Wednesday, April 22, 2009

ASLRRA seeks upgrades in railroad financing program

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American Short Line and Regional Railroad Association President Richard F. Timmons addressed Congress Wednesday, urging improvements to the Railroad Rehabilitation and Improvement Financing (RRIF) Program that would affect local communities and businesses reliant on short line rail service.

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“Short lines have grown from 8,000 miles of track in 1980 to nearly 50,000 miles today. There are over 500 short lines operating in 49 states,” said Timmons, addressing the House Committee on Transportation and Infrastructure’s Subcommittee on Railroads, Pipelines and Hazardous Materials. “Short lines are the ‘first mile-last mile’ for over 14 million carloads of goods annually–nearly one out of every four carloads moving on the national rail network.

RRIF loans fund track maintenance and rehabilitationprojects that aid rail access to local businesses nationwide. The projects are labor intensive, requiring short lines to hire contractors and additional laborers, as well as purchase track ties and other U.S.-made materials, Timmons noted, adding, “Railroading is the single most capital intensive industry in the country.”

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He continued, “Based on comprehensive data surveys ASLRRA has conducted since 2004, short lines invest nearly 30% of their annual grossrevenues in track rehabilitation and maintenance.”

RRIF at present leverages substantial private investment in the short line infrastructure but the program is not being fully utilized, ASLRRA says. ASLRRA wants Congress to subsidize an interest rate reduction to 1% on all RRIF loans, as well as defer payments for up to five years after substantial completion of a project.

A third improvement to the RRIF program to extend the loan term from 25 to 35 years was proposed by ASLRRA and adopted by the Transportation & Infrastructure Committee last year. “I am proud to say, in the 10 years the RRIF loan program has been on the books, not a single short line railroad has missed a single quarterly payment on its debt,” said Timmons.