It takes one and a half hours on the aging “Caltrain” to travel the 77 kilometers (47 miles) from San Francisco, at one end of Silicon Valley, to San Jose on the other end. But the days of slow trains could soon be over, now that the California State Senate plans on shortening the travel time to 30 minutes by 2029. Using high-speed trains — capable of reaching well over 250 kilometers per hour — travelers could reach Los Angeles Union Station, 530 kilometers further down the line, in roughly two hours.
The “bullet train” project wants Germany’s state-owned rail operator Deutsche Bahn to be part of the project. Its subsidiary DB Engineering & Consulting won a $30 million (€26 million) “early train operator services contract” to plan the first stretch from San José to Bakersfield.
California’s biggest ever infrastructure project is slated to cost $68 billion and would help relieve congestion in the skies above Los Angeles and San Francisco. Plus, the high-speed rail project would create jobs and boost economic growth in the rural region where the first portion of the track, which will cost $20 billion, will be built between Bakersfield and Fresno.
But the project, which is being planned and realized by the California High Speed Rail Authority, is controversial. Critics are worried that house prices in San Francisco and San José, which have been rising for years, could stagnate if Fresno were just an hour away for commuters in the future.
Opponents also argued that California does not have money to fund the construction and must avoid financing it through bonds. In 2014 a court rejected a first business plan, deeming it too optimistic. In 2016 a second plan was submitted with reduced forecasts for passenger numbers and revenues, but even under those scaled-down assumptions, the high-speed railway would recoup its costs after a few years, much to the annoyance of its detractors.
The business plan envisages 19 million passengers a year starting in 2029, and an impressive environmental benefit: Annually 897 million liters of auto gas and 132 million liters of kerosene will be saved when travelers switch to using the train, whose electricity will come from renewable sources.
It is up to the German planners to work out the details. DB Consult will draw up the timetables, plan the operation and the running of the train fleet. They will also propose a pricing system and come up with a marketing concept. “It’s a successful entry into the US market,” the head of Deutsche Bahn’s consulting unit, Niko Warbanoff, told Handelsblatt. Whether Deutsche Bahn will get a further slice of the contract remains to be seen. The actual operation of the route or even of parts of it has not been put up for tender yet. Deutsche Bahn rarely puts in bids to run routes or an entire network abroad, with one current exception being a freight line on the Arabian Peninsula.
Mr. Warbanoff’s 4,300-strong workforce specializes in planning, either for parent company Deutsche Bahn, or abroad in Gulf States and elsewhere in Asia. They are accustomed to the unpredictability of megaprojects such as the Californian high-speed rail venture, which has been a rollercoaster ride since its launch in 2008. Costs were initially estimated at $30 billion, and then spiraled to $100 billion before settling to the current $68 billion – due to the partial use and modernisation of existing track.
The US market is interesting for railway companies despite the country’s reliance on air travel and highways. The country has 225,000 kilometers of train track, giving it the world’s biggest railway network, bigger even than Russia’s or China’s. But the Americans have little experience with high-speed trains. Their freight trains are gigantically long and they trundle across the landscape at a leisurely pace.
Siemens' Sacramento-based subsidiary will likely bid on railway tenders in order to stick to “Buy American” provisions enacted under former President Barack Obama.
Railway companies are extremely keen on getting a piece of the project not just because of the scale of the order but also due to the prestige attached to running America’s first high-speed train line. German industrial group Siemens is also hoping for orders. Its Sacramento-based subsidiary will likely bid when the railway contracts are put out to tender, to ensure they stick to the “Buy American” provisions enacted under former President Barack Obama, which require trains be largely manufactured in the US.
Siemens could offer its Intercity Express (ICE) train, and the company’s new French partner Alstom makes the famous TGV, another high-speed train. This means a planned joint venture with Siemens-Alstom could offer two types of trains, which have considerable differences: The TGV is pulled and pushed by engines located at the each end of the train, whereas the ICE is propelled by multiple underfloor motors using what is known as a distributed traction system. Other companies like Bombardier, Hitachi and China’s CRRC, which has a plant in Springfield, Massachusetts, and is currently building another one in Chicago, will also likely bid for the contract.
California’s high-speed railway is still years away, but San Francisco is already anticipating the day when the first trains will arrive from Los Angeles. Preparations are well underway — underneath the city’s shiny new Transbay terminal, a ghostly subterranean station was built for long-distance trains. The tracks end at a massive rock wall. There are no tunnels leading in or out, not yet anyway.
Handelsblatt’s Dieter Fockenbrock covers the transport industry. Axel Postinett specializes in consumer electronics, the video game industry, e-commerce and internet corporations. To contact the authors: email@example.com, firstname.lastname@example.org