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77–211 PDF 2013

AN UPDATE ON THE HIGH-SPEED 

INTERCITY PASSENGER RAIL PROGRAM: 

MISTAKES MADE AND LESSONS LEARNED 

(112–114) 

HEARING 

BEFORE THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

DECEMBER 6, 2012 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

Available online at: http://www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=transportation 

(II) 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JOHN L. MICA, Florida, Chairman 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

FRANK A. LOBIONDO, New Jersey 

GARY G. MILLER, California 

TIMOTHY V. JOHNSON, Illinois 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

SHELLEY MOORE CAPITO, West Virginia 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ANDY HARRIS, Maryland 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

JAIME HERRERA BEUTLER, Washington 

RANDY HULTGREN, Illinois 

LOU BARLETTA, Pennsylvania 

CHIP CRAVAACK, Minnesota 

BLAKE FARENTHOLD, Texas 

LARRY BUCSHON, Indiana 

BILLY LONG, Missouri 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York 

JEFFREY M. LANDRY, Louisiana 

STEVE SOUTHERLAND II, Florida 

JEFF DENHAM, California 

JAMES LANKFORD, Oklahoma 

REID J. RIBBLE, Wisconsin 

CHARLES J. ‘‘CHUCK’’ FLEISCHMANN, 

Tennessee 

VACANCY 

NICK J. RAHALL II, West Virginia 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

RUSS CARNAHAN, Missouri 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

MAZIE K. HIRONO, Hawaii 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

STEVE COHEN, Tennessee 

LAURA RICHARDSON, California 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

VACANCY 

(III) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... v 

TESTIMONY 

PANEL 1 

Hon. Kevin McCarthy, a Representative in Congress from the State of California ..................................................................................................................... 10 

Hon. Janice Hahn, a Representative in Congress from the State of California . 10 

PANEL 2 

Hon. Ray LaHood, United States Secretary of Transportation ........................... 14 

PANEL 3 

Mitchell Behm, Assistant Inspector General for Rail, Maritime and Economic 

Analysis, United States Department of Transportation ................................... 43 

Susan A. Fleming, Director, Physical Infrastructure Issues, Government Accountability Office ................................................................................................ 43 

Hon. Paula J. Hammond, P.E., Secretary of Transportation, Washington 

State; Chair, American Association of State Highway and Transportation 

Officials High-Speed and Intercity Passenger Rail Leadership Group; and 

Chair, States for Passenger Rail Coalition ........................................................ 43 

Hon. Ann L. Schneider, Secretary, Illinois Department of Transportation ........ 43 

Edward R. Hamberger, President and Chief Executive Officer, Association 

of American Railroads ......................................................................................... 43 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Hon. Kevin McCarthy .............................................................................................. †

Hon. Janice Hahn .................................................................................................... 62 

Hon. Ray LaHood ..................................................................................................... 68 

Mitchell Behm .......................................................................................................... 98 

Susan A. Fleming .................................................................................................... 108 

Hon. Paula J. Hammond, P.E. ................................................................................ 135 

Hon. Ann L. Schneider ............................................................................................ 145 

Edward R. Hamberger ............................................................................................ 159 

SUBMISSIONS FOR THE RECORD 

Hon. Ray LaHood, United States Secretary of Transportation: 

Request to submit letter and attached S. 1029 Connectivity and Bookend 

Investments list from Dan Richard, Chair, California High-Speed Rail 

Authority Board, to Hon. John L. Mica, Chairman, and Hon. Nick 

J. Rahall II, Ranking Member, Committee on Transportation and Infrastructure, December 4, 2012 ........................................................................ 17 

Request to submit Current High-Speed and Intercity Passenger Rail Program Investments maps ............................................................................... 27 

Responses to questions for the record from Republican members of the 

Committee on Transportation and Infrastructure ..................................... 81 

Responses to questions for the record from Hon. Corrine Brown, a Representative in Congress from the State of Florida ..................................... 90 

Mitchell Behm, Assistant Inspector General for Rail, Maritime and Economic 

Analysis, United States Department of Transportation, responses to questions for the record from Republican members of the Committee on Transportation and Infrastructure ............................................................................... 106 

Page

IV 

Susan A. Fleming, Director, Physical Infrastructure Issues, Government Accountability Office: 

Responses to questions for the record from Republican members of the 

Committee on Transportation and Infrastructure ..................................... 130 

Responses to questions for the record from Hon. Corrine Brown, a Representative in Congress from the State of Florida ..................................... 133 

Hon. Ann L. Schneider, Secretary, Illinois Department of Transportation, 

responses to questions for the record from Republican members of the 

Committee on Transportation and Infrastructure ............................................ 156 

† Hon. Kevin McCarthy did not submit a written statement. 

v 


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SUMMARy OF SUBJECT MATTER 

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From: 

Subject: 

Members ofthe Committee on Transportation and Infrastructure 

Majority Staff on the Subcommittee on Railroads, Pipelines, and Hazardous 

Materials 

Hearing on "An Update on the High Speed and Intercity Passenger Rail 

Program: Mistakes Made and Lessons Learued" 

PURPOSE 

On Thursday, December 6, 2012, at 9:30 a.m. in 2167 Rayburn House Office Building, 

the Committee on Transportation and Infrastructure will receive testimony regarding the Federal 

Railroad Administration's (FRA) High-Speed and Intercity Passenger Rail (HSIPR) Program. 

Last December, the Committee held a series of two hearings on the HSIPR Program and this 

hearing will follow-up on those hearings. The hearing will provide an opportunity to examine 

F'RA's management of the program, consider where projects are in the process, and discuss 

means of improving the program now that a majority of the funds have been obligated. 

HISTORY OF THE HSIPR PROGRAM 

Legislative History 

The Passenger Rail Investment and Improvement Act of 2008 (PRIlA) authorized two 

passenger grant programs to States, one for capital improvements on traditional intercity 

passenger rail, and another for bigh-speed rail (greater than 110 mph) on designated HSR 

corridors. These two programs were combined in subsequent appropriations acts into the FRA's 

HSIPR Program. Using that framework, the American Recovery and Reinvestment Act (ARRA) 

allocated $8 billion in federal funding. The President's stated vision for the HSIPR program was 

to provide 80 percent of Americans with access to bigh-speed rail within 25 years. 

Only two months after the passage of the ARRA, Congress appropriated $90 million in 

the fiscal year 2009 Omnibus for State Capital Grants for Intercity Passenger Rail Service. In the 

Consolidated Appropriations Act for fiscal year 2010, an additional $2.5 billion in HSIPR 
vi 


Insert offset folio 2 here 77211.002

funding was appropriated, but no more funds have been appropriated to the program. Indeed, the 

FY 2011 Omnibus Appropriations Act actually rescinded $400 million of unobligated HSIPR 

funds, bringing the total appropriated funding for HSIPR down to $10.1 billion. 

Status of Funding and Projects 

In the HSIPR program there are a total of 151 projects, including large multi-billion 

dollar, long-term construction projects and small planning projects. The FRA has obligated 99% 

of all HSIPR funds to 148 projects totaling approximately $9.934 billionl (see chart below). 

Because of an obligation deadline in ARRA of September 30, 2012, it is important to note that 

100% of the ARRA funding in the program has been obligated. However,just because the 

funding is obligated does not mean the projects are under construction, as the agreements 

discussed in further detail below must be in place prior to expenditure. Further, the ARRA funds 

must be spent by September 30,2017 or the funds' availability will be cancelled. (See 31 U.S.c. 

§lS52(a». As for the remaining 1% of total funding, which includes both FY2009 and FY2010 

funding, only three full projects and part of another project are unobligated,2 as of November 19, 

2012. 

Now that federal funding for the HSIPR Program has been almost fully obligated, the 

FRA has shifted focus from awarding and obligating funds to overseeing project management. 

As of November 29, 2012, there are six completed construction projects, with thirty-one 

construction projects underway, and thirteen expected to begin in the next six months. Many of 

the construction projects are upgrades to routes on which Amtrak already operates and service on 

those routes will not exceed 110 mph. For example, prior to Thanksgiving, the State of Illinois 

and Amtrak introduced 110 mph service on the Chicago to Sf. Louis route for an approximately 

IS-mile stretch of track between Dwight and Pontiac, IL. Of the other projects funded under the 

program, only the California High-Speed Rail project and the Northeast Corridor would be truehigh speed rail. The Committee will explore the Northeast Corridor's future in a hearing next 

week. Listed below are the obligated projects and funding by corridor. 

I This total does not include approximately $50 million in ARRA funding retained by FRA for oversight and 

administration. 

, The three unobligated projects include: Texas' Valley View Double Track Project IV ($7J9M, FY09 funds); 

Florida's Orlando-Miami Corridor Plan ($8M, FYI 0 funds); and New York's Syracuse Track Construction and 

Signal Improvements (SI8.5M, FYIO funds). Part of the Chicago-Iowa City Corridor Service project bas yet to 

obligated; the unobligated amount totals $S3M of the FYIO funds. 

2 
vii 


Insert offset folio 3 here 77211.003

SOU1'C<: Federal J1ailraad Administration 

*Other planning projects, projects on other corridors, and projects on Amtrak Jong distance routes. 

Project Agreements 

The key stakeholders in the projects include FRA, the States, and the freight railroads. 

While FRA manages the grant program, the vast majority of the project grantees are States and 

State agencies, though Amtrak: has received funding for Northeast Corridor (NEC) 

improvements. Aside from the NEC and some other properties owned by Amtrak and the States, 

most HSIPR projects are taking place on infrastructure owned by host freight railroads. Given 

the role freight railroads play in our nation's economic growth, ins important that the host 

freight railroads' capacity to move their freight not be compromised by passenger rail expansion 

and investment. This has meant that the grantee States and host railroads have had to establish 

different sets of terms or agreements to protect each entity's respective interests. 

Specifically, three types of terms or agreements have been identified: (1) service outcome 

agreements or service outcome terms, which set forth the benefits of the investment and the 

service levels; (2) maintenance-related terms or agreements, which address maintenance 

responsibilities; and (3) construction-related terms or agreements, which address responsibilities 

for construction management and performance. In certain circumstances, in lieu of service 

outcome agreements/terms, FRA has allowed for development rights andlor investment terms or 

agreements because the project is fairly localized and not one where the project itself could 

guarantee a particular outcome for the service. 

3-
viii 


Insert offset folio 4 here 77211.004

The Committee will hear from witnesses, including representatives of all of the major 

stakeholders, on the progress of the program, their experience with implementation, and 

improvements that should be made. 

CONCERNS WIm RSIPR PROGRAM 

FRA Grant Management Concerns 

A variety of concerns have been raised regarding the management of the HSIPR 

Program. As noted last December, in March 2011, the Govemment Accountability Office 

(GAO) released a report that highlighted concerns with transparency and other issues with 

FRA's selection process. Specifically, the report found FRA applied its established criteria 

during the eligibility and technical review, but GAO could not verifY whether it applied its final 

selection criteria because the documented rationales for selecting projects were typically vague. 

More recently, however, the DOT Office of Inspector General (DOT 1G) has released 

two reports raising concerns with FRA's grants management framework and stakeholder 

agreements process. Specifically, in a September 11, 2012 report entitled "Completing a Grants 

Management Framework Can Enhance FRA's Administration of the HISPR Program" 

(September Report) the DOT 1G found that FRA lacked sufficient guidance for staff and grantees 

to comply with HSIPR grants administration policies and procedures. Furthermore, the DOT IG 

found that "FRA' s HSIPR goals ... lack the thoroughness needed to ensure grant managers imd 

decision makers, including Congress, understand the goals the program aims to achieve." 

