Sunday, June 26, 2011

Comparing Two Bridges; One across San Francisco Bay, and one HSR to nowhere

Many others, besides us, have identified the new Bay Bridge, from Oakland to San Francisco, as a notorious example of what to expect with the construction of High-Speed Rail.

Here's the central point.  In education, there are two usually defined skills.  One is Mastery; that is, acquiring all the facts, information, and knowledge. The other skill is Transfer; that is, applying that information/knowledge within other contexts.  So, here we go.

First of all, cost overruns.  The original cost estimate of the Eastern span of the new Bay Bridge was around $2 billion.  The current costs are over $7 billion and climbing.  

The current cost estimate for HSR, which has been climbing over the past decade, is now in the $40 billions, rising from $25 billion to $33 billion before 2008.  And even based on HSR documentation, it is actually $66 billion.  But, construction hasn't even begun.  Indeed, the rail authority hasn't gone out for bids yet.  So, by now, based on many other mega-infrastructure projects, we can forecast with some reliability that the costs for this California HSR project will be above $100 billion.

Next issue is employment.  There are hundreds, if not thousands of Chinese employed to build this bridge.  Most of them in China, of course.  But, many also here.  The article, below, from the New York Times tells us about other projects that," As with the Bay Bridge, American union labor would carry out most of the work done on United States soil."  Note the word "most."  It is the case that there are large numbers of experienced bridge construction workers in the US, and even in California.  It is no surprise that they would find work on this bridge. 

What is more surprising is that all the components are being built in China, shipped here to be assembled. And, doubtlessly, there need to be many Chinese here with bridge assembly experience working to put together what was built in China.  In other words, this is not a "Buy America" kind of project.  Like ever more of everything that is manufactured, the US does its shopping in China where cheaper labor gives us cheaper goods.  

So, what does that have to do with high-speed rail?  Transfer.  First of all, we have zero manufacturing capabilities for HSR components, rolling stock and other necessities.  Second, we have no construction experience in HSR (especially the really fast kind); that and the manufacturing capacity are all overseas.  HSR sounds more and more like this new Bay Bridge, only even less US labor dependent.

The California HSR project is funded with federal dollars to be matched with state bond funds.  The federal requirement for federal dollars  is "Buy America."  How will the HSR managers wiggle around that?  There are loopholes in the legislation and be assured that they will use them.  Yes, there will be US Union guys employed, but far, far fewer than currently promised. The picture I'm getting from this article is that American labor will do the "easy" stuff, like working with concrete.  But the "hard" stuff is going to be done by Chinese.

If the HSR authority finally decides to buy their stuff from China, it will be the new Bay Bridge all over again. But, this time, it's based on federal dollars, including ARRA Stimulus Funds intended to employ unemployed American workers.  Just watch the wiggling and maneuvering to get around that.

Union political support for this HSR project is hugely misconceived.  The construction doesn't start until end of next year, if then.  Meanwhile the Union construction unemployed can cool their heels.  And the rail authority's contractors will hire a fraction of what everyone is now being told. Furthermore, all the stuff needed will be built overseas, where it's cheaper.  As we've said, we don't have any HSR construction or manufacturing capacity in the US. 

What will be the response when US Stimulus dollars go back overseas as profits, such as for Parsons Brinckerhoff, based in the UK?

So, California, our high-speed rail will employ fewer US union work-force than we now believe, and be built, if not in China, in some other country.   That's just one more aspect of the HSR project with all its misleading promises that warrants the "scam" label.

PS: I love the part where Schwarzenegger went to China to inspect the construction process and found it OK.  If anyone should be an expert on the technicalities of bridge construction, it would have been a second-rate actor from Hollywood!  I'm reassured, aren't you?

"Despite the American union complaints, former California Gov. Arnold Schwarzenegger, a Republican, strongly backed the project and even visited Zhenhua’s plant last September, praising “the workers that are building our Bay Bridge.”

Bridge Comes to San Francisco With a Made-in-China Label

Ryan Pyle for The New York Times

Published: June 25, 2011

At a sprawling manufacturing complex here, hundreds of Chinese laborers are now completing work on the San Francisco-Oakland Bay Bridge.

Next month, the last four of more than two dozen giant steel modules — each with a roadbed segment about half the size of a football field — will be loaded onto a huge ship and transported 6,500 miles to Oakland. There, they will be assembled to fit into the eastern span of the new Bay Bridge.

The project is part of China’s continual move up the global economic value chain — from cheap toys to Apple iPads to commercial jetliners — as it aims to become the world’s civil engineer.

The assembly work in California, and the pouring of the concrete road surface, will be done by Americans. But construction of the bridge decks and the materials that went into them are a Made in China affair. California officials say the state saved hundreds of millions of dollars by turning to China.

