Friday, October 2, 2009

CA Submits Second Federal HSR Stimulus Application - Up to $10 Billion Could Be Headed Our Way

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

Across California the California High Speed Rail Authority is hosting rallies in support of the state's application for federal rail stimulus funds. You can follow along at the Authority's official Twitter feed, @cahsra.

The official application was unveiled today in a press conference with Governor Arnold Schwarzenegger, Speaker Karen Bass, and a whole host of other dignitaries, including most of the CHSRA board. The total amount of the application is $4.7 billion, which closely tracks the $4.5 billion the board approved on September 23. When combined with state and local matching funds, including funds from Prop 1A that would be eligible to be spent with the 50% match required under AB 3034, the total funding this could generate for the HSR project is $10 billion, more than enough to get actual construction work underway.

Some of the statements from the LA event:

At a news conference at Union Station, Gov. Arnold Schwarzenegger said he is a high-speed rail "fanatic" and asserted the project would provide a $10 billion economic boost to the state.

"I think it is disgraceful for America to be so far behind when it comes to infrastructure," Schwarzenegger said. "In Europe and Asian countries, they're traveling now up to 300 miles (per hour on bullet trains) while we're traveling on our trains at the same speed as 100 years ago. That is inexcusable. America must catch up."

Schwarzenegger said California deserved to get more than half of the $8 billion in federal stimulus money set aside for high-speed rail development because it is further along in planning than other states and is ready to break ground in 2011, a year before the federal deadline for getting the money.

Also, Schwarzenegger said "those stimulus dollars will go further in California than in any other state because California has pledged to match -- dollar for dollar -- all money received" from the federal government....

In a statement, Los Angeles Mayor Antonio Villaraigosa touted the project's environmental benefits.

"A high-speed rail system that runs faster on one-third the energy of air travel, and one-fifth the energy of car travel, will dramatically reduce CO2 emissions and the time people spend stuck in traffic on our state's freeways," he said.


Among the backers of the application is Senator Barbara Boxer, who put out this statement:

Senator Boxer said, “I am pleased to support the request that the California High-Speed Rail Authority is making today. California voters have already committed nearly $10 billion in state bonds for this effort. This investment of federal high-speed rail funds could help us create more than 130,000 jobs in California, reduce air pollution and congestion on our roads, and accelerate our push for a cleaner and more efficient transportation system.”


Of course, CHSRA's approved application wasn't the final version. The applications for federal stimulus come from the governor's office. And that is where things are starting to get interesting. No small amount of money was shifted around between the September 23 proposal and today's proposal. From the September 23 application:

$1.28 billion for San Jose to San Francisco, including station improvements, grade-separations, electrification and safety state-of-the-art "positive train control" in an upgraded, shared alignment with Caltrain.

$466 million for Fresno to Merced, including right-of-way acquisition, grade-separations, utility relocation, environmental mitigation, earthwork, guideway structures and track.

$819.5 million for Bakersfield to Fresno, including right-of-way acquisition, grade-separations,
utility relocation, environmental mitigation, earthwork, guideway structures, track relocation and new track.

$2 billion for Los Angeles to Anaheim, including high-speed train facilities at Los Angeles Union Station (LAUS), Norwalk Station, and the Anaheim Regional Transportation Intermodal Center (ARTIC); right-of-way acquisition, grade-separations, utility relocation, environmental mitigation, earthwork, guideway structures, tunneling, and track work.


And from the October 2 application:

$2.18 billion for Los Angeles to Anaheim, including high-speed train facilities at Los Angeles Union Station, Norwalk Station and the Anaheim Regional Transportation Intermodal Center; right-of-way acquisition, grade-separations, utility relocation, environmental mitigation, earthwork, guideway structures, tunneling, and track work. Total jobs created: 53,700.

$980 million for San Francisco to San Jose, including station improvements, grade separations, electrification and safety state-of-the-art "positive train control" in an upgraded, shared alignment with Caltrain. Total jobs created: 34,200.

$466 million for Merced to Fresno, including right-of-way acquisition, grade-separations, utility relocation, environmental mitigation, earthwork, guideway structures and track. Total jobs created: 10,500.

$819.5 million for Fresno to Bakersfield, including right-of-way acquisition, grade-separations, utility relocation, environmental mitigation, earthwork, guideway structures, track relocation and new track. Total jobs created: 16,500.