(September Report, p. 12). The DOT IG also explained that the FRA lacks mechanisms to assess 

program and grantee performance and does not have a comprehensive training program for 

HSIPR staff. 

In a November 1,2012 report entitled "FRA's Requirements for High Speed Rail 

Stakeholder Agreements Mitigated Risk, but Delayed Some Projects' Benefits," the DOT 1G 

assessed FRA's development of stakeholder agreements for long-term, corridor projects, and the 

effects that the requirements' development had on short-term, ready-to-go projects. The DOT IG 

found that FRA's lack of clear guidance on structuring service outcome agreements required 

FRA to be more involved in negotiating the agreements resulting in a challenging and more time 

consuming process. Furthermore, the agency's focus on negotiating those long-term project 

agreements delayed realization of short-term project benefits. The Committee will hear from the 

DOT IG on its findings from these reports. 

California High-Speed Rail Proiect 

One of the Committee's HSIPR Program hearings last year was focused on the California 

High Speed Rail project, as it is by far the largest beneficiary of the HSIPR Program. In total, 

the project has been awarded $3.897 billion ($2.952 billion from the Recovery Act, and $945 

million from the FY 2010 Appropriations bill). This represents approximately 39 percent of the 

total HSIPR grant funding obligated by the FRA. Since the Committee's hearing last December, 

the California High-Speed Rail Authority (CHSRA) adopted a revised business plan in April 

2012 that estimated the total cost of the project at $68 billion with a completion date of 2028. 

4 
ix 


Insert offset folio 5 here 77211.005

The plan claimed cost and time savings through use of a "blended" approach, i.e., using current 

right-of-way into San Francisco and Los AngeJes, not a dedicated high-speed rail aligmnent. 

The plan also assumes that, in addition to the Federal funds already obligated, the project will 

receive future Federal support of approximately $42 billion. 

In July 2012, the California State Legislature approved State bond funds in the amount of 

$2.7 billion as a match to the obligated Federal funds. The CHSRA is now preparing to begin 

construction by next sunnner on the initial construction segment (lCS) from south of Merced to 

north of Bakersfield. However, it recently announced that the compJetion date for the rcs would 

be pushed back a year until December 2017. Other than the rest of the State bond funds, 

CHSRA does not currently have any other funding, Federal or otherwise, to complete the initial 

operating segment (lOS) from Merced to the San Fernando Valley. The chart below provides the 

planned funding breakdown for each segment of the project. 

Due to a number of concerns raised with the project at last year's hearing, the Committee 

Chairman and Subcommittee on Railroads, Pipelines, and Hazardous Materials Chairman, along 

with the M!!iority Whip and a number of the California delegation signed on a letter to the 

Comptroller General of the United States requesting the Goverument Accountability Office 

(GAO) to review the project. The GAO's review is focused on (1) the reliability of the project's 

costs and financing sources; (2) reasonableness of the passenger traffic and revenue estimates; 

and (3) comprehensiveness of estimates of economic impacts, including those on adjacent 

landowners, associated with the project. The Committee will be updated on the status of GAO's 

review, which is expected to be completed by February 2013. 

3 PropositionlA was approved by California voters on November 4, 2008, and authorized the State to sell $9.95 

billion in general obligation bonds to fund the high speed rail project; however, under State law, the bond funds are 

only available after appropriation by the Legislature. 

5 
x 


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INVITED WIlNESSES 

The Honorable Ray LaHood 

Secretary 

United States Department of Transportation 

Mr. Mitchell Behm 

Assistant Inspector General for Rail, Maritime and Economic Analysis 

United States Department of Transportation 

Ms. Susan Fleming 

Director, Physical Infrastructure 

Government Accountability Office 

The Honorable Paula J. Hammond, P .E. 

Secretary of Transportation, Washington State 

Chair, AASHTO HSIPR Leadership Group 

Chair, States for Passenger Rail Coalition 

Mr. Edward R. Hamberger 

President & CEO 

Association of American Railroads 

The Honorable Ann L. Schneider 

Secretary of Transportation 

State of lllinois 

6 
(1) 

AN UPDATE ON THE HIGH-SPEED 

INTERCITY PASSENGER RAIL PROGRAM: 

MISTAKES MADE AND LESSONS LEARNED 

THURSDAY, DECEMBER 6, 2012 

HOUSE OF REPRESENTATIVES, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, WASHINGTON, DC. 

The committee met, pursuant to call, at 9:35 a.m., in Room 2167, 

Rayburn House Office Building, Hon. John L. Mica (Chairman of 

the committee) presiding. 

Mr. MICA. Good morning. I would like to call this hearing of the 

House Transportation and Infrastructure Committee to order. 

Today is another one of our hearings focused on passenger rail in 

the United States, and this is an oversight hearing which we conduct at the full committee level. I am pleased to welcome everyone 

to this hearing and this opportunity to review the progress of highspeed rail in particular today, and the title of the hearing is, ‘‘An 

Update on the High-Speed Rail Intercity Passenger Rail Program: 

Mistakes Made and Lessons Learned.’’ 

The order of business is we are going to hear Members’ opening 

statements from the committee. Then our first panel will actually 

be two Members who we will welcome and hear their commentary. 

Both of them are from California, leaders in the Congress we are 

pleased to welcome, and then we will have the Secretary, and I believe, and one panel, and another panel to follow. So that is the 

order of business. 

And again, welcome, and I will start with my opening statement, 

and we will yield and continue. 

Well, again, as I said in introductory comments that we have 

been trying to conduct some oversight of passenger rail service. We 

focused in the past hearing on Amtrak and its organization and reorganization attempts I think dating back to 2005 and most recently. 

The purpose of these hearings is not to micromanage. Sometimes 

people say I get a little bit into the weeds, but to, in fact, hopefully 

influence policy which we are responsible for, legislation that accounts for an important responsibility under our transportation 

portfolio, and that is making certain that the United States is in 

the business, regarding rail and conducting that activity for passengers and freight in a responsible manner. 

At this committee’s level, we have responsibility over Amtrak, 

our significant and really only passenger enfranchised operator in 

the United States, and so we focus quite a bit on that agency, and 

as you know, for 40 years or more, we have subsidized that operVerDate Aug 31 2005 15:10 Feb 07, 2013 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\12-6-1~1\77211.TXT JEAN
2 

ation for more than a billion dollars a year, and we are also faced 

with subsidizing high-speed rail, and that has been a $10 billion 

investment that has been made by this administration and also by 

the Congress, I think eight, was it American recovery stimulus dollars, $8 billion and then several billion added by Congress. That is 

no insignificant figure. 

Again, when we are dealing with multitrillion-dollar deficits, we 

do have a responsibility as a Congress and a committee to see that 

that money is wisely spent, and even if it is stimulus money, that 

that money is spent. One of the questions that I will pose today to 

the Secretary and to others that are before us is, to date, only I 

believe 7 percent of the $10 billion has actually been expended to 

date. Now stop and think about that. We are supposed to be adding 

jobs, the stimulus was supposed to be creating economic opportunity, but 7 percent of the stimulus dollars and the total $10 billion has been spent to date. 

I might also preface my remarks by saying that I consider myself 

one of the strongest advocates, in fact, I have been quoted as saying the biggest cheerleader for transportation and for passenger 

rail and for high-speed rail in the country, and I still hope to cling 

to that title. My effort as chair is actually to move a positive program forward. I started working with Mr. Oberstar when we did 

the PRIIA act, it was the first rail passenger reauthorization in 11 

years, and worked with the other side of the aisle in moving that, 

that important legislation that deals with passenger rail, forward, 

it sets the framework that we are now operating under. And we 

will be looking at a reauthorization in the next Congress, so it is 

very important. 

Let me just say that, whether we are building a high-speed rail, 

intercity passenger rail, transit services, any kind of infrastructure, 

highways, you wouldn’t want to build a four-lane highway, where 

there are no passengers or vehicles to access it. You wouldn’t want 

to build a city transit system where you don’t have adequate capacity or people, passengers to use that facility. The same thing holds 

true with high-speed rail and intercity passenger service. 

I am greatly concerned about the direction of this whole effort. 

I was excited when I heard President Obama and his administration at the beginning wanted to promote high-speed rail. Unfortunately, most of the money, the $10 billion, does not go for highspeed rail. They chose instead to support almost 150 projects, and 

the number is growing, and a lot of that money has been left behind. In fact, most of the money that has been rededicated to highspeed rail has been sent back by States, including my State, the 

State of Florida, where we had a bait-and-switch proposal for highspeed rail, the actual speed was 84 miles per hour, 84 miles that 

took 1 hour to transit the distance of the proposed link in central 

Florida, and that is not high speed. High speed is at least, and by 

our definition, 110 miles per hour average. That doesn’t mean the 

train gets up to 110, 150, 160 miles for some stretch, we are talking about the average speed. 

There was also a bait and switch in Ohio. We were looking at 

39 miles to 58 miles per hour. That money was wisely turned back. 

There was a similar proposal in Wisconsin. That money was turned 

back. And unfortunately, the beginning of the whole high-speed efVerDate Aug 31 2005 15:10 Feb 07, 2013 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\12-6-1~1\77211.TXT JEAN
3 

fort in the United States has been somewhat of a setback for highspeed rail. 

The only route that has a possibility of being high speed is California; we have two California Members we are going to hear from. 

We will go into details about California’s progress, but having visited out there, it does only service what, about a 100-mile stretch 

and mostly in a rural area without the transportation interconnections that we need and intermodal systems. We are serving the 

major population centers. We will talk about plans, and I am concerned about some of the direction of what is going on in California, about plans to connect to, I always say LAX, Los Angeles 

and SFO, the San Francisco Bay Area, which are also troubling reports that we have on that. 

So our intention today is really to try to work in a positive fashion to make certain that true high-speed rail occurs in the United 

States. I make no secret, I tell people in Florida, in my district, and 

around the country, that our number one goal should be and as you 

may know, Amtrak owns and the Government people own have an 

interest in the 600 miles of track between Washington, DC, our Nation’s Capital, Philadelphia, New York City, Boston, the most congested corridor in the United States of America, and that is the 

only 600 miles that we really own. We own some other small 

stretches, all the rest commuter, I am sorry all the rest of Amtrak 

service is run over more than 20,000 miles of private freight rail. 

And I see some of the freight rail people in the audience, and they 

have concerns, too, about using some of their corridors and not having dedicated high-speed corridors, and we need to address that 

issue as we move forward. 

My final point is the Northeast Corridor is where I think we 

should be putting the focus, some dollars; give the administration 

credit for at least taking the money that has been turned back 

dedicating some of it to the Northeast Corridor, but we are doing 

that in a piecemeal, half-baked fashion. The Northeast Corridor, 

every State, every major area can benefit by bringing high-speed 

rail to the Northeast Corridor. Seventy percent of our air traffic 

delays emanate from the Northeast Corridor, even when we have 

next-generation air traffic control and move planes a little bit faster and closer together, with the doubling of the air traffic, with all 

of the other restrictions that we have in that corridor, you must 

have high-speed rail to serve that area, and it has the connections 

to also service one of the most congested corridors in the United 

States of America. 

Next week, our hearing, our final hearing, will be a hearing that 

we will hold on the Northeast Corridor. Our very first hearing on 

a snowy day in January when I became chairman was at Grand 

Central Station in New York City, and we will conclude our final 

hearing of this session dealing with progress or lack of progress in 

the Northeast Corridor next week in our hearing that will focus 

specifically on the Northeast Corridor. 

