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Railroads need congressional backing to pursue public-private partnerships, AAR's Hamberger says


Congress should support public-private partnerships to fund rail infrastructure improvements because the public benefits when more freight moves by rail, Association of American Railroads President and Chief Executive Officer Ed Hamberger told members of the U.S. House Transportation and Infrastructure Committee's Railroad Subcommittee during testimony June 26.

Rail can help reduce congestion and air pollution, improve safety and enhance mobility, but financial markets will only fund investments that provide a reasonable promise of a direct economic benefit to the investing railroads, he said.

"Public-private partnerships provide a means for transportation planners and providers to effectively meet vital transportation needs by combining the efficiency of the private sector with the equity of public participation," said Hamberger, citing the recent partnership agreement in Chicago between the city and Class Is, which "is expected to produce a stream of hundreds of millions of dollars in public benefits just to the Chicago region."

AAR is opposed to the Local Railroad Rehabilitation and Investment Act (H.R. 876), which would establish a rail trust fund to pay for rail-infrastructure projects. Most of the money would be raised from Class Is and rail customers, but proceeds would be distributed by the government "minus inevitable bureaucratic overhead," said Hamberger.

"The pressure to use these funds to finance non-Class I projects — including passenger rail, highway-rail crossing traffic-control devices or short-line railroad infrastructure — would be tremendous," he said.

If taxes are used to fund a rail trust fund, shipping costs would increase.
"The net effect of this would be to needlessly divert rail traffic to trucks, with attendant negative ramifications for economic efficiency, congestion, the environment and safety," said Hamberger.

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More News from 6/27/2003