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1 Executive Summary

California High-Speed Train Project

2.1 Introduction

2.2 Building on Worldwide Experience

2.3 Train Types and Amenities

2.4 The High-Speed Line and Physical Structures

2.5 Travel Times and Fares

2.6 High-Speed Train Stations

2.7 Environmental and Economic Benefits

Project Implementation Tasks and Schedules

3.1 Institutional Structure

3.2 Organizing Design, Construction and Operation Contracts

3.3 Technology Selection

3.4 Phasing and Staging Construction

3.5 Financing

3.6 Overview of Sample Schedule

3.7 Next Steps Forward

Endnotes

Sources

Photo Credits

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Throughout California’s history,our economic strength and develop-ment have been led by advancesin transportation – first with the con-struction of railroads and later byinvestments in highways and airports.

In the mid-1990s, inspired by stunning successesin Japan and Europe, California began exploringhow an economically viable high-speed train linelinking major metropolitan areas could sustainthe state’s long-term mobility and economicgrowth.

California’s burgeoning population and increas-ingly congested highways and airports demandnew transportation solutions. Transportationconsistently ranks near the top of the list ofconcerns expressed by the public. Yet, newairport capacity has proven elusive. Planners inSan Diego and Orange counties, for example,have been unable to site new airports after morethan a decade of effort. Highway constructionhas become limited by environmental constraints,development pressures and financing barriers.As a result, in addition to the intercity travelneeds of the millions of visitors who come to ourstate each year, Californians are confrontedwith finding practical new options for accommo-dating the intercity travel needs of 45 to 50 millionresidents by the year 2020.

In 1996, the California High-Speed Rail Authoritywas created to build a high-speed train networkconnecting California’s major metropolitan areas.By 2000, the Authority had developed invest-ment-grade forecasts of ridership, revenue, costand benefits of the system.

In 2004, the Authority and the Federal RailroadAdministration (FRA) issued a Draft ProgramEnvironmental Impact Report/EnvironmentalImpact Statement (EIR/EIS) (two volumes and64 technical reports), received and reviewed over2,000 public and government agency comments,and determined preferred corridors and stationsfor the majority of the line.

With initial planning completed, the Authoritymust next develop the structure and institutionalorganization to manage construction worth tensof billions of dollars, ensure maximum participa-tion and risk-sharing from the private sector, andsuccessfully adapt the existing high-speed traintechnology to California’s needs.

The first section of this implementation plansummarizes the California high-speed project—its alignment, stations and technologies—as wellas its financial and economic profile. The secondsection lays out the roadmap for the Authority’sevolution, from a planning authority with a smallstaff to a construction management agency and,finally, to a comprehensive long-term managerof operations and assets.

Project Background

Created in 1996, the California High-Speed RailAuthority has pursued the vision for a high-speedtrain system connecting California’s major met-ropolitan areas. The Authority has identifiedpreferred corridor alignments and stations fromthe Central Valley through Los Angeles to SanDiego as well as inside much of the Bay Area.Between the Central Valley and the Bay Area,further study is needed to select a preferredcorridor alignment.

The recent program environmental review hasfound that the high-speed train system will havefewer impacts, create more economic stimulusand cost less than half as much as the alterna-tive—building more lanes, bridges and rampsalong highways; and terminals, gates and run-ways at airports. The Authority’s studies showthat the full system, serving 30 stations, willattract 42 to 68 million passengers per year in2020, operate at a surplus and cost over$33 billion to build. High-speed trains will becapable of speeds of up to 220 mph and will besimilar to those in service today in Europe andAsia. The system will be built mostly within oralongside existing transportation corridors andwill be entirely grade-separated from parallel andcrossing roads, providing the same extremelysafe environment enjoyed in other countries,where not a single passenger fatality has occurredon new lines in 41 years of operation.

Trains will have multiple cars that can provide avariety of accommodations for travelers, suchas a café car, business compartments, youngfamily play areas or even a “Quiet Car”SM. Wheredemand is high, trains could seat up to 1,600passengers. Seat restraints or belts will not beneeded at any time and passengers will be freeto move around the train safely and comfortably.

Most of the high-speed train tracks will be atground level, needing a minimum path 50 feetwide—comparable to a new two-lane road withshoulders, but providing 20 times the transpor-tation capacity.

In mountainous or hilly areas, or places whereroad crossings and freight railroad spur tracksare frequent, viaducts and tunnels may be usedto grade-separate the high-speed train tracks.The high-speed train line will be fenced andequipped with intrusion detection linked to astate-of-the-art train control system.

Trains will draw electric power from overheadwires connected to the commercial power gridand, in braking, will regenerate electricity backto the grid, thereby conserving power and reduc-ing costs. Train maintenance will be performedat several facilities throughout the state, whoselocations will be determined in the project-levelenvironmental work.

High-Speed Service and StationArea Development

Express high-speed trains will take one hour andfifteen minutes between San Diego and LosAngeles, and a little over two and one-half hoursfrom San Francisco to Los Angeles. When timeto get to, through, and from stations and airportsis factored in, high-speed train travel will be asquick or quicker than air travel for most trips,and less time-consuming than all but the shortestintercity trips by car.

High-speed train fares will be set between thecost of driving and the fares for air travel andwill vary depending on the service chosen, thedemand for seats and time of booking. To meetpassenger demand forecast by 2020, 86 weekdaytrains in each direction are expected to run in amix of express and local trains.

Each of the 30 potential stations are expectedto be significant hubs for transit- and pedestrian-oriented community development. All sites willbe multi-modal transportation centers, serve ashare of the projected 115,000 to 186,000 dailyhigh-speed train passengers, and offer consid-erable opportunities for new shopping and busi-ness services.

Organizational Structure

Experience from recent successful large railprojects shows that design and constructionstaffing needs are highly dynamic, with largenumbers of expert, specialized staff needed forrelatively short periods of time. Even govern-ment-owned railroads have made extensive useof private sector consulting engineers and con-struction contractors supervised by a core staffof experts to manage contracts and ensurefulfillment of public goals.

Increasingly, governments have looked to theprivate sector for operation, maintenance andfinancing of high-speed train lines. While someprojects have sought to assign the full responsi-bility for implementation and operation to privatesector consortia, this is not possible in California,because the high-speed train project is severaltimes more geographically extended, and finan-cially several times more costly than the privatesector’s ability to obtain bonding to ensure com-pletion of the project.

Consequently, the Authority has determined thatthe best approach for the California high-speedtrain is an institutional structure that relies uponan experienced core public sector staff to managespecialist contractors in civil and structural en-gineering, architecture, train systems, construc-tion management, operations and maintenance,travel forecasting and marketing.

The Authority staff also will need strong capabil-ities in environmental permitting, transportationand procurement law, contract management andfinance to provide oversight and maintain itsfiduciary responsibilities.

Contracting for Design, Constructionand Operation

The Authority will divide the project into a varietyof contracts of different lengths, content anddollar amounts to achieve the best combinationof cost, schedule, technical expertise and equi-table distribution of work within California.

