[IMAGE]HSR.jpg[/IMAGE]To say that there is explosive interest in high-speed rail is near the heights of understatement. More than 250 applications for high-speed rail planning grants were submitted to the Federal Railroad Administration (FRA) since the program was launched this past summer. And California, despite its huge fiscal troubles, is well on its way to have the first truly world-class high-speed network in the U.S., the plans for which had been in development well before President Barack Obama even entered politics.

Both federal and state programs have taken more than a few pages from other countries' high-speed playbooks.

California: American model?

In late 2005, before it really had its own fleshed-out policy, the FRA approved the Golden State's program-level environmental report, the first ever for a high-speed rail project. The same year, the California High Speed Rail Authority (CHSRA) prepared and released its system implementation plan for building the high-speed train system in California, as well as a business plan for building and operating the service. It provided a multi-year schedule for all necessary activities in the project and also included a financing plan, identifying annual expenditures without committing to any sources of funding (though it was determined that state budget appropriations were a legitimate source). The business plan envisions roughly one-third of the estimated $40 billion budget coming from federal government sources, one-third from state funds and the remainder from private investors over a 20-year period. The first phase of the project, from Anaheim to San Francisco, is estimated to have a construction cost of $33 billion to $34 billion in 2008 dollars.

The next major milestones in the progress of Golden State high-speed rail, believed to be the largest infrastructure project in the state's history and possibly the largest in the country, are completion of the regional concept designs and environmental assessments. To manage that work, the CHSRA and Parsons Brinckerhoff, as its program manager, has divided the program into 10 regional sections and selected eight regional consultant teams, with several regional segments managed by the same team. From north to south the segments are: San Francisco to San Jose (HNTB Corporation); Altamont Corridor (AECOM); San Jose to Merced (Parsons Transportation Group); Merced to Sacramento and Merced to Fresno segments (AECOM Transportation); Fresno to Bakersfield (joint venture of Hatch Mott MacDonald, URS Corp. and ARUP with URS as lead); Bakersfield to Palmdale (same joint venture with URS as lead); Palmdale to Los Angeles (same joint venture with Hatch as lead); Los Angeles to Orange County (STV Inc.); and Los Angeles to San Diego (HNTB).

The function of each regional consultant is to provide the planning, environmental and engineering. The program manager's team reviews and confirms the work of the regional consulting teams to ensure consistency with established common standards. Once the state and regulatory authorities approve the design and environmental documents, the program management team will initiate procurement of design-build contracting teams that will finalize the design and construct the civil segments and systems, such as train control and traction power. Once the final design is under way, the program manager will begin the process of selecting an operator that could provide its own trains or operate those purchased in another contract, and will take the system into commissioning and start-up.

The first of these segments, between the Bay Area to the Central Valley, cleared a major hurdle this past fall, when the CHSRA formally approved the preferred alignment on this segment for the draft and final environmental documents to be filed with both state and federal authorities. It is expected that both the state Notice of Determination and federal environmental Record of Decision could be reached on this section by spring 2010.

In November 2008, the state's voters approved a $10 billion state bond issue. Federal and state safety regulators also gave a major boost last year when they approved, in principle, the CHSRA's planned process for seeking system regulatory approval, which was significant because at 220 mph California's system will be the fastest train service ever operated in America. Rights-of-way preservation has also begun.

In addition, this phase will involve the industry and regulators to develop a technical approach that takes advantage of international experience while adapting it to U.S. operating conditions and regulations. Regional transit authorities and freight operators must also be involved where there will be shared use of corridors. All this must culminate in state and federal regulatory approval before the project can proceed to construction.

Essential to the success of this phase is the support of political and civic leaders, and thus far the record has been encouraging. For the past nine years, the project had two governors who initially opposed it, then became supporters upon further investigation and involvement. Similarly, lukewarm legislative support for high-speed rail in California has steadily improved during the past decade; today, there is the broadest support for the project ever.

Feds mirror California

The plan in California broadly echoes the Obama Administration's vision announced last spring to build a network of high-speed rail lines across the U.S. As noted earlier, the administration's investment in high-speed and intercity passenger rail dwarfs that of any previous expenditure by several factors.

The first part of the new policy is the new commitment of spending never before seen in the U.S. on the mode. Eight billion dollars was included at White House insistence in the $787 billion American Recovery and Reinvestment Act of 2009, passed just weeks after Obama's inauguration. On top of that amount, the administration proposed another $5 billion over the next five years, the first billion of it for the coming fiscal year beginning this October.

