Glass Half-Full? Or Half-Empty?

Written by Al Engel, Ken Sislak and Eric Peterson
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The closest service the U.S. has to HSR is Amtrak’s Northeast Corridor Acela Express, which soon will have new Alstom trainsets. Hopefully, California will be next, with a true HSR system.

RAILWAY AGE, MARCH 2020 ISSUE: China leads the world with 22,000 miles of HSR. What does the U.S. have to report?

In March 2010, the Amtrak Board of Directors authorized the creation of a Department of High Speed Rail reporting to the CEO. Its charge was to advance a vision of next-generation high-speed rail (HSR) for the Amtrak Boston-to-Washington corridor and also advance other high-priority corridors such as Orlando-to-Tampa. It felt that we were finally on the cusp of a new era or renaissance in passenger rail. It seemed that the stars had finally aligned with a uniform national government in place and critically important authorizing and funding legislation in place to facilitate a meaningful national program. In fact, the Federal Railroad Administration was busy preparing a national rail plan to identify corridors and routes for implementation.

The enactment of the Passenger Rail Investment and Improvement Act (PRIIA) of 2008, and the subsequent appropriation of upwards of $10 billion for passenger rail improvements in the American Recovery and Reinvestment Act (ARRA) of 2010, launched implementation plans for new routes as well as existing service upgrades. It was also a real plus that the California citizens approved Proposition 1A authorizing $9 billion in bonding for the San Francisco-to-Los Angeles HSR project. This provided substantive matching money for federal grant applications netting California billions in federal money.

The global disposition in 2010 for HSR was highly favorable with China making final plans to host the 7th World HSR Congress in Beijing in December 2010. China had two years of operating experience with Beijing-Tianjin HSR line (73 miles, 205 mph) launched in the summer of 2008 for the Beijing Olympics. China had a highly reliable proof of concept and was already under way building out a national network connecting its major cities, reducing intercity trips as much as 70% or more. The Japanese were already advancing their plans to celebrate 50 years of accident-free Shinkansen high-speed passenger rail service.

Ten years later, China has achieved the remarkable milestone of completing and putting into service more miles of high-speed passenger rail service than all of the rest of the world’s nations have built in the past 50 years. And once again, China is hosting another UIC HSR Congress (the 11th) in Beijing, June 30-July 3, 2020. It can now profile an “eight-vertical, eight-horizontal” HSR grid that has been extended to 32 of the country’s 34 provincial-level administrative divisions and reached 22,000 miles (35,000 km) in total length, accounting for about two-thirds of the world’s HSR system in commercial service. The HSR building boom continues with the network set to reach 24,000 miles (38,000 km) by 2025, completing its ambitious grid network.

The APTA (American Public Transportation Association) H-S&IPR (High Speed & Intercity Passenger Rail) Committee is represented on the UIC Program Planning Committee and has been for many years. So what will we have to report? The near-ending of the 2020 winter is bringing with it a proposal from the U.S. House of Representatives to appropriate $55 billion over the next five years to fund improvements to freight rail networks across the continent that might some day allow passenger trains to operate at speeds up to 160 mph.

But as dreary as this situation seems for the U.S., it is a far cry from where the nation was 10 years ago, and there is reason to be optimistic that things will only get better.

Since the enactment of  PRIIA in 2008, and the subsequent appropriation of upwards of $10 billion for passenger rail improvements in the ARRA of 2010, significant progress has been made to update and expand the capacity of the nation’s passenger rail service. In corridor after corridor, track upgrades are occurring, new track capacity is being built, new rolling stock is being built, and new passenger rail service is coming to life.

In the Northeast Corridor, plans are being drawn to eliminate critical bottlenecks, straighten alignments and acquire state-of-the-art passenger rolling stock that will allow faster, more frequent, more reliable service between Boston and Washington. Along the corridor, New England states have upgraded to quality and frequency of service like the Hartford Line that give travelers new mobility options.