So, with those comments, again, as a strong supporter because 

of energy, environment, because of congestion, I still remain dedicated to moving positive intercity passenger rail and particularly 

high-speed service because the United States is falling further behind and must lead the pack instead of be behind the pack. 

4 

With those quick comments, let me yield to the patient ranking 

member, who was so nice to me yesterday, I have to be very nice. 

Mr. DEFAZIO. Thank you, Mr. Chairman, I am disappointed that 

your portrait isn’t hanging behind us. 

Mr. MICA. It is never going to hang there. 

Mr. DEFAZIO. Nothing can move Don Young from the center. 

Mr. MICA. Nothing. Look at the size of that. 

Mr. DEFAZIO. It takes five people to move it. 

So thank you, Mr. Chairman. 

Mr. Chairman, I have been involved in the issue of high- and 

higher speed rail since early on in my career in Congress. In the 

early 1990s, Al Swift on the Appropriations Committee designated 

the first proposed five high-speed rail routes in America, and one 

of them was from Eugene, Oregon, to Vancouver, British Columbia. 

And we will hear a little bit later from Paula Hammond, who is 

the secretary of transportation from Washington State, who will 

describe our progress or lack thereof, small amount of progress in 

achieving those goals. 

But we are plugging away at it. This is not an easy thing. Rightof-way issues are very problematic. The conflicts between freight 

and passenger rail, we need to invest time and effort in helping to 

work those things through. But I do believe that the American people do want higher and high-speed rail. California is trying something unique in terms of new right-of-way. They are seeing the difficulties with that, but that does have the promise of true highspeed rail that can pretty much only come with new and dedicated 

right-of-way, which is very problematic and very expensive. But I 

still believe that there is a tremendous market for this, and if done 

right, it will be something that future generations of Americans 

will look back on and say, they can’t believe there was a day when 

we were limping around with what we are limping around with 

now in underfunded Amtrak, undercapitalized Amtrak, and we are 

not putting in the investments we need to help people move efficiently from point to point by higher speed rail. 

I just point to the Spanish example. It is probably most analogous to ours. Twenty years ago, they had a system that was 

crappier than what we have here, and they built their first segment from Madrid to the coast. And after a while, pretty much everyone in Spain had had a chance to ride on it, and they all said, 

hey, we want that, too. And now they have a system that moves 

people very long distances very quickly, has changed real estate 

markets and businesses. It has been a tremendous boost. They 

have got problems with their economy but has made major changes 

for them that have been beneficial. And similarly, you can find that 

in places like California, with extraordinarily high-priced real estate in the urban centers, but with high-speed rail, people could 

live even further out than they do now and get there economically 

and environmentally responsibly. 

So I look forward to discussing the problems we have had, and 

the improvements we can make, and what the future is going to 

look like. I regret that I have to go to a meeting because I am on 

policy and steering, because I am looking forward to a lively exchange between the two Californians, which I know will be lively, 

and I always love to hear from Secretary LaHood. But I will have 

5 

to step out. But I know they are, now I am ably followed by others 

who will take my place. 

Thank you, Mr. Chairman. 

Mr. MICA. Well, thank you, Mr. DeFazio. 

And he has been a great partner. I appreciate all of his work. I 

will probably see you next week for my last hearing as chair, but 

I want to thank you. 

We took the United States through 9/11 and some very difficult 

times together. 

Mr. DEFAZIO. The TSA has been a work in progress. 

Mr. MICA. Don’t mention TSA, please. I always refer to that as 

my bastard child, but you helped it in the conception. 

Mr. DEFAZIO. Well, I didn’t even want to go there. 

Mr. MICA. I think we are going to have a lively one today, because we have got Mr. Denham from California, and I think Ms. 

Richardson won’t miss this opportunity. 

But, Mr. Denham, you are recognized. 

Mr. DENHAM. Thank you, Mr. Chairman. 

I will take the short opportunity to make a quick statement. I 

always look forward to talking about high-speed rail in California, 

because it always changes; there is always something new to talk 

about. This was something that I supported when I was in the 

State Senate, when it was a $33 billion project going to the ballot 

initiative to borrow $9.95 billion when we actually had a decent 

credit rating. Since then, our credit rating has been downgraded; 

our debt has gone through the roof to the point of near bankruptcy. 

And this plan that we once had has no plan. It went from $33 billion to $98.5 billion, with no private investors to pay for it, with 

no funding coming from the Federal Government to pay for it and 

unable to float the $9.95 billion dollar bond that the voters passed. 

Now the voters are saying, no, thank you. Let’s put it back on the 

ballot, so that we can end the project once and for all. 

I think there are a lot of things that we would like in California, 

and certainly a new shiny train would be one of them. It would be 

fun to have, but the question you have to ask yourself is, can we 

afford to have something fun? Can we afford to have a luxury right 

now? And can we afford it do it do it with no plan? 

So my questions will continue to center around where does the 

$98.5 billion come from, and if that has now been reduced down to 

$68 billion, where are these new ridership numbers coming from 

that have no justification? 

And lastly, I want to see something that shows that we actually 

have a budget, that it is actually going to be done on time, not over 

several decades. 

And thirdly, one of the things that was promised, not only to me 

as a Member of the Central Valley but to the entire State, was that 

this was going to be done on a preplanned corridor that was going 

to stay off of our ag land, not only our valley’s number one industry 

but our State’s number one industry, and if we continue to disrupt 

our ag industry, we will continue to lose our number one industry. 

With that, I yield back. 

Mr. MICA. I thank the gentleman. 

Now, the gentlelady, Ms. Richardson from California, you are 

recognized. 

6 

Ms. RICHARDSON. Yes. Thank you, Mr. Mica. 

I can’t compare to the bastard child that you referred to with Mr. 

DeFazio, but maybe I will be a good cousin for you today. 

Thank you, Chairman and Ranking Member DeFazio, who was 

here earlier, and I would also like to acknowledge Mr. Denham. I 

traveled with Mr. Denham and Mr. Mica to the Central Valley to 

look at this very issue, and although we may not agree on the ultimate thoughts of your perspective of this project, I think you have 

been very conscientious and want to do what is best for the Central 

Valley, and we hope to work to provide you with that plan; that 

is why the part of the Secretary being here and others, so that we 

can get this ball rolling and get it done. 

Today we are here to discuss the high-speed and intercity passenger rail opportunities. And I also want to acknowledge Secretary Ray LaHood. I think probably more than any Secretary that 

I have seen here in Congress, you consistently come very patiently 

to answer our questions and want to make sure that we are well 

informed so that we can do our work, and we thank you for that, 

sir. 

As a member of the Railroad Subcommittee and cochair of the 

California High-Speed Rail Caucus and vice chair of the Bicameral 

High-Speed Rail Caucus, the development and implementation of a 

national high-speed rail system is one of my highest priorities. 

Right now, China is operating 13 high-speed railways and has 

more than 20 under construction. By 2020, this network will cover 

nearly 10,000 miles. 

When I looked at the title of this initial hearing about what mistakes have been made, it seems to me one of the number one mistakes has been is our lack of continued commitment to high-speed 

rail and providing adequate dollars to be able to have a true system here in the United States. 

Not only are we not investing in alternatives to highway systems, but we are spending it on Band-Aids for infrastructure, rather than investing in a top-tiered system. Our President has certainly taken bold steps, and the Secretary has carried that flag 

with us, but we must provide them the support to provide the additional dollars that are certainly going to be needed, as Mr. Denham 

referenced, to be able to get this project going. 

When you consider the amount of money that is spent on gasoline, aging infrastructure and all of the changes, certainly highspeed rail must be at the forefront. And when you consider that the 

Federal Reserve Bank of San Francisco referenced that infrastructure investment gets a good bang for the buck in the sense that fiscal multipliers, the dollars increased by the output of each dollar 

that we are spending, are significant and should be done. When 

you consider that California, as Mr. Denham mentioned is the 

ninth highest GDP in the world, the first in the United States and 

represents about 12 percent of the country’s population, certainly 

when others before us, generations before, considered trains going 

west, we shouldn’t be hesitating and insisting upon an only one 

way when we know the opportunities are there in California. Some 

portions of California offers a landscape that makes it a true highspeed rail possibility, similar to France and China, and our chairman here alluded to that. 

7 

The recent GAO’s preliminary assessment of California’s cost estimates show that California’s High-Speed Rail Authority has to secured $11.5 billion from Federal and State sources and still needs 

a shortfall of $57 billion to move forward. 

To put this investment into perspective, in the 1950s, Congress 

took bold action to invest in its infrastructure and to create an 

Interstate System. The initial system took 35 years to build, and 

after several editions, the highway system is a total length of 

47,182 miles. The cost of construction has been estimated at over 

$425 billion in today’s dollars if we were making that same decision. So certainly we should move forward at this time. 

An urban mobility report by Texas Transportation Institute 

found that the cost these slow speeds of what we currently have 

and long delays and endless congestion continues to cost the 

United States over $100 billion annually. Now is the time to make 

that investment for alternatives to congested highways and to simultaneously create jobs. 

The intercity passenger rail service is one of those alternatives 

that at any speed trumps long delays and crawling speeds that 

faces our Nation’s major interstate today. The Northeast Corridor 

and the California high-speed rail system should be treated as the 

first step to developing the Nation’s high-speed rail network, not an 

ending point. 

I want to thank all of our witnesses before us today, and I look 

forward to your testimony about this important issue. 

And I yield back. 

Mr. MICA. Thank you so much. 

Ms. Norton. 

Ms. NORTON. Well, Mr. Chairman, I don’t know if this is your 

swan song. 

Mr. MICA. No, that is next week. 

Ms. NORTON. All right. Because if so, I would not be surprised 

that it was on high-speed rail. 

Mr. MICA. It will be, and it will be on the Northeast Corridor. 

And then I might save a little time for the FTC. 

Ms. NORTON. I knew it. That is your real swan song, and that 

will never go away. 

Mr. Chairman, it has been a pleasure to work with you on that 

matter. I don’t know about California and other places where highspeed rail may be controversial, but I do know where we are furthest along, and all I want to do is to see us get started so that 

we have a pilot to show that we can do this. 

Those who created the American railroad system with considerable help from the United States Government during the Civil 

War, private and public alike, our public officials, the magnates 

who took the Government money and ran with it, they would be 

turning over in their graves to see how far behind we are developed 

and developing country on high-speed rail. The fact that we cannot 

say that there is a single example of real high-speed rail in the 

United States should be, and for me is, a matter of personal embarrassment as an American citizen. 

And in the District, where we have the hub of Amtrak, Amtrak 

has already created a master plan for redesigning the station in 

order to accommodate high-speed rail. It is already dealing with 

8 

the infrastructure, and, of course, in the Northeast Corridor is 

where we have already the fastest trains. 

I will not, I want to engage in a competition with the rest of the 

country and I see and I understand why the stimulus package trying to catch up with countries around the world funded the highspeed rail at various parts of the country, but I notice, I note that 

the IG says there needs to be milestones. You are not going to hook 

up this entire country on high-speed rail by just saying, on your 

mark, here we go. I don’t think we will be able to avoid prioritizing 

where the money goes, piloting it because we have not done it, and 

I Am not convinced we know how to do it, because we haven’t done 

it, and to avoid making mistakes throughout the country of having 

no model to study, I hope we will at least start where we already 

have started on the Northeast Corridor and somebody else in the 

Southeast or California or anywhere in the United States think 

they can do it faster and their model is ready, I will concede to 

them. Just let’s get started. 