$276.5 million for preliminary engineering and environmental work in all system segments including Los Angeles to San Diego via the Inland Empire, Los Angeles to Palmdale and Bakersfield, Sacramento to Merced and the Altamont Rail Corridor. Total jobs created: 12,000.


The differences appear to be:

-$300 million on the Peninsula

+$180 million for LA-Anaheim

We still don't know yet what the details of the shift have been, as the detailed application information has yet to be provided to the public.

Apparently the funding request for the Transbay Terminal train box is still in the plan, but due to a lack of political lobbying leadership on the Peninsula, other voices on behalf of other parts of the state were more successful in retaining funding.

There are also rumors flying around about money for Caltrans' Division of Rail, which operates the popular and important Amtrak California routes. Some reports I've heard claim that $300 million was moved out of HSR and into Caltrans rail projects. Richard Tolmach, a die-hard HSR denier, put out a press release quoted in the comments to yesterday's post, where he claims that CHSRA staff "successfully convinced the Governor's office on the afternoon of Thursday October 1 to block about $3 billion of conventional rail proposals under development by Caltrans."

The problem here is that under Track 2 of ARRA, most of the money is intended to serve high speed rail projects. It is likely that Amtrak California has gotten some funding, as they should. But the notion that $3 billion would ever have been dedicated by the state to funding non-HSR intercity rail is ridiculous, and it is simply not credible to believe that the USDOT would have ever been willing to fund $3 billion in non-HSR intercity rail even if the state of California asked it to do so. Tolmach is spinning - and that's being generous - when he says, without producing any evidence, that the CHSRA tried to undermine other passenger rail. We have no reason to believe any such thing occurred, in no small part because we have no reason to believe any other passenger rail was likely to get a whole lot of money.

And despite Tolmach's claims, the most persistent stories I've heard on this all day is that Caltrans rail programs actually got MORE money than they were expecting.

While we try to sort out what, if anything, was left on the cutting room floor, we should not forget the movie itself. California High Speed Rail is poised to get around $4 billion in federal funding, which will enable the project to spend potentially $9 or $10 billion by 2012 to get underway.

That is a tremendous accomplishment. Now it's up to the US Department of Transportation to deliver the goods. And based on what the White House has said, California can expect to receive most or even all of the money requested in this application.

Despite what the deniers, NIMBYs, and naysayers may argue, this train is leaving the station. California high speed rail is going to happen.

32 comments:

jim said...

Iseriously doubt there was ever 3 billion for the state's conventional rail. Our budget is nowhere near that by a long shot.

What I know is that we are keeping our funding and there's no cuts which is good, and we also got ARRA money for improvements to safetry and ADA and those projects have started and created jobs. Andw e got some kind of homeland security money.


but 3 billion? no.some one is telling stories.

Rafael said...

a) $4.7b * 2 = $9.4b, not $10b. Math was never Arnie's strong suit.

b) AB3034 section 2704.08 spells out a laundry list of criteria that must be met before the state legislature is allowed to actually appropriate any prop 1A(2008) funds for actual construction. Rustling up non-state funds (2704.07) at least equal to the state's (2704.08(a)) is a necessary but not a sufficient condition in that context.

On top of CHSRA's to-do list, lawmakers must verify that the state's always-parlous finances allow the additional debt to be sold and serviced at the time CHSRA makes an appropriations request. That determination is to be made in the context of the annual Budget Act process, which has been totally broken for 23 years running thanks to prop13(1978) the 2/3 rule. It is always several months late and could easily lead to construction cost escalations for the HSR project.

In essence, AB3034 simply wasn't written with the possibility of a massive federal stimulus bill in mind. The component projects that could possibly turn dirt by Sep 30, 2012 don't add up to any "usable segment" in the sense of AB3034 section 2704.08.

CHSRA recommended that California offer up prop 1A(2008) bonds anyhow in an effort to maximize the chances that USDOT will choose its grant application over those of other states, even though H.R. 1 doesn't require any state match at all. For example, Florida's $2.5 billion application for Tampa-Orlando Airport includes $0 in pledges by the state - though it may well get crowded out of contention for that very reason.

Future federal dollars from regular surface transportation funds will require at least a 20% match, so now would have been a really good time to husband California's scarce prop 1A(2008) bonds.

