White House Offers High-Speed Rail Plan, Invites Competition for Funds

WASHINGTON — The Obama administration yesterday unveiled its strategy for the creation of a national high-speed rail network, inviting states and localities to compete in the coming months for federal funding. The grants may favor states that can provide matching funds, from bonds or other sources, market participants said.

The Federal Railroad Administration is expected to issue guidance on or before June 17 on how to apply for the grants. States and localities will then begin submitting plans for 100- to 600-mile corridors that would compose the various legs of a national rail network.

The plan will be capitalized initially with about $8 billion of high-speed rail funding provided by the stimulus act. The administration also requested another $1 billion annually for five years in the summary of its fiscal 2010 budget proposal that was issued in February.

The administration cited 10 potential corridor or network recipients — California, Pacific Northwest, South Central, Gulf Coast, Chicago Hub Network, Florida, Southeast, Keystone, Empire, and Northern New England rail lines — and left open the possibility of additional funding for the Northeast Corridor that links Washington, D.C., and Boston.

Grants are to be disbursed starting as early as this summer, the administration said. Eight states in the Midwest are banding together to receive funding for a network with a Chicago hub, for which they were recently granted planning money.

The Federal Railroad Administration expects to dole out grants in steps, according to John Horsley, executive director of the American Association of State Highway and Transportation Officials. The first cycle of grants will begin around May or June for smaller projects that have a quick turnaround, said Horsley, who was briefed by DOT officials prior to the announcement yesterday. The projects that would receive funding would improve the speed of passenger trains on existing corridors, he said.

The “real intense competition” of corridor grants will begin later in summer, Horsley said, adding that there is no indication whether the administration will divvy up the funding or provide it to one or two projects.

Criteria for the selected projects will include the extent to which the project or corridor program would benefit the economy or advance the administration’s goals for transportation and rail, and also would be based on the feasibility of the financial plans.

But the overall plan is a moving target and is likely to be further defined by an upcoming surface transportation reauthorization bill and FRA program guidance.

States already are launching their campaigns for federal high-speed rail funding.

Eight states in the Midwest and Chicago sent a joint letter to Transportation Secretary Ray LaHood on April 10 touting their consensus on building high-speed rail in three corridors of the Midwest Regional Rail System. Wisconsin, Illinois, and Michigan will be among states competing for the first cycle of grants, they said, adding that early estimates for the cost of track and operating equipment in those states total about $3.4 billion.

Earlier this month, the FRA approved money to help those states plan their rail corridor, although it was authorized separately from the high-speed rail plan. The FRA awarded the Wisconsin Department of Transportation an intercity capital grant of $297,000 for planning of the rail lines.

Meanwhile, California Gov. Arnold Schwarzenegger yesterday pointed out that the state’s voters have already approved nearly $10 billion of bonds to help pay for a high-speed rail corridor linking San Francisco and Los Angeles.

“We have already laid the groundwork for high-speed rail in California and with a boost from our federal partners, nearly 40 million Californians and millions of travelers from around the world will be able to experience the reality of America’s first high-speed rail system,” Schwarzenegger said in a release.

While DOT officials did not say if state matching funds would be among the judging criteria for grants, they indicated “it could possibly be a factor,” Horsley said.

Horsley’s group, AASHTO, has requested about $6 billion of funding per year for six years to develop a high-speed rail network. He anticipates that the forthcoming grants will be like “stirring up a hornet’s nest” of competition and that Congress will approve a more fully funded rail program in the next five years to continue its implementation.

The American Road and Transportation Builders Association announced its support for the rail plan yesterday but urged the president and Congress to “establish a dedicated user fee to finance this initiative” over the long term.

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