The Authority will generally use a “design/build”approach in awarding infrastructure contracts,integrating the final design and construction intosingle contracts.

For the various high-speed trains and their power,signaling, track and communications systems,the Authority believes a single contract for design,installation/supply and maintenance is the bestguarantor of success and cost-effectiveness.The Authority will seek bids on these terms and—if warranted by the ridership and revenue studiesunderway and the potential suppliers’ perceptionof the revenue risks—may also seek to includeoperations in those bids.

Choosing the California High-SpeedTrain Technology

The Authority intends to adapt to U.S. require-ments the electrically powered high-speed traintechnology that has been proven extremely safeand effective in revenue service in Europe andAsia. This will minimize the risks of unproventechnology, lower costs, ensure a faster deliveryof rolling stock, and assure the use of the safesttransportation technology operating today.

Several train and systems manufacturing con-sortia are expected to aggressively compete forthe chance to equip California’s high-speed trainline and to develop the nation’s first high-speedtrain system that meets U.S. requirements. Thisoffers California the valuable opportunity to obtaina competitively priced system.

The Authority and any potential high-speed trainsupplier will have to obtain approval of operatingequipment, infrastructure and operating practicesfrom the FRA. As an early priority, the Authoritywill assemble an industry group to cooperativelystudy with the FRA whatever changes may beneeded to European or Asian designs. Basedon these results, the Authority will competitivelybid the high-speed train systems, select a winningbidder and then formally apply to the FRA forspecific approval.

The Authority believes it will obtain approvalbased on the demonstrated safety of high-speedtrains on mostly dedicated, grade-separatedlines with appropriate train control systems,inspection and maintenance regimes, and afford-able design changes.

Construction and Financing ofthe Line

In deciding which parts of the line would startconstruction and operation first, the Authoritywill consider the following factors:

availability of capital

ridership

ability to operate without state subsidy

train maintenance

geographical distribution ofconstruction and service

scarcity-related cost increases

A full financing plan will be developed aftercompletion of the ongoing ridership and revenueforecast update. Currently, the most likely fundingsources are through public/state-issued bondsand federal matching funds.

Sample Schedule Overview

It will take from eight to 11 years, depending onthe complexity of the segment, to develop andbegin operation of an initial segment of theCalifornia high-speed train, assuming that theAuthority chooses a specific supplier of high-speed train technology as an early action.

Next Steps

Complete selection of preferredalignments and stations

Start project-level environmentalimpact review on high-priority segments

Prepare financial plan

Develop Authority staffing resources plan and scope-of-work for aprogram management team

Select the program management team

Pre-qualify train system suppliers and undertake joint industry/FRA studies

Work with local governments and transportation agencies on right-of-way preservation.

With adequate funding, the Authority can move forward on the following next steps:

Introduction

Through California’s history, economic strengthand development have been led by advances intransportation—first with the construction ofrailroads and later by investments in highwaysand airports. In the mid-1990s, inspired bystunning successes in Japan and Europe,California began exploring how a high-speedtrain line linking the major metropolitan areascould cost-effectively sustain the state’s long-term mobility and economic growth.

In 1996, the California High-Speed Rail Authority(Authority) was created to implement a high-speed train system connecting California’s majormetropolitan areas. By 2000, the Authority haddeveloped investment-grade forecasts of rider-ship, revenue and cost, and quantified the ben-efits of the high-speed line embodied in a busi-ness plan. Shortly after the issuance of thebusiness plan, the Authority initiated the requiredfederal and state programmatic environmentalreviews in partnership with the U.S. Departmentof Transportation’s Federal Railroad Administra-tion (FRA). In 2004, the Authority and the FRAissued a Draft Program Environmental ImpactReport/Environmental Impact Statement (EIR/EIS)(two volumes and 64 technical reports), receivedand reviewed over 2,000 public and governmentagency comments, and determined preferredcorridors and stations for the majority of the line.

The Authority, having accomplished this initialplanning work with a small staff directing numer-ous consultant teams, must now develop thestructure and organization to manage construc-tion work worth tens of billions of dollars, ensuremaximum participation and risk-sharing fromthe private sector, and successfully adapt existinghigh-speed train technology to California’s needs.

The first section of this implementation plansummarizes the California high-speed train pro-ject—its alignment, stations and technologies—as well as its financial and economic profile. Thesecond section lays out the roadmap for theAuthority’s evolution, from planning authority witha small staff, to construction management agencyand, finally, to a comprehensive long-term managerof operations and assets.

Building on Worldwide Experience

California’s high-speed trains will use state-of-the-art electrified trains capable of speeds of upto 220 mph in revenue service similar to thosein service today in Europe and Asia. The linewill consist of new infrastructure, often in oralongside existing transportation corridors, butmostly existing railroads. The entire high-speedtrain system will be grade-separated from paralleland crossing roads providing a very reliable andextremely safe travel environment.

Proven high-speed train technology was chosenbecause it meets the requirements of the enablinglegislation for the California High-Speed RailAuthority to operate at sustained speeds of 200mph (320 km/h) or greater and because there is

extensive operational history for this technologyand there are competitive manufacturers. Addi-tionally, high-speed trains like these have thepotential to share tracks at reduced speeds withother conventional trains.

High-speed trains have steadily expanded theirmarket share and geographical coverage inEurope and Asia.

Beginning in 1964 with the Tokyo–Osaka bullettrain (Shinkansen), Japan showed that high-speed trains could provide major transportationcapacity, deliver significant operating profits,and reduce the need for new airports and high-ways. Today’s 1,350 miles of high-speed linecontinues to be expanded to serve most majorcities and the additional demand for travel thatcomes with increasing income and population.Today, the Shinkansen carries over 300 millionpassengers a year.

In 41 years of high-speed train operation inJapan, there has not been a single passenger

fatality, largely due to the separation of the railline from roads and the myriad of safety fea-tures and operating procedures incorporatedinto the service.

In Europe, the first high-speed train began op-erating in 1976 on a short section of a new linebetween Rome and Florence that was completedin 1992. In 1981, the first TGVs were operatingon portions of a new line between Paris andLyon, eventually cutting the train trip time in halfand freeing up airline and airport capacity forflights from overseas and the rest of Europe. In1987, Germany launched its first high-speedtrain and began operations of InterCity Express(ICE) service.

With the addition of new lines in Italy, Franceand Germany, and the construction of high-speed lines in Spain, England, Belgium and theNetherlands, over 2,550 miles of high-speedlines have been completed in Europe. Europeanhigh-speed trains currently carry roughly 250million passengers a year and have not had a

passenger fatality on new grade-separated high-speed lines.

In 2002, Korea opened a high-speed line fromSeoul to Pusan, which is now carrying around100,000 passengers per day. Taiwan has begunoperational tests on a new 225-mile-long high-speed line from Taipei to Kaohsiung, and expectsto carry around 186,000 passengers per daywithin a decade.