To the south of Washington, Virginia and the Carolinas are adding new service and capacity that will someday allow electrified passenger trains to operate from Boston to Raleigh and beyond. Further south, mayors, governors and state legislators are collaborating to reinstate passenger rail service across Louisiana, Alabama, Mississippi and Florida that was wiped away from hurricanes 15 years ago. And entrepreneurs in Florida have opened brand new passenger rail service from Miami north.

Similar progress is being made in the Midwest, in Texas, in the Rocky Mountain states, in the Northwest and in California.

These advances, while not jaw-dropping, are significant, and reflect the efforts of legions of volunteers and hired advocates who have, for many decades, labored to convince federal, state and local regulators and lawmakers of the merits and benefits of passenger rail, and especially higher-speed/high-speed passenger rail as a mobility option to other popular modes of transportation.

One of the leading voices in this on-going campaign has been the APTA H-S&IPR committee. Formed with APTA in the early 2000s, the original members of the committee had earlier formed the U.S. High-Speed Ground Transportation Association and merged it with APTA. From its emergence with APTA, the H-S&IPR committee has become one of the largest APTA committees, and has membership that includes passenger rail operators and owners, state rail entities, engineering firms, labor representatives, rolling stock and locomotive manufacturers, policy consultants and other passenger rail advocates.

Making the Case

The need for public investment in intercity passenger rail, especially HSR, has been based on arguments relating to economic development, environmental impact, energy intensity, land use efficiency and more. While convincing in most modern industrialized nations running the gamut from Japan, France, Spain, Germany to China, HSR has experienced  a global build-out of some 30,000 miles.

In the U.S. (and even in Canada), HSR has been a much harder sell. Here, many of our political leaders have the mistaken notion that intercity passenger rail should pay for itself from the farebox or the direct proceeds from the return on investment (ROI). Highway and aviation public investment are not held to the same standard.

The H-S&IPR Committee has recognized this shortcoming by undertaking research that quantifies the total ROI to the community. In October 2017, APTA released a Phase I study establishing that H-S&IPR Committee projects can have broad societal benefits that go far beyond time and cost for users. A large set of individual impact and benefit factors that can be applicable for H-S&IPR projects are identified. For each one, it defines impact metrics and describes how information and tools can be applied to measure or estimate the impact. It then lays out a framework for classifying and portraying benefits from public policy perspectives relevant for constructing a “business case” for H-S&IPR projects. The practical application of this approach is illustrated via case studies. The report also summarized traditional approaches to estimating ROI and their limitations.

A Phase II is now planned that will develop a comprehensive and prescriptive methodology for determining ROI for H-S&IPR projects. The study will also quantify the economic benefits of linking mega-regions. Both the AASHTO (American Association of State Highway and Transportation Officials) Rail Council and the States for Passenger Rail Coalition have recognized the value of this project, especially given the current emphasis on regions and corridors.

Planned Texas Central HSR.

The committee has worked within APTA to help shape legislation and policy recommendations, and has called on Congress annually to seek support for legislative authorization and appropriations. The committee also works with other organizations like the Rail Passengers Association (RPA), States for Passenger Rail (SFPR), the AASHTO Committee on Rail, One-Rail, and the Intercity Passenger Rail Committee of the Transportation Research Board (TRB), as well as a broad range of non-rail organizations like the U.S. Chamber of Commerce, the American Association of Retired Persons (AARP), utility interests and environmental advocates.

In the first 15 years of the 21st century, the APTA H-S&IPR Committee celebrated significant victories with the inclusion of nearly $10 billion in President Obama’s ARRA initiative and subsequent budget requests—the largest U.S. investment in passenger rail since the authorization and funding of the Transcontinental Railroad in the mid-1800s—and the passage of the Fixing America’s Surface Transportation (FAST) Act in 2015, which contained the first-ever Rail Title in a surface transportation authorization bill.

