Tuesday, September 8, 2009

Clear Winners

NOTE: We've moved! Visit us at the California High Speed Rail Blog.

Two things jumped out at me in this Wall Street Journal article about federal high speed rail funds. The first is about efforts by corporations to position themselves to benefit from HSR and other passenger rail projects:

Siemens USA, a subsidiary of Germany-based Siemens AG, has spent $76 million to expand a factory in Sacramento, Calif., where it builds rail cars. The company has already provided passenger vehicles for light-rail systems in San Diego, Denver and Salt Lake City, and it plans to hire more than 100 workers in the year or so ahead as it competes for stimulus-funded contracts.

I hadn't known of that Siemens plant, but it's definitely well-positioned to take on HSR work should the Authority choose to go with them to provide the rolling stock for the California system. That isn't stopping other companies, including the French and the French-Canadians, from showing interest:

The fastest trains currently running in the U.S. -- operated by Amtrak as the Acela service between Washington and Boston -- were built by the Canadian firm Bombardier Inc. and France-based Alstom SA. Both companies continue to be major players in the U.S. market.

Both will likely play some role in pursuing HSR contracts here in California. For its part, GE plans to stick to the "higher speed rail," projects aiming at speeds of 110 and 124 mph.

The other and more significant thing that stood out in the WSJ article were comments from FRA administrator Joseph Szabo about what would happen with the HSR grants:

As soon as this week, Joseph Szabo, administrator of the Federal Railroad Administration, Transportation Secretary Ray LaHood and other senior White House officials will start deciding how to award the grants. A Transportation Department spokesman said the officials won't meet with any lobbyists or state transportation officials.

In an recent interview, Mr. Szabo indicated that clear winners will emerge from the process.

"We have to come away with very tangible success," Mr. Szabo said. "One of the worst things we can do is spread the money around so thin" that no major impact is seen."

There's really no other way to read this except that California HSR is going to get a significant chunk of change. All indications coming out of USDOT are that California is going to get money, and that our HSR project is seen as a signature project for this administration. Can't wait to see the final results of the DOT's process.

28 comments:

bossyman15 said...

I hope the lawsuit in the court didn't hurt our chance for the money.

looking on said...

The lawsuit is clearly going to have a major effect on what projects the Feds will approve for stimulus funding.

A new EIR must be prepared for the SF to Merced section. That takes time. The time deadline for stimulus funding doesn't permit a delay this long.

So the funding will have to go to the central valley section and So. California. No. Ca. will have to get it funds elsewhere.

The funding problems, even with stimulus monies are immense. Today the dollar hit a new low against the foreign currencies. That's basically an inflation factor for the project's construction since so much will have to come from foreign sources.

Rumor has it, the Authority is testing the waters in Sacramento to see if they can get another bond measure to the ballot. How unrealistic can they be?

Alon Levy said...

Looking On, the dollar is not at a new low against anything. It's at a post-crisis low. Remember how the in summer and fall of 2008, the financial crisis created a flight to safety that significantly strengthened the dollar. The Euro went from $1.59 in July '08 to $1.25 in November; it's only just recovered to $1.44. The Canadian dollar went from $1.07 at the beginning of November '07 to $1.00 in July '08, and then to $0.77 at the end of October, and has just recovered to $0.92.

Anonymous said...

Spin all you want, but it wasn't that long ago that the it was 1.50 CDN to 1.00 USD. There's a reason why the CDN used to be called the "dollarette."

We've debased our currency completely.

looking on said...

I should have said 2009 new low for the dollar today.

The euro rose to a new 2009 high of $1.4562 on Wednesday, while the British pound also gained slightly to $1.6529.

from:

http://finance.yahoo.com/news/Oil-hovers-above-71-amid-apf-551500868.html?x=0&sec=topStories&pos=5&asset=&ccode=

Currently as you see oil pices rise, the reason is the weaking dollar, not really the supply of oil.

There is no doubt, we are headed for violent inflation with a very weak dollar -- that's the administration's plan.

Alon Levy said...

The 1.50 CAD to 1 USD was a multi-decade low for the CAD, achieved in 2002. This spurred demand for Canadian imports, which subsequently strengthened the currency.

