Who will build this train?   September 9th, 2010

Interesting Quote from the June issue of Railway Age Magazine article “Who will build this train?”

…Realistically, observers and supporters say, at least $50 billion in guaranteed federal HSR funding is needed to attract state dollars and private investment. The Obama Administration’s financial commitment is, again, a start, and there’s momentum in Congress to expand it….

Seeing opportunity, offshore railways are knocking on America’s door, with investment capital in hand.{emphasis added} The Chinese Ministry of Railways, for example, has joined forces with General Electric and is offering the California High Speed Rail Authority a 30-year DBOM (design-build-operate-maintain) deal. Central Japan Railway, its sights set on Florida, is prepared to offer financing through JBIC (Japan Bank for International Cooperation), as is East Japan Railway in California. SNCF (French National Railways), Deutsche Bahn (German Rail), and RENFE (Spanish National Railways) have similar proposals. Working with key suppliers—Alstom, Siemens, Talgo, Bombardier, Kawasaki, Mitsubishi, CAF—these established HSR operators are prepared to meet rather stringent “Buy America” requirements that some say are unrealistic…

Contracts for the California HSR projects should be signed by 2011 and construction needs to start by 2012. It could boil down to which country offers the best financing package to win the project for its nation’s businesses. This is more than a contract for rail cars, there is the construction, electrification, operating and maintenance contracts as well. Such a financing deal will make it easier to start construction without having 40 odd billion dollars up front by the CHSRA. Since the winner of this contract will have “skin in the game” hopefully there will be incentive to run a popular and efficient passenger service if they expect a return on their investment. NB

This entry was posted on Thursday, September 9th, 2010 at 12:47 PM and is filed under Editorials.