The second part of the program is its ambitious goal: to "transform the nation's transportation system" by rebuilding existing intercity rail lines, initially, then investing in new world-class high-speed services in "100-mile to 600-mile corridors." The administration's models are the interstate highways and U.S. aviation system developed in the past century. Like the California high-speed project, cornerstones of the federal policy are a program of grants to states (and regional compacts) that meet minimum criteria.

The third and final leg of the fed's policy comprise the guidelines and standards for this federal assistance in the form of a strategic rail plan publicized less than two months after the stimulus bill was signed by Obama. Guidelines for potential recipients of the money have been issued, and first round grant awards are expected to be announced before the end of September, up to three years ahead of the schedule required by the law passed in February.

The first round of applications will focus on projects that can be completed quickly and, thus, can yield measurable job creation and other economic and environmental benefits. The next "track" will fund proposals for comprehensive high-speed programs like California's or for corridors or sections of corridors. Other funds will be provided for planning. FRA had identified ten major corridors previously, and these are likely to be given priority for funding. In addition to California's network, they include corridors/networks in the Pacific Northwest; Texas and the Southern Plains cities; the Gulf Coast; a large Chicago-based Midwest network; a Florida Corridor; another Southeast Corridor; a Keystone Corridor that includes Philadelphia, New York, and Pittsburgh; the Empire Corridor, which connects New York City with Albany and Buffalo; and a New England Corridor connecting Boston with Montreal. The FRA is also interested in improving the nation's only existing high-speed rail service in the Northeast Corridor with this program.


On the right track?

These issues raise various questions: What is the role of the central government in nations wanting high-speed rail? What is the local role if any? How much private sector involvement should there be?

For answers, both the Obama and California programs have looked to international systems. Officials in both programs visited and studied developments in France, the United Kingdom, South Korea, Taiwan, Japan and Italy. Many of the experts working for the various consultant teams in California have worked on those projects. Newly developing high-speed programs, elsewhere, such as in Spain, have done the same (see sidebar).

Something must be working, because, notes Roloff van Ark, president of Alstom Transport in North America, the very-high-speed rail market (185 mph or higher) is forecasted to grow 3.6 percent per year for the next decade. It is already worth more than 2 billion euros annually ($2.5 billion), one of the most robust parts of the booming railway market. Since the launch of the first Japanese Shinkasen in 1965 and the French TGV in 1981, Alstom alone has sold 640 very-high-speed trainsets throughout the world. The company estimates that it has 70 percent of the market. Siemens, Talgo, CAF and Kawasaki, other large multinational builders of such trainsets, are also continuing to see sales growth.

Van Ark and others will point out that central to European and Asian success in this mode are the essential elements that California and the federal U.S. governments seek to emulate: strong governmental funding and policy oversight roles that show consistent public commitment over decades and, importantly, multiple officials' terms. All this must also be coupled with private sector funding participation, project delivery and service operation in a managed competition.

That is not to say that these policies are without critics. Indeed, the libertarian Reason Foundation and Cato Institute have ganged up on high-speed programs using essentially the same arguments: overstated benefits, too big a role for government; and if the technology is so great it should be developed and financed completely in the private sector. "The only way to make sure the benefits of high-speed rail exceed the costs is to build them without tax subsidies," concludes Cato's Randal O'Toole, a fierce and long-standing critic of both high-speed intercity and urban rail transit.

The point of view, though widely shared on the extreme right, is naïve and ignores both the history of transport infrastructure and some key facts. First, all of the benefits of such technology has always been difficult to measure and to some degree requires a public leap of faith. Secondly, and perhaps most importantly, no major transport mode has ever been completely financed and run in the private sector independent of government subsidies. In fact, no transportation industry has ever turned a profit in the long run, notes no less a capitalist than Warren Buffett.

So, why should high-speed rail be any different? The real issue is getting the balance between the public and private sectors' involvements correct. On that score, with an estimated one-quarter of the funding and operations coming from the private sector and the bondholders likely to be private investors, the policy developing in California seems well within the international mainstream. The federal government's implementation will carefully consider the California approach, says Karen Rae, deputy FRA administrator and the high-speed policy's point guard for her agency.

