1. Finally, at last, after waiting oh, so very long (Too long, in fact.), SunRail, the 61 mile long commuter rail system in Central Florida serving the Metropolitan Orlando area is about to be a reality.

   Just hours ago, the Florida Senate, meeting in a special session, passed HR 1, a bill to create SunRail and to also permanently fund South Florida’s Tri-Rail system.

   Life is good.

   SunRail had failed twice before in the Florida Senate, two years in a row in the legislature’s regular annual sessions. The Florida House each time overwhelmingly passed the proposal, but a spiteful state Senator from the small city of Lakeland, Senator Paula Dockery, did her best to kill SunRail because she was mad her husband’s original, too-expensive, ill-advised bullet train scheme was made to go away by former Governor Jeb Bush almost a decade ago.

   In a rare change of places in politics, the Republicans were pushing for SunRail, and the Democrats were mostly against it. Senator Dockery, who is now running for governor in next year’s state elections, is also a Republican.

   Overall, SunRail had bipartisan support on many fronts, but the trial lawyers were originally against it because the original bill protected CSX, which is selling the track and infrastructure to the State of Florida for hundreds of millions of dollars wanted reasonable risk protection for any freight trains it would continue to run in off-hours when SunRail wasn’t running between Deland, a far northern suburb of Orlando in Volusia County (near Daytona Beach), through the heart of downtown Orlando via Sanford (home of Auto Train’s southern terminus), Casselberry, Longwood, and Winter Park all the way down to Poinciana, to the southwest of Orlando, near the theme park area of Orlando (Walt Disney World, SeaWorld, Universal Studios).

   There was a fuss by the unions, who claimed the Republican-ruled State of Florida government was union-busting. At the last moment, they came to an agreement through some sort of backroom deal, and the unions relented and allowed the Democrats to vote for SunRail.

   But, mostly, for the first two years, SunRail failed because of one Senator, Paula Dockery. She used every piece of disinformation and distortion she could find to kill SunRail out of spite, and she cut deals with as many other senators as she could on unrelated topics to buy their votes in her favor. It took the untimely death of a longtime Senator from here in Jacksonville, who supported the concept of SunRail, but voted against it due to a deal cut with Senator Dockery, for the bill to finally pass. The dearly departed Senator’s elected replacement was one of the chief paid lobbyists for SunRail the previous year, so his vote was an automatic “yes.”

   In the end, it all came down to politics and perception. SunRail was touted as a job creator (no doubt about that), and it was touted as a budget buster, taking money out of the mouths of babes and education opportunities away from school children, not to mention all of the alleged hospitals and clinics which wouldn’t be built because of the cost of SunRail.

   It was only when the Republican majority in the Florida Senate realized it wouldn’t be prudent to go against the Republican President of the Senate and the Republican Governor that some sense came into focus.

   In the mean time, United States Department of Transportation Secretary Ray LaHood came to Florida earlier this year and made it very, very clear if SunRail was not approved, and a funding source found for Tri-Rail, then Florida would be completely out of the running for any federal stimulus funds to build the proposed high speed rail routes in Florida. Added to Secretary LaHood’s admonishment were similar dire warnings from Republican Senator George LeMieux and Democratic Senator Bill Nelson (of NASA and space travel fame), as well as a varied assortment of Members of Congress.

   So, no matter how good the plan, how good the plan is for the citizens of Florida and Central Florida’s tens of millions of annual visitors from around the world, it all came down to a few votes and a lot of political pressure.

   Is that any way to run a railroad?

2. Here is who will benefit from the SunRail/Tri-Rail bill:
   • The majority of SunRail will run fairly parallel to Interstate 4, the main highway through the very middle of downtown Orlando. Interstate 4 is best described as a slow moving parking lot any time between 7:00 A.M. and about 8:00 P.M., and if there is a wreck, well, don’t plan on being home for dinner on time.