I suspect that the governor and a even a supermajority of the state legislature have the political will to make good on the pledge to match any federal stimulus funds awarded with prop 1A(2008) bond appropriations.

Alas, the road to the hot place is paved with good intentions. Given AB3034's wording, we may end up with the paradoxical - not to mention extremely embarassing - situation that the state cannot actually meet a key stipulation of its own application, unless the law is changed.

"Those are my principles. If you don't like them I have others." - Groucho Marx.

Tony D. said...

$3 billion for Amtrak?! What, are we getting a second high-speed rail line down the El Camino Real to SoCal? Jim's right about the story.telling.

Regardless of the complications Rafael brings up, this is good news nonetheless.

Rafael said...

@ Jim, Tony D -

it's quite possible that planners at Amtrak California did indeed make plans to beef up the Pacific Surfliner, Capitol Corridor and San Joaquin routes such that they could "reasonably be expected to reach top speeds of 110mph", the definition of HSR used in both PRIIA and ARRA.

This could have been a backup plan in case CHSRA couldn't come up with enough "shovel-ready" component projects of its own. It's not immediately clear why the governor would not ask for the whole $8 billion if he had the option.

Note that AB3034 allocates only a few hundred million to Amtrak California, so that portion could not have been matched 1:1. Also, any plans to upgrade Amtrak, only safety-related aspects such as priority grade separation projects, perhaps PTC implementation, would be exempt from NEPA/CEQA. Actually increasing speeds to 110mph would require EIS/EIR processes and there wasn't time to even kick those off for Amtrak California.

Still, if the work was in fact done, it won't go to waste. In the medium-to-long-term, upgrading these corridors to 110mph top speed makes a lot of sense. It's just a question of how and when to fund them.

Morris Brown said...

Rafael:

"Alas, the road to the hot place is paved with good intentions. Given AB3034's wording, we may end up with the paradoxical - not to mention extremely embarassing - situation that the state cannot actually meet a key stipulation of its own application, unless the law is changed."

Thank you for your input on this. This was precisely the point I made in my letter to the CHSRA, which was noted by Judge Kopp, but for which I have gotten no feedback and as far as I can tell, was just ignored.

How the stimulus funding request was finally adopted, was obviously aimed to give something to all the political entities. Thus Bay Area, Central Valley, Los Angeles, and even San Diego, which isn't even on the list for Phase I, got some attention.

I don't think they can change the law (Prop 1A) without going back to the voters. It would seem highly unlikely that the State could find $4 billion somewhere in the general fund, and they can't float a new bond without getting voter approval.

Funding is the number one problem now, recognized especially by Director Crane.

Adirondacker12800 said...

Also, any plans to upgrade Amtrak, only safety-related aspects such as priority grade separation projects, perhaps PTC implementation, would be exempt from NEPA/CEQA. Actually increasing speeds to 110mph would require EIS/EIR processes and there wasn't time to even kick those off for Amtrak California

Once you grade separate track you can go 90. Put in PRR pulse coded cab signals and you can go 125 if the track is up to it... So there wouldn't need to be an EIS/EIR....

lyqwyd said...

Two questions:

First:
Regarding the idea that the state wont be able to come up with the funds to match, isn't that the bond autorized by prop 1A? doesn't any money received from feds authorize the equivalent sale of prop 1A bonds?

Second:
Does the $980M for the peninsula include $400 million for the transbay train box? Meaning, there's only $580M for actual train related construction?

Thanks

YE$ONHSR said...

Now standing in for the pro-HSR Rafael is a naysayer..what do you think is going to happen here???
Its not some Euro-dream of yours.
This is the only way we will get this much out of that tiny amount of funds. NO they are just going to give us 4.7B and give eveyone else 300M a project.AND 4billion left on the bond at 20%match will bring 16Billion with the new 2009 Transportation bill..when passed.SO what is wrong with this plan?? looks to be the best at this point..AND stop worry about people using the "F" word..you sound like someones nun at school

dave said...

@ lyqwyd

I beleive the $400M for the TB-Train Box was submitted already for track 1 funds, this is for track 2 funds. The majority in funds available. They should be seperate.

Alon Levy said...

Robert, when you say Tolmach is a denier, you're not giving any information. It'd be far more useful if you explained what exactly his angle is. Is he a road lobbyist? Is he a NIMBY? Is he anti-government in general? Or is he just a run of the mill rail skeptics?

