Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Backed by 2.9 million votes, C.C. Dockery is rolling full speed toward Tallahassee. The 67-year-old Lakeland, Fla., businessman who put up $2 million of his own money to promote a victorious high-speed rail referendum, was set to meet last week with Gov. Jeb Bush to present him with a bill outlining the next steps. And he’s hopeful that he can also show the bill to Florida House Speaker Tom Feeney and Florida Senate President John McKay. So far, Dockery, the most prominent exponent of the “Floridians for 21st Century Travel Connections and Choices” initiative, seems to be a one-man show in Tallahassee. He says it’s too early to say which lawmakers may sponsor his bill. Only two politicians, former state Rep. James Hargrett and Dockery’s wife, state Rep. Paula Dockery, have supported his referendum campaign, he adds. Nevertheless, Florida’s capital is learning to live with a comeback of the project whose total cost estimates range from $8.2 billion to $21.9 billion, after 16 years of on-and-off planning. “It’s going to be very hard to not do anything,” admits bullet train critic Robert W. Toole. “Unless some constitutional flaw can be found, that is,” adds the president of the Los Angeles-based Reason Foundation, a free-market think tank. Possible court challenges aside, Dockery is on a roll. He is now backed not only by a 53 percent vote, but by a constitutional amendment that mandates construction of a high-speed rail network linking Florida’s five largest metropolitan areas, to start by 2003. Indeed, although House Speaker Feeney has ridiculed the high-speed rail project as the “miracle train,” he is doing research on the issue, an aide said. “Mr. Feeney recognizes the people’s wish,” she said. The public pressure is mounting since Florida is one of the few big states where intercity rail plans haven’t gotten anywhere. After Jeb Bush axed the Florida Overland Express (FOX) bullet train project last year, Florida’s Department of Transportation came up with a four-phase plan to improve intercity rail service in incremental steps. But no significant political lobby has picked it up yet. “It’s just talk,” Dockery says about that plan. Because incremental solutions don’t work, he says, Florida needs the newest technology on new tracks. Indeed, the amendment mandates construction of a system with dedicated tracks allowing trains to reach at least 120 miles per hour. Meanwhile, a growing number of states such as New York, Illinois, Michigan and California are making big steps toward high-speed rail, committing billions of dollars to Amtrak for incrementally improving service. A 70 mile per hour, 10 times-a-day tilt train service is now linking Portland, Ore., and Vancouver, British Columbia, an area not exactly known for a rich rail tradition, and the Acela bullet train had its inaugural run from Washington, D.C., to Boston this week. However, many Tallahassee operators are certain that the bullet train will do harm, sucking funds away not only from road construction, but from education and public security as well. “I don’t see any money at all for this,” says state Sen. Ron Klein, a Democrat from Boca Raton. “Florida has a constitutional requirement for a balanced budget. We’ll have a $600 million to $800 million deficit next year. I’m not sure where there could be funds to finance a billion-dollar project.” Klein supports a bill that would put the issue back on the ballot in 2002. But it would need a three-fifths majority in the Legislature to pass. Dockery’s tough response: You may challenge it, but bullet trains are now constitutionally mandated. Funds were committed to high-speed rail in previous years, and they will need to be tapped again. There’s always a fight over resources, and there’s always a loser, he adds. But although Dockery wants to tap state funds, he also has a message to taxpayers: “I don’t want any tax increases,” he says in his North Carolina drawl. “I’d probably be hit harder than anybody else.” Here’s what Dockery’s bill is proposing. It outlines which metropolitan areas should be linked, recommends the creation of a high-speed rail authority that reports to the governor and Legislature, and allocates to the authority the annual $70 million previously earmarked for high-speed rail before Jeb Bush terminated FOX when he took office in January 1999. That could be the basis to back up a bond issue; revenues of a first segment to go on line could soon take care of the balance. Most important, the rail should be built in segments, says bullet train activist Malcolm Kirschenbaum, a former chairman of the Florida High Speed Rail Transportation Commission. “So the revenue stream of the first part can pay for the other parts. Logically you would build the high-traffic corridors first.” For the 90-mile, Tampa-Orlando segment, for instance, the total cost, if you believe earlier state Department of Transportation per-mile cost estimates, would range from $1.3 billion to $1.8 billion. Last month Dockery told the Bond Buyer trade magazine that the first segment could be bonded for $900 million, which would make for $45 million in debt service, at 5 percent tax-free interest. “Does that sound impossible?” Dockery asks. Last but not least, bullet train proponents are eyeing federal funding possibilities. One option is TIFIA, a federal loan guarantee program for infrastructure development. And there’s a $10 billion bond bill by U.S. Sen. Frank