Commuter rail to cost twice the estimate in campaign

New contracts bring total to more than $10 million annually
By Ben Wear - AMERICAN-STATESMAN STAFF - Tuesday, May 22, 2007The Capital Metro board awarded a $112 million contract Monday to Veolia Transportation Services Inc., a French company, to run the agency's freight rail and commuter rail operations for the next six years and four months.

The initial cost to run commuter rail is $9.4 million a year, including separate debt payments for its rail cars: almost twice the $5 million annual operating cost estimate shared with the public during the 2004 campaign to approve the 32-mile line from Leander to downtown Austin. The line will begin operations in late 2008.

The operating cost could be higher if Capital Metro, as some board members want, brings all commuter rail workers under the agency's umbrella and union pay scale rather than having them work directly for Veolia. Furthermore, Rich Krisak, Capital Metro's rail manager, said the numbers do not include fuel costs. Capital Metro will pay those directly, including an estimated $700,000 annually to fuel the diesel commuter rail cars initially.

Taken together, that would bring the first-year operating cost to $10.1 million.

Right Track PAC, a political action committee that worked closely with Capital Metro during the 2004 election, said in a widely disseminated mailer during the campaign that "Cap Metro estimates the new commuter rail system will cost approximately $60 million in capital and construction costs, and will require an additional $5 million annually to operate the trains and to lease-purchase the rail cars."

"It's pretty clear that from the beginning, Capital Metro has been deceptive at best, lying at worst, in their presentation to the public of the cost of this commuter rail system," said Jim Skaggs, a retired high-tech executive who has opposed Capital Metro rail ventures for the past decade. "This just confirms that they can't afford to continue on the way they have."

Capital Metro spokeswoman Andrea Lofye, when asked about the increased costs, said, "First of all, we don't know who Right Track PAC was. What we put out had different costs. . . . Our operating costs in the Veolia contract are on par with our own independent estimates for commuter and freight services."

Right Track PAC's chairman was former Austin Mayor and now state Sen. Kirk Watson, a Democrat. Its treasurer was former Austin City Council Member and longtime civic leader Lowell Lebermann Jr. According to a "Long-Range Transit Vision Update" released by the agency in May 2004, "Initial operating costs are estimated at $5M — including lease-purchase of vehicles."

The $112 million bid award to Veolia includes:

• $35.6 million for commuter rail, not including the cost of the rail cars.

• $61.5 million for freight rail operations, beginning in October. Capital Metro has another subcontractor handling freight rail operations on its track, primarily runs to and from the Marble Falls area to haul rock.

• A $14.6 million contingency, or 15 percent of the total, for the company. Krisak said much of that contingency is in place to account for possible quick growth in both the commuter rail and freight rail systems. Capital Metro's six cars will handle just 2,000 passengers a day, running primarily at rush hour.

The payments to Veolia are based on an hourly rate, however, and would increase if the agency decides to run the commuter rail service on an all-day basis or extensively on weekends.

The agency is considering ordering more cars.

bwear@statesman.com; 445-3698


Commuter rail costs

• $35.6 million of the $112 million bid is for commuter rail.

• First-year operating cost would be $5.2 million.

• Agency has $4.2 million annual payments to retire rail car debt.

• Fuel would cost $700,000 a year initially.