FRA waives Buy America rules on high speed train prototypes

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CHamilton

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FRA waives Buy America rules on high speed train prototypes

The Federal Railroad Administration has approved a waiver on Buy America procurement rules covering the supply of up to four high speed trainsets for the US market.

The letter dated November 24 is a response to requests from both Amtrak and the California High Speed Rail Authority, who are each seeking to procure two pre-series trains for testing at speeds of at least 255 km/h on the Northeast Corridor and California’s nascent high speed line in the Central Valley....

For the procurement of prototypes, FRA does not believe that it is in the public interest for Buy America to be imposed.

‘FRA believes a waiver is appropriate because domestically-produced high speed trainsets meeting the specific technical, design, and schedule needs of Amtrak and CHSRA are not currently available in the USA’, the letter explains. ‘Moreover, domestically-produced high speed trainsets cannot be bought or produced in the USA within a reasonable time given the programme schedule associated with Amtrak's and CHSRA’s projects.’
 

PerRock

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Reading some of the comments, I (and I think the comenters are as well) a bit confused.

The articles linked here say that the waiver is only for the first 2 (per HS line, so total of 4) trainsets. But I couldn't find anything saying that in the FRA website (linked above), but I also didn't read every single word in the Amtrak request. So is it for all of the trains or just the first 2? The comments on the FRA website seem to think that it's for all of them.

peter
 

afigg

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Reading some of the comments, I (and I think the comenters are as well) a bit confused.

The articles linked here say that the waiver is only for the first 2 (per HS line, so total of 4) trainsets. But I couldn't find anything saying that in the FRA website (linked above), but I also didn't read every single word in the Amtrak request. So is it for all of the trains or just the first 2? The comments on the FRA website seem to think that it's for all of them.

peter
The waiver is just for the 2 two "prototypes" each for Amtrak and CHSRA which will be the initial test units to be built overseas to expedite the testing process and I expect will be in the batch of the first units to go into revenue service (for Amtrak anyway). The original Amtrak waiver request is available on the FRA website eLibrary document section. Specific link: Amtrak Buy America Waiver Request for two (2) prototype high speed rail trainsets. (If you click on Waiver Requests near the top of the page, you can find the CHSRA request as well).

The FRA decision letter for Amtrak and CHSRA are nearly identical, but here is the letter to Amtrak: Amtrak High Speed Rail Prototypes Buy America Waiver Decision.

BTW, I posted this news yesterday in the Amtrak Acela II RFP thread as it is especially relevant to getting the Acela replacements in service more quickly.
 

William W.

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They need to eliminate the Buy America requirement entirely. This is 2014, and we live in a global economy. If something can be made oversees with better quality, and at a lower price, then that's the best option.
 

jis

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These types of rules are often used by developing countries to force technology transfer under license to help build their own industrial base. I suppose what is good for the goose is good for the gander.
 
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me_little_me

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They need to eliminate the Buy America requirement entirely. This is 2014, and we live in a global economy. If something can be made oversees with better quality, and at a lower price, then that's the best option.
Unless of course you are an unemployed American who can't find a good job. ;)
 

William W.

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They need to eliminate the Buy America requirement entirely. This is 2014, and we live in a global economy. If something can be made oversees with better quality, and at a lower price, then that's the best option.
Unless of course you are an unemployed American who can't find a good job. ;)
How many "unemployed Americans" are able to weld, do complex electrical work, or work with compact plumbing?

Having outdated rules such as this makes it more difficult for Amtrak to operate, and acquire the quality equipment that it needs. One of the main reasons that Viewliner II production is so behind schedule is that CAF was unable to find workers with the necessary skills.

I see little evidence to support the idea that this policy somehow protects American jobs. Let Amtrak get the best equipment that it can, at the best price that it can. If that means going overseas, so be it.
 

Bob Dylan

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Protectionism has been around forever when it comes to trade, it's what caused the Boston T- Party and helped lead to our Revolution!

As was said it works for awhile in developing countries but overall it' s poor public policy!

As for "outsourcing" American jobs, its been a spectacular success for corporations but if people would check into it its been a disaster for our manufacturing jobs and our middle class!

If companies can't find qualified workers to build stiff here its the fault of the educational system which is always about 10 years behind and the government which promotes policies that only benefit the rich and corporations!

You could look it up!!
 

