The Continuing Saga of the American-Made Streetcar

Portland Streetcar, the non-profit organization that operates streetcars in Portland, is demanding that the city cough up $145,000 to fix its brand-new, American-made streetcar. Let’s take a look at the history of this car.

First, the city used its own money to buy streetcars from the Czech Republic for an average of $1.9 million apiece. Each streetcar has just 30 seats, but the cost per vehicle is about six times greater than a 40-seat bus. But that wasn’t expensive enough.

The most recent expansion of Portland’s streetcar system was funded by the federal government, which has a buy-America requirement. So Oregon’s congressional delegation and lobbyists persuaded the Federal Transit Administration to give Oregon Iron Works $4 million to build a prototype streetcar. The company used plans purchased from the Czech manufacturer of Portland’s streetcars to effectively produce a replica of those cars.

Notwithstanding the fact that federal taxpayers paid for the car, Oregon Iron Works (now doing business as United Streetcar) then sold the car to Portland for $3 million, $2.4 million of which came from a federal grant. So now taxpayers have spent $7 million on a car whose nominal value is about $2 million if purchased from the Czech Republic (or really, about $300,000, the cost of a bus).

This streetcar was part of a 2009 contract in which Portland would buy six streetcars from United Streetcar for $20 million. By 2011, however, United Streetcar reneges on the deal, saying it will only deliver five streetcars for the price of six (or the price of ten Czech streetcars or about 60 buses). For some reason, Portland goes along with the change.

“You’re not getting less,” United Streetcar’s president told the Oregonian. “I actually think you’re getting more. You’re getting a lot better quality vehicle.”

That’s quickly disproven. First, United Streetcar fell months behind schedule, leading the city to pay another engineering firm nearly $1.75 million to oversee United Streetcar’s construction progress.

Second, when the first streetcar was put out on the street, it suffered from numerous defects, one of which limits its top speed to 25 mph (instead of the design top speed of 43 mph). Since the new streetcar route crosses Portland’s Broadway Bridge, where autos typically go about 45 mph, a 25-mph limit must greatly impede traffic (though some people no doubt think that is a benefit, not a cost).

Tucson, which ordered seven streetcars from United at a cost of $4.3 million each, is also seeing delays. United was supposed to deliver its first street to the Arizona city next month, followed by about one a month so that the city could open its streetcar line in October. Now it appears the line won’t open until February, 2014 at the earliest.

In sum, United Streetcars cost more than twice as much as the Czech streetcars they imitate (and more than ten times as much as buses); they don’t go as fast; they are full of defects; and the manufacturers’ warranty seems to make city taxpayers liable for those defects. Such a deal. Oh, but I forgot: it creates jobs, so it’s all okay.

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20 thoughts on “The Continuing Saga of the American-Made Streetcar

  1. paul

    My recollection is that in 1981 San Diego decided they could not afford to take federal funding for their streetcar system as it would have meant having to buy American made streetcars. They bought German streetcars of the type they still use today.

  2. C. P. Zilliacus

    The Antiplanner wrote:

    First, the city used its own money to buy streetcars from the Czech Republic for an average of $1.9 million apiece.

    Washington, D.C. purchased three identical units that have never rolled one centimeter in revenue service (at least not yet) because there are no tracks with power and no maintenance/storage facilities for the planned streetcar lines. Some tracks have been built along certain routes, but no trolley wire has been strung.

    Each streetcar has just 30 seats, but the cost per vehicle is about six times greater than a 40-seat bus. But that wasn’t expensive enough.

    In theory, the streetcar will last much longer than a bus. Note that I am not saying that this makes the streetcar a better deal.

    Rail transit vehicles, if they do last for the 30 to 40 years, will need at least one “mid-life overhaul,” which is not cheap.

  3. C. P. Zilliacus

    Paul wrote:

    My recollection is that in 1981 San Diego decided they could not afford to take federal funding for their streetcar system as it would have meant having to buy American made streetcars. They bought German streetcars of the type they still use today.

    San Diego took no federal government money to build the line to San Ysidro. But they have accepted money from the FTA for some of the newer lines.

    I recently read that San Diego is selling some of the original Siemens cars to Argentina.

  4. redline

    Since the new streetcar route crosses Portland’s Broadway Bridge, where autos typically go about 45 mph, a 25-mph limit must greatly impede traffic (though some people no doubt think that is a benefit, not a cost).

    Actually, the streetcars slow to approximately 4 mph when crossing the bridge. Since there are two traffic lanes in each direction, this reduces traffic in whichever direction the streetcar is headed to one lane.

  5. Frank

    Another reason I’m glad I no longer live in Stumptown. Too bad people from all over the country have to subsidize Portlanders’ wasteful and anachronistic choo choo trains.

  6. English Major

    Hi Anti-Planners:

    I am here to learn about Urban Planning so that I can defend myself from radical Portland planners.
    Unfortunately, I have a deep affection for our UGB, but I will listen to arguments against the UGB.
    I hope we can be productive here, and find acres of common ground to agree on.

    Here is my first post:

    Am I missing something, or did PDX double down on stupidity?
    What does the double-dumb idea tell us? Even if you assume that a street car line is not a bad idea:

    Can someone explain why we did not buy an existing Siemens product instead of financing a Czech prototype?

    1. German engineering can be great
    2. Siemens employs people in the Willamette Valley
    3. Siemens trains are built by union workers with good pay and some of the world’s best working conditions

    Honestly, as a taxpayer and a chick, I would prefer a horse drawn carriage.
    Cheaper and more fun. A hay ride to work would be a riot. We make hay right here in NW Oregon.

  7. the highwayman

    Lady, just to sum up this entire blog.

    Rail is bad, because it is rail.

    Road is good, because it is road.

