Tuesday, January 19, 2016

Will FAST Act bring fast results?

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After years of delays and extensions, a multi-year surface transportation bill is finally in place. Will it deliver on the advertised?

On Dec. 4, 2015, President Barack Obama signed the Fixing America’s Surface Transportation (FAST) Act, a five-year federal transportation bill, into law. The FAST Act authorizes $305 billion in funding for federal surface transportation programs for fiscal year (FY) 2016 through FY 2020 and provides funding to improve highways, bridges and transit systems.

Rail provisions in the FAST Act promise to improve rail infrastructure and safety by “consolidating rail grant programs, cutting red tape and dedicating resources for best use. It also establishes a federal-state partnership to bring passenger rail assets into a state of good repair. Additionally, the bill will accelerate the delivery of rail projects by significantly reforming environmental and historic preservation review processes, and applying existing exemptions already used for highways to make critical rail investments go further.”

“The new bill includes several provisions that should be good for the U.S. transit industry and, therefore, for Wabtec,” says Richard Betler, Wabtec President and CEO. “For example, this is the first multi-year bill passed in a decade, and that means transit agencies should have a longer-term planning horizon for potential projects. In addition, the bill calls for a 10.2% funding increase in year one and further increases in future years. When coupled with our strong backlog of transit projects around the world, the new bill is another reason to be optimistic about Wabtec’s long-term growth opportunities in the transit market.”

Suppliers certainly have cause to celebrate as companies like Alstom Transport, Bombardier Transit Corp., Brookville Equipment, CAF USA, Kawasaki Railcar USA, Kinkisharyo, Siemens, and a new entry into the North American market, China’s CNR Changchun, are busy filling equipment orders for several public transportation agencies across the U.S., Canada and Mexico. The current passenger railcar backlog, according to information complied for Railway Age’s exclusive, annual “Passenger Railcar Market At A Glance” chart is a healthy 5,701 units worth an estimated $1.2 billion. Agencies like New York MTA, BART, WMATA, MBTA and the Toronto Transit Commission account for a sizeable chunk of the market.

Orders for more than 500 cars are expected to be placed this year by New Jersey Transit, which will soon release an RFP for 113 electric multiple-unit multi-level cars; Amtrak, which is in the midst of procuring trainsets to replace the Acela Express equipment on the Northeast Corridor; and WMATA, which continues to modernize its entire railcar fleet.

More impressive is the 2017-2021 five-year outlook. Transit agencies responding to the survey indicated they are contemplating placing orders for as many as 4,500 new and rebuilt vehicles.

In 2015, 971 cars were delivered to 24 agencies, the fourth-highest total in 10 years.

Railway Age asked Catherine Connor, Manager of Federal Government Affairs at WSP|Parsons Brinckerhoff, to comment on the passing of the FAST Act, how she thinks money will be allocated and what this means for the rail transit community. Connor is a registered lobbyist who has broad-based experience tracking the federal budget and appropriations process. She serves on numerous industry committees and coalitions that advance the cause of the transportation construction industry, actively engaging in public policy development in support of infrastructure investment. She works to develop industry consensus, and advocates those positions to Congress. Connor provided the following responses:

RA: How is money being allocated and from where is it coming?

Connor: 92% of the overall bill is funded through the Highway Trust Fund, which is funded through a combination of user fees, primarily the federal gas tax, and more recently through several large transfers of revenue from the general fund — approximately $70 billion in the FAST Act alone. The rail title (i.e. Amtrak funding) and transit capital improvement grants are funded directly from the general fund and not through the highway trust fund and therefore are dependent on annual appropriations.In most cases, funding is allocated by formula, but the FAST Act does create several new discretionary grant programs, such as a bus and bus facilities grant program, a nationally significant freight and highway projects grant program, and three small passenger rail grant programs.

RA: What is your general take on the FAST ACT and what does it mean to you and the rail transit community in terms of lease starts and upgrades, expansions to networks, etc.?

Connor: The FAST Act is a step in the right direction, and the five-year federal commitment will provide much-needed stability and certainty for transportation agencies. Armed with greater predictability and aided by a number of beneficial new programs particularly related to freight, multimodal projects and environmental streamlining/expedited project delivery, it is time to work in partnership with state and local governments to pick up the pace to create a safer, more effective and more resilient transportation network that meets the country’s growing needs. Access to jobs, greater mobility, improved safety and a more sustainable future are just a few of the benefits Americans will see as the FAST Act is implemented. The private sector can help achieve these objectives with innovative technologies, creative solutions, and by sharing project risk. However, the bill is only the first step—we have to keep up the momentum to identify a long-term funding solution.

RA: How do you think the FAST Act will benefit passenger rail?

Connor: For the first time, passenger rail programs are included in a federal surface transportation bill. This will help to put rail programs on equal footing with the traditional highway and transit programs. The funding levels in the FAST Act for Amtrak are not high as Amtrak and the rail industry had hoped, but they are an increase over the current levels. The rail title of the FAST bill authorizes the first funding for passenger rail (other than Amtrak) in several years. The new grant programs and separate Amtrak reform provisions indicate that rail improvements, especially on the Northeast Corridor, remain a Congressional priority. However, it is important to remember that passenger rail programs, including Amtrak, are dependent on annual appropriations. Funding is derived from the General Fund, not the Highway Trust Fund.

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