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.