February 12, 2013
At the High Speed Rail Association’s conference, Stephen Gardner, a vice president at Amtrak, laid out Amtrak’s ambitious plans to construct a high-speed rail network with trains cruising at 220 mph along the Northeast Corridor from Boston to Washington by 2030. The company needs about $2 billion annually for infrastructure upgrades, but only has one-quarter of that to spend. Read More and Watch Video
“There’s actually a huge looming challenge. We are staring at a mountain of necessary capital investments coming to this railroad,” said Gardner.
Amtrak is already investing in upgrades along certain sections of the corridor. For example, the company is spending $450 million to upgrade a 24-mile stretch of track between New Brunswick and Trenton, New Jersey to accommodate Acela trains sprinting at 165 mph. It is also replacing a bridge over the Niantic River in Connecticut that’ll remove a major bottleneck for trains running between New York and Boston.
But Amtrak needs $151 billion to build out a true high-speed rail network that can match speeds in Europe and Asia. Some of the big projects still on the drawing board include the Gateway Project—two new tunnels between New York and New Jersey with four tracks between Newark Penn Station and New York Penn Station. Also, the Baltimore and Potomac Tunnel, completed in 1873, is another bottleneck that requires replacing because trains have to reduce speeds to as low as 30 mph in order to negotiate sharp turns.
Therefore, the popular question asked at the conference was where would the funds come from. Richard Arena, president of the Association for Public Transportation, said it probably wouldn’t be the federal government because of the nation's deficit. Gardner, of Amtrak, also said that it would be unrealistic to expect the federal government to provide all the funds.
“The federal government is not going to ride in here and be some kind of loan horse. The federal government to make significant investments is going to require the other entities (the states who host the NEC and the commuter railroads using the NEC) to be part of the solution.”
Richard Geddes, an associate professor at Cornell University believes that the only way to get the funds to build true high-speed rail requires the participation of the private sector via public and private sector partnerships (PPPs).
“The role of private investors taking an equity position is one of the best possible things that can happen to high speed rail in the United States.”
Arena said new and innovative methods such as value capture can be used to fund and maintain high-speed rail projects. Value capture is a type of public financing that recovers some or all of the value that public infrastructure generates for private landowners.
“Public investments can increase adjacent land values, generating an unearned profit for private landowners. The unearned value may be “captured” directly by converting them into public revenue,” said Arena.