Archive for September, 2009

Billions in California bond funding for a north-south high-speed rail line. Strong political backing from the Governor and President. A controversial routing, with make-believe ridership and cost projections. Engineering and planning handled not by Caltrans, but a Legislative aid by the name Mehdi Morshed. Murky connections between government backers and corporate beneficiaries of the project.

No, it isn’t 2009, and this isn’t the California High-Speed Rail Authority. The year is 1982. But everything else is the same.

Richard Trainor’s Paradise Lost? describes the now-forgotten history of California’s first attempt to build a bullet train. On October 12, 1982, AB3647 became California law. It provided $1.25 billion in tax-exempt revenue bonds for the design and construction of a “Shinkansen-type bullet train.”

In 1982 (as is the case today), Caltrans had world-class engineers. Rather than leverage those capabilities, a new organization would be created to design the statewide rail system. Sound familiar?

The passage of AB 3647 stunned many observers, including Adriana Gianturco, who had been led to believe that a bullet train would fall under the aegis of Caltrans. In fact, Alan Boyd and Larry Gilson of American High Speed Rail had promised Gianturco when she met with them in the spring of 1982 that Caltrans would still be involved in the project. Gianturco told me this when I interviewed her in the spring of 1983. Gianturco then found that Caltrans was cut out of the process entirely. American High Speed Rail Corporation would instead build the bullet train with private engineering and design, and construction firms like the Irvine Company and the Fluor Corporation, the two biggest developers in Orange County, and both politically wired.

The selection of the route, and the lack of community involvement generated considerable opposition (not unlike the current controversy in Meno Park and Palo Alto):

The bullet train process and the low-ball legislation outraged a number of environmental groups and citizens along the route. AHSRC held a number of public and legislative meetings in an attempt to mollify them with some pork.

As is the case in 2009, funding for the project was put in place based on an erroneous business plan. Once the ridership numbers received greater scrutiny, support for the project evaporated. Will history repeat?

At one legislative meeting, Jess Unruh was called to testify and said: “I am here to bite the bullet on this bullet train.” Unruh, the former all-powerful Assembly Speaker, confessed that he too had been promised studies showing how the bullet train would produce such fantastic ridership figures that it would shortly be in the black, with the ability to cover the tax-exempt state bonds.

At another hearing, the Senate Transportation Committee heard from Jonathan Richmond, visitng Fullbright scholar and transportation expert:

Jonathan Richmond presented the Senate Transportation Committee and the assembled press with the theretofore “secret” Arthur D. Little study, which had been funded with the AMTRAK loan to AHSRC.

Richmond tore it to shreds. The studies were flawed, said Richmond. The numbers in the Arthur Little report didn’t make sense. They wouldn’t stand up; they were make-believe. Richmond demonstrated that the methodology used to assemble the figures showing the bullet train could operate without further state funding was insupportable, until John Foran shut him up. AHSRC tried to undo the damage, but it was too late. Their credibility was shot.

Six months later, the project was dead.

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The consultant mafia for San Francisco’s 1-mile long Central “Stubway” project have scored another $9.9 million in pork grant funding from the FTA. This is in addition to the $66 million spent on who knows what.

To put in perspective:
Even at inflated Muni prices, $66 million is enough to build 1 mile of at-grade streetcar line. At world-market rate prices, $66 million is enough to build 6 miles of at-grade streetcar all the way out to Land’s End. As well, $9.9 can serve as nice downpayment on modern low-floor trams.

Instead, Muni is proposing to spend $1.57 BILLION on this money pit:

The 1960’s Protest and Revolt movement in Amsterdam described “underground public transport means the final hegemony of the car on the street level.” That is certainly the case here, where billions of transit dollars are being spent to preserve automobile LOS in Chinatown.

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Metrolink Back-Seat Drivers

Senator Boxer is fuming that Metrolink has just a single crew member in the cab on 87% of its runs.

The agency had said it would double up on crew members in locomotives as part of a series of safety reforms after the Chatsworth crash a year ago that killed 25 and injured 135. The so-called second-set-of-eyes plan was a hastily implemented reform after investigators found that the Metrolink engineer had been text messaging on a cellphone and apparently ran a red light just before crashing head-on into a freight train.

The Chatsworth collision is an example of what risk-expert Dr. John Adams terms “low-frequency, high-impact” incident. These types of incidents provoke knee-jerk reaction from politicians who feel the need to do something regardless of cost-benefit.

To my knowledge, there has never been a peer-review study on the benefits of two train drivers. For all we know, such measure would be counterproductive, should the two become distracted while engaging in heated debates over the previous night’s Dodger’s game.

Amtrak-style train service, such as Metrolink, is notorious for low employee productivity. Most transit agencies (outside the US) run commuter service with just a single crewman (i.e. the driver), using Proof-of-Payment ticketing in lieu of conductors. Whereas “safety” regulations and make-work rules in the US necessitate all kinds of extra labor expenses — ticket punchers, ticket sellers, and now an extra train driver too.

There is also significant opportunity cost that comes with hiring superfluous drivers. Their salary comes at the expense of real safety measures; for example, hiring extra patrols at problem intersections to ticket car drivers going around crossing gates.

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The AP reports:

The watchdog of the Securities and Exchange Commission has found that three agency exams and two investigations of Bernard Madoff’s business were incompetent, despite ample warnings of the multibillion-dollar fraud. But SEC inspector general David Kotz’s report found no evidence of any improper ties between agency officials and Madoff.

This conclusion by the IG, that agency officials were merely incompetent and not corrupt is quite a leap of faith. It is a prime characteristic of government organizations that it is impossible to distinguish between incompetent and corrupt behavior.

Now, it is true that strictly speaking, the low-level know-nothings staffers did not commit illegal or corrupt acts in their bungled investigations. After all, they were too busy going after Martha Stewart.

No, the key question (not examined by the IG) is how the SEC, one of the most important regulatory bodies in the country, came to be staffed by nitwits?

Was it due to cuts in funding? Political patronage? Did the SEC develop an institutional culture of not going after major players? And what role did Wall Streets huge campaign contributions play in all this?

In other words, the scandal was caused by complex systemic issues. Distinguishing between corrupt and incompetent actions is almost impossible.

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