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How Far Can $1.3 Billion Take Amtrak?

March 19, 2009, 5am PDT | Judy Chang
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Amtrak's list of projects that will get stimulus funding is just about finalized, but this financial boost is just the beginning. Three rail experts weigh in on how the initial $1.3 billion in grants will get spent, and how else the agency can use the money to achieve self-reliance.

In the past, railroads have faced a stigma of antiquity, especially among non-riders-a throwback to a dustier, more untamed America. Now, with the signing of the American Recovery and Reinvestment Act into law last month, The Obama administration has essentially highlighted an often overlooked component of transportation infrastructure. Through the ARRA, high-speed and passenger rail systems will be more generously funded since before the automobile came onto the scene.

In particular, Amtrak, the country's intercity rail network, came one step closer to its own, long-awaited leg up on March 13, when Vice President Biden, along with acting Federal Railroad Deputy Administrator Jo Strang and members of Congress, announced funding plans for Amtrak under the Recovery Act. The FRA, banker to the nation's rail systems, is doling out $8 billion in grant funds, $1.3 billion of which is Amtrak-specific. Most of the $1.3 billion will go to maintaining and repairing equipment, tracks, and other structures, while the $450 million that isn't goes to security and safety upgrades.

As for the rest of the $8 billion in capital grants, projects involving (1) intercity passenger rail services, (2) high-speed rail corridors, and (3) congestion mitigation improvements will all get a shake at the money, according to the FRA. Amtrak is eligible for funds in only the last two categories: projects for improving the equipment, tracks, and facilities of high-speed rail corridors; and congestion management, as long as the agency is partnered with a state.

Not to mention the final criterion for funding eligibility-shovel-readiness. Operating expenses and planning aren't part of the deal, so this money is strictly for creating jobs, and building and upgrading equipment.

Photo courtesy Planetizen Flickr Pool member Michael Patrick.

While the country awaits a more detailed announcement on funding, Amtrak spokesperson Marc Magliari said Amtrak has been, and still is, eager to get to work. "Sometimes I see things that need work," he said of his observations of Amtrak stations across the country, "and sometimes I see things that need applause. St. Louis went from ramshackles to a multi-modal facility. Of all places, Missouri. Milwaukee, too."

"We have hundreds of millions of dollars of capital projects we couldn't do for lack of funding," he said. "We're going to be putting out-of-service cars back in service." Indeed, according to the Vice President's press release, exactly 68 stored or damaged cars will be returned to service and 125 men and women will be hired to do it as part of the plan.

Where the Money Goes

The money slated for Amtrak is a gold mine by some standards. Whether or not the money is spent wisely is a different matter, however. Magliari stressed the spending cap placed on the Northeast Corridor in the legislation, which ensures that no more than 60% of funding for "non-security activities may be used for capital projects along the corridor." This despite the fact that the Northeast Corridor is the busiest rail line in the United States. Every day, the heavily used corridor takes more than an estimate 700,000 passengers on both Amtrak and seven other commuter lines up and down coastal cities of Northeast United States at up to 150 miles an hour, from the line's southernmost stop in Washington, D.C. to Boston. The largest Amtrak project funded by the ARRA involves replacing a 102-year-old movable bridge over the Niantic River in Connecticut, a project two decades in the making.

Estimates courtesy of Amtrak.

And Amtrak has many more shovel-ready projects just waiting for funding. Great American Stations, Amtrak's network of community partnerships dedicated to revitalizing passenger rail stations across the country, has "redevelopment standards that predate the stimulus." According to Magliari, there is no frenzied rush for ideas, no scenarios involving rail officials rolling around in wads of cash. The long-time-coming stimulus money will go where it was intended to-a backlog of money-poor projects that never got a chance until now. "Funding those improvements would gain momentum," he added.

Still, Bruce Richardson, president of the Florida-based United Rail Passenger Alliance, remains concerned that too much will be wasted on the Northeast Corridor. "Of anywhere in the country," said Richardson, "they have the least transportation output, in terms of bang for the buck." At a transportation output rate of one-tenth of one percent of the national transportation marketplace, a figure this small makes Amtrak "statistically irrelevant."

"Amtrak needs to help itself by immediately upgrading its long-distance fleet," he said. By doing so, it can quickly buff up its current, skeletal image. "[Amtrak's] $500 million deficit is relatively small," he conceded, but the agency has stood by for too long without taking action. "All three passenger systems in Japan make money. Germany is making money. The French are making money. [When it doesn't], Amtrak throws up its hands and gives up." He explained, for example, that a typical long-distance train is comprised of about 18 passenger cars. By adding just a few more cars to each train, Amtrak could potentially eliminate 40% of its deficit.

"And trust me," Richardson side-noted, "There are plenty of people willing to lease equipment to Amtrak." Aircraft are commonly leased from one airline to another, typically when the lessee is underequipped for heavy travel or maintenance. Similarly, Amtrak has cars potentially within its grasp, minus the agonizing trip to Congress to beg for them. "And all that equipment is self-sustaining. It pays for itself," he said.

"The New Economy" of Rail

Gil Carmichael, Senior Chairman of the Intermodal Transportation Institute at the University of Denver, is also on board with the idea. "What Amtrak needs to do," he said, "is order 100 new train sets, as fast as they can. If they dont, they'll jumpstart an economy to make them." Carmichael also agrees that the benefits of such an arrangement are hard to miss. Not only is it financially reasonable, it's also fast. "If [Amtrak CEO] Joe Boardman leased them, the cars would be good to go in 25 to 30 months." And if that doesn't pan out, then he asks that you envision with him two new factories, where people would be put to work to build new trains. "It's the new economy," he said.

Carmichael, who is also a former Federal Railroad Administrator appointed by George H. W. Bush, thinks this is a remarkable time for rail projects, including Amtrak's. "There's much more money than that," he said of the $8 billion and $1.3 billion allotted to high speed rail and Amtrak, respectively. "States have more than $40 billion for highways; they can flex the money and it can go to rail projects."

To sweeten the deal, President Obama is asking Congress for an extra billion dollars for rail over the next five years. In doing so, he is essentially accomplishing something that Carmichael was unable to get either former Presidents Bush to do. "What's happening is phase one of a beautiful vision for high-speed passenger trains. Obama is the Eisenhower of this century, the author of the Interstate II," he said in reference to his own published vision of high-speed travel.

Ultimately, despite the optimism and speculation among rail enthusiasts, Amtrak and the FRA are the only ones who will decide where the money goes. But Bruce Richardson, the president of URPA, has one last tip: "Whatever the endeavor is, Amtrak should be doing the best it can to be self-reliant."

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