WASHINGTON — State plans for high-speed rail lines are in danger due to a lack of stable funding and underdeveloped federal leadership and guidance, according to a new report by the Government Accountability Office.
A leadership vacuum or lack of stable funding could make it hard for the rail stakeholders who received $8 billion of American Recovery and Reinvestment Act high-speed rail grants to spend them by the legal deadline, the GAO said.
If unspent, states could lose their highly coveted grants.
The report, released Thursday, said recent history suggests that states will need to secure funding, build public and political support, and collaborate with other stakeholders to carry out passenger rail plans.
“While there is a palpable excitement created by the [ARRA] funding for new high-speed rail service, establishing new service is a difficult, multiyear effort,” the report said.
The task requires federal and state financial resources “far beyond the funds provided by the [ARRA] in a time of continuing federal and state deficits.”
States want the federal government to take the lead on interstate rail cooperation, as nearly all of the federally designated high-speed rail corridors cross state lines.
States are also waiting for the federal government provide guidance fast-rail safety standards.
More importantly for the municipal bond market, states still lack a stable funding source that would help establish a market for financing passenger rail.
“Stakeholders said that a stable federal funding stream would encourage firms to enter and invest in the intercity passenger rail marketplace,” the report said.
“However, even with strong federal leadership and funding, it could take several years to provide the necessary infrastructure, such as for building new passenger rail cars, potentially making it difficult to spend some [ARRA] high speed rail funds by 2017, as required by law,” it said.
The GAO said that the Federal Railroad Administration was required by a 2008 law to quickly draw up a preliminary national rail plan — a second version of which is planned for a September release — and develop a high-speed rail vision.
The “vision” document did not define the federal government’s goals or stakeholder expectations for high-speed intercity passenger rail, and the preliminary rail plan gave states and interstate rail coalitions no recommendations.
While tasked with assembling the two rail plans, the agency was flooded with applications for ARRA high-speed rail grants, and officials had to meet a tight deadline to announce those awards. FRA officials are currently in the “early stages” of setting up agreements with state grantees, the GAO said.
The September national rail plan document will provide states with more guidance on public and private funding, as well as state, local, and federal roles, the report said.
Despite the unresolved issues, the ARRA and fiscal 2010 congressional appropriations shoveled $10.5 billion of funds into the high-speed intercity passenger rail sector, where only $120 million had existed in the previous two fiscal years combined, the report noted.
The U.S. DOT did not provide an opinion on a draft of the GAO’s assessment. The GAO also culled its information from several state departments of transportation including California, Illinois, North Carolina, Pennsylvania, and Virginia, the national rail corporation known as Amtrak, and several freight railroads, manufacturers, and passenger rail advocacy groups.