$4.8-Billion Contract Won by Fluor Daniel

An international consortium that includes Irvine-based Fluor Daniel Inc. and the firm that developed France’s 200-mph train system won a contract Tuesday to begin designing and building a $4.8-billion, high-speed rail system in Florida.

It could be three years before Florida’s governor signs a final contract, but the state Department of Transportation award gives the Fluor-led group exclusive rights to start work on the nation’s most ambitious public-private rail system.

The 325-mile initial route, scheduled to be completed in 10 years, would link Miami, Tampa and Orlando with passenger trains traveling at speeds up to 200 mph.

The project, the largest single contract ever for Fluor Daniel, is being watched by government and private transportation officials all over the country. Its success could provide the juice needed to jump-start stalled bullet-train proposals in several states.

The state’s willingness to help finance the Florida project was the critical factor, said project director Eugene K. Skoropowski, head of Fluor Daniel’s transportation services division.

“Florida is the only state that has ever come forward and become an equity partner,” Skoropowski said.

The state has budgeted $1.8 billion over 25 years to help finance the project and will provide much of the land for the rail system right of way, state Transportation Secretary Ben Watts said. An additional $3 billion would be financed with tax-exempt bonds, which would be repaid from ticket sales.

Numerous proposals for high-speed trains--including a Los Angeles-San Diego bullet train in 1981 and a Los Angeles-Las Vegas high-speed route pitched in 1985--have flopped.

“Government has always expected private business to carry all the costs. Government equity was the missing ingredient in all the other, failed plans,” Skoropowski said.

Irvine-based Fluor Daniel will receive fees for managing the project, for engineering and design work and for actual construction if final approval is granted. The company’s previous top contract, won in 1975, was to manage a $3-billion oil refinery project in Saudi Arabia.

“The champagne flowed” over lunch at the Governor’s Inn restaurant near the Florida Capitol in Tallahassee after the award was announced Tuesday, said a jubilant Skoropowski. He added, “This is one of the most beautiful days I’ve experienced in my lifetime.”

The project won’t create many new jobs at Fluor Daniel’s headquarters in Orange County, but will provide employment for hundreds of engineers and thousands of construction workers in Florida. When completed, the system will provide work for 1,200 operating and maintenance employees.

Fluor Daniel’s Florida Overland Express consortium was one of five bidders on the project. The initial contract caps a yearlong effort by the group, including a nine-month race to design the proposal, which was submitted at the end of October.

Presuming the Florida Overland Express consortium is successful with the first phase, billions of dollars more are on the table.

“We anticipate this to be the first of a statewide series” of projects that eventually would link all of Florida’s major cities via high-speed rail, Transportation Secretary Watts said.

For Fluor Daniel, the contract adds to a growing backlog of business that has caused analysts at several major brokerages to issue glowing reports in recent weeks on the construction and engineering company’s parent, Fluor Corp.

Fluor’s stock rose by 62.5 cents a share Tuesday to close at $66.375 in heavy trading on the New York Stock Exchange.

Watts said the Fluor Daniel group’s plan used the “proven technology” of the French high-speed rail system, which has a good safety record.

The consortium includes Paris-based GEC Alsthom, which developed the super-fast train linking Paris and Lyon and will build the engines and power units for the Florida system. Bombardier Inc. of Montreal will build the passenger cars while Odebrecht Contractors of Florida, a unit of a Brazilian company, will participate with one of Fluor Daniel’s construction units to build the system.