Playing fast and loose with fast trains here

By Richard Tolmach
Special to The Sacramento Bee
Published 3:00 a.m. PST Sunday, January 25, 2004

Governor Schwarzenegger supports high-speed rail but, citing the state’s financial problems, has called this month for the $9.95 billion California highspeed rail bond measure to be pulled from the November ballot. Even diehard rail supporters say that’s a good thing. California cannot afford a plan as flawed as the one the High-Speed Rail Authority has presented. Not this year or any year.

Successful high-speed rail that deals with congestion and boosts the state’s economy is a great dream. To achieve this success, the governor will need to bring in a competent team to review the details on routes, exposure to operating losses, bonding mechanisms and the key issue of giving a political board control over railroad finance decisions. Putting off the vote gives us a chance for a high-speed rail proposal that delivers on its promises and helps the state’s deficit, instead of just deepening it.

Historically, California’s major transportation projects have overpromised and underdelivered, but that sad history does not have to continue. All too often, California projects have been born as political pork barrels for land speculators and contractors, not the strategic development tools they can and should be.

In Europe, high-speed rail route decisions ordinarily are made on commercial grounds by traffic experts who have to prove to banks that the service will be profitable to be financed. Routes are economically drawn, not just politically engineered.

That’s how European rail projects can achieve their environmental benefits without breaking budgets. Pointedly, the governor’s new secretary of business, transportation and housing, Sunne McPeak, called earlier this month for an end to transportation projects that don’t reduce congestion.

She said California must focus its scarce funding on projects that create more efficient land use, and connect jobs and housing. Plans for a new rail line to be released by the High-Speed Rail Authority next Wednesday as a draft environmental report fail this simple test.

The Rail Authority, created in 1996 to implement high-speed rail route recommendations by its predecessor, the California High-Speed Rail Commission, has refused to study the commission’s recommended high-speed route paralleling Interstate 580 through the Altamont Pass between the Bay Area and the Central Valley. Critics say this refusal is wrong, stupid and perhaps illegal.

High-speed rail through Altamont would reduce congestion on Northern California’s most gridlocked stretch of highway. Altamont would reinforce development of existing centers like Livermore, Tracy, Stockton and Modesto with smart growth. Altamont would also connect existing jobs and housing by providing an improved route for fast regional service as well as high-speed trains.

Altamont Pass is not some fringe alternative; it is the primary corridor for Bay Area-Central Valley and Bay Area-Los Angeles traffic. Altamont was also found to be the best route by the 1993 Cal-Speed UC Berkeley study, and a contemporaneous independent French study. All indications are that it has the lowest cost, serves the most Californians and has the fewest potential environmental problems of all available routes.

In its December 2003 issue of California Today, the Planning and Conservation League weighed in, suggesting that before “voters commit $10 billion to this project, the state should fully explore [the Altamont] option as a full-fledged alternative.”

State Senate Majority Leader Don Perata (D-Oakland) and Sen. Jackie Speier (D-Hillsborough) and Assembly members Darrell Steinberg (D-Sacramento) and Mark Leno (D-S.F.) all have written letters to the Authority asking for the Altamont Pass route to be reinstated in the environmental study, to no avail.

Once again, special interests appear to have locked the public out of the decision. This arrogant exclusion seems like exactly the kind of governmental abuse Governor Schwarzenegger says he wants to terminate.

Going for the green

Instead of Altamont, the Rail Authority has touted a group of alternatives called the Diablo and Pacheco routes that rape public open space. These leave the Bay Area through San Jose by invading protected lands like Henry Coe State Park, wilderness areas around Mount Hamilton and federal wildlife refuges in San Joaquin Valley wetlands. The Diablo routes require clearing, grading, road-building and massive tunnel construction that would divide the largest roadless wilderness in the Coast Range, endangering critical habitat for countless species. The Pacheco routes would threaten miles of federal wildlife refuges, traverse more wetlands than any other route, desecrate the Santa Nella National Cemetery and incorporate a serious potential inducement to sprawl.

Details of the Pacheco route imply that new suburbs will be built on Central Valley farmland far from existing development.

Regional opposition to the authority’s Pacheco and Diablo alternatives has grown, as more Northern California cities have recognized that they are being cut out of the plan by a routing which takes a left turn at Fresno. Cities north of the turn such as Merced, Modesto, Stockton and Sacramento risk being excluded from high-speed service for decades, if not permanently. It is likely that the next extension in line after a basic San Francisco-Los Angeles starter route is complete will be Los Angeles-San Diego. A Sacramento high-speed extension might never happen if the first two phases don’t go smoothly. By comparison, the Altamont routing gives Sacramento, Stockton and Modesto three kinds of benefits: one-hour trips to the Bay Area, two-hour trips to Los Angeles and the start of service in our lifetimes.