The FAST Act Rail Title provided many important policy achievements for the freight and passenger rail industries, and demonstrated the significance of rail to the nation’s mobility. The measure also provided opportunities for both the private and public sectors to access a variety of funding and financing mechanisms that could underwrite the further renewal of America’s rail network.

FAST Act Reauthorization

Now, the APTA H-S&IPR Committee is working within APTA and collaborating with other traditional and non-traditional partners to ensure that the Rail Title in the FAST Act is renewed in the next Surface Reauthorization act, and is urging congress to establish a permanent funding mechanism that will assure on-going support for intercity and high-speed passenger rail, including Amtrak, in much the same way that other transportation modes have been funded for decades. Among the committee’s requests to Congress are:

• Maintain a Rail Title in the next Surface Transportation Authorization act.

• Create a Passenger Rail Trust Fund, and identify new, long-term, dedicated revenues to significantly increase intercity passenger rail investment.

• Authorize Qualified Tax Credit Bonds for surface transportation projects under section 54A of the tax code.

• Expand the eligibility of mass-commuting facility PABs (Private Activity Bonds) beyond their current use (construction of rail and bus infrastructure and facilities) to include acquisition of rolling stock.

• Remove mass-commuting facilities from the federally-imposed state volume cap for PABs, thereby aligning these public transportation and intercity passenger rail activities with airports, docks and wharves, which are not subject to the PAB state volume caps.

• Reduce the “capable of 150 mph” speed requirement for high-speed intercity passenger rail facility PABs to allow more projects to be eligible, especially privately-operated passenger rail services running on shared rights-of-way with freight railroads.

• Establish a public transportation version of Economic Opportunity Zones, or its equivalent, in which investors in real estate projects in the vicinity of a public transportation or intercity passenger rail station, multi-modal terminal or facility would be eligible for certain tax benefits (tax credits and/or accelerated depreciation) upon making an investment that benefits the local agency for capital purposes in an amount equal to a specified percentage of the real estate investment.

• Create tax code incentives to attract “tax-oriented equity” into public transportation and intercity passenger rail projects (i.e., equity investments whose return is based principally or solely on federal tax benefits).

• Require the Department of Transportation (DOT) to consistently apply the requirement that federal loans be considered local match across all DOT programs.

• Specify in statute that Railroad Rehabilitation and Improvement Financing (RRIF) loans be used for the non-federal share of a project.

• Authorize Better Utilizing Investments to Leverage Development (BUILD) Transportation Discretionary Grant funds to be used to fund the subsidy cost of federal credit assistance under RRIF, similar to the authority to use BUILD grants for TIFIA (Transportation Infrastructure Finance and Innovation Act) subsidy cost.

• Permanently extend eligibility for TOD (transit-oriented development) projects for RRIF loans and loan guarantees.

• Require the Secretary of Transportation to repay the credit risk premium for recipients that have satisfied all obligations attached to RRIF loans.

• Authorize federal funds for credit risk premiums under RRIF to leverage RRIF loan assistance.

• Provide specific funding to commuter railroads for PTC (Positive Train Control) implementation and ongoing operations and maintenance costs incurred after completing PTC implementation under the Consolidated Rail Infrastructure and Safety Improvements (CRISI) program.

• Provide specific funding to commuter railroads for passenger rail-highway grade crossing safety.

• Authorize advance acquisition of railroad right-of-way (ROW) similar to advance acquisition permitted for highway and public transit projects.

• Authorize a study to address the actions needed to upgrade and restore intercity passenger rail for 21st century demands.

• Restore the Railroad Cooperative Research Program and authorize appropriations to support a broad range of railroad research needs.

• Mandate that intercity passenger rail grants will be funded in part with new, long-term dedicated revenues to significantly increase passenger rail investment. These passenger rail revenues will be deposited in a Passenger Rail Trust Fund and will not compete with revenues dedicated to the Highway Trust Fund.