“They’ve produced a pretty impressive bridge for us,” Tony Anziano, a program manager at the California Department of Transportation, said a few weeks ago. He was touring the 1.2-square-mile manufacturing site that the Chinese company created to do the bridge work. “Four years ago, there were just steel plates here and lots of orange groves.”

On the reputation of showcase projects like Beijing’s Olympic-size airport terminal and the mammoth hydroelectric Three Gorges Dam, Chinese companies have been hired to build copper mines in the Congo, high-speed rail lines in Brazil and huge apartment complexes in Saudi Arabia.

In New York City alone, Chinese companies have won contracts to help renovate the subway system, refurbish the Alexander Hamilton Bridge over the Harlem River and build a new Metro-North train platform near Yankee Stadium. As with the Bay Bridge, American union labor would carry out most of the work done on United States soil.

American steelworker unions have disparaged the Bay Bridge contract by accusing the state of California of sending good jobs overseas and settling for what they deride as poor-quality Chinese steel. Industry groups in the United States and other countries have raised questions about the safety and quality of Chinese workmanship on such projects. Indeed, China has had quality control problems ranging from tainted milk to poorly built schools.

But executives and officials who have awarded the various Chinese contracts say their audits have convinced them of the projects’ engineering integrity. And they note that with the full financial force of the Chinese government behind its infrastructure companies, the monumental scale of the work, and the prices bid, are hard for private industry elsewhere to beat.

The new Bay Bridge, expected to open to traffic in 2013, will replace a structure that has never been quite the same since the 1989 Bay Area earthquake. At $7.2 billion, it will be one of the most expensive structures ever built. But California officials estimate that they will save at least $400 million by having so much of the work done in China. (California issued bonds to finance the project, and will look to recoup the cost through tolls.)

California authorities say they had little choice but to rebuild major sections of the bridge, despite repairs made after the earthquake caused a section of the eastern span to collapse onto the lower deck. Seismic safety testing persuaded the state that much of the bridge needed to be overhauled and made more quake-resistant.

Eventually, the California Department of Transportation decided to revamp the western span of the bridge (which connects San Francisco to Yerba Buena Island) and replace the 2.2-mile eastern span (which links Yerba Buena to Oakland).

On the eastern span, officials decided to build a suspension bridge with a complex design. The span will have a single, 525-foot tower, anchored to bedrock and supported by a single, enormous steel-wire cable that threads through the suspension bridge.

“We wanted something strong and secure, but we also wanted something iconic,” said Bart Ney, a transportation department spokesman.

A joint venture between two American companies, American Bridge and Fluor Enterprises, won the prime contract for the project in early 2006. Their bid specified getting much of the fabricated steel from overseas, to save money.

California decided not to apply for federal funding for the project because the “Buy America” provisos would probably have required purchasing more expensive steel and fabrication from United States manufacturers.

China, the world’s biggest steel maker, was the front-runner, particularly because it has dominated bridge building for the last decade. Several years ago, Shanghai opened a 20-mile sea bridge; the country is now planning a much longer one near Hong Kong.

The selection of the state-owned Shanghai Zhenhua Heavy Industries Company was a surprise, though, because the company made port cranes and had no bridge building experience.

But California officials and executives at American Bridge said Zhenhua’s advantages included its huge steel fabrication facilities, its large low-cost work force and its solid finances. (The company even had its own port and ships.)

“I don’t think the U.S. fabrication industry could put a project like this together,” Brian A. Petersen, project director for the American Bridge/Fluor Enterprises joint venture, said in a telephone interview. “Most U.S. companies don’t have these types of warehouses, equipment or the cash flow. The Chinese load the ships, and it’s their ships that deliver to our piers.”

Despite the American union complaints, former California Gov. Arnold Schwarzenegger, a Republican, strongly backed the project and even visited Zhenhua’s plant last September, praising “the workers that are building our Bay Bridge.”

Zhenhua put 3,000 employees to work on the project: steel-cutters, welders, polishers and engineers. The company built the main bridge tower, which was shipped in mid-2009, and a total of 28 bridge decks — the massive triangular steel structures that will serve as the roadway platform.

Pan Zhongwang, a 55-year-old steel polisher, is a typical Zhenhua worker. He arrives at 7 a.m. and leaves at 11 p.m., often working seven days a week. He lives in a company dorm and earns about $12 a day.

“It used to be $9 a day, now it’s $12,” he said Wednesday morning, while polishing one of the decks for the new Bay Bridge. “Everything is getting more expensive. They should raise our pay.”

To ensure the bridge meets safety standards, 250 employees and consultants working for the state of California and American Bridge/Fluor also took up residence in Shanghai.

Asked about reports that some American labor groups had blocked bridge shipments from arriving in Oakland, Mr. Anziano dismissed those as confused.

“That was not about China,” he said. “It was a disagreement between unions about which had jurisdiction and who had the right to unload a shipment. That was resolved.”

Xu Yan contributed research.

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