Top commercial speeds on dedicated high-speedlines continue to increase in response to marketdemand, technological advancement and oper-ational profitability. These trains have run dailyat top speeds of 187 mph (300 km/h) for over15 years, and the newest lines are being built toaccommodate 218 mph (350 km/h). East JapanRailways is testing prototype trains capable ofin-service speeds of 224 mph (360 km/h).

Recorded test speeds routinely exceed commer-cial speeds, providing significant confidence inthe capability of these train systems to operatecommercially at these higher speeds. Currently,the TGV holds the train speed record at 323 mph(515 km/h), and the ICE and various Shinkansentrains have reached 255 mph and 277 mph,respectively.

Figure 2.2TGVMediterraneanline crosses A7toll plaza nearAvignon

Figure 2.3Shinkansen on elevated track travelsthrough Tokyo

Train Types and Amenities

In developing California’s system, the Authorityintends to take full advantage of the many yearsof research and development and practical ap-plication of high-speed train service by utilizingtrain systems that have been proven in everydayregular revenue service over extended periodsof time.

Operating “trainsets” will have multiple cars andwill be up to 1,300 feet long, depending on thetype of train and the market demand. At peaktravel times, trains can be lengthened, or trainsetscan be connected, to operate as a single train,providing seating for up to 1,600 passengers.Seats will have more space than a conventionalairline seat and seat restraints or belts will not

be needed at any time. Passengers will be ableto comfortably and safely stroll to a café car topurchase snacks and beverages. The preciseconfiguration of seating and accommodationwill depend on market demand. With multiplecars, each trainset can provide different typesof accommodation for different passenger mar-kets. The same train can have business com-partments for conferencing en route, theater- orairline-style seating, young family play areas, oreven “Quiet Cars” SM where cell phones and loudcomputer programs are not allowed. Tables,power jacks, reliable cell phone connections,wireless Internet service and video or audioentertainment can also be provided, dependingon market demand.

Figures 2.5 and 2.6High-speed train interiors –seating, Shinkansen (top),TGV café car (bottom)

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Figure 2.4Source: UIC,InternationalUnion ofRailways

The High-Speed Line and PhysicalStructures

The majority of the California high-speed trainsystem will be at-grade alongside existing rail-roads, roads and highways. The minimum pathrequired for the two-track rail line is about 50feet wide, or about the space required for a newtwo-lane highway with shoulders and a smallmedian. However, this two-track high-speedtrain line has 20 times the capacity of such aroad, allowing up to 20 trains per hour in eachdirection.

Smooth transitions and grades of less than threepercent will assure a comfortable and safe ride

at high speeds. Mountainous and hilly areasoften will require viaducts and tunnels, as seenin Figures 2.7 and 2.8. Also, in areas with manyconsecutive at-grade road crossings or freightrailroad sidings, viaducts and tunnels may beused to separate the high-speed line, rather thanbuilding numerous bridges over the line.

California’s high-speed trains will mirror theoutstanding safety record of overseas systems.Tracks will be fully grade-separated from roadtraffic with bridges or underpasses. The high-speed line will be fenced and equipped withintrusion alarms linked to train controls that candetect persons, animals or debris on the tracks.And high-speed train control systems will provide

in-cab signaling and automatically stop trains ifnecessary.

The electric trains will draw power from overheadwires connected to the commercial power grid.Trains will be regularly inspected at terminalstations and train maintenance will be performedat several new facilities throughout the state,whose locations will be determined during theproject-level environmental work.

Figure 2.7(far left)TGV on viaduct,near Sens, France

Figure 2.8 (left)Tungsiao tunnelportal and high-speed track,Taiwan

Travel Times and Fares

The California high-speed train will be very com-petitive with air travel times for many intercitytravelers and will be faster than all but the shortestintercity trips by car. Figure 2.9 displays thedoor-to-door time for several major markets;while less time is spent on a plane than on thehigh-speed train, extra time required to passthrough airport security and for access/egressto and from airports makes rail faster overall formany trips, including the downtown-to-downtowntrips shown.

The high-speed train will not only save its pas-sengers time but also will benefit those whochoose to use the airlines and roads—by reduc-ing the additional peak demand and congestionthat is expected to grow by 2020.

Fares will be set to maximize the transportationand environmental benefits of the investmentwhile still providing a positive cash flow to coveroperations. This level lies between the cost ofdriving and the fares for air travel. As in systemsaround the world, fares would vary dependingon how much in advance tickets were boughtand the class of service, such as coach or busi-ness. To meet 2020 forecast passenger demand,86 trains are projected to run in each directionon weekdays in a mix of express and local trainsthat maximize service to a variety of markets.

AVERAGE ESTIMATED TRAVEL TIME BY MODE IN 2020 WITH HIGH-SPEED TRAIN

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YEAR 2020 POTENTIAL TRAIN STOPPING PATTERNS (total per day each direction)

Figure 2.9

Figure 2.10

h=hours m=minutes

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On the plane

AIR

TOTALDoor to Door On the train

HIGH-SPEED TRAINExpress Times

TOTALDoor to DoorCITY PAIRS

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Fresno toLos Angeles

San Diego toLos Angeles

Burbank toSan Jose

Sacramento toSan Jose

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High-Speed Train Stations

Stations providing travelers with access to high-speed trains can be strong focal points for transit-oriented community development. Approximately30 potential stations have been identified basedon their ridership potential, cost to construct,opportunity to connect with other modes oftransportation, and distribution of populationand major destinations along the routes.Existing transportation hubs will be served, suchas Union Station in Los Angeles, Santa Fe Depotin San Diego, Diridon Station in San Jose, Trans-bay Terminal in San Francisco and Anaheim(ARTIC) Station.

The high-speed train facilities at each stationwill consist of tracks, controlled access platforms,full access for disabled passengers andticketing/waiting/passenger service areas.Many stations along the route will have platform

tracks off the main high-speed line to allowexpress trains to pass unimpeded. Stations areexpected to have 1,300-foot-long platformsallowing level boarding of the train.

Figure 2.11 High-speed train station in Francebuilt for the TGV Mediterranean in Avignon

Figure 2.13New TGV stationand developmentat Perpignan

Figure 2.12 Multi-level Kyoto station combinestravel and commerce

In urban centers where trains would routinelyend their runs, larger and more complex trackand platform arrangements are planned. Suchstations also will provide sufficient passengertraffic to create new opportunities for shopping,business meetings, and provide offices and otherdevelopment not primarily dependent on theautomobile for mobility. Kyoto’s Shinkansenstation is shown in Figure 2.12 on the previouspage as an example of how this could occur.

Preferred station sites will all be multi-modaltransportation hubs with links to local and regionaltransit, airports and highways. It is assumedthat parking at the stations would be providedat market rates (no free parking). Each stationsite would support higher density, mixed-use,pedestrian-oriented development around thestation. As the project proceeds to more detailedstudy, local governments will have to plan andzone for transit-oriented development aroundhigh-speed train station locations and to finance(e.g., through value capture or other financingtechniques) and maintain the public spacesneeded to support the pedestrian traffic gener-ated by hub stations.

