinkansen but there’s no reason it can’t be used as long as all trains are equipped with ETCS and the track itself is grade separated.

    > I wouldn’t, but the reality is that Chinese bullet train is neither legal or pass the FRA crash test…

    No bullet train will pass the FRA crash test. Only the bunker buster 2000lb bomb Acela manages that feat. Caltrain got a waiver for UIC standards but they neither asked for more nor is it for a completely grade separated RoW.

    James Fujita Reply:

    > Useless, I agree with you in principle. Unless Kawasaki’s and Siemens’ lawyers were completely useless, there is no way that China can export its current crop of trains.

    Way to go. I am now imagining a legal team made up completely of Useless clones (even though I don’t know what Useless looks like, nor do I want to), and a Kawasaki exec facepalming and saying “why did we hire these guys?” XD

    BTW, it really ought to be completely grade separated.

    Useless Reply:

    @ bleh

    > Unless Kawasaki’s and Siemens’ lawyers were completely useless, there is no way that China can export its current crop of trains.

    Then Chinese bullet trains will not be in the US, you and I agree. Any effort to court Chinese bidders is simply a waste of time and taxpayer’s money then.

    > But it would be a lot easier to support you if you didn’t resort to all those distortions in your anti-Chinese crusade.

    There is no distortion of any kind to speak of whatsoever.

    > Perhaps with the successor of the current trains.

    Which takes 10 years to design, test, and verify. It’s not like Chinese are any faster than foreigners when it comes to high-end engineering, in contrary of what’s believed. For example, Chinese have been working on their Maglev for ages and it is nowhere near service, and Chinese did try to develop their own indigenous bullet trains for 7~8 years before finally throwing the towel and decided to steal foreign bullet train technology instead.

    > but there’s no reason it can’t be used as long as all trains are equipped with ETCS and the track itself is grade separated.

    FRA crash test.

    > No bullet train will pass the FRA crash test.

    Not the current one. But the revised one, yes. But neither Shinkansen or Chinese Shinkansen knock off could pass even the revised crash test.

    > Caltrain got a waiver for UIC standards

    And UIC is what everyone expects FRA to accept as the high speed train crash test standard.

    Alon Levy Reply:

    And UIC is what everyone expects FRA to accept as the high speed train crash test standard.

    How many times have you been saying this without a single reference?

    Useless Reply:

    @ Alon Levy

    > How many times have you been saying this without a single reference?

    You better pray for that outcome, since there would be only two complying vendors left if FRA askes for more than UIC.

    Spokker Reply:

    If the train passes an FRA crash test, it shouldn’t be used.

    Are we heading toward another Acela?

    James Fujita Reply:

    yeah. I’d rather have a train which I knew was safe because 1) it was completely grade separated, 2) free from outside traffic as much as possible 3) signaling, signaling, signaling, signaling 4) a logical schedule, and stick to it 5) no fatal accidents EVER in its home country, and barely even one derailment

    than have a train which could pass an outdated test.

  2. jimsf
    Jan 16th, 2011 at 19:21

    The only thing that should matter is that the trains must be built in a factory in california by californians making good wages. Where the tech came from originally is not our concern. As long they build em here.

    James Fujita Reply:

    It will be interesting to see how the Chinese handle “Californians making good wages”, assuming of course that they get the contract to build HSR.

    Japanese companies have a lot of experience in that. American Honda, rather than fight the unions, offered workers a better deal than the UAW. Most Honda factory employees are non-union, but they are not treated poorly.

    Will the Chinese offer good wages? We will see…..

    Robert Cruickshank Reply:

    Actually, the NUMMI plant in Fremont was a joint venture between Toyota and GM – and the workers were unionized, members of the UAW.

    James Fujita Reply:

    I didn’t say anything about Toyota.

    But both are Japanese companies with experience dealing with American workers. They used two different approaches.

    Honda’s first U.S. is still open, but I believe Toyota ended up with a Toyota-only factory elsewhere.

    Many Japanese companies dealt with U.S. trade law by building factories here, including Kawasaki Rail.

    Don’t know much about Chinese U.S. factories.

    Wad Reply:

    Honda builds many of its American lineup cars, as well as motorcycles, in Ohio. Newer and low-volume models are imported from Japan.