     As with all commuter rail systems, the sudden appearance of commuter trains will do nothing to alleviate traffic congestion; you couldn’t run enough trains with a two minute headway on a triple track mainline to take care of Central Florida’s driving problems. The benefit of SunRail is it will provide a reasonably priced, reasonable time alternative to driving on Interstate and surface roads, so almost every commuter in and out of downtown Orlando or commuters traveling from one side of Metropolitan Orlando to another will have the opportunity to take the train and possibly benefit.

   • The Orange Blossom Expressway, a second proposed commuter rail system in Central Florida will also benefit. This much smaller system will connect in downtown Orlando with SunRail, coming from far suburban counties to the north of Orlando. This system will travel over rails currently owned by a short line railroad. The start of SunRail could prompt this feeder system to get off the ground faster.
   • Everyone in the engineering and related fields, plus many in the construction industry will benefit, almost immediately.

     SunRail is probably one of the projects which is actually “shovel ready” and will have a relatively short construction window before beginning service. The current CSX infrastructure is excellent, and it won’t take much to upgrade what is already there to make it commuter-system ready. There will be some double tracking required, and the construction of local stations will take place, but none of those are years-long projects, especially with the year-round, construction friendly warm climate of Central Florida.

   • CSX will hugely benefit; it’s selling 61 miles worth of infrastructure it currently pays taxes on to the State of Florida for over $400 million, and it still gets to run as many freight trains as it wants over the tracks in off hours for – are you ready for this? – $1.00 a year. (Yes, one dollar.)

     Additionally, CSX gets more tens of millions of dollars to upgrade the former Seaboard Air Line Railroad main line through Ocala to divert trains from the former Atlantic Coast Line Railroad main line through Orlando it is selling to the State of Florida for SunRail. The money for diverting the traffic will go to more infrastructure improvements on the old SAL line such as grade crossings, more sidings, better signaling, and the construction of several highway and road overpasses in congested areas.

     CSX will also build a brand new Intermodal facility southwest of Orlando in Polk County, abandoning its older, smaller, more expensive to operate facility in Orlando that is currently on the SunRail route. The upgraded CSX/SAL line via Ocala will handle the diverted traffic from Orlando and the old Intermodal facility and take it all to the new facility.

   • Palm Beach, Broward, and Miami-Dade Counties, the host counties of Tri-Rail, will all benefit from this legislation. In lieu of the desired $2.00 per day surcharge (A nice synonym for “tax”) on rental cars in each of the three counties, excess state transportation funds will be used for Tri-Rail. Each of the three counties will still contribute to Tri-Rail finances on an annual basis, but the three counties will not be solely responsible for funding the commuter rail system.

     This will also most likely clear the way for a huge expansion of Tri-Rail into a “Y” shaped system. The former inland SAL main line Tri-Rail now calls home parallels – in some cases just by a matter of city blocks – the current main line of the Florida East Coast Railroad (FEC), a private subsidiary of RailAmerica, based here in Jacksovnille. The FEC for years has been hoping for a similar deal CSX received over two decades ago to sell its track and infrastructure to an expanded Tri-Rail system, while retaining similar rights as CSX has to run over Tri-Rail in off hours.

     As with CSX, the FEC would be relieved of the tax burden of ownership and the costs of maintenance and insurance on about 75 or so miles of very expensive, urban track and infrastructure if Tri-Rail buys its line from the north of West Palm Beach (Around Jupiter, Florida.), south all the way into downtown Miami.

     Since Henry Flagler and the FEC in the late 19^th and early 20^th Centuries were the original builders of all of the East Coast of Florida south of St. Augustine for all practical purposes, the FEC line has a superior route through the middle of downtowns and urban areas than the old SAL line which was not completed into South Florida until the Florida Land Boom in the 1920s. The FEC had all of the downtowns and track which hugged the South Florida beaches, and the Seaboard was forced to build further to the west in the suburbs and swamplands on the edge of the Florida Everglades south of West Palm Beach where the line swung east from its route through Winter Haven, Sebring, and skirting Lake Okeechobee.

