Public Apathy "Promotes" Boondoggles. Another H-3? The Obama Effect on the Rail Vote

PUBLIC APATHY. It is one of the major boosters of the ridiculous Honolulu rail, according to award winning journalist and author John Fund of the Wall Street Journal. He spoke about it yesterday at the 36th annual Business and Investment Conference organized by Smart Business Hawaii at the Ala Moana Hotel.

Cost is ridiculous, environmental impact is horrendous and federal monies are no more. Yet Honolulu rail rolls along. Why?

Because too few local citizens participate in protests, contact and pressure elected officials, contribute money and time, etc., etc. He also acknowledged that in most cases major successes are achieved by a few, so those of us really working on stopping the rail are not the exception.

So, I say, if rail happens Abe Lincoln will be correct one more time. In a moment of disappointment Abe said "People get who (or what) they deserve."

ANOTHER H-3? John also quoted past Mayor Mufi Hannemann who after the marginal 50.6% "yes to steel on steel rail" vote proclaimed that "this is not going to be another H-3." Yet as you know from my previous posts the cost of rail was predicted in late 2010 to be at least 40% higher compared with the cost estimates during 2008 campaign. Project construction is 3.5 years late.

Rail has already faced one lawsuit in state court on Hawaiian issues and is facing a major one in federal court for NEPA violations. But this is only the beginning. There will be lawsuits for illegal agricultural land conversions and usage. Noise impacts in the proximity of HUD financed homes and apartments because rail noise violates HUD night time noise levels. A challenge for the misuse of TheBus funds to sore-up TheRail finances is also in consideration. And of course dozens of eminent domain lawsuits.

H-3 was built in the middle of nowhere, whereas rail steps on the toes of thousands of citizens. We have not seen anything yet in terms of legal challenges.

THE 2008 ELECTIONS OBAMA EFFECT ON RAIL. John Fund provided statistical evidence that in the 2008 election "island son" presidential candidate Barrack Obama drew thousands of new voters in the polls particularly younger ones who overwhelmingly voted in favor of rail. (I add that I have noted this attitude in young people. Rail is a government project for their future which will cost them next to nothing because it is the government's monies and not theirs...) John argued that if there was a more typical election without the prominent "Obama effect" in the local polls, the rail question would have been a solid No.

Survival of the Unfittest: Why the Worst Infrastructure Gets Built

The worst infrastructure gets built! This is the concise conclusion of analysis by Oxford University professor Bent Flybjerg who for many years has been emphasizing the pitfalls of "megaprojects" which typically turn out to:

• be much more costly than predicted before construction started
• provide fewer benefits that planners predicted, and
• attain a 50% lower ridership than predicted, for urban rail systems

Dr. Flybjerg attributes this to several factors, many of which are prevalent in the proposed Honolulu rail megaproject, as shown below, followed by my assessment from * meaning "not so much in Honolulu rail " to ***** "spot on for Honolulu rail":

• Such projects are inherently risky owing to long planning horizons and complex interfaces. (***** Honolulu rail is all elevated, heavy rail in the middle of vital arterial streets of a a crowded city with cultural, historical and soils issues)
  
• Technology and design are often non-standard. (** Honolulu rail is heavy rail guideway with light rail automatic trains by Ansaldo)
  
• Decision-making, planning, and management are typically multi-actor processes with
• conflicting interests. (**** Honolulu rail is heavily political project built as a city project in the middle of state highways with political push from Senator Inouye in Washington DC.)
  
• Often there is ‘lock in’ or ‘capture’ of a certain project concept at an early stage, leaving analysis of alternatives weak or absent. (***** This is exactly why the NEPA-based lawsuit was filled in federal court. Mufi Hannemann took office in Jan. 2005 and by late fall 2006 the ~100 page Alternatives Analysis had selected elevated rail as the "winner".)
  
• The project scope or ambition level will typically change significantly over time. (**** Honolulu rail started as a 34 mile proposal for about $4 Billion and right before construction it is a 20-mile $5.2 Billion project that excludes Kapolei town, Waikiki and UH-Manoa!)
  
• Statistical evidence shows that such unplanned events are often unaccounted for, leaving budget and time contingencies sorely inadequate. (*** Honolulu rail will be subjected to many changes as eminent domain lawsuits begin once construction starts.)
  
