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Infrastructure Technology Institute

Researchers, Politicians and industry professionals Discuss High Speed rail at Recent Lipinski Symposium

Ray LaHood
U.S. Secretary of Transportation Ray LaHood shakes hands with attendees.

“How fast?  How soon?  How Much?” were key questions debated by participants at the 5th annual William O. Lipinski Symposium on Transportation Policy, which focused on the future of high speed rail (HSR) transportation in America.  Named in honor of former U.S. Representative William O. Lipinski, this year’s event brought together supporters and skeptics to consider the challenges and opportunities of HSR.

U.S. Transportation Secretary Ray LaHood began the day with a strong advocacy statement: “Very soon, you’re going to be riding on a train from Chicago to St. Louis that's going to be a state of the art train on state of the art tracks because of the investments that we have made in high speed rail in Illinois. For whatever critics there are here of high speed rail today, for the people, this is an alternative form of transportation that currently does not exist in Illinois. This will get cars off the road, get people out of congestion and from one point to another in an efficient, cost-effective way. This is what the American people want.”

Morning Panel
The morning panel listens as Sam Skinner speaks.

In a panel discussion moderated by Bruce Dold of the Chicago Tribune, LaHood’s view was shared by Joseph Szabo, U.S. Federal Railroad Administrator; former Minnesota Congressman James Oberstar; and Howard Learner, Executive Director of the Environmental Law and Policy Center.   Speaking in opposition were Samuel Skinner, former White House Chief of Staff and U.S. Transportation Secretary; Congressman William Shuster from Pennsylvania; and Robert Poole, Director of Transportation Policy at the Reason Foundation.

Arguing in favor of balanced federal investment in transportation, Mr. Oberstar said, “We have invested very heavily in highways and air travel and not enough in train travel –$1.4 trillion in highway spending, $485 billion in air travel since 1975, and $38 billion in rail…passenger service needs to be more dependable and faster than the car.”

“How can we afford it?” queried Mr. Learner about public investments in railroads, air and highway services, “this decision is a ‘both/and,’ not an ‘either/or.’ In many metro areas ridership is going up, which tells us that there is need and desire from the public for all services.”

Shuster
Rep. Shuster presents his argument.

Rep. Shuster argued that, “… there is a place for high speed rail in this country, but not in the way the president has laid out. The northeast corridor is the most congested part of the US – this is where we should focus and the administration has missed this…we ought to be focusing the dollars where the connections make sense.”

“It’s certainly nice to have travel choices, and we have a number of choices already, but the real question is who is paying for them?” asked Robert Poole. “High speed rail is not a business, all over the world it is a subsidized mode and we only know of two systems that have actually recovered their capital costs. Others have received significant capital subsidies and others have received operating subsidies.”

The panel debate was followed by a discussion of the challenge of forecasting the market demand for high speed rail services. Dr. Steven Polzin, Director of Mobility Policy Research at the University of South Florida’s Center for Urban Transportation Research, said that “The level of understanding we have of travel behavior is really better than its ever been – we’ve been watching and collecting data for a number of years, but clearly uncertainty still remains.” Polzin noted that travel trends are hard to predict due to competing services, uncertainties in local and regional land use development, connectivity to other modes of transit, and the challenging environment that accompanies the introduction of a service that is new to this country.

Mid-morning panel
Kimon Proussaloglou gives his presentation.

Frank Koppelman, professor emeritus of Northwestern University  and Kimon Prossaloglu of Cambridge Systematics, Inc.,  outlined the critical importance, and the challenges of, forecasting ridership and revenue on a new system, particularly one for which that has been no prior U.S. experience on which to basis forecasting models.  This makes it difficult to anticipate traveler responses.  The problem is compounded by limitations in available, timely intercity passenger travel data.  Data gaps in rail and auto travel are particularly important.

Koppelman, who chairs the peer review panel for the travel forecasting component of the California High Speed Rail Program, cited the importance of peer reviews in such contexts to make assumptions and models transparent  and the guard againsted biased estimation.

A third panel addressed the other major challenge to implementing HSR in America, finance. William Testa, Vice President of the Economic Research Department at the Federal Reserve Bank of Chicago, focusing on the Chicago region, spoke about the potential economic development benefits from HSR.  “Benefits in economic development hold great promise,” he said, “but they are quite uncertain and would likely require public subsidy. “  He then posed the question, “What is the public’s appetite for risk (and possible failure)?”

Thomas Lanctot, Principal at William Blair & Company, described the need for and the value of public-private partnerships. “Private sector engagement is going to be of critical importance if high speed rail is going to succeed. The traditional methods of infrastructure finance, either federal grants or borrowing money, are just not going to be enough to make this thing go.”

Lanctot reviewed the recently-released business plan for the California HSR and observed that, “While the California High Speed Rail Business Plan reflects improved and more conservative analysis, many assumptions remain optimistic and speculative.”

Raymond Ellis, Managing Director of AECOM, Inc. expressed doubt that
“…there are any US true high speed rail projects which will throw off sufficient cash from operations to 100% finance their capital costs.”  He also saw it as unlikely that any (private) concessionaires would accept the ridership and revenue risk associated with monetizing (franchising) a HSR project.  Furthermore, he felt that funding a true HSR program on their own is beyond the capacity of any of the 50 states.

If HSR rail is to proceed, Dr. Ellis felt these requirements have to be met:

  • HSR programs should be implemented incrementally and the increments  should have independent utility.
  • The Federal government must be a reliable partner to the states, Amtrak,  and the private sector in implementing  HSR programs. This may include grants as well as credit support through the RRIF and TIFIA program.  States must also be meaningful partners with the Federal government.  
  • States as well as multi‐state entities need the authority to enter into public private partnerships, through which availability payments would be the mechanism for supporting implementation and operation of HSR programs.
  • Joint development programs should be pursued at stations – with a particular emphasis on funding/financing those stations and related facilities.

Afternoon panel
The last panel of the dayfrom left to right: William O. Lipinski, William Testa, Raymond Ellis, Ann Schneider, Paul Karas

In the closing panel, earlier speakers and panel participants joined in a final question and answer session, moderated by ITI Director Joseph Schofer. The panel synthesized the knowledge shared throughout the day and shared their conclusions.

One participant asked a particularly interesting question: “A lot of the discussion today recapitulates the discussions held in the 50’s about how to fund the Interstate highway system…There was never any prediction that the highway system would be a business – it would be a public transportation system. Is there any reason we can’t look at passenger rail the same way?”

William Lipinski responded, “Eisenhower was the main proponent of the Interstate highway system, and he pushed for it to move forward because he wanted the highway system for military purposes. This is an element that does not really exist today with high speed rail.”

Mr. Lipinski closed the forum with this statement: “We have heard many interesting facts today, and I have big doubts about true high speed rail in this country… I don’t see any possibility of true high speed rail coming to pass. We don’t have any money to finance an aviation bill or the highway trust fund right now, and I don’t see how we can take on true high speed rail at this time. We can, however upgrade our existing railways.”

Schulz Award
Left to Right: William O. Lipinski, Joseph Schofer, Jo Ann Schulz, Robert Schulz, and Henry Bienen with the David F. Schulz Award

During luncheon, Former Rep. Lipinski presented the David F. Schulz Award for Outstanding Public Service in Transportation and Infrastructure to U.S. Senator Richard J. Durbin, for his contributions to securing resources for major transportation investments in Illinois.