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NRC's Baker provides insight on stimulus bill's rail-industry impacts


Yesterday, Progressive Railroading hosted a webcast to review the rail and transit portion of the American Recovery and Reinvestment Act. Chuck Baker, president of the National Railroad Construction and Maintenance Association Inc. (NRC), offered information and insight on how the legislation has and will continue to impact the freight, transit, intercity and high-speed rail industries.

Although the bill doesn't specifically include funds for the freight-rail industry, freight railroads could benefit from several general transportation funding pots. The bill includes $27.5 billion in "highway" money allocated to state departments of transportation and local metropolitan planning organizations, which can be "flexed" to fund freight- and passenger-rail projects.

So far, several states have chosen to flex some of those dollars for rail projects — including Kansas, Iowa, Oregon, Texas, Washington and, most notably, Ohio, says Baker, who is a senior associate at Chambers, Conlon & Hartwell, L.L.C., which represents and lobbies for the NRC and American Short Line and Regional Railroad Association. The state has awarded more than $60 million in "highway" money for rail projects, including $20 million for a CSX Transportation double-stack clearance project, $20 million for a Norfolk Southern Railway line relocation in Youngstown, $11 million for a rail highway safety upgrade in Lima, $7 million to upgrade the state-owned Panhandle Line and $6.5 million for the NS Airline Yard Rail project.

The recovery act also includes $1.5 billion for a surface transportation infrastructure discretionary grant program. Although program guidelines have not yet been issued, Chicago's CREATE program seems tailor-made for the program and Baker expects it will receive a portion of the funds. However, because port, freight and passenger rail, and highway projects are eligible for the funding, Baker believes the individual grants won't top much more than $100 million apiece.

"I anticipate a massive oversubscription of interest for the highly competitive program ... perhaps $15 billion or more worth of applications," said Baker.

Freight railroads also might benefit from some of the $8 billion included in the bill for intercity passenger rail and high-speed rail funding, since much of the country's intercity passenger rail services operate over freight-rail tracks.

On the transit side, the bill includes $6.9 billion for transit capital assistance formula grants. Each transit agency already knows how much money it's receiving through the program and Baker expects to see "a continuing stream of award announcements from transit agencies through March 5, 2010," the deadline for all funds to be obligated.

The transit portion of the recovery act also includes $750 million for fixed guideway modernization and another $750 million for New Starts. Although New Starts guidelines have not yet been issued (an announcement is expected in "the not too distant future," said Baker), the criteria is expected to heavily focus on projects that already are part of the New Starts program, which will enable the agencies to obligate the funds quickly. Agencies would be  most likely to receive funds in areas such as New York City, Utah, Phoenix, Seattle and Dallas, Baker said.  

Meanwhile, the bill includes $1.3 billion for Amtrak, a "very meaningful amount of  money" for the national intercity passenger railroad, as it's just shy of what they typically receive in an annual appropriation.

"They essentially doubled their annual appropriation in one shot," said Baker.

The Federal Railroad Administration already has been distributed the funds to Amtrak, which recently published its project list. All projects must be completed by Feb. 17, 2011.

Finally, the legislation includes $8 billion for intercity and high-speed rail.

"The split between the two is not specified, and that's on purpose," said Baker. "It's Congress' way of saying, 'We want to give you flexibility based on the applications you get.'"

Funding guidelines will be issued by June 17. Baker expects the California high-speed rail program, which has $9 billion in state funds obligated for its project, to receive a large sum of money, as well as the Midwest/Chicago Hub network, which is touting the role high-speed rail could play in helping Chicago win a bid for the 2016 Olympics as a reason why it should receive a chunk of the funding.

With all the opportunities available through the stimulus bill, railroad contractors and suppliers should be contacting railroads, Amtrak and transit agencies to make them aware of their capabilities and availability, and helping to lobby state DOTs to flex highway stimulus funds for rail projects, Baker said.

For more on the stimulus bill, and what it being or could be used for, see the May issue of Progressive Railroading.

Angela Cotey

Contact Progressive Railroading editorial staff.

More News from 4/23/2009