     Tri-Rail plans to keep its current system, and add trackage to the north and south of West Palm Beach on the FEC. This is the same trackage which is part of Amtrak’s high speed rail proposal for Florida, vying for part of the $8 billion in stimulus money to be awarded later this Winter.

   • Every other proposed commuter rail system in the country will benefit from the passage of the SunRail bill because from the beginning, the bill has been a model of rational, reasonable planning, with no pie-in-the-sky ridership figures, too-conservative costs, or too-extravagant revenue figures. SunRail was conceived and planned using real world numbers and real world expectations. Like the Northstar system in Minneapolis, and the Trinity system in the Dallas/Fort Worth area, SunRail most likely will exceed expectations on opening day.

     The deal struck with CSX, similar to the deal the Commonwealth of Massachusetts struck with CSX to expand its state commuter system outside of Boston, most likely will become a model for all future deals with CSX, which is good. CSX will receive huge benefits from the deal, which is to be expected as CSX acts on behalf of its shareholders. While CSX will benefit, the public will also benefit in any number of ways, not the least of which is access to private railroad infrastructure CSX has no duty to share with anyone else it doesn’t choose to do business with on any particular day. But, both the SunRail and Massachusetts projects demonstrate how everyone can win, and life goes on with everyone benefitting.

   • Amtrak will greatly benefit from SunRail; it will have the benefit of the upgraded infrastructure necessary for SunRail, plus the upgraded shared station facilities, and more friendly dispatching since there will be very little freight train activity south of Jacksonville (Where ALL freight trains came into Florida to be funneled south into Florida’s peninsula) on the former ACL line/now SunRail line for 61 miles in Central Florida. For about 210 miles from Jacksonville to the Auburndale cutoff where Amtrak trains turn from the former ACL line onto the former SAL line for the run into Miami, Amtrak trains should have a mostly clear shot of clean dispatching with very little freight train interference. This could lead to a shortening of Florida schedules since the northbound Silver Meteor and Silver usually arrive into Jacksonville ahead of schedule.

     Another benefit to Amtrak will be a heightened awareness of passenger rail travel by the commuters on SunRail; passenger-train-aware people are more likely to be receptive to long distance train travel. Hopefully, Amtrak will make the most of this by heavily promoting Amtrak trains at commuter stations.

   • U.S. Railcar, which is now the proud owner of the former Colorado Railcar designs for both single and bi-level commuter trains should benefit greatly from today’s vote. The original plan, when Colorado Railcar was still a viable company, called for that company’s DMUs to provide all of the motive power and consists for SunRail, and it’s highly likely any expansion of Tri-Rail in South Florida will also use these same DMUs which have undergone field tests on Tri-Rail in the past few years. Perhaps this will help U.S. Railcar with its request for a federal grant to construct a factory in Ohio to build these self-propelled railcars.
   • Transportation planners in Jacksonville to the northeast of Central Florida, and in the Tampa Bay area to the southwest of Central Florida have won a major victory. In addition to the creation of SunRail and the funding of Tri-Rail, the enabling legislation also creates two new state programs to deal with all present and future commuter rail systems in Florida. As far as state government is concerned, commuter rail in Florida “has arrived.”
   • Real estate developers and entrepreneurs will benefit greatly. Even though Central Florida is very densely built-out and populated, look to new mixed use housing and retail and office developments to spring up within walking distance (Even in the Florida heat and rain in the Summer.) of the new SunRail stations.
3. Here is who will not benefit from the SunRail/Tri-Rail bill:
   • Anyone who intentionally buys or builds a home near an existing railroad track which has been in place since the late 19^th Century. The NIMBYs lost; the train tracks which were built to handle traffic will continue to do so, and those opposed to trains will have to find a life elsewhere.
   • The anti-rail talking heads who make careers out of making arguments which are usually a couple of French fries short of a Happy Meal against commuter rail and any other type of rail. Often, what’s old is new, and commuter rail is making a comeback in this country and will have a happy life alongside the automobile and sport utility vehicles of the world. While the return on investment in SunRail and Tri-Rail may not happen in exactly the same way or following the same formula which works for building more and more roads and highways, the ROI on commuter rail has a proven record of success beyond the tired “green” and “sustainability” arguments which are – by themselves – no complete arguments at all for huge projects such as commuter rail.
   • Asphalt and concrete manufacturers. Instead of laying literally miles and miles of asphalt and concrete on new roads, these folks will have to settle for acres of new asphalt and concrete on new commuter rail station parking lots and access roads.
4. As a final note, we should examine Amtrak’s role in all of this. Some had suggested in order to go around various liability questions with CSX and other issues before this bill was passed Amtrak should simply be the operator or SunRail, and many of those issues would go away.

