As Expected, Private Investors Showing Interest in CA HSR

Jul 21st, 2014 | Posted by

A common criticism leveled against the California high speed rail project is that private investors haven’t committed anything to the project. That’s always been a flawed argument. This blog has repeatedly made the point that private investment will show up once the state government has shown it is committed to delivering its own funding to the project, without which no private investor is going to be interested in it.

That’s exactly what is happening right now. With the recent budget vote to deliver hundreds of millions of dollars a year in cap-and-trade funds to the California HSR project, private investors are now stepping up just as we always said they would:

Inking a deal that will send the project hundreds of millions of dollars a year in fees collected from polluters is the signal the private sector was waiting for, according to formal letters of interest the state received last month. With only a fraction of the project’s funding in hand, the state needs private investment for about one-third of the final price tag to have any hope of completing the rail line.

“The new funding gives us confidence that as political leanings and priorities change, it won’t be easy for the government to back out of its end of the deal,” said Stephen Polechronis, senior vice president of Los Angeles-based AECOM, one of the world’s largest engineering and construction firms. “We feel we have a partner now.”…

But it’s significant that Vinci Concessions, a French company that is considered a world leader in developing highly technical high-speed rail projects, is one of the nine companies that eagerly wrote to California about the bullet train last month. Several other firms that wrote letters are based in Spain, also home to a state-of-the-art system….

“Developing the first high-speed rail corridor in the United States is an extremely exciting proposition,” said Sidney Florey, Vinci Concessions’ director of North American business development, whose company is now building a bullet train between Tours and Bordeaux in France. “If California makes the right offer, anybody in this industry would be interested.”

This isn’t the first time that the private sector has shown interest. The Authority has been receiving letters and proposals from the private sector for years now, ongoing proof that the private side was always interested in getting involved. But the cap-and-trade vote has produced a different and much greater level of interest that has grabbed the media’s attention.

Let’s hope this is the first sign of a turnaround in the media’s narrative about the project. With cap-and-trade funding and now meaningful steps toward private funding, the HSR project is on more solid ground than it has been since the Tea Party takeover of the House in 2010.

Note: apologies for the lack of posts in recent days, as I was in Detroit for the Netroots Nation conference. And yes, I rode the People Mover in a complete loop. It was…somewhat useful. Bring on Woodward Avenue light rail!

  1. morris brown
    Jul 21st, 2014 at 11:36

    My my… same o … same o..

    This Jessica Calefati article doesn’t deserve the space that the media has allotted to it. Is she now working for the Authority?


    “just show me the money” and not just write the same “interest has been shown….” nonsense.

    Eric M Reply:

    So what Sidney Florey of Vinci Concessions said is a lie?

    Zorro Reply:

    Only if one believes the tripe and FUD of Morris.

    JCC Reply:

    So sayeth the almighty MORRIS BROWN the most learned, esteemed, all knowing and all powerful. Even the most interesting man in the world (from the commercials) stops everything and listens attentively to the almighty MORRIS BROWN.

    All Hail Morris Brown

    Alan Reply:

    You nailed it. Morris lives with the delusion that he is somehow more privileged and more entitled than anyone else, and he isn’t used to people standing up to him. I don’t play that game.

  2. morris brown
    Jul 21st, 2014 at 11:55

    SHOW ME THE MONEY …. not show me just interest!


    joe Reply:

    “If California makes the right offer, anybody in this industry would be interested.”

    I’m gonna make him an offer he can’t refuse.

  3. Alon Levy
    Jul 21st, 2014 at 13:14

    This line is about five years out of date:

    With only a fraction of the project’s funding in hand, the state needs private investment for about one-third of the final price tag to have any hope of completing the rail line.

    “One third” goes back to the 1A assumption of one third state/1A funding, one third federal, one third private. Things have changed since, on multiple fronts.

  4. John Nachtigall
    Jul 21st, 2014 at 13:35

    I just don’t see any way private funding can make money on HSR if they have to invest in the project up front.

    So lets say the project needs 20 billion from private investors. That assumes the other 50 billion comes from public sources. Lets also assume (best case) that is the “last” 20 billion and there is a substantial initial system already up and running.

    The expected ROI for an investment of this sort is at least 10%. So ignoring the time cost of money (which in this case is very significant) they would put in 20 billion and get out 22. Add in the time value of money and it is more like 3X the initial investment of 60 billion returned.

    So lets say investor X gives them 20 billion in 2015. In exchange they get the rights to run the system and keep the profits (which may in and of itself be illegal because the profits are supposed to be invested in phase II) and the right to the real estate along the route.

    Investor X still has to pay the value of the land taken. Then build. Then sell the retail and residences they sold. Even in the SF bubble investors are getting about 25% more than they invested.

    So Investor X gives 20 billion to the Train Build out. Then invests another 60 billion in real estate.

    In exchange for this 80 billion, he/she nets 75 billion in real estate (hopefully) and the profits from the train over the next 30 years.

    Lots of reward.

    I am sure that private enterprises want to run the system. They want to invest nothing and run the system for a cut of the profits. That will be a decent ROI. But if you have to put significant money in up front, no way to make money.

    Donk Reply:

    I agree with John on this one. The idea of private investment in CAHSR sounds a lot like the “collect underpants” scheme.

    Ted Judah Reply:

    John’s theory holds if the partner pulls the same crap that caused the Trans Texas Corridor to crumble. If it’s purely a, “we lend you money to buy our stuff and then you rent to own it from us,” there is slim pickings.