PRR 60

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I don't think the issue is finding skilled labor. The primary issue is getting the specialized machinery and tooling necessary to make the car bodies and some other parts. This type of production equipment is custom designed and manufactured. It's not something that can be ordered and delivered in a matter of weeks or even months. No manufacturer would buy and install any of that kind of equipment until the order was in the books. That results in the domestic production lead time clock for some of the content starting when the project is awarded and the successful vendor is able to begin to fully equip the production shop.

It is necessary to make two trainsets then hold production pending testing of those sets. It makes sense to allow more off-shore content in those first train sets in order to allow the testing to begin before full domestic production capability is on-line. While the first sets are being produced and tested, the shop will be able to get fully capable for the main production run.
 

jis

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Yup. Forcing technology transfer under license. Exactly the sort of thing the U.S. incessantly bitched about when it was a developing country putting in such restrictions on American Companies trying to sell stuff at much higher price manufactured outside the purchasing country. Lived through those battles back in the 60's and 70's in India. The net result was that the Europeans and the Soviet Block won all the contracts, which was sad, and very shortsighted on part of the U.S. It is just the shoe is on the other foot now. That's all.
 

Bob Dylan

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Interesting perspective jis from someone who has been on the other side of the fence so to speak!

And reverse engineering ( aka theft)is also a consideration in some countries!

Edited: clean up typos caused by Spell Check!
 
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Anderson

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I'm just wondering since this has come up in offsite discussions, but hasn't there been some concern expressed that the Chinese (in particular) seem likely to place one or two rounds of orders for something, reverse-engineer the tech, and then do it themselves?
 

Paulus

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I'm just wondering since this has come up in offsite discussions, but hasn't there been some concern expressed that the Chinese (in particular) seem likely to place one or two rounds of orders for something, reverse-engineer the tech, and then do it themselves?
They've done that with a number of things, though also a good deal of technology transfer as part of the contracts. Of course the major difference is that China has a very large domestic market to make it worthwhile. Not so with America.
 

cirdan

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Yup. Forcing technology transfer under license. Exactly the sort of thing the U.S. incessantly bitched about when it was a developing country putting in such restrictions on American Companies trying to sell stuff at much higher price manufactured outside the purchasing country. Lived through those battles back in the 60's and 70's in India. The net result was that the Europeans and the Soviet Block won all the contracts, which was sad, and very shortsighted on part of the U.S. It is just the shoe is on the other foot now. That's all.
In the case of India, you could say in the long term it was a roaring success. Would India ever have become such a hub for the software industry for example if the government hadn't pushed that development and basically told the multis, if you want to sell in India you must produce in India? Would an unfettered market have developed similarly?

In terms of mechanical and electrical engineering, India's not doing too bad either. Tata has in 20 years or so advanced from being a bad joke to a world class company. And there is a plethora of less known but quite succesful companies both inside India and exporting from it.

Would that have been possible if the Indian government hadn't laid down strict rules and stood through some heavy criticism?

I'm not saying it is. This is an open minded question.
 

cirdan

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I'm just wondering since this has come up in offsite discussions, but hasn't there been some concern expressed that the Chinese (in particular) seem likely to place one or two rounds of orders for something, reverse-engineer the tech, and then do it themselves?
They've done that with a number of things, though also a good deal of technology transfer as part of the contracts. Of course the major difference is that China has a very large domestic market to make it worthwhile. Not so with America.
With the USA and in the domian of passenger rail, you could argue that there is a huge potential for catching up. Intercity and commuter rail is far less developed than in Europe for example, so there is work waiting to be done almost everywere. Should the political climate and attitudes shift, the USA would become a very interesting market with potential for high manufacturing volumes and follow on orders able to keep quite a few large plants (and companies) in business for a very long time.

The question though is, who has the confidence that it will actually happen in the forseeable future?
 

jis

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Yup. Forcing technology transfer under license. Exactly the sort of thing the U.S. incessantly bitched about when it was a developing country putting in such restrictions on American Companies trying to sell stuff at much higher price manufactured outside the purchasing country. Lived through those battles back in the 60's and 70's in India. The net result was that the Europeans and the Soviet Block won all the contracts, which was sad, and very shortsighted on part of the U.S. It is just the shoe is on the other foot now. That's all.
In the case of India, you could say in the long term it was a roaring success. Would India ever have become such a hub for the software industry for example if the government hadn't pushed that development and basically told the multis, if you want to sell in India you must produce in India? Would an unfettered market have developed similarly?

