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May 2009

Rail News: Passenger Rail

The Stimulus Express: Intercity Passenger Rail and High-Speed Rail

By Angela Cotey, Associate Editor

Early versions of the stimulus package included, at most,$2 billion for high-speed and intercity rail. And even that amount, let alone anything more, seemed like a long shot — even to high-speed rail advocates.

“During the stimulus debate, we were blocked by everybody because there was nothing shovel-ready for high-speed rail,” says Rick Harnish, executive director of the Midwest High Speed Rail Association. “We did an email campaign saying high-speed rail should receive $5 billion and took a lot of abuse with people saying it was unrealistic.”

Harnish recalls waking up the morning the legislation was approved and “waiting to see how much high-speed rail got cut.” Imagine his (and many others’) surprise to find the stimulus committed $8 billion to high-speed and intercity passenger rail — a direct request from President Obama himself.

“The president has made high-speed rail his No. 1 priority,” says Harnish.

On April 16, Obama further displayed his support when he unveiled a strategic plan outlining his vision for high-speed rail in America, one that he likened to President Eisenhower’s vision for the interstate highway system.

“My high-speed rail proposal will lead to innovations that change the way we travel in America,” Obama said in a statement. “We must start developing clean, energy-efficient transportation that will define our regions for centuries to come. High-speed rail is long overdue.”

The strategic plan outlines 10 high-speed rail corridors as potential recipients for stimulus dollars: the California, Pacific Northwest, South Central, Gulf Coast, Chicago Hub, Florida, Southeast, Keystone, Empire and Northern New England corridors. Amtrak’s Northeast Corridor also could be eligible for funds, as well as other high-speed rail projects not included in the federally designated corridors.

A range of opportunities

Funds can be used to create new corridors or make incremental improvements along existing rail lines to operate faster trains. The grants will be awarded for individual, ready-to-go projects, as well as programs that call for developing phases of high-speed rail corridors that have completed planning and environmental work, and have a prioritized list of projects. In addition, funds will be available for states to conduct planning activities on corridors where projects are not yet ready to “establish a structured mechanism and funding stream for future corridor development activities,” according to the strategic plan.

In the first round of applications, the Federal Railroad Administration (FRA) — which is administering the grants — will focus on projects that can be “completed quickly and yield measurable, near-term job creation and other public benefits,” according to the strategic plan. The second round will include proposals for comprehensive high-speed programs covering entire corridors or sections of corridors.

The FRA is required to release grant application guidelines by June 17, though the president and U.S. Transportation Secretary Ray LaHood are “committed to coming out with them before then,” says FRA spokesperson Warren Flatau.

“There’s a lot of work going on right now in terms of developing the organizational infrastructure to administer this grant funding,” says Flatau, adding that the FRA has never administered a competitive or discretionary grant program, which is why the agency has been given a longer timeframe to award grants than other agencies that are doling out stimulus dollars.

However, the FRA suggests that states or high-speed rail authorities seeking to get a head start on the application look at how the FRA structured the Capital Assistance to States – Intercity Passenger Rail Service Program established last year. The program provided $30 million in federal funds to match local investments in capacity projects, says Flatau.

“They intend to structure it, in general terms, in that same way,” he says.

The FRA expects to begin awarding the first round of grants in late summer, possibly by late August, says Flatau.

“They’re working on a very aggressive timetable, and a lot of states are trying to start putting things together despite not having exact application guidelines,” he says.

Defining high-speed rail

The fast pace at which the stimulus process is moving could be a bit overwhelming for some states that don’t have the resources in place to develop “true” high-speed rail systems (i.e., with trains operating at speeds higher than 200 mph), says Harnish.

“While the name of our group is the ‘high-speed rail association,’ we haven’t been working on it for years — we always hoped to get a constituency built around what you can call ‘super commuter rail’ at 110 mph, and then we can talk about high-speed rail,” he says. “So here we are at a spot where no one in the Midwest even knows where you would put high-speed lines, how much it will cost and what the transit times would be.”

Now, Midwest high-speed rail stakeholders are discussing right-of-way issues and high-speed rail costs while continuing to promote incremental improvements that would bring trains speeds up to 110 mph in key corridors.

“Spain’s secondary lines are running at 110 mph, so we do need to do 110 mph upgrades, but we also have to get aggressive about designing 220 mph track in intense corridors,” says Harnish.

