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utilizing a ESOP to capitalize infrastructure for California High-speed Rail

July 28, 2015

Utilizing a ESOP to capitalize infrastructure for California High-speed Rail  

California High Speed Rail authority is looking for private/public partnerships to fund construction of the San Jose to Merced segment and the Merced to Burbank segments

We propose a leveraged income tax-free ESOP to build out these segments and to operate and maintain train sets.

This is an ESOP proposal made to the French;


     I think SNCF should reconsider California High Speed rail at least for the Northern route, I offer an idea that might assist you in making for a viable plan, That would be tax-free Employee stock ownership plan
       An ESOP under American law can also borrow money under favorable tax conditions to build capital projects such as the one put out above. So I suggest an American subsidiary of SNCF 100% owned by the ESOP
I break it down this way
5.5   SNCF and partners(?) manufacture rolling stock in California with an American Subsidiary with a majority owned ESOP
5.5    SNCF will do maintenance of all rolling stock and facilities over a 30-year maintenance period with an American subsidiary with a majority owned ESOP
     Doing both above means cash flow to the SNCF/ESOP for building train sets and the much longer pay out for infrastructure.The leveraged ESOP has borrowed to build the capital infrastructure after all and the cash flow from manufacturing train sets improves the picture for ESOP employee owners with more and earlier cash flows. lets discuss this capital infrastructure,
 HRS proposes capital expenditures to be paid for with cap-and-trade, we would have argued for a carbon tax as being a more reliable and risk free system.the EU cap-and-trade system has proven not reliable or transparent or fair.(5.4)
5.6 Train operator.  This makes sense for a ESOP under IRS regulations of pension funds.This would be a long-term contract that would satisfy IRS ERISA requirements for stability for employees to vest.And this would be SNCFs great strength in managing high-speed rail.
5.6 (A) caltrains  could be leased by the leveraged  ESOP for 50 years and the cash used to build tunnels for HSR from the VTA/Bart to San Francisco,this would be the SNCF/ESOP that operates HSR train operator.
5.6 (B) this means the local transit operates must pay back the SNCF/ESOP over 50 years for the Caltrains property and the local partners must agree to pay for HSR tunnels with no stops to San Francisco,the same SNCF/ESOP would benefit with a faster trip to LA from SF  by reducing travel time to LA .The Leveraged ESOP purchasing CalTrains  and the Bay Area Joint Powers using the money to build a HSR tunnel is something we like to call Tunnel Arbitrage.
The ESOP and operator would pay JPB $1.5 Billion to the JPB and would receive over 50 years cap and trade funds.The $1.5 Billion is returned to the JPB /CHSR MOU.
The California high-speed rail RFEI has one failing mark, An ESOP that provides service and a tax-free advantage to it client should also be allowed to own as an ESOP the services offered at train stations. This might mean restaurants and hotels. These types of businesses would be privately owned  by innovators but with the ESOP as start-up founder(leveraged ESOP)  We know the train station is a local partnership with local agency’s so any ESOP employee needing more hours should get a free pass to work anywhere in the system.
Our post 9/11 veteran owned concern proposes that California High Speed rail conduct a ESOP feasibility study for each of the segments and manufacture and operation of train sets to compare to other bidders

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