March 31, 2011 - From the March, 2011 issue

CHSRA Executive Director Roelof van Ark on the State of High-Speed Rail

The story of the California High-Speed Rail project in recent years has been one of a mixed bag of good news and bad news. While federal money has poured in through the stimulus and other measures, the project has become a favorite punching bag by pundits around the state and country. Managing the financing and external affairs obstacles of this game-changing project is High-Speed Rail Authority Executive Director Roelof van Ark, who in the following TPR/MIR exclusive interview details the current state of the project. From planning to financing to building, 2011 is shaping up to be the year that high-speed rail hits the fast track in California.

Roelof van Ark

TPR/MIR spoke to you eleven days into your tenure in June of 2010. What are you finding in terms of your agenda and priorities for building out this 800-mile system? What have become your priorities?

I split the priorities into two areas: One of the big priorities remains external affairs. That means staying in contact and communicating with the outside world and the stakeholders. This is a project of 800 miles, and it requires continuous contact with key stakeholders and people outside. There is so little understanding of "real high-speed rail". I say "real" high-speed rail, which means systems that operate at 200-220 miles per hour, as opposed to systems that are often referred to as high-speed rail in the United States, which go about 100 miles per hour.

We need to constantly stay in touch with stakeholders. Obviously, a system of 800 miles touches tens of thousands of people. For some of them, this is quite emotional. Many people still do not understand the concept of high-speed rail. Many people in the United States have not had the pleasure and the privilege of understanding high-speed rail systems because they have never traveled on them or lived in the country that uses the systems. One of our tasks is to remain in contact with the people outside, to speak to communities, key stakeholders, and to keep the project going.

The other priority is the inside -keeping the project on track. I am a hands-on person. I have been involved with big projects around the world, and it's important to ensure that the project stays intact. Internally, the people are important. We need only the best. We have brought on a lot of people since we spoke last. We have made a lot of changes since last June, bringing on a lot of experience-people with ten to 15 years building high-speed rail systems. They are what I sometimes refer to as greybeards-people with a lot of experience in how these things work and how things get done.

How would you describe the procurement to date-the teams you are building and what is on track to get the job done?

With the respect to the set-up of the organization, we have done a good job of enhancing the quality of the internal teams by putting experienced people in place that have built these types of systems before. We have not done well in hiring staff for the Authority itself. That has been one of my disappointments. It has been a difficult task because I need legislative support for that, and that has not yet been put in place. I am now getting support from the governor's office to address those issues, so we will break the ice on that soon.

Since the last time we spoke, we decided where we will start construction on the system. That allows us to structure the project a lot better. For that reason, we have been able to reprioritize our environmental schedules, reprioritize the work that needs to be done, and give a lot more focus to construction in the Central Valley. That prioritization was needed. When I got here, we had four pre-qualified sections. It was very difficult to run a project with four sections in competition. Now that we know where will start, the focus and prioritization puts a much better structure into place in the organization and ensures that we can develop the project from here on out in a more structured fashion.

You're referring to the 123 miles of track that would stretch from Bakersfield to just north of Fresno, which would use about $5.5 billion federal and state funding. What are the challenges now that you have prioritized externally and internally? How will you start building by September of next year?

Right now we are finalizing our environmental documentation. It is normal for an environmental process to do a limited amount of engineering, up to about 15 percent engineering. We are enhancing the level of engineering to about 30 percent. As we are doing that, we are doing some good value engineering. We are incorporating stakeholder requirements in the more detailed design engineering at the same time as taking cost out of the project and, hopefully, building more miles with this amount of money-stretching out dollars. That process is continuing daily.

We are on track to get our draft environmental documents out. It is a little later than what I was hoping for, but it is not endangering the project. It will still allow us to get a red mark by early 2012 and get our construction in the second part of 2012. We are out on the streets at the moment with a Request for Expression of Interest (RFEI). Those responses are due by March 16. There has been a lot of activity on the market, which we are happy about. We will be doing an RFEI feedback conference in Southern California on April 12. The process will continue, and we will go out to the market in the middle of the year with a Request for Qualification (RFQ). The purpose of the RFEI is for us to gather more and more data so we can feed that into the RFQ.

By the end of the year, we want to have the Request for Proposals (RFP) ready, so we can synchronize that work with the environmental side and have the documents out on the market to place contracts in the second half of 2012.

You will need more than $40 billion for the whole project. How much will you need from the private sector and the public sector? What is the value back for the public from the money they will invest in California High-Speed Rail?

Close to $20 billion will be from federal funds (around $18-19 billion), the $9 billion from Prop 1A funds, and around $10 billion in private funds. The private funding is around 20 percent of the project's value. I believe it to be a fair interpretation of what one can expect. If you look around the world, you will find a lot of investment in real high-speed rail systems. Real high-speed rail is a competitive alternate transportation node because it offers competitive transportation compared to air travel and automotive travel at competitive market prices.

Therefore, worldwide, real high-speed rail systems are cash positive. It is the same as when a busing company is on the freeway. The infrastructure has been built by tax dollars. You pay through various tax methods-gas taxes, private taxes, and other taxes. But the public sector generally pays for infrastructure and the private sector can operate by bringing their own vehicles and bringing their own maintenance depots. It is the same thing with high-speed rail. Worldwide, all the examples are of operators buying and leasing their own trains, covering their own up-loading costs, paying usage costs for the use of the tracks, paying the energy bills, and making a profit. We can do the same in United States.