The precise location, configuration and numberof stations is not known at this time, but wouldbe decided during subsequent project-levelenvironmental review.

Environmental and Economic Benefits

Spurred by population and economic growth inthe next 35 years, intercity travel and long-distance commuting in California is forecast tonearly double from current levels. Comprehensivestudies comparing the environmental impactsof high-speed trains and alternative highway/airport expansion alone (conducted from 2000to 2004 in compliance with California and federalrequirements) concluded that high-speed trainswould:

create less impact on the natural and builtenvironment

– less potential impact on wetlands and water resources, biology and farmlands– less noise impact and even reductions in areas where the high-speed train

project grade-separates existing roads over adjacent rail lines

cost less than half as much to build over30 years than other transportation optionsand will not require operating subsidy

create more jobs and economic activityand reduce the cost of travel in the state

encourage more compact transit-orienteddevelopment, saving 67,000 acres fromurban/suburban development, including24,000 acres of farmland

avoid 10,000 auto accidents yearly withtheir attendant deaths, injuries and propertydamage compared to expanding onlyhighways

save up to five million barrels of oil per yearand reduce pollutant emissions, even withfuture improvements in auto fuel efficiency.

Furthermore, economic studies show that thehigh-speed trains would bring economic benefitsworth twice the cost of construction and woulddirectly result in creating 450,000 new permanentjobs in California.

Institutional Structure

The Authority’s legislative mandate to developa high-speed train system includes broad powersto enter into contracts for any of the stages andactivities of planning, design, construction, op-eration and maintenance. To date, the Authorityhas used this power to conduct its planningwork with a small staff directing numerous con-sultant teams under contract.

Now, the Authority needs to transition into anagency capable of handling much larger work-loads and ensuring that the public interest is metduring all phases of the project. The agencystaff needs to have a broad range of expertise,provide continuity and institutional stability, andbe able to adequately oversee private sectorcontractors. At the same time, the Authoritywants to keep the permanent agency staff smallenough to be flexible, innovative and efficientduring the various phases of the project.

The Authority examined several recent successfullarge high-speed train and related infrastructureprojects, both overseas and in the U.S., to identifythe institutional structure that would best meetits objectives. Organizational alternatives rangedfrom established government-owned railroadsto small new government agencies that issuelarge, long-term franchise contracts to majorprivate sector conglomerates.

Each of the projects investigated had verydynamic staffing needs. Large numbers of spe-cialized engineering and construction personnelwere needed over a relatively short design andconstruction period, and even during this phase,the necessary specialties changed. Subsequentlong-term operations typically required yet adifferent group of specialized personnel. All ofthese projects used contractors to some extentto meet these changing personnel needs.

The specialized expertise needed to overseeimplementation and operation of a high-speedtrain system does not currently exist in Californiastate government, although the related expertiseof state agencies could be tapped for somefunctions. Personnel needs would vary duringimplementation (e.g., to support the constructioneffort, several hundred staff would be neededfor limited terms varying from two to 10 years).Current state personnel hiring processes arecumbersome and time-consuming and do notprovide recruitment incentives to attract thespecialized expertise needed to manage con-struction and launch of the proposed system.While rail operations and maintenance functionswill be ongoing, the capability to carry thesefunctions out is more readily available in theprivate sector. Competitive private sector biddingis increasingly used by California’s public transitagencies and for high-speed train operations inEurope and Asia.

The Authority has determined that the best ap-proach for the California high-speed train is ahybrid institutional structure which relies uponan expert core public sector staff using compet-itive contracting to the greatest extent possible.Private sector contractors would best providethe majority of personnel needed to implementthe high-speed train system. This structurewould allow for competitive bidding and targetedrecruitment to meet the ebbs and flows of ex-pertise and labor needed to implement andoperate the proposed system. A key privatesector contract would provide for project man-agement support.

Initially, the project management contractor/s,under the direction of Authority staff, would assistin the development of design criteria, preliminarydesigns, bid documents, project timeline andcontrols, and system integration. When projectsenter the design and construction stage, theproject management contractor/s would provideoversight and coordination of the work beingdone by other contractors. The project manage-ment contractor/s would need to be brought onearly in the implementation period through multi-year contracts requiring continued close coordi-nation with and oversight by the Authority staff.Other private sector agreements would includenumerous contracts for civil works design andconstruction, train systems design, procurementand installation as well as operations, mainte-nance and supply contracts.

The Authority would need to be able to managea number of separate activities for different partsof the system simultaneously—planning, environ-mental review and permitting; design, real estateacquisition, negotiations with existing railroadsand public entities; construction and testing; andfinally, operation, maintenance and supply.

Figure 3.1

Organizing Design, Construction andOperation Contracts

The Authority’s enabling legislation gives it theability to enter into contracts with private orpublic entities for the design, construction andoperation of high-speed trains and allows forcontracts to be separated into individual tasksor segments, including design/build or de-sign/build/operate contracts.

At over $33 billion for the complete high-speedtrain project, a single contract for the planning,design, construction, operation and maintenanceof the entire system is neither practical nordesirable. The project is simply too large toconsider such an approach. Numerous privatesector contracts in varying sizes and dollaramounts will be required to complete systemimplementation. Breaking the project tasks intomultiple contracts, where possible, would pro-mote competition within the construction andsupply industry.

With a modest public sector staff supported byprivate sector consultants and the Authority’sbroad contracting capabilities, the Authoritycan choose the best procurement strategy foreach contract package, whether design/build,design/bid/build, design/build/operate,design/build/operate/maintain or other hybrid.

Design/Build (D-B)

This approach integrates the design and con-struction functions into one contract. D-B willgenerally be the most appropriate approachfor the large civil works construction contracts.Detailed design and construction will be basedon the preliminary designs prepared by theAuthority and its consultants and the performancecriteria.

The D-B method brings many benefits:

it provides a single point of responsibilityfor final design and construction

it typically reduces the time for projectcompletion

project costs are usually reduced dueto lower design costs (as compared tothe DBB method)

the latest in construction methods areintegrated early into the design

it allows for “fast-track” construction(the ability to begin construction while thedesign of the project element continues)

and D-B can effectively harness competitionamong contractors and suppliers.

Design/Bid/Build (DBB)

The DBB method is the conventional method forbuilding public works projects in the U.S. Pre-liminary designs are prepared by either the projectmanagement contractor/s or other contractor/s.Based on the preliminary design and the perfor-mance criteria, the Authority would contract forthe development of final designs and bid docu-ments. The completed final designs would beput out to bid for construction.