Ian said...

Typical that arnold touts this just as the CA supreme court confirms that taking cash from the State Transit Assistance funds to balance the budget was illegal.

Public transit just isn't as shiny I guess.

Rafael said...

@ adirondacker12800 -

I don't know what the situation is on the east coast, but in California rail operators can't jump from 79mph to 125mph just because they acquire technology that lets them. Especially in built-up areas, the noise and vibration impacts of increased speed need to be looked at in an environmental study first.

Rafael said...

@ Morris Brown -

IANAL, so I don't know if a bill that was passed via a ballot initiative can be modified by the state legislature acting alone.

@ lyqwyd -

re (1): as explained, the problem isn't the general concept of matching funds, it's the details of how and when prop 1A(2008) bonds may be authorized.

re (2): the $400 billion requested by TJPA were in a separate track. The application for that went out a while ago, CHSRA's request only includes funding for extending its platform tracks at the TTC from Beale St to Main St.

Rafael said...

@ Alon Levy -

Richard Tolmach is a former Amtrak California employee and President of the California Rail Foundation, a three-person advocacy group for improved standard-speed rail. Like many others, they claim to support the idea of HSR but reject the specific route and implementation plan selected by CHSRA.

Rafael said...

@ yesonhsr -

I was pointing out a legal issue with actually following through on the pledge to match federal funds 1:1. There's a mismatch between what politicians claim they will do and what AB3034 allows them to do.

There was no formal requirement for a state match for ARRA grants. There is for PRIIA and there will be for future pots of federal money that California will need to go after. With the administration and Congress committed to developing HSR nationwide and California the only express HSR project with any secured state funding at all, do you really think USDOT would ignore a request for unmatched stimulus funds from the Golden State, which is in one of the deepest fiscal holes in the country?

Now was not the time to pledge up matching funds, especially not at 50% and not via prop 1A(2008) bonds, because the safeguards in AB3034 mean they can't be appropriated easily.

Don't get me wrong, I'm not saying California shouldn't use its own money to help itself out of this recession. I'm just saying it shouldn't have made a formal pledge to do so in its application for stimulus funds. Informal would have been good enough.

BruceMcF said...

It would, indeed, be foolish to match ARRA funds 1:1. It would, on the one hand, certainly be sufficient to offer a 20%:80% match, and on the other hand, if the California HSR Authority spends at a 50:50 rate, then $9b goes to $18b.

And a 20%:80% match would still put California in the top ranks. Some states are taking the ARRA at its word that "no match is required", and others are offering other forms of contribution, such as committing operating subsidies to the slower speed services that will be the initial users of the infrastructure.

IOW, it would seem that the 50%:50% match idea is another push by the Governator for massive PPP, "Private Public Partnership", aka Pinching Profits from the Public.

Rafael said...

@ BruceMcF -

the 50:50 match was CHSRA's idea, not the governor's. Since we don't have the full text of the application that went to FRA, I can't be 100% certain there wasn't a change - but chances are, there weren't.

A 20% match would still have had the same legal issues with actual appropriations, though it might have been easier for the state to work around them.

BruceMcF said...

@Rafeal, there is certainly some match allowed - whether 10:90 or 1:99 I wouldn't know - since the applications all involve planning work and a portion of the bonds can be spent for planning.

And of course, a 20:80 match on the applications makes it far simpler to release the bond funds, since an approved ARRA project will be far more likely to be part of a full segment with 50% or more external funding.

"the 50:50 match was CHSRA's idea, not the governor's."

What you intended to say, I am sure, is that the 50:50 match was in the CHSRA submission. Saying who's idea it was without being privy to the deliberations behind the CHSRA submission would be to claim telepathy.

It is, of course, equally foolish wherever the original idea came from.

Adirondacker12800 said...

I don't know what the situation is on the east coast, but in California rail operators can't jump from 79mph to 125mph just because they acquire technology that lets them. Especially in built-up areas, the noise and vibration impacts of increased speed need to be looked at in an environmental study first

That doesn't stop them from running at 79 over tracks that are grade separated and signaled. Or running at 25. The trip would still be safer and faster than if they left the grade crossings in and didn't install signals.

