SP PROMOTES HIGH-SPEED RAIL PROJECT IN CALIFORNIA

SP PROMOTES HIGH-SPEED RAIL PROJECT IN CALIFORNIA

While the selling and leasing of rail lines is old hat for the Southern Pacific Lines, their biggest venture, a multimillion-dollar gamble, is making everyone take notice.

The railroad is laying the groundwork for a high-speed rail project that could revolutionize transportation in California and put millions into the railroad's pocket. The proposal comes at a time when SP is fighting accusations of profiteering in another Southern California project."I think the market for high-speed rail would expand significantly (once it is available), but someone has to get it together and do it," said Robert Starzel, SP's vice chairman. "We're offering the impetus."

The project would link the San Francisco and Los Angeles areas via the railroad's coastal route. The line is now used by Amtrak. The typical trip between the two major California metropolitan areas is roughly 11 hours, and SP thinks that with the right kind of track work and technology the time could be cut in half.

Others, however, think the time and money necessary to make that happen - at least two years and more than $850 million - aren't worth the investment. Critics say SP is suggesting the project simply to raise money.

"It would be a fiasco if it ever took shape," said George W. Hilton, a recently retired professor of economics at the University of California-Los Angeles. "The fact is, you can fly it in an hour.

"I don't think the line is very well suited to it," he said. "It's something the SP is trying to sell to gullible city governments."

Mahdi Morshed, staff director for the state Senate's Transportation Committee, said, "SP's approach, and it has been successful with it, is to get people excited about a service and then charge dearly for it.

"This is not to say the (coastal) route isn't a viable corridor. But an analysis of price and service issues should be done first," he said.

Airlines can provide a very competitive service at a fraction of the projected cost, Mr. Hilton and other critics said. In addition, the SP route is longer than an alternative route running through the San Joaquin Valley alongside Interstate 5, a major California highway.

"One of the problems is the SP route is very long compared with I-5," said a rail analyst who asked not to be named. "The SP route also has a problem of going up and down a lot of hills, which hurts high-speed rail. That's a problem for all railroads in the state."

But SP, armed with various consultants' research, has a number of persuasive counter-arguments. The first is that there is already a heavy demand.

The daily Coast Starlight service is Amtrak's most heavily patronized inter-city passenger train, carrying more than 500,000 people a year. It runs along the 410-mile route from San Jose, with local connections into San Francisco and Oakland, to Burbank, with connections into downtown Los Angeles. It runs along some of the most scenic areas in the country, stopping at various towns along the coast.

Currently trains are limited to speeds between 50 mph and 80 mph. With $357 million in work to straighten some of the curves, trains could reach speeds of up to 110 mph along 69 percent of the route. The addition of another $500 million in tilt-train technology - equipment that can maintain a train's center of gravity during high speed turns - would allow speeds up to 110 mph over 88 percent of the route.

An alternative route through the San Joaquin Valley would cost as much as $8 billion, SP officials argue, because new rail lines would have to constructed through the Tehachapi Mountains north of Los Angeles. The current route, which is shared with the Atchison, Topeka, & Santa Fe Railway Co., is too crowded with freight and too convoluted to support high-speed operations, they say.

"The valley route is only competitive in the minds of some backward thinking politicians," said Claude T. Everhart, a consultant hired by SP to coordinate local government support for the project.

By contrast, SP's coastal route is relatively free of freight trains - a fact that leads into one of SP's more threatening arguments. The alternative to a high-speed rail project is abandonment, company officials hint, leaving several coastal communities without rail service. But they acknowledge such a move would prompt regulatory battles that could be tough on the railroad.

That's the beauty of the high-speed rail project, Mr. Starzel said,

because "it avoids the problem by seizing an opportunity."

But winning financial and political support for such a project can be equally tough. SP endured three years of haggling with three counties in the San Francisco area over the sale of 40 miles of track for $210 million two years ago. Accusations of profiteering at the public's expense have resurfaced this year as SP tries to cement a deal with ports in Southern California to turn over about 20 miles of track. The preliminary price tag on that deal is $260 million.

The sale or lease of the 410-mile coastal route could bring in "hundreds of millions of dollars" - money that the hard-pressed SP could desperately use, Mr. Starzel said. The exact price would have to await track assessments and negotiations.

That would involve up to 11 counties, which would turn to various state and federal agencies for financial support. With that many players, the negotiating picture could get very complicated.

Undaunted, SP is already talking to the various counties involved about drafting plans and financing for the project. Using the promise of jobs for the upgrade work, SP is also lining up support from organized labor. And the appeal of taking traffic off the road and putting it on the train is winning the backing of environmental groups.

"This whole thing could be done, up and running in two years," said Mr. Everhart.