    But established firms in countries with HSR won’t offer that. Expect a far more complex deal that would give the partner perhaps some sort royalty for using the electronic transmission capacity of the system. Or maybe some sort of sole-sourcing bid contract that will affect other specifications. There also perhaps a clause to have some real estate in downtown areas for free.

    And even if that doesn’t come to pass, just the ability to have your technology be the first used in HSR in the US is a plum prize psychologically, regardless of how lucrative it is financially.

    joe Reply:

    Courting of private investment is basically telling GOP to STFU.

    Jeff Morales used this against the Fresno GOP.
    Morales said a reversal of the supervisors’ support for high-speed rail would have no direct effect on the agency’s federal grants or funding plans, or on selecting a site in the San Joaquin Valley for a heavy maintenance facility for the train system.

    But “actions have consequences,” he added. “When people talk about private investment, a very chilling factor for private investors is hearing things about not supporting the system.”

    Morales told supervisors that about a dozen companies have expressed interest in providing private investment into the rail system as it develops.

    STFU and don’t scare off private investment in HSR.

    synonymouse Reply:

    “a very chilling factor for private investors” is Prop 1a, which dictates 2:40 and no subsidies. They want a free ride, guaranteed repayments, courtesy of the taxpayers.

    STFU – machine bosses and PB bozos.

    joe Reply:

    Boondoggle that will lose money is now a cash cow being sold to the highest bidder. Why can’t we just widen I-5 to 12 lanes?

    synonymouse Reply:

    Train to Palmdale, Tehachapi, Caliente a cash cow? More likely liquidated at auction by a State that can no longer afford to subsidize it. The class ones cannot use it – who wants it even at pennies on the dollar?

    joe Reply:

    So no free ride guarantee for investors after all.

    BruceMcF Reply:

    “2:40 and no [operating] subsidies” is just “2:40”, since anything short of 3:30 is going to be able to operate without an operating subsidy. The no operating subsidies is a binding constraint on the Initial Operating Service, but not on a service that connects the southern Central Valley to both the LA Basin and the Bay Area in under two hours either way.

    synonymouse Reply:

    “anything short of 3:30 is going to be able to operate without an operating subsidy”

    That’s three times as long as air. There is a reason they came up with 2:40.

    And wait until Amalgamated goes on strike for a week like the CGT with SNCF. Brown and Pelosi won’t be around to try to outlaw MegaBus or air competition.

    adirondacker12800 Reply:

    People don’t live at the airport and not very many of them are going to stay at the airport when they get off the plane.

    BruceMcF Reply:

    “That’s three times as long as air.”
    As adirondacker12800 points out, not door to door its not.

    “There is a reason they came up with 2:40.”

    And that reason was quite definitely NOT because of any reason to believe that 2:45 was where operating subsidies would be required.

    Paul Druce Reply:

    And rail is longer door to door as well.

    Joe Reply:

    Not as long because they have more stations.

    Joe Reply:

    If you’re mary poppins then the flying time is three times as long. For Airport users its not.

    Mattie F. Reply:


    Mattie F. Reply:


  5. JCC
    Jul 21st, 2014 at 16:38

    The fact that AECOM and French and Spanish companies are looking at the possibilities underscores why the Morris Browns and John Nachtigall are always starting from the premise HSR sucks and then trying to find ways that always result in a big fat fail for HSR. Their limited reasoning defines them.

    I am not at all stating that public/private partnership will work out, because I am not putting myself in a hole like they do, but IF a public/private partnership does end up aligning itself, how are they going to explain why or even how it succeeded? I am sure their excuses and hyperbole will be as lame as some of the other things that they have written.

    John Nachtigall Reply:

    If it works I will admit I was wrong. It’s that simple.

    The fact they are looking into it just makes them a decent company that does due diligence. It’s not like there are so many HSR opportunities that they can afford to not look into one.

    But private companies invest in infastructure that has ROI. Look at the Chicago parking deal. Invested 2 billion and returning 9 billon or more. Toll roads same deal. Bridges. Etc.

    HSR wants 20 billon now to pay off in 10+ years. Any private company with that kind of money and risk tolerance is going to expect 60 to 80 billon in return. There just isn’t that much money to be had

    joe Reply:

    These bi-polar arguments swing from manic giveaway to depressed money loser.

    Doing stuff has risks which is why HSR critics propose NOTHING. DO NOTHING.

    synonymouse Reply:

    Not do nothing, just don’t do something stupid.

    Wait until Vinci et al get a load of shuffling off to Mojave searching for the Lost Dutchman. You think they are dumber and/or more naive than SNCF?

    Clem Reply:

    Bruce McF made an interesting point in an earlier thread: investors are looking for a certain ROI and don’t care about how compromised the routing is, as long as there is still money to be made. ROI being constant, this means that investors will come in later and later with less and less money, the worse the chosen routing. The transportation industrial complex just needs a chance to fleece taxpayers first, leaving just enough of the system to be built as far into the future as possible but not so little or so far that private investors won’t spring for that final piece. This is what you might call Leveraged Cost Maximization, which is a deviant cousin to the Public Private Partnership.

    synonymouse Reply:

    It will be instructive how they liquidate Prop 1a; otherwise there is always the slight chance a suit might prevail, given the extreme likelihood they cannot meet its conditions with the current plan.

    Jos Callinet Reply:

    Brooks Brothers Suit?

    Joe Reply:

    Scary world huh?

    synonymouse Reply:

    Would you like to buy a Bridge? I’ll sell it reasonable and you can make a lot of profit.

