With President Biden assigning a high priority to funding the development of infrastructure, the time for a substantial buildout of U.S. rail capacity might finally be here — at least on the passenger side.
Released last week, the Biden Administration’s $2 trillion infrastructure plan would set aside a substantial amount of money for rail development, with an emphasis on passenger service and mass transit. Newly appointed Secretary of Transportation Pete Buttigieg “wants to do in the rail sector what happened in the ‘60s for the highways,” comments Marc Buncher, president and chief executive officer of Siemens Mobility.
Biden’s initial $1.9 trillion economic rescue package, signed into law on March 11, provides $30.5 billion in emergency funding for urban mass transit. That includes $1.7 billion for Amtrak. Of the total earmarked for transit, $26 billion is earmarked for operating expenses, but that’s not all cities will get this time around. Funding for transit under the $2.2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act, signed by President Trump in 2020, was meant to match transit operating expenses, but the new relief package doles out to state agencies 132% of that amount as of 2018. “Originally it was thought to be ‘keep the lights on’ money,” Buncher says. “Now there’s capital dollars.”
Biden’s new infrastructure plan sets aside $80 billion for repairs, improvements and route expansions by Amtrak. And while the rail freight sector would benefit from certain projects specified under the plan, they aren’t its main target. “All of the freight railroads are publicly traded companies,” explains Buncher. “None are accessing federal dollars.”
Nor do freight railroads particularly need it at this time. “They’re actually doing pretty good,” says Buncher. “Operating ratios are at all-time highs right now.” That’s due in large part to the railroads’ having undergone a marked shift in their business base. Coal, one of the industry’s historical cash cows, plummeted in volume with the switchover by utilities to natural gas and renewable energy sources. Taking its place were massive amounts of consumer goods from China, bound for big-box stores and other major retailers.
Freight would get an indirect boost from the plan if it’s approved by Congress in its current form. In addition to the money for Amtrak and development of high-volume passenger rail corridors, Biden wants to “enhance grant and loan programs that support passenger and freight rail safety, efficiency and electrification,” the White House said an accompanying fact sheet. What’s more, projects aimed at alleviating congestion at ports and other choke points for freight will help to address the capacity crisis that’s currently slowing portions of the nation’s intermodal system to a crawl.
The electrification of passenger rail transit is yet another outcome of the Biden infrastructure plan that could have a beneficial impact on freight, if it leads to the replacement of carbon-spewing diesel locomotives with electric models. Extending such a system over long distances would be extremely expensive, Buncher notes, but electrifying select corridors extending a few hundred miles could make economic sense, eliminating carbon emissions along those busy routes.
There’s also the question of the progress of high-speed rail, development of which has stalled in the U.S. due in part to disputes over private property rights. Other countries rely on eminent domain to lay the tracks for high-speed trains. In the U.S., by contrast, such efforts must rely on securing rights of way without the government taking ownership of the land, Buncher says. The huge amounts of money needed to build out the system are the other major barrier to high-speed trains linking major American cities such as San Francisco and Los Angeles. (Which hasn’t stopped state authorities from moving ahead with plans for bullet trains in select corridors, but progress has been achingly slow.)
As it stands, the Biden infrastructure plan doesn’t specify funding for the development of high-speed rail. The U.S. High Speed Rail Association has called on the Biden Administration to create a High-Speed Rail Development Authority within the Department of Transportation, but such an agency will have to await a subsequent bill.
Buncher is nonetheless optimistic that high-speed trains will eventually become commonplace throughout the U.S. and Canada. “The dollars being spent are at values that have never been seen before,” he says, citing Florida’s Brightline service, now linking Orlando, Fort Lauderdale and West Palm Beach, as an early example of a working system. Other corridors considered ripe for future high-speed rail development include Houston-Dallas and Los Angeles-Las Vegas. “A lot of people are dabbling,” he says, “but the funding that’s going to come this round will change the industry forever.” ♾
In any case, the release of billions of dollars for new infrastructure funding won’t guarantee that the money is efficiently spent on much-needed transit projects. For that to happen, Buncher says, the federal government will have to do a better job of coordinating its funding efforts. He’s part of a constituency urging Secretary Buttigieg to develop a broad, nationwide approach to project funding, rather than leaving individual regions, states and cities to adopt their own platforms. “Right now, everybody’s sort of doing their own thing,” he says.
Timely, incisive articles delivered directly to your inbox.