Monday, March 23, 2009

Opinion: A “new” U.S. passenger railcar industry?

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By Gene Skoropowski, Managing Director, Capitol Corridor Joint Powers Authority

gene_skoropowski_lo-res.jpgOn March 16, China’s Ministry of Railways signed a $5.7 billion contract with domestic manufacturer China CNR Corp. for 100 220-mph high speed trainsets for the 825-mile Beijing-Shanghai  high speed line. China CNR Corp.—Tangshan Railway Vehicles, Chanchun Railway Vehicles, and the Chinese Academy of Railway Sciences—signed a joint venture agreement with Siemens Transportation for technical assistance and the supply of electrical equipment and bogies for the new trainsets. The first of these new trainsets will enter into service in October 2010. Over the next four years, the Ministry of Railways expects to order up to 1,000 more high speed trainsets to operate the Wuhan-Guangzhou and Wuhan-Shijiazhuang high speed lines now under construction.

Talk about creating jobs! Industrial jobs during construction, permanent jobs operating and maintaining trains after construction, and a useful, environmentally responsible transport service to the pubic. And, I would expect to see an ongoing stream of railcar orders being made annually to sustain China’s new industry. I wonder if we in the U.S. will learn something from this?

If we want a railcar manufacturing industry to exist in the U.S. to help sustain and grow an intercity passenger rail network, we require funding for a continuing stream of car orders. Manufacturers cannot afford to have industrial production facilities sitting around idle while political leaders try to decide if there should or should not be capital funding appropriated for rolling stock orders this year. The U.S., during the past 40 years of non-policy and non-funding the nation's intercity passenger rail system, put four of the world’s best passenger railcar manufacturers out of business: American Car & Foundry, St. Louis Car, Pullman, and Budd.

Fortunately, the federal capital funding situation has changed dramatically in the last few months, to an extent and magnitude most of us never thought possible. However, investment in a passenger rail system or in passenger rail rolling stock is not a one-time shot. Like investments in highways, mass transit, airports, and waterways, there is an ongoing capital and capitalized maintenance investment that must be made to sustain the initial investments.

Nowadays, we are not surprised when going out for bids for railcars that there is no domestic industry to respond. And, because there is no continuous intercity railcar production in the U.S., it takes three to four years to see delivery from the time a contract for an order is signed.

Thankfully, now that we have a global economy, foreign countries that have been wiser in funding and sustaining their domestic railcar building industries are ready to compete for railcar orders here. They most likely will establish at least semi-permanent assembly facilities if we are wise enough to provide a continuous stream of funding to support the railcar building industry on an ongoing basis, as well as provide new vehicles for all our domestic passenger rail operators—high speed, intercity, commuter, rapid transit, and light rail.

Finally, if you think that high speed rail corridors only make sense for distances up to 500 miles, think again. The Chinese high speed rail corridor between Beijing and Shanghai is 825 miles long. “Yeah,” we say. “Our major cities are just so far apart, that high speed rail can’t work, except in a dozen or so corridors.”

Let's get on the bandwagon!



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