Study Days Billions Needed for Freight Rail Infrastructure - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

Study Days Billions Needed for Freight Rail Infrastructure

(Photo: AP) (Photo: AP)

09/20/2007 2:56 PM ET

WASHINGTON (AP)- Major U.S. railroads will require $135 billion in infrastructure investment over the next 28 years, more than a quarter of which will have to be funded by the government, according to an industry study released Thursday.

The study, conducted for the American Association of Railroads by Cambridge Systematics Inc., does not factor in possible growth in passenger service. Amtrak and some commuter lines operate trains on the freight network.

The AAR used the report Thursday to advocate for a bill pending in Congress that would provide tax incentives for infrastructure investments that would increase freight rail capacity. The association warned that if nothing is done, highway congestion will only worsen as the economy grows.

"This stuff will move- it will just move by truck," association president Edward R. Hamberger said.

The study is based on federal forecasts for rail demand. The Department of Transportation estimates that, measured by weight, demand for rail freight transportation will increase 88 percent by 2035.

The study concluded that a total of $148 billion in investment in all freight rail infrastructure will be needed by 2035. Of that, $13 billion is projected on short line and regional freight railroads, while $135 billion is on the seven biggest freight railroads, known as Class I railroads.

The Class I railroads believe they can pay for $96 billion of their $135 billion share "through increased earnings from revenue growth, higher volumes, and productivity improvements," according to the report.

That leaves $39 billion, or about $1.4 billion per year, that must come from outside assistance such as tax incentives or public-private partnerships, the study says.

But even that level of investment will not keep truck traffic from increasing. The study did not look at what would be needed to divert the type of freight currently carried by trucks to rail, only at what it would take to maintain the current mix, said David T. Hunt, one of the authors.

Hamberger said the investment tax credit would go a long way toward filling the $39 billion gap, but he did not know whether it would cover it completely.

Investment in freight infrastructure is crucial for the future of passenger rail, too, said Ross Capon, executive director of the National Association of Railroad Passengers.

He noted that one of the lines that the report expects to become extremely congested if no improvements are made by 2035 is in California's San Joaquin valley. The state already has made significant investments to accommodate passenger service on that line, but still has reliability problems, Capon said.

The AAR study assumed the number of passenger trains that run on tracks owned by the freight railroads would stay the same. But Amtrak and passenger rail advocates have talked about expanding in key corridors.

The National Surface Transportation Policy and Revenue Study Commission, which asked the railroad association to commission the freight study, is conducting a separate study to forecast the needs of passenger rail. That study is expected to be wrapped into the freight study and the information presented to Congress.

The AAR is made up of all the major freight railroads, such as Norfolk Southern, Union Pacific Corp., Burlington Northern Santa Fe Corp., and CSX Corp., as well as Amtrak and some regional railroads.


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