New Evidence Shows Flaws in SNCF Plan for California HSR
The recent Los Angeles Times story accusing the California High Speed Rail Authority of dismissing a proposal from SNCF, the French national rail operator, is still bouncing around despite the obvious flaws in the SNCF proposal. New evidence, however, shows that the SNCF proposal did not meet basic guidelines or even comply with state law and therefore was properly rejected by the Authority.
Stephen Smith at Market Urbanism is convinced “it ain’t lookin’ good for the CHSRA”:
So, what does all this mean? It means that the CHSRA very well might have been offered private funding for the plan, but turned it down because it didn’t fulfill desired political objectives of going through towns in the Central Valley onto the main trunk line (again: SNCF’s I-5 proposal would have connected Bakersfield, Fresno, etc., just through spurs rather than the main line, not on every single LA-SF trip). This would be okay if the CHSRA was public about it, but they stand accused – by the LAT and by David Schonbrunn – of covering it up. (Obviously it would also have been in Parsons Brinckerhoff’s interest to ditch the SNCF plan, and of course there are many people who have been employed both at PB and CHSRA.)
Smith is accusing the CHSRA of a coverup here, based only on a conversation with prominent HSR critic David Schonbrunn. That’s flimsy hearsay evidence, but Smith runs with it anyway. What’s really going on here?
As it turns out, the 2010 SNCF “proposal” was so riddled with flaws that it was clearly not deserving of further consideration. Sources familiar with the proposal have made it clear that SNCF was looking for a competitive advantage in getting the HSR contract, and in doing so submitted a proposal that violated state law and was not worthy of further discussion.
Most significantly, the SNCF proposal would have required the state to provide the company with a revenue guarantee. As has been made extremely clear by HSR critics and opponents in recent years, that is a clear violation of AB 3034 which explicitly forbids a revenue guarantee.
Other factors weighed heavily in the Authority’s decision – quite justifiable, in my view – to reject the SNCF proposal, which was not detailed and lacked key specifics. One of the keys for the Authority was the SNCF suggestion that an Interstate 5 alignment be used. The Authority believed, reasonably, that this would reduce ridership significantly by bypassing the at least 2 million residents of the San Joaquin Valley and therefore jeopardize operating revenues. That bypass proposal also violates AB 3034.
Sources also indicate that the “private investment” that the LA Times and Smith have reported SNCF pledged was not nearly as certain as the reports have made it seem and that no formal offer of private investment was ever made. Further, SNCF’s own creditworthiness was uncertain, with S&P downgrading SNCF in mid-2010 as a result of new European Union rules limiting government support for national rail operators.
CHSRA board chairman Dan Richard was prepared to list a series of other objections the Authority had to the SNCF proposal in a letter to the editor of the Los Angeles Times. After all, it would only be fair for Richard to be granted the opportunity to respond to Vartabedian’s biased article. Unfortunately, the Times chose not to run Richard’s letter. This blog has obtained that letter, and it is reproduced in full below:
Over the past year, your reporters covering the High Speed Rail program have spun out one sensational story after another, invariably repeating critics’ charges uncritically and writing things that mostly turn out to be wrong. However, the latest example, “High Speed Rail Officials Spurned offer from French Company,” hits a new low.
First, it was strategically timed; your reporters asked for our comments on this item several weeks ago. They waited until after the vote on Friday in an attempt to reset the debate and again focus on the “deficiencies” of the High Speed Rail Authority.
Second, how in the world can one elevate the self-serving proposal of one company that would have had the state simply handing them the keys (with no offer of funding, by the way) into a serious policy question? SNCF’s proposal to take over the program would be the equivalent of the LA Airports Authority bringing in Airbus to construct the new terminals; don’t be surprised when the jetways don’t accommodate anyone else’s airplanes.
Third, your reporters might have noted that the bond measure authorizing construction of high speed rail specifically calls out cities that must be served. One can argue whether going up I-5 makes more sense (and it doesn’t) but there is the small matter that bypassing Central Valley towns raises serious legal questions along with environmental concerns.
Finally, and most notably, I was not a member of the Board during the time frame discussed in your story, but I am aware that there was significant controversy over SNCF in 2010, emanating from their role in deporting French Jews to death camps during WW II. The California Legislature passed Assemblyman Bob Blumenfield’s bill (vetoed by Gov. Schwarzenegger) to have barred the company from public contracts absent an apology and compensation. Your newspaper editorialized (“Echoes of the Holocaust“) on Nov 20, 2010 that: “Particularly distressing is the fact that the apology was apparently not prompted by regret. Rather, it seems to have been spurred by the company’s desire to win multibillion- dollar high-speed rail contracts in California and Florida.”
Today’s story ignores all of that controversy in an attempt to make the High Speed Rail Authority look incompetent or worse. Yet, it shouldn’t have been hard for your reporters to find this material in the archives. After all, one of them covered the issue at the time.
California High-Speed Rail Authority
Combined with the other information I cited above, Richard’s letter makes it pretty clear that the SNCF proposal was simply not worthy of serious consideration. It also raises serious questions about why The Times chose to publish the story on the Monday after the big victory in the State Senate for HSR. It also further implicates SNCF as having sour grapes over the way their actions in the Holocaust were addressed by the state legislature and The Times editorial board.
Together, this new evidence provides more confirmation that the CHSRA was right to reject SNCF’s flawed proposal. But we already had all the information we needed to know theirs was a bad idea. The purpose of high speed rail is not to provide the fastest travel time possible between SF and LA. Its purpose is not to be built as cheaply as possible. Its purpose is instead to provide the people of California with a fast, safe, affordable, reliable way to get around the state in a post-oil world. HSR’s job is to move people. That means its tracks should go where the people are. Any proposal to bypass the Central Valley metropolises via I-5 is a proposal that doesn’t meet the core values or purpose of the system and should be rejected on that basis alone. As it turns out, that wasn’t the only reason why the SNCF proposal was rejected.
Personally I would love for SNCF to come back and offer another proposal along the lines of their 2009 analysis that showed the Highway 99 corridor to be sound. SNCF has a lot to offer California high speed rail, and could certainly use the revenue. Let’s hope that if they do try again, they follow the letter and the spirit of the law.