    American Honda is headquartered in Torrance. Toyota’s North American sales and marketing headquarters is practically next door.

    Toyota’s line for scrapping NUMMI was that a California plant was not economical enough to run by itself. GM got an “out” because of the bankruptcy. And until the first wave of deindustrialization hit the U.S., California was West Detroit for the carmakers.

    Southern California had several large auto plants, and the Bay Area had a couple. One reason carmakers abandoned California for final assembly plants — so it wasn’t just Toyota that used this excuse — was due to high costs of shipping out parts here, then shipping back finished cars to the rest of the country.

    adirondacker12800 Reply:

    Decades and decades ago the automakers put assembly lines near their markets. In Detroit’s heyday California probably absorbed most of the finished product locally. It’s much cheaper to ship parts to the market than it is to ship assembled cars. Or was.

    James Fujita Reply:

    Honda also has a truck and SUV factory in Alabama, not that it really matters.

    I always figured that Honda’s American HQ was in Torrance partially because of the huge social support system available in Southern California (i.e. a lot of Japanese and Japanese Americans already living here, keeping Japanese culture alive).

    BTW, any good factory also requires a good support system — and a lot of auto parts suppliers are in the Midwest, as a side-effect of “Detroit’s heyday”. So, today’s factories end up in Ohio, Indiana, Tennessee or even Ontario even if HQ (and R&D) is in California.

    Wad Reply:

    The Japanese community is precisely why Honda picked Torrance for its headquarters, with Toyota and Nissan following suit. Initially, Honda had to bring Japanese workers to the U.S. to train the American workforce.

    The South Bay is also home to a great deal of smaller companies dependent on trade between Japan and the U.S.

    James Fujita Reply:

    I’m intimately familiar with Japanese workers coming to America to train Americans. My father was part of the group which helped get Marysville set up, and we moved to Columbus during that time. He wasn’t on the factory floor, but he was still part of Honda history.

    And there might be a similar process for any new bullet train factory.

    Wad Reply:

    Absolutely. That’s the correct process for manufacturing and job importation.

    The problem with “Buy” laws is that it tries to shortcut the long but necessary process to gain such a a factory. The reason why politicians crave these finishing plants is because they need to show something big and visible to prove that jobs are being created.

    The long way creates both jobs and wealth, but it is too scattered and stealth to pack the same oomph as a smokestack-to-the-sky plant.

    What had allowed Honda and foreign carmakers entry into the U.S. was a robust sourcing network of suppliers. While Detroit was wasting away, foreign carmakers realized they could make the same deals with various parts, material, paint, glass and consulting companies — all of which were eager to add to their client lists.

    We do not have a dedicated plant making high-speed rail cars because we have no domestic market for them. With so few HSR plans nationwide, it wouldn’t make sense for any company to found an assembly plant unless “Buy” laws required them. Remember, these vehicles are durable goods — the factory would be humming for a few years, then idled for decades.

    What the U.S. does have is the same network of subordinate suppliers cars have for the railroad industry. These suppliers could adapt their lines to imported rolling stock at a reasonable cost.

    If the U.S. does settle on a high-speed rail framework nationwide, then the order might be large enough to warrant assembly plants in the U.S., with a market that can sustain them.

    In Jane Jacobs’ two books on the economics of city regions, she called these subsidiary companies the “web of interconnected developers.” It is one of the five ingredients a city needs to keep economic forces in balance.

    One pitfall of “Buy” laws was written in a Zompist summary about the Jacobs books.

    In 1975, the Shah of Iran signed a contract to build an immense helicopter factory in Isfahan. The chief contractor was Textron, which set up a subsidiary in Euless, Texas, to handle development of the helicopter itself. The factory construction was subcontracted to Jones Construction Co. of Charlotte, North Carolina.

    Jones delegated the electrical portion of the factory to Howard P. Foley Co. of Washington DC; Foley in turn employed six electrical wholesalers– e.g. S-Tran Products of Alexandria, Louisiana, which in turn subcontracted the switching gear to General Electric, involving plants in Texas, North Carolina, Illinois, and Iowa. Jones subcontracted the air conditioning and plumbing to Sam P. Wallace Co. of Dallas, Texas, whose net of sub-subcontractors embraced 150 companies.