• Require that Surface Transportation Authorization Recommendations authorize funding for four specific commuter and intercity passenger rail programs including CRISI Grants; Federal-State Partnership for State of Good Repair Grants; High-Performance Intercity Passenger Rail Grants; and the Railroad Cooperative Research Program.

• Authorize that the CRISI and Federal-State Partnership for State of Good Repair Grants grow at the same general rate (i.e., 16.1% per year) as public transit capital funding.

• Include specific authorizations of funding within the CRISI Grant program for operations and maintenance of PTC on commuter railroads ($160 million per year); and Passenger Rail-Highway Grade Crossing Grants for commuter railroads and other operators of high ridership corridors ($250 million per year).

• Authorize $21 billion for High-Performance Intercity Passenger grants over a six-year period.

• Fund commuter and intercity passenger rail grants through a combination of new contract authority and General Fund authorizations.

• Establish contract authority derived from the newly established Passenger Rail Trust Fund, with the percentage of funding derived from contract authority increasing each fiscal year (growing from 10% of funding in FY 2021 to 60% in FY 2026).

• Require that during the authorization period, the Authorization Recommendations include $13.6 billion of contract authority for commuter and intercity passenger rail grants.

To achieve these objectives, members of the H-S&IPR Committee will descend on Washington this spring to encourage members of congress to fashion reauthorization legislation and to seek its passage before the current FAST Act expires this coming September.

Joseph M. Calisi photo.

From Policy Forum to Multi-Day Conference

Because congressional advocacy is so critical to advancing legislative and regulatory support, recruiting and education an army of advocates is vital. Over the past six years, the committee has held a series of policy forums that have focused on issues ranging from achieving the tipping point for making intercity passenger rail competitive with the rest of the world, to examining the economic impact of high-speed and intercity passenger rail.

Every June, APTA holds a Rail Conference, which this year takes place in San Francisco June 14-17. It’s a multi-modal (heavy rail, light rail, commuter rail and intercity rail) that includes sessions on domestic and international HSR developments. Since we are on the West Coast, the California project will be profiled along with other public and private project updates. The H-S&IPR Committee holds a regular committee meeting on the Sunday morning of the conference.

In 2021, the committee will take a major leap, hosting a two-day conference in Philadelphia on April 7-9, at the Philadelphia Marriott. The conference will feature leading passenger rail advocates from throughout the U.S. and the world, myriad workshops and panel presentations on subjects such as rail planning, economic impact, rail funding and financing, project delivery, shared right-of-way, public policy, technology and innovation, advocacy, workforce development and global competition.

2021 will also mark the 50th anniversary of Amtrak, and it is hoped that Amtrak’s new Acela Express NEC trainset will be available for conference delegate inspection.

H-S&IPR Committee members are busy organizing the conference and preparing an agenda sure to be of interest to industry experts as well as non-traditional partners who may see in passenger rail, and especially HSR, new mobility options that are economical, climate-friendly, reliable and very customer-conscious.

The Future of Passenger Rail in America

In the early 2000s, Amtrak was struggling to attract Congressional support and ridership. Over the past two decades, Amtrak’s ridership has reached record levels, and Congressional support for Amtrak and passenger rail continues to grow. Today, on the eve of writing the next Surface Transportation Reauthorization, it is incredible to see the number of states and corridors that are aggressively pursuing the renaissance of passenger rail. In fact, by a recent count, there are more than $260 billion in rail development projects in the pipeline. Over the next decade, it’s easy to see a very bright future for U.S. passenger rail.

Albrecht P. (Al) Engel, is Principal of Al Engel Consulting and Chair, APTA H-S&IPR Committee. Kenneth G. Sislak is a Vice President at AECOM and Publisher, SPEEDLINES. Eric C. Peterson is Principal of Transportation Policy Consultant and Associate Publisher, SPEEDLINES.

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