As Expected, Private Investors Showing Interest in CA HSR
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!