    The Shah thought he was buying development, making Iran into an advanced nation. But all he was buying was a factory, though an immense one. What he needed in order to actually be developed was what he couldn’t buy: the web of thousands of companies that together enabled to US to build that factory. (In the end he didn’t even get his factory– he was overthrown when it was only a third completed.)

    It’s taken from and is a great read on an idea of how the economics of cities works.

    adirondacker12800 Reply:

    Federal taxpayers don’t care where in the US the money is spent. If it’s cheaper to build them in one of the existing rail car plants in the East build them there.

    James Fujita Reply:

    Personally, I wouldn’t mind if the bullet trains were built in Yonkers.

    But it would be nice if Kawasaki built a plant in California.

    adirondacker12800 Reply:

    Or Rotem’s plant in Red Lion. It’s going to be a big empty space once they finish their current order.

    jimsf Reply:

    they need to be built here because this whole thing was about x number jobs allegedly being create in california. So the jobs should be here. And costs, if they do it in the valley, aren’t any higher than most other places. They dont’ make bay area wages there and one can live comfortably on 50k in a place like fresno.

    The price tag is more than just the up front cost, there is a long term cost of shipping jobs out of state or overseas. The savings isn’t really a savings. Over time, as we have seen, its our undoing.

    The spirit of cheap, easy and unregulated, turned out to be very, very expensive for american taxpayers in the end. the loss in real estate value across the nation, the assorted bail out packages, the emergency propping up of the economy wherever possible, the people who livilihoods and lives where destroyed by foreclosure and unemployment. Not just the financial cost, but just the fact that this has just f—ked millions of peoples lives for no reason and those people will now spend a decade trying to put their lives back together. Was it worth it? So you think maybe a slower, steadier, tamer, more responsible more deliberate approach to managing our economy might be the mature thing to do.

    Protect jobs, make sure americans have a good standard of living, make sure we don’t give away the farm for a quick nickel. No more wham bam thank you mam. you wanna play here, you get a haircut, and bring candy and flowers or hit the road. And if they don’t wanna play, then we put our resources back to work and start building our own stuff and buying it. We can certainly feed ourselves with no problem as well.

    Risenmessiah Reply:

    Ultimately the way you do that is by having an American firm do the manufacturing and have the state prioritize studying engineering for HSR within the UC system.

    I think the mistake being made is looking for one private partner to underwrite everything. Instead, CAHSR should identify what it wants from each potential suitor and have them invest equally. For example, the Japanese are going to be very helpful with construction design because of the seismic similarities with California. But I’d love to know if the French for example have the best kitchens. Who makes the best steel? Siemens? There’s no rush.

    Once construction begins in the Central Valley, everyone is going to want a piece, even Wall Street.

    jimsf Reply:

    That sounds good. I don’t see why, with our resources, UC, etc, and talented labor pool, that we cant design and build our own trains to begin with instead of having to shopping for the cheapest knock off at trainmart. Since when is california, home of lockheed, and apple, etc etc, not capable of designing and manufacturing something as simple as a train?

    Joey Reply:

    Because, even given virtually unlimited funding, developing technology from scratch takes time. Theoretical work is all very well, but there are some things you can only learn from the progressive trial and error of actually building trains – all of the current manufacturers have gone through several years, if not decades of experience with this.

    Oh, and high speed trains are far from simple.

    Risenmessiah Reply:

    So what you are saying is…that you are not confident that any American firm or consortium of firms is able to design and devise rolling stock over the next seven years? Should we just all go home and leave this to the professionals?

    adirondacker12800 Reply:

    They might be able to design it and even build it in 7 years. It will have no record of operations, No supply chain for when it needs parts. No other operators identifying problems. And it would cost a lot of money to reinvent the wheel.

    Joey Reply:

    Most likely, only because whatever we can come up with will be more expensive and much less reliable than its foreign counterparts.

    Risenmessiah Reply:

    Good to know. I’ll be sure to avoid investing in American firms that develop innovate technologies in seven years and less, like Boeing, Apple, and Tesla. I mean, it’s not like those guys have rolled out anything groundbreaking in the last seven years at all….

