WASHINGTON — With high-speed rail projects having trouble getting government and private financing, infrastructure firms and rail advocates are looking to “Plan C” — public-private partnerships.
Despite more than $10 billion in federal investment over the past three years, there are still no dedicated high-speed rail lines in the United States and no projects actively under construction. Following “Plan A,” federal funding, and “Plan B,” private financing, infrastructure firms are putting their faith in P3s.
“The benefits far outweigh the downsides,” Richard Arena, the president of the Association for Public Transportation, told attendees at a high-speed rail conference in Washington, D.C., Wednesday.
Arena said the Northeast Corridor — with cities like Boston, New York, and Philadelphia — and California represent the best hopes for high-speed rail, but officials have not managed to come up with enough money to fully fund projects. Allowing localities to partner with private firms that will bear some of the initial cost in exchange for the ability to reap later revenues is the answer, he said.
Arena acknowledged there are some obstacles to that path, however. P3s are a relatively new funding mechanism for infrastructure, and each state involved in a project would need to pass P3-enabling legislation. Half the states have not done so, he said.
“Only in October did New York pass design-build legislation,” said Craig Covil, a director at global civil engineering firm ARUP, which has worked on planning for both the Northeast Corridor and California proposals.
Each project would also have to have a business plan providing a reliable revenue stream beyond the farebox, Arena said. He proposed a federal option, drawing taxes from Amtrak and airline tickets to support a dedicated high-speed rail trust fund. Those funds could provide a predictable, stable flow of cash to back bonds for high-speed projects, not unlike the use of federal highway dollars to back GARVEE, grant anticipation revenues vehicle, bonds.
“The biggest thing you get is the ability to bond,” Arena said.
But Arena said there might be some skepticism about the legal protection for taxpayers issuing billions in debt for long-term projects, and said he knows the idea of a user fee on Amtrak and plane tickets would be unpopular.
Despite that, leading transportation officials are getting behind the idea. Both House Transportation Committee chairman John Mica, R-Fla. and Transportation Secretary Ray LaHood have said recently that they support the approach, and Mica said he insisted on it as a prerequisite for his support of American high-speed rail.
P3s are the way to go, agreed Vinay Mudholkar of Louis Berger Group, but the project planning process can’t continue to drag as it has on all the proposed U.S. high-speed lines.
“It takes too long, Mudholkar said. “Six, seven years to get the contracts together. You’ve got to put money where your mouth is.”