Most high-speed rail advocates are at a loss to understand why such destructive alternatives as Pacheco and Diablo received study, since they are more expensive than Altamont and do not have strategic advantages to recommend them. There is frankly little traffic to serve in parks, wilderness areas and cemeteries, or along the two-lane Highway 152. Even more puzzling is why the authority would undermine the success of its tens of millions of dollars in environmental studies by failing to include the feasible Altamont alternative.

How did our California high-speed project aim so wide of the mark? Critics say the authority’s work during the past five years has been tainted by a uniquely Sacramento combination of campaign contributions, sole-source contracting and questionable back-room technical decisions. The result is that the California High-Speed Rail project now looks like a combination of a pork barrel and a land scam, complete with brochures (viewable on its Web site) announcing “the New California Gold Rush.” Some observers even suggest that the route planning process is being abused by project insiders to manipulate investor expectations.

Whether the Rail Authority had a legal basis to change routing decisions made by the prior High-Speed Rail Commission, its direction shocked rail stalwarts like retired state Sen. President Pro Tem James R. Mills. Mills, who originated California’s transit funding programs and put California on the rail map with the highly successful San Diego Trolley and state-supported Los Angeles-San Diego Amtrak service, is a vocal critic of the bond measure. He believes the Rail Authority is counterproductive to its stated goals and should be abolished.

Last Nov. 1, Mills told the California Rail 2020 conference that after his appointment by the State Senate Rules Committee, he left the authority board because he distrusted the staff, and “frankly couldn’t get any straight answers from them about the constant changes in plans.” Mills notes that as recently as three years ago, Executive Director Mehdi Morshed told him that Pacheco couldn’t be used as a route. “Now it’s the opposite, and Altamont can’t be studied,” said Mills.

Kings County Supervisor Alene Taylor says she asked Rail Authority staff, “How come you didn’t look at this particular \ route?” On Jan. 12, the supervisor said in a Fresno radio station KMJ news story that the authority staffers “have not been forthcoming, have not been truthful in information, such as where the line is going to go, how much it is going to cost.”

Pacheco isn’t the only alternative to be buried and then revived by authority staff. The Modesto Bee reported on Jan. 18, 2002 that the proposal for a “tunnel through the fault-ridden Diablo Range and running tracks through the San Luis Wildlife Refuge” had been dropped. Rail Authority “analysts predicted that the tunnel would cost at least $2 billion more than the other options.” However, the dubious Diablo alternative appears to be alive and well in the latest Rail Authority study, perhaps as a straw man.

San Francisco designer Michael Kiesling has kept a running tally of faulty reasons the authority has given that Altamont can’t be studied. “It does no good to refute them, because they always come up with a different reason in the next public meeting,” says Kiesling. Kiesling’s Web site contains refutations of anti-Altamont reasoning including the authority’s spurious claims that high-speed trains can’t be split, routes can’t be split and further misinformation that a short two-track rail bridge parallel to the Dumbarton Bridge between Fremont and Palo Alto would cost billions.

Controlled by the coin-operated

In September 2002, it looked like reform was just around the corner. Republican gubernatorial candidate Bill Simon alerted the press and set his lawn chair down in the front yard of Rail Authority Chairman Rod Diridon’s home in Santa Clara, just as a Governor Davis fund-raiser began inside.

The previous day, Diridon had stood beside Davis as the governor signed the bill to put the high-speed rail measure on the ballot. Diridon had invited mega-buck consultants and contractors to a gathering honoring Davis, asking for $2,000 per company. While Simon held forth about “pay-to-play” for the assembled TV cameras and reporters, lobbyists and execs of the paying and playing engineering companies went running for cover, holding up briefcases and papers to avoid the cameras.

Instantaneously, Davis claimed the fund-raiser had been cancelled, and his chief spin doctor Garry South told the press the campaign had decided to turn back all contributions. Citing the Diridon e-mail solicitations the Simon campaign provided to the press, South said the targeted invitation “put this thing so far over the line … we didn’t hesitate a second to cancel it.”

But “pay-to-play” never ceased. Davis’ appointee Rod Diridon never stopped receiving checks for his pet projects from high-speed rail contractors working for his authority. Instead of contractor cash funding the Davis campaign, the donations have gone to the Mineta Transportation Institute on the San Jose State University campus, a key participant in the high-speed rail promotion drumbeat. Last-minute actions before Davis relinquished the governor’s office in October kept Diridon and two fresh new Davis appointees (one of them Davis Chief of Staff Lynn Schenk) on the High-Speed Rail Authority board.

To Governor Schwarzenegger, the current plans may have too many fingerprints of a well-connected clique of San Joaquin Valley politicians. Sen. Dean Florez (D-Shafter) is authoring a bill to move back the high-speed rail bond measure vote date to 2006, former Sen. Jim Costa (D-Fresno) is gathering funds for the campaign, and former Assemblyman Rusty Areias (D-Los Banos) is handling relations between the Rail Authority and State Parks, as a subcontractor on the environmental study working for Parsons, Brinckerhoff, Quade and Douglas (PBQ&D).

