Florida Abandons Rail Project

Florida Gov. Jeb Bush said Thursday he will withhold funding for a $6.3-billion high-speed train system to have been built by an international consortium that included Irvine-based Fluor Daniel Inc.

The 325-mile rail system would have connected Tampa, Orlando and Miami with trains traveling at 125 to 200 mph.

Bush opposed the Florida Overland Express, known as the FOX, because of concern that it wouldn’t attract enough riders to make it financially viable. He also cited the possible harm to surrounding wetlands and water quality.

The project’s consortium partners--which also included Montreal-based Bombardier and Anglo-French conglomerate Alstom--were selected in 1996 to build and operate the railroad network.

A FOX spokesman said Bush’s decision to halt state funding has killed the project.

“The project is terminated,” FOX spokesman Gene Skoropowski told Reuters. “It’s unfortunate that Florida is passing up what I would call a once-in-a-lifetime opportunity and probably a lot of the federal funds that go along with it.”

He said the FOX partnership would tidy up a few loose ends and then close its Orlando offices, probably by the end of January.

Fluor officials said they were disappointed with the announcement and planned to reassign a team of 20 employees that had been working on the project for the last two years. The company had been handling financial and environmental estimates for the public-private partnership.

“Because this was such a complex project, we knew it was a longshot for it ever to reach completion,” said Lisa Boyette, spokeswoman for Fluor. “We were certainly hopeful. But the news didn’t come as a surprise.”

Fluor said the loss of the undisclosed revenue from the project wouldn’t affect earnings because it was still in the preliminary stages and hadn’t been registered in the engineering and construction firm’s backlog.

Fluor already has been paid “for nearly all” of the work it has done on the project, Boyette said.

In halting the proposed rail system, Bush said the uncertainty and risk to Florida’s taxpayers “is too great to continue funding this project with our tax dollars.”

Indeed, the General Accounting Office said in a report released Thursday that the U.S. Department of Transportation was unlikely to guarantee a $2-billion loan needed for the project. The report also said the estimated ridership could have been overstated by as much as 30%.

The GAO called plans to begin operating the route by 2005 “unrealistic” because the environmental impact review alone would take as long as five years.

The news had little impact on Fluor’s stock price, which declined 44 cents a share to $39.69.