Lautenberg, D-N.J., that is attached to this year’s tax bill. The bill would allow Amtrak to raise $10 billion over 10 years by selling bonds to finance high-speed train lines throughout the United States. All in all, Dockery claims the bullet train will pay for itself, including construction costs, within 17 years. It’s no surprise that many politicians and experts quickly dismiss such forecasts. “That’s laughable,” says Randall Cox, author of a study for the James Madison Institute that criticized what he claims were too rosy projections behind FOX. “Not a chance.” Part of the severe skepticism toward bullet trains has to do with the leap of faith that proponents are asking taxpayers and investors to take. Even Dockery admits that projections have a lot to do with guesswork. Asked about projections of U.S. road and air travelers switching to rail, Dockery says, “We won’t know until that thing is going.” But then, high-speed rail has no precedent in the U.S., so it’s a free-for-all for daring statements on both sides. “In the U.S. it’s not likely commercial revenues [of bullet trains] come close to being viable,” the Reason Foundation’s Toole says. “Most lines won’t even get operating costs out.” Opponents in Florida and elsewhere in the U.S. like to point out the general consensus that governments still must foot most of the construction bill, either through backing bond issues with revenue streams, via bailouts, or by directly paying for the project. In Europe, shrinking subsidies and huge investment requirements have led high-speed rail builders to seek debt financing, including traditional bank loans as well as more innovative leasing and capital market solutions, says Michael Wilkins, a London-based analyst with debt ratings agency Standard & Poor’s. But, partly due to the sheer size of the projects and partly due to the different regulatory and political agendas behind each project, large companies have been reluctant to ante up the funds themselves. So private sector lenders are looking to governments for support for timely repayment of their debt obligations. This reality and expectations such as state Sen. Klein’s are mutually exclusive. “The way it’s proposed now, it’s a state-supported system,” Klein says about the Florida project. “The state has much too big a role in funding this.” One major cause of concern is that high-speed rail construction projects often become financing nightmares and produce cost overruns. “I think passenger forecasts for rail links are generally overly bullish,” says Wilkins of Standard & Poor’s. “There has not yet been one large rail project that has come in on time and to budget.” Even the first fully private, large-scale rail infrastructure operator, Britain’s Railtrack PLC, hasn’t been immune to cost explosions. On its West Coast line, Railtrack recently was forced to raise estimates for a high-speed upgrade by a whopping 162 percent, from $3.2 billion to $8.4 billion. And financing for the second stage of the Channel Tunnel Rail Link to London is in limbo, because Railtrack underestimated construction costs. There are also safety concerns that are now forcing the company to divert billions of dollars in its existing network. Observers agree that Britain’s taxpayers likely will have to step in. But then, high-speed rail is helping to relieve road and airport congestion, thus adding to the overall bottom line. What’s more, bullet trains have shown they can be gold mines in the long term. Eight years after it started in 1981, the Paris-Lyon TGV has paid back every centime of construction costs, says Gunther Ellwanger, high-speed rail director of the International Union of Railroads. The mother of all bullet trains, the 35-year-old Tokaido line linking Tokyo and Osaka, has been profitable since the 1970s. And Virgin Trains, which has become the largest rail operator in Britain, is optimistic enough to introduce costly high-speed service on the island’s West Coast line. Also, private stakeholders in rail projects are beginning to share the risk. Construction giant Fluor Daniel, which was willing to foot some of the bill for FOX, is currently involved in a London Underground consortium that finances a large part of the project. And French bullet-train builder GEC Alstom is involved in the financing of Virgin’s West Coast deal. But Florida is not Europe, where government spending is taken for granted. So most likely, there will be victims of a zero-sum game shuffle of funds in the state. One of them may be local mass transit. Some of the funds that Dockery is seeking, for instance, are tied up in the a program for intermodal projects such as the planned station at Miami International Airport. The idea of taking the money from the Florida DOT’s mass-transit budget won’t be good for buses and Tri-Rail in South Florida, says Senator Klein. “We have a significant transportation problem,” he says. “I don’t see that it makes sense to take money out of regional projects and move it to intercity projects. In the state, we should be focusing on public-private responses in regional areas. I’m not convinced we need to do anything additional to link metropolitan areas.” But that intermodal program money is only tied up for a limited number of years, counters Kirschenbaum, the Dockery supporter. “Let them finish their programs, and after three or four years, the funds can be reverted to high-speed rail,” he suggests.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.