This section between L.A. and San Francisco is a unique corridor. It is well positioned for a good, real high-speed rail system. The distance is right. The time that we can transport people from north to south is right. And we should be able to make-like the other countries of the world-a cash-positive business case, which will attract priority investors.

For generations infrastructure investment had bi-partisan support at the federal and state levels. It seems as though, especially with Congressman McCarthy (R-Bakersfield)-who made the statement recently that the train in Fresno would be a train to nowhere-that this has not been had a consensus issue, but a partisan issue. How do you navigate such political terrain?


We will continue to talk with whomever needs to and wants to talk with us on these issues. The same applies to all the members of Congress. They voted for this in the past. They were in agreement with the concept. This will be the backbone that this state requires to remain a competitor in the world arena. We need to offer this mobility to the people of California so that in this next generation, or the next millennium, people will be more efficient. With 10 million more people that will be in California in the next decade, we need to offer this alternative. It is the job of the politicians to ensure that government plans for the future.

In addition, a secondary but very important aspect is the short-term advantage of generating a huge number of jobs-something that the Central Valley is in dire need of. High-speed rail will bring a long-term benefit and an efficiency improvement, including, of course, environmental improvement, to the San Joaquin Valley, which is very concerned about environmental conditions. It will take many cars off the freeway, which will allow the enhanced transportation of products to the ports. It will also bring short-term relief to the high unemployment rate in the San Joaquin Valley and the state as a whole. That alone is an improvement to the economic situation in the state and in the country. Government should support this project because it will have a positive impact on the economy today and the economy in the long run.

You have done these projects all over the world. Are there days you think it would be easier to this in China than in California. If so, why?

Having done quite a lot of business in China, it is at times easier to do business in China. But I would not necessarily want business done in California the way it is done in China. We need to give people more rights to decide what they need and what they want. The European model is a very good one. The people in Europe have a fair say in they way things people move forward in their countries. A long-term vision is necessary in the United States. Projects of this nature, and many of these big infrastructure projects, have a long-term vision. We have referred to the interstate highway system quite often now. We made a decision to start in the Central Valley because that is the backbone of our system, where will be traveling at 220 miles per hour, and, otherwise, we can't travel at high speed.

When people talk about the interstate highway system, no one talks about where it started because it is irrelevant. We need to have more long-term vision. We need more politicians with a long-term vision, and we are very happy to see that the president has proposed a long-term, six-year project, which incorporates $53 billion for high-speed rail, which is exactly what we'll need to get involved in these high-speed rail projects.

What is the potential for California capturing some of the money that the federal government is offering for high-speed rail that was intended to go to other states in the country?

We captured money from Wisconsin and Ohio. We were really fortunate to get more than 50 percent of that money back-about $620 million. We are expecting the federal government to come out with a procedure or process by which we, and others, can apply for the funds being sent back from Florida. We hope we can receive a big portion of that. We believe that Washington understands real high-speed rail and appreciate that our system is a real high-speed rail system. The California system will be a real showcase for real high-speed rail in the United States. When we get high-speed rail operational in California, this will become the test bed for high-speed rail technology in the United States. We have to manufacture things that have never been manufactured in the in the United States before. To do that, we will need a test facility, which the Central Valley will offer, because nowhere else in the country can we operate trains at 220 miles per hour. Do we have signaling technology that allows operation at 220 miles per hour? Do we have turnouts or switch machines that operate at 220 miles per hour? Do we have any technology that operates at 220 miles per hour? The Central Valley will become the test bed for other states as well because no one else has this infrastructure.

The people in Washington understand that. As they look toward the possibility of having real high speed rail in other parts of the country in the future, California will lead the way as the first operational test facility.

What enticements need to be offered to attract $10 billion in private capital? Some have said that like with the building of the railroads, it might be in the stations in metropolitan regions that are connected to the network. Is that part of the planning and thinking of the High-Speed Rail Authority?

We do believe that that is one of the areas where money can be invested by private investors. We have made it known that we intend to invest together with the L.A. County Metro to purchase the Union Station real estate, which is intended to make that possible. We would like to be involved in this multi-modal hub and give private investors the opportunity to get involved when we bring high-speed rail into the city. Cities and stations are an opportunity for private investment, as are the supply of the trains. Around the world, you will generally find that the operator supplies the trains, which are owned and operated by a private operator, as are the maintenance facilities. In many parts of the world, private operators even fund some of the infrastructure itself. There are privatized tunnels in the world for high-speed rail, which operate very similarly to a toll road or a toll tunnel.

If we speak again in January of 2012, what will we likely be talking about?

We will have the excitement of having the rail bids coming out. We will be much closer to starting rail construction. We will have completed our environmental process. We will much further down the line on scheduled items, and we will have a clearer way forward to the beginning of construction. You indicated that there is some turbulence about certain politics. I am not a politician in Washington. We have a hope that they find a budget and out of that negotiation process, including Florida monies and a long-term funding and vision, we will have more security and additional dollars for high-speed rail connecting Southern California and Northern California.

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Given the earthquake in Japan, what are the challenges of building high-speed rail given our seismic conditions?

It is a challenge. We work very closely with people from Japan. We have cooperation agreements with various countries around the world, but the Japanese have very good experience with seismic design. We work with local experts in seismic design. One thing is that the design has to incorporate the requirements of possible earthquakes and seismic effects. Secondly, train operation is effected as soon as there is seismic activity. The trains stop immediately and are evacuated. That is part of an early warning sensing methodology that they use Japan that is also designed into our system. If there is no seismic activity, it is a little easier. But we are taking full consideration needed for high-speed rail in California.



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