And there are plenty of incremental improvements that could be completed. Last month, the governors of Illinois, Indiana, Iowa, Michigan, Minnesota, Missouri, Ohio and Wisconsin, as well as Chicago Mayor Richard Daley, sent a letter to Secretary LaHood seeking federal support for a regional high-speed rail network. Using Chicago as the hub, the network would include routes to St. Louis; Madison, Wis.; and Detroit and Pontiac, Mich. If the states obtained $3.4 billion in federal dollars, they could complete 110-mph upgrades on the lines between 2012 and 2014.

The states also could use about $130 million to continue planning work for several additional corridors, such as between Madison and the Twin Cities; Chicago and Indianapolis and Cincinnati; and Chicago and Toledo and Cleveland, Ohio. The Midwest high-speed rail proposal has a decent shot at obtaining some stimulus funds, NRC’s Baker said during the Webcast.

“The proposal for the Chicago Hub network is tied in with the city’s bid for the 2016 Olympics, which are obviously very near and dear to the president’s heart,” he said.

However, the strategic plan stipulates that stakeholder agreements must be in place with states, rail operators and infrastructure owners (in most cases, freight railroads) in order for a state to obtain high-speed stimulus funds, said Baker. The latter will be the most challenging.

“[BNSF Railway Co. President, Chairman and CEO] Matt Rose is on public record saying that any passenger train traveling above 90 mph can’t share the same track as freight trains because of maintenance needs and the laws of physics,” said Baker. “That’s a big outstanding issue, and it’s taking on much more urgency now that there’s billions in public money sitting out there.”

Shared benefits

Southeast High Speed Rail Authority (SEHSR) officials also will need to work with freight railroads — specifically, Norfolk Southern Railway and CSX Transportation — to carry out improvements that will help bring their Washington, D.C.-to-Charlotte, N.C., corridor up to 110 mph.

They don’t anticipate having much trouble; the states of Virginia and North Carolina have been working on track upgrades that benefit both passenger and freight railroads for years. The stimulus package could help advance corridor improvements not only for passenger trains, but CSX’s National Gateway and NS’ Crescent Corridor, as well, says North Carolina DOT’s Simmons.

“We all need capacity, so we’re looking at doing things like adding double track, building new sidings, extending sidings and building universal crossovers,” he says.

SEHSR officials currently are reviewing project lists and ranking projects that already have agreements in place, and environmental and engineering work well under way.

“We’ve talked about these projects for months and even years, so we know what they are,” says Simmons. “We have a partnership with Virginia, and that will make both states very competitive because the government is asking us to not only stimulate the economy, but they also want something that will be part of a national network. We’re trying to figure out how it all fits together in a coherent way, not just in year one, but in year five.”

Stimulating activity

Although the high-speed rail grants won’t begin to be distributed for several months, SEHSR officials already have been approached by firms seeking to enter into public-private partnerships to complete some of the projects, says SEHSR Project Manager David Foster. And while stimulus-related job creation is still a ways off in the high-speed sector, ARRA has stimulated plenty of activity.

“We were working hard before, but now a lot of other decision makers, including or governor, are asking what we can do and how quickly we can make it happen,” says Foster, joking that “it might not have reached the economy yet, but it’s sure wearing us out.”

In addition, engineering firms planning to bid on high-speed projects might soon have to bring back laid-off workers because the bidding process alone is a major undertaking, Foster added.

The California High Speed Rail Authority (CHSRA) stands to gain a significant share of the ARRA funds, as its development plans for a statewide high-speed rail system with trains operating at 200-plus mph is further along than any other U.S. high-speed program.

The authority currently is in the design engineering phase for the corridor’s first segment, between San Francisco and Anaheim. CHSRA also has a significant state commitment working in their favor; in November, voters approved a $9 billion bond measure to help finance the project’s first phase.

“By that measure, they’re far ahead of other applicants,” said NRC’s Baker.

CHSRA hopes to obtain at least $3 billion in stimulus funds, says Chairman Quentin Kopp. Without knowing the specific stimulus guidelines, the authority anticipates applying for funding to build a maintenance facility in or near Merced, Calif., and storage yards in the Bay Area and L.A. Basin. CHSRA also hopes to receive $500 million for right-of-way acquisition.

However, the FRA has specified that projects must have “independent utility,” said NRC’s Baker, meaning that if plans for a high-speed rail system don’t pan out as expected, the individual projects still will be useful on their own.

