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Bullet train bids finally tell public the true price tag

(The Naples Daily News posted the following Associated Press article by Mike Branom on its website on Febraury 13.)

ORLANDO -- As the tedious work of planning Florida's high-speed rail network inched forward over the past two years, Gov. Jeb Bush has always been nearby with chastening words. If the state has to pay too much, he said, these trains will never leave the station.

Now that the public could be on the hook for as much as $2.7 billion to help build the route's first leg, Tampa to Orlando, Bush finally has his answer on the project's cost.

But the question remains: How much is too much?

"This little choo-choo could cost a lot of money," Bush said Tuesday.

Four years ago, $6.3 billion -- the cost of a similar project that would've linked Tampa, Orlando and Miami -- was too much for Bush and he ended Florida Overland EXpress (FOX) shortly after taking office. It was the second time in a decade that a Florida governor had derailed bullet trains.

The Florida High Speed Rail Authority opened bids on Monday from four conglomerates hoping to construct the rail network. Whether Bush tries to kill the current project, which would be the largest public works project in state history, will be determined over the following weeks as state officials pore over the massive documents. Voters approved the project as a constitutional amendment in 2000.

The companies were required to submit bids for two routes: one that would connect Orlando International Airport directly with Walt Disney World en route to Tampa; the other including an intermediate stop at the Orange County Convention Center. All but one bidder broke down the expected public-sector cost -- which would go to build the line -- and the private-sector investment -- which would go toward operations and maintenance.

Depending on the contractor selected and the route taken, the estimated total cost could exceed $4 billion more than half of which would come out of taxpayers' pockets.

"The prices were higher than I was expecting," said Bill Dunn, a member of the authority.

Even worse for those wishing bullet trains could be bought at a bargain, submitting the highest bids were the two top contenders.

Global Rail Consortium, a group led by a Korean company and the Arcadis design and engineering firm, had the largest total bid at $4.1 billion. And Fluor-Bombardier, a joint effort by two firms with practical experience in both bullet trains and Florida politics, submitted a $3.6-billion bid that would hit up the public for almost three-quarters of the cost.

Sen. Jim Sebesta, chair of the Senate Transportation Committee, said that simply wouldn't fly.

"The private sector is really going to have to put up some upfront cash before anybody in the state government is willing to write a check," said Sebesta, R-St. Petersburg.

Both companies -- knowing that Bush has opposed high-speed rail from the time voters approved it -- have pointed out how the public's contributions would be limited.

Fluor-Bombardier and Global Rail each said the state would be reimbursed for most of the construction cost over 30 years. Based on the state's ridership estimates, Flour-Bombardier said Florida would get back $2.1 billion while Global Rail estimated the amount at $1.7 billion.

"Even though they want the state to put up a big chunk of cash on the front end, which is not good news, they will pay us back on the back end," Sebesta said. "I was not expecting that. So, that is very good news."

Also, the companies said they would pay for all operation and maintenance costs while assuming liability of ridership is lower than forecast.

"It's what we call a financially self-sustaining proposal, and it puts the risk where it belongs -- with the private sector," said Lecia Stewart, Bombardier's vice president for high-speed rail. She added that enough people could be riding the train by the second year of operation to send at least $35 million in ticket revenue back to the state annually.

But Sebesta wondered how the companies' promises could be guaranteed.

The other bids were submitted by Georgia Monorail Consortium, about which Dunn and Sebesta admitted little is known; and ET3.com, the brainchild of a Crystal River man who claims that vacuum tubes and magnetic-levitation technology could whisk capsules containing passengers at speeds up to 3,000 mph.

Georgia Monorail, which is also trying to build a bullet train system in Vietnam, said the line would cost $1.5 billion to $2.6 billion, with $404 million to $644 million coming from taxpayers; ET3.com's bid came in at $1.2 billion, with no breakdown of public vs. private money.

The previous two efforts to build a high-speed rail network in the state were doomed by their high costs.

In 1984, then-Gov. Bob Graham established the Florida High Speed Rail Commission. A heavy emphasis was placed on real estate development rights providing funding, but a crash in that market was too much to overcome and Lawton Chiles, elected governor in 1990, killed the project shortly after taking office.

But Chiles didn't let the idea die and resurrected high-speed rail in 1992, this time within the state Department of Transportation. However, high-speed rail backers again faced disappointment when Bush canceled FOX in early 1999.

The Fluor-Bombardier partnership had been selected for FOX, and those companies were highly disappointed when Bush pulled the plug. Since that setback, Bombardier has gone on to build Amtrak's Acela line in the Northeast. Acela remains the nation's only high-speed rail system.

Although that previous experience would make many companies leery of getting involved again -- especially with Bush still running the state -- Bombardier believes Florida has grown to where the potential payoff is too great to ignore.

"We have a state where the population has grown and the density is increasing," Stewart said. "The market really is there."

Thursday, February 13, 2003

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