    Alon Levy Reply:

    If it were possible to develop an American HSR train in 7 years, then how come GE hasn’t done so already?

    Risenmessiah Reply:

    Alon, GE probably has, in China.

    Useless Reply:

    @ Risenmessiah

    > GE probably has, in China.


    James Fujita Reply:

    Tesla is a pioneering startup in virtually uncharted waters. Apple started in a garage, but that was ages ago. Boeing has been around longer than Apple, and they know how to make planes bigger, not smarter.

    James Fujita Reply:

    of those three companies, Tesla is the one most closely resembling the situation the U.S. faces in HSR. and Tesla isn’t exactly setting the automotive world on fire.

    Risenmessiah Reply:

    I think it’s wholly disingenuous to disregard the fact that all three, Apple, Boeing, and Tesla have all produced new products within the last seven years that were the product solely of innovation. I recognize that there is no obvious company to build rolling stock domestically. But the truth of the matter is that the US is up a big creek with no paddle if we cannot design the technology that we need anymore.

    D. P. Lubic Reply:

    “But the truth of the matter is that the US is up a big creek with no paddle if we cannot design the technology that we need anymore.”–Risen Messiah

    Some perspectives and opinions on something we may have lost, courtesy of Railway Preservation News:

    Joey Reply:

    I’m not saying that technological development in the U.S. is impossible. Sure, we could develop a high-speed train, but my point is that it would be entering into a very well-established world market where most of the other competitors have decades of experience. Any American HST would be outperformed by its foreign competitors for years if not decades after its introduction.

    Nathanael Reply:

    Absolutely. No American startup can, within seven years, build a train which is competitive with the major foreign rail rolling stock manufactuers. Period. The classic example is the silliness we got with BART.

    Tesla had the first-mover advantage in electric cars — nobody else is *building* them — they started out by lifting vast numbers of pre-existing parts from other car part manufacturers — and they still took more than seven years.

    The same model could perhaps be applied to, say, diesel railcars, which are a market under-served by many of the big train manufacturers.

    In bullet trains, with at least three competitors in cutthroat competition at the top of their game, and at least two others vying to get there, no startup has a chance.

    Do what the Chinese do and require that the major manufacturer start a joint venture with a California firm. Or grow the market for American rail vehicles enough for there to be an *incentive* for the engineers from the best firms to come to the US and start an American startup. There would be no reason for such engineers to do so now, as prospects are simply better in the existing firms.

    swing hanger Reply:

    Agree. Building rolling stock is as much an art (i.e. not found in a manual, but part of human experience) as a science. Years of experience, trial and error, and incremental modifications are what leads to reliable and higher performance (both in speed and cost savings) rolling stock- the latest models owe much to earlier stock.

    jimsf Reply:

    We can probably just get the trains online. Ebay or craigslist would be a start. Or we could could buy used ones for less.

    jimsf Reply:

    ah yes here, trains for sale

    adirondacker12800 Reply:

    this may come as shock to you but Americans live in places like Pennsylvania where Rotem has a plant and New York where Kawasaki has a plant and there are other plants that get shared by Alstom – Siemens – Bombardier etc. And there’s a plant in Nebraska that specializes in passenger rail car shells….

    Nathanael Reply:

    Once there’s enough of these plants, and once there’s enough demand that we can start getting parts built in the US (the US still has a major influence in air brakes and signalling, but nothing else), then it may become possible for engineers to move to the US.

    Unfortunately, we have decades of mistakes — of outsourcing — to clean up from, and it will take a long time to recover. Bombardier, IIRC, bought up the Budd and Pullman designs, because there was so much good stuff there. A country with an industrial policy would have made sure that Budd and Pullman survived instead of exporting their jobs to Canada.

    datacruncher Reply:

    Assemblyman Henry Perea of Fresno has said he plans to introduce a “Buy from California” bill for HSR. He feels California’s money should be spent in California. What kind of requirements it will contain for suppliers to be from or to hire California residents will be interesting to see.

    datacruncher Reply:

    Actually I’m wrong, he already introduced it last month.

