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Fluor Wins Bid for High-Speed Rail in Florida

Transportation: Irvine company is part of international consortium chosen by state to begin $4.8-billion project.


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.

The project, the largest single contract ever for Fluor Daniel and the nation's most ambitious public-private rail system, is being watched by government and private transportation officials all over the country. Its success could provide the juice needed to jumpstart stalled bullet train proposals in several states.

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

The state of Florida's willingness to help finance its 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," he said.

"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.

It could be three years before Florida's governor signs a final contract, but the Flordia Department of Transportation award gives the Fluor Daniel-led group exclusive rights to start work on the project.

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

The state has budgeted $1.8 billion over 25 years to help finance the project and also will be providing much of the land for the rail system right-of-way, said Ben Watts, Florida's transportation secretary. An additional $3 billion would be financed with tax-exempt bonds, which would be repaid from ticket revenue.

Fluor Daniel will receive fees for managing the project, for engineering and design work and for actual construction work if final approval is granted. It'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 Florida's capitol building in Tallahassee after the award was announced Tuesday, said a jubilant Skoropowski. "This is one of the most beautiful days I've experienced in my lifetime."

The project is not expected to create many new jobs at Fluor Daniel's headquarters, but ultimately could provide employment for hundreds of engineers and thousands of construction workers in Florida. Upon completion, the rail system would provide permanent work for an estimated 1,200 employees.

For Fluor Daniel, a subsidiary of Irvine-based Fluor Corp., the contract adds to a growing backlog of business that has caused analysts at several major brokerages to issue glowing reports on the company in recent weeks. Fluor Corp.'s stock rose by 62 1/2 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. It will supply the engines and power units for the Florida system. Bombardier Inc. of Montreal will build the passenger cars and Odebrecht Contractors, a Florida subsidiary of a Brazilian company, will participate with one of Fluor Daniel's construction units to build the system.

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