Calif. gauges private-sector interest as critics question cost, ridership

California went fishing for private contractors and investors yesterday with the state's first open invitation to outside parties looking to participate in construction of an 800-mile high-speed rail line.

The agency in charge of the project, the California High-Speed Rail Authority, gave interested parties a five-week window, until March 16, to express interest in design, construction, financing, operations and maintenance of the north-to-south line.

The first step in the authority's open-tent approach is meant to gauge interest before a more formalized request for proposals is issued later this year. Authority officials said they are seeking all manner of private interest, in either the first, 120-mile leg of the project in the Central Valley or any future phase, to include financing and core systems work in electrification and signaling.

The first phase of the project will cost about $5.5 billion with more than half of that to come from federal sources (and most of it already obligated). Jeffrey Barker, the authority's deputy executive director, told reporters yesterday "it's time to turn to the private sector" following public-sector financial commitments and voters having approved the project in a 2008 ballot measure.

"This is opening the door to that process," Barker said during a press call.


The pitch comes as Washington continues to heighten its scrutiny of the California blueprint, especially in light of well-publicized rail retreats in Ohio and Wisconsin. Just this week, Vice President Joe Biden announced plans to spend $53 billion over the next six years on high-speed trains and rail improvements, with an $8 billion down payment on the sector to be included in the White House budget next week (Greenwire, Feb. 8).

But with Republicans now in charge of the House, there is some question as to whether appropriators will agree with President Obama on high-speed rail. In Washington yesterday, according to a report from McClatchy Newspapers, House Transportation and Infrastructure Chairman John Mica (R-Fla.) indicated he would prefer spending cash on rail improvements in the busy Northeast rather than California.

The story quoted Mica saying he is not impressed with California's plan to build the first segment of its rail line in the Central Valley. Mica questioned if ridership in a state, where the car is king, would ever meet expectations.

$65B price tag?

Adding to the pushback were new cost estimates released yesterday by a watchdog group called Californians Advocating Responsible Rail Design that pegs the entire project's cost at $65 billion. That is up from a $43 billion estimate the authority released in 2009.

Nadia Naik, co-founder of the Palo Alto-based group, explained her organization had been hoping to see updated numbers from the authority, but when she lost confidence that those numbers would appear anytime soon, the group decided to release its own estimate.

"Our figures are based on the authority's documents and [American Recovery and Reinvestment Act] applications and were calculated over two months ago," she said. "The 2009 $43 billion figure was outdated the day it was released, because it [priced] the project as it existed circa 2005."

Naik also called on the authority to release its own updated cost estimate as soon as possible, noting that a business plan for the project was due to the state Senate by Feb. 1 but that deadline has slipped until later this year because the authority's relationship with its financial consultant, PricewaterhouseCoopers, apparently fell through.

Elizabeth Alexis, an economist and another co-founder of the group, said the organization prepared the new estimate by filling in the gaps of a 2009 spreadsheet from the authority. For instance, the 2009 estimate did not assume reconstruction of Caltrain stations along the high-speed rail's route south of San Francisco, which Alexis said would add significant costs. Nor did the 2009 estimate include figures on what it would cost to build extensive aerial platforms in Bakersfield and Fresno, she said.

"They know these numbers, they just don't share them," Alexis said. "It shouldn't just be the small club of high-speed railed obsessives that are in on the joke. The public should see these numbers."

Alexis said her group wants to work with people on both sides of the rail debate.

"We're just a group of normal people who kept running into each other at the same meetings," she said.

A spokeswoman for the rail authority, Rachel Wall, defended the California project, saying it represents the first mega high-speed rail project attempted in the United States.

"California is building a true high-speed rail system connecting major metropolitan cities," Wall said. "It will generate revenue and be a cheaper, faster transportation alternative for Californians. We are building a system that is analogous to the systems in Asia and Europe."

Sullivan reported from San Francisco.

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