The DBB method would allow the Authoritygreater control because the designer is exclu-sively serving the Authority’s interests, and itincreases the involvement of smaller, local andminority-owned contractors; however, it requiresmore oversight, coordination and administrationfrom the Authority. The DBB method is not easilyfast-tracked due to the need to conduct twoprocurement processes, and it requires extensivecoordination between the design and construc-tion contractors.

Design/Build/Operate (DBO),Design/Build/Maintain (DBM),or Design/Build/Operate/Maintain(DBOM)

These methods initially are similar to the de-sign/build option but continue over time withadded functions of operations or operations withmaintenance. While the Authority has found itimpractical and undesirable to enter into a singlefranchise contract for the implementation of theentire high-speed train system, there is thepossibility of entering into a single contract forthe systems (signaling, communications, trackand electrification) and train technology for theentire project. This option may provide the bestopportunity for private sector financing, risksharing and clear accountability for the perfor-mance of trains and systems.

Although the Authority will utilize all contractingmechanisms, the Authority believes that the

design/build procurement strategy will likely bepreferred for the major, high-value constructioncontracts, especially those in which final designand construction problems are relatively wellunderstood at the end of preliminary design.

The Authority believes that the best procurementstrategy for the train technology and systemswill include design, construction/supply/ instal-lation and maintenance in a single contractbecause it best supports the integration of high-speed train systems and offers the possibility ofleveraging public/private partnership opportuni-ties. In some projects, operations of the trainservice has also been included with provisionof train systems and, in others, maintenanceand operations have been kept separate. TheAuthority may consider a train systems packagethat includes maintenance and operations aswell; this decision will depend on the outcomeof the final ridership and revenue analysesnow underway and on the potential suppliers’perception of the revenue risks.

Further discussions with technology providersand others as well as additional analysis will beneeded to determine if a DBOM for the systemsand train technology is financially feasible andpreferable to a DBM. If a single DBOM or DBMis not pursued, another approach would be tobreak major system and operating elements intoseparate contracts: 1) track; 2) electrification;3) signaling/communications and train technol-ogy; 4) operations; and 5) maintenance.

In any of these approaches, a single operatorwould be responsible for providing a varietyof services (local, regional, express, premium,etc.). The Authority believes that a single high-speed train operator would better ensure inte-gration of services, accountability, reduced risk,effective coordination and communication, andwould simplify Authority oversight.

Figure 3.2Artist cross-section ofproposedTransbaystation

Technology Selection

In developing California’s high-speed train, theAuthority intends to build on technology devel-oped over more than 40 years of increasinglysophisticated and extensive high-speed trainservice around the world. Having existing sup-pliers adapt off-the-shelf equipment to an as-sortment of U.S. requirements will minimize therisks of unproven technology, lower the cost ofdesign and testing, ensure a faster delivery oftrainsets, and place more of the risk on thesupplier.

However, one issue will require the Authority towork closely with the FRA on potential changesto or waivers from FRA regulations in order tooperate the safest, most reliable high-speed trainservice possible. Extremely successful Europeanand Asian technology differs significantly in onemajor respect from the current U.S. regulatoryrequirements governing passenger and freighttrains. The FRA currently requires all existingU.S. passenger trains to be at least twice asstrong in certain aspects than the lightweightequipment used in European and Asian high-speed trains. In order to meet this strengthrequirement, manufacturers would have to struc-turally redesign their trains, at significant addi-tional development cost and time, resulting inhigher costs to the Authority, but with uncertaineffect on the ultimate safety of the operation.

Such a redesign would make high-speed rollingstock heavier, jeopardizing the low axle loadingsthat have efficiently enabled the high speeds,low operating and maintenance costs, and pos-itive cash flows like those enjoyed by high-speedtrain operations in Europe and Asia. In additionto being more costly to purchase and operate,heavier equipment may cause changes in othersystem components such as track or bridgesand result in higher maintenance costs.

In the late 1990s, the FRA considered waivingU.S. equipment strength requirements to allowoperation of a Florida high-speed line becauseit was to be operated on rights-of-way dedicatedto high-speed train operation and separate from

other railroad lines. However, suspension of theFlorida project meant that FRA rule-makingwas never completed. Under any circumstance,California will have to start a similar federalregulatory process that will lead to an FRA “Ruleof Particular Applicability” governing operationsup to 220 mph on the high-speed-train-onlylines.

While the majority of the high-speed train systemis being planned with dedicated separate tracks,there are two sections of the system that areproposed to be shared with existing commuterand intercity trains at reduced speeds. Undercurrent regulations, either the selected Europeanor Asian equipment would have to be modified

Figure 3.3Shinkansen in thecountryside, Japan

structurally to meet the FRA requirements or theproposed system would have to be modified inother ways to avoid compatibility conflicts withfreight trains and conventional passenger trains.

The Authority will engage the FRA and a groupof pre-qualified high-speed train manufacturersto investigate safety approaches that have beenapplied successfully in other countries and toconsider how existing high-speed train vehiclesand systems might need to be modified for usein California. Manufacturers would be pre-qualifiedfor future California contracts based upon theirexisting ability to produce very high-speed trainsand their willingness to work with the state andfederal governments. Pre-qualification of manu-facturers and safety studies will also improve

price competition and quality of bids on the trainsand systems as well as improve the Authority’sability to evaluate those bids.

Pre-qualification is intended to help streamlineFRA rule-making for California’s unique circum-stances. Once the FRA/high-speed train systemscompatibility studies are completed and financingis secured, the Authority will proceed to a com-petitive procurement of the high-speed train andrelated systems from among the pre-qualifiedhigh-speed train manufacturers. A decision onwhich high-speed train system to use will thenallow the Authority to formally apply to the FRAfor the Rule of Particular Applicability.

The California high-speed train has been devel-oped with criteria and standards that allow useof any of the existing European and Asian tech-nologies. Prior to selecting a train technology,progress can be made on numerous planning,environmental approval and preliminary designtasks that will take several years. However,detailed design will be made more efficient bythe selection of a specific train type and system,and in some cases will require coordinated,technology-specific parameters such as electricpower supply and signal systems. Optimally,the train technology selection will be made andrule-making will be substantially completed withintwo to three years of obtaining significant fundingfor the project and before the planning andenvironmental work is completed.

Figure 3.4High-speedtrain stationwith multipleplatformsavailable forarrivals anddepartures

Phasing and Staging Construction

The California high-speed train project is over700 miles long, with 30 potential station locations.The estimated cost for the entire project is over$33 billion. The sheer scale of this proposalmakes it impractical to construct and initiateoperations of the entire project all at once. Evenif sufficient funds were secured, constructing aproject this large all at once would strain theCalifornia economy through excessive demandfor construction materials and labor. Like otherlarge transportation projects, the high-speedtrain system can be divided into smaller seg-ments that can be operated before the full systemis complete.

New ridership and revenue forecasts are beingprepared and further studies must be done forthe Authority to select a preferred route for thenorthern mountain crossing between the BayArea and the Central Valley. Both are critical todetermining operable segments and in whichorder to construct and open them for service.Moreover, the amount of capital available toimplement the system and any limitations on theuse of those funds should be known prior tomaking commitments regarding the phasing ofconstruction.

