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US high-speed rail authority talks about China's involvement

By Han Shasha (People's Daily Online)    11:56, February 13, 2015

Dan Richard,(R)chairman of the California High-Speed Rail Authority and Jeff Morales,(L) Chief Executive Officer of the California High-Speed Rail Authority meets the reporter at the office in Sacramento, capital city of California,USA. (People's Daily Online/Han Shasha)

San Francisco, Feb.5, (People's Daily Online)----Promoted by Chinese leaders, China's high-speed rail has been a landmark worldwide, with the networks exported and constructed in other countries, including Turkey and Venezuela.

California high-speed rail, like fresh but hard-to-get meat, attracts world bullet train vultures to snatch, of course including China. The $68 billion project, if completed, will be the first ever one in the United States.

People's Daily Online recently conducted an exclusive interview with Dan Richard, chairman of the California High-Speed Rail Authority, the government agency in charge of building high-speed rail in California, talking about his understanding of the project and the Chinese companies' involvement.

Editor's note: Considering reading habit and grammars, the reporter edits some phrases without changing the meaning of the sentences.

People's Daily Online: How to change people's long-lasting habit of traveling by air or by car to take high-speed rail?

Dan Richard :In the United States, we have many things that are very well developed. We have freight rail system that is probably most efficient in the world. And yet our passenger rail system is very far behind the rest of the world. We admire the incredible achievements in China of building high speed rail network. So part of what we are doing is that we are taking lessons from other parts of world where high speed rail has been built and we are able to show people that in this countries, passengers have gotten out of their cars and have taken trains instead of airplanes. And this has been something that has been going on across the world. So we expect the same experience here. And it makes it easier for people to imagine the benefit of high speed rail when they realize that in other countries this has been done very successfully.

People's Daily Online: How many studies have been done on the expectations for ridership and feasibility of the project?

Dan Richard : We have done many studies on this. And it's important to say that's not just the studies we have done but we have asked other experts to review that work, to give their critics and their understanding of it. And at this point, we feel very confident that the numbers that are estimating for riders are probably conservative and so we believe that our high speed rail line will have very strong ridership across California. And that will meet very important test we have. Under California law, when we build high speed rail, it must be able to operate without government subsidy, which means that it must be able to get enough riders to get enough ticket revenue to cover the cost of operating the system. So we have to be very careful to make sure that the ridership numbers, ridership projections are as accurate and as sound and carefully analyzed as possible.

People's Daily Online: How do you get the number?

Dan Richard : There are many ways to estimate the ridership. For example, we look at the trips between cities right now by air or by car. We can look at the experience from other areas. We go out and we do surveys of people to get a sense of what their demands and interests will be. We also have some existing trains that are not high speed rail that actually have very high levels of ridership. And we know that those people if they are riding a train that is slow would be very likely, as long the prices are reasonable, to shift to the train that is fast. The scientists are able to come up with computer projections of this. And then we test those and we ask other experts to look at those. I think that number of course is very small compared to numbers in China. But for our first line, we believe we will have 29 million passengers per year between Los Angeles and San Francisco. And that is going to be more than enough to cover the cost of the operating the system.

People's Daily Online: What's the ticket price for the trip between San Francisco and Los Angeles?

Dan Richard : We have been thinking of the ticket price. And one of the things we realizes is that we look at the experiences in Europe and in France where they have high speed rail, for a long time, there are battles with the airlines over the ticket pricing. We imagine the ticket price will be 85% of the discount airfare. When we did the study, you can buy a airplane ticket from San Francisco to Los Angeles for about 100 dollars. Since that time, the price for the airport ticket has gotten up very high, it's much more expensive now because of fuel and demand. We thought if we have high speed rail today, our ticket price will be about 85 U.S. dollars. We believe that high speed rail will be very affordable, not just for wealthy people, but for average citizens.

People's Daily Online: People joked it "turtle speed" that it takes 35 years to get the project started from 1980s to January 2015. What's your comment on this?

Dan Richard : When countries develop, I know China is going through this process right now with your extraordinary rapid economic development, at first people are very interested in the jobs and what it takes just build this and get the jobs. And then more people get the jobs and more people live a comfortable life. People start to worry about other things. So we have people in this country who wants living in nice communities, they don't want to change. So they raise objections and we tries to listen to them. so what slows this down is that we look at the environmental issues and we look at the communities and all of these things. We very much admire how China has been able to build this system so fast. But I think it is also my understanding that now sometimes as your country is developing so well, once they are receiving these benefits of better life and then they start to think wait a minute, I don't want anything to change. And so they come to resistance. This is just the way is in our country right now. And we have laws that allow people to raise objections and try to slow things down. And sometimes they do. I know when we meet with officials of Chinese government and Chinese business, they look at us and just shake their heads, they don't understand why it takes long. But this is just the process here.

People's Daily Online: The total cost is expected 68 billion U.S. dollars. How can you get that money?