• As a consequence, misinformation about costs, benefits, and risks is the norm throughout project development and decision-making, including in the business case. (**** Even pro-rail local newspapers and City Council members gripe about the lack of transparency and the ever evolving changes in costs.)
  
• The result is cost overruns and/or benefit shortfalls during project implementation. (***** If built, Honolulu rail's ultimate result will be a 50% cost overrun and a 50% ridership attainment, at best.)
  

LINK to the full article Survival of the unfittest: why the worst infrastructure gets built—and what we can do about it by Bent Flyvbjerg. Sa¨ıd Business School, University of Oxford, e-mail: bent.flyvbjerg@sbs.ox.ac.uk. Part of the research for this paper was carried out while the author was professor at Aalborg University, Denmark, and Delft University of Technology, the Netherlands.

Large Unions and Massive Labor Laws Lead to Fewer Jobs

France is a prime example of having large and powerful unions, a 3,300-page Labor Law and employee payroll taxation at 39%. The result of all this is more automation and fewer jobs.

In the late 1990s Paris totally retrofitted metro line 14 which today carries 725,000 passengers a day. It is totally automated and the computerized trains run much closer to each other.

Self checkout has proliferated and continues to gain ground in countries where labor is expensive. Other examples from France include:

• Orders at many McDonald's are taken via touchscreen devices.
• Transit services operate with smart cards
  
• Self-serve car washing Elephant Bleu has grown to 472 stations

One result is that France is a leader in the creation and adoption of automation. Another is that unemployment rarely drops below 10%. More details in The Economist's Driverless, Workless article.

Honolulu Rail 2011 Summary

In 2004 I started keeping tabs on major events of the infamous Honolulu Rail. This link takes you to the 2004 to 2010 highlights. The 2011 highlights are below.

January 18: FTA issues Record of Decision. The ROD allows the city to take these actions if it so chooses (but read the statement after the list):

• the acquisition of any real property or real property rights identified in the Final EIS or ROD as needed for the Project;
• the relocation of persons and businesses on that property;
• the relocation of the Banana Patch community, if it so desires, in accordance with the ROD;
• the relocation of utilities affected by the Project; and
• the acquisition of rail vehicles for the Project.

This pre-award authorization is not a real or implied commitment by FTA to provide any funding for the Project or any element of the Project. However, if FTA were to provide grant funding for the Project, the cost of the actions listed above, performed after RAMP approval, would be eligible expenses. No other Project action has pre-award authorization at this time." [Underlined in the original].

January 31: The Native Hawaiian Legal Corporation filed a lawsuit Monday afternoon in Honolulu Circuit Court to stop construction of the city's $5.5 billion rail project.
"The complaint filed by Paulette Ka'anohiokalani Kaleikini claims both the city and state failed to perform a complete archeological survey of native Hawaiian remains, or iwi, along the entire 20 mile rail line as required by state law. Kaleikini is being represented by the Native Hawaiian Legal Corporation, a non-profit group dedicated to preserving the indigenous people."

February 4: The University of Hawaii Economic Research Organization released a Brief titled, "Honolulu rail Transit: Do the Benefits Justify the Costs?" Their conclusion was that, "Preliminary considerations suggest a high degree of uncertainty about whether the benefits of rail justify the costs. As the conversation about rail costs advances, we should continue to consider the relative size of the benefits."

February 16: "FTA Administrator Peter Rogoff said Tuesday the City and County of Honolulu’s revised financial plan for rail transit must be more robust and not compromise public bus service. "We need to see a financial plan that shows that they have not only the funding to meet their obligations above the federal commitment (but) they also need to demonstrate to us that they have sufficient resources to keep the existing bus service operating and well maintained,” said Rogoff, during a nationwide conference call with reporters. “In the most recent financial plan submitted to the FTA in September of 2009, the city uses of $300 million in federal bus subsidies to fund construction of the $5.5 billion elevated rail system.”

The city's current financial plan for funding rail construction shows it will use $1.5 billion in federal New Starts funds, $300 million from the federal bus funds, and $3.5 billion from the additional ½ percent GE tax. As of the end of 2011 a "robust" financial plan is unavailable.

