How should we build high-speed rail in the United States? And how should be pay for it? Do we need dedicated lines and dedicated funding? Or can we build a system incrementally?

Yesterday morning, the Progressive Policy Institute brought together some of the leading thinkers on this issue to kick off our Second Annual North American Strategic Leadership Infrastructure Leadership Forum in Washington, DC.

The discussion centered around three questions:

• Do we need a dedicated right of way for high-speed rail or can it be developed incrementally? (Panelists agreed that a dedicated right of way would be ideal, but generally felt that the politics would be difficult);

• How can we fund high-speed rail? (Panelists agreed that we need a dedicated source of funding, though again, the politics of establishing such a fund are tricky); and
• Should private capital be enlisted? (Panelists agreed that definitely, private funding should play an active role, and offered some ideas how).

The event’s panelists were: Pierce Homer, Transportation Director, Moffatt & Nichol; Ken Orski, Editor and Publisher, Innovation Newsbriefs; Mark Reutter, Fellow, Progressive Policy Institute; and Petra Todorovich, Director, America 2050. Michael Riley, managing editor of Bloomberg Government, moderated.

Do We Need a Dedicated Right of Way?

Mark Reutter made the strongest case for a dedicated right of way, arguing that a self-contained track free of interfering traffic was necessary for true high-speed rail.

“New rights of way is the only technologically sound approach to genuine high speed rail,” Reutter said. “Dedicated rights of way provide the necessary platform for greater safety and sustained speed, and eliminate choke points and interfering track. It’s the only way high-speed rail can compete with air traffic.”

Reutter also pointed out that on most corridors, trip times on Amtrak are no faster than they were in 1971 (when Amtrak was created) and in many places slower than they were under private rail in the 1950s.

Other panelists thought that incremental development also had to be part of a strategy.

“I think the answer is both,” Todorovich said. “Some corridors are suitable for dedicated rail systems. Other places need time to build markets, and in those places it makes sense to invest in incremental improvements. Operationally, there’s no question a closed, dedicated system is better. But you have to maintain support.”

Orksi was the most skeptical. “If money were no object, I’d say we can do both,” he said. “But since we live in a world of limited resources, I’d say invest whatever limited resources there are on improving existing freight lines.”

How Do We Fund High-Speed Rail?

This week, PPI released a memo written by Reutter arguing that a cleaned-up and repurposed Highway Trust Fund could become a dedicated source of funding for high-speed rail, a proposal that formed the backdrop of the conversation. Panelists agreed that dedicated funding was a good idea, but political feasibility remained an issue.

“I’m attracted to the notion of a trust fund,” said Orski. “But there are great obstacles. First, will there be enough political support in Congress? Or will concerns about deficits oblige them to focus on other more urgent infrastructure projects? Any proposal will raise howls of indignation from highway interests.”

Reutter responded by arguing that, “there have always been special interests, that’s how government works. Groups always want to cling to the allocations they get. All that means is we need leadership. You have to have an overall vision of economic development.”

Homer, meanwhile, argued that they key to funding high-speed rail was to identify economic interests who might benefit from it. “There have to be individuals, organizations, and regions who would see benefit in this and would be willing to pay for it,” he said.

Homer also noted that any funding plan had to think about not just the capital expenditures to cover the building, but also the long term operational and maintenance costs, which are likely to exceed the capital costs. “The larger and more difficult question is how to pay for operations,” he said.

Is Private Funding Necessary?

On the question of private funding, there was widespread agreement that it was necessary. The more difficult question is how to attract that investment.

Homer argued that government needed to do more to reduce the risk inherent in such investments. “In the U.S., the biggest obstacle is regulatory risk,” he said.

He added that if there is a market where ridership exists, “private capital is going to find where there is the greatest economic benefit.”

Todorovich agreed. “Private interests are interested because they want revenue streams, and that could come from passenger fares.”

But Reutter added that regardless of private money, government needed to provide a reliable source of government money that “private investors can count on. There needs to be a level of government guarantee, that’s why a surface transit fund is so essential for this.”

Homer also argued that rather than focusing on speed, what might drive the most investment was focusing on reliability. “If I knew it was a two-hour trip from Richmond to Washington, I’d take that any day over I-95,” he said. “As this evolves, I think we should be talking about high-reliability rail.”

The forum continues tomorrow. For a full schedule of PPI-sponsored events, click here.

photo credit: Jim Arkedis