Dan Richard : Sixty eight billion US. dollars includes inflation. If we can build it all in one time, it would be about 54 billion dollars. We are trying to find ways to make it go faster and we will also make it cheaper. Governor Brown said he is not worried about the money. We will have the money. We have some money from federal government. We have some money from our state government in California. And we expect about 1/3 of the project cost will be paid for by the private sector whether its private companies, or whether it's other nation's company. In California, we have a law last year to help deal with the global warming problem. This is a way that we are looking at the global warming problem which is under cap-and-trade. If some business can't reach that level, they can buy credits from another business. The state earns money by selling these credits to the businesses. Since the program just started, we are not completely sure. But we believe that the potential for that is between a half billion U.S. dollars each year. And the program goes on into the future. Ten to fifteen billion U.S. dollars from that is not out of question at all. Maybe 20 billion from private sector, 10-15 from cap-and-trade, we have state bond money that are state voters vote for another 9 billion, we have 3 billion dollars of federal money. Plus, we will have money from advertising. We will have money from development surrounding the stations. We will have money from allowing companies to come in, and lease our right of way. We will collect money from people like that. So there are a lot of other sources in addition to the big pieces that will help put the whole package together.

People's Daily Online: Do you accept international money?

Dan Richard : Certainly. In fact, our organization just met with a group of Chinese governmental officials and companies. Other countries are coming in as well. We are very open. Our governor Brown went to China in 2013 on the trade mission. He signed a number of cooperative agreements with provincial governments. California is very interested in a strong working partnership with China. And we are open to other countries as well. As I said at the beginning, around the world, people have successfully built high speed rail. China has more miles of high speed rail than any other nation on earth. So we are not trying to do something totally new. We are trying to build a system serves our people and working cooperatively with experienced international operators which is very open.

People's Daily Online: Do you have any concerns about accepting international money?

Dan Richard : I don't have concerns about accepting the money. We just have to put business structure together that works for everybody.

People's Daily Online: What's the structure?

Dan Richard : Let me say two things, first of all, we have a structure in mind, but what we have said is that we would entertain any other proposals that people may make, so just because this is what we have in mind does not mean it's the only way that this can be done.

But our thought is that we would be building part of this with our funds, and then we would allow other organizations from other countries or other private companies to come in and to bid, to offer, to operate the system and may to build part of the operating. And then that organization would receive the revenues and they would have a chance to make profit. That is our thinking of the structure. But is somebody has a different structure, a different idea to help us build this faster, we are happy to talk about that.

People's Daily Online: How can Chinese companies get involved?

Dan Richard : I think they have already been involved since we have met with a number of Chinese companies and also with Chinese government officials. We invite people to come and talk with us those business negotiation and business discussion. I think that's the main message that we are very eager to work with people to get our project built. And we are open to many different ideas.

People's Daily Online: What the main risks? What can you do to guarantee the return?

Dan Richard : This is the area that is challenging because our law doesn't allow us to guarantee the return. So they must look at this and decide if they think that the ridership projections we have made are correct and so they would make investment. And of course you know there is profit potential here.

People's Daily Online: What are the criteria for selecting a partner?

Dan Richard : What are important for us would be the experience people have with high speed rail, to build, to operate safely, and it would be creative and would be able to help us to build faster and cheaper. So that experience and how that experience will help us build our project faster and cheaper, I think would be the most important thing for us.

People's Daily Online: What are the advantages of the Chinese companies?

Dan Richard : Two things: one, China has tremendous experience. China has now built many high speed rail lines in many different places. It has the experience with construction. A lot of lines in China have been through difficult areas and through mountains, so for us, you have experience in construction, you have experience with operation. That experience will be a huge advantage. Financing package would be advantage also. I need to say we are open to work with anybody. So clearly, we have interests from many parts of the world. But I also want to make it very clear that we are open. And we are happy to sit down. There is no resistance to ideas of foreign nations, whether it is China or any other nation being our partner of the project.

People's Daily Online: What challenges they may face?

Dan Richard : I think the challenge would be that if it's the Chinese company, that's their first project building in the United States. There are always culture differences and issues people have to work through when they work in another country. So that may be a challenge. But I think those issues can be addressed. I would say that making sure that they have good communication and harmony of ideas about how the project should be built would be important.

People's Daily Online: How do you think Elon Musk's "Hyperloop"?

Dan Richard : I like technology. When I was a very young man, I worked at NASA space agency. I am a big fun of technology. I think that's an exciting idea but needs to be tested. It's years away from any real application. That's fine. I am happy to see them tested but you know right now, whether China or the United States or Russia or any other countries, people are looking at the high speed rail technology. They continue to make the trains better and signaling better. There are a lot of interesting technology in the high speed rail area right now. Maybe someday there will be different technology. But I think this approach will last for a very long time.

And I guarantee you no other technology will go faster. Believe me because all these ideas start with somebody drawing a line and looks it's so easy and so good. But in fact, when you actually have to build it, you are running into many difficulties and it takes a long time. So no one is going to be able to come in with a different technology and do it faster than we are doing here. 


(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Editor:Yuan Can,Bianji)

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