    Also here is some thing else to think about, considering inflation, why isn’t a streetcar around $350,000 as it should be today?

  8. English Major

    I don’t think that the UGB causes street cars. I am new to the blog and just thought I would introduce myself.

    What I am against: an expensive transportation investment with no riders. Our civic funds are limited, and I don’t like the community blowing money for schools and public safety on a flippin’ toy train.

    I need to sort out my beliefs, here. If Portland did not have radical idealogues as planners, I could
    be reading a novel. But as an educated person who loves Oregon, and loves my poor, embattled, broke Portland, I am forced to learn about Urban Planning. What I see from Portland’s planning bureau is
    shockingly stupid reports that I can pull apart without any background in planning (i.e. studies that are biased on their face, extrapolating studies from NYC when the studies say “do not extrapolate to other areas”, quoting the National Association of Realtors and developers without mentioning the bias inherent in their studies). Just sloppy thinking.

    So, I am here to learn. Pls, understand that the conversations in PDX are usually lame testimonials about how Joe the neutered male who writes code at home in his pajamas likes small, over-priced studios and riding his bike in the rain.

    I still wonder why we went with a Czech prototype when Siemens trains are available.

  9. MJ

    “Buy American” requirements are but one type of regulation that needlessly increases the cost of these projects. But Portland has taken this one step further and tried to promote the growth of an industry (streetcar manufacturing) based on direct government grants. That is troubling. The poor results that have arisen so far are just the tip of the iceberg, in my opinion.

    Combine this with the fact that Portland residents just elected a mayor who used to work as a streetcar shill (and so is not just drinking the kool-aid, he is making it) and a city whose economic development policy seems to be based on promoting itself as a place that is both exceptionally “green” and “weird”, and you get the mishmash of policies that promote and subsidize companies like Oregon Iron Works/United Streetcar.

  10. redline

    EM, “United Streetcar” went with the Czech model because they were able to purchase the plans used to build the 19th-century transport here in America, thus satisfying the requirement for federal tax funding. Siemens has no reason to sell plans; they are manufacturing in the country already (but German-owned, fail to satisfy the federal requirement).

    US, however, even working from the plans they purchased, have been unable to reliably produce even one streetcar; their “prototype” was just returned to Porkland for “testing” four days ago. It was supposed to have been delivered over four years ago, and Porkland Streetcar by now should have taken delivery of some half-dozen working streetcars.

    It’s worth noting that Porkland Streetcar is run by former Metropolitan Service District head (and charter member of FON – Friends Of Neil) Tricky Ricky Gustafson. I believe that he’s also brought his daughter onto the board. Given Rick’s history, it’s safe to assume that there’s a lot of dirt involved.

  11. Sandy Teal

    English Major –

    “Portlandia” hit the nail on the head this week, when the mayor of Portland sought help to find something ban/outlaw in Portland that had not yet been banned/outlawed in Seattle.

    Certain cities are banning plastic bags, large sodas and goldfish as an attempt at social signalling, knowing that they real effect of the law is nill. Same with throwing money at light rail instead of buses.

  12. English Major

    Sandy,

    It is funny to me how how certain “green” gestures are so value-laden. Plastic bags, for instance, are arguably more “green” than paper. But we have a meme that “plastic bad, wood good.” I don’t watch Portlandia because it is depressing- it is too spot on.

    If we wanted to help the enviroment, we would consider discouraging the private ownership of large dogs. Large dogs have large carbon footprints, but to discuss that would get me lynched in PDX.
    No, we must take away our neighbor’s car and their soda, because we drink lattes and ride bikes.

    I am willing to make sacrifices to save the air and the water. But those sacrifices must be scientifically based and fairly applied. Right now, my nemesis the PDX city planner, is shoving his version of utopia on me, and pushing the cost onto individuals. My friend George is lives near Division and he is really taking a hit from the new density. The value, the attractiveness of his house has been unfairly reduced
    by the deliberate congestion and the ugliness of the new crapartments. That house means alot to George, and I am fighting for him. He bears the brunt of the supposed efforts to slow climate change.

  13. Frank

    Here in Seattle, the bag ban is already having both env and econ unintended consequences. I prefer free-market solutions, but if gov’t must get involved, why not mandate biodegradable bags (which will undoubtedly result in unintended consequences, too)? I’m not particularly fond of plastic shopping bags, especially after seeing them floating in Crater Lake and lining the Bright Angel trail in the Grand Canyon. But I have to wonder about back-door deals with Salem and Weyerhaeuser. Bans of any product invariably result in benefits to competing products/industries.

    English Major, don’t forget the most hypocritical, that’ll-really-piss-em-off topic: breeding. Some commenting here and elsewhere prophesize environmental Armageddon while popping out a kid or two or three. Nothing like reproducing to grow your carbon footprint. Yet they get a tax deduction for breeding while calling for an increase in my taxes? Wtf?

  14. English Major

    Frank,

    Only jerks use the term “breeders.” Freedom means the right to have a family that you can support.

    The anti-car folks that I dislike in Portland are also anti-family.

  15. Iced Borscht

    English Major, welcome.

    For a thorough and hard-hitting account of Portland, please consult my travel guide:

    http://icedborscht.com/blog/2010/03/31/cool-hip-travel-guide-to-portland-oregon/

    Although written several years ago, its message remains true and timeless. Plus it has earned accolades from such sources as Bill Kristol’s Weekly Standard and also Bill Kristol’s Weekly Standard.

    I made sure to include a special Smart Growth section, so please read that part in full and with rapt attention.

    Thanks

  16. Frank

    Don’t be a Lazy Reader; I didn’t use the term breeder. I used the term breeding. Twice. It means to produce offspring. You can look it up.

    You can also look up “a lot” while you’re at it. It’s two words, English Major.

    Welcome to The Antiplanner. :-)

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