There's big chunks of Metro North territory where the trains could run faster than 90 but Metro North in it's infinitive wisdom has a speed limit of 90. There's places on the NEC where the trains can run faster than 100. Some of them do but others don't because the train itself can only go 100. MARC's commuter trains go as fast 125 on the Penn Line. NJTransit probably will once the ALP46a locomotives are delivered. If you don't put in the grade separations or the signals, the speed limit will be 79, increasing the speed to 125 won't be an option.

Rafael said...

@ adirondacker12800 -

California just isn't the east coast. CEQA sets a much higher bar for community involvement in decisions on transportation infrastructure than NEPA does.

Safety considerations define the maximum feasible speed limits. The actual ones may be lower, e.g. to keep the noise down.

YESonHSR said...

Yes 50% match is pushing it with our bond..but it appears its a all out "push" to get as much as we can from this limited 8 Billion that many projects what a piece of.
The only way DOT will be able to give us more than half (4.7) and not have every other state screaming is them pointing out we matched them dollar for dollar.
Without the match they would never give us over half let alone all 8 which is what all these first step projects cost. CAHSR will need to shepered the remain bond funds to the max after this.
also I wonder if some of the 980M set aside for intercity rail can be used as the LA leg will have the San Diego Amtrak trains running on it...And sorry if my post was "grippy" it was a very long day at work and on the train home!

lyqwyd said...

@rafael

"Given AB3034's wording, we may end up with the paradoxical - not to mention extremely embarassing - situation that the state cannot actually meet a key stipulation of its own application"

and:

"as explained, the problem isn't the general concept of matching funds, it's the details of how and when prop 1A(2008) bonds may be authorized."

I'm certainly ignorant of the details of AB3034, so that could be the result of the misunderstanding, but I haven't seen the explanation that there would be problems with releasing the bond funds, just assertions that there could be. Please help me understand why it could be problematic.

I personally think it's possibly a good strategy to match dollar for dollar, it certainly lends a much higher level of credibility to our request. It still, even worst case from a funding perpective, leaves about $4.5 Billion available to match future federal funding at 20% matching, resulting in a total available funding of $22 Billion to be spent on top of the ARRA & matching funds.

Plus, and I could be wrong about this, but I believe I've seen projects where already spent funds have been used to qualify as matching funds, so all the money we spend on "matching" ARRA spending could potentially be used to qualify for future matching funds. It would certainly come down to the details & legaleze, but I think I've seen it done before.

As I said, I could be totally wrong about this stuff, but I'm not convinced that concerns about ability to spend the bonds are warranted.

Rafael said...

@ yesonhsr -

"The only way DOT will be able to give us more than half (4.7) and not have every other state screaming is them pointing out we matched them dollar for dollar."

Do all the other track 2 applications come with a dollar-for-dollar match? Florida's certainly didn't.

USDOT has received requests totaling over $100 billion for an available sum of $8 billion. No matter what they do, lots of states will be screaming anyhow.

Giving everyone an itty little bit would let politicians claim they had brought home the bacon but achieve very little in terms of new transportation infrastructure. It is precisely to avoid having the paltry sum available earmarked to shreds that Congress handed over the decision on where to invest to USDOT.

Rafael said...

@ lyqwyd -

it doesn't make sense for us to have this discussion until you've read section 2704.04 through 2704.08 of AB3034.

I'm not a lawyer, either, but the language is reasonably straightforward. As I read it, AB3034 requires CHSRA to do a whole lot more than secure matching funds before the state legislature is allowed to appropriate construction funds.

Political will is fine, but the law is the law. You can't just ignore it because circumstances have changed and it's now inconvenient.

YESonHSR said...

Well I sure hope they dont hand over 2.4billion to FLA with no match and for a project that was DOA until this funding showed up!
The other projects deserve it more as in the Midwest/DC-Virgina and the SEA-Portland corridor. I do see what your saying ..nobody else is putting up anything..

BruceMcF said...

YESonHSR said...
"The only way DOT will be able to give us more than half (4.7) and not have every other state screaming is them pointing out we matched them dollar for dollar."

At a 20:80 match, fighting to get more than half of the one-off ARRA funding would be penny wise and pounds foolish. The name of the game is getting the annual transport rail funding - which can be allocated into the infrastructure bank when it is set up - as large as possible.

For that, spreading the ARRA funds a little more widely to get more staunch allies in the general fight is the politically prudent course.

