No Deal: Florida High Speed Rail Lost in Space
Friday, February 25, 2011 - 10:45 AM
[UPDATE: On Friday morning, Governor Scott asked USDOT Secretary Ray LaHood for another week to consider the proposal for an interlocal entity, the potential compromise described below.]
(Matt Dellinger, Transportation Nation) Florida Governor Rick Scott will make no formal announcement about his final decision to kill the Tampa-to-Orlando high speed rail line, his spokesperson told the Tampa Tribune. It seems that the people of Florida and the nation will have to settle for a brief interview Scott gave to a local Fox News affiliate. “I’m not convinced that project is a good project," he said. "There’s a significant risk of cost overruns for construction. Historically that’s what’s happened with those projects.”
Neither the reporter, Derrol Nail, nor the Governor seemed to appreciate the irony that these remarks were delivered at the Kennedy Space Center, where Discovery departed on its final mission yesterday. NASA's shuttle program, a rather expensive mode of transportation enjoyed by only a few, has nevertheless brought great economic development to the region, and the winding down of the shuttle program will mean layoffs: United Space Alliance, for instance, has announced that 548 workers at Kennedy will lose their jobs come April.
Constructing America’s first high speed rail line in Florida, while not as difficult as building a space station, would more than make up for that dip in employment. Senator Nelson, who was also on hand at the launch, told Fox that the Governor “has made a mistake that’s going to cost people 24,000 jobs in the immediate future.” The Senator’s official statement yesterday pulled no punches. Nelson called the Governor’s decision to reject $2.4 Billion in federal high speed rail funds “pitiful,” “a monumental mistake,” and “hasty and ill-informed.”
Scott’s spokesperson held firm, insisting that “the governor remained principled in his position in protecting Florida taxpayers.” And indeed, principle appeared to play a larger role than practicality.
For the last week, since the Governor first announced his decision, a group working on behalf of several Florida cities, the USDOT, and members of the state’s congressional delegation, had been urgently preparing a proposal that would allow the bullet train to move forward but spare Florida’s taxpayers the financial risk that Governor Scott claimed as his main concern.
On Wednesday, lawyers working with the pro-rail group drafted an “interlocal agreement” to establish a Florida Regional High Speed Rail Commission among the cities of Tampa, Lakeland, Orlando, and Miami. That Commission would have taken the $2.4 Billion dollar federal grant from the state and proceeded with the planned RFQ and RFP process to identify a private partner to build, operate, finance, and maintain the high speed line.
A legal opinion on the proposal, delivered to the city attorneys of Orlando and Tampa by the Florida law firm Gray Robinson, confirmed that if all parties agreed to the plan, “Florida will not be a party to the Bid Documents or the Project Documents... and as such has substantial insulation from any financial liability by virtue of that fact.” Further insulation was expected to come from the bidders themselves. “The construction contract is going to be a Fixed Price Design Build Contract,” the opinion read. “A firm fixed price contract is not subject to adjustment based on the contractor’s cost experience during performance, and this places full responsibility, in terms of profits and losses for costs above the fixed price, directly upon the awardee.”
More than one of the eight identified bidders had indicated they would be comfortable assuming that responsibility. Last week, in an interview with Transportation Nation, Nora Friend, a Vice President at the Spanish rail company Talgo, expressed confidence that their consortium, Florida Mobility Partners, would have been willing to assumed all financial liability in exchange for potential profits and prestige. Friend expressed personal aggravation at Governor Scott. “In this country they choose, unfortunately, rail as one of those very contentious partisan issues. And we think it’s just terrible. If we don’t assume some risk and launch at least a first initial project that can be successful, the rest is not going to come.”
Tampa Mayor Pam Iorio, in her statement yesterday, leveled a similar complaint. “The most disturbing part of the Governor’s decision is that he will not even allow the bid process to take place,” she wrote. “In effect, the message being sent to eight world-wide business consortiums across the globe and the United States is don’t bother.”
An exasperated USDOT declared that it had "addressed every legitimate concern Governor Scott has raised with respect to plans to connect Florida through high-speed rail. We have repeatedly and clearly told Governor Scott and his staff that Florida would not bear financial or legal liabilities for the project, and that there is strong private sector interest in taking on the risk associated with building and operating high-speed rail in the state."
Yes, the USDOT can send the $2.4 Billion grant elsewhere (the money does not go back to the treasury as some deficit cutters would like it), but looming large is the fact that all other true high-speed rail efforts—in California, the Northeast, the Midwest, and Texas—are years behind Florida's.
Skeptics and critics have raised many important questions about high speed rail—its cost, its uncertain ridership, its ability to compete against driving and flying—but the Tampa-to-Orlando project was uniquely feasible because it had cleared so many hurdles. The state had completed its studies and owned the needed right of way; it had the support of their congressman John Mica, the Republican chair of the House Transportation Committee, among many others; and eager bidders with world-class expertise had assembled with hopes of investing their own private dollars. The RFQ was a month away.
Because of its location at a major tourist destination, it was to have drawn the interest of a broad swath of Americans, and presumably create constituencies for this kind of rail travel all over the country. And ultimately, planners envisioned, it would be the basis of a much longer line to Miami -- there is no swift way to get from Tampa or Orlando to that southern Florida city without a traffic-heavy drive or a short-hop flight.
With so much advantage to be lost, some would like the USDOT to give Florida one more fighting chance. State Senator That Altman, a self-described “conservative Republican and a strict constitutionalist” who has worked on high speed rail for twenty-five years, told the Tampa Tribune that he wanted even more time, to explore legal maneuvers challenging Governor Scott’s ability to unilaterally reject the federal funds. "Clearly I believe Scott is operating beyond his executive authority," Altman said, though he admitted, "I'm not completely sure what can be done."