U.S. Passenger Train Projects Receive Funding, including Amtrak and Light Rail

While the Coronavirus pandemic dramatically slowed passenger train usage, many train systems have significant long-term expansion plans. The U.S. remains far behind the rest of the developed world in terms of high-speed passenger rail. Despite the possible advantages of regional high-speed trains for the U.S., including energy efficiency, low pollution output and relief for crowded airports and highways, funding remains uncertain. Many analysts also have serious doubts that ridership could reach high enough levels to justify the investment, as America is largely an automobile-based culture.

Voters in California approved $10 billion in bonds in 2008 to support the development of fast passenger trains within the state. Unfortunately, the projected cost of building a high-speed rail line running between Los Angeles and San Francisco ballooned from the original estimate of $36 billion in 2009 to estimates of about $80 billion as of early 2019. Estimates have continued to balloon. Consequently, in early 2019 the scope of the project was rolled back to focus on completing only the relatively small first stage, which would run between Bakersfield and Merced in the heart of California’s agricultural belt. The U.S. Department of Transportation responded to the news by cancelling more than $900 million in federal grants for the bullet train. In 2020, state legislators proposed shortening the line to the 120 miles that were already somewhat under construction, as well as switching from electric trains to lower-cost diesel. By early 2023, the cost of the project had ballooned to $128 billion, and a completion date for the vastly reduced project was pushed back to 2033.

Similarly, a local light rail project for Honolulu, Hawaii was opened for initial bidding in 2009. It was intended to run 20.2 miles, from the east side of town to the middle of downtown, with 21 stations serving elevated railways. The hope is that the train could cut down on Honolulu’s infamous road traffic congestion. The Honolulu Authority for Rapid Transportation (HART) shortened the route to 18.75 miles. Originally budgeted at $5.2 billion, the project is now expected to cost at least $9.9 billion with completion in 2031. An initial 10.8-mile route is scheduled to open in the spring of 2023. Meanwhile, a proposed, privately founded high-speed line connecting Dallas and Houston, Texas was in planning for years, but appeared to be completely stalled-out as of 2023.

A Maglev project is also proposed for the U.S. Northeastern corridor, connecting Washington, D.C. and New York City. It has a total estimated cost of $100 billion and is backed by a private company called Northeast Maglev based in Washington, D.C. The Federal Railroad Administration approved a $27.8 million study grant toward the project in November 2015. The Japanese Government has indicated interest in providing billions of dollars in investment for the installation of Japanese train technology on the Washington, D.C.-New York City route, and the leg connecting Washington, D.C. and Baltimore, Maryland. In early 2019, Congress approved and additional $10 million in preliminary funding for the project. It remains to be seen whether or not the project will move forward.

Many leaders in various U.S. states are rejecting the thought of proceeding with high-speed rail projects. These naysayers include some state governors, many state legislators and financial analysts, all concerned about potential cost overruns on construction and the further potential of long-term operating losses. Meanwhile, some observers believe that most rail projects could never be competitive with automobile travel or airline travel, in terms of costs, convenience, or both. Part of the challenge lies in the fact that the U.S. has very low population density and long distances between major cities, in contrast, for example, to the densely-populated rail corridors in Japan—one of few nations to have passenger rail systems that are financially self-sustaining.

Amtrak, the long-maligned, federally supported U.S. railway was hit hard by the Coronavirus pandemic. In fiscal 2022, Amtrak carried 22.9 million passengers, down from 2019’s 32.5 million passengers but up significantly from 2021’s 12.1 million.

As of 2022, Amtrak served more than 500 destinations that connected 46 states, the District of Columbia and three Canadian Provinces. However, nearly all of the track that it utilizes is owned by freight railroad companies. Amtrak’s own history shows how difficult it can be to make a passenger rail system financially sustainable. It has lost money every year of its existence.

Amtrak is spending $2 billion to buy 28 new sets of power cars and passenger coaches from Alstom SA. The new model, called Avelia Liberty will have a top speed of 160 mile per hour and carry one-third more passengers to a maximum of 378 (up from 304). The first Avelia Liberty is hoped to enter service in the fall of 2023 and ultimately, the new trains will replace the existing fleet of 20 trains.

Meanwhile, urban light rail systems continue to expand at a modest pace in many urban centers around the U.S. Houston is slowly adding to its relatively new system, which, for a few years, has made it possible to ride from downtown to the massive event complex and sports stadium at Reliant Center, as well to the Houston Medical Center, one of the largest in the world. Denver hopes to invest more than $7 billion over a ten-year period ending around 2022 or 2023, adding up to 122 miles of new rail to its existing 35-mile “FastTracks” system. Los Angeles is spending $9 billion to complete a combination subway-light rail expansion by 2026 that will connect 4,000 square miles within the Los Angeles area.

In Florida, a private railroad called All Aboard Florida began service of its Brightline diesel-electric higher-speed rail system in January 2018. It currently connects Ft. Lauderdale to West Palm Beach, with additional routes planned to Miami and Orlando with limited stops. The project’s sponsoring companies are all owned by private equity firm Fortress Investment Group. Designed to run on existing track used by Florida East Coast Railway freight trains, the trains run at standard speeds, except for a small high-speed stretch where it may reach 125 mph.

The Miami-Orlando extension is expected to cost $4.2 billion and begin operations in mid-2023. The line will be comprised of 170 miles of new track and it will be partly funded by $2.7 billion in tax-exempt bonds. Brightline signed a branding deal with Virgin, renaming its Miami station Virgin MiamiCentral. The firm is negotiating to add a Disney World station in Orlando as well as an extension west to Tampa.

Fortress Investment Group won $600 million in private-activity allocation from the state of California in April 2020. The firm hope to use these funds, plus other potential allocations of federal and state funding, to build a new high-speed line between Las Vegas and suburban Los Angeles. The project, which will travel at speeds of up to 200 miles per hour, will make the trip in 85 minutes. It is hoped to cost $5 billion to be built, with completion expected in 2027.

SPOTLIGHT: Bus Rapid Transit

In approximately 10 U.S. cities, specialized bus systems have been adopted as a less-costly alternative to light-rail. In Tampa Bay, Florida, for example, there is a 41-mile bus system that connects five main employment centers using dedicated bus lanes and raised station platforms for easy boarding. The system took five years to construct at a cost of $455 million, compared to a proposed nine-mile light rail project which would have taken 10 years to build and cost $620 million.

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