Keywords: American Recovery and Reinvestment
Act, high speed rail, federal funds, railroad, public-private
President Obama has announced awards totaling $8 billion from
the American Recovery and Reinvestment Act for high speed
inter-city passenger rail projects. The money will go to 13 rail
corridors covering 31 states and the District of Columbia. Major
awards include: $1.25 billion to develop a high speed rail corridor
between Tampa and Orlando in Florida, with trains at speeds up to
168 miles per hour; $2.25 billion to connect Southern California to
the San Francisco Bay area, with trains running up to 220 miles per
hour; and $2.6 billion for projects in the Midwest Corridor,
including $1.1 billion for service between Chicago and St. Louis.
Smaller awards across the nation target improvements and extensions
to existing inter-city lines, repair of tunnels and bridges for
increased speeds on existing tracks and planning studies for future
While this investment in high speed rail is unprecedented,
demand far exceeds available federal funds. The US Department of
Transportation received requests totaling $55 billion. Additional
funds for high speed rail projects may be made available from the
$1.5 billion in discretionary stimulus funds yet to be announced by
US DOT Secretary Ray LaHood. Also, Congress has approved an
additional $2.5 billion for high speed rail projects that has not
yet been awarded and a proposed version of the transportation
reauthorization bill includes an additional $50 billion for high
The awards provide only partial funding for most projects,
creating significant opportunities for private investment in
high-speed rail infrastructure in the United States. Private
capital is likely to be required to bring many projects to
fruition; private rail car manufacturers will be tapped to provide
specialized equipment and private operators with expertise in
high-speed rail from the United States and abroad may also play a
Many states are already looking to public-private partnerships
to supplement federal, state and local funding as well as
management capacity for the development, financing and operation of
such projects. For example, the Florida Department of
Transportation expects to contract with the private sector for more
than $1 billion for core systems, rolling stock and operation of
the Tampa to Orlando corridor. In California, the total estimated
cost for the new San Francisco to Los Angeles corridor exceeds $40
billion and the state expects to use a combination of bonds and
public-private partnerships to fill this gap. In addition, the
federal government has secured a commitment from more than 30
domestic and foreign manufacturers and suppliers to establish or
expand operations in the United States if they are retained for
high speed rail and intercity passenger rail projects.
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Mayer Brown article provides information and comments on legal
issues and developments of interest. The foregoing is not a
comprehensive treatment of the subject matter covered and is not
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