    Joe Reply:

    The scam is that the seller doesn’t own the bridge, not that owning critical infrastructure is a bad deal.

    synonymouse Reply:

    It is not the structure; it is the chokepoint, aka the natural monopoly. Duh, tolls – raised every year, ka-ching.

    adirondacker12800 Reply:

    It wasn’t a monopoly. There were lots and lots of competition from the ferries.

    synonymouse Reply:

    Think of it this way. Let’s say the 6th Army proclaimed in the early 30’s that its Presidio could not be tainted by any bridge and they had the raw political power to enforce that embargo. That’s a chokepoint and an embargo. The Presidio is the unique launch point for a bridge across the Golden Gate.

    The Tejon Ranch property at Lebec is analogous – the uniquely optimal crossing and their embargo is as unacceptable and unconstitutional IMHO. They have made Jerry Brown their stooge.

    joe Reply:

    There’s a perfectly rational explanation for I-5 cutting across The Great Embargo of Tejon Ranch and synonymous will fabricate it up in the next comment.

    synonymouse Reply:

    The primitive road route was already there when the Chandlers and investment partner bought the Ranch ca. 1913. Grandfathered and apparently had been traveled by Native Americans for many years.

    They do not want to move their planned golf course for hsr it seems. But rip up some almond fields, real green of Jerry.

    synonymouse Reply:

    Without the road how are the Tejon Mountain Village “rupins” going to get anywhere?

    Ted Judah Reply:

    Given what we know about Le Plan Douty however, it seems unlikely that even if ROI is constant–that a partner would acknowledge that.

    TomA Reply:

    Almond fields are very ungreen – lots of water required. Trains and natural scrub would definitely be greener.

    Paul Dyson Reply:

    Redundant oil tank cars could bring in water….

    synonymouse Reply:

    Strip malls and ranchitos are greener? Can you eat AmBART and/or scrub brush?

    Alan Reply:

    Contracts for PPP projects have to be written very carefully, to avoid unexpected adverse consequences for the public. One example: During a blizzard last winter, (might have been a year ago…) the now-privately owned Indiana Toll Road could not be closed, as the Indiana State Police wanted to do, because the owners wouldn’t risk the loss of toll revenue due to the closure. Rescuing people actually dumb enough to pay the toll and drive into the blizzard was the state’s problem.

    In the Denver area, the contract for a privately owned toll road provided that the city could not construct any improvement to nearby streets that could be considered a competitor to the toll road.

    Obviously, a contract for PPP projects involving HSR need to be written with the same care, particularly to ensure that the contract does not prohibit improvements to the San Joaquins, Caltrain, Metrolink, etc.

    Neil Shea Reply:

    The Orange County toll roads had the same contractual prohibition against improving parallel routes. They were badly underperforming but the OCTA eventually had to buy out the private owners at full value just to improve the other highways in the county.

    About Indiana, if the state police ask you to close the road in a blizzard and the private owner does not, what does their insurance company say to that? What kinds of liability have they now assumed?

    adirondacker12800 Reply:

    For the few people that showed up to pay tolls it cost them more in labor to collect the tolls than they got in tolls. The State Police might not be able to tell them to close the road but it’s been my experience that when it’s bad enough to close the toll roads extensively it’s bad enough that the other roads are closed too. Nothing stopping the State Police from issuing tickets to few people who show up for driving on some road other than the toll road. And warning them that they will get another one if they get stuck on the toll road or one when they get off. And that they are free to park their car at the toll plaza until it’s safer to drive.

  6. morris brown
    Jul 21st, 2014 at 19:55

    Here you can read these “letters of interest”, that Robert wrote about from the Jessica Calefati article.


    They certainly are letters expressing interest, but not interest in investing in the project; they express interest in wanting to win work contracts to build the project.

    Nice try by Morales at the Fresno Supervisor’s board meeting last Tuesday ( 7/15/2014); his attempt to convince the Supervisors private investment coming.

    synonymouse Reply:

    “In particular, if there were sufficient funding in statute that provided a multi-year source of repayment…”

    “…some of our members would consider (after the proper analysis and studies} competing for construction projects…”

    And please elucidate “Life-Cycle Contract”?

    Yeah, after a “proper analysis” of the DogLeg it’s thumbs down.

    Joe Reply:

    I used an iphone and looked at one page and viola the letter I read ALSO offers ways to “Invest and Finance” the project to make it cost effective.

    synonymouse Reply:

    They are not talking at risk investment. It is a loan and guess who co-signs?

    synonymouse Reply:

    Maybe Jerry should contact Gold in Sacks and arrange to sell stock in the Mojave Flyer.

    Joe Reply:

    I thought to let you reply to your reply to yourself but decided it might devolve further.

    HSR is a boondoggle until it haz probate interest which flips HSR into a giveaway of a essential public asset.

    synonymouse Reply:

    A detour over Tehachapi and Mojave “a[sic] essential public asset”?

    Now a 15 mile base tunnel to Palmdale perhaps essential public asset in LA’s mind but let LA pay for it. Vote for the California “six pack” and learn LA a thing or two about treating the rest of the State as its colony.

    adirondacker12800 Reply:

    The rest of the state doesn’t want Los Angeles to start asking rude questions about what the rest of the state is doing with their money.

    Ted Judah Reply:

    You have it backwards. These days it is about what Los Angeles is doing with the Bay Area’s money….

    adirondacker12800 Reply:

    There’s rich people in LA too. And more people in LA.

    Ted Judah Reply:

    Again you need to pay closer attention. Majority of state taxes are coming from 3 counties.

    adirondacker12800 Reply:

    A quarter of the people in the state live in Los Angeles County. There are more people in Los Angeles County than there are in the Bay Area. There are places in the Bay Area where per capita the state collects a lot more money. There aren’t a lot of those people.
    Which three counties and what percentage of the state budget do they contribute?

    synonymouse Reply:

    An excellent reason to cut LA loose.

