U.S. Commits $13 Billion to Aid High-Speed Rail

U.S. Commits $13 Billion to Aid High-Speed Rail

By CHRISTOPHER CONKEY and ALEX ROTH

Wall Street Journal

APRIL 17, 2009

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.

Besides allocating $8 billion in stimulus funds for high-speed rail, Mr. Obama said he would seek to budget $5 billion more over the next five years.

Sounding an ambitious theme akin to President Dwight Eisenhower's push for the interstate highway system, 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." The interstate system 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.

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.- Associated Press

Mr. Obama outlined a system for handing out money that will favor states and cities that have high-speed rail projects ready to go.

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.

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.

Building a high-speed rail network like the one in Western Europe would likely cost hundreds of billions of dollars, but Mr. Obama called the $13 billion effort "a first step." He suggested makers of everything from locomotives to rail spikes could enjoy a boost from additional spending in the years ahead.

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 that have lengthy experience in passenger-rail markets could also benefit, including Siemens Transportation Systems Inc., which makes equipment for both passenger and freight rail.

Although Siemens 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.

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.

Amtrak Chief Executive Joseph Boardman said money should go to upgrading existing routes, such as the corridor between New York and Washington, D.C.

Write to Christopher Conkey at and Alex Roth at