July 2011

Transit Funding, Elections Loom Large Over the Industry

by Alex Roman, Managing Editor

Courtesy iStockPhoto

AECOM
Jerry Premo
Executive VP/Global

There is much controversy surrounding high-speed rail. Do you feel there's still a place for it in the U.S.?

Sure. The interest that so many states have expressed in high- and higher-speed rail is often forgotten. When Florida's money was 'recompeted,' there was a tremendous response. The fact is that there have been decisions made in three states, in particular, that have received a tremendous amount of press, — Florida Ohio and Wisconsin — but the reality is that a number of states want to do what historically has been an essential building block in transport projects in our country. Specifically, they want to carefully plan and provide an opportunity for public input. That's now going on in a lot of different places. I think it's important to acknowledge that reality.

My next point is that we do have some higher-speed rail that hopefully can be made even faster. The Northeast Corridor is a transportation powerhouse; more people travel by train in the corridor than fly. Amtrak has an ambitious program with a dramatic vision for the future. It's a scheme for truly high-speed rail — less than an hour and a half from New York to Boston and less than an hour and a half from New York to Washington, D.C. Amtrak is dreaming big dreams, something very few people in this country do anymore. I have no qualms about being an unabashed advocate for improvements in America's current high-speed rail corridor, namely the Northeast Corridor.

What are some of the challenges your company is currently facing?

We're a global company. We work for clients around the world and there are some parts of the globe that are really, really cooking. That's been important to AECOM as we balance out what everyone would acknowledge to be relatively slower markets in Europe and North America. All told, the factors that make transit a good investment are the things that are strong underpinnings for continued investment in transit, namely, city building and environmental issues. We are very positive about public transportation, high-speed rail and the role of freight in moving goods. It's an absolutely integral part of AECOM's today and tomorrow.

What has contributed to the slowdown in the U.S.?

One is the recession that we are now coming out of. There have been serious drops in tax revenue, particularly sales tax revenues, because people have spent less. The agencies have been hurting, not only in advancing big capital projects, but in meeting operating costs. Now, they are being hammered a bit by rising fuel costs. So, one of the problems is the availability of money at the non-federal level.

A second is the lack of federal reauthorization. Universally, people believe we would be better off if a long-term bill was enacted. I know how tough it is to advance any projects, particularly if there's uncertainty about whether the federal partner is going to be there.

Booz Allen Hamilton
Ghassan Salameh
Executive VP

What growing trends do you see in the industry?

There is an urgent need for more reliance on innovative funding as federal and state sources dry up and transit competes with other public services for a limited pot of funds. Also, there is more emphasis on technology to increase capacity, improve efficiency and capture more revenue, as well as the growing availability and complexity of transit technologies triggering the need for more advanced planning and systems integration to leverage these investments.

Additionally, there are concerns about the aging workforce and retirements of experienced staff. This will have profound effects on the future of the industry and increasing challenges in succession planning and human capital management. Without a new generation of managers or craftspeople, management, maintenance and operations of current systems will be jeopardized. Longer term, there is a need to keep the focus on mass transit in simple terms: Transit is a critical element of sustainability improvement, energy efficiency/security, and to urban and suburban economic development and quality of life.

What is your outlook for the future of public transportation?

The future has to be bright. Due to growing populations, constrained transportation capacity and new environmental sensitivity there will continue to be growing emphasis on transit as part of the mobility mix in successful metropolitan areas, because it is fundamental to sustainability. However, public transportation will continue to be challenged in terms of the competition for human and financial capital and will need to continue to actively promote its role in regional and national quality of life issues. And as usual, it depends on gas prices and local politics.


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