    Ted Judah Reply:

    I tried to find more recent data, Adirondacker, but the best I could do was some 2006 data from Department of Finance. Back then, personal income tax mostly reflected population. Since the passage of Prop 30 and the collapse of the housing market down south, however, these are likely to be incorrect.

    But in case people are wondering, these counties reflect 72% of PIT collections for 2006 statewide. The column on the left has Southern California counties that reflect 46% of revenue but 50% of the population. The Bay Area counties on the right reflect 29% of revenue, but less than a quarter of population. And as I said, the discrepancy is only getting worse, not better.

    Los Angeles 25% Santa Clara 9%
    Orange 10% San Mateo 5%
    San Diego 8% San Francisco 5%
    Riverside 3% Alameda 4%
    Contra Costa 4%
    Marin 2%

    Total: 46% Total: 29%

    adirondacker12800 Reply:

    The state collects other taxes besides personal income taxes.

    Ted Judah Reply:

    2/3 of all General Fund revenue in CA is personal income tax.

    nslander Reply:

    Synon – you are out of your frggin mind. That is all.

    Zorro Reply:

    That ballot is just a naked power grab by Fuhrer Tim Draper, He’s a rich silicon valley jerk. I’m against this measure and I’d bet that most in California are(most not being Repubs/baggers and other stupid folks), in the 3 counties that did have secession on the ballot, the 2 with secession as local ballot measures next to the state line with Oregon passed, the 3rd county that was farther away had its ballot measure on secession fail. Counties can’t form their own states, only Congress can form new states as that is spelled out in the US Constitution and the text is plainly written, so that even stupid jerkwads would understand. This measure would make several states that would be too poor to even repave their own roads and to police their states, they’d be poorer than either Alabama and Mississippi. You think your roads are bad now, just wait, it’ll take some time, but the radicals will start cutting taxes on the rich, hiking them on the poor who have no money and cutting everything in sight and trying to privatize everything in sight, out of sight and your pocket book, as has happened before, your water rates start to climb. This measure is stupid. I predict it will FAIL.

    Tim Draper Submits Six Californias Ballot Measure Signatures

    If it passes, it has a clause that goes into effect even if California isn’t split
    I’m wondering if Tim Draper’s real motivation is to give charter counties the same “home rule” powers that charter cities have, and enable binding regional government; if that’s the “steak”, and the stuff about dividing California into six states is just the “sizzle”. After all, Section 4 of the initiative is not very exciting and it would be difficult to generate any buzz around it:

    Article XI of the California Constitution is amended to add section 4.5 to read:
    Sec. 4.5(a) Upon enactment of this section, it shall be competent in any county charter to provide
    that the county governed thereunder may make and enforce all ordinances and regulations in
    respect to municipal affairs, subject only to restrictions and limitations provided in their several
    charters and in respect to other matters they shall be subject to general laws. County charters
    adopted pursuant to this Constitution shall supersede any existing charter, and with respect to
    municipal affairs shall supersede all laws inconsistent therewith.
    (b) A county charter may provide for the delegation of authority in respect to municipal affairs,
    by way of compact, or other agreement, to a regional association of counties, consisting of the
    other counties within the boundaries of the new states provided for in section 2.5 of Article II [sic],
    during the interim period of time before Congressional approval of the new states.
    (c) For purposes of this section, any law intended by the Legislature to be a general law or matter
    of statewide concern that supersedes the authority of a county over its municipal affairs and also
    requires an annual subvention of funds to reimburse the county for the costs of the program or
    service pursuant to section 6 of Article XIIIB, shall require an annual transfer of funds from the
    state treasury to a county treasury, as needed, and in the absence of such reimbursement, the
    county shall have no obligation to enforce the law. The state shall have no power to incur debt
    owed to a county pursuant to this subdivision.

    [End of Section 4.]

    Of course, he has a fatal typo above; it refers to “the new states provided for in section 2.5 of Article II” but Article II Section 2.5 of the Constitution just says “A voter who casts a vote in an election in accordance with the laws of this State shall have that vote counted.” He probably meant to refer to his new Section 2 of Article III but made a drafting error.

    Zorro Reply:

    Oh and this slime ball ballot measure is mentioned elsewhere, like on Facebook and on the Daily KOS.

    This is a ballot measure that only crackpots will support…

    First off, this is never going to happen.

    Silicon Valley venture capitalist Tim Draper will submit signatures Tuesday to put what could be one of the most dramatic startups ever on the ballot – a plan to divide California into six states.

    Second off, it’s a fairly transparent plan to break up Democratic dominance within the state, the “six states” proposed being gerrymandered in such a way as to eke out three conservative states from the rural portions of the state. And it suffers from the continued Silicon Valley problem of gigantic and uncalled-for egotism, the general premise that being a tech millionaire means it’s now time to inform the masses as to how your run-of-the-mill Ayn Randisms are now ingenious because you said so.

    Draper, speaking to a crowd of tech insiders in San Francisco earlier this year, insisted his plan was not – as some critics have suggested – a means of getting more Republican representation in California. He said he was simply aiming to spread Silicon Valley’s spirit of innovation to the entire state, which he said has been struggling with partisanship and lack of leadership as businesses decamp for better climates. […]

    Draper is no stranger to the challenges of expensive state ballot measures. In 2000, he spent $20 million on a failed measure to support school vouchers.

