Is High-Speed Rail on the Horizon?

Jan. 22, 2010
Increased funding could present opportunities for manufacturing, but viability questions remain.

Part of President Obama's plan to revitalize U.S. manufacturing includes funds to develop a high-speed rail network. When Obama issued his "framework for revitalizing American manufacturing" in December, he said he would propose an additional $1 billion per year on top of $8 billion Congress already committed to develop high-speed rail.

On Dec. 4, U.S. Transportation Secretary Ray LaHood said more than 30 rail manufacturers and suppliers, both domestic and foreign, had committed to establish or expand their operations base in the United States if they're chosen by states to build high-speed rail lines.

Some of those manufacturers include GE Transportation, Lockheed Martin, Siemens and American Railcar Industries. In a subcommittee House hearing in Pittsburgh last June, GE Transportation CEO Lorenzo Simonelli said his company is prepared to build high-speed diesel-electric passenger locomotives in northwestern Pennsylvania.

"We are ready to partner with the federal government, the states and Amtrak to make higher and high-speed passenger rail a reality by providing locomotives made in the United States of America rather than importing technology and products from overseas," Simonelli said.

The Plan

Obama's plan would include10 major corridors in the United States of 100 to 600 miles in length for high-speed rail systems. Potential areas identified by the president for high-speed rail include lines that would connect the cities of the Pacific Northwest; southern and central Florida; the Gulf Coast to the Southeast to Washington, D.C.; Pennsylvania and New York to the cities of New England; and a central hub network that draws Chicago and other industrial Midwest cities closer together.

So far, state support for the program has been strong, according to LaHood. As of Dec.4, the Federal Railroad Administration had received 45 applications from 24 states totaling approximately $50 billion to proceed with high-speed rail corridor programs and 214 applications from 34 states totaling $7 billion for corridor planning and smaller projects.

When Obama first announced his vision for high-speed rail in the United States, he noted successes in France, where the system "has pulled regions from isolation, ignited growth, remade quiet towns into thriving tourist destinations," and similar stories about Spain, China and Japan.

But some argue that high-speed rail hasn't worked out so well in other countries, and in areas such as California where rail initiatives are underway, the plan has been met with some opposition.

A high-speed rail system would be utilized by few Americans and cost more than highway travel, according to a report written by Randal O'Toole, a senior fellow with libertarian think tank the Cato Institute.

What's the True Cost?

In his September 2009 report "High-Speed Rail is Not 'Interstate 2.0,'" O'Toole cites National Transportation Statistics that show the average American traveled 4,000 miles on interstates in 2007, while high-speed rail proponents estimate Americans would ride less than 60 miles per year on the federal rail system.

On average, residents of France and Japan ride high-speed trains less than 400 miles per year, a number that would be difficult to approach in the United States because of greater geographic expanse and lower population densities, according to O'Toole.

Part of the problem, notes O'Toole, is that trains would only stop in 65 of the nation's 100 largest urban areas, leaving people in smaller cities and towns to access high-speed rail by driving to a major city.

As for cost, O'Toole says Congress has underestimated the project's total expense when it approved the initial $8 billion funds. The federal plan calls for about 8,500 miles of moderate and high-speed rail routes using existing tracks at a $3.5 million-per-mile cost, totaling nearly $30 billion, O'Toole says.

In addition, plans for faster trains on entirely new tracks in California and Florida could push the total price up to $90 billion, according to O'Toole.

Planning Issues

A California legislative report released on Jan. 13 concludes the state's high-speed rail plan lacks many specifics, including unknown confidence in cost, revenue and ridership projections.

In addition, fare forecasts have increased since voters first approved the proposition. The 2008 plan showed fares would cost about $55 one way between Los Angeles and San Francisco, the Palo-Alto Daily News reported. But a new plan calls for a one-way fare of $105, the paper reported.

Confusion over the cost to implement a national high-speed rail system doesn't appear to be getting any clearer. Continued multiyear funding will be necessary to make high-speed rail a reality, says Matt Mayrl, national policy director at the Apollo Alliance, a green jobs labor group.

While there aren't many U.S. manufacturers currently involved in the passenger rail industry, with the right policies in place Maryl says high-speed rail could add jobs throughout the supply chain with new demand for components and infrastructure.

Before that happens, though, legislators need a better understanding of whether the benefits associated with such a major infrastructure project will indeed outweigh the costs.

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