Thank you, Mr. Chairman. 

Mr. MICA. I thank the gentlelady. 

And I also thank her; for 15 years, we talked about having Union 

Station as a true intermodal center. We used to have our people 

come to the Greyhound station, two, three blocks, drag their luggage to Union Station; we used to have to go around town to take 

a bus from some satellite location. And Ms. Norton was with me. 

In 15 months, we got that done and dedicated, came up for that, 

even during a very heated election. But I thank you for your leadership. 

Also, not this Secretary, but Porcari the Deputy Secretary, was 

instrumental in making the Nation’s Capital have a true intermodal center. But I thank both of you. 

Ms. Edwards. 

Ms. EDWARDS. Thank you, Mr. Chairman. 

I want to thank all of our witnesses today, and I want to particularly thank Secretary LaHood. I understand it is your birthday. I 

don’t think I would have chosen to spend my birthday with you, 

but I am glad you have chosen to spend your birthday with us. 

And particularly to the chairman, for holding this hearing and 

discussion today about high-speed rail, we had a chance to just 

about a week and a half ago, of course, to go up to New York, and 

bless Amtrak, but it just took forever, even on the Acela. And so 

I do share your view and that of Ms. Norton that we have a really 

densely populated corridor in the Northeast that requires robust 

development of high-speed rail, but I don’t think that has to be, nor 

should it be, at the exclusion of development of high-speed rail in 

other corridors of the country. 

When I think about a trip that I took many years ago with my 

son, from Paris to the Dordogne region in France, and it was going 

from a densely populated urban area to a rural and mountainous 

region, and high-speed rail wasn’t excluded from there. And so I 

think the same can be true of areas along the, around the central 

coast; I think that that is true in other areas of the country. And 

for us to be competitive, I think it is absolutely necessary. 

And we know, of course, and we don’t have to sing the phrase 

here, but we know that the investment in high-speed rail and that 

9 

kind of infrastructure will pay off in terms of thousands and thousands of jobs, and it will pay off in terms of making us more competitive. I mean, if a worker going from Boston to Washington, DC, 

can have so many more options for work for employment, our employers can have so many more options if their employees could 

make it a day commute. And so we need to get started, and there 

has been so much discussion on this committee with the stimulus 

package. 

And I really have to question why it is that Members of Congress 

are so headstrong against high-speed rail in some corridors when 

it was their Governors and their State legislatures that wanted the 

high-speed rail dollars. And yet they have rejected that. 

I have to say, in Maryland, we were particularly beneficiaries 

when Florida went through its own rejection phase. I am grateful 

for that. I don’t think it was particularly smart. And so I look forward to a discussion today about how we can get off the dime. 

Sometimes there is great resistance to change, and that requires 

somebody to punch through with vision. And I am sure, and I know 

that this is true, that over a period of time when the Interstate 

Highway System was being developed, there were areas that said, 

no, we don’t want the highway. Well, who doesn’t want a highway 

now? 

There have been other occasions, even with our own Metrorail 

here in this region, I can think of communities that I represent 

now who said, I don’t want metro coming to our district. It will 

keep people out. And guess what? They are begging for Metro now. 

I was begging for Metro this morning when I spent an hour and 

a half commuting 8.6 miles. 

And so all across this country we have a need to get from one 

place to another to do our business to conduct our work. And I 

share the view of many in our freight rail industry. We could be 

so much more efficient if we weren’t sharing tracks and sharing infrastructure with our passenger rail system. 

So let’s get this right, Mr. Chairman. Let’s spend the money that 

we need to spend and let’s consider that an investment and a payoff maybe not for us but for a couple of generations in the future. 

And with that, I yield. 

Mr. MICA. I thank the gentlelady. 

The gentleman from Indiana, Mr. Bucshon. 

Dr. BUCSHON. Thank you, Mr. Chairman. 

I am going to make a few comments. I am from Indiana, and we 

are probably not ever going to get high-speed rail. 

But in my observations recently with the ongoing interstate 

project through my district, trying to get a highway built from 

Evansville to Indianapolis, I see some of the same stepping stones 

that high-speed rail has. And I think some of the discussion needs 

to revolve around, what are the impediments, other than money, 

that are stopping these type of projects? And the reality is that 

there are environmental issues, ongoing lawsuits for years, sometimes decades. There are right-of-way issues, again, ongoing lawsuits, sometimes for decades, that cost people so much money that 

the question I have is, should the Federal Government continue to 

funnel money to projects that are going to take two decades, three 

10 

decades, if we are not going to really address some of the drivers 

of the ongoing cost? 

Interstate 69, which is a little different from building a highspeed rail, but it is through new terrain; it is not an existing rightof-way, started—we started thinking about this project in the late 

1960s, and I would argue, had the Interstate Highway System, if 

we tried to build that today, we couldn’t build it. And so I think, 

with my 2 years on this committee and being into a number of 

hearings about high-speed rail, I am in favor of it. I think in a lot 

of areas it makes sense. But I think we do need to address some 

of these issues. 

Thank you. I yield back. 

Mr. MICA. Any other Members seek recognition? 

If not, I thank our two first witnesses, Member panel, for their 

perseverance. And they get first choice of speaking. I would also 

ask unanimous consent that members not on the committee, including Mr. McCarthy and Ms. Hahn and others if they choose to 

be permitted, to sit with the committee at today’s hearing, offer 

testimony and ask questions. 

Without objection, so ordered. 

So you are welcome to join us afterwards if—you will be at the 

end of the pecking order on questions, but you have endured very 

well so far. 

With that, we want to welcome our two colleagues from California, Mr. McCarthy, Ms. Hahn, and thank you for joining us. 

We will recognize Mr. McCarthy, first. 

Welcome, and you are recognized. 

TESTIMONY OF THE HONORABLE KEVIN MCCARTHY AND THE 

HONORABLE JANICE HAHN, REPRESENTATIVES IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. MCCARTHY. Well, thank you, Mr. Chairman. 

And before I begin, I do want to thank you for your commitment 

to America’s infrastructure and your tenure as chairman. You have 

done a very good job and we appreciate that commitment. 

To Mr. Secretary, happy birthday. You happen to share that with 

someone very special to me, my wife, so I will see her later today. 

And to Ms. Hahn, thank you for joining with us. 

I listened to all the comments today, and I can’t disagree with 

your comments, but the one thing that we all have to look to, especially in a time of why we are here; none of you have planned to 

be here during this time of year. We are here debating a fiscal cliff. 

We are here debating the direction of America, where are we going 

to go financially? We have a very responsible ability as Members 

of Congress: We are the stewards of public funding. And it is rightful that we have this hearing again, and I appreciate it. 

In December, when I came, I raised a couple issues. We want to 

invest in infrastructure. We want America to move quickly our 

freight and our people in the best ways possible. 

What you want, you also need to plan for, a plan that works, a 

plan that is tested, a plan that is audited and a plan that has a 

review. I happen to come from California. I happen to sit in the 

area that many of you talk about it is going to be part of where 

11 

it begins. And I have real doubt of viability, the cost, and if and 

when this will ever be built. 

That is why I joined with the chairman, Mr. Denham, Mr. 

Hunter, Mr. Miller, when we sent the letter to the GAO, asking for 

an audit and review of the business plan in California. And I will 

look forward to hearing their testimony later and looking and reading the report when it is completed. 

To date, the project in California has been the biggest recipient 

of Federal money, billions of dollars. There are concerns about the 

business plan itself and equally concerning to me; just because we 

have invested money doesn’t mean we have to invest more. The 

current plan, to be finished at the smallest level of number, asks 

for another $38 billion from the Federal Government. 

Please put that in perspective. The debate we are rassling over 

for the rest of the month on our fiscal cliff, if you raised all the dollars and raised all the taxes as proposed, you only get $31 billion 

in a year. And they are requesting more than what we would even 

get from that. 

So we need to be good stewards. Yes, we want movement. Yes, 

we want to work it right. But before we make an investment again, 

shouldn’t we review the business plan? 

Secondly, it is an issue that Mr. Denham raised. This was put 

before the California voters; yes, it looks different today. As a California voter, I personally think you would have to go back to the 

Californians because this is not what was proposed. It said there 

would be private funding. There is no proposed private funding as 

of today. 

There is no money in, and I question whether there will be in 

the future. 

So, is the Federal Government now on the hook for the rest of 

the plan, which the voters were asked for and said would come? If 

we are the biggest funders of this, why would we not wait to what 

they said they would do? That is a question we all have to ask. 

Thirdly, when you read the business plan, and you live in my 

area, the numbers just don’t add up. The millions of people that 

they project will ride the train from my area are nowhere near the 

population that will do it. There is roughly 750,000 within the Central Valley that currently take a train or an airplane to the region 

in which they are going to serve. 

So is your investment going take pay off? Or are you making an 

investment where you are going to have to continue to invest and 

subsidize the riders to be on the train themselves? 

California first brought this issue up when we had a surplus. 

Many people realize in a Government when you have a lot of surplus, you start big picking up big dreams; you want to do a lot of 

different things. That is not the same perspective of where California is today, and it is definitely not where the Federal Government is today. 

So our stewardship has to analyze the business plan, analyze the 

numbers, and also put on the table, maybe it is the time we cut 

our losses. Maybe we say, no, we are not going to fund anymore, 

and the savings should go to pay down our deficit. 

12 

Look, I know Hollywood happens to be in California, but this is 

not a Kevin Costner movie. If we build it, I don’t know if they will 

come. And that is not how we play with taxpayers’ money. 

It is right to have this hearing, but it is right to scrutinize, and 

before we move forward on anything, the legislative analyst’s office 

and the peer review have the same questions to the business plan. 

We should even ask more because it wasn’t their money; it is the 

taxpayers’ money that we are responsible for investing. And that 

is the review we need. I yield back. 

Mr. MICA. I thank the gentleman. 

I am pleased to recognize Ms. Hahn, the gentlelady from California. 

Ms. HAHN. Thank you and good morning. 

Thank you, Mr. Chairman, members of the committee, thank you 

for allowing me to participate in this hearing today. 

I have only been in Congress about a year and a half, but my 

whole life I have been deeply involved in transportation issues, particularly in my capacity on the Los Angeles City Council for 10 

years, and so my dad who was a L.A. County supervisor for 40 

years in L.A. County took my brother and me to the World’s Fair 

in 1960, which was held in Seattle. Many of you probably weren’t 

born then. And so there was this modern monorail project that 

ferried people around the World’s Fair. And the investors of that 

project at the time offered to build that monorail system as a pilot 

program in Los Angeles, traversing the Harbor Freeway. Dad 

thought it was a good idea but couldn’t again get any of the other 

city fathers or county fathers to agree that this was a good investment. Nobody at that time thought we could ever get people out 

of their beloved cars. 

So that monorail now circles Disneyland’s Magic Kingdom in 

Anaheim constantly. But that is a reminder to me that the biggest 

mistake I think we have made so far is not building major transportation projects that the public can use, will use and will get 

them out of their cars. 

You know, in California, I believe and I think the voters have 

proved that time and again, that high-speed rail will reduce congestion; it will create jobs; and it will modernize the entire State’s 

rail system. It will reduce congestion, which is a key issue for Californians. Transportation congestion is strangling the business potential of our State and weighing down the economic activity that 

isn’t just critical to the success of California but to the Nation as 

a whole. If any of you have ever driven on the freeway between Los 

Angeles and San Diego, it could take anywhere from 2 to 4 hours 

in traffic. 

