The proposals are in and the contractors expected to build the next segment of California’s bullet train are a consortium led by Dragados USA Inc., a subsidiary of a Spanish construction firm. The group had the highest technical competence score and the lowest price, and was determined to be the “apparent best value,” according to the California High-Speed Rail Authority.
But the price offered by Dragados is either meant to be amusing or unusually specific. The consortium bid was $1,234,567,890.
Is that a joke? Authority staff said no. It’s an official bid that will likely become the binding price point after the authority’s board approves the contract in January.
It may not be a joke, but it was certainly silly for the construction companies to set such a price when the public is already incredibly skeptical of the bullet train cost projections. Why not bid $1,111,111,111?
This is a project, after all, that was supposed to cost $33 billion when it was approved by voters in 2008 but is now estimated to cost $65 billion.
Dragados did come in significantly below the authority’s estimated $1.5-billion to $2-billion price range to build the 65-mile segment from Fresno to north of Bakersfield. The price was also much lower than the $1.7-billion and $2-billion bids from two other firms, which prompted journalist James Fallows of the Atlantic to ask the authority whether the winning bid was “suspiciously low.” (The authority told him no, and explained why.)
The bullet train is a worthy project but it still has to overcome a credibility gap. Public confidence is essential now, particularly with Republicans in Congress vowing to block federal funding for the rail line. It’s not a good time to get cute with pricing.
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