“In California, that will be key — if the full program doesn’t turn out as it’s envisioned or gets delayed 10 or 20 years, the feds want to make sure the money isn’t being wasted,” he said.

But CHSRA also plans to apply for stimulus funds that would benefit regional or local transit agencies as well as high-speed rail, such as eliminating three grade crossings between Anaheim and L.A., along Metrolink’s corridor, and three in San Bruno, along Caltrain’s right of way. The authority also might apply for funding to electrify Caltrain’s commuter-rail corridor; CHSRA plans to use the same communications, signaling and train-control systems as Caltrain would use on the electrified corridor, says Kopp.

The stimulus dollars for high-speed rail will more than fulfill their intended purpose. They also will likely have some bigger-picture implications.

“This will create an enormous amount of jobs. I think it will surprise people,” says Wisconsin Transportation Secretary Frank Busalacchi, who also serves as chairman of the States for Passenger Rail Coalition. “There’s a lot of infrastructure that has to be put down. Then you have to purchase equipment, then once the systems are up and running, there’s the maintenance need and operations.”

Advancing U.S. high-speed rail programs also will create new business opportunities, adds Busalacchi, who served as a member of the National Surface Transportation Policy and Revenue Study Commission.

“We now have the demand for high-speed rail,” he said. “If you look at the corridors, for example, Milwaukee to Madison, we’d be ready to purchase trainsets within two, two-and-a-half years — it’s not like it’s 10 years away. This could happen very quickly.”

Keep the investment coming

And therein lies an opportunity for U.S. companies to cash in on the high-speed rail evolution.

“There are Buy America provisions [in the stimulus bill], so American companies could be building these systems,” says Busalacchi. “Eventually, a company is going to have to make a serious financial commitment to build these trains in this country.”

Likewise, the federal government will need to make serious long-term financial commitments in order to keep high-speed rail projects progressing, advocates say. The stimulus bill is a good first step — as is the president’s proposal to provide an additional $1 billion annually for high-speed rail for the next five years — but many billions more are needed.

“Having this $8 billion approved is a clear recognition that there’s a long-term stimulus that needs to happen, and that’s a major rework of our economy,” says Midwest High Speed Rail Association’s Harnish. “But we need to be spending $8 billion a year, minimum.”


Intercity Passenger Rail And High-speed Rail — $8 billion

  • $8 billion to be awarded by USDOT to states, intercity passenger rail or high-speed rail authorities, or Amtrak
  • Funds to be obligated by Sept. 30, 2012


The Bigger Picture

In the short and mid-term, the stimulus package will help transit agencies and Amtrak get a better grip on infrastructure improvements and expansion programs.

It even could have a bit of a trickle-down effect to help agencies alleviate budget constraints.

“I think this will take some pressure off capital programs in the months and years ahead to allow some agencies to focus on their operating budgets, which have the most immediate need — and that’s highly a function of the recession and the impact it’s having on our primary funding sources,” says GCRTA’s Calabrese.

In the long-term, certain aspects of the stimulus bill — the high-speed rail portion, in particular — set the stage for continued investment in previously unfunded or under-funded programs.

“To decide you’re going to head in this direction — for reasons of transport policy, the economy, land use, the environment, energy policy — it’s a great step forward,” says North Carolina DOT’s Simmons. “We’ll have good success out of this investment, but we need to follow through with it to realize all the benefits.”

National policy still needed

For some, following through means getting serious about developing a national transportation policy.

“We really need to be looking at what we want to achieve and what it will take. Until you do that, this is just willy nilly, piecemeal,” says James Simpson, former FTA administrator and another Spartan Solutions co-founder.

Funding is another discussion in and of itself.

“We’re financing our transportation program with a fuel tax that’s woefully inadequate. Here, the fuel tax is 18.5 cents; in Europe, it’s $4.50,” says Simpson. “That’s why they have hundreds of billions to spend on transportation infrastructure each year and we have $40 billion. That’s how they can have bullet trains.”

And that’s why existing funding mechanisms, protocol and formulas — the same ones the stimulus bill is based on — won’t cut it in the long run, transit officials say.

But industry insiders also acknowledge the ARRA regulations and funding are a step in the right direction, and believe the next surface transportation bill will be the real test as to how well Congress and the Obama Administration “get” the country’s transportation infrastructure needs.

“We need to look at things differently, look at how we approach transportation projects in general,” says DART’s Thomas. “As we do that, it will further elevate opportunities for transit projects.”


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