Turning to aviation, there are delays there as well. Flying between Los Angeles and San Francisco in theory takes only an hour, 

but one out of every four flights between Los Angeles and San 

Francisco, the busiest short-haul market in the United States, are 

late by close to an hour or more. And that doesn’t even include the 

time now it takes with air travel and going through security. 

Our transportation network is already overburdened, and that is 

long before you start factoring in the projected increase in travelers 

in California. But in many cases, there is no physical space to exVerDate Aug 31 2005 15:10 Feb 07, 2013 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\12-6-1~1\77211.TXT JEAN
13 

pand a freeway or build a new runway to take into account all of 

the projected growth in travelers. 

In many cases, the communities do not want to expand their airports. The community surrounding LAX is already mobilizing 

against any expansion. As the population grows, we need to construct new transportation options to reduce congestion, options that 

won’t just continue to patch our existing system but break open a 

new transportation future. I think high-speed rail is that option. 

Second, there is no doubt that high-speed rail is a job creator. At 

a minimum, the construction project will create 20,000 jobs each 

year for 5 years. This is great for the State of California, which was 

certainly hit hard by the recession, and that 20,000 is before you 

factor in the jobs that this new system will ultimately generate. 

Third, the plan will modernize the State’s rail system. They have 

created a blended system that will begin construction on highspeed rail while improving other rail systems throughout the State. 

This will allow for the high-speed rail system to connect the intercity and regional rail systems, called the bookends, and there are 

connectivity funds for rail projects throughout California, including 

Caltran’s Positive Train Control and Los Angeles Metrolink upgrade in my part of the State. This railroad will get needed upgrades and swap out diesel engines for an electrified system that 

is cleaner and faster. 

High-speed rail would not happen without Federal Government 

support, including legislation passed by Congress to authorize this 

program. 

If the United States is going to maintain our position of economic 

leadership, we have to invest in the best infrastructure in the 

world. That will not be true if we do not invest in high-speed rail. 

We cannot wait until our highways are completely congested, our 

airports cannot expand any more, to start thinking of other longstanding transportation options. We need to catch up to Germany, 

France, and Japan. I just heard this morning that Japan is celebrating their 50th anniversary of their bullet train. We cannot 

allow China to surpass us in our next generation of infrastructure. 

Tourists from across the world will visit our high-speed rail to marvel at our civic engineering and technological prowess. This is not 

just about transportation but about changing the revitalization 

along the cities along the route. 

In conclusion, it is clear that I support the high-speed rail in 

California; the Federal program will help make it possible. What 

we need now is vision. What we need now is leadership. And what 

we need now is a belief that the people of California and this country want us to invest in this type of transportation option. 

Thank you, Mr. Chairman. I yield back my time. 

Mr. MICA. Thank you. I thank both of the Members for joining 

us, and you are welcome now to join us if you would like and stay 

for questions. We will excuse you at this time. 

As we bring Secretary LaHood up, who is our next witness, Ms. 

Hahn when you see the mayor of Los Angeles, tell him what we 

need now is light rail to the airport and that is my continuing message to the city of Los Angeles. Just an aside. We will get that 

done. 

14 

Well, our second panel consists of the Secretary of Transportation, former member of this panel, distinguished Secretary of 

Transportation, who we have had a chance to work with. I appreciate his cooperation and efforts, and I am also delighted to have 

him here on the anniversary of his birth. 

Welcome, Secretary LaHood, and you are recognized. 

TESTIMONY OF THE HONORABLE RAY LAHOOD, UNITED 

STATES SECRETARY OF TRANSPORTATION 

Secretary LAHOOD. Mr. Chairman, let me again begin by congratulating you on a job well done as chair of this committee. 

I served when I came here with Bud Shuster, who was the chair, 

and I heard every, all of Jim Oberstar’s lectures, as you have, over 

a long period of time, and what you have been able to accomplish 

in a very short period of time as chair of the committee I think is 

extraordinary, a transportation bill, probably not as long as either 

one of us wanted, but it is a good bill; an FAA bill, it is a good bill. 

And we couldn’t do the work that we do at the Department of 

Transportation without the leadership of this committee and your 

chairmanship over the last time that we have been together. So 

you have done a lot, and you have a lot to be proud of. 

And we haven’t agreed on everything, but we have agreed on 

most things because we agree how important transportation is for 

America. And I just I want to offer my words of congratulations to 

you. 

And I also want to say a word as a former staffer of 17 years 

around here, Jim Coon and his team really did a good job on both 

bills and on a lot of other things. And I know Jim is moving on 

to bigger and better things, but to all of the staff that work on this 

committee, you are the ones that do the work, and we appreciate 

all of you also. 

So to the chairman and the ranking member, I am delighted to 

be here. President Obama’s High-Speed Intercity Passenger Rail 

Program is bringing more transportation options to millions of 

Americans. As we invest in our rails, we are creating jobs and supporting economic growth across the country. High-speed rail and 

higher performing passenger rail are critical for America’s future. 

By 2050, our country will be home to 100 million more people. 

Right now, our highways and runways are already congested. I 

don’t have to tell any of you that from any of the communities that 

you come from. 

This congestion will only grow with time. We can act today, or 

we can face a transportation crisis later. 

Investing in rail is a priority for President Obama and this administration. And most importantly, it is a priority for the American people. Since 2009, we have received 500 applications. 

In your statement, Mr. Chairman, you acknowledged two or 

three Governors who turned down the money. Since, during this 

period of time, we have received 500 applications. For the money 

that was turned back from Florida, $2.3 billion, we had $10 billion 

worth of requests for that money. The idea that people don’t want 

passenger rail, they do. We have the statistics. But we have the 

people that tell us this. 

So let’s look at the progress we have made. 

15 

As a result of this administration’s investment, the Nation’s first 

true high-speed rail system is set to break ground this year. The 

220-mile-per-hour train system will carry travelers from Los Angeles and San Francisco in less than 3 hours, more than twice as fast 

by interstate. California will have high-speed, true high-speed 

trains. 

We have introduced and are now expanding 110 miles-per-hour 

service. And as you indicated, Mr. Chairman, that is—the law says 

that is high-speed trains. In October, I rode on a train for a very 

short stretch as a result of investments we made in Illinois, Chicago, St. Louis corridor, and I saw the progress myself. I also recently visited a plant in Rochelle, Illinois, that is building 130 rail 

cars, and creating about 250 jobs in the process. These are cars 

that are being ordered from California and other places, these are 

American jobs, American workers building America’s train sets, 

that is what this is about. 

This Rochelle plant did not exist before President Obama initiated a high-speed rail program. And when I was there that day, 

I not only spoke to 250 employees, they are talking about building 

another facility there as a result of the vision that this administration has for passenger rail. This is about jobs. Not just the—these 

are jobs that exist today as a result of our investments, more that 

40 stations are being upgraded across the country, strengthening 

the connections between regions and revitalizing local economies. 

And we are leading a comprehensive planning effort to determine 

the Northeast Corridor’s next generation of service. In a short 

amount of time, we have developed a sophisticated grant management process for one of the largest, discretionary infrastructure 

programs in the country. Rather than a one-size-fits-all approach, 

we are targeting service improvements to the specific needs of 

every market. 

For those of you who think we haven’t moved fast enough, 4 

years ago there was no high-speed rail vision. Four years ago we 

had not invested $10 billion, and if we would have moved too fast 

and the money hadn’t been spent or allocated properly, I would be 

sitting here answering your questions about that. We had to reach 

agreements with freight rail companies in America. I hope you are 

going to hear from Ed Hamberger, the head of the freight rail system that we worked cooperatively with every freight rail. We 

worked with them and we hammered out agreements, we didn’t get 

everything we wanted. 

So the idea that this is taking too long, we are talking 4 years, 

4 years. And agreements with every freight rail company in America, to use their freight system—to use their infrastructure, because we don’t have enough money to build all the tracks. We need 

our friends in freight rail. So the idea that it is taking too long, 

it took 50 years to build the Interstate System, and in the beginning, not every Governor wanted a road running through their 

State. What do we have today? Because of the vision of Eisenhower, because of the vision of a Congress that said every year we 

are going to invest in highways, we have a state-of-the-art Interstate System. 

So we have obligated 100 percent of our Recovery Act money, 99 

percent of our total program funding. And as a result, 152 projects 

16 

are now moving forward in 32 States in 4 years, not fast enough 

for some, but done the right way, by the book. We have $1.7 billion 

in construction projects are now underway or completed in 17 

States, in 4 years. Not fast enough for some, but pretty darn good, 

and done the right way by the book. And we have another $1.5 billion in job creating projects that will break ground in the next 6 

months. 

We have already seeing projects come in on time and on budget. 

We recently completed a project in Vermont that upgraded 190 

miles of track, speeding up both passenger and freight rail; in 

Maine, we have restored passenger rail service to two towns for the 

first time since 1959, and in the process, sparked millions of dollars 

in private sector investment. 

In the Northeast, we invested more than $3 billion in projects. 

For those of you who think we haven’t invested enough in the 

Northeast, we have invested $3 billion, that is almost as much we 

invested in California. And more than we have invested in anyplace else in the country except California. And what we have 

done, we have upgraded infrastructure, eliminated bottlenecks and 

are laying the foundation to expand high-speed rail. For instance, 

our investments will ensure that by 2016, the segment between 

New Haven and Hartford will be completely double-tracked providing commuters more frequent and reliable train service and 

shorter trips. And in Pennsylvania, we made improvements on the 

Philadelphia, Harrisburg Keystone Corridor that will allow for 

trains to travel at higher speeds, but as much as we have accomplished, the reality is we have only started to meet States’ enormous pent-up demand for passenger rail. Over the last 8 years, 

Americans, particularly younger Americans, have been driving less 

all while choosing passenger rail and public transit. We are doing 

for the next generation what previous generations did for us, we 

have an obligation to do what other generations did. 

The other generations built the Interstate System. What are we 

going to do? I have nine grandchildren, what are we going to do 

for the next generation? The next generation of transportation is 

high-speed rail, and we are on track to accomplish it. We are not 

going to stop, we are not going to be dissuaded by our detractors. 

We are going to have high-speed rail in America, we are on our 

way. 

The President has a vision. Many of you have a vision, it is going 

to happen. Thank you, Mr. Chairman. I am happy to answer questions. 

Mr. MICA. Thank you. 

I will get right into questions. 

Secretary LAHOOD. Mr. Chairman, could I just also insert as a 

part—— 

Mr. MICA. Without objection your entire statement will be. 

Secretary LAHOOD. And there is a letter from Mr. Richard. 

Mr. MICA. And the letter that you have indicated. 

Secretary LAHOOD. Thank you. 

[The letter follows:] 

17 


Insert offset folio 7 here 77211.007

CALIFORNIA 

High-Speed Rail Authority 

December 4,2012 

The Honorable John L. Mica 

Chairman 

Committee on Transportation and 

Infrastructure 

u.s. House of Representatives 

Washington, DC 20515 

The Honorable Nick J. Rahall 

Ranking Member 

Committee on Transportation and 

Infrastructure 

U.S House of Representatives 

Washington, DC 20515 

Dear Chairman Mica and Ranking Member Rahall: 

In anticipation of your upcoming hearing, "An Update of the High Speed and Intercity 

Passenger Rail Program: Mistakes Made and Lessons Learned," I want to provide the 

Committee with an overview of the outstanding progress of the high-speed rail project in 

California. 