February 22: City has a "ceremonial groundbreaking", not a groundbreaking ceremony in the middle of nowhere along the North-South Road.

March 22: Ansaldo Honolulu wins the bid to build the city transit cars for $574 million, and will also operate and maintain the system. See below a quick summary of the bids. Phase 1 is called Design-Build (DB) and phase 2 is called Operation and Maintenance (OM)

------- Ansaldo---------Bombardier------ Phase
----$573,782,793----$697,263,592-------1, DB
----$506,030,806----$262,717,960-------2, OM
--$1,079,813,599----$959,981,552-------Total build and 15 years of operation

For Phase 1 Ansaldo is $125 Million less than Bombardier, but in total Bombardier is $125 Million less than Ansaldo, and Ansaldo won! (Honolulu math....)

May 14: Complaint (LAWSUIT) filed against against the U.S. Secretary of Transportation, various executives of the Federal Transit Administration, and the City Transportation Director:

• Count 1: defining the purpose and need so narrowly as to preclude consideration of all reasonable alternatives
• Count 2: failure to consider all reasonable alternatives (NEPA)
• Count 3: failure properly to analyze the environmental consequences of alternatives (NEPA)
• Count 4: improper segmentation (NEPA)
• Count 5: failure to identify and evaluate use of native Hawaiian burials and traditional cultural properties (section 4(f))
• Count 6: arbitrary and capricious evaluation of the project’s use of section 4(f) resources
• Count 7: improper project approval (section 4(f))
• Count 8: failure to account for effects on historic properties (NEPA)

July 14: Rail contract appeals set for Sumitomo, Bombardier

July 16: Honolulu Magazine publishes critical article on rail

August 15: HART Board set-- Eight of the ten-person “apolitical” and rail-clueless HART board consists of six current and former City employees and two union officials. The minority two are businesspeople. Also, Bombardier appeals to FTA in Honolulu rail dispute. And Sumitomo--Losing bidder on Honolulu rail project goes to HART of the matter.

August 21: How the city misled the public. By Walter Heen, Benjamin Cayetano, Cliff Slater and Randall Roth.

August 24: Closer look shows why Sumitomo may have decided against Honolulu rail appeal

August 27: Pacific Business News reverses position to now oppose rail.

September 13: Bombardier loses latest appeal of Honolulu rail contract

October 14: Bombardier files new appeal of Honolulu rail contract

October 21: Ansaldo, State Reach Deal on Licensing Violation
Ansaldo Honolulu JV has agreed to pay the state $150,000 to settle two cases alleging that the company didn't have a contractor's license. Submitting a bid without a contractor’s license constitutes unlicensed contracting. The fine for unlicensed contracting activity ranges from $2,500 and can run as high as 40% of the total contract price.

October 26, 2011: Ansaldo penalty 'slap on the wrist,' councilman says
City Councilman Tom Berg, a critic of the selection of rail car contractor Ansaldo Honolulu, said the city should have disqualified the Italian-based company because it was in violation of state law by bidding for the project before obtaining a contractor's license.

November 23: Pro-rail Star Advertiser editorial tells HART "Honolulu's contract with a subsidiary of an Italian conglomerate to design, build and operate the city's rail transit project was scheduled to be signed next Friday, but a delay is needed to reassess what increasingly looks as shaky as the euro." And "In our 100 year history The Outdoor Circle (TOC) has seen no other venture that holds the potential to degrade the landscape of Oahu as the proposed Honolulu Rail Transit project. TOC has been involved in virtually every step of the project from the moment it was first brought to the public for discussion. For more than five years, at every opportunity, we have urged the City to explain how it will mitigate Transit’s horrific visual damage to this island as well as the degradation to neighborhoods and communities along the route of this six billion dollar project."

November 28, 2011: Why Does Carlisle / Hamayasu / Horner Stick with Ansaldo while Under so Much Fire?

November 29, 2011: The Honolulu Authority for Rapid Transportation signed a $1.4 billion contract Monday with Ansaldo Honolulu JV, giving it the go-ahead to start construction on the system’s cars and other key components. There will be no guideway and rails for at least another 5 years. So why did we order trains?

