Dear House T&I: right policies let rail be the only mode privatized “from the infrastructure on up”

FOR IMMEDIATE RELEASE — February 21, 2011

Ken Prendergast
All Aboard Ohio Executive Director
(216) 288-4883

COLUMBUS – For the first time since the early 20th century, railroad carriers’ unique ownership of their infrastructure and rights of way could be a speedy growth engine for them. All Aboard Ohio made that case as the U.S. House Transportation & Infrastructure Committee sought testimony at a series of “field hearings” for its upcoming renewal of the six-year federal surface transportation spending law.

A field hearing was held in Columbus on Feb. 19. All Aboard Ohio is grateful to U.S. Rep. Steve Stivers (R-Columbus) for inviting us to submit written testimony. T&I Committee Chair Rep. John Mica (R-Winter Park, FL) asked witnesses for ideas and input on how to:

  • accelerate transportation project delivery;
  • identify creative financing options; and
  • increase private-sector investment in transportation projects.

All Aboard Ohio offered solutions to problems told by witnesses like Ohio Department of Transportation Director Jerry Wray who lamented falling state and federal gas tax revenues and the rising costs of maintaining roads. Keith Tuttle of Motor Carrier Services in Toledo urged longer hours that truckers can be on the road – because of highway congestion, truckers cannot travel as far. Meanwhile Rep. Mica reminded witnesses about rising gasoline prices and that federally compliant transportation projects typically require a decade to go from idea to construction.

In its testimony (see:, All Aboard Ohio noted there are three ways for government to subsidize transportation:

  • direct financial outlays (grants and loans);
  • tax credits; and
  • outright ownership of transportation infrastructure.

All Aboard Ohio urged expansion of tax credits to meet the committee’s three basic goals, noted above. It would allow federal transportation incentives to move at the speed of business and without expanding federal bureaucracies.

“The passenger and freight rail industry is unlike any other mode of transportation as the carriers must own and be responsible for their infrastructure and rights of way,” All Aboard Ohio noted in its testimony. “That places a much higher fixed-cost burden on rail carriers (including Amtrak and transit agencies), compared to other modes where carriers can treat the public infrastructure they use more so as a variable cost. Rail carriers must pay for their own right-of-way policing and security, maintenance, dispatching and traffic management, and liability insurance. By comparison, for highway users and airlines, those costs are largely externalized onto general revenue taxpayers. Any public policy changes must acknowledge this unique situation in the rail industry.”

In recognition of this situation, All Aboard Ohio urged creation or expansion of tax-credit incentives for the following activities:

Capital improvements: encourages private enterprise, not public agencies, to lead rail freight, passenger and transit projects.

Positive Train Control: addresses the unfunded mandate of PL 110-432 on railroads to invest up to $10 billion to install PTC by 2015.

Public-benefit activities: allows railroads to provide public-benefit activities that do not benefit freight rail shareholders.

Electrification: encourages railroads and public utilities to expand use of electricity as a source of motive power.

Safety & technology research: promotes innovation at rail industry suppliers.

All Aboard Ohio urged Congressional action on two other issues:

Expand service partnerships with higher education: specialization in education requires more travel by students who often do not have cars and no other way of getting around. We support the Ohio Higher Education Rail Network model.

Simplify the RRIF program: The Railroad Rehabilitation and Improvement Financing should offer no-interest loans, eliminate loan rankings based on purpose, be aligned more closely with the fiscal soundness loan-award policies of private lenders, and require only NEPA categorical exclusion documentation.

“The low-cost, market-based, high-impact proposals in this report would allow the rail industry to use its inherent strengths to surge ahead and take the next logical steps for both passenger and freight. And thus, the unique situation of carriers’ responsibility over their infrastructure could be turned from an albatross into a true asset,” All Aboard Ohio concluded.


1 Comment to "Dear House T&I: right policies let rail be the only mode privatized “from the infrastructure on up”"

  1. January 24, 2012 - 2:40 AM | Permalink

    2.) Can I just say what a relief to find someone who actually knows what theyre talking about on the internet. You definitely know how to bring an issue to light and make it important. More people need to read this and understand this side of the story. I cant believe youre not more popular because you definitely have the gift.

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