High-Speed Rail

Global firms weigh in on high-speed rail development in California

An artist’s rendering depicts a California high-speed train pulling into a station.
An artist’s rendering depicts a California high-speed train pulling into a station. Special to The Bee

Almost three dozen firms or teams of companies from around the world have put their names into the hat for potentially participating in the development of California’s high-speed rail program.

The firms, ranging from international construction conglomerates to global financial institutions, all submitted responses to the California High-Speed Rail Authority’s request for input in how to bring its ambitious bullet-train plans to fruition. Businesses were asked to offer their ideas by early this week on financing, building and delivering a ready-to-operate system of electric-powered passenger trains by 2022. Those responses will form the basis for the rail agency to determine its next steps for its first operational segment, a 300-mile route from Merced to Burbank estimated to cost about $31.2 billion.

Seeking companies’ interest “is not a formal procurement but is instead a means for the authority to gather practical feedback from the private sector, based on their experience and expertise, on how to structure upcoming procurements,” said Jeff Morales, the rail authority’s CEO, in a memo to the agency’s board members in advance of their meeting next week in Sacramento.

Among the issues for which the authority sought input were cost savings, schedule acceleration, innovation and attracting private-sector investment.

One idea the state has for its $31.2 billion Merced-Burbank operating segment is for a developer to finance, design, build and maintain the 300-mile route, in exchange for a 25- to 50-year repayment of the developer’s capital investment.

The responses represent firms from Spain, England, France, Italy, Sweden, Germany, China, Japan and Australia or their American subsidiaries, as well as some homegrown U.S. firms. They include some that are doing business with the rail authority or have done so previously, such as the Los Angeles-based consulting firm AECOM; Parsons Inc. of Pasadena, which is part of the contracting team building the first 29-mile segment between Fresno and Madera; and Dragados USA, a subsidiary of Spain’s Grupo ACS / Dragados that is one of the contractors to build a 65-mile section of the rail route through the Valley from Fresno to the Tulare-Kern county line.

Some are international banking or financing companies such as Barclays Bank and John Laing Investments, both in England, Meridiam Infrastructure of France and Australia’s Macquarie Capital or Plenary Group. And there are others who specialize in managing or operating transportation systems, including Spanish companies Isolux Corsan and Sacyr Concesiones, or Thales Group and VINCI Concessions, both based in France.

China, which has the fastest-growing system of high-speed rail lines in the world, weighed in with a pair of responses: one from Beijing National Railway Research & Design Institute of Signal & Communication Group Co. Ltd. and another from a consortium called Chinese High-Speed Rail Delivery Team. From Japan, the Japan California High-Speed Rail Consortium represents a collaboration of train manufacturers Kawasaki Heavy Industries, Hitachi, Mitsubishi Heavy Industries, railroad operator East Japan Railway Co., Mitsubishi Corp. and Sumitomo Corp.

Over the next month, staff will hold one-on-one meetings with respondents to discuss details of their responses, Morales said.

The rail line through the San Joaquin Valley, for which construction began earlier this year with completion expected in 2018, is intended to be the backbone of a $68 billion statewide system of trains connecting San Francisco and Los Angeles, with passenger trains traveling at speeds up to 220 mph by 2028. The initial operating segment from Merced to Burbank is planned to be the first portion of the line to carry paying passengers by 2022.

$6 billionEstimated cost of Merced-Bakersfield sections

$31.2 billionEstimated cost of Merced-Burbank segment

$68 billionEstimated cost of San Francisco-Los Angeles Phase 1 system

The rail authority has about $6 billion – a combination of about $3 billion in federal stimulus and transportation funds and about $3 billion from Proposition 1A, the $9.9 billion high-speed rail bond measure approved by California voters in 2008, to build its Valley sections from Merced to Bakersfield. The big question, from both critics and supporters, has been where the money for the rest of the system was to come from.

When the authority issued its request for responses in June, it raised the curtain on one potential strategy for getting the Merced-Burbank segment up and running: seeking a developer to finance, design, build and maintain the 300-mile route, in exchange for a 25- to 50-year repayment of the developer’s capital investment. The presumed source of repayment would be a stream of cap-and-trade money – funds paid by industries to the state to buy air-pollution credits under California’s landmark greenhouse gas-reduction program. The rail authority is scheduled to receive 25 percent of cap-and-trade money on an ongoing basis – anticipated to amount to about $500 million this year.

Remaining money from Prop. 1A, about $4 billion of which remains uncommitted, would be used to make incentive or “milestone” payments when the developer reaches certain benchmarks and match a portion of the developer’s investment. But the developer would be expected to finance the remaining costs in return for the long-term repayment.

Firms or teams expressing interest in helping California develop its high-speed train system

Name

Headquarters

Industry

Acciona Infrastructure

Spain

Infrastructure construction

ACS Infrastructure Development / Dragados USA, / Cobra Industrial Services

Spain

Infrastructure construction

Acumen Building Enterprise Inc.

Oakland

Transportation consulting

AECOM

Los Angeles

Infrastructure development

AirTrain Inc.

Mexico

Ground-effect mass transit concept

Ashurst LLP

England

International law

Barclays Bank PLC

England

International banking/finance

Bechtel Infrastructure Corp. / Arup North America Ltd. / SYSTRA Consulting Inc.

San Francisco / England / France

Infrastructure development

Beijing National Railway Research & Design Institute of Signal & Communication Group Co. Ltd.

China

Transportation engineering

Bouyges Travaux Publics S.A.

France

Infrastructure construction

Chinese High-Speed Rail Delivery Team

China

Transportation construction

Cintra Infraestructuras S.A. / Ferrovial Agroman U.S. Corp.

Spain

Infrastructure development, construction

DB International GmbH

Germany

Rail infrastructure development

Ericsson Inc.

Sweden

Telecommunications

FCC Construccion S.A.

Spain

Civil engineering, construction

Fluor Enterprises Inc. / Balfour Beatty Infrastructure Inc.

Texas / England

Infrastructure development

Globalvia Inversiones S.A.U.

Spain

Infrastructure development

INABENSA

Spain

Engineering, construction services

Indra USA Inc.

Spain

Technology consulting

Isolux Corsan LLC

Spain

Infrastructure construction, operation

Italferr S.p.A

Italy

Rail infrastructure engineering

Japan California High-Speed Rail Consortium

Japan

Train manufacturing / operation

John Laing Investments Ltd.

England

Infrastructure finance

Kiewit Corp.

Nebraska

Engineering, construction

Macquarie Capital (USA) Inc.

Australia

Financial services

Meridiam Infrastructure North America Corp.

France

Infrastructure investment

OHL Infrastructure Inc.

Spain

Infrastructure development

Parsons Transportation Group Inc.

Pasadena

Engineering, construction

Plenary Group

Australia

Infrastructure investment, operation

Sacyr Concesiones S.L.

Spain

Transportation construction, operation

Siemens Industry Inc.

Germany

Train manufacturing

Skanska

Sweden

Infrastructure development

Thales Transport & Security Inc.

France

Transportation management, operations

TYPSA Group

Spain

Engineering consulting

VINCI Concessions

France

Transportation financing, operating concessions

  Comments