Obama Unveils Plan to Fund High-Speed Passenger Rail


WASHINGTON -- President Barack Obama on Thursday called for spending at least $13 billion to launch a "new era" of high-speed passenger rail transportation, sparking competition among states and providing a potentially rich new market for rail equipment makers.

Flanked by Vice President Joe Biden, a long-time Amtrak rider, and Transportation Secretary Ray LaHood, Mr. Obama spoke of "a new system of high-speed rail in America" that will be "faster, cheaper and easier than building more freeways or adding to an already overburdened aviation system." He outlined a system for handing out money that will favor states and cities that have high speed rail projects "ready to go."

[Aceka] Associated Press

Amtrak's high-speed Acela Express service, shown here arriving in Boston, got a big boost in ridership following the Sept. 11, 2001, terrorist attacks, but transportation officials say the train service and air shuttles are now competing neck-and-neck.

California Gov. Arnold Schwarzenegger quickly declared that his state, which has a $30 billion plan to create bullet train lines capable of taking passengers from Los Angeles to San Francisco in two hours, "will be in the front of the line in submitting its application" for federal funds. "We expect to receive a significant portion of these funds," he said.

But Amtrak Chief Executive Joseph Boardman said money should go to upgrading existing routes, such as the corridor between New York and Washington, D.C. Trains on that line current take two hours and 45 minutes to travel between the cities, but Mr. Boardman said that time could be reduced by 30 minutes with about $1 billion in infrastructure improvements.

"People have to start understanding that high-speed rail in the Northeast corridor is a futuristic project," Mr. Boardman said.

But Mr. Obama and other administration officials on Thursday sounded more ambitious themes, likening their high-speed rail effort to President Dwight Eisenhower's push for the interstate highway system. The interstate system, now largely complete, contributed to the growth of the U.S. auto industry in the 1950s and, along with cheaper air travel, consigned passenger rail to third-class status in the U.S. transportation system.

Mr. Obama called the $13 billion effort "a first step," suggesting makers of everything from locomotives to rail spikes could enjoy a boost from additional spending in the years ahead.

The U.S. isn't alone in promoting expanded rail service. The Chinese government on Thursday said its rail sector will get $2 billion in additional investment this year from China's economic stimulus plan.

Rail analyst Jim Lucas of Janney Montgomery Scott said higher U.S. spending on passenger rail could benefit a wide range of U.S. companies. Among them: Harsco Corp., which makes rail right-of-way equipment; Portec Rail Products Inc., which makes rail spikes and joints; and Wabtec Corp., which makes passenger-train locomotives and other transit-related parts.

Some European and Japanese manufacturers who have lengthy experience in passenger rail markets also could benefit, including Siemens Transportation Systems Inc., which makes equipment for both passenger and freight rail.

Although Siemens's parent company, Siemens AG, is headquartered in Germany, the company has a Sacramento, Calif. plant that makes light-rail trains. Juergen Wilder, general manager for the company's rolling-stock division in the U.S., said the company would likely use its Sacramento plant to make any new trains ordered through the stimulus funding.

The initial funding for Mr. Obama's plan will come from an $8 billion program in the stimulus bill, and $1 billion a year for the next five years from the federal budget. Mr. Obama said grants will first go to upgrade existing intercity lines, where Amtrak trains typically travel no faster than 79 miles per hour. Later, he said, some funding will be dedicated to new high-speed routes with bullet trains capable of traveling above 150 miles per hour. It remains unclear which class of service will receive the most funding, and states are lobbying the administration to support their specific plans.

Write to Christopher Conkey at christopher.conkey@wsj.com and Alex Roth at alex.roth@wsj.com

Copyright 2008 Dow Jones & Company, Inc. All Rights Reserved

This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit


More In Politics

Companies within this Article

Harsco Corp.(HSC)

26.66 1.47 4:01p.m.

Portec Rail Products Inc.(PRPX)

6.88 0.20 3:59p.m.

Siemens AG ADS(SI)

63.26 1.35 4:00p.m.


31.80 1.22 4:02p.m.