   Amtrak is consistently the most expensive commuter system operator in the country, with a less than stellar record (See the immediate previous issue of TWA to this issue and the discussion of Amtrak’s failures in California operating the Pacific Surfliner service on behalf of California.).

   Here is something to think about: If Amtrak were no longer America’s best kept secret, and the company promoted itself like any other American company, more Americans would know of and understand passenger rail.

   Reading the online news articles about SunRail and the accompanying idiotic, knee-jerk reactions to SunRail by uninformed readers was a tragic exercise. It appears a certain element of our society absolutely hates anything to do with passenger rail, and think it should be consigned to museums and Third World countries. These people have no idea, nor rational concept of the many economic and social benefits of passenger rail. Many of these people would rather give up their firstborn child than their automobiles.

   There is nothing wrong with choice, just as there is nothing wrong with someone choosing to only travel in their personal vehicle. That’s the kind of choice we take for granted in this country, and we cherish to right to make that choice.

   But, while keeping that same right to choose, we should not be taking away the rights of others who choose to travel by a means other than a personal vehicle.

   Amtrak carries two tenths of one percent of America’s travelers, which is hardly a blip on anyone’s screen. Amtrak is – and remains – statistically irrelevant to American transportation.

   If Amtrak chose to be a healthy, relevant passenger carrier, then many of the arguments made against SunRail out of ignorance simply would not have added anything beyond puffs of hot air to the discussion. That was not the case, however; SunRail failed twice because no one knew how to make a rational argument for passenger rail against a determined foe, because no one knows about passenger rail.

   That is something Amtrak can do something about; it can stop being statistically irrelevant, and create a vision for the future which includes conventional passenger rail as part of our domestic transportation network. Until that happens, more prospective commuter rail systems are going to be delayed or shot down in flames because no one can talk intelligently about the sins and virtues of passenger rail in America.

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see also: (Wikipedia)SunRail, Orange Blossom Expressway

1. There has been so much going on these past couple of weeks that needs to go on the record, we’re producing a third This Week at Amtrak in less than a week. We have read about the sudden departure of Amtrak former Inspector General Fred Weiderhold, Jr. and the follow-up to that departure by Senator Chuck Grassley of Iowa. Also making a buzz in the past 10 days was the presentation of a report by the United States General Accountability Office entitled “High Speed Passenger Rail: Effectively Using Recovery Act Funds for High Speed Rail Projects.” Reading all the way through it could prove to be a snoozer for some, but this report by the GAO’s director of physical infrastructure issues raises some important points about the need for clarity and focus in government, particularly relating to the subject of passenger rail. That report is presented at the end of today’s TWA.
2. First, some good news from here in Florida. We’ve been following the saga of Tri-Rail, South Florida’s commuter rail system which operates in three counties, Palm Beach, Broward (Ft. Lauderdale), and Miami-Dade. (Note, if you’re like this writer and wondered how Dade County suddenly got to be Miami-Dade County in recent years, you are not alone. It seems the county fathers decided since Miami pretty much completely dominates Dade County, the county should officially be renamed Miami-Dade County. Which, if you’re a map printer, created some headaches for you. One interesting note: further north, in Central Florida is Seminole County, which is adjacent to Orange County the home of Orlando and partially to Walt Disney World. Originally, Seminole County was named Mosquito County, and the name was changed sometime prior to the Florida Land Boom. It would be tough to draw tourists to a location named Mosquito County.)