Critics of the Rail Authority also cite the lack of independent analysis of PBQ&D work as a key flaw in the process. PBQ&D has had a virtual lock on high-speed rail work in California since 1991. It obtained its current work under a sole-source contract pushed through the Department of General Services shortly before the Oracle contract scandal all but ended that practice.

Critics draw analogies to the Boston Big Dig and the Los Angeles Red Line tunneling meltdown. In Los Angeles, cost overruns totaling hundreds of millions of dollars couldn’t be brought under control until Mayor Dick Riordan brought in PBQ&D competitor Fluor Daniel and other rail experts to critique and suggest more cost-effective alternatives.

Governor Schwarzenegger would do well to conduct this kind of review. An early target in Scharzenegger’s proposed budget was Governor Davis’ $4.9 billion congestion relief program, a political pork barrel which evaded normal cost-effectiveness measures. The complete absence of guidelines and standards for project priority allowed Governor Davis to handpick cuts of pork for favored constituencies and vendors. Such perks as Governor Davis’ use of a private jet for travel throughout the 2002 campaign came from a transportation project contractor, Tutor-Saliba. As they say in the Capitol, “One hand washes the other.”

The $5 billion BART extension from Fremont to Santa Clara that topped the Davis congestion package is emblematic of the problem. Critics like Kiesling ridicule BART cars for being more expensive than 200 mph high-speed rail cars and fault California’s permissive attitude towards waste in public works.

In the real world, no 16-mile rail line has to cost $5 billion and take until 2026 to build, but the public has been helpless until now to stop the waste. One of the best things Schwarzenegger could do for California is to take project design out of the smoke-filled rooms and bring it into the daylight of the marketplace. “Turnkey” or “design-build” contracts, in which entire projects are supplied ready to operate, can put competition back into the design phase and give vendors a financial incentive to control costs.

After all, there is no good reason to spend $5 billion and two more decades on a Santa Clara to BART project which any number of rail vendors would be delighted to build this decade for less than $1 billion. Competitive proposals would guarantee that a cost-effective option can see the light of day. In today’s corrupt system, the most profitable business model for any company is to design a gold-plated system and claim nothing cheaper is possible.

Governor Schwarzenegger faces the same challenge reforming the high-speed rail proposal before setting it before the voters. The biggest specific problem with the current plan, says Daniel McNamara, a veteran in the 1980s of American High Speed Rail Corporation’s proposal for a Southern California system, is that “the authority conceives of high-speed rail as a sort of statewide BART project with state government’s deep pockets to guarantee whatever cost overrun occurs.”

“Nobody else on the planet who is building high-speed rail thinks that way anymore,” says McNamara. “It’s usually turn-key or design-build-operate contracts, so investment banks take a hard look at the financial details, because we all know public agencies frankly don’t have the motivation.”

It’s a little-known fact, says McNamara, “that American banks were primary investors in Europe’s high-speed trains. Our banks send our money overseas because those projects are properly vetted.” Since we have no such safeguards, California high-speed rail could end up with a $35 billion capital cost plus billion-dollar annual train deficits.

Smart growth advocates want a rail line that lives up to the European model of reinforcing central cities, by giving them fast and frequent access. Secretary Sunne McPeak says California already has too much “dumb” growth. But unless the governor forces some reform, California is headed towards using fast trains to create new sprawl, maximize commute distances and enrich land speculators.

 Click on photo for a larger image

Strangest high-speed rail station

The Central Valley’s northernmost high-speed rail station if the Diridon-favored Pacheco route is adopted is a dairy farm seven miles northwest of Los Banos. Windswept and barren, with wetlands starting just a mile to the north, east and south, the land has even fewer people than cows.

Within five miles of the station site, the only settlements are a handful of farmhouses and the Interstate 5 rest stop known as Santa Nella.

But not for long. Last July 31, a story in the Silicon Valley-San Jose Business Journal told of I-5 City, a leapfrog incursion of commuter houses to be built on agricultural land at the junction of I-5 and State Route 152. Similar conversion at the Los Banos station site would create a huge new suburb of Silicon Valley spreading out into the west Valley wetlands.

The strangeness of the station site is exceeded only by the difficulty of getting high-speed trains there. The line to the station at the dairy owned by former Assemblyman Areias and other family members until 1998 and 1999 would blast through the Santa Nella national cemetery immediately to the west and scatter the birds in miles of federal wildlife refuges to the east. To paraphrase McPeak, that’s “dumb, dumb, dumb.”

“A station outside Los Banos makes absolutely no sense,” says Mayor Rudy Trevino of Atwater, a Central Valley real estate broker for the past 40 years. “When something makes no sense, you know that big dollars are involved. I think all this makes for exorbitant profit for someone.”

About the Writer —————————————-

Richard Tolmach is president of the nonprofit California Rail Foundation and has promoted and planned rail service in California as a state employee since 1976.



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