In terms of mechanical and electrical engineering, India's not doing too bad either. Tata has in 20 years or so advanced from being a bad joke to a world class company. And there is a plethora of less known but quite succesful companies both inside India and exporting from it.

Would that have been possible if the Indian government hadn't laid down strict rules and stood through some heavy criticism?

I'm not saying it is. This is an open minded question.
Of course it worked well for India. Similarly tactics worked well for the US at a time when it was trying to develop its own industry in face of competition from well established companies from Europe.
If you look at the world Steel industry today, a significant part of it is owned by Indians Tata and Mittal mainly. The story of steel in India is quite revealing. At independence India had a nascent steel industry with a couple of significant plants - there was Tata Steel in Tatanagar, and ISCO in Burnpur. India decided that steel is fundamental to infrastructure and India has incredible pile of almost pure Hematite deposits, so they decided to focus on steel. They sent out a world tender to set up steel plants with technology transfer. USA said they would sell steel but would not help set up steel plants, so they opted out. The Soviets set up Hindusthan Steel plants in Bhilai and Bokaro - huge huge plants. Germans set up Rourkela and the Brits set up Durgapur. Tatanagar and Burnpur were upgraded too in that period. That was the beginning of modern steel industry in India, and the US of its own accord decided not to participate. Fat good it did to its own steel industry.

All in all I think India did the right thing for its long term prosperity.

If the US manages Build America well, it should work out well. One difference between India back in the '50s and the US today is that the net result of Build India back then was cheaper steel. The immediate effect of Build America is more expensive rail equipment. But the latter has more to do with FRA intransigence and the relatively small size of the passenger rail market in the US more than anything else I think.
 
B

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Buy America started as a jobs program for Boeing. It was a total disaster for the end consumer and, in the end, for Boeing. Turns out building wings and fuselages doesn't translate easily to building trolley cars.

Dumb FRA crash standards have nothing to with Buy America, btw.

I'm not saying Buy America hasn't had some successes. But it's good to keep in perspective where it started. Not part of a carefully considered strategic industrial policy. Just a kneejerk reaction to a recession that hit one company with expensive lobbyists really hard.

Bombardier ducking out of Acela II sounds of a piece. There was hanky panky when they got the contract for Acela I. Ended badly, either on liquidated damages or make-good provisions, however that worked out. Now they bravely run away.
 

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Buy America is probably causing trouble, but it certainly is causing *less* trouble than the non-standard FRA rules. If we harmonized our rules to international standards, there would be a lot more incentive for foreign companies to build trains in the US. (For, if nothing else, the South American export market). As long as US rules are whacked-out and US-specific, this makes construction for the US a pain.
 

Anderson

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Buy America is probably causing trouble, but it certainly is causing *less* trouble than the non-standard FRA rules. If we harmonized our rules to international standards, there would be a lot more incentive for foreign companies to build trains in the US. (For, if nothing else, the South American export market). As long as US rules are whacked-out and US-specific, this makes construction for the US a pain.
(1) What South American export market? South of the US, the only rail systems of particular note are Cuba and Argentina. Brazil, Peru, Panama, and Chile have a stray line or two and Mexico may be getting back into passenger rail in some form...but that's really it, especially as Brazil seems to have royally botched their HSR project.

(2) With that being said, I think it is fair to push for at least some standardization, particularly once PTC is in place on most lines. At that point most of the reasons for having the extra buff strength requirements (the "rolling bank vault" issue, if you will) would be basically eliminated.
 

jis

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If you are suggesting collisions will become impossible everywhere that is not true. They will just become less likely. Also there will be only marginal reduction in derailments (only the over speed related ones and only on PTC enabled routes).
 

Anderson

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If you are suggesting collisions will become impossible everywhere that is not true. They will just become less likely. Also there will be only marginal reduction in derailments (only the over speed related ones and only on PTC enabled routes).
I'm not quite going that far. However, reducing the chances for collisions will (further) reduce some of the arguments on buff strength and the like...something that I know has been raised as a rather odd aspect of rail in the US. Derailments and grade crossing collisions are another set of matters entirely, but I suspect that in a lot of cases the added weight doesn't do much in a non-collision derailment...and grade crossing crashes are just another ball of wax entirely.
 
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