   Tri-Rail has been publicly struggling with its upcoming annual budget since once again, no permanent funding source was declared for the commuter system by the gutless, do-nothing Florida legislature this year. Tri-Rail officials have been publicly wringing their hands, hoping for a government miracle to save having to slash all weekend and holiday service, and cut huge amounts out of daily service, effectively creating a revised system which would meet very few needs of its total ridership, and drive passengers away. Add to all of that the feds telling Tri-Rail if it didn’t run a full complement of service, the United States Government would demand all sorts of money be repaid in full for infrastructure improvements made (Double tracking the system, and more.) with signed contracts saying Tri-Rail would operate a certain size schedule, no matter what.

   Suddenly, it was a miracle. Well, no, not really. What it was amounted to was transit officials accustomed to lots and lots of funding from other sources (Mainly, the county governments.) and never having to say you’re sorry for anything “finding” some money for operations.

   So, what happened? Gosh, golly, gee, wow, it turns out the money for next year’s full operations was there all of the time, just sitting unused and unloved in another account. Yes, you guessed it, Tri-Rail bosses figured out money could be borrowed from accounts to improve parking and some other equipment upgrades to keep the system operating while a final solution is found for a permanent source of funding.

   The transit-riding public, and all of the businesses in the Tri-Rail area which support the system with paid subsidies for employees and other programs read account after account in the news media saying Tri-Rail was in crisis. Yes, it was – a crisis of its own making. It would have been wonderful if the gutless, do-nothing Florida legislature had done something this year about solving the funding problem for Tri-Rail on a permanent basis. But, keeping true to form, they punted and said it was someone else’s problem.

   What the various denizens of Florida’s legislative branch of government fail to recognize in a huge state such as Florida (Fourth in the nation for population.) is what brings prosperity to one corner of the state brings prosperity to all of the state. Transit is not a regional issue for Florida; it is a state issue. It’s a given in state government highways and other infrastructure will be built and maintained; why isn’t it a given commuter rail should be built and maintained, too, as long as it’s a viable system like Tri-Rail?

3. The plight of Tri-Rail is similar to the plight of Amtrak. There was a belief at Tri-Rail someone else would bail them out and keep the system running, while the real answer to the immediate problem was just sitting in a Tri-Rail bank account.

   Much the same is true at Amtrak. As long as it’s business plan – a favorite of the fans of failure – continues to emphasize money from outside sources instead of first finding every possible way to generate revenues by full use of the company’s various assets, Amtrak will lurch from crisis to crisis.

   Amtrak probably thinks the failed experiment of the heartstrings-pulling Heartland Flyer, funded by the State of Oklahoma for seven figures a year, is a good train. Harrumph. The Heartland Flyer is a waste of good Superliners and locomotives which could be producing far more revenue elsewhere, and could be replaced by a bus or two for the average of a total of 111 passengers per day the train hauls over its 206 mile, two-state route. Amtrak nationally only captures one tenth of one percent of domestic transportation output; the taxpayers of Oklahoma are taking a huge bath with the Heartland Flyer as on a statewide basis it falls far below Amtrak’s national average.

