In high-speed rail competition for Tampa-Orlando service, Japan makes first move -- with $$$
Wake up and good morning. Japan's taking an early lead in what's expected to be furious competitive bidding by foreign high-speed rail companies vying for the symbolic Tampa-Orlando contract for the first high-speed rail service in this country. How? Not by offering superior rail technology but something more near and dear to the penny-poor United States these days: Money to fund the project.
According to Bloomberg News, Japan may offer as much as $210 million in loans to help pay for a Florida high-speed railway as a Central Japan Railway Co.-led group (see example of its Shinkansen high-speed trains above) competes against Asian and European companies to build the first U.S. bullet-train line. State-owned Japan Bank for International Cooperation (Japan's export-import bank) may lend as much as 60 percent of the Florida project’s overall funding shortfall as part of JR Central’s bid, Tadashi Maeda, head of corporate planning, said in an interview in Tokyo yesterday. The project has a funding gap of about $350 million, according to Florida Rail Enterprise, the state agency responsible for it.
It could be a make or break deal. While the federal government has provided initial funding to kickstart the Tampa-Orlando link, it has not committed to provide all the necessary funds nor the ongoing operating money needed to actually run a high speed rail link. Not that it should. But with incoming Florida Gov.-elect Rick Scott apparently dubious of any large-scale project like high speed rail seeking state subsidies, any private injection of funds (like Japan State Bank for International Cooperation) would only up the prospects for this project coming to fruition.
Bloomberg News says Japan’s offer may help JR Central compete for the $2.7 billion Florida contract against possible bids from Alstom SA, Siemens AG, South Korea’s Hyundai Rotem Co. and a venture between General Electric Co. and China’s CSR Corp. Florida Rail Enterprise (part of the Florida Department of Transportation) is due to release bidding details for the line, linking Tampa and Orlando, as early as this month, said Florida Rail chief operating officer Nazih Haddad (photo, right).
"Government support is vital for getting this kind of big contract," Masayuki Kubota, who oversees the equivalent of $1.9 billion in assets in Tokyo at Daiwa SB Investments Ltd., told Bloomberg News. "Any big project has its own risk, but I think JR Central will manage the risk properly." Here's Bloomberg's complete story.
This is only the first volley of foreign deal-making under way for the high-speed rail project. It helps that the Tampa-Orlando link is first out of the gates because foreign high speed rail companies believe, correctly, that nailing the first contract in the U.S. will up their chances for future deals.
None of this, of course, eases the looming logistics issue for Tampa, which will end up as the western endpoint of a high-speed rail service while still lacking any viable plan to move arriving high-speed rail passengers where they really want to go in this metro area. Ignoring that fate will only set up Tampa Bay for ridicule as a metro area too balkanized to prepare for its own future.
-- Robert Trigaux, Times Business Columnist