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Monday, November 14, 2005

Seattle: International Embarrassment

Posted by on November 14 at 10:52 AM

Another slam on Seattle from a brainiac trade magazine out of London:

Infrastructure Journal ó London
11 November 2005

You can’t have your American pie and eat it

The death knell for Seattle monorail sent a chill down the spine of the international community looking to invest in US projects. Following as it does the equally unpleasant experiences of Florida High Speed Rail and Georgia 319, it cannot help but shake the confidence of players in the US market ó writes Angus Leslie Melville

While it is not fair to look at the US as one homogenous market - an issue that was raised with some force at Infrastructure Journal’s Transport Investment Forum 2005 earlier this week - its impact cannot be ignored.
Seattle Monorail was unceremoniously dumped - five years since its first inception and more than US$100 million down the line - after giving the world one of the most impressive examples of a volte-face from municipal authorities where political will wilted on the vine - money that the agency plans to recoup partly through the sale of land.

Because of its size, the US can never be viewed as one single market - more a series of markets - however the rough passage of the financing (and in this case its demise) of a major infrastructure project in one of a state’s major cities can impact negatively on future projects.
In the case of the Seattle monorail, it should be noted that every reason that the urban transport project should have made it off the drawing board was in place - apart from the vital element of political will, which has already been dealt with by this journal.
In a chat last night with Seattle Monorail Project boss John Haley, the sense of loss was palpable.
In answer to the question, where did it all go wrong? Haley says: ‘I have been told I can answer any question you ask, but I’m not sure that I have the answer for that.’
Hale was brought in to carry out an independent assessment of the project in the summer and it all stacked up apart from the political will - which had already left by the emergency exit.
The mass transport system has a dedicated alignment, a dedicated funding source, environmentally cleared plan, and an almost completed DBOM contract to deliver it at a fixed price.
Now there have been many projects in the US that have been scrapped for wanting any one of these issues, but Seattle monorail had them all in shovelfuls.

Add to all that upside a dedicated revenue source removing financial risk from the equation; the City of Seattle not having to dip into its coffers; the state not being called upon to fork out any green-backs; and not so much as a begging letter sent to the federal government. As for the bond issue, no-one was on the hook to back it and with current liquidity, they would have sold with ease.
It was an eminently finance-able project using modern technology, offering Seattleites a six-minute service on elevated system that would provide a critical transport link that could boast both environmental and economic benefits.
But it’s dead in the water.
At no time did anyone in the city council consider the new finance option. The council trashed the project and led the voter by the nose to turn it down.

In truth, the first nails were hammered into the project’s coffin back in June when the politicians who wanted to kill off the project stopped referring to its construction costs - which is the norm - and started referring to its value over the duration of the contract. The negative media was instantaneous.

In the UK market you have a relationship with the government or one of the major procuring agencies like the Highways Agency or department of health or education. Hence you pretty much know what’s important to them, the rules and how to play.
It is hard to draw the same parallels in the US where you have to invest in building relationships with local state and city authorities that each have different legislation and rules.
But they don’t have to take the piss.
Once it was all done and dusted, Seattle City Council had plunged the knife in the back of Seattle Monorail Project, sacrificing it on the pyre of misunderstood financing it penned a letter to the agency requesting it not sell the land.
Why? Well, it might be good for a transport project at some time in the future. The council now wants private parties to step forward for an exciting transport project in the city.
Any takers?

Angus Leslie Melville
Infrastructure Journal