CA High Speed Rail's New CEO: Roelof van Ark

How were you enticed to take the position of CEO of the California High Speed Rail Authority?

I'm a rail man. I've been involved in rail projects more or less throughout my life. Although I've done many things in my life, rail transportation has always been a big part of my life. In the latter part of my life, I was in executive management positions for rail companies or companies that supply rail solutions and rail systems. I worked at Siemens and Alstom, who are suppliers of high-speed rail or rail technologies around the world.

Why this particular job? You get to a time of your life where a new challenge is interesting, and nobody can challenge me that this is a good challenge. This is an interesting job. I'm very much from this part of the world. When I found out that they were looking for someone to manage the Authority, I decided this might be an interesting challenge for me.

I've been involved in building turnkey projects around the world, none of them necessarily this size, but they were multi-billion dollar transportation projects. I was in charge of the transportation turnkey or design build team at Siemens, working out of Berlin, and built big projects like the Guangzhou Metro, the Shanghai Metro, the Bangkok Sky Train, and many other big multi-billion dollar projects.

If ever there was a place in the world where high-speed rail really fits the typical business model, it is here in California between two big metropolitan areas like Los Angeles and San Francisco. Not to forget the other cities, like San Diego and Sacramento. The other corridors and the other parts of the corridor will become as exciting in the future because they themselves are large. But we need to build the backbone and put that in place first. Our children and grandchildren will be very appreciative of the fact that we put a transportation backbone into this wonderful state-something that it needs to remain efficient and to offer the population a safe, efficient, and environmentally friendly backbone transportation system of the future.

We do this interview on the eleventh day of your tenure. What are the immediate challenges that you confront?

The California High-Speed Rail Authority has been a very small and thinly populated organization. Clearly we have to strengthen up the Authority so that we can become better in our function of leading this project. People want to know from the Authority what we are building. When you monitor a project of many billions of dollars you must ensure that the money is correctly spent. These are taxpayer dollars, so we must ensure that we have the mechanisms in place to monitor and control expenditures and to make sure that tax dollars are spent correctly.

The project continues and it is very important is for us to continue at the same pace, if not faster, to ensure that the environmental impact reports and studies meet the milestones and the schedule laid down by the federal government and the Federal Railroad Administration (FRA) so that we can qualify to obtain the ARRA funds that have been allocated for the project. Although we have achieved the nomination for certain amounts of these funds, a part of those funds will only become available when the environmental impact studies and reports have been concluded and we move forward into the design and build phase, when we have to meet the criteria laid out by the FRA. That is all on the timeline.

The federal government has specific requirements for stimulus funds to make sure they get spent wisely but within a laid out period of time. We have a very tight schedule and are aiming to reach that time schedule to ensure that we get what I refer to as seed money. It is a fantastic opportunity for use to initiate and start this project. It is definitely not sufficient to what we finally will require from the federal government. But two years ago that money was unexpected-a definite good start of seed money to initiate the project.

TPR/MIR interviewed your predecessor, Mehdi Morshed, last year, and he shared that the project's business plan projected an expected $8 billion in investment from the private sector to match the public sector dollars that had been committed. Is that still the number? Is it a reasonable expectation, and how do you convince the sources of that capital to make such a large investment of capital?

Those are still very much those numbers. There are many sources of private funds and financing that are possible and should be made available for a project of this nature. The biggest single factor that we must ensure is that we can prove to the private sector that this project is for real. That means, like that anywhere in the world, you've first got to see that the government-the federal government and state government-is committed to making a project of this nature happen. The mechanism on the state side is relatively secure with the Proposition 1A funds, which commits close to $10 billion to high-speed rail-or $9 billion to high speed and $995 million to inter-connecting and improvements to the existing system so that we make high-speed rail more effective and make the feeders to the high-speed system more effective and safe.

When I was outside on the other side in the private sector, the commitment from the Californian state was well received. The present commitment from the federal side, that means the ARRA and high-speed rail bills, are seen as a positive indication. But obviously there is still a gap there, and we need to work on securing longer-term federal commitments to high-speed rail projects-and we're not on our own; there are other states that have got the same issues. These projects run ten or 12 years, which is a long period of time, but the outside world will be looking for at least an indication of commitment. If you have a longer-term commitment to these projects they have a real likelihood of conclusion and of completion.

The federal government did full-funding grant agreements through the FTA. These full-funding grants include a letter of intent that the federal side, the FTA, sees the project as a viable project and is behind the project, not just in that particular budget year, but in the longer term. There is nothing at this stage on the FRA side, but clearly we need to work with the legislators and with Washington and find out what comfort factor they are going to give high-speed rail lines throughout the country so that we can attract private investors. They would be, in my opinion, only the third investor in the PPP because it will have to be first the federal government, the state government, who has given $10 billion, and then finally the private sector, if they see the commitment of the other two.

Reading between the lines, you, like Governor Schwarzenegger and Dale Bonner, are an enthusiast for public-private partnerships. But traditionally, public-private partnerships assume authority is given to the PPP to choose the design, pick the designers of the system, and to select the team and the rolling stock. Is this what you anticipate will be the case in California?

It is not always necessary that the operator be the designer of the core system. It depends on what you define as the core system. The model in Europe is that the infrastructure is built by state-oriented entities and the law is opens it up so that anybody with the right qualifications can operate trains on the rails of the various countries, obviously paying a fee for operations.

