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Rail News Home High-Speed Rail

June 2011



Rail News: High-Speed Rail

High-speed rail's blurry and beaten path



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By Angela Cotey, Associate Editor

On May 9, the U.S. Department of Transportation (USDOT) announced it had allocated $2 billion in High-Speed Intercity Passenger Rail (HSIPR) grants to Amtrak and 15 states.

The good news: That money will be used to fund projects that will make tangible improvements to rail service throughout the country — Northeast Corridor upgrades to increase train speeds from 135 mph to 160 mph on some of the corridor’s most heavily used sections; track improvements in Michigan that will allow for 110 mph operations along a significant portion of the Chicago-Detroit corridor; an extension of the California High-Speed Rail Authority’s initial construction segment in the Central Valley; and rail car and locomotive purchases in the Midwest and California for 125 mph operations on some corridors.

The not so good news: The $2 billion was redirected from a project in Florida, where the federal funds would have covered almost all the construction costs for a Tampa-Orlando corridor. The project was on track to become the country’s first dedicated high-speed rail (HSR) line until Florida Gov. Rick Scott rejected the funds in February, effectively killing the project (at least for the time being).

Such ups and downs are par for the course — and, likely will continue to be — when it comes to U.S. HSR development. When Congress approved the American Recovery and Reinvestment Act (ARRA) in February 2009, rail supporters were shocked to learn that HSR — which had been discussed in the United States for decades but never had federal funding to support it — would receive a whopping $8 billion. The request came from President Obama himself, who, unbeknownst at the time, was gearing up to make HSR one of his administration’s signature issues. In April 2009, Obama further cemented his dedication to creating a network of faster rail service when he unveiled a strategic plan outlining his vision for HSR.

“By announcing this program, the Obama administration really brought intercity passenger rail and high-speed rail much more into the mainstream as a serious transportation mode,” says David Carol, high-speed rail market leader for Parsons Brinckerhoff.

As a result, more attention than ever has been drawn to HSR the past two-and-a-half years. Some of it has been positive. In addition to the stimulus funds, Congress approved another $2.5 billion for the HSIPR program in FY2010. The Federal Railroad Administration (FRA) has announced grants totaling $10.1 billion and about half of that money is now being put to use. States that have been working for years to develop high-speed service finally received money to do so. Other states have started the planning process. Engineering firms, suppliers and contractors have benefitted from new business opportunities, with prospects of more to come.

Critical thinking

But HSR has received some negative attention, too. Critics have come down hard on all aspects of the program, from how much money’s being spent, to the speeds at which some “high-speed” trains would run, to the Federal Railroad Administration’s execution of the program. In some cases, necessary freight railroad agreements are holding up grant agreements. The months since the November elections have been particularly tough, with three new governors returning high-speed funds to the federal government and new members of Congress threatening to kill the HSIPR program.

They’ve already had at least some success — in March, Congress approved a continuing resolution for the FY11 budget that zeros out funding for the HSIPR program through the remainder of the fiscal year. Funding for the coming fiscal year looks bleak, as the Great Recession and its aftermath has fueled a no-spending mantra for many politicians, both at the federal and state levels.

‘Ebbs and flows’

The program’s fits and starts will continue. Grant obligation announcements and project progress still will be mixed with political rhetoric and ideological criticism. Funding for a new federal program of any sort — and particularly one that President Obama strongly supports — will be hard to come by in a Republican-controlled House. But despite HSR’s anything-but-certain future, program stakeholders and federal officials will continue navigating down the beaten, blurry path to HSR development in the United States. And as they do, they’ll keep their eyes on the bigger prize: an integrated network of high- and moderate-speed trains that will change the way people travel in the coming decades.

“It’s unreasonable to expect that everything always goes according to the perfect plan you lay out. You have to understand there will always be some little ebbs and flows in your process, an amount of evolution,” says Federal Railroad Administrator Joseph Szabo. “The bottom line is that 32 states continue to move forward with their plans for high-speed and intercity passenger rail in the United States. There’s no denying the need for this program.”

And no denying the interest. Since the FRA launched the stimulus application process in summer 2009, states have collectively applied for more than $75 billion in HSR funds. The funds have been allocated to a “pretty good mix” of projects, says National Railroad Construction and Maintenance Association President Chuck Baker, who also serves on the American High Speed Rail Alliance advisory board.

Funds are being distributed for planning, environmental and engineering work; incremental improvements to increase train speeds in corridors such as Chicago-St. Louis, Portland-Seattle and Charlotte-Richmond-Raleigh; and construction on dedicated HSR tracks in California.