    Tech man’s burden, bringin’ disruptive innovation to the dullard masses. Sorry—the story of wealthy businessmen funding ballot measures to pass transparently self-serving but state-damaging things is a bit of a sore spot in this state, it being something that happens Every Single Damn Election. The measures are then advertised by groups like “Citizens for Happier Puppies,” which turns out to be a front for the American Puppy Crushers Association, and we get lovely ads about how taxes will go down if we stop oppressing industries that just want to give all our puppies sharp metal hugs.

    All right, let’s make this quick. California has some problems, but “partisanship” is a rather facile explanation—and by “facile,” I mean toddler-ish. Requiring supermajorities of the legislature to accomplish Basic Things would be a big problem, thank you very much past anti-government crackpots with petition drives. Continued efforts to further disembowel an educational system that was once among the top in the nation would be a big problem, thank you very much anti-tax and pro-voucher zealots. Yada yada yada Prop. 13, yada yada yada Silicon Valley doesn’t seem to be going anywhere, yada yada whatever. Thanks to Rich Guy petition drives, we impeached a governor because the massively crooked Enron (successfully!) blackmailed the entire effing state and California Rich Guys saw an opportunity to replace him with someone friendlier to the damn grifters. We then elected a Republican actor instead because, Christ, the guy from the action movies was literally the most serious Republican left in the entire state. Rich Guy petition drives have done a number on our fair state, a number and then some, but this particular one stretches too far. Even if you could get the votes for it (not likely), do we really think Congress would take such a thing up? The California legislature?

    J. Wong Reply:

    If businesses are decamping from California, why doesn’t Tim Draper do so?

    Zorro Reply:

    I’ve no idea on that, but He’s welcome to leave anytime He wants to.

    synonymouse Reply:

    The super-rich migrate to California because of the weather and hole up in the enclaves to party.

    Of course Draper’s six pack cannot pass just like the dumb shits in Jefferson did not support breakaway. They are too stupid to understand you have to get Jerry’s attention and then start demanding perks, just like the elite.

    But it is inevitable that LA and Socal dominance will become transparent to the stix hix and provincials. When they make their move on Hetch Hetchy.

    synonymouse Reply:

    The mother of crackpot ballot measures was Prop 1a. I ought to know as I voted for it.

    I guess I was “out of my friggin mind”.

    Eric Reply:

    Yeah, when I read that bit about changes to the state constitution that take effect if the measure passes and congress doesn’t approve the split, just really shows where the power grab is. All the public talk will be about splitting the state, and not about this.

    Paul Dyson Reply:

    15 mile base tunnel, another ruse to suck the water out of the north. I told you before syn, HSR is an aqueduct in disguise, with hologram trains. I have the secret blueprints!!!!!!!!!!!!!

    synonymouse Reply:

    No big secret – SFPUC was already informed it would have to “share” Hetch Hetchy.

    Obama is on the Peninsula today tapping real estate interests. Pretty straightforward where the machine bosses’, of both parties, heads are at.

    Growth = Global Warming

    Urbanization = Global Warming

    LAHSR = sprawl greenwashed.

    Bill Reply:

    Does anyone use the word “boondoggle” in verbal conversation? Or is it a catchphrase highly utilized by the regressively-minded right winger crowd? So over that fucking term. Boondoggle, say it out loud in a serious conversation, I dare you.

    Jerry Reply:

    Or do these same people who use the word “boondoggle” ever use it for the Iraq War?

    Richard Mlynarik Reply:

    Slaughter of millions is totally the same thing as a few billion of public works fraud.

    “Choo choo good” because “Saddam Hussein bad”. Or something like that. Maybe “Dick Cheney bad”? Or “Jesus wept”? Something. “Kittens cute”? “Dagnabbit hornswaggle”? Whatever.

    Jerry Reply:

    Thanks for the Gabby Hayes memory.

    John Burrows Reply:

    Boondoggle rhymes with hornswoggle—The two words work well together. Maybe the high speed rail deniers could add more punch to their message if they began with something like “The California voter has been hornswoggled by the high speed rail boondoggle”.

    joe Reply:

    Poppycock! There is but one ‘sogdollager’, and that is High Speed Rail.
    Critics better skedaddle before they become dumfungled and have to face our blustrification.

    Alan Reply:

    ACS welcomes the opportunity to demonstrate how we can contribute to financing this effort and to deliver new high speed transportation alternatives that will connect the communities of California.


    In particular, if there were sufficient funding in statute that provided a multi-year source of repayment, we would be interested in competing for construction projects where
    private financing, investment or equity were needed.

    (emphasis added to both quotes)

    Sure sounds like companies that are ready to put money on the table. Morris is off in his little fantasy world again, it would appear.

  7. joe
    Jul 22nd, 2014 at 06:39


    Falling behind: U.S. among the least energy efficient of the world’s largest economies
    Germany is the global leader in energy efficiency, and the U.S., with its ingrained car culture, is among the least energy efficient of the world’s largest economies.

    That’s the conclusion of a new report released by the American Council for an Energy-Efficient Economy,

    The U.S. was the 9th most energy-efficient economy in the ACEEE’s 2012 ranking, which criticized the country for focusing more on road construction than expanding public transportation.

    Scramjett Reply:

    The sad thing is that the Germans are a prime example for us to follow, and even ultimately surpass! More than 25% of their population bicycles for their trips, they have extensive public transportation infrastructure and their own sophisticated HSR lines. But they also have their own Big Three automakers (BMW, VW, Mercedes) AND the autobahn! They are living proof that you can have it both ways!

    Joe Reply:

    Germany has also lower costs for installing home solar. Another area we should follow
    Here’s the data and possible explanations.

