Florida High Speed Rail - The Progressive Way

[FayeforCure]

Yay Richard Branson sees Florida HSR as a great investment!!

Forget the Regressive way to HSR!

WOULDN'T WANT TO SECOND-GUESS RICHARD BRANSON, who built a successful progressive empire now would we?

November 16, 2010 11:30 AM Eastern Time  
Partnership Formed to Pursue High Speed Rail (HSR) System in Florida
VINCI, OHL, Virgin, and Alstom Pledge to Include Private Financing in Any Bid

TAMPA, Fla.--(BUSINESS WIRE)--A group of leading companies serving the rail transportation industry today announced they have formed a partnership to compete for high-speed rail opportunities in Florida. The companies in the partnershipâ€"all of whom are number one in their respective fieldsâ€"include: VINCI, OHL, Virgin, Alstom; and non-equity partners: Archer Western, AECOM, and PBS&J. Each of the partners boasts strong ties to Florida and a long history of doing business in the state.

“High Speed Rail in Florida will create thousands of much needed jobs quickly, and can fuel our emergence from the current recession. When the Public and Private sectors work together, we always achieve a better outcome”
.“High Speed Rail in Florida will create thousands of much needed jobs quickly, and can fuel our emergence from the current recession. When the Public and Private sectors work together, we always achieve a better outcome,” said Fadi Selwan, Business Development Director of VINCI Concessions.

The group’s proposal to design, build, finance, operate, and maintain the system will include a private financing dimension that offers the best solution for Florida once the specific bidding rules are established.

Richard Branson, Founder of Virgin, said, “High speed rail has proven to be a great driver of economic development, urban mobility, and a cleaner environment around the world. Virgin and our partners realize the importance of combining strong private expertise and finance with government investment to maximise the economic development benefits and ensure every dollar is wisely invested.”

Through the strong partnership, Virgin, VINCI, and OHL will operate the full turnkey system of state-of-the-art Very High Speed trains built and maintained by Alstom. Alstom, VINCI, OHL and Archer Western will lead the engineering, design, supply (consistent with Buy America) and construction aspects of the project with the support of engineering companies AECOM and PBS&J. Equity partners will include: VINCI, OHL, Alstom, and Virgin.

Officials of all the companies in the partnership reiterated the importance of the group’s proven ability to bring forward public-private financing solutions and emphasized the potential of high-speed rail to create local jobs and sustainable economic growth.

http://www.businesswire.com/news/home/20101116006763/en/Partnership-Formed-Pursue-High-Speed-Rail-HSR

[thelakelander]

I don't have a problem with private companies putting up their own money for it.  Privately financed and operated projects typically turn out better than their public counterparts.  I also assume under this scenario, they could possibly better address some of the issues that could hamper its success.  Good luck to them.

[JeffreyS]

I would love for sir Richard to have a vested interest in our state.  Perhaps he could start with his spaceport at Cecil.

[FayeforCure]

Privately financed and operated projects typically turn out better than their public counterparts. 

That's a complete and utter myth. It generally depends on whether we are talking about a public good or a private good.

in the presence of asymmetric information it is difficult to achieve the expected shifting of risks to the private sector. Given the complexity of such contractual structures, although transactions costs become more transparent, they may also be expected to be higher than in a vertically integrated public sector provider. The benefits may thus depend on the private sector being able to manage the process of investment and introduction into service more efficiently than traditional public sector transport providers.

http://ideas.repec.org/p/wiw/wiwrsa/ersa03p68.html

BTW private defense contractors have generally been over-priced compared to our military.




Here is an interesting article on the subject as well:
http://yglesias.thinkprogress.org/2010/10/china-financed-infrastructure-spending/

[thelakelander]

Privately financed and operated projects typically turn out better than their public counterparts.

That's a complete and utter myth. It generally depends on whether we are talking about a public good or a private good.