The pound's current rate is actually low by historic standards - it's about on a par with what it was ten years ago, when the USD was at a multi-decade high. In 2007 and 2008, the GBP was trading around 2 USD.

And currency exchange rates have no connection to inflation in developed countries. The US isn't as import-dependent as you think. It had high inflation in 2008 when the dollar was weak, but so did the rest of the world.

Eric M said...

And with a low dollar value and unemployment rising, it's a great time for construction projects. People need work and goods in the US are lower. Don't build things when the economy is at peak performance. A lot of people want to just sit around and wait for that to happen. Come on people, use your heads

Anonymous said...

"We have to come away with very tangible success," Mr. Szabo said. "One of the worst things we can do is spread the money around so thin" that no major impact is seen."

Yes, clearly he refers to sending $$ to CHSR so they can redo their PROGRAM EIR. Or maybe he's talking about CALTRAIN projects in California like the San Bruno Curve, and grade separations of Peninsula Caltrain which won't result any tangible high speed rail when completed, and in fact more likely than not will need to be completely ripped up when HSR finally comes (in 5,10,20 years from now).

Hmmm Caltrain may have outsmarted the fox.

Reality Check said...

Robert, in addition to the Sacramento Siemens plant (which has been there for many years now):

Sacramento Siemens light-rail car factory is hiring

Alstom is just setting up a new plant on Mare Island in Vallejo:

Alstom to overhaul Amtrak California Cars at Vallejo's Mare Island

Alstom reviving Mare Island rail link for Amtrak car refurb deal

Mare Island rail link to be restored for new Alstom rail car shop

Robert Cruickshank said...

Um, looking on, there is NO requirement, legal or otherwise, that a new EIR must be prepared for SF to Merced. No legal remedies to the Atherton v. CHSRA decision have been made yet.

As to the declining dollar, we're going to have to deal with that no matter what. Stopping all efforts to provide economic recovery and long-term economic growth is actually a pretty good way to produce a worthless currency.

Finally, I haven't heard anything about the Authority wanting another bond. If they did want one they should wait until 2015 or so, when construction is already underway. There is no chance whatsoever that they could get another bond through this Legislature.

looking on said...

@Robert:

You are absolutely right --- today there is no requirement for a new EIR -- the remedy that will be requested by the plaintiffs has yet to ruled upon. That is today. When the remedy is issued, you will see that my statement will be deemed correct.

You should really get into the financial mess that this project in currently mired. Pringle acknowledges that is the biggest challenge. Delay getting more money until 2015 --- well you won't be able to start construction until then. AB-3034 clearly put restrictions on funding the segments.

I see you are coming Saturday to the "teach in". They are now expecting a possible 400 to attend. Why not --- a free lunch.

pa rail watcher said...

on the Palo Alto City website under "in the know" and Press Release":

09/08/2009

City of Palo Alto And Peninsula Cities Consortium Convince High Speed Rail Authority To Use Enhanced Public Involvement
Specifically In Decision Making For The High Speed Rail (HSR) Project

Palo Alto, CA – The City of Palo Alto has been working with the Peninsula Cities Consortium (PCC) to advocate for greater public involvement in the High Speed Rail (HSR) Project. As a result, the California High Speed Rail Authority (Authority) has just confirmed, with the release of its August/September Project Activities Update for the San Francisco to San Jose High Speed Rail Segment, that it has listened and is committed to ensuring that citizens can actively participate in the discussions and decisions concerning HSR.

The Authority made the following six commitments to encourage public engagement:
(see website for more all of them)

4. Incorporate Context Sensitive Design Principles into project planning and outreach;

The City of Palo Alto and the PCC welcome these new commitments by the Authority to help ensure the public is involved in a meaningful and impactful way. From its inception, the PCC has urged the Authority to use the principles of Context Sensitive Solutions (CSS) with respect to this transformational megaproject. CSS principles have been recognized nationwide since 1998. Both the Federal Highway Administration and the California Department of Transportation (CalTrans) currently use CSS principles when dealing with road projects and the PCC felt that it fits well with the HSR project.