    In sunny California, the potential to generate more with solar is much greater.

    Scramjett Reply:

    Yes, that thought occurred to me as I wrote that out. Their homes and offices also use far less energy, are far more comfortable, they have appliances such as dryers that use 1/3 to 1/2 the energy and they will most likely achieve Zero Net Energy much sooner than California will. There is definitely A LOT more California can do to improve.

    Joe Reply:

    The US leads with appliance efficiency, thanks to CA standards. The info is in the first link.

    We have potential if the Neanderthals would get out the way.

    Reality Check Reply:

    Germany also has Audi and Porsche in addition to BMW, Mercedes and VW.

    And why is it that the US can’t figure out how to make red-light and speed cameras work as well as they do in most any other country (Australia, Brazil, Canada, England, France, Germany, Singapore … just to name a few)? The real problem, it seems, is political with a small but vocal segment of drivers (including electeds, attorneys and other privileged people) who treat the whole idea as being unfair, foreign and/or unconstitutional or, at the very least, unsporting. Relying on expensive cops to zoom around pulling people over for such easy-to-enforce-electronically violations is nutty.

    synonymouse Reply:

    No expensive cops around; they are all lounging at a DUI checkpoint-roadblock.

    How about DWA? Driving while arrogant.

    adirondacker12800 Reply:

    Audi Porsche and Volkswagen are all the same company

    Reality Check Reply:

    Yes, the Volkswagen Group also includes Bentley, Ducati, Lamborghini, SEAT and Škoda too. And so?

    adirondacker12800 Reply:

    Then US Big Three aren’t and haven’t been the big three for many decades. They were the Big 12 until they decided to trim back some of the brands.

    Reality Check Reply:

    I have no idea what point you are (or were) trying to make.

    adirondacker12800 Reply:

    IF all the brands that the company that owns Volkawagen and Porsche own get to be counted all the brands that GM owns get to be counted. Or all the brands Toyota has. Or all the brands Ford does.

    joe Reply:

    Camera’s are used to generate revenue, not enforce law and safety.

    The fines are paid to private corporations that own the camera, they mine the data for ticky-tack violations and issue fines. The fees paid are NOT violations or admission of violation but fines split by the city and company.

    This is shit judges used to throw out of court for wasting their time.,0,1163294.story
    The [Chicago] Tribune investigation found that thousands of tickets were issued in error. Many more tickets could be blamed on unannounced — and temporary — changes in the enforcement criteria.

    Redflex Traffic Systems Inc., the private vendor that operated the cameras until it was fired last year for acknowledging it bribed its way into the contract, was supposed to monitor daily for such anomalies. It apparently never reported any, and the city was satisfied with that representation.

    So to review: Cameras all over the city periodically sprang to life, spewed hundreds of tickets while nobody noticed and quietly settled back down. City officials can’t explain what happened. They didn’t even know it was happening. But they are confident no one was wronged. Raise your hand if you share in that conviction.

    It’s revenue.

    Scramjett Reply:

    This. Here in Sacramento and down in Stockton, the red light cameras are all contracted out to private companies who have a profit motive. In Europe, their speed and red light cameras are owned and operated publicly and the few that might be privately owned/operated are subject to extensive public scrutiny.

    wdobner Reply:

    If it’s a sad thing, then o guess it,could be a good thing for us that the construction of all those brown coal plants to offset the intermittency of all those solar panels (and much more crucially the knee jerk decision to shut down their nukes) will have those Germans right down around our range in no time.

    joe Reply:

    The Germans are accelerating, not regressing.

    On Sunday, Germany’s impressive streak of renewable energy milestones continued, with renewable energy generation surging to a record portion — nearly 75 percent — of the country’s overall electricity demand by midday. With wind and solar in particular filling such a huge portion of the country’s power demand, electricity prices actually dipped into the negative for much of the afternoon, according to Renewables International.

    Observers say the records will keep coming as Germany continues its Energiewende, or energy transformation, which aims to power the country almost entirely on renewable sources by 2050.

    The modest uptick in coal-fired generation was substituting for pricier natural gas, not representative of a return to coal as it’s often mischaracterized….Germany’s largest utility chose not to renew two long-term contracts for coal-fired power.

    The intermittent renewable power is predictable. They can do it.

    wdobner Reply:

    No, increasing carbon emissions due to knee jerk reactions to events half a world away can only be called regressing. And they increased carbon emissions WHILE increasing the price. That’s completely backward no matter what sort of spin you’re trying to put on it. It doesn’t matter how much solar power they generate on a few dozen days in the middle of the summer, it’s the remaining 340 days of the year that determine their carbon output, and that output is rising.

    Meanwhile France’s emissions have been far more stable due to their reliance on nuclear power.

    BTW the ThinkProgress piece is demonstrably false:

    Generation from brown and hard coal is now around 50% of its energy of Germany’s energy’s mix, the highest since 1990, says German analysts AGEB

    They’re bringing more than 5 gigawatts of coal power online in the next 4 years. That’s more than Germany had in terms of solar before 2009. Solar is not keeping up with Germany’s Energiewende and their economy is suffering for it.

    joe Reply:

    You exaggerate. Shifting to renewable is a democratic decision driven by reasonable recognition that nuclear mishaps are, empirically as we are seeing, too common.

    Changing to renewables is de facto a transition which is what is being exaggerated as a regression.

    For example it’s not 2009. It’s 2014 and they have 36 GW of solar capacity, not 5 or less. That’s not regressing. It’s a shift to renewable.

    Solar met around 43% of Germany’s power demand today, the equivalent of 20 average-sized coal-fired power stations staying offline, noted Berlin-based think tank the Heinrich Boell Foundation.

