FAQs: Frequently Asked Questions
With high speed rail a top priority on Obama’s agenda and the $8 billion in stimulus funds awarded to more than a dozen of projects, many questions are being raised by organizations and individuals around the country expressing interest as well as concern about such a large investment.
Below you will find frequently asked questions as well as anticipated questions that relate to the different high speed rail initiatives in the United States. The questions marked with an asterisk (*) come from an interview with Eric C. Peterson that was televised on Fox Business News, while the rest was compiled through extensive research. Some of the questions were also generated via email as well as through discussion on our American High Speed Rail Alliance Fanpage on Facebook and our AHSRA LinkedIn account.
Q*: Why is high speed rail needed in the US? How will it help our economy?
Q*: How are we going to get enough money to fund high speed rail?
Q*: Who would travel on this – would it work for commuters?
Q*: How much will it cost passengers? Will this be an inexpensive way to travel?
Q*: The companies being commissioned for this are not US rail companies – what US companies will benefit from high speed rail? How?
Q*: Why is high speed rail needed in the US? How will it help our economy?
A: The capacity of America’s intercity transportation system is almost maxed out. Additionally, concern over foreign oil dependence, and the impact of the current transportation system on the environment dictate that new measures must be taken. Looking around the world, the most obvious and successful measure is high speed rail, a transportation mode that complements and easily connects with other transportation modes, is environmentally friendly, uses renewable energy, can reduce travel times and relieve congestion, promotes and supports economic redevelopment, and potentially could create hundreds of thousands of jobs at all levels of skill and responsibility for decades to come.
High speed rail has the potential to benefit America’s economy and society in positive ways not experienced since the construction of the U.S. Interstate highway system.
The Federal government estimates that for every $1 billion in project spending 20,000 jobs are created or retained. Plus, every dollar spent has a multiplier effect of three to one. Following those standards, even the $8 billion announced on January 28, 2010 will support 160,000 jobs and stimulate at least $24 billion in new economic activity.
Q*: How are we going to get enough money to fund high speed rail?
A: The overall cost of a national high speed rail system could exceed $300 billion, roughly the average annual cost of the US defense budget. This sum represents an investment in America’s future, and as an investment will produce significant dividends for taxpayers and investors, as well as significant savings for consumers in travel time, energy, environmental/health, and quality of life improvements.
This investment will not be made all at once. It will flow over the years…possibly decades…that it will take to build and evolve a national high speed rail system.
There are many successful models for financing initiatives like this. Obviously by the modest down payment announced by the Obama Administration last week, the Federal government will play a role. In most countries around the world with high speed rail systems, and actually even here in the United States where the federal government has been the major investor in the capital needs of public infrastructure, the federal government has played a leading and vital role as both the initial investor and as the guarantor for private investment.
The other partners and participants in the financing of America’s high speed rail system are yet to be identified. There is an expectation that state governments will participate, and in all likelihood there will be various forms of private/public partnerships.
One strategy that is gaining interest is an infrastructure investment bank. Modeled after Fannie Mae and Freddie Mac, the infrastructure investment bank could be a vehicle that removes all infrastructure capital costs from the annual federal and state budgets, and establishing a dependable source of long-term capital free of the vagaries of the annual appropriations process (thereby reducing the cost of public financing).
Another possibility may be that private enterprise devises a financial strategy that is profitable and ensures a return on investment for equity stakeholders. The Japanese Railway Company claims to operate under such a model. The American freight railroads also have achieved success using this model. Perhaps it is time for them to revisit their historic participation as the original providers of passenger rail service in America.
Q*: Who would travel on this – would it work for commuters?
A: Based on the experience of other nations, it appears that individuals traveling 100 miles to 600 miles are served best by high speed rail. In most cases, trips that took from door to door three or more hours (principally regional air travel) or moved at speeds less than 100 miles an hour (auto travel) benefit most from high speed rail. Additionally, by helping to relieve the demand on those traditional modes of travel, travel times and conditions are vastly improved for travelers who opt to stay on the plane or road.
A successful high speed rail system must be connected with all other forms of transportation in order to provide maximum benefit. Airports, city center transit facilities, commuter rail lines, highway systems, even some levels of freight transportation benefit from the availability of high speed rail (like highly perishable agricultural goods, medical supplies, and overnight parcel delivery).
Q*: How much will it cost passengers? Will this be an inexpensive way to travel?
A: Relying on the experience of travelers in other nations with high speed rail service, the cost for passengers on high speed rail is extremely competitive, and in many cases far less expensive than other passenger transportation modes. As gasoline becomes more expensive and the societal impact (i.e. cost) of non-renewable energy consumption increases, high speed rail will become even more attractive as a travel cost container.
Q*: The companies being commissioned for this are not US rail companies – what US companies will benefit from high speed rail? How?
A: High speed rail is not a technology presently existent in the United States. America will need to learn the technology and American workers will need to be trained.
Recently, U.S. Transportation Secretary Ray LaHood convened a summit with roughly 30 representatives of American and international companies that hope to sell their products and services to support America’s high speed rail initiative. The message he carried to these representatives was that America’s high speed rail system will employee American workers. If you are a foreign company wanting to do high speed rail business in the United States you will be expected to build your capacity in the United States and train and retain American workers to build, operate and maintain America’s high speed rail system.