Here's one example that would suggest your "utter myth" quote may be off base.  The privately financed Clarion Health People Mover was constructed for a fraction of the skyway, the operational costs are a fraction of the skyway's and its in service 24 hours a day.  Two projects that provide a similar service except the privately financed option constructed 15 years later was done for less than half the cost and provides better service. 

http://www.schwagerdavis.com/pdf/clarian.pdf

The trains run automatically during the work day (5:30AM - 10PM) to handle greater travel demand, departing every six minutes.  Overnight (10PM-5:30AM), they operate on an "on-call" basis.

SDI anticipates the system's life span to be 30 years and its annual operating budget approximately $1,000,000.

Clarian Health Partners invested $40 million into its people mover system, including discretionary funds earmarked for community improvements and station enhancements.  Here is how the total budget breaks down:

39% - Stations, walkways, connectors, & maintenance facility

21% - Guideway structure

16% - Train, control, communication and power distribution technology

10% - Site improvements, utility relocations and traffic control

9% - General conditions and professional services

5% - Pneumatic tubing installation - not APM-system related

The system that was built for $183 million, more than half from the federal government, needs $14 million to operate each year - $1.5 million of that from Washington for maintenance alone.

In 2009, it generated only $431,000 in revenue, less than a 4 percent return. Most public transit systems lose money, but by comparison JTA's bus system made back more than 20 percent - $6.2 million - of its $30.2 million cost in 2009.

http://jacksonville.com/news/metro/2010-09-05/story/after-20-years-jacksonville-skyway-remains-punchline

[thelakelander]

Btw, the skyway is 2.5 miles and the Clarion Health peoplemover is 1.5 miles.

$40 million/1.5 miles = $26.7 million/mile

$183 million/2.5 miles = $73.2 million/mile

[FayeforCure]

Really beautiful project in Indianapolis!

It doesn't surpries me that the skyway constructed in jax cost as much as it did.

There could be multiple reasons for it and I won't devote the time to research them all.........but potentially:

1. 15 years later, the private company was further along the learning curve of this new technology, thus making it less expensive to construct
2. Just because the skyway was publicly financed doesn't mean they don't use private contractors for construction. And we all know the way contracts get awarded in FL........usually no-bid contracts.
3. The clarion financed people mover, has a very specific functionality........a sort of micro-cosm that doesn't need interconnectivity. Thus ensuring successful utilization.

I'm sure there are many more reasons.........as said in the study I quoted where the public private partnerships are evaluated in the country that has longest been using them..........the complexity of the arrangements make it hard to evaluate thye positives and negatives. Here is their conclusion:

Private finance of transport infrastructure, either through direct private provision or through public-private partnerships has developed rather further in the UK than in most European countries over the past two decades.

(snip)

This paper reviews the UK experience in terms of developments of the national air, rail and road networks and local public transport (especially light rail systems). The paper highlights the variety of methods of introducing private finance and assesses these against the criteria of risk bearing, transaction cost reduction, and efficiency in delivery. The key problems are identified as relating to the treatment of network effects and the vertical separation of infrastructure and service (unbundling). The framework is then used to assess the extent to which private sector provision impacts on regional development either positively, by advancing the provision of infrastructure which can provide wider benefits, or negatively by becoming a drag on future development by imposing higher costs of infrastructure usage and maintenance.

It becomes clear that a distinction needs to be drawn between infrastructure which is mainly used for intra-regional transport and that which has an inter-regional or international dimension.

Thank you for using anecdotal experience and then generalizing it as Republicans often do.

Even so I like your example of a limited (relatively small) project that was more efficiently accomplished through private financing.

[thelakelander]

Wow, now I'm being associated with Republicans. Go figure.

[thelakelander]

There could be multiple reasons for it and I won't devote the time to research them all.........but potentially:

1. 15 years later, the private company was further along the learning curve of this new technology, thus making it less expensive to construct

I made a mistake on the years. Clarion Health's system was proposed in 2001 and opened in 2003.  The Skyway was originally proposed in 1971.  The Skyway's first 0.7 mile leg opened in 1989, while the Southbank route opened in 2000.

2. Just because the skyway was publicly financed doesn't mean they don't use private contractors for construction. And we all know the way contracts get awarded in FL........usually no-bid contracts.