    – See more at:

    wdobner Reply:

    You exaggerate. Shifting to renewable is a democratic decision driven by reasonable recognition that nuclear mishaps are, empirically as we are seeing, too common.

    Except they aren’t common, particularly in Gen III and newer units.

    Changing to renewables is de facto a transition which is what is being exaggerated as a regression.

    All of which is for naught. Their carbon dioxide emissions *increased* after they’d blown $140 billion on renewables. Every watt of solar has a watt of coal being brought online to fight the intermittency problem. They’re now generating more of their energy in coal power plants than for any time since 1990. In what way is ANY of this a transition to renewables? Any rational person would recognize it’s a transition to coal power.

    Holding up a few days in the middle of summer as an example of Germany’s solar “success” only serves to highlight just how unrealistic their goals are and how renewables cannot hope to supplant fossil fuel sources. If anything, Germany demonstrates that solar power INCREASES fossil fuel consumption for 10 out of 12 months.

    Donk Reply:

    Unfortunately the real reason that Germany is so much more energy efficient is because it depends on Russia and the Middle East to import most of its energy. But you can make it sound like it is just because Germans are progressive people.

    Richard Mlynarik Reply:

    Hitler. Its all because of Hitler. And BismarckStalinPutinBinLaden.

    Wind turbines = Saddam Hussein. Obviously.

    Passivhaus = Wagner.

    Taktverkehr = Kristallnacht.

    Bremsenergierückgewinnung = Ayatollah Khomeini.

    Eric Reply:

    You’re being even more spastic than usual.

    joe Reply:

    BARTDotyRichardsKoopPBQD = CAHSR!

    Eric Reply:

    That doesn’t make sense to me. Just because a country imports its oil and gas doesn’t mean that it uses any less energy. Furthermore, NYC gets its oil and gas from the same places as the rest of the US, but IIRC it uses only 1/3 the energy per capita of the US average, because it has so much less need for driving and HVAC.

    adirondacker12800 Reply:

    They want to discourage the imports so they tax it heavily. Which makes people use alternatives or squeeze more efficiency out when they don’t use alternatives.

    BruceMcF Reply:

    As adirondacker12800 notes … and in addition the political power of domestic producers to fight more energy efficient alternatives is substantially greater than the political power of overseas producers to do so.

    Alon Levy Reply:

    Sorry, but no. Germany imports natural gas from Russia, yes, but burns the gas locally, so the greenhouse gas emissions are produced in Germany. Same is true for any country’s imports of Middle Eastern oil.

    Scramjett Reply:

    There may be some truth in that, but the bigger reason is their climate. People often forget that Germany and the rest of Europe is at roughly the same latitudes as Canada. It’s not quite as cold because of the tropical water that gets circulated up north, but it is by no means like California’s Mediterranean climate. They invested heavily in energy efficiency because dirty energy was expensive and…dirty. Germans, and Europeans at large, are more into quality of life than Americans seem to be.

    adirondacker12800 Reply:

    most people in the US live someplace not California, most of them where it gets cold. Some of those places get cold in the winter and hot in the summer.

    Joe Reply:

    Well the get far less shortwave radiation AKA sunlight, than CA or eastern US yet lead in solar cell deployment and have the lowest “soft costs” for installing PV cells. Soft are permitting, installation and fees etc.

    Donk Reply:

    First I didn’t say that Germans are not progressive people, I am just implying that there is a certain cause and effect. The U.S. is an energy rich country and has developed this way. Look at Texas. That’s way people in the U.S., and especially TX have grown up over generations now happy to waste energy. Germany has always been more dependent on importing energy. So Germans have grown up knowing that conservation is important. More extreme examples are the Dutch and the Japanese, who have grown up in environments with other types of constraints and have had to think differently.

  8. Scramjett
    Jul 22nd, 2014 at 11:55

    I wish we didn’t need private investment. But at least it’s coming from French and Spanish companies who are very familiar with HSR, so the chances of them bailing should be lower.

    Ted Judah Reply:

    The French already bailed out on us before. Not sure how serious you can take them if they threaten to again….

    joe Reply:

    Vinci Concessions, a French company, had nothing to do with the failed powerpoint pitch.

    Ted Judah Reply:

    Uh, if Vinci is being taken seriously, people need to be prepared for what shoe is going to drop. Te company is a big advocate of tolls…on highways. This they would build the HSR line in exchange for long range concessions on it AND so interstates (Remember, Obama proposed this in his transportation bill…)

    Still, after what happened in Orange County with the toll roads, this is a nutty idea. Gavin Newsom is licking his chops.

    Joe Reply:

    And maybe request the first born of each family.

    Virginia Metro Silver Line is partially funded with toll revenue collected from the Dulles to DC tollway.

    SPUR proposed tolling highways from the CV to LA for construction revenue.

    Vinci isn’t the problem. Tolls cannot pay for HSR operations. If CA tolls roads it’s for other purposes.

    Joey Reply:

    You couldn’t use the money for operations, but you could use it for construction. Not that either would fly politically…

    Joe Reply:

    Thats the Silver Line. Money to construct the system extension, not for operations.

    I oppose regresive taxes like tolling the CV to build HSR. Its out there already, no corporate partner is going to innovate any novel tax beyond what’s being proposed.

    One might ask the GOP House why no Federal HSR funding when there is a corporate partner. Maybe produce a slideshow of non-califonia the Feds funded in other states.