To summarize, over the past year, the California High-Speed Rail Authority (the Authority) 

has (1) significantly revised and improved its business planning for the project, predicated 

on tile idea that high-speed rail is an integral part of a broader statewide rail transportation 

system; (2) acquired the necessary funding appropriations from our State Legislature; (3) 

enhanced organizational capabilities with an experienced executive team and (4) forged 

critical relationships with regional operators/partners to develop plans for early 

investments that benefit existing passengers, while laying the groundwork for 

implementation of true high-speed rail service; (5) targeted attention and outreach to those 

communities most affected by the project's construction and operation to address impacts 

on farms, business and residences; and (6) strengthened governance and oversight of the 

project. 

The Blended System: A Statewide Raj! Modernization Plan 

The Authority, State of California, and the U.S Department ofTransportation are committed 

to the blended system envisioned in the Revised 2012 Business Plan (Business Plan). This 

blended system will benefit the overall passenger rail system by simultaneously beginning 

construction on the high-speed project and investing in regional rail systems throughout 

the state. These early investments, made in collaboration with regional transportation 

partners, lay the foundation for the high~speed rail system as it expands to connect the state 

while providing immediate benefits to the millions of Californians who use these intercity 

and interregional systems every day. Underscoring the broader impacts of this approach, 

the $4.7 billion appropriated by the California Legislature in July leverages other regional, 

state and federal funds, resulting in almost $13 billion of improvements to ollr state's rail 

systems, the majority of the investments occurring in the urban "bookends." 

Hence, in these times of tight budgets and limited near-term capital opportunities, we 

believe that this integrated approach can serve as a model for coordinated passenger rail 

systems in other states, By maximizing the value of the investment at each step, such as a 

highly improved Amtrak service in the Central Valley and an electrified Caltrain service in 

the Bay Area, the taxpayers are not left with a stranded investment. Rather, they can see the 
18 


Insert offset folio 8 here 77211.008

tangible results of public investment creating immediate improvements while also seeing 

the long-range vision for the project outcome. 

Separately, but in concert with the initial high-speed rail projects, a portion of the 

connectivity funds appropriated in SB 1029 have already been allocated by the California 

Transportation Commission (CTC) for work on several important rail projects throughout 

California. These projects include Caltrain's advanced Signaling system (Positive Train 

Control) in the Bay Area, San Francisco MUNl's Central Subway project, Los Angeles 

Metrolink's locomotive upgrade, Altamont Corridor Express' Stockton passenger track 

extension, and San Diego Trolley's Blue Line light rail improvements. As part of a statewide 

rail improvement program designed to supplement the high-speed rail system, these early 

investments will help modernize local and regional rail, vastly improve the state's mobility 

and economic competitiveness, and reduce greenhouse gas emissions. A complete list of 

system-Wide improvements funded by SB 1029 is attached. 

Economic Benefits' Beyond Short-Term. Immediate Jobs 

The construction and operation of the high-speed rail system is expected to generate tens of 

thousands of jobs. This will be especially impactful in the Central Valley, which currently is 

experiencing some of the nation's highest unemployment rates. High-speed rail will put 

people in the Valley back to work and have the potential to spur development of a highspeed rail technology and academic sector in the region. 

Beyond these immediate economic benefits, the Authority and local governments alike see 

high-speed rail as part of an integrated strategy to help cities throughout the state revitalize 

their downtown cores. High-speed rail will link the mega-regions of California in ways 

never before imaginable. By bringing more people to the downtown centers of our cities, 

high-speed rail will directly contribute to economic development, increased livability, and 

preservation of agriculture lands threatened by urban sprawl. Due to these immense 

possibilities, the Authority's program and business plan have been endorsed by the 

bipartisan group of mayors of Los Angeles, Palmdale, Fresno, San Jose, San Francisco and 

Sacramento, all of whom see it as an essential element of their growth plans. 

Project Status and Next Steps 

As you are aware, on July 18,. 2012, Governor Jerry Brown signed into law S8 1029, which 

appropriates $4.7 billion in state funds and approves the use of $3.3 billion in federal funds 

for statewide improvements to transportation in California and to begin the highMspeed rail 

project initial construction in the Central Valley. Since the passage ofSB 1029, the 

Authority has continued its work to plan, design, build, and operate the high-speed rail 

project as authorized by California voters in the Safe, Reliable, High-Speed Passenger Train 

Bond Act for the 21" Century (Proposition 1A). Initial construction is scheduled to begin in 

the Central Valley in Summer 2013. 

As the project progresses on all fronts, the Authority continues working with stakeholders 

on planning activities, strengthening relationships with regional partners, completing 

important milestones in the environmental process, and progressing with plans to begin 

construction in 2013. Several major project milestones have been recently reached. 

Specifically, on September 18, 2012, the Federal Railroad Administration (FRA) issued a 

Record of Decision (ROD) that approved the Environmental Impact Report/Environmental 

Impact Statement (ElR/EIS) for the alignment from Merced to Fresno. Also, as part of his 

Page 2 
19 


Insert offset folio 9 here 77211.009

"We Can't Wait" initiative, President Dba rna announced on September 21. 2012 that the 

federal permitting and review processes for the Fresno-Bakersfield section would be 

streamlined in order to expedite delivery of the project. 

The public review period for the Fresno-Bakersfield section's Draft EIRjEIS concluded on 

October 19, after it was extended from 45 to 90 days in direct response to stakeholder and 

public feedback that more time was needed due to the size and complexity of the document. 

The extended review period allowed greater public involvement in the project by providing 

ample time to respond, Authority staff is now in the process of reviewing those comments 

and developing detailed and direct responses to them, including scheduling meetings with 

stakeholders to review their comments in person. As with any effort of this magnitude, the 

Authority anticipates that its plans will be greatly improved by public input. 

The Request for Proposal (RFP) for Right of Way Services was released in September and 

the Request for Qualifications (RFQ) for Project and Construction Management Services for 

Construction Package 1 was released in October. In connection with the release of these 

solicitations, the Authority hosted pre-bid conferences, provided opportunities for small 

businesses to meet the shortlisted teams for the Design-Build contract, and adopted goals 

for the participation of Small Businesses and Disadvantaged Businesses in the project 

These efforts have been well received and recognized as positive first steps toward 

ensuring that small businesses, inclusive of Disadvantaged Business Enterprises, Disabled 

Veteran Business Enterprises, and Micro-Businesses are afforded every opportunity to 

participate in the high-speed rail project. 

Most recently, on November 16, 2012, a Sacramento County Superior Court judge rejected 

an injunction requested as part of the County of Madera, City of Chowchilla, and Timeless 

lawsuit cases. These cases are California Environmental Quality Act (CEQA) challenges to 

the Merced-Fresno EIR. This ruling allows the project to keep moving forward on schedule. 

The full case will be heard in April 2013. 

Organizational and Administrative Improvements 

The Authority has addressed many of the organizational issues identified in the past. The 

majority of the Authority's executive management team has now been filled, including Chief 

Executive Officer, Chief Deputy Director, Chief Program Manager, Chief Counsel, Risk 

Manager, Chief Administrative Officer, and Chief of External Affairs. In addition, numerous 

support positions have been filled covering all aspects of the project. 

Simultaneously, at the oversight level, the Board of Directors has put in place strong 

governance measures, including the formation of a Finance and Audit committee. 

Government Accountability Office (GAQ) Review 

The Authority is of the understanding that the GAO will be providing testimony to the 

Committee at the hearing specifically regarding a preliminary assessment of their ongOing 

review of aspects of the California high-speed rail program. While we welcome all external 

review of our plans and operations, we wish to emphasize that we are still engaged in 

reviewing the project issues with the GAO and that their findings are not yet final. 

The Authority has been working closely with the GAO for many months to assist their team 

in analyzing numerous aspects of the project including cost estimating and ridership as 

Page 3 
20 


Insert offset folio 10 here 77211.010

requested by this Committee and other Members of the US. House of Representatives. 

However, months of work remain before the review can be considered complete. The 

Authority greatly appreciates the professionalism and dedication demonstrated by GAO 

staff throughout the ongoing review and will continue working with their team to provide 

the information necessary to finalize the process. 

In conclusion, the Authority is committed to working closely with our federal, state, and 

local partners to ensure the sUCCess of California's high-speed rail project. As the project 

continues to advance, we look forward to an open and frequent dialogue with the 

Committee, Congress, and the pUblic. In doing so, we hope to construct a high-speed rail 

system that benefits all Americans and can serve as a model for future projects. If you have 

any questions or concerns, please contact me or Jeff Morales, Chief Executive Officer at 

(916) 324-1541. 

Sincerely, 

~?iJ 

Dan Richard 

Chair, California High-Speed Rail Authority Board 

Attachment 

cc: The Honorable Bill Shuster, Chairman, Subcommittee on Railroads, Pipelines, and 

Hazardous Materials 

The Honorable Corrine Brown, Ranking Member, Subcommittee on Railroads, 

Pipelines, and Hazardous Materials 

The Honorable Ray LaHood, Secretary, U.s. Department of Transportation 

Page 4 
21 


Insert offset folio 11 here 77211.011

SB 1029 CONNECTIVITY AND BOOKEND INVESTMENTS 

California's High-Speed Rail system includes billions of dollars in infrastructure investment throughout the 

state. These funds will strengthen and improve existing rail networks, while also connecting them with 

California's future high-speed rail system. Senate Bill 1029, passed by the California Legislature and signed 

by Governor Brown in July 2012, invests almost $2 billion from the Safe, Reliable, High-Speed Passenger 

Train Bond Act for the 21" Century (Proposition 1A) into transit, commuter, and intercity rail projects across 

the state. This funding leverages approximately $4.5 billion in additional funding for these projects. 

The following is a summary of rail infrastructure investments made throughout the state as a result of highspeed rail program: 

CALTRAIN - ELECTRIFICIATION 

SB 1029 provides $600 million to install an electric rail system that will enable the replacement of diesel 

trains and connect the system with high-speed rail, resulting in cleaner and faster travel. The state 

investment of these dollars will leverage funding to bring the total investment to $1.5 billion. (Bookend) 

CAL TRAIN - ADVANCED SIGNAL SYSTEM 

SB 1029 provides $42 million ($106 million total including BART and SVTA contributions) for the design, 

installation, testing, training and warranty for an intelligent network of signals, sensors, train tracking 

technology, and computer systems on the Caltrain Corridor as part of Cal train's advanced Signaling system. 

This system is required by federal regulation and allows trains to travel at higher speeds when safe to do so. 

The state investment helps bring the total dollars for this project to $231 million, with other matching funds. 

(Connectivity) 

SF MUNI - CENTRAL SUBWAY 

SB 1029 provides $61 million to construct a 1.7-mile extension of light rail line from 4th & King Streets to 

Chinatown (downtown San Francisco). The state investment in SB 1029 helps leverage a total investment of 

$1.6 billion into this project, with other matching funds. (Connectivity) 

BART - MILLBRAE STATION TRACK IMPROVEMENT & CAR PURCHASE 

SB 1029 provides $145 million to lengthen track at the Millbrae Station (cross platform connection to highspeed rail), and for the purchase of new BART cars. The state investment will be matched by other funding 

for a total investment of $290 million. BART is also contributing $38 million of its share for the design, 

installation, testing, training and warranty for an intelligent network of signals, sensors, train tracking 

technology, and computer systems on the Caltrain Corridor as part of Caltrain's advanced signaling system. 

