Builder: Train will deliver a profit
(The Associated Press distributed the following article by Mike Branom on December 12.)
ORLANDO -- The contractor for a proposed bullet train system said Thursday that the state will turn a profit on high-speed rail, challenging Gov. Jeb Bush's concerns about the cost of the venture.
Representatives from Fluor-Bombardier told members of the Florida High Speed Rail Authority that the state not only would recoup its investment, pegged at $75 million annually for 30 years, but also could reap more than $400 million in net revenue over that time.
"It will be one of the best investments of public transportation that the state will ever see," authority member and Lakeland businessman C.C. "Doc" Dockery said.
Bush had complained about the price of the constitutionally mandated system in a letter to lawmakers last week.
"The state of Florida will pay an exorbitant price for high-speed rail -- a price that simply cannot be justified," Bush wrote while asking legislators to support a ballot measure to cancel the project. "We will spend billions of dollars before a single rider supports the system."
Fluor-Bombardier's winning bid to design, build, operate and maintain the rail system's first leg, linking Orlando and Tampa, came in at more than $2 billion.
If the bid's proposal was implemented without any changes, the state would get back $419 million, Fluor-Bombardier said.
"This is the kind of information that the governor either doesn't understand or didn't include in his letter," said authority chairman Fred Dudley, who was appointed to the bullet train panel by Bush.
Bush spokeswoman Alia Faraj said too many questions remain about the assumptions of ridership and revenue used by Fluor-Bombardier and the authority, which is why the governor wants to repeal the amendment.
Four years ago, $6.3 billion -the cost of a similar project that would have linked Tampa, Orlando and Miami -- was too much for Bush, and he ended Florida Overland EXpress (FOX) shortly after taking office.
Because the authority wants to alter Fluor-Bombardier's proposal, the revenue the state could garner would be less than the projected $419 million.
At Thursday's meeting, contract committee members Dockery, Dudley and Leila Nodarse voted unanimously to recommend to the full authority that Fluor-Bombardier should double-track the line and prepare it for electric trains, although the first trains will be turbinepowered.
Those changes would add about $300 million to the proposal's cost while cutting the revenue stream to $176 million over 30 years, Fluor-Bombardier said.
With Fluor-Bombardier winning the authority's contract only six weeks ago, this was the first time the partnership of the two companies could present the positive numbers it promised during the bidding process.
"We think it represents a very good deal for the state," said Lecia Stewart, Bombardier's vice president for high speed rail in North America.
The full authority will vote whether to ask Fluor-Bombardier to make changes to its proposal at its meeting in Orlando on Wednesday.
Dockery said the contract committee's recommendations on the system's technology also gives the authority a base from which to start negotiations with FluorBombardier.
"The price on this will come down," Dockery said.
Friday, December 12, 2003
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