May 20, 2011

Amtrak seeking private investment for Northeast Corridor

Amtrak is developing an in-depth business plan that will maximize the opportunity for private investment to finance the construction of infrastructure and the acquisition of equipment required to provide 220 mph next-generation high-speed rail service in the Northeast Corridor.

“Amtrak will aggressively pursue private investment, in combination with funding from the federal government and from other public sources, to achieve our goal of initiating true high-speed rail from Washington to Boston,” said Al Engel, Amtrak vice president, high-speed rail.

In April, Amtrak issued a request for proposals for a fully implementable and robust business and financial plan where Amtrak is the key developer and operator of the high-speed rail system. It will identify and develop public and private funding sources and address fundamental issues of risk, credit, debt and investment phasing among other criteria.

The business plan also will include strategies and tactics for meeting the project delivery timelines and achieving financial targets, provide information for Amtrak’s FY 2013 federal budget request and lay out the strategy for subsequent forays into the private investment and capital markets. To date, numerous private investment firms have expressed interest in working with Amtrak. Proposals are due June 10.

Engel said the active pursuit of private financing is one of several actions taken by Amtrak to move forward its next-generation high-speed rail vision plan since it was announced in September 2010. Another key action is the development of a stair-step approach outlining a clear, structured and coordinated path to achieve 220 mph service on exclusive operational segments first between Philadelphia and New York, then New York to Washington, D.C., followed by New York to Hartford and finally Hartford to Boston.

The recent announcement by the U.S. Department of Transportation (U.S. DOT) to award Amtrak $450 million to upgrade a 24-mile section of its Northeast Corridor infrastructure to support maximum speeds of 160 mph is an important part of this stair-step approach.

In addition, Amtrak distributed its high-speed rail vision plan for international peer review by high-speed rail operators in Europe and Asia. Most reviewers agreed with the stair-step approach and noted that the current strategy is needed for successfully implementing next-generation high-speed rail in the Northeast Corridor. Many reviewers also said Amtrak ridership estimates were too low and several major operators indicated there are construction cost reduction opportunities that could reduce the capital investment.

There also was the recurring theme by the reviewers that Amtrak would likely capture a larger share of the intercity travel market than what is projected in the plan.

Other significant actions taken by Amtrak in the past several months, include the announcement of the Gateway Project to construct a new Portal Bridge over the Hackensack River and new tunnels under the Hudson River to access an expanded New York Penn Station, as well as the unveiling of a plan to lengthen all 20 existing high-speed Acela Express trains from six to eight coaches to expand seating capacity 40 percent. In addition, the Northeast Corridor was named a federally-designated high-speed rail corridor by the U.S. DOT.

Furthermore, Amtrak is a partner in the 8th World Congress on High-Speed Rail that will be held in the U.S. in July 2012. As a partner with the International Union of Railways, the American Public Transportation Association and the Association of American Railroads, Amtrak will host the world congress in Philadelphia. The event is expected to attract some 2,000 attendees worldwide to exchange views on the development and achievements of high-speed rail.

“Even with limited funding, Amtrak is continuing to make bold moves forward toward realizing its vision for 220-mph next-generation high-speed rail in the Northeast Corridor,” Engel explained.

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