   Rational people hope this more than decade-long operating junior train will one day grow into a real, productive, adult train if the consortium of states working together right now figures out a way to correctly stretch this route north of Oklahoma City and connect it with the route of the Southwest Chief in Kansas. When you consider the tiny consist of the Heartland Flyer still has only a 43% load factor, one has to wonder if anything at all is being done to bolster this train. While it does serve as a feeder to the Texas Eagle in Fort Worth, Texas, (And, the Eagle itself only has a 53% load factor, well below what it should be.) the Heartland Flyer is an example critics can point to and say, “Look at the millions of dollars Oklahoma has fed into this train, and the impact on the mobility of Oklahomans is near zero in the overall picture of state transportation output.” While a tiny, vocal, misinformed minority group of supporters of this train can boast and say Oklahoma has Amtrak service, the real question is, “at what price?”

   Amtrak’s critics constantly point to the high cost of low return on many routes, and the Heartland Flyer is a prime example of when a real, gut-wrenching decision has to be made whether or not to provide a transportation alternative at an exorbitant price, or use those assets elsewhere. Having a train for the sole sake of having a train helps no one except those who like to stand by the side of the track and watch the train go by.

   From the standpoint of Amtrak’s business plan, it doesn’t care where government money comes from, as long as it comes. The only states which have a viable train that can be pointed to by other states as a success story are North Carolina and the Carolinian, with a load factor of 77.9%, Pennsylvania’s Pennsylvanian with a load factor of 74.3%, and Michigan’s Pere marquette, with a load factor of 67.3% (But, as reported earlier this month in TWA, even the State of Michigan is looking cross-wise at continued funding for this train as ridership has slipped this fiscal year.). If North Carolina’s model can be followed, it would be easier for other states to justify the cost of state-funded passenger rail service.

   While starter projects are important, the 11-year run of the Heartland Flyer has proven nothing more than a half of a blip on the transportation radar in Oklahoma, and realistic people have to seriously look at this train and how the assets to operate this train could create a better return on investment elsewhere. It’s notable North Carolina’s other state funded train, the Piedmont, with a load factor of 44.6%, operates solely with equipment owned and maintained by the State of North Carolina.

   So, in summary, Tri-Rail found fiscal religion in its own bank account, and will live to fight another day for better state funding, perhaps in the form its has advocated for years, a small, local sales tax on rental cars only in the three tourist-laden counties Tri-Rail serves. Oklahoma has shelled out millions of dollars for a junior train (If there were any Rail Diesel Cars still available for intercity service, this train as it is today would be a good candidate for those.), and, unless a solution is found to extend the train to its logical endpoint further north in Kansas, will have to make some serious decisions about the worth of the Heartland Flyer.

   Amtrak, as our national passenger rail provider, still lacking a long term vision, has got to make some decisions, too, before someone else makes them for it. Amtrak has to decide whether it is happy to drain money out of state bank accounts or develop its own plan for as much self-sufficiency as possible. As long as there are annual fights over money being paid to Amtrak to run these small routes, there will be anxiety and wonder every budget year. As one president of a state passenger rail association so eloquently said, “it’s not a matter of making 55% return at the farebox, it’s a matter of straining every muscle and ounce of energy and squeezing out every dime of assets to get to 56% that’s important.” Amtrak and its various fans of failure have been too happy for too long to never worry about reaching that extra point of self-reliant liberty.

4. Something fun from half-way around the world: Fox News reported in mid-June many Japanese women choose to commute in female-only passenger rail coaches during rush hour to avoid being groped by men, and now men are requesting men-only coaches for fear of being accused of groping.

   You can’t make this stuff up. Ten representatives of male commuters petitioned the commuter train operator for men-only coaches, noting there have many cases of groping, as well as false charges of groping, so, since the female-only coaches have been successful, in the spirit of gender-equality, men-only coaches should also be available.

   No word on whether married couples would be allowed to ride in the same car.