(Connectivity) 

SANTA CLARA VALLEY TRANSPORTATION AUTHORITY (SCVTA)- CALTRAIN ADVANCED SIGNAL 

SYSTEM (POSlTIVE TRAIN CONTROL) 

SCVTA is contributing $26 million for the design, installation, testing, training and warranty for an intelligent 

network of signals, sensors, train tracking technology, and computer systems on the Caltrain Corridor as part 

of Caltrain's advanced signaling system required. (Connectivity) 

ALTAMONT COMMUTER EXPRESS (ACE) STOCKTON PASSENGER TRAIN EXTENSION 

SB 1029 provides the Altamont Commuter Express (ACE) train with nearly $11 million in high-speed rail 

connectivity funds to extend an existing platform and do additional track work to connect new platform for 

Amtrak and access to a new ACE maintenance facility. This investment brings the total to $25 million, with 

other matching funds. (Connectivity) 
22 


Insert offset folio 12 here 77211.012

SACRAMENTO REGIONAL TRANSIT (RT) - SACRAMENTO INTERMODAL FACILITY IMPROVEMENTS 

SB 1029 provides $30 million for the relocation of existing light rail track, passenger platform and associated 

systems to connect to a new Sacramento lntermodal Facility and future high-speed rail terminal. The state 

investment in SB 1029 brings the total investment to $60 million, with other matching funds. (Connectivity) 

CAL TRANS - CAPITOL CORRIDOR (AMTRAK), OAKLAND TO SAN lOSE TRACK IMPROVEMENTS 

SB 1029 provides $47 million to help construct a series of track improvements to permit an increase in 

service frequency between Oakland and San Jose from the current 7 weekday round trips to 11 weekday 

round trips. The state investment in SB 1029 brings the total investment to $248 million, with other 

matching funds. (Connectivity) 

CAL TRANS - CAPITOL CORRIDOR (AMTRAK). SACRAMENTO TO ROSEVILLE 

SB 1029 provides $16 million to Amtrak's Capitol Corridor station in Roseville for a series of improvements 

designed to increase service frequency, reduce freight train conflicts and accommodate freight train growth 

projects, consists of relocation of the Roseville station and addition of a third track. This investment brings 

the total to $28 million, with other matching funds. (Connectivity) 

CAL TRANS - SAN IOAOUINS (AMTRAK). MERCED TO LE GRAND 

SB 1029 provides $41 million to Amtrak's San Joaquin for construction of 8.4 miles of double track between 

Le Grande and west Planada to increase service and reduce freight conflicts. (Connectivity) 

SOUTHERN CALIFORNIA MEMORANDUM OF UNDERSTANDING 

SB 1029 provides $500 million for regional rail projects that improve local networks and facilitate highspeed rail travel to Southern California. Projects will be selected by local transit agencies, in conjunction 

with the High-Speed Rail Authority, and state funding will be matched by additional investments to make the 

total investment in these projects $1 billion. (Bookend) 

LOS ANGELES METROPOLITAN TRANSPORTATION AUTHORITY (METROl- REGIONAL RAIL 

CONNECTOR TRANSIT CORRIDOR 

SB 1029 provides $115 million to help construct a 2-mile light rail connection among Metro Gold, Metro Blue 

and Metro Exposition light rail transit systems through downtown Los Angeles to provide a one-seat ride 

from throughout the County to Union Station and the high-speed rail system. SB 1029 helps leverage $1.4 

billion in funding for this project. (Connectivity) 

SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY (METROLlNK) - NEW OR IMPROVED 

LOCOMOTIVES/CARS 

SB 1029 provides $89 million to repower and/or purchase 20 to 30 higher horsepower locomotives, and 

recondition and improve passenger cars. The state investment of $89 million will help leverage a total 

investment of $203 million for this purpose. Metrolink also received approximately $35 million for 

advanced signaling system work from Proposition 1A in previous appropriations. (Connectivity) 

SAN DIEGO METROPOLITAN TRANSIT SYSTEM £TROLLEY) - BLUE LINE LIGHT RAIL 

S8 1029 provides $58 million to rehabilitate grade crossings, track, and switches and ties, add track work 

and signaling. and raise platforms to accommodate low floor vehicles to allow for reduced headway and 

improved reliability. This investment helps bring a total investment of$152 million to update and 

modernize San Diego's Blue Line light rail system. (Connectivity) 

NORTH COUNTY TRANSIT DISTRICT (COASTER) POSITIVE TRAIN CONTROLS 

SB 1029 adds $7.3 million to a previously appropriated $10.5 million of Proposition 1A funds to a Positive 

Train Control project for the North County Transit District in the San Diego Area. The funds are to build an 

advanced Signaling system to track the location of trains in order to avoid collisions. The state investment 

will help bring the total investment in this project to $60 million. (Connectivity) 
23 

Mr. MICA. That will be made a part of the record, without objection, so ordered. 

A couple of the concerns that we have, first of all, I mentioned before that out of $10 billion, I think $8 billion was stimulus and 

there was another several billion dollars appropriated by Congress 

for rail, only 7 percent had actually been spent. You have indicated 

a great deal almost all of it is obligated. Can you provide the committee with a timeframe of the payout? You have asked for additional investment, I heard Ms. Richardson talking about putting 

more money in, we have difficulty getting money out. It can be obligated, but 7 percent is about $700 million of $10 billion. 

I think Congress even took back some of the money that had 

been appropriated. So shovel-ready as the President found out has 

been somewhat of a national joke because everything takes so long. 

And we are trying to get expediting of the process we did some of 

that in the MAP–21 bill and certainly we need to have FRA and 

other agencies that are responsible for getting that money out. 

Could you provide us with expenditure sort of graphic description? 

Secretary LAHOOD. I will do that for the record if that is OK. 

Mr. MICA. That would be great. I don’t mind investing the money 

if we know how it is being spent, but to come and ask for more and 

we haven’t been able to spend it, any recommendations, too, for 

speeding up the process? I think some of the things that we do 

with FRA are totally mindless. You can run freight trains and all 

kinds of traffic, and Amtrak can run all the service they want, and 

then we spend years doing these studies to see if we can run additional passenger service, to me, it just—— 

Secretary LAHOOD. Look, Mr. Chairman, I think you all did some 

good work on MAP–21 on speeding things up. 

Mr. MICA. And we are looking to—some of that was compromised 

to get it through, but particularly in rail to get people out of that 

cars, for energy and for the environment. We have to be able to 

spend the money, 7 percent, as you know, 21⁄2 years after stimulus, we only had $60-some billion in infrastructure money that 35 percent of that money was still sitting in Washington. And I know you 

were working to get that out, but we have to change the law and 

some of the policy that we are in charge of in order to make things 

truly shovel-ready. 

There were some concerns expressed in the Government Accountability Office report on the selection of some of these projects, the 

process—the GAO released this report March of 2011. Specifically, 

the report said that there were concerns about transparency and 

other issues with an FRA selection process. They couldn’t verify, 

again, some of the criteria by which some of these projects were selected. Can you cite any improvements in that process? Again, you 

were citing a number of projects, but also criticized by GAO for the 

process. 

Secretary LAHOOD. Look, we pay attention to what the GAO 

said, and we have tried to improve our decisionmaking process. We 

have tried to use the Governors as our partners on these projects, 

and in receiving proposals from them and from the States, from 

their DOTs and working with them, we have paid attention to 

what the GAO said and tried to improve our process for selecting 

projects. 

24 

Mr. MICA. Well, the other most recent report by the inspector 

general and that was released just weeks ago September 11th, 

2012. It said, they raised concern about FRA grants management 

framework and stakeholder agreement process. Would you like to 

comment regarding their criticisms? 

Secretary LAHOOD. The comment I would make is that when this 

program started, it was part of the stimulus program as you indicated, $8 billion, and we have never had a high-speed rail program 

before at FRA or at DOT and we had to staff up. Were we short 

of staff? Yes. Have we staffed up? Yes. Have we found the people 

with the expertise? Yes, we made improvements. We take seriously 

what the IG and the GAO tell us and we have tried to make those 

improvements. But frankly on the day that this program started, 

there was no high-speed rail program or staff and we had to staff 

up for that. 

Mr. MICA. We do only have really one high-speed rail project underway in the United States, the Northeast Corridor, we have a 

long-term plan, 30 years and $130 billion was the last plan I saw, 

and next week we are going to focus on the Northeast Corridor. I 

think it can be done in a third of the time and probably a third 

of the money if we included private sector partnerships and people 

who have actually built these systems in congested corridors, but 

that is the subject of next week. 

Right now and most of the commentary was on the one project 

that we have that can achieve high speed chosen between, again, 

two fairly rural destinations planned to connect into the major metropolitan areas, San Francisco to the north, Los Angeles to the 

south. 

Now it may be true that in 3 years or so we can finish that leg. 

The total cost of that leg is about $6 billion I, maybe $8 billion 

when we get through, part of it Federal, part of it State, et cetera. 

But the report we have from California is that the total project is 

going to be $68 million with a completion date of 2028. And the latest plan also—that raises questions if it is $6 billion or $8 billion 

and that leaves $60 billion. It would take a pretty substantial Federal commitment in the future. Of course, we have the next 4 years 

and we have money, 39 percent of the stimulus money is obligated 

to the California project. But a longer term commitment to connected into those two major areas consumes a huge amount of 

money, you heard opposition from some of the Members from California. 

The other criticism I heard the plan they are looking at actually 

could save some money, even though that is an expensive figure, 

but they are going to use current right-of-way to San Francisco and 

Los Angeles, which is not a dedicated high-speed alignment. The 

future Federal support for this is estimated at $42 billion. How do 

you see that playing out? 

Secretary LAHOOD. Well, first of all, we have a very strong commitment from the Governor, who has appointed new people to his 

Rail Authority; Governor Brown is as committed a Governor as we 

have in the country to this project, which obviously is very important, but we also have a very committed assembly in California 

that had to take a vote to sell the bonds, and both the House and 

Senate in California voted for this project. 

25 

You all know they represent the people in California in the assembly in Sacramento. So at the very top leadership in California, 

we have the people supporting this that we need to support it. And 

we also have several companies talking with the Governor and his 

staff, and the High-Speed Rail Authority about investing in California. We know that this project can not or will not be built with 

total Federal dollars. We don’t have enough money here to do that. 

We need private investment. 

Mr. MICA. Let’s—what I am trying to lean towards is it appears 

that there is a commitment, well there is a commitment, you have 

already committed 39 percent of the $10 billion which should be 

sufficient from a Federal standpoint for this first leg. The first leg 

is sort of the easy part of it, because again, it doesn’t serve the 

metropolitan areas. The expensive part and the more difficult part 

is down the road, and that will take a commitment from future 

Congresses and future State legislatures and Governors, but it is 

not going to be a fully completed high-speed rail system in California until, again, their estimate is 2028 and we are missing $42 

billion in Federal money and $60-some billion for the total project. 

So if there is some plan that the administration has for 

partnering in the future, we would also like to see that. And also, 

what about the issues raised now about the nondedicated alignment, nondedicated high-speed alignment using current right of 

ways, north and south? 

Secretary LAHOOD. Well, to your question of financing, I will just 

repeat what I said. There are lots of private investors working with 

the State of California, the Governor’s Office and others about their 

ability to privately invest in this project. And we know full well 

that this project will not be fully funded by the Federal Government, California knows that. 

With respect to the others, I will have to submit something for 

the record on those alignments. 

Mr. MICA. So it sounds like you are open to having the private 

sector in that corridor and other corridors fully participate, both 

from financing, construction and operational standpoint? 

Secretary LAHOOD. Absolutely. 

