DOT using innovative financing to move passenger rail forward
In cities and towns across the country, rail investments lead to more jobs, increased private sector buy-in, and better infrastructure for everyone. It’s a true win-win-win situation. And to fully realize the potential for rail in America, we must continue investing federal resources and leveraging them with our public and private sector partners.
That's the essence of what I said at a House Committee on Transportation and Infrastructure hearing on Innovative Rail Financing earlier this week. Funding the passenger rail investments America needs is an important challenge; fortunately DOT has a lot to build on.
When he took office, President Obama laid out a vision to connect 80 percent of the nation’s population to a high performance rail network within the next 25 years. And since 2009, DOT has made unprecedented investments in America’s rail infrastructure to help make this vision a reality. Every step of the way, we’ve put people to work and generated economic growth in communities across the country.
- 6,000 corridor miles are being improved;
- 40 stations are being upgraded; and
- 260 next generation passenger rail cars and 105 locomotives are being procured.
Our High-Speed and Intercity Passenger Rail program is investing more than $10 billion in strategic, market-based projects in 32 states. And, from station upgrades to large-scale freight initiatives, our TIGER program has awarded over $750 million to more than 45 rail projects.
Another innovative financing tool we're using to stretch taxpayer dollars is our Transportation Infrastructure Finance and Innovation Act (TIFIA) program. TIFIA provides direct loans, loan guarantees, and standby lines of credit for major infrastructure projects throughout the nation.
In Denver, for example, a TIFIA loan in combination with another loan is being used to leverage more than half of the total project funding for the redevelopment of Denver Union Station from other sources. More than 2 million square feet of mixed-use development is now being built with public and private capital around the station, spurred by its revitalization. And it’s estimated that public sector investments will create 7,000 jobs during its construction.
So, when the question of how we fund the rail infrastructure we need comes up, we already have some good ideas.
The President’s 2014 Budget Request proposes a five-year, $40 billion rail reauthorization. And we’re proposing to fund this reauthorization by creating a new rail account as part of a broader Transportation Trust Fund – providing much needed funding predictability for both our public and private sector partners.
Our current rail authorizations – passed in 2008 in true bi-partisan fashion – were game-changing. Since they were passed, Amtrak’s ridership, its on-time performance, and its financial performance have reached all-time highs. The freight rail industry has invested in its infrastructure at a pace not seen since the 19th century. And last year was the safest in railroading history.
Now, imagine what we could continue to accomplish if we treated rail like our highways and other forms of transportation – and provided it with a sustained source of funding.
By 2050, we’ll need to move up to an additional 100 million people and eight billion tons of freight. The demand for rail is at an all-time high. In the last ten years, Amtrak’s ridership has increased by 40 percent.
But making long-term investments on an inconsistent, year-to-year basis is both difficult and inefficient. No rail system in the world has ever been successfully planned and developed that way. Predictability in federal funding is a necessity. It’s what states, local governments, and the private sector are looking for.
It’s what will move American rail forward. And it’s what will generate the public-private rail partnerships needed to realize the President’s vision for a national passenger rail network that is the envy of the world.
John Porcari is the U.S. Deputy Secretary of Transportation