Winning high-speed rail bid is lower than expected

tsheehan@fresnobee.comApril 16, 2013 

— A trio of U.S. companies outbid four other teams of contractors vying for the contract to build the first segment of the proposed high-speed train system in the San Joaquin Valley -- and for several hundred million dollars less than state engineers estimated.

The consortium of Tutor Perini Corp. of Sylmar, Zachry Construction Corp. of Texas and Parsons Corp. of Pasadena offered the low bid of less than $1 billion.

Five construction teams submitted bids in January to the California High-Speed Rail Authority for the first stretch of the rail line from east of Madera to the south end of Fresno.

Engineers for the rail authority, the state agency in charge of developing the statewide train system, had at one time estimated the 28-mile portion would cost $1.5 billion to $2 billion to design and build. More recent estimates suggested bids likely would come in at $1.2 billion to $1.8 billion.

The Tutor Perini/Zachry/Parsons bid of $985,142,530 was deemed the "apparent best value" by the rail authority, based on a score that considered the price and the technical expertise of the competing companies. Tutor/Perini/Parsons had the lowest technical score of the five bids -- 20.55 out of 30 possible points -- but it racked up 70 out of 70 points in the financial assessment.

The other four bids were:

$1,085,111,111 by Dragados/Samsung/Pulice, a joint venture of Dragados SA of Spain; Samsung C&T America, a subsidiary of South Korean multinational Samsung Group; and Pulice Construction Inc. of Arizona.

$1,263,309,632 by California High-Speed Rail Partners, composed of Fluor Corp. of Texas, Swedish-based Skanska and PCL Constructors of Canada.

$1,365,770,098 by California Backbone Builders, a consortium of two Spanish construction firms: Ferrovial Agroman and Acciona.

$1,537,049,000 by California High-Speed Ventures, made up of Kiewit Corp. of Nebraska, Granite Construction of Watsonville and Comsa EMTE of Spain.

"Today is a significant milestone," authority CEO Jeff Morales said in a written statement.

Rob Wilcox, a spokesman for the rail authority, said a contract proposal will be presented to the agency's board within weeks in anticipation of awarding a contract in time for construction to begin this summer.

By that time, Wilcox said, the rail authority expects to have begun acquiring the land it needs for the right of way. About 75 parcels are needed by the end of September, and 356 pieces of property will be needed, in whole or in part, for the Madera-Fresno section.

Once a contract is awarded, he added, "there will be a ramp-up of hiring" by the contractor for workers. Detailed reports from 2011 estimated that rail construction would be directly responsible for about 1,300 jobs each year in the valley during the four- to five-year construction period, with additional spin-off jobs resulting from the activity.

Must include goal

One component of the contract will be a goal adopted by the rail authority that small businesses -- including companies owned by minorities, women and disabled veterans -- be hired as subcontractors to perform 30 percent of the work.

The Tutor Perini/Zachry/Parsons bid pencils out to about $35.2 million per mile from Avenue 17 near the BNSF Railway freight tracks east of Madera to American Avenue at the south end of Fresno. The construction section will include a bridge over the San Joaquin River; elevated tracks over Herndon Avenue; a tunnel under Belmont Avenue, Highway 180 and a freight railroad line; an elevated railway to cross over Highway 99 at the south end of Fresno; and 12 street or road overpasses.

Not included in the contract is the relocation of a 2.5-mile stretch of Highway 99 between Ashlan and Clinton avenues through west-central Fresno. That's where the six-lane freeway snuggles up against a Union Pacific Railroad yard, leaving no room to shoehorn the high-speed tracks into their planned route. The rail authority has agreed to pay Caltrans up to $226 million to handle the chore of moving the freeway 100 feet to the west.

The Madera-Fresno section is the first of five major construction contracts for high-speed railroad infrastructure in the valley. The next three contracts cover pushing the line to the northwestern outskirts of Bakersfield, and the fifth pays for laying steel rails spanning the 130-mile Madera-Bakersfield section. Together, the five construction packages were originally estimated to cost about $6 billion -- including more than $3 billion in federal stimulus and transportation money from the Obama administration that must be spent by Sept. 30, 2017.

For months, Morales and other officials with the rail agency expressed hope that a competitive construction climate would bring bids that were lower than engineers' estimates. Last month, Morales suggested that if those hopes materialized, there could be enough money left to extend construction of the valley section northward to downtown Merced.

Backbone of system

The Merced-Bakersfield line is proposed to be the backbone of a 520-mile, $68 billion passenger rail system linking San Francisco and Los Angeles with electric trains capable of traveling as fast as 220 mph. Trains are not expected to carry passengers until 2022 at the earliest, when the authority hopes to operate between Los Angeles and Merced, where passengers would connect on existing Amtrak or other commuter train lines to the Bay Area.

But obstacles remain in the railroad's path. Two lawsuits are pending against the rail authority in Sacramento County Superior Court.

The first, which will be heard by a judge Friday, claims the agency violated the California Environmental Quality Act in May 2012 when it approved the Merced-Fresno section. That lawsuit was filed by the Farm Bureau organizations in Madera and Merced counties; the Chowchilla Water District; the grass-roots agriculture organization Preserve Our Heritage; and the Fagundes farming family, which owns land in Madera and Merced counties.

The second case, lodged by Kings County farmer John Tos and Hanford resident Aaron Fukuda, charges that the rail authority's plans are illegal under Proposition 1A, the $9.9 billion high-speed rail bond measure approved by California voters in 2008. That lawsuit, which hopes to block the sale of bonds, will be heard in Sacramento in late May.

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