“It’s been well balanced geographically, and it hasn’t been political as far as where the awards have gone,” says Baker, a partner at government relations firm Chambers, Conlon & Hartwell L.L.C. “They didn’t just go to Democratic governors, didn’t just go to states with Democratic senators or congressmen.”

As of mid-May, the FRA had obligated $5.8 billion of the $10.1 billion that’s been awarded, including about 71 percent of the stimulus dollars, putting the agency well ahead of its ARRA-mandated deadline to have the money all obligated by September 2012.

“We’ll likely beat our statutory obligation by a year,” says Szabo.

It doesn’t mean the program’s administration has been flawless. Designed as a safety and regulatory agency, the FRA had never administered a grant program — let alone a multi-billion-dollar one — prior to the HSIPR program. The agency has had to hire and train new workers, create application guidelines and develop criteria for selecting HSR projects to receive federal funds.

States’ struggles

FRA officials also worked hand-in-hand with state departments of transportation, which in most cases were short-staffed, too. Many state DOTs also struggled to determine which projects they should seek funding for and complete the detailed application process under the quick turnaround time.

“One of the unfortunate elements of the program was simply that its initial slug of funding came out of a stimulus bill, in which time and the ability to generate quick results was at a premium, and you’ve got a program that did not really have much of the planning in place,” says PB’s Carol. “I think a lot of the states, the federal government and a lot of the consulting firms supporting states were reaching very deep into their archives to try to figure out what are good projects, what are the reasonable costs to expect, how do we work with freight railroads, how do we work with Amtrak?”

As a result, the entire grant process — from seeking applications to announcing grant recipients to handing the money over to states — took too long, many HSR observers believe. Had the FRA executed some grant agreements a bit more quickly, it could have fended off some of the criticism, Baker believes.

“We’d have been better off with some pretty good agreements that had some flexibility executed pretty quickly and getting some investments in the ground rather than letting the program hang out in space where all anyone knew about it was the money being spent, but there were no accomplishments to defend the program with,” he says.

These days, the program can use some defending. Although HSR has always had its share of critics, many of whom made their opinions known in the news media and blogosphere post-ARRA approval, the cries against HSR have grown louder in recent months.

In fall 2010, Republican gubernatorial candidates Scott Walker of Wisconsin and John Kasich of Ohio turned HSR into a campaign issue, with each candidate vowing to return their states’ HSR funds to the federal government if elected. Both won the governorship, and in late 2010, the U.S. Department of Transportation redirected Wisconsin and Ohio’s money to other states.

Wisconsin’s $810 million would have been used to upgrade track between Milwaukee and Madison — a critical link in the Midwest’s plan to operate faster trains between Chicago and the Twin Cities — to operate higher-speed intercity passenger trains. Ohio’s $400 million would have been used to construct the 3C Corridor, connecting Cleveland, Columbus, Dayton and Cincinnati — cities that hadn’t been served by intercity passenger trains for decades.

In theory, the funding redirection shouldn’t have been a huge blow to the HSIPR program. After all, the money still is funding HSR projects — just different ones. But the campaigns against HSR received national media attention, and the rejection of federal funds became symbolic of a larger spending-slash debate taking place in Washington, D.C. Newly elected Republican congressmen came out swinging when they took office in January, threatening to rescind any unspent stimulus funds — high-speed dollars included.

‘A sad situation’

The program took an even bigger hit in February, when newly elected Florida Gov. Rick Scott announced he, too, was rejecting the $2.4 billion in federal HSR funds allocated to his state. Although Scott said during his campaign he wasn’t necessarily against HSR, he did say he wanted to review the project to make sure Florida taxpayers wouldn’t be on the hook for cost overruns.

Scott’s rejection was even more notable than Walker’s and Kasich’s because the federal government had pledged nearly all the money needed to construct the state’s Tampa-Orlando high-speed line, which would have served as the country’s first dedicated high-speed corridor. With offers from private-sector firms to help design, build, maintain, operate and finance the system, it could have been the poster child for HSR in the United States.

“Florida is, to me, a really sad situation because you had a state that had done more rail planning than perhaps any other,” says Carol, whose firm had a hand in the environmental and engineering work for Florida’s project, as well as many others in states such as Illinois, California, North Carolina and Connecticut. “You had a lot of planning that was wasted and it will become harder and harder for a state that’s ideal for a high-speed rail system to implement that system simply because no one has the confidence it won’t be killed again.”