December 12: Senior Federal Judge A. Wallace Tashima denied the City/FTA Motion to a) dismiss certain of the plaintiffs for lack of standing, and b) the plaintiffs did not identify certain historical sites during the environmental process. The lawsuit is definitely GO!

December 18: Bidding Irregularity and Delays Imperil Honolulu Rail Insurance Program
"A program that was supposed to reduce insurance costs for the Honolulu rail transit project by $20 million has been indefinitely delayed after irregularities in the city purchasing process forced the city to cancel a key contract award. "

December 29: FTA grants HART permission to enter the Final Design phase but has many difficulties with HART's financial plan. The FTA asks HART to the State legislature and the City Council to get an unspecified extension of the ½ percent General Excise Tax increase or find other monies ... "these revenue sources require actions by the State of Hawaii and/or the City that have not been taken and which are beyond HART's ability to control. In addition, "HART made assumptions in three areas that require justification."

The figure below is an exact copy of the City's mid-2008 Draft EIS. The blue dashed line is my addition that shows that the project is late by 3.5 years well before any actual construction has started!

US: Gas v. Wind -- Hawaii: Geothermal v. Wind

Matt Ridley concludes his article Gas Against Wind as follows:

To persist with a policy of pursuing subsidized renewable energy in the midst of a terrible recession, at a time when vast reserves of cheap low-carbon gas have suddenly become available is so perverse it borders on the insane. Nothing but bureaucratic inertia and vested interest can explain it.

Like the U.S. mainland has abundant gas Hawaii has abundant geothermal energy. Tapping into geothermal power can be more expensive than hydraulic fracturing or fracking for natural gas but geothermal power in Hawaii is less exhaustible than natural gas on the mainland, and once developed its use does not produce greenhouse gasses.

Like in the U.S. natural gas is in shale hundreds of miles away from big metropolitan areas, but a national grid makes electric power transmission feasible, although billions need to be spent to the existing grid if gigawatts are to be transmitted efficiently and reliably.

In Hawaii a cable to connect Oahu, Maui and the Big island may be too expensive, but there are alternatives: Hydrogen, and Ammonia (as a carrier of Hydrogen.) Hawaii can utilize abundant geothermal energy to transform into a hydrogen/electric economy for long term sustainability, instead of blowing Billions in the wind.

In addition to blowing Billions on unreliable power production, I quote from Ridley's article: The wind farm requires eight tonnes of an element called neodymium, which is produced only in Inner Mongolia, by boiling ores in acid leaving lakes of radioactive tailings so toxic no creature goes near them.

California Rail Boondoggle

Outside Hawaii infrastructure boondoggles are called what they are... boondoggles. Hawaii is too insular and managed by an inner political cast of characters. As a result lies and misrepresentations prevail at all government levels when it comes to billion dollar issues such as Rail, Wind (and other suspicious Renewables), Government Pensions, and Employee Health Coverage.

I quote a brief article from the Wall Street Journal below. Note that:

1. Congress will ask tough questions about rail projects
   
2. Congress will refuse to fund billion dollar shares for rail projects
   
3. California's fast rail at over $100 Billion comes to $2,700 per person
   
4. Hawaii's elevated rail at over $7 Billion(*) comes to $7,600 per person
   

(*) You do not believe the Mufi / Carlisle / Toru / Horner / PB co$t e$timates, do you? They are of the same quality as their ridership estimates shown below:




Bullet Train Boondoggle

The House Transportation and Infrastructure Committee put California's high-speed rail plan on trial last week, asking rail experts and local officials some questions that the project's planners and state lawmakers apparently failed to consider. Like how the state will finance its 500-mile bullet train from Anaheim to San Francisco.

California voters approved a $10 billion bond initiative to fund the project in 2008. At the time, the state's high-speed rail authority, which is responsible for planning the project, estimated that the train would cost only $33 billion and be financed primarily by the federal government and private sector. The authority also promised that the train wouldn't require a subsidy. However, a few months ago the authority released a revised business plan that estimates the rail will cost between $98 billion and $116 billion. The authority expects the federal government to put up $73 billion and the private sector to invest $10 billion. Jerry Brown, the state's Democratic governor, praised the new plan as more "honest."