5. Here is the GAO report mentioned above.
   

   Testimony Before the Subcommittee on Surface Transportation and Merchant Marine Infrastructure, Safety, and Security, Committee on Commerce, Science and Transportation, U.S. Senate

   HIGH SPEED PASSENGER RAIL

   Effectively Using Recovery Act Funds for High Speed Rail Projects

   Statement of Susan A. Fleming, Director Physical Infrastructure Issues

   For Release on Delivery Expected at 2:30 p.m. EDT, Tuesday, June 23, 2009

   Mr. Chairman, Ranking Member Thune, and Members of the Subcommittee:

   I am pleased to be here today to discuss the implementation of high speed intercity passenger rail projects in the American Recovery and Reinvestment Act of 2009 (the Recovery Act). The $8 billion provided by the Recovery Act for high speed and other intercity passenger rail projects has focused more attention on and generated a great deal of anticipation about the possibility of developing high speed rail systems in the United States. These projects are seen by some as serving an important transportation role, by moving people quickly and safely, reducing highway and airport congestion, and being environmentally friendly. My statement today focuses on (1) the factors that we have identified that affect the economic viability of high speed rail projects and (2) how the Federal Railroad Administration’s (FRA) recent strategic plan incorporates those factors. ¹ My testimony is based on our recent report on high speed rail, our review of FRA’s strategic plan, and discussions with FRA and selected transportation experts. ²

   In summary, we found that while the potential benefits of high speed rail projects are many, these projects—both here and abroad—are costly, take years to develop and build, and require substantial up-front public investment, as well as potentially long-term operating subsidies. Determining which, if any, high speed rail projects may eventually be economically viable will rest on factors such as ridership potential, costs, and public benefits. FRA largely agrees with our March report. FRA’s strategic plan for high speed rail outlines, in very general terms, how the federal government may invest the $8 billion in Recovery Act funds for high speed rail development. However, this plan does not establish clear goals for the federal government in high speed rail—other than establishing a “longer term goal of developing a national high speed intercity passenger rail network of corridors”—and does not define a clear federal role for involvement in high speed rail projects other than providing Recovery Act funds. As such, in our view, it is more a vision than a strategic plan. As part of a discussion to prepare for this hearing, FRA told us that it sees its strategic plan as a first step and that it intends to seek structured input from stakeholders and the public to help develop strategies to implement its vision.

   Factors That Affect the Economic Viability of High Speed Rail Projects

   The factors affecting the economic viability of high speed rail projects include the level of expected ridership, costs, and public benefits (i.e., the benefits to non-riders and the nation as a whole from such things as reduced congestion), which depend on a project’s corridor and service characteristics. High speed rail is more likely to attract riders in densely and highly populated corridors, especially where there is congestion on existing transportation modes (such as highways or airports). Characteristics of the proposed service are also a key consideration because high speed rail is more likely to attract riders where it compares favorably to travel alternatives in terms of trip times, frequency of service, reliability, and safety. Costs largely hinge on the availability of rail right-of-way, and a corridor’s terrain. To stay within financial or other constraints, project sponsors typically make trade-offs between cost and service characteristics.

   Once projects are deemed economically viable, project sponsors face the challenging tasks of securing the significant up-front investment for construction costs and of sustaining public and political support and stakeholder consensus. We found that in other countries (France, Japan, and Spain) with high speed intercity passenger rail systems, the central government generally funded the majority of the up-front costs of high speed rail lines. ³ The $8 billion in Recovery Act funds for high speed rail (and other intercity passenger rail) lines represents a significant increase in federal funds available to develop new or enhanced intercity passenger rail service. This amount, however, represents only a small fraction of the estimated costs for starting or enhancing service on the 11 federally authorized high speed rail corridors. For example, the San Francisco-Los Angeles portion of the California high speed rail corridor alone, which already has about $9 billion in state bonding authority, is estimated to cost about $33 billion dollars. ⁴ Furthermore, federal funds for high speed rail in the past (as with the Recovery Act) have been derived from general revenues, not trust funds or other dedicated funding sources. This makes ongoing capital support for high speed rail projects challenging, as they compete for funding with other national priorities such as health care, national defense, and support for ailing industries. In addition, the challenge of sustaining public-sector support and stakeholder consensus is compounded by long project lead times, the diverse interests of numerous stakeholders, and the absence of an established institutional framework for coordination and decision making.

