UPDATE: The U.S. Dept. of Transportation has given Florida officials until Feb. 25 to find a way to address Gov. Rick Scott’s stated concerns about financial risk and keep the project alive.
Florida state lawmakers and members of its Congressional delegation are racing to find a way to save the state�s high-speed rail plans and the $2.4 billion in federal dollars committed to build it, after Gov. Rick Scott rejected the funds for building a Tampa-to-Orlando line.
“In order to complete it, it looks like we are going to have to find another entity, something other than the state to channel the funds through, along with the private companies bidding to build and operate the high-speed rail,” said Sen. Bill Nelson (D) in an electronic message to constituents. “This is so important to the future of Florida and to us right now, because it is 24,000 jobs over the course of the next five years.”
In announcing his decision Feb. 16, the governor cites concerns about potential capital cost overruns on the public-private project, fears that ridership and revenue projections are overly optimistic, and worries that if the state were to shut down the job after accepting the money, it would have to return the $2.4 billion in federal funds.
“The truth is that this project would be far too costly to taxpayers and I believe the risk far outweighs the benefits,” says Scott in a written statement. He added that he would rather invest in ports, rail and highway infrastructure, though the U.S. Dept. of Transportation will not reallocate that money to other projects in Florida.
Bob Burleson, president of the Florida Transportation Builders� Association in Tallahassee, Fla., thinks the project�s long-term risks made for the deciding factor.
“The real issue was even if the private sector guaranteed they could build it with no additional cost to the state, if five years or eight years from now they walked away, the state could be left holding the bag, to either pay back the money to the federal government or pay to operate the train for 20 or 30 years,” Burleson says. “That’s probably what caused the governor to kill it.”
“There is overwhelming demand for high-speed rail in other states that are enthusiastic to receive Florida’s funding and the economic benefits it can deliver,” says U.S. Transportation Secretary Ray LaHood, in a written statement.
When Republican governors in Ohio and Wisconsin turned down federal dollars for high-speed rail, U.S. Transportation Secretary Ray LaHood redirected that $1.195 billion to other states, including Florida.
“We are extremely disappointed by Gov. Rick Scott’s decision to walk away from the job-creating and economic-development benefits of high speed rail in Florida,” LaHood adds. “We worked with the governor to make sure we eliminated all financial risk for the state, instead requiring private businesses competing for the project to assume cost overruns and operating expenses.”
U.S. Rep. John L. Mica (R-Fla.), chairman of the House Transportation and Infrastructure Committee, had supported high-speed rail and fought for those federal dollars. He expressed “deep disappointment” at Scott’s decision.
“This is a huge setback for the state of Florida, our transportation, economic development and important tourism industry,” says Mica in a written statement.
Mica adds that he has urged Scott to reconsider and allow the private sector to assume the risk and future costs. Eight consortiums had expressed interest in designing, building, financing, operating and maintaining the line.
“With the federal government assuming 90% of the cost of the project, I am disappointed the private sector will not have an opportunity to even offer innovative proposals to help finance the balance of the costs and to construct and operate this system,” Mica says.
State Sen. Paula Dockery (R-Lakeland), a long-time high-speed rail supporter and member of Scott’s transition team, expressed in a written statement disappointment that Scott did not allow the private teams interested in designing, building, financing, operating and maintaining the train an opportunity to submit proposals. She said “It appears that Secretary LaHood will direct these billions lost by Florida to California where true high speed rail has the next best opportunity to succeed.”
Several consortiums had expressed interest in designing, building, financing, operating and maintaining the line.
Tim Brown, spokesman for Florida High Speed Rail Development Partners, a consortium that includes Alstom, VINCI, OHL, and Virgin, says, “We are disappointed with the Governor's decision as we believe high speed rail has a unique potential to create jobs and spur economic development in Florida.”
Francis Jelensperger, with Parsons, declined to comment, saying, “we consider that we are still in the procurement process.”
“We had a lot of major contractors that put a lot of work and effort into trying to develop proposals,” Burleson says. “But the governor sets the transportation policy for the state, and that’s what he chose.”