Selection of workable segments and the orderin which they are phased should include theseconsiderations:

the availability of capital to construct thesegment/s and procure train systems

ridership and revenue potential and theability of the segment/s to be operatedwithout state subsidy

the ability to service trainsets at appropriatemaintenance facilities

a distribution of construction and initiationof service in regions of both Northern andSouthern California

the avoidance of cost increases relatedto labor or material scarcity.

The High-Speed Passenger Train Bond Act(SB 1865/SB1169) directs that the first portionof the high-speed train system to be funded willbe San Francisco to Los Angeles. Even alongthat route there may be regional segments thatcan be opened before construction is completeon the entire north-south line.

Figure 3.5Laying tracks, Taiwan, ROC

Financing

The California high-speed train project is one ofthe world’s largest public works projects, withestimated costs over $33 billion. Based on theexperience of other countries, a “carefullyplanned” high-speed train system is a smartinvestment that is projected to return a benefitof at least two dollars for every public dollarinvested. More importantly, once built, the serviceprovided by the system is expected to yieldannual operating surpluses in excess of $300million ($1999/Business Plan 2000).

High-speed lines worldwide generate surpluses(1) from their operations, unlike traditional pas-senger service, because high-speed attractsmore passengers, generates more revenues andlowers unit costs of production (e.g., a crew canmake two round trips a day instead of one). Theresulting combination of higher revenue andlower unit operating costs has made all high-speed train services net contributors to thefinancial performance of their operators. InEurope and Japan, high-speed train systemsgenerate enough revenue to cover operationalcosts (2), and most of the high-speed lines coversome of their construction costs (the TokaidoLine between Tokyo and Osaka generatedenough operating surplus in the first decadeto completely match the capital costs). In Cali-fornia, a high-speed train will compete withautomobiles and airplanes, which have enjoyed

a century of substantial public funding andare well-established. Until the high-speedtrain system operates at a surplus, publicresources will be needed for capital and de-ployment costs.

In 2000, the Authority published its businessplan, which presented two funding approaches:

a full-funding scenario, which assumedthat the entire system be constructedsimultaneously

a phased-funding approach that focusedon securing resources required to com-plete discrete sequential phases of theproject as expeditiously as possible.

The Authority concluded that the phased-fundingapproach is the most prudent and business-likeapproach and will ultimately be of better valueto the state’s taxpayers. The phased-fundingapproach calls for development of a detailedfinancing plan which would include state andfederal funding sources as well as the Authority’sbroad contracting powers to secure private sectorfunds.

Since the preparation of the 2000 business plan,there have been some developments in potentialfunding sources for the high-speed train system.

DOLLARS IN MILLIONS; 1999 $$ UNLESS ANNOTATEDFigure 3.6For sources see page 32

(1) (2) see Endnotes

OVERSEAS HIGH-SPEED TRAIN COMPARISONS

COSTPER MILE

YEAR PASSENGERS(millions)

REVENUE OPERATINGCOST

NET OPERATINGCASH FLOW

CAPITALCOST

MILES

TokaidoShinkansen

Tohoku/JoetsuShinkansen

TGV Paris-Lyon

TGV Atlantique

$18

$72

$32

$29

1990

1992

1991

1991

191

76

19

18

$9,100

$3,230

$1,100

$ 810

$3,330

N/A

$ 440

$ 355

$6,770

N/A

$ 660

$ 455

$5,800

$33,300

$8,070

$5,000

320

460

250

170

THSRC $73-922009 68 $1,920 $ 650 $1,270 $15,300-$19,400

210

In 2002, The Safe, Reliable High-Speed Passen-ger Train Bond Act for the 21st Century (SB 1856-Costa) was signed into law by former GovernorGray Davis calling for voter approval in theNovember 2004 general election of $9.95 billionin General Obligation (GO) bonds for rail devel-opment in California. Nine billion was authorizedfor high-speed trains and $950 million wasauthorized for capital improvements to intercityand commuter rail lines and urban rail systems.

Due to the state’s fiscal condition in 2004,SB 1856 was amended by SB 1169 (Murray)and signed by Governor Schwarzeneggerdelaying the vote until the November 2006general election.

The potential availability of GO bonds, coupledwith the refinement of the high-speed train pro-gram through environmental review, requiresdevelopment of an updated financing plan. Thatplan will be developed concurrently with andbased on a new ridership/revenue study currentlyunderway (3) and will take into consideration theavailability of GO bonds as a potential fundingsource.

Overview of Sample Schedule

It will take from eight to 11 years to develop andbegin operation of an initial segment. The sched-ule below illustrates the sequencing of major

tasks, assuming that the Authority chooses aspecific supplier of high-speed train technologyas an early action. Each of the line items is brieflydiscussed on the following pages.

SAMPLE SCHEDULE

Major financing available

Organization and agreements

Segment planning, EIR/EIS & permits

Preliminary design

Project control, mgmt., verification

FRA/train systems compatibility studies

Train system selection

FRA rule

Train system testing, construction & delivery

Right-of-way acquisition

Final design

Earthworks, RR viaducts

Grade separation

Track, power

Signals, communications

Testing, open for service

Begin/End marker

Completion milestone

Intermediate milestone

# of trains

Prototype train

Design & construction contractors

Train builders

Operators

Authority staff & direct contractors

Figure 3.7

(3) see Endnotes

Major Financing Available

Completion of planning for the high-speed trainsystem, program-level environmental impactreviews and FRA/high-speed train systemscompatibility studies can be accomplished withannual appropriations until major financing isavailable. However, a significant portion of thefunding for the first segment of the high-speedtrain will have to be available with a reasonablycertain plan to secure the remainder before pre-construction/supply/installation work can begin.Key elements of that work include:

bids from train systems suppliers

specific FRA rules to govern the systemand operations at planned speeds over150 mph

preliminary design of the alignment,structures, stations and facilities

project-specific environmental review

bids for final design and constructionof the high-speed train.

The most likely sources are the state bond ref-erendum placed on the ballot by the CaliforniaLegislature and federal matching funds.

Organization and Agreements

Critical to the success of the high-speed trainsystem are: institutional development of theAuthority, selection of project management andother consultants, agreements with significantstakeholders such as railroads and existing railoperators, and establishment of guidelines andagreements for station development. Agree-ments would be sought with local agencies tomaximize infill transit-oriented joint developmentof station areas. Preliminary agreements withaffected railroads and rail operators need to bereached before project-specific EIR/EIS workcan progress, with final agreements after theEIR/EIS work and FRA rule-making.

Segment Planning, EIR/EIS & Permits

Project-specific EIR/EIS work supported bypreliminary design will require one to two yearsto reach a draft EIR/EIS, followed by a finalEIR/EIS and agency sign-off six to12 monthslater. Major permits from federal and state agen-cies would follow six to 12 months after that.