Based on the lessons from abroad, future success of the high-speed network in the U.S. is dependent on three key factors. First, the strong policy initiative as articulated by both California and the Obama administration must be sustained beyond the terms of the current leadership. Here, a lesson from Italian high-speed history is instructive. Although the first section of the Florence-to-Rome line was begun as Europe's first high-speed line in 1970 and was supposed to take only five years to complete, it opened two years behind schedule and took another 15 years before major route upgrades on the line were completed; but by then the first line of the French TGV from Paris to Lyon opened, as did the first lines of the networks in Germany, Spain, Britain and Belgium and the Netherlands were opened, relegating Italy to near the bottom of the list of European high-speed countries when it had once been first. The major reasons for the delays include changes of government commitment and fiscal challenges, but also the tough tunneling through some of Europe's highest mountain ranges. As a result, although the Italian railway network exceeds 10,000 miles, only 400 of it comprises dedicated high-speed lines, even counting the Milan-Turin segment expected to open by end of this year.

Second, a funding mechanism beyond annual appropriations must be found, such as the gasoline tax that has sustained public transportation and highway funding for decades; yet, as is increasingly understood, that mechanism is now falling short of what is needed. A new one is proving elusive not just for high-speed investments but even traditional surface transportation programs.

Finally, the future of high-speed in America needs an early win. France had its Paris-to-Lille line; Japan its Tokyo-Osaka route; Italy its Rome-Florence "Direttissima"; Spain had its Madrid-to-Seville. Perhaps California will be America's early scorer, or an upgraded Acela service on the Northeast Corridor. Although we are early in the first quarter of a long game, advocates could use a touchdown soon.


Spanish high-speed development has insights for U.S. networks

Spain has emerged from a lagging economy to one of the fastest growing in Europe, and its railway industry is a vivid example of this turnaround. Its development has lessons for both how the network can be designed and built quickly as well as how success can sustain the network's expansion even against political and economic turmoil.

Only 17 years ago, in 1992, Spain opened its first high-speed line from Madrid to Seville; the network is known by the acronym AVE, which stands for Alta Velocidad Española (Spanish for "Spanish High Speed") but also the Spanish word for bird. Today, the network comprises 4,300 miles and next year it will be largest in the world by system track length. By 2020, the nation says it will have 6,250 miles of high-speed rail in revenue service, making AVE available to 90 percent of the population within 62 miles.

Modeled after the first-generation French system, the AVE network operates at speeds of up to 186 mph on dedicated track.

According to Spanish government studies, travelers will choose rail over auto or air if the journey is as short as two-and-a-half hours. Any minor reduction in time past this threshold does not significantly increase passenger demand along the line, particularly if they are not located in city centers. This also means that at the commercial speeds of the mode, any high-speed business plan must have at its core reduction of travel times in journeys between 125 miles to 500 miles.

The government-backed AVE service is also commercially aggressive. For example, in its customer satisfaction policy, the line from Madrid to Seville offers what is believed to be the only money-back policy in the world that refunds the entire fare if there's even a five-minute delay. The policy was implemented in 1994 on Spain's first AVE line; since then less than 0.25 percent of trips have been taken under the policy. Although there are plans for the rest of Spain's high-speed network to implement it, the Madrid-Seville line remains the only with the money-back guarantee.

If anything, Spanish investment has accelerated. Since 2003, the government's spending in both high-speed and conventional railways has exceeded that of roads, surpassing $6 billion annually - more than one-half a percent of the Spanish GDP. Even more impressively, one-half of the $252 billion budget for Spain's 2005-2020 Transportation Infrastructure Plan will be spent on rail infrastructure.

Although French and German technology was imported for the AVE system, the market growth in Spain boosted domestic technology development in the sector. For example, Talgo and CAF, two well-established Spanish rolling stock builders, have developed tilting trainsets and automatic gauge-switching bogies that are now exported throughout Europe and the rest of the world.

Such technical achievements have not gone unnoticed in North America. To address concerns of some about the safety of introducing a high-speed train in the same corridor as conventional trains, which is included in some sections of California's development plans, officials of the California High-Speed Rail Authority (CHSRA) invited representatives of the Spanish industry to discuss their country's impressive safety record, even during its rapid network development.

The Spanish experience proves that "high-speed passenger trains and freight rail can coexist safety and efficiently," Mehdi Morshed, executive director of the CHSRA, said after the meetings.

In the early 1990s the European Union demanded a standardized system called ERTMS. It works by standardizing both the information and the means of transmission that trains automatically send and receive to and from signaling control systems, so as to obviate the need to change systems upon changing countries.