Ok, I see no reason to really dive into this one.  I'll trust your word.

3. The clarion financed people mover, has a very specific functionality........a sort of micro-cosm that doesn't need interconnectivity. Thus ensuring successful utilization.

All transit systems need interconnectivity.  Clarion's connectivity is provided by linking medical destinations together.  Unfortunately, despite the significant financial investment, the skyway fails to directly connect with with most of downtown's major destinations.

[tufsu1]

2. Just because the skyway was publicly financed doesn't mean they don't use private contractors for construction. And we all know the way contracts get awarded in FL........usually no-bid contracts.

really Faye?  

If so, please explain to me what the CCNA is....you know, the Consultants Competitive Negotiations Act (Chapter 287.055 F.S.)...the one that requires professonal services jobs (non-construction) to be selected on qualifications...but construction jobs are bid on by price....its pretty much Florida law!

[FayeforCure]

Wow, now I'm being associated with Republicans. Go figure.

Just wait a minute, Lake.  Before she's done, you will be part of the 'middle aged white conservatives' conspiracy.

Stephen, you missed out "male"!


Of course there are outliers in any group though.......as even I was a Republican at one time


Thanks for your response thelakelander. I appreciate your input.


All in all I hope Florida HSR will become a showcase as the first operational true HSR in the USA!

[thelakelander]

I've never been a Republican and never plan on becoming one.  By the same token, I don't plan on becoming a Democrat either.  I'm not really a fan of the two party system.  I prefer to see things done than to play politics and stick with general party platforms.

[fieldafm]

All in all I hope Florida HSR will become a showcase as the first operational true HSR in the USA!

Then they should toss out the current plan and start from scratch

And before you make any brass assumptions... I am not middle aged but I do hate progress, newfangled ideas and like to complain about the way it used to be before all these carpetbagging, hippy Democrats came in and screwed everything up with their opium and free love  

I prefer to see things done

That doesn't make a lick of sense.
Anger and complaining, that's what made America great.

[FayeforCure]

I've never been a Republican and never plan on becoming one.  By the same token, I don't plan on becoming a Democrat either.  I'm not really a fan of the two party system.  I prefer to see things done than to play politics and stick with general party platforms.

I fully agree. That's why I will support those who have the best interest of Amtrak at heart!

The tea-party platform and Republican platform offers very little support for rail. So if we want things done, we need to elect leaders that support rail, and we all know what party they can be found in most.

As a famous quote says: People who demand neutrality in any situation are usually not neutral but in favor of the status quo.

I am not a fan of the two-party system either that's why I elected to get an Independent to represent Florida in the US Senate: Charlie Crist.

I hope that was your choice too.

[Ocklawaha]

Your missing the point that California will see success because it has carefully built and supported an intrastate rail network for 30 years. They have built demand and support and we have built FREEway's.

The Peoples HSR Train? Really Faye, because it is HSR and it is Florida, does NOT make it a good or progressive plan... Mechanical TV WAS a progressive plan and it failed... So did Quad Sound... and so will a train that runs from a parking garage, to an amusement park, to an airport. Where the hell are the Floridian's in this equation?  Oh I know, "LAKELAND!" ...and OcK leads the Tea Party eh? Hardly...

Change the damn plan and tap TAMPA UNION STATION as well as DOWNTOWN ORLANDO THROUGH SANFORD and this train WILL fly. Give up the Orlando-Miami leg as part of a Tampa-Miami system and get busy connecting Tampa-Sarasota-Ft. Myers and Miami, then it WILL fly. From Sanford turn north to Jacksonville, and from Miami run straight up the coast to Jacksonville... Compliment the whole network with Amtrak locals to the panhandle, Ocala, Gainesville and anchor them to Tampa, Jacksonville and Orlando and it WILL fly. You see Faye, I love the idea of HSR, it's just the current plan that will fail. If we indeed are first off the block to get running and this thing flops in ridership as we railroader's predict it will take down every other US HSR plan with it. We can't afford that error no matter which Daddy Warbucks likes it.

OCKLAWAHA