Investors have refused to finance the bullet train without a subsidy, and Congress isn't appropriating any more money for high-speed rail. Of the $11 billion that Congress has already appropriated, the Obama administration has authorized $3.9 billion for the California project on the condition that the state build the first segment in the Central Valley, presumably because there's less resistance to the train in rural areas than big cities. That may be true, but the train's a losing proposition everywhere. According to a new Field poll, two-thirds of Californians want a referendum on the project. And by a 2-to-1 margin, they'd vote to kill it.

Greg Gatzka, director of the King County Community Development Agency, testified at the hearing that the train would result in "approximately 7,100 acres of severed and/or disrupted" farmland and cost the dairy industry $50 million. It would also interfere with a $67 million broadband infrastructure project. Kings County has sued the rail authority because of the numerous disturbances, as have the cities of Palo Alto and Palmdale.

Even if the rail authority were to settle these legal challenges, a high-speed train wouldn't be operable until the state comes up with an additional $25 billion to complete the segment and electrify the tracks. In the meantime, the authority plans to run Amtrak trains on the tracks, though there may be problems with that plan, too. Elizabeth Alexis, cofounder of the group Californians Advocating Responsible Rail Design, testified that it's uncertain whether diesel trains could safely run on tracks built for electric trains.

In any event, Federal Railroad Administrator Joseph Szabo insisted that $100 billion is a small price to pay for a modern transportation system and that "adding and maintaining transportation capacity in California, while vital, is expensive." For instance, repairing the Bay Bridge will cost roughly $6 billion; a 10-mile expansion of the 405 freeway will run around $1 billion; and the ongoing modernization of Los Angeles's biggest airport is pegged at $4.1 billion.

So why is a state that is already struggling to finance basic infrastructure initiating an exorbitant project that most taxpayers don't want? None of the witnesses had a good answer.

-- Allysia Finley

HOT Lane Transponders, Congestion as an Advantage, Congestion Pricing, Roadbuilding Costs

A potpourri of interrelated recent articles ...

HOT Lanes are supposed to be free for large carpools, discounted for small carpools and full price for solo drivers. Recall that the purpose of HOT Lanes is twofold: (1) Incentivize Transit and Carpooling and, (2) Have low occupancy vehicles pay congestion insurance (toll). The correct term is not toll but Congestion Insurance because HOT Lanes guarantee over 45 mph speed, whereas common tollways charge a toll and may serve abundant bumper-to-bumper traffic.

The problem is this: HOT Lanes use electronic non-stop no-toll-booth tolling at freeway speeds. So how do large carpools go free, low carpools pay a discounted toll and solo drivers pay the full toll? This article from Orange County shows the electronic solution.

Yogi Berra once said, "nobody goes there anymore. It’s too crowded." In the article The Case for Congestion, John Norquist who served as mayor of Milwaukee from 1988-2004 proposes that congestion is a positive attribute for a city. It shows that a city is vibrant, dynamic and bustling, as opposed to decaying and lethargic.

However, too much congestion puts a lid on the economic growth and long term sustainability of a city, so congestion reduction techniques are always in demand, particularly when they tend to be popular and relatively inexpensive. In A Blueprint for Beating Traffic, Eric Jaffe summarizes the success of Road Pricing in Stockholm, Sweden. Interestingly, some of the road pricing collections are being used by the Swedeish government to build one of the modern under-city roadway tunnels, Södra Länken, to relieve bottlenecks and to facilitate traffic and the economy of the city.

And when it comes to costs, new U.S. roadways cost much much less that new U.S. rail lines, as Randal O'Toole explains in Highway Cost Overruns.

Jitney Advantages for Transit Service

A seriously thought out plan for JITNEY service can have many advantages, in addition to those identified in this article focused on poor and disadvantaged populations. They include:

• Low government cost, mostly for safety and health inspections
• Scalable, from trunk arterial routes to ridges and valleys
• Flexible to reroute as needed by time of day, day of the week, special events
• Congestion reduction by offering fast and competitive service,
• Cost savings to the poorest especially,
• Cost savings to government to target bus routes on high demand routes only
• Creation of a new industry with very low entry costs for self employed.

Google Atlantic City Jitney to read more about one successful deployment of jitneys in the US:

Jitneys are Atlantic City's most convenient and chief mode of affordable transportation around town. The Jitney Association is comprised of 190 individual owner-operated vehicles.