Mica’s argument

The funding give-backs did shake some people’s confidence in the entire HSIPR program. Rep. John Mica (R-Fla.), who chairs the House Transportation and Infrastructure Committee, says he supports HSR development in the United States in places where he believes it makes sense, such as the Northeast Corridor (NEC). However, Mica also wants to see plenty of private-sector involvement in U.S. HSR development, and has criticized the FRA’s funding allocations to date.

During a March 11 hearing held by the Subcommittee on Railroads, Pipelines and Hazardous Materials to discuss intercity passenger-rail privatization, Mica voiced concern that the HSIPR program had lost credibility when Wisconsin, Ohio and Florida governors rejected the funds.

“I am so dismayed. I considered myself one of the strongest supporters of bringing true high-speed rail to the United States,” Mica said. “But the launch of high-speed rail has been an absolute disaster.”

The FRA’s Szabo disagreed at the hearing, saying he believes the program remains credible, and that the actions of three governors don’t reflect the actions of the majority of states that are proceeding with HSR plans.

But just one month later, the HSIPR program took yet another blow when Congress passed an FY11 continuing resolution that eliminated funding for the remainder of the year, plus rescinded $400 million of unobligated balances in the HSIPR account. Many HSR critics and other program followers took to the blogosphere, declaring the high-speed rail program was dead. House and Senate Republicans had won their battle, and the president didn’t even put up a fight, they said.

But the USDOT has painted a far different picture. During a May 9 press teleconference held to discuss the reallocation of Florida’s funds, U.S. Transportation Secretary Ray LaHood said high-speed rail remains a top priority for the Obama administration, which negotiated with Congress during the FY11 budget process. High-speed rail funding was one of the many concessions that had to be made.

“You didn’t hear any whining and complaining about that. The budget agreement that was reached was reached between Congress and the administration, and we’re not sitting around wringing our hands,” said LaHood, adding that President Obama’s FY2012 budget still includes $53 billion over six years for high-speed rail. “Based on the fact that we had 100 applications for $2 billion and those amounted to $10 billion, members of Congress around the country will understand very quickly that their people … want high-speed rail.”

HNTB Corp. Chair of High-Speed Rail Services Peter Gertler agrees that the FY11 funding cut isn’t as detrimental to the program as many have said it is.

“It’s really important to put this into perspective,” he says. “The administration has now granted just over $10 billion in grants, more than 30 states have been the recipients of those and that includes bipartisan participation. There have been some bumps in the road, but by no means does that mean the whole program is unraveling.”

For the time being, there’s plenty of HSIPR funding being put to work to keep states, engineering firms, suppliers and contractors busy.

“There’s a lot of implementation and execution to focus on here starting now and over the next year even, so there’s a lot to worry about other than new funding going forward,” says NRC’s Baker. “That being said, obviously the program will continue to need new federal funding coming in every year to maintain its momentum and build the network out.”

And at this point, future funding is the biggest uncertainty facing the HSIPR program. As Congress gears up to debate the FY12 budget, many congressmen have made it clear that budget cuts are the priority. Spending increases or funding for new programs will be very closely scrutinized. And that has HSR stakeholders concerned.

“Ten billion dollars is a lot of money any way you measure it, but it’s not enough to build these programs,” says Gertler, whose firm is in charge of engineering and program management for HSR projects in California, the Midwest, Northeast and Southeast. HNTB had a stake in the Florida project, too. “The greatest risk to the program right now is whether there will continue to be funding, and there’s no answer to that. There has been some discussion, but for now there is no clear commitment, and that’s worrisome.”

Gertler believes Congress may appropriate another billion dollars or so for the HSIPR program during the next two fiscal years. Szabo, too, is hopeful the program will gain more steam in FY12.

“Clearly the president believes we need to balance our budget and there are cuts that need to be made, but he also believes there are certain investments that have to be made, and investing in infrastructure is one of them,” Szabo says. “He understands the need for transportation investments and the need to balance our transportation network and the role that rail can play. It’s difficult times, but we believe the program can and should move forward.”

It’ll have a better chance of doing so if President Obama is re-elected in 2012. If a Republican took office and supported HSR, it’s unlikely that he or she would give it the same priority as Obama.

“Even though I can’t tell you right now where the money will come from, it’s hard to see a future where the president is re-elected and he continues to identify high-speed rail as his top transportation priority and there’s no money for it,” says Baker. “If he’s re-elected, it’s starting to look like that’ll be a key fork in the road.”

The bigger picture

But just claiming HSR as a transportation priority won’t be enough. The Obama administration will need to continue citing HSR as a necessary component to a national transportation network. Szabo believes they have a strong argument.