When based on a promise of a 50:50 match, its pennies foolish and pounds foolish.

The only way I can see the 50:50 match making sense is if the expectation that around $2b of the $4.7b request will be funded, so the state bonds are only on the hook for $2b in matching funds, leaving $6.5b+ in the kitty (I don't know how much can/will be expended in authority operations and planning activities). At a 20:80 match, $6.5b+ translates into $32.5b+, and with the $4b already expended would be $36.5b+.

Even better if $1.5b is funded, plus another $500m of no-match applications in other tracks, leaving $7b+ in the kitty, $35b+ at a 20:80 match, and with the $3b already expended a total of $38b+.

Obviously, if the state expects to get $2b, then they have to apply for something above $4b given the number of applications that are going to be knocked back or see their "study" components funded with no construction funds (dozens of applications can be "partially funded" for studies to bring them up to shovel ready for well under $1b total).

In terms of political benefit, the New England and the Mid-Atlantic states will be in as long as something can spill over to improving the NEC and connecting rail services.

The politically supported portion of the SE Corridor brings VA and NC in (South Carolina and Georgia seem to be mostly token members).

Chicago / Twin Cities, St. Louis and Detroit plus the Triple C brings in all five Great Lakes states plus three Midwestern States. And the Midwest Hub states can play for time as well as long as they get something.

So in the national politics, its easy to see why getting a second Express HSR system started in Florida would be appealing in terms of ensuring that the political momentum is there come 2014-2016.

Alon Levy said...

In terms of political benefit, the New England and the Mid-Atlantic states will be in as long as something can spill over to improving the NEC and connecting rail services.

In principle, yes. In practice, they don't give a damn - they care more either about statewide commuter rail, or about the in-state intercity corridors (Keystone, Empire). Connecticut not only is making no effort to increase Acela speeds on Shore Line curves, but also actively sabotaging such efforts with its blanket 75 mph speed limit on Metro-North territory.

lyqwyd said...

@Rafael

OK, I read it, and I still don't see anything that would lead me to think there would be problems in getting the bond money allocated and spent.

Perhaps you are referring to section 2704.07:
"The authority shall pursue and obtain other private and public funds, including, but not limited to, federal funds, funds from revenue bonds, and local funds, to augment the proceeds of this chapter."

But to me that only says the private funds have to be pursued, not necessarily locked in before the bond money can be spent.

What part do you think will make it difficult to spend the bond money?

Rafael said...

@ lyqwyd -

These are the bits I'm most concerned about. IMHO, point (I) refers to an operator of high speed trains as opposed to commuter rail in this context. Ellipses and emphasis are mine.



2704.08. [...] (c) [...] (2) The plan shall [...] certify to all of the following: [...]

(G) Construction of the corridor or usable segment thereof can be completed as proposed in the plan.

(H) The corridor or usable segment thereof would be suitable and ready for high-speed train operation.

(I) One or more passenger service providers can begin using the tracks or stations for passenger train service.

[...]

(K) The authority has completed all necessary project level environmental clearances necessary to proceed to construction.

lyqwyd said...

I'm not a lawyer either, but none of that really concerns me:

Re G: No concern, they just will certify that it can be.

Re H: That could delay spending on a portion of the route, but certainly not the entire route.

Re I: This is probably the most concerning, but to me still not really concerning. It doesn't say they have to enter into to contract with anybody, just that they have to certify or identify.

Re K: The EIR stuff will be completed sooner or later.

Rafael said...

@ lyqwyd -

we seem to be having a communication problem here. All of these criteria have to be satisfied before any prop 1A(2008) bonds may be appropriated for the purpose of actual construction.

Electrifying Caltrain, extending the TTC platform tracks, ROW acquisition etc. are all necessary, but none of them creates a usable segment of track for an HSR operator.

Of course it would be reasonable in the present situation to spend whatever can be spent intelligently as soon as possible because of the recession. It's just that in its present form, AB3034 isn't flexible enough to permit that.

lyqwyd said...

@Rafael

I just don't agree with your interpretation. I don't think any of those things are particularly difficult to meet.

I think the program level EIR will satisfy sections G, H, & K.

For I (the operator) I think all they need to do is get an MOU with one of the existing operators who says they are interested in operating the line as described in the EIRs.

I think you are interpreting it way too strictly. As I said, I could certainly be wrong.