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State funding deal

22 Apr 2008

USA: Responding to an 88% increase in ridership on state-supported inter-city services between 1996 and 2006, the Dep­artment of Transportation has unveiled a grant programme to support efforts by individual states to fund enhancements to passenger rail operations. 'Rail pass­engers demand improved service and quality and this grant programme will allow states to address these concerns', commented Federal Railroad Administrator Joseph H Boardman.

Previously federal grants had only been available for investment in local transport and commuter rail, although the administration has been keen to transfer responsibility for inter-city services from the federal budget to the states.

Transportation Secretary Mary Peters has made available $30m to match local funding on a 50:50 basis, giving a potential pot of $60m. She suggested this could be used for track and signalling upgrades, new or lengthened passing loops or for the purchase of new rolling stock. Critics say this is a drop in the ocean, pointing out that hundreds of millions of dollars, if not billions, are needed to refurbish or replace ageing assets and expand services if inter-city rail is to play a meaningful role in America's future transport mix.

Reflecting the scale of the problem, Amtrak President & CEO Alexander Kummant has requested $1·67bn in subsidy for the 2009 financial year. Describing the request as 'responsible and realistic,' he explained that it would provide $506m for operating support and $801m for capital projects. He re­iterated that ridership is at an all-time high and said Amtrak will continue to improve its efficiency. But rising fuel prices and labour costs plus a massive programme to replace defective concrete sleepers on the Northeast Corridor will be expensive.

Kummant emphasised the need to start a rolling stock replacement programme, using some of the 2009 capital budget for 'pilot programmes, the procurement of new equipment for short-distance corridor service, and the testing or demonstration of new equipment for the Northeast Corridor'. Other expenses include a deal with the unions for $114m in back pay to employees who worked for nearly eight years without a salary increase.

It seems likely that Amtrak will get more than the $800m allocated in President Bush's budget proposals, but Congressman John W Olver, who chairs the House Appropriations Transportation Subcommittee, said money will be tight and he won't be able to find as much as the railway needs.