July 25, 2009 -
PRLog -- Ten potential corridors in the US have been identified to develop high speed rail with a US$8bn federal stimulus package. US President Barack Obama has released a strategic plan to develop high-speed rail in the US. A Vision for High-Speed Rail in America identifies 10 potential corridors in the country. However, the report is concerned for the feasibility of the ambitious plans considering the level of cost and planning associated with developing high-speed rail. Obama announced the plans to develop a network of high-speed rail routes across the country in an attempt to revolutionise the US transport network. The project is hoped to boost the economy, create jobs, reduce dependence on oil and make transport more 'green' in America.The proposal includes 10 high-speed rail corridors, crossing more than 20 states and plans to upgrade the existing high-speed line. In the federal stimulus package, US$8bn has been allocated to developing highspeed rail; an additional US$1bn will come from the budget each year, proposed under the FY2010 budget, for the next five years to support the plans. However, there are concerns, which BMI echoes, that this is not nearly enough funding. The US currently has only one high-speed line: Amtrak's Acela Express, which links Boston to Washington DC via New York. However, the line tends to travel slower than the 125mph needed to classify it as 'high speed'. This is compared to 1,180miles of high-speed rail in France, a country roughly the size of Texas. There are plans underway in California already to develop a high-speed railway stretching 800 miles, linking San Francisco to Los Angeles. That project alone is estimated to cost around US$45bn, far more than the entire amount allocated from the federal stimulus for 10 corridors, indeed the cost for all 10 would amount to around half of the federal stimulus package. This comparison highlights the fundamental financial issues that the report warns of. There are plans to involve the private sector in the proposal, something the report believes will be necessary to get the projects on track. Best estimates for the California rail put full operation in 2020, and this is a project that has already been in planning for some time. The strategic plan for the development of high-speed rail will concentrate on projects that can be completed quickly and provide job creation sooner rather than later. In light of this, it is believed that it may be decades before some of the planned corridors come to light, if at all.This latest issue of the US Transport Report predicts that over the 2009-2013 forecast period, overall freight carried across all transport modes will grow by an annual average of 1.2%, measured in million tonnes-km (mntkm). This will lag predicted economic growth which we see averaging 1.4%. Both numbers have been pulled down by the recession that we see as being the dominant story of 2009-2010.By transport mode, we see growth being led by railfreight (1.6% per annum), followed by airfreight (1.4%), road haulage (1.2%), shipping (0.9%) and pipeline throughput (0.7%). Companies will be monitoring the fall in demand for freight to assess when the bottom of the cycle has been reached and when to anticipate a possible recovery. We expect transport and communications GDP to grow to US$1.143trn by 2013, representing 6.6% of US GDP.The protectionist trend in US freight transport first hit the headlines early in 2006, when US Congress broke ranks with President George W. Bush and successfully opposed the sale of a controlling interest in six key ports (including New York, Philadelphia, and Miami) to Dubai Ports World (DPW) on security grounds. Under intense political pressure DPW, which acquired the ports through its takeover of Londonbased Peninsular & Oriental (P&O), then agreed to sell its US interests to a third party, an American International Group (AIG) unit. Similar protectionist trends have shown up in the aviation sector, where Congress and trade unions tried to hold back plans to give foreign investors a greater say in the running of US-based airlines. At the beginning of 2009 another international player, Deutsche Post-owned DHL, withdrew from the domestic US express delivery market after years of losses. The exception, perhaps because it has gone largely unnoticed, has been road transport, where a series of foreign toll-road operators have been buying large stakes in US roads. But here too there are signs of greater caution. It is believed the new government will be under continuing pressure to take a protectionist stance on a range of trade and transport issues, but since taking office has shown itself minded to hold back from moving far in that direction.As the largest economy in the world, it could be argued that there is already enough internally-generated competitive drive in the US freight business. The report disagrees, taking the view that even major US companies could improve their performance by being exposed to greater external competition. Major US airlines have, despite some exceptions and recent improvements, piled up massive losses and have been in and out of bankruptcy protection. There has been a notorious lack of new investment in the country’
s pipeline and refinery infrastructure, exposed during Hurricane Katrina.
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