   FRA’s Strategic Plan Is a First Step

   FRA’s strategic plan attempts to address the absence of an institutional framework for investments in high speed intercity passenger rail service. In our recent report and in 2005, ⁵ we discussed the need for:

   1. Clear federal objectives and clear roles for all stakeholders (federal, regional, state, and local governments and freight, commuter, and passenger railroads).
   2. Clear identification of outcomes expected.
   3. Ensuring the reliability of ridership and other forecasts to determine the viability of high speed rail projects.
   4. Including high speed rail with a reexamination of other federal surface transportation programs to clarify federal goals and roles, link funding to needs and performance, and reduce modal stovepipes that hinder financing transportation improvements that will lead to the greatest
      improvements in mobility.

   FRA’s plan, which the Recovery Act required the FRA to issue 60 days after the act was signed, outlines in very general terms how the FRA will allocate the Recovery Act high speed rail funds. It does not define goals for investing in high speed rail, how these investments will achieve them, how the federal government will determine which corridors it could invest in, or how high speed rail investments could be evaluated against possible alternative modes in those corridors. In our opinion—and as FRA recognizes—this strategic plan is a first step in planning federal involvement. FRA has emphasized that its approach is to involve the ultimate “owners” of high speed rail—the states and communities in which they will reside—to help flesh out the approach to developing high-speed rail that are under its control. FRA officials also told us that it plans to spend Recovery Act funds in ways that show success to help keep longterm political support for these projects at the local level.

   Overall, FRA generally agrees with the issues that we raised in our March report, with the report’s recommendations, and with the observations that we are making today. Last week, FRA took its next step by issuing interim guidance for applying for Recovery Act funds. ⁶ The guidance lays out the evaluation criteria for grant funding, the weights to be applied to the criteria, and the selection criteria.

   In conclusion, the infusion of up to $8 billion in Recovery Act funds is only a first step in developing potentially viable high speed passenger rail projects. The host of seemingly intractable issues that have hampered development of these projects remain as challenges, and these issues will need to be resolved to effectively spend Recovery Act funds. Surmounting these challenges will require federal, state, and other stakeholder leadership to champion the development of economically viable high speed corridors and the political will to carry them out. It will also require clear, specific policies and delineations of expected outcomes, and objective, realistic analysis of ridership, costs, and other factors to determine the viability of projects and their transportation impact.

   Mr. Chairman, this concludes my prepared remarks. I would be pleased to answer any questions you or other Members of the Subcommittee may have.

   ¹ By economically viable, we mean that a project’s total social benefits offset or justify the project’s total social costs.

   ² See GAO, High Speed Passenger Rail: Future Development Will Depend on Addressing Financial and Other Challenges and Establishing a Clear Federal Role, GAO-09-317 (Washington D.C.: Mar. 19, 2009); and Federal Railroad Administration, Vision for High- Speed Rail in America (Washington D.C.: April 2009). We conducted this performance audit from May 2009 to June 2009 in accordance with generally accepted government auditing standards. These standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

   ³ GAO-09-317.

   ⁴The corridor would extend from Sacramento and San Francisco through Los Angeles to San Diego.

   ⁵ GAO-09-317 and GAO, 21st Century Challenges: Reexamining the Base of the Federal Government, GAO-05-325SP (Washington D.C.: February 2005).

   Please contact Susan Fleming at (202) 512-2834 or Flemings@gao.gov about this statement. Contact points for our Offices of Congressional Relations and Public Relations can be found on the last page of this statement. Greg Hanna and James Ratzenberger made key contributions to this statement.