Preliminary Design

Preliminary design constitutes 15 to 30 percentof the total design required for a segment andis required to support the EIR/EIS, permitting,agreement and right-of-way acquisition.

Project Control, Management andVerification

The Authority must systematically control sched-ules, costs and system configuration as prelim-inary design and the EIR/EIS work are undertak-en. As design and construction proceed, projectmanagement responsibilities grow along withquality control and construction inspection work-load. Train and systems suppliers and futureoperators would have a formal role at this point.Rolling stock acceptance, warranty and projectwrap-up extend beyond the start of service.

FRA/High-Speed Train SystemsCompatibility Studies

An early requirement is consultation among theFRA, the Authority and a group of pre-qualifiedhigh-speed train manufacturers to investigatehow existing high-speed trains and systemsmight need to be modified for use in California.This work likely would require six months to twoyears, would result in better-informed and refinedbids from manufacturers and likely would shortenthe subsequent FRA rule-making.

Train System Selection

The Authority intends to select the high-speedtrain technology and manufacturer/s as early aspractical. Rolling stock specifications are neededfor final systems design, and the manufacturershould participate in the oversight of the designand construction of the high-speed train infra-structure.

Thus, it is vital that the Authority has qualifiedstaff and program management contractor/s todevelop the appropriate bid requirements andoversee selection of contractors. In the projectschedule of this document, the decision ontechnology is anticipated to be made twoto three years after significant financing is se-cured. Project-specific environmental studies,preliminary engineering, and right-of-way pres-ervation would all begin—and in some cases

may be nearing completion—prior to the selectionof the high-speed train technology.

An early selection of train and systems suppliersis assumed in this schedule, allowing the settingof final design criteria, finalizing preliminary designissues and allowing for the initiation of FRA rule-making.

Federal Railroad Administration Rule

Rule-making is estimated to require two to threeyears. The Authority and the selected train sys-tems supplier would confer on issues to beaddressed by the rule with the FRA and wouldconsult with other affected rail operators. If therule can be concluded more rapidly, train systemtesting, construction and delivery could beaccelerated.

Trainset Testing, Construction andDelivery

This task depends on the completion of theFRA rule. Design, construction and testing ofthe prototype trainset is assumed to requiretwo and one-half years (shown by “P” on theschedule (Figure 3.7)). Testing of a prototypefor reliability, performance and compliance withFRA and other requirements is assumed to takeone year. After testing of the prototype, six

months are assumed before the delivery of thefirst trainsets, which then are delivered at therate of one per month. Operations can beginwhen enough) trainsets are available to start aservice. The schedule (Figure 3.7) shows thecomplete acquisition of 38 trainsets ending twoyears after the start of service.

Figure 3.8TGV trains at Avignon station platform

Right–of-Way Acquisition

This task begins after the substantive completionof the environmental work and is expectedto require up to three and one-half years. Ininstances where the right-of-way is already as-sembled, as in the shared segments and LAUS,this activity will be subsumed into the agreementnegotiations, potentially saving a year of time.

Final Design and Construction/Installation

The schedule assumes that the majority of thework is performed through design/build contractsin which substantial overlap of work will bepossible through staging of subsegments by thecontractors. Completion of design will requireseveral years, and construction of long tunnelsand grade separations will take the longestamount of time and will drive the constructionschedule. Depending on the segment, civil worksdesign and construction will require three andone-half to five years. Installation of track, powersystems, signaling and other systems are esti-mated to require up to three years for the longersegments, but because work can start sequen-tially, it can be completed in only one additionalyear after the civil works.

Testing, Training and Service Opening

This task can begin after the first segments arecompleted, with substantial overlap with instal-lation of systems. Service is assumed to beginsix months after completing all the necessaryfacilities in a given segment.

Figure 3.9Series 700 Shinkansenin Kyoto station

Next Steps Forward

In the next several years, coordinated actionon several fronts will be needed to move theCalifornia high-speed train project forward:

Bay Area – Central ValleyProgram EIR/EIS

Through the programmatic environmentalimpact review, the Authority has selectedpreferred alignments and stations fromSacramento through Fresno, Bakersfield,Palmdale, and Los Angeles to Irvine,Riverside and San Diego. Portions of thealignment and the associated stations in theSan Francisco Bay Area have been selected,but a preferred alignment is not yet definedto link the Central Valley to the Bay Area.Therefore, the Authority intends to develop anext-tier “Bay Area—Central Valley ProgramEIR/EIS” in order to identify a preferredalignment.

Statewide Ridership/Revenue Forecasts

A detailed study of high-speed train ridershipand revenue, conducted with the Bay AreaMetropolitan Transportation Commission, willupdate statewide forecasts and determinethe effect of specific combinations of align-

ments and stations between the Bay Areaand Central Valley. Statewide ridership fore-casts will be available in the first half of 2006.

Prepare Financial Plan

The financial plan will draw upon the resultsof the ridership and revenue studies, thealignment studies and the cost estimates ofpreferred alignments as well as developmentsin state and federal funding.

Develop Authority Staffing Planand Scope-of-Work For ProgramManagement Team and SelectProgram Management Team

Over the next several years, the Authority willbegin the transition from a small study-oriented agency to a mid-sized flexible con-struction and operations oversight agency.As explained in the section on institutionalstructure, the Authority has decided to use aconsultant team as program manager to en-sure the necessary technical expertise withoutpermanently enlarging state payroll. Beforethis step is taken, the Authority will developa detailed organizational plan for the neces-sary administrative and technical skills tomanage the consultants’ work and protectand advance the state’s interest in the project.The Authority will also develop a scope-of-

work for the program manager’s contract.Once these steps have been completed, theAuthority will then select the program man-agement team by competitive bid.

Pre-Qualify Train SystemSuppliers and Undertake JointIndustry/FRA Studies

The Authority will identify a group of potentialhigh-speed train system suppliers who canparticipate in a study with the FRA of howexisting high-speed train vehicles and systemsmight need to be modified for use in California.High-speed train manufacturers will be pre-qualified to compete for future California high-speed train contracts based upon their exist-ing ability to produce very high-speed trainsand their willingness to work with the stateand federal governments in an open, com-petitive process.

Project Specific EIR/EIS

At the completion of the program environ-mental review, implementation would beginwith preliminary engineering and project-levelenvironmental review to assess potentialenvironmental impacts not already addressedin the Program EIR/EIS.

30

Project-level environmental review wouldfocus on a portion of the proposed high-speed system and would provide furtheranalysis of potential impacts and issues atan appropriate site-specific level of detailin order to obtain needed permits and toimplement segments of the high-speed trainsystem.

