Rail industry cites need to spend $148 billion over next 30 years

Rail industry cites need to spend $148 billion over next 30 years About $148 billion is needed to expand rail infrastructure capacity to meet future freight demand during the next 28 years, according to a study commissioned by the American Association of Railroads at the request of a federally chartered study panel.
   New tracks, signals, bridges, tunnels, terminals and other facilities are needed to keep pace with the projected 88 percent increase in freight rail transportation during that period.
   “Without this investment, 30 percent of the rail miles in the primary corridors will be operating above capacity by 2035, causing severe congestion that will affect every region of the country and potentially shift freight to an already heavily congested highway system,” according to the report by Cambridge Systematics.
   The report was released as the nation debates the adequacy of infrastructure funding in the wake of the Minnesota interstate bridge collapse in August and Congress begins planning for the 2009 surface transportation reauthorization bill that sets spending priorities for the following five years.
   The AAR said it forwarded the report to the National Surface Transportation Policy and Revenue Study Commission established by Congress to report on the nation’s future infrastructure needs and how to finance them.
   AAR President Edward Hamberger used the study to bolster a call for approval of an infrastructure tax credit pending in Congress.
   The rail industry is seeking a 25 percent tax credit from Congress for any expansion projects to help speed investment beyond the $9.4 billion in capital spending projected for this year. Most of that money simply goes to maintain the tracks, bridges, yards and equipment currently in place.
   The credit would apply to port terminals, shippers and other companies that invest in new rail links.
   Cambridge Systematics said the railroad industry could cover $96 billion of the needed funds from earnings or borrowing, but that a gap of $1.4 billion per year would need to be paid for through tax incentives, public contributions for projects with public benefits, and other sources. Most of the investment — $135 billion — will be needed on networks operated by the Class I railroads, it said.
   Hamberger said efforts in some quarters of Congress to re-regulate the rail industry would reduce returns that railroads need to reinvest in one of the nation’s most capital-intensive industries.
   “The study’s findings point clearly to the need for more investment in rail freight infrastructure and a national strategy that supports rail capacity expansion and investment,” the report said.