    Joey Reply:

    Okay, how about tolling everyone? Or tolling the mountain crossings so that you don’t also get intra-CV trips?

    adirondacker12800 Reply:

    How about getting automobiles to pay their own way first?

    joe Reply:

    How about a progressive income tax.

    Ted Judah Reply:

    Well, brace yourself. The current highway toll in France from Paris to Lyon is 33 euros, or about $45.

    If you collected a similar toll of all vehicles in transit between LA and SF, SF and Reno, LA and Phoenix, and LA and Las Vegas, you would collect about 3.3 billion per year in revenue. So figuring depreciation, inflation, and the like… t Vinci is probably willing to pay about $30 billion in construction costs for a 20 year concession if they are guaranteed a toll revenue of about $45 for each trip. If you drop the toll amount, you either have to increase the length of the concession OR add some urban highways to the offer.

    (I used FHWA data on rural average interstate usage to calculate this by the way.)

    To get the toll revenue down to

    adirondacker12800 Reply:

    62.30 roundtrip between New York City and Washington DC for discounted off peak electronically collected tolls without resident discounts. I didn’t check for what it would be peak or for cash. Or if you take an alternate like I-295 or US 1.

    Ted Judah Reply:

    The rationale behind tolls in the East is that the registration fees out there are much lower. Also, Maryland doesn’t toll anything but bridges, and Delaware’s section is short. So what you are really saying is $50 from New York to Philadelphia for non residents.

    You realize, of course, most travellers out here are residents right?

    Eric Reply:

    You should create/raise tolls on every crowded freeway until it is no longer crowded.

    The only economically rational alternative to that is build more freeways, but most developed countries already have more freeways than they need (Poland is the main exception).

    Ted Judah Reply:

    Virginia already collects tolls on the Dulles Connector. This would be taking converting an existing route and charging tolls on that. Don’t forget, this is would be in addition to any cap and trade tolls imposed. Also tolling the five wouldn’t be enough. You would need to do urban routes as well…

    Joe Reply:

    They’ve jacked up the tolls to pay for the Metro.
    SPUR wants to toll highways between CV and LA to pay for HSR.

    What’s new ? This stuff is out there now. No corporation needed.

  9. Neil Shea
    Jul 22nd, 2014 at 17:39

    So just in round numbers of $billions, how’s our HSR kitty doing and what might we be able to finish by ‘securitizing’ (selling bonds against) HSR’s future CnT revenue share, and taking some private investment?

    If we had $9B from 1a (not counting the $995m) + $3B from the Feds, and we’re spending ~$5B on the track from Kern Cty line to Madera, that leaves ~$7B. Then there was a bit of the HSR on the Caltrain corridor, and prob some to LA, so lets call it ~$6B left.

    Now 30 year CnT bonds could prob raise ~$10B. With $22B from public sources so far, getting $10B (~30%) in private investment could be well within reach. So now we have $26B in the kitty.

    Someone remind me, but I think BKR – PLM – BUR is ~$20B. So including the bonds and 30% private funds, it seems we’re darn close on completing the entire IOS from BUR to Merced, including electrification and signaling.

    With some loco-hauling at either end I think you now get a single seat ride from LAUS to SAC and OAK/SJC. I’m not icing any champagne just yet but 2014 may be a very good year for CA HSR.

    Meanwhile HSR officials keep talking about getting revenue from fiber optic right of ways (like Sprint from SP rail) — would that be worth several hundred million from multiple carriers if they can get to most of CA’s major cities?

    Also when does the CHSRA start claiming some of the value increment from developments near stations?

    Ted Judah Reply:

    Although it’s true that the CHSRA can seize land for the project now and sell or lease it like old tyme railroads did in the 19th century, the Governor can’t presume cities will just hand over the money. Remember, this is the same guy who obliterated redevelopment agencies. If anything, expect the Authority to play nice with municipalities as far as zoning and development around stations. Then expect some leases for major properties like hotels and the like.

  10. jimsf
    Jul 23rd, 2014 at 19:33

    Crowded San Joaquin route needs more Amtrak trains

    By James Fujita4:11 p.m. PDT July 22, 2014

    Joey Reply:

    If they’re done replacing the functional automatic doors with manual swinging doors on those cars they bought from NJ Transit then maybe there can be more service…

    jimsf Reply:

    those comet trains are going away. They are not acceptable to the new jpa. They were a temp solution.

  11. Paul Dyson
    Jul 23rd, 2014 at 21:12

    The JPA will have to suffer them for a while
    At least they have reclining seats
    I gave them the solution
    Put a couple of Metrolink cars in the consist for low level boarding
    And ADA and luggage
    See if they do it

    jimsf Reply:

    you can’t get that creative. it wont go anywhere.

    Ted Judah Reply:

    Aren’t new cars already ordered for the Surfliner and San Joaquins? Something about a 2015 start date for deliveries?

    jonathan Reply:

    Yes. Made by Nippon Sharyo on the East Coast (Rochelle?) .
    The refurbished Coments were _always_ a temporary expedient.

    Ted Judah Reply:

    Wikipedia said 42 cars rolling out by late 2015 from NS’s plant in New Rochelle, Illinois. However, that isn’t enough to replace Amtrak California’s fleet. So there could still be a shortage of cars on the San Joaquins.

    Paul Dyson Reply:

    Heard a whisper that deliveries are delayed. Anyway there are not enough to go around if the corridor boards want more service, longer trains, and retire existing consists. And the order is shared with Illinois. However, because of the original low bid there is some 1B money leftover that could add to the order, but of course those cars won’t be available until well into 2016 or 2017. Oh and let’s get the geography right, it’s Rochelle IL, not New Rochelle. I can confirm that IL is not on the east coast.

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