But that would mean that the Authority could well supply all the infrastructure components and a private operator could supply the trains. There are also models in the world where private operators got involved and operated the rolling stock of the existing system. Both are possible. We will be talking to parties about which of these options will bring us the optimal private participation.

California has received expressions of interest from France, Germany and Japan, each with their own sophisticated rolling stock. Do you anticipate, on the eleventh day of your tenure, that whatever is built will be compatible to all, or will it be a particular system?

In Europe, the systems have become so interlinked and the traffic today moves between the countries. The Europeans have been forced into standardization of their specifications, and anybody who participates on the European market-which means operators and/or suppliers-have to meet such specifications. Even others, like the Japanese and so on, who are participating in those markets, apply those relatively universal specifications. It is definitely our intent to have very functional specifications, open specifications, as far as possible, which will allow as many suppliers of rolling stock, infrastructure, or equipment as possible to participate.

The trains themselves are a smaller component of the complete system. That is the place where passengers interface with the system, but the biggest part of this project is, in fact, the infrastructure. All the bridges, the tunnels, the viaducts, and the innovation are multitudes bigger than the trains. But that doesn't mean that the trains will be specified. The trains will be as universal and open as possible. The only thing that we would ensure is that in our designs the envelope and the parameters where these trains would interface with the track-the power supply, the signal link system, the tunnels, and the gauge that they would have to operate in-would be a universal gauge so that the majority of suppliers can supply equipment into that gauge.

There has been a lot of discussion prior to your coming onboard about building out segments of the line out of the Bay Area and the Anaheim-L.A. segment. People have avoided the cost of the Tehachapis. Are there opportunities to coordinate multiple uses, whether utilities or water, to build something through the Tehachapis that is less expensive than a single-use high-speed rail line?

The peninsula is an excellent example of exactly that. Although I have not yet had an opportunity to meet with Caltrans, I am very clear, and I'm sure Caltrans is too from the communications I've received from them, that the best way forward is a combined way forward. Together we can give all the inhabitants of the Bay Area, and the peninsula in particular, a much-enhanced combined system. To some extent, the same thing applies to the working relationship with some of the freight railroads. It should not necessarily be to the detriment of one or the other. When one gets into discussion with freight rail operators, high-speed rail can be a possible catalyst to an enhanced overall solution. The most important thing is that we, as combined parties, work together to make it happen. The moment we start drifting apart is not good for a combined final solution. We have to work together, and I have already been in quite a few of these meetings the last ten days. We have parties that are very interested to work together.

If we have the opportunity a year from now to again interview you, what do you hope you will have accomplished, and what do you anticipate will be the focus of your ongoing efforts?

I hope that in a year from now we will be well into our design phase, getting toward 30 percent design of the segments of our line that would be our starter segments. Today I cannot venture to mention those that would come about because it's not just up to us; it's also up to the FRA. Together we can finally establish which of these segments are those that would be pilot or the prime starter segments. If the interaction with the public slows down certain segments too much, those segments might be the ones that have to be left to the next phase and not be the starter segments for our line.

A year from now I hope we are well down the road with the designs for those segments that will be the starter segments, and hopefully by that stage too we will be preparing our specifications to go out for inquiry. That really needs to start getting the contractors involved in this project. We've got a year's time to move from this environmental investigation phase and into the request for proposal phase, design, and then the real business starts. That's when we'll start the rail work. That's what will generate jobs in California. Not just jobs of engineers and consultants, but jobs on the civil construction side, earth moving side-a wide spectrum of jobs, which remain one of the dire needs of the state.

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Do you have a reaction to both the Bakersfield City Council action this past week to refuse approval of one of the two proposed routes and to the similar challenges in the Bay Area? How do you handle such challenges to securing right-of-ways for a high-speed system in California?

It's a little premature to jump to the Bakersfield situation immediately. Again, it's my eleventh day, but obviously I'm aware of it. I'm aware of the alignments there, but I wouldn't like to go into that detail today. There are processes that need to be followed through this whole environmental process. The intent of the environmental impact is to map out as many alternatives as possible. This process has been followed, and will continue to be followed-be it in the peninsula, be it in the Los Angeles area, be it in Bakersfield, or anywhere else. Obviously the public and all interested parties have the possibility and the right to participate in all these discussions. But at the end of the day, all those parties, including, of course, the town councils and city councils, need to look at the alternatives because it's not as if any of these alternatives are not being discussed. If we have to build a railway line between point A and point B, it's a matter of finding the way between point A and point B and being flexible on one or two of the issues in between. The communication is about what is the least intrusive and what is the least harmful and where all parties be a little but more flexible to make point A and point B connectable within the parameters of the law. And in Bakersfield and on the peninsula we will continue to speak to all the local people, all the authorities, and all the interested parties in discussing all these alternatives.

Governor Schwarzenegger sent a letter a couple weeks ago to U.S. Secretary of Transportation Ray LaHood offering a demonstration rail line between San Diego and L.A. Does that complicate your life or does that contribute to your process of overcoming the challenges before you?

This particular request from the Governor Schwarzenegger to Secretary LaHood was done with the right intent to promote and show to the people of California that there is a lot more flexibility possible on our rail systems here in North America. To make something like the request to Secretary LaHood possible would require probably a lot more time and a lot more effort, in particular relating to the safety circuits, the signaling, and level crossings, than the time frame mentioned in the request. I do not know what the outcome could be. We could obviously limit those demonstration projects to a much more limited route or area. Maybe that would be a doable solution. But given my knowledge of Southern California, I do not know that it's feasible to implement that in a bigger portion of the line that soon.