“Our vision here for passenger rail is comprehensive. It is based on the successful model that’s been used in Europe and Asia. Not every train goes 200 mph; it’s about having a comprehensive network,” he says. “The best analogy is the road system — it has local and city streets, country roads, state highways and the interstate system, and they all fit together to form a comprehensive road network. The interstate system couldn’t function without the feeder routes.”

But it’s not so easy to make a case for new transportation funding, especially these days, and especially when highway and transit lobbyists are making their own case for additional infrastructure investment.

“Is it fair to say that high-speed rail should suffer to preserve other transportation modes? I’d argue that’s not appropriate or fair, but those other programs are established and institutionalized, and high-speed rail is dealt with on a year-by-year basis,” says PB’s Carol.

And until HSR has a secure spot in the surface transportation program, it’ll continue to be a target for funding cuts — and criticism.

“There needs to be an established way of national planning, an established way of selecting projects and an established funding stream for those projects. You still need certain established criteria that creates credibility in the program,” Carol says. “The FRA has been doing a wonderful job of getting there, but there have been a series of application processes and money given back and then new funding rounds, and it creates criticism about the process.”

A lot of that criticism has come from members of Congress, who believe the FRA has not awarded grants for the right projects. A large chunk of the funds will be spent to upgrade existing intercity passenger-rail service operated by Amtrak — something that’s not sitting well with key members of the House Transportation and Infrastructure Committee.

“We will not achieve real high-speed rail in America by dumping 21 of 22 grants into the black hole that is Amtrak,” said Rep. Bill Shuster (R-Pa.), chairman of the committee’s Subcommittee on Railroads, Pipelines and Hazardous Materials in a May 9 statement responding to the redirection of Florida’s funds. “We need to focus government funds on the lines that make the most sense, and create incentives to bring the private sector to design, build, maintain and manage true high-speed rail lines.

A Private proposal

Mica and Shuster are developing a plan to do just that. On May 26, the congressmen announced they plan to introduce legislation that would transfer ownership of the NEC to a private entity and launch a competitive bidding process that would enable a public-private partnership to develop “true” HSR rail service along the route. The chosen firm could complete the project in about 10 years vs. the 30 years Amtrak has proposed in its long-range vision for high-speed rail in the NEC, and for a fraction of the cost, Mica and Shuster said.

However, HSR supporters argue that the federal government needs to commit a steady stream of funds for HSR development before the private sector will get involved.

Criticism of the HSIPR program is sure to continue, no matter how successful the program is or does become. Much of that criticism is premature, especially considering the long-term nature of infrastructure investment, Baker believes.

“These projects take years to build and sometimes even after that it takes years to convince people that there are alternatives to how they currently get around,” he says. “The results for these rail infrastructure investments have useful lives of 30, 40, 50, sometimes 100 years, so the fact that everybody has rushed to judgment about this program so quickly … much of it feels political or even ideological because there’s just no way to reasonably know at this point whether much of this investment will be effective or not.”

But if HSR is ever to gain more traction as a key transportation mode, the return on investment eventually will need to be clear — crystal clear, Baker adds.

“It will be crucial to execute the program well. These projects had better get built on time and on budget and they better show some serious ridership increases once they’re done,” he says. “We’ve got to have success stories. It’s going to be a hard lift [to secure funding] no matter what; it’ll be an impossible lift if we end up with a bunch of stories about failed projects.”

Folks at the FRA feel that pressure on a daily basis as they work to finalize the remaining grant agreements with states under the watchful eye of a skeptical Congress. HSR critics are sure to pounce on any slip-up, or perceived slip-up, the FRA makes, just as they’re sure to disparage any progress the agency might make. For Szabo, it’s important to keep his employees focused on the task at hand.

“I tell my staff here, ‘Don’t pay any attention to the outside noise. Just keep doing good work and from good work, good projects follow,’” says Szabo.

Szabo seems to be following his own advice. He also finds comfort in knowing he’s not the first head of a federal agency in charge of such a closely scrutinized program. The Federal Highway Administration encountered similar criticism as it worked to develop the interstate highway system under the Eisenhower administration in the 1950s. Despite a series of fits and starts, concerns about funding and a slew of skeptics who questioned the need for such an extensive road system, the interstate highway system has become a necessary transportation link in the United States.

The high-speed rail program is following a similar path, but administration officials believe they will be able to continue navigating their way along it.

“Progress isn’t linear. There will be peaks and valleys, but we’ll continue to move forward,” Szabo says. “We have great confidence in the program, where it’s going and what we’ve achieved to date.”

E-mail comments to Angela Cotey, Associate Editor.



Keywords

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