Figure 3.10 below shows the estimated costto construct major segments where a pre-ferred alignment has been chosen as well asa range of estimated costs for performing thenecessary preliminary engineering andproject-level environmental review. (4)

Right-of-Way Preservation

For the portions of the line where a generalalignment has been selected, the Authoritywill conduct assessments to identify segmentsat risk of imminent development or otherchanges in use that could significantly in-crease implementation costs and difficulty.In conjunction with other state and localagencies, the Authority will develop a planfor protective advance acquisition consistentwith state and federal requirements and avail-able funds. As each project-level EIR/EIS isapproved and normal acquisition is permitted,the Authority will conduct a similar review toprioritize the use of acquisition funds. All ac-quisitions will conform with the Federal Uni-form Relocation Assistance and Real PropertyAcquisition Policies Act of 1970, as amended.

The Authority also will seek to reach agree-ment on terms of access to shared rights-of-way with rail line owners and operators,shared capital and operating costs, typesof improvement required to maintain existingoperations while allowing high-speed trainoperations, and other critical matters suchas liability indemnification, insurance require-ments, and other legal and operationalmatters.

CAPITAL AND PROJECT LEVEL ANALYSIS COST ESTIMATES

Fresno to Bakersfield

(FIGURES IN MILLIONS, 2003 $$)

SEGMENT LENGTH(miles)

CAPITAL COSTENGINEERING AND

PROJECT-LEVELEIR/EIS COST

Bakersfield to Palmdale

Palmdale to Los Angeles

Los Angeles to Irvine

Los Angeles to Riverside

Riverside to Mira Mesa

Mira Mesa to San Diego

116

84

61

43

66

74

19

$3,100

$3,900

$4,800

$2,300

$2,900

$4,000

$1,200

$31 - $46

$39 - $58

$48 - $72

$23 - $34

$29 - $43

$40 - $60

$12 - $18

Figure 3.10

(4) see Endnotes

Endnotes

(1) – page 24

The “net contribution” or “net revenue from oper-ations” or “operating surplus” is calculated asthe difference between ticket revenues (on-boardfood purchases, sale of advertising space, stationconcessions and the like are generally a separateprofit/loss center) and costs of operation: itemssuch as driver and crew costs, including benefits,insurance and other overhead; fuel and electricity;maintenance of track, structures, signaling, powersupply lines and stations; maintenance andoverhaul of trainsets, locomotives and coaches,including replacement parts; station operations;commissions on ticket sales; ticket taxes, whereapplicable; personnel and administration. Whereother services use track or other facilities, theremay be a sharing of the cost with that otherservice. These costs do not include depreciation,amortization, interest payments, income taxesor opportunity costs of capital. High-speed trainoperators typically report revenues two to twoand one-half times the operations costs.

(2) – page 24

The first TGV line between Paris and Lyon isreported by the French National Railway to havecovered its cost of construction and trainsetacquisition (around $2 billion in then current U.S.

dollars) in less than 10 years, including depreci-ation and interest payments. As a quasi-government company, the French National Rail-way pays no income tax. This reported profitcontrasts with the full non-TGV network, whichis reported to require significant subsidy forfreight operations, local light-density services,regional commuter services and slower conven-tional long-haul trains.

(3) – page 25

The Authority is working in cooperation with theMTC on statewide high-speed train ridershipforecasts.

(4) – page 30

The estimated total capital costs (in 2003 dollars)for each of the corridor segments of the Author-ity’s preferred system cover all aspects of imple-mentation, including construction, rights-of-way,environmental mitigation, and design and man-agement services. Construction costs includeprocurement and installation of line infrastructure(tracks, bridges, tunnels, grade separations andpower distribution); facilities (passenger stations,storage and maintenance facilities); systems(communications, train control); and removal orrelocation of existing infrastructure (utilities, railtracks). The right-of-way costs are for acquisition

of property. The environmental mitigation costsinclude a rough estimate of the proportion ofcapital costs required for mitigating environmentalimpacts based on similar completed highwayand rail line construction projects. No specificmitigation costs are identified at the programlevel of review. Other implementation costs areincluded as estimated add-on percentages toconstruction costs to account for agency costsassociated with administration of the program(design, environmental review and management).

Rough order of magnitude costs are also esti-mated for the project-level environmental reviewand associated preliminary engineering for eachcorridor segment. These costs are based onapproximately one percent of the estimatedcapital costs for each segment; however, thecosts may vary (up to 1.5%) according to thelevel of construction complexity (e.g., amountof tunnels, structures, etc.). These percentagesare typical of large transportation projects.

Sources for figure 3.6, page 24

Tokaido Shinkansen

Construction and acquisition costs as reportedin multiple English language sources based onoriginal budgets, and clarified by JNR VicePresident of Engineering1955-1963: Shima,Hideo, “Birth of the Shinkansen – A Memoir”,Japan Railway and Transport Review, October1994, pp 45-48. Operations, ridership, andrevenue data derived from various sourcesincluding extensive interviews with senior JNRstaff reported in Matthieu, Gérard, “High Speedin Japan: Accomplishments and Future”,unpublished paper, SNCF, Paris, France, April1992; JARTS, “The Shinkansen”, Tokyo, Japan,1979.

Tohoku/Joetsu Shinkansen

Derived from Matthieu and JARTS, with 1994East Japan Railways staff review and correctionof data.

See also Taniguchi, Mamoru, “High Speed Railin Japan: A Review and Evaluation of theShinkansen Train”, Working Paper UCTC No.103, University of California Transportation Center,UC Berkeley, April 1992.

Yen-dollar exchange rates from R. McKinnon,Stanford Institute for Economic Policy Research,pre 1971; Board of Governors of the FederalReserve System G.5 Foreign Exchange Rates,post 1971; inflation adjustments from FederalReserve Bank of Minneapolis and R. Sahr, OhioState University CPI factors.

TGV Paris-Lyon and Atlantique

Berlioz, Claude and Leboeuf, Michel; “Economicbalance sheet of the TGV-Sud-Est”; FrenchRailway Review, Vol 1, #4, September 1983;Mathieu, Gérard; “Ten Years TGV Sud-Est – aresounding success”; Rail EngineeringInternational Edition, 1991, Number 3. Alsoinformation extracted from various articles inRevue Génerale des Chemins de Fer, January-February 1992, October 1991, September 1983,and September 1981, edited by SNCF, publishedby Dunod, Paris, France. See also Arduin, J.P.& Ni, J., “French TGV Network Development”,Japan Railway and Transport Review, March2005, pp 22-28, and Lucas, M. & Brand, N.,“Operating and Maintenance Costs of theTGV System in France and North America”;Journal of Transportation Engineering, AmericanSociety of Civil Engineers, January, 1989.

THSRC – Taiwan

From Client’s Brief material prepared for theTHSRC in 1998, and ongoing reports andprogress. See also Web sites www.thsrc.comand www.hsr.gov.tw.

French franc and New Taiwan dollar – U.S. dollarexchange rates and inflation adjustments fromFederal Reserve bank data.

Other U.S.

For a national perspective on HSR potential inthe U.S, see Federal Railroad Administration,U.S. Department of Transportation, “High-SpeedGround Transportation for America”, Washington,D.C., August, 1996.