"CSS is an obvious choice for the HSR project to help ensure that it is built in a way that meets transportation, safety and community goals," said Palo Alto City Council Member Pat Burt. "The Authority’s commitment to use Context Sensitive Solutions is especially important because CSS is already a proven process used by other agencies and it relies on reaching consensus with all stakeholders on all aspects of the project.”

In general, CSS involves each stakeholder group in the project: residents, community organizations, neighborhood associations, civic groups, schools, businesses, chambers of commerce, business districts, local government, municipal officials, state and federal environmental and economic development agencies, transportation organizations, and advocacy and environmental groups.

In a guidebook partially authored by Parsons Brinkerhoff (the engineering firm responsible for the San Jose to San Francisco segment) titled Performance Measures for Context Sensitive Solutions- A Guidebook for State DOTs, the authors explain that “Consensus does not mean that everyone agrees, but that all groups and individuals can live with the proposal.”

“The City recognizes that a properly and thoughtfully implemented High Speed Rail system has the potential to be beneficial to the Palo Alto community and wants to explore creative urban design solutions that consider community values within the context of the high speed rail project,” said Palo Alto City Council Member Yoriko Kishimoto.

The City of Palo Alto and the PCC have expressed their commitment to being actively involved in each phase of project review and look forward to partnering with the Authority on this monumental project and coming to a consensus about how the project can be designed, built, operated and maintained.

Anonymous said...

Would there be any high speed rail trains built with stimulus money to California? Would Siemens get an order? Nope. In fact they'd be doing things like San Bruno improvements for Caltrain, that have nothing to do with eventually running high speed rail trains through.

What kind of tangible benefits would the feds see from sending $ to California at this point - Cali doesn't even have a valid description of the project yet (per lawsuit ruling). The types of things that California requested have almost nothign to do with getting high speed rail in place, certainly nothing tangible for the Obama administration to point to when this funding is spent and gone. California HSR in all its disarray, destructive route decisions, authority management issues, lawsuits lining up, duplication of resource (caltrain/HSR overlapping service between SF to SJ - and no grownups around to call THAT for what it is), no business plan, etc seems like the very epitomy of "One of the worst things we can do is spread the money around so thin" that no major impact is seen."

Who again do you mean would be the clear winners? I'm not following.

Observer said...

When will there be a ruling on the remedies required by the judge in the Atherton Lawsuit? When are the plaintiff's required to submit their proposal? When is the judge expected to rule?

lyqwyd said...

There's not going to be any new EIR, there will just be amendments to the program level, which can be done as part of the ongoing project level EIR.

No delay, no extra cost.

The stimulus money can be used as matching funds as far as bond spending goes.

Anonymous said...

"just be amendments to the program level"

Doubtful - since the thing will have to be rerouted, even if its only parallel to UPRR Row, a whole new analysis of land use, eminent domain, and environmental impacts, AND COST, will ahve to be done.

If you were sending someone out to study (say for example) liquifcation for the project level eir - where would you send them? You have no idea, because the program level eir has an inadequate description (per the judge) you don't even know if the ROUTE holds when the UPRR issues get resolved. Your theory that they're just dotting a few "i"s and crossing a few 't's as they do they're in the neighorhood doing project level eir is simpleton.

lyqwyd said...

My theory is not just dotting and crossing. I read the ruling in detail and the judge said nothing about needing a new route, just that it needed to be better spelled out. UPRR is not out of the story yet, but even if they are, all they need to do is account for the required amendments in the project level EIR, then apply those to the program level EIR.

There is no requirement that a program level EIR be done before project level, so all they need to do is complete the project level EIR with the judge's requirements factored in and use the project level findings and incorporate them into an updated program level EIR. Since a project level EIR is more detailed regarding the specific project being covered, everything in it can be applied to the corresponding elements of the program level EIR.

No added delay, no added cost.

Adirondacker12800 said...

duplication of resource (caltrain/HSR overlapping service between SF to SJ - and no grownups around to call THAT for what it is)

I'll bite. I call it a railroad. All over the world intercity trains express through the suburban stops near the cities. Between New York City and Philadelphia there's at least 4 levels of service provided by three different operators on one set of tracks. 5 levels of service and 4 operators if you want to call the expresses to Atlantic City a separate service.

The same thing happens all over the world....

dave said...

