I know you’re getting a lot of praise from the local press, but reality check: Read this slam on Seattle published Monday by a brainiac transportation journal in London.

Basically, they want to know what Seattle is smoking.

Infrastructure Journal — London

24th October 2005 — Seattle Monorail Project — when political will…won’t

If you want a groundbreaking project to go ahead, then one of the most important ingredients in the recipe has to be political goodwill. And that is precisely where one of the US’s most interesting transport projects on the table right now falls down —writes Angus Leslie Melville

The focus of the international transport industry is turned squarely on the US and expectations are high for project finance as well as numerous bond-financed design/build projects.

Seattle monorail is one of the few projects that you can pick out from the line-up of usual suspects where it is conspicuously failing to make it off the drawing board despite strong local support.

And the one thing that is acting as the biggest stumbling block is a fundamental lack of support from the mayor’s office.

It has already passed four public votes—each one with increasing majorities in its favour. It has a fully approved environmental impact study, the land has been acquired and right-of-way secured. So that's all green light -- go.

Now add into the equation that there is real need for an alternative, separate transport system to deal with mounting congestion problems.

The need to finance the alternative transport system is made all the more important with a petrol tax referendum in November that will most likely see the repeal of tax on fuel. And the city has no other source of funding other than `gas tax' for transport improvement projects in the city.

You would imagine the metropolitan authority would be backing the project to the hilt, and you would think there would be serious concern over the cloud this puts on future large infrastructure projects in Seattle and Washington. After all, with Cascadia Monorail Company lined up to construct the 14-mile DBOM Green Line to enhance travel between downtown Seattle and its surrounding communities, the city has the opportunity for a near-term groundbreaking on one of the most exciting projects in the market today.

Led by Fluor, this consortium of more than 20 urban mass transit firms includes Hitachi, Mitsui, Alcatel, HDR Engineering, Howard S. Wright Construction, Hoffman Construction, RCI Construction Group, Atkinson Construction, as well as other Seattle and Washington state contractors and consultants.

That's a lot of private sector goodwill—which is not being matched by the public sector.

On the financial side, there is in place a revenue stream that is dedicated to the monorail project from the motor vehicle excise tax, which—to go elsewhere—would require a change to legislation.

To improve its chances of one day providing a new public transport system in Seattle, the agency responsible for the project has shortened the route, thereby bringing the price down.

But the crunch date for the project is 8 November when yet another ballot is being staged. If it passes again, it is going to leave the mayor in an awkward position, as it is the only major transport project likely to go ahead in the near future—especially if the gas tax is repealed as well.

The project is financeable—the markets have said that they will sell the bonds as they can sell against the guaranteed index revenue stream, which cannot be retired by legislation until the debt has been paid off. The debt is non-recourse so in addition to a major transportation improvement, the city also accrues the benefits of sales taxes, increased property values and the improved ability to attract and maintain businesses without incurring any of the risk of having to pay back the debt.

One of the issues that seems to be holding up the project and causing the mayor's office headaches is the tenor of deals. Word coming from the city's administration is that 30-40 year debt is too long and the mayor does not want to burden the tax payer 30 years down the line.

This—while it outwardly appears to be noble gesture—is not the way other cities view financing their transport projects these days. And when you compare these tenors with the 99-year concession for Chicago Skybridge, the length of the Seattle project rather pales into insignificance.

Most US cities and states have recognized their cash shortfall and are either paying long-term through tax-exempt bonds or longer concessions.

The project is ready to go, the contract is fully negotiated. All that has to be done is to renegotiate the contract to take into account the shortening of the alignment.

If it fails the vote in November is dead. But if it passes, it will be ready to move forward in January.

You will travel a long way before you find a transport project in the US that has more going for it than Seattle Monorail—but it needs the political will to get behind it.

And if they need a case study of an urban transport system where project finance has worked to stiffen their resolve—all they need to do is look north to the Richmond-Airport-Vancouver.

There appears no rational reason why the city would not support his project.

Are we missing something? Or is there a sinister plot at play for the city to engineer the cancellation of the project so that it can steal the motor vehicle excise tax to start paying for roads that it otherwise cannot afford?

Angus Leslie Melville
Editor
Infrastructure Journal,
26a Adam and Eve Mews,
London, W8 6UJ
+44 (0) 20 7938 3660
www.ijonline.com