    The bill in part reads:

    “185036.1. (a) The authority shall make every effort to purchase
    high-speed train rolling stock and related equipment that are
    manufactured in California, as defined in subdivision (b), consistent
    with federal law and any other applicable provision of state law.
    (b) For purposes of this section, the following terms have the
    following meanings:
    (1) “Manufactured in California” means that the rolling stock and
    related equipment are manufactured in whole or in substantial part
    within California or that the majority of the component parts of the
    rolling stock and related equipment were manufactured in whole or in
    substantial part in California.”

    swing hanger Reply:

    Ugh, before long we’ll see bills introduced requiring everything to be manufactured in Fresno…

    Ted Crocker Reply:

    Galgiani’s Build California legislation was vetoed by Schwarzenegger. His reasoning:

    “I am returning Assembly Bill 1830 without my signature. This bill would require the High-Speed Rail Authority to make every effort to purchase high-speed train rolling stock and related
    equipment that is manufactured in California.

    While I support job creation in the state, this bill could result in unnecessary additional costs and delays in the constructing of high-speed rail in California and for this reason I am unable to sign

    Makes me wonder what stance Brown will take on similar legislation?

    datacruncher Reply:

    Perea’s bill is a copy of the final version of AB1830 (Which eventually showed as introduced by Jones not Galgiani. Galgiani actually introduced 1830 as an electric industry bill but it was gutted and amended to be about HSR).

    At one point AB1830 included a clause for a 5% bid preference for made in California. But that clause was dropped from the final version.

    You are right, it will be interesting to see how Brown will treat similiar legislation if it gets to his desk.

    James Fujita Reply:

    are we talking about trainsets, rails, concrete, electrical equipment, signaling or all of the above? because those restrictions would be harder on bullet train builders (a whole new factory or refurbishing an old assembly line) than say, rail construction crews.

    BruceMcF Reply:

    Majority of component parts is a slippery phrase. If the Engine is made in Japan or Spain, but the Seats are made in California, exactly how does that counting work?

    BruceMcF Reply:

    Sorry, that is, if the motor is made in Japan or Spain.

    adirondacker12800 Reply:

    The motors will very likely be made in China. As will most of the components of the electronics. The components of the lighting too. What else….

    Useless Reply:

    @ adirondacker12800

    > The motors will very likely be made in China.

    Nope, Japan or Taiwan. Chinese themselves use Japanese motors.

    > As will most of the components of the electronics.

    Not at all. Components are made elsewhere, then assembled together in China. This is why China’s running a massive trade deficit against Taiwan and Korea, the component suppliers.

    In case of electronics there is no point in having them made in China and are not made in China.

    Alon Levy Reply:

    There are armies of lawyers whose job is to parse trade laws. In principle, it works based on value added; in practice, there is a lot of wiggle room to define added value, resulting in protracted lawsuits when a company thinks it’s following the law and the government disagrees.

    jimsf Reply:

    That is fabulous. It should be signed into law asap. That is the kind of spirit we need to see again. Enough with begging hat in hand.

    Useless Reply:

    @ jimsf

    > The only thing that should matter is that the trains must be built in a factory in california by californians making good wages.

    This is not a requiement. They only need to be made somewhere in the US using 70% US content, not necessarily in California.

    > Where the tech came from originally is not our concern. As long they build em here.

    You got it backward, this is what matters the most, that all models sold in the US to be legal under the US laws.

    jimsf Reply:

    I don’t have it backwards. The us does.

    Victor Reply:

    US Law still applies to everyone within the US, Otherwise there’d be Chaos and We don’t want that.

    jimsf Reply:

    well one, we’ve had nothing but chaos, starting and putting out fires, in this country for the past 30 years, so why worry now, and two, another reason for us to cut the u.s loose so we aren’t held back the nonsense from back east.

    Andy M. Reply:

    It will probably end up being more like an IKEA-style take it out of the box and assemble according to instructions in California by people barely qualified to assemble IKEA furniture and who will consequently be making poor wages while the supplier makes sure no useful knowledge is transferred.

    jimsf Reply:

    If they get a benefits package and 20 bucks, and they live in fresno or surrounding, that’s a pretty decent gig.