Isn't it funny how HSR opponents and NIMBY's claim their is no money for this project and then when the funding starts showing it's face, they freak out and say that we don't deserve it, It's a waste, Blah, Blah Blah!

It should be crime what you people are doing!

looking on said...

When the court rules on the submitted writ is not known. The court calendar is backed up until the end of the year. He could just make a ruling without a hearing --- he might want a hearing and push it way out.

My only comment on what I'm reading here, is some of those writing have not a clue about what they are talking about, when writing what will be the result of this court's ruling.

Spokker said...

People probably know they have no idea what they are talking about and are just speculating. If we had to know what we were talking about to post on an Internet discussion, there would be no posts.

focus said...

Levels of service... lets see; keep saying "high speed rail" down caltrain corridor, then don't fix curves, ill design tracks and stations, work around historic landmarks and other untouchable landscapes, and compromise speeds for proximity to people (alla aeordynamic, noise and vibration environemtnal mitigations that must inevitably come to pass) - basically put in an expensive complex duplication of caltrain service that jumps wildly up to (maybe) 100mph for 1 minute pops here and there, and drops back down to 50,60,70,80mph - hey what you're talking about is a hella expensive duplication of caltrain service down a corridor that is terribly ill suited to that expansion. IT DOESN"T MAKE SENSE - there's not a single good reason for it (oh woops other than a few fat cats who can't be burdened with a train transfer walk across a platform at Diridon???). Its a monumental waste of tax payer money. HSR should be required to link up to, but not be allowed to POORLY duplicate local service where local service exists. State of california can't afford that kind of blatant wastefulness to satisfy the glory whims of a couple greedy politicians. ITs about time the grownups step in and start running CHSR, figure out how to get REAL high speed rail at 220mph running down a big straight stretch of central california, and let cities and counties decide how best to link in with local services.

Problem well defined is 90% solved; CHSR has gotten WAY too big for its britches, way too full of its own mission.

Anonymous said...

http://www.bizjournals.com/sanjose/stories/2009/09/07/daily32.html

Poll: Most back property rights vs. high-speed rail
Silicon Valley / San Jose Business Journal

The latest Business Pulse survey finds support for those who live along the proposed California high-speed rail to potentially derail the project.

Almost two-thirds of the readers (63 percent) who responded answered yes when asked if it is fair that the project could be killed by property owners next to the proposed route.

AndyDuncan said...

hey what you're talking about is a hella expensive duplication of caltrain service down a corridor that is terribly ill suited to that expansion. IT DOESN"T MAKE SENSE - there's not a single good reason for it

Once you electrify, grade separate, speed-up and expand caltrain service, you might as well let the HSR trains run along those tracks and provide through service. Forcing a transfer that wouldn't make sense.

Caltrain has been looking for ways to pay for those improvements for years – a majority of californians just agreed to help fund them.

Anonymous said...

Anon 1027,
It was a BizJournal survey, not a scientific poll, so it has no credence whatsoever.
A vast majority of young, progressive voters who favor HSR don't even read the BizJournal.
Nice try.

Bianca said...

Anonymous 10:27- so people who read a local business publication answer an unscientific survey in a way that reflects their own self-interest.

All that tells me is that people have bought into the Fear, Uncertainty and Doubt being spread by those opposed to the project.

This is one of those situations where the Endowment Effect has come into play. The people who own land abutting the Caltrain ROW bought land adjacent to an active railroad, with freight trains running past. The fact that these properties sell for more than a million dollars says more about the wildly distorted local real estate market than anything else. The fact remains that there is a freight train running through their backyards. It's not some pristine wilderness preserve, it's an active railroad.

I understand that people are financially and emotionally invested in their homes. We all are. But just because people built houses next to the railroad and residents got used to the noise generated by the railroad doesn't mean that they get to veto the will of the voters of the state of California.

Alon Levy said...

Focus: four-tracking is useful if you don't want HSR to stop at every station on the Caltrain tracks. That's why HSR lines around the world don't share tracks with other services, except sometimes on station approach tracks. The LGV Sud-Est doesn't run on RER tracks, nor did anyone at SNCF ever propose to terminate it in a suburb where people can connect to the RER.

Anonymous said...

"focus" is right on. The current CHSRA plan is strictly jury-rig.