  3. Andre Peretti
    Jan 17th, 2011 at 06:47

    Very bad news for Alstom but very good for Talgo:
    a French court of appeal has confirmed a 10 years’ prison sentence + €10 million fine for Saudi prince Nayef Bin Fawaz al Chaalan. He was caught in 1999 at Le Bourget Paris airport with 2 tonnes of cocaine in his B-727. Strong diplomatic pressure has been unsuccessful and no further appeal is possible.
    This will be interpreted as a grave offense by king Abdullah.
    The Spanish and French consortia were the only remaining bidders for the Saudi HSR (rolling stock + operating). This last episode, added to other offenses, is believed by “saudiologues” to be the death toll for the Alstom-SNCF bid.

    Peter Reply:

    “2 tonnes of cocaine in his B-727”

    Sounds like a classy guy to me.

    Andre Peretti Reply:

    A B-727 is really modest for a middle-east prince. No wonder he had to smuggle cocaine to supplement his income.
    His cousin, prince Al Walid ben Talal, found his own B-747 really cramped and ordered an Airbus 380.

    Peter Reply:

    I wasn’t referring to the plane, I was referring to the 2 tons of cocaine.

    Alon Levy Reply:

    It’s a good thing Singapore never went into the rolling stock business.

    jimsf Reply:

    a 727 and 2 tons of cocaine. Isn’t it amazing how much stuff american’s money can buy for other people. We should all be impressed with ourselves.

  4. Tony D.
    Jan 17th, 2011 at 09:58

    Had to drive roundtrip last night from Gilroy to SFO and back to pick up my wifes cousin; where the hell is HSR when you need it!

    Kind of related to this topic and the last; Robert or anyone, how would a “loan” from Japan or China work? i.e., how would it be paid back, interest rates, good deal/bad deal, etc. Some commenters think a “loan” from foreign country is a bad idea, some think it’s good. What’s the real deal?

    Andre Peretti Reply:

    Here is how it works for new HSR lines in France:
    Several consortia bid for construction and temporary concession of the line.
    The state supplies the ROW and pays a fraction (which can be 0%) of the construction costs.
    The consortium which demands the smallest financial participation from the state wins the bid.
    The winning consortium builds the line and collects the tolls from rail companies for the duration of the concession. When the concession expires, the state recovers full property of the line.

    Robert Cruickshank Reply:

    There’s no single answer to that question – that’s what the Peer Review Report was getting at when they said the Authority needs to figure out its business model.

    Andre Peretti provided a very useful overview of the French model, which could be done in the US as well. The Authority has indicated it wants to own the actual track, but that a private consortium could operate the system and collect revenues that way – and repay loans from operating surpluses. But that’s just one possible model and I’ve seen nothing from the Authority to indicate they’ve settled on anything yet.

    Those details matter a great deal. As we saw in Taiwan, an otherwise successful system found itself in big financial trouble when it used too much borrowed money to build the infrastructure, and required a bailout. This is where the “revenue guarantee” question enters the CA HSR picture.

    It’s also where the ridership question actually becomes important – nobody with any actual knowledge of HSR systems disputes that the CA system will generate large amounts of ridership. The real question is what amount of ridership is needed to generate a specific amount of revenue in order to pay for system operations and to repay any loans. And that in turn will decide the fare structure.

    The problem with using too much private funding is it creates a tendency to maximize revenue and not ridership. The simplest, most effective and efficient way to do this is build the entire system out of state and federal tax dollars and operate the system with subsidies if needed in order to pack the trains full, and pack the rails full of frequent trains. But an ideological decision has been made that omg we can’t have that, so instead we need to find some private funding method.

    While the debates over routes and structures have dominated the discussion of CA HSR since 2008, I’ve always maintained that this issue – the business model, the role of private funding – is actually the most important issue, even if it hasn’t gotten the attention it deserves.

  5. Andre Peretti
    Jan 17th, 2011 at 16:53

    “a tendency to maximize revenue and not ridership”
    For many people this may be difficult to grasp, as the common notion is: the higher the ridership, the higher the profit. In fact, the maximum profit is when you run fewer trains and keep them full from departure to terminus. It’s good business, but is it good public service?

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