Mr. MICA. Very good, I am pleased to hear that. I met recently 

with some of the high-speed various countries to have their operations, and we are falling further behind, as I may have told you. 

Even the Russians had someone at the table, they now have got 

high-speed rail between St. Petersburg and Moscow. But I was interested to find the European Union is now opening, in a couple 

of years, all of the public transportation operations for high-speed 

and other rail service to the private sector, which is, I think, something we should look at. 

And actually, Italy has moved forward in an expedited fashion 

opening to private contractor Ferrari, which is now providing—it is 

not planned, they are now providing—competing service to the public sector in Italy. So we can look at some things that may or may 

not be successful in other countries and try to pick the very best 

options, but have you on the record today as supporting both the 

financing, the construction and the operation—— 

Secretary LAHOOD. Totally. 

26 

Mr. MICA. I am pleased to hear that. Let me yield now if I may 

to Ms. Richardson. 

Ms. RICHARDSON. Thank you, Mr. Chairman. I can only take my 

colleague, Mr. Denham, at his word, when we went to the Central 

Valley and he echoed the same today that one of the roadblocks 

that has been for him has been the lack of kind of knowing the details as a colleague. And so the conversation you just went through 

with Mr. LaHood, how soon could we expect to get an update on 

who these private companies are that are able to invest? How 

much are they willing to invest and how soon is this going to come 

together? Because he—I have heard him, Mr. Denham, say the 

same concern for over a year now. 

So when do you anticipate that the Governor would be prepared 

to work with you to present a package of how we might be able to 

get the private investment piece in with us? 

Secretary LAHOOD. Look, I am not going to speak for the Governor, but what I am going to say we will be happy to provide you 

the names of the companies that are in California and in other 

States wanting to make investments. How much they are going to 

invest, obviously that hasn’t been determined. That has to be determined through negotiations, but we can certainly give you a report 

on companies that want to invest in California. 

Ms. RICHARDSON. Would you also express to the Governor on behalf of this committee, and I don’t think the chairman would object 

to that, that he would put together some sort of report to give this 

committee an update whether he wants to do it through closed session because it might be pending negotiations, but give this committee some sort of better sense of what we can anticipate of the 

real commitment of private investment. 

Secretary LAHOOD. Sure. 

Ms. RICHARDSON. Thank you, sir. 

My next question building you said the President has a vision, 

I think the best example of the vision is that he has actually put 

money upfront on the table to begin this process of high-speed rail. 

But Mr. Denham, again, says that there is it no plan. Could you 

help us to better understand what the specific plan is of the President’s vision for high-speed rail, in particular, for California? 

Secretary LAHOOD. The President’s vision for the country is to 

connect 80 percent of the country over the next 25 years. We believe that the cost of that is about $500 billion. And I have submitted maps for the record, I can do it again. I have some maps 

here that I would be happy to submit for the record, which show 

what that is. 

[The maps follow:] 

27 


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28 


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29 

Ms. RICHARDSON. OK. 

Secretary LAHOOD. Look, we can’t do this without Governors, we 

need partners, and we have plenty of partners, both Republican 

and Democratic partners, and that is the way this is going to work. 

Ms. RICHARDSON. And one of the other objections has been that— 

and I realize it was not of your doing, it was actually in California 

of determining that Central Valley would be the first kind of leg 

here. And you mentioned in your testimony the adjustments that 

have been made through San Francisco. How quickly could you see 

us potentially, given completing the Central Valley leg, being able 

to connect to San Francisco? I believe that that is much further 

than the considerations being done going south. 

Secretary LAHOOD. I believe now there is a commitment on the 

part of the Governor and Dan Richard, who is the head of the Railroad Authority. Jeff Morales who is the executive director of the 

Railroad Authority to complete the California high-speed rail corridor within the next 10 years. 

Ms. RICHARDSON. Wow. OK, sir, with that, I would like to join 

my colleagues in wishing you a happy birthday. 

Secretary LAHOOD. Thank you. 

Ms. RICHARDSON. And also I think even more than your birthday, 

we hope that you will continue to stay and serve in this capacity. 

Secretary LAHOOD. Thank you. 

Ms. RICHARDSON. Thank you, sir. 

Mr. MICA. Thank you. The gentleman from Wisconsin, Mr. 

Ribble. 

Mr. RIBBLE. Good morning, Mr. Secretary. 

Secretary LAHOOD. Good morning. 

Mr. RIBBLE. Thank you for coming in today on your birthday, we 

are glad to have you here. One quick comment, and maybe you can 

help me understand, I am from northern Wisconsin where we don’t 

have high-speed rail and probably never will, it is a lot of woods 

and farmland and not a lot of people. But I do recognize that there 

are corridors in our country that high-speed rail would work and 

probably would work pretty effectively. And so I don’t come at this 

from a position of being negative on high-speed rail. I want to 

make it clear. Although I do think there is a level of naivety, kind 

of a wonderful naivety for Americans who often compare what is 

going on in China to what is going on in the United States. 

Having spent some time in the construction industry and having 

spent some time in China involving construction, there is a certain 

nimbleness to communism. There is a freedom of just taking over 

land because the country owns it all and they can say to citizens, 

you know, we would like this land and you leave, and without compensation. And so there is a speed and cost savings there that 

doesn’t allow us to compare what is going on in China today to 

what is going on in the U.S. The economies are much different, and 

certainly our systems of Government are different. It would probably be helpful for the overall conversation to set aside those comparisons. 

But I would like to kind of focus in on what is going on in California since the earlier panel was here. Can you give us an idea 

of what the real timeline is that you expect it to be? When is this 

going to be up and running and how much more money is it going 

30 

to cost the taxpayers in northeast Wisconsin to subsidize California’s high-speed rail? 

Secretary LAHOOD. Well, the investments that are being made in high-speed rail across America amount to a little over $10 billion 

so far, that is Federal share right now. And obviously, States are 

putting in their own money, California certainly is doing that. 

There is, as I said, their assembly voted to sell the bonds, and it 

was not without a lot of debate out there. These things are controversial, but what I said to Ms. Richardson I think is true, the 

goal is to complete a high-speed rail corridor in California over the 

next 10 years. 

Mr. RIBBLE. And do you—— 

Secretary LAHOOD. And the cost is currently $69 billion. 

Mr. RIBBLE. Yeah. And do you think that cost will be able to hold 

given your experience in transportation projects? You have been 

around, even though you are a young man on your birthday here, 

you have been around here a while. You have seen how this inflationary trend can go. Do you have any guess what the real number 

is? 

Secretary LAHOOD. I don’t, I don’t 

Mr. RIBBLE. It is likely to go up, though, wouldn’t you agree with 

that? 

Secretary LAHOOD. Well, I will let that be your—— 

Mr. RIBBLE. Having watched how much time often transpires 

from the beginning to the end of these, I think it is a reasonable 

expectation. 

I want to go to a broader question now because I do believe that 

there is friction that is put in our economy as a result of lack of 

investment in transportation here in the U.S. I think that is clear. 

And if we want to be a global competitor, it is really important that 

our airports, our ports, our highways, our rails are functioning. 

Like I said, I come from Green Bay, Wisconsin, which is a large 

manufacturing State. We have big obstacle in the way with Lake 

Michigan to get product moved to the east coast, so I recognize that 

there is need for investment. 

I often hear from my constituents a concern of the Government, 

of the Federal Government picking regions of the country to win 

and lose in the economic battles that take place between States. In 

other words, if we invest a lot of money in the Northeast Corridor 

as Federal taxpayer or we invest a lot of money in California, the 

taxpayer in Wisconsin is wondering are we just making those 

States more competitive to compete against Wisconsin manufacturing. Can you talk a little bit about how the whole thing plays 

together and what the answers should be? 

Secretary LAHOOD. First of all, I know you know this, but you 

all were in the ball game. 

Mr. RIBBLE. Oh, yeah, I am not making a statement on—— 

Secretary LAHOOD. I know you are not. I am saying if you feel 

that your State is disadvantaged, it is not because of us. We wanted to make investments we were ready to make investments. 

Mr. RIBBLE. Let’s take it from Montana, let’s just take a different 

region, so the broader question is really, the point I am trying to 

make is that there are mega regions in the United States, large 

population areas. Is it fair to taxpayers that are living in rural 

31 

areas to subsidize the large, already somewhat quite wealthy suburban areas? 

Secretary LAHOOD. I will put it to you this way: You name me 

any form of transportation in some way, shape, or form that is subsidized by the taxpayers. Transit is, I don’t know if Green Bay is 

advantaged by transit, I don’t know, but I know you are advantaged by roads. My son went to school at St. Norbert’s. You have 

got some pretty good roads up there. 

Mr. RIBBLE. It is a pretty good school too. 

Secretary LAHOOD. It is a very good school. That was paid for by 

all the taxpayers to advantage taxpayers in Wisconsin and transit 

money. 

Mr. RIBBLE. And used by Wisconsin taxpayers. 

Secretary LAHOOD. That is correct, that is correct. 

Mr. RIBBLE. It is not likely high-speed rail will be used a lot. 

Secretary LAHOOD. But you do have a corridor between Milwaukee and Chicago that is subsidized by the Federal Government, 

it is an Amtrak line. And people on that line that use it a lot are 

advantaged by all other taxpayers. 

Mr. RIBBLE. Very good. Well, thank you for being here today and 

I yield back. 

Secretary LAHOOD. Thank you. 

Mr. MICA. Ms. Norton. 

Ms. NORTON. Thank you, Mr. Chairman. Mr. Secretary, you have 

earned many happy birthdays, not only for your service in this administration but for your long service to the United States in many 

capacities. 

Secretary LAHOOD. Thank you. 

Ms. NORTON. First, I want to commend you and this administration, when I say let’s get started, you got us started, you moved us 

off the dime. You got 151 projects, they are all obligated. Yes, you 

have some States divided. And when they are divided I think you 

are doing the right thing, take back the money. And look what you 

get, you get a bonanza of other jurisdictions, if Florida and California are still debating whether or not they want to become second-class States, be my guest. There will be many other States that 

move forward. And this is a country of jurisdictions. Some will 

come later, all will come, and those who come early will be ahead. 

Now I indicated when we began that my concern is the best way 

to produce something so that it shows that we can, in fact, move 

forward quickly with high-speed rail. Now this name that has been 

penned on this project about a train to nowhere is unfortunate. Let 

me indicate one way that I think we could get over that. I think 

that has a lot to do with the fact that here again we are a federation of States, and we need high-speed rail throughout the United 

States so the administration starts in strategic places. You know, 

it is in parts of California, parts of northeast, the Northeast Corridor, the central part of the country, the Chicago fulcrum. 

And yet, if one were to defend against the notion of a train to 

nowhere, I am not sure there is a good defense. For example, the 

GAO says in its report that they had warned in June that States 

would be—that States would be the primary recipients of the Recovery Act funds for high-speed rail, but says the GAO, many 

States did not have rail plans that would, among other things, esVerDate Aug 31 2005 15:10 Feb 07, 2013 Jkt 000000 PO 00000 Frm 00041 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\12-6-1~1\77211.TXT JEAN
32 

tablish strategies and priorities of rail investments in a particular 

State. Well my concern is whether the United States of America 

really has priorities of where to begin and where we would end. 

What we have seen in the past couple of years ever since the initial important investment is no funding from the Federal Government. So we really, in some kind of dream of our own, to keep the 

notion going that somehow these States from west to east will continue to move forward because even under the best of circumstances, as we approach a cliff which I still believe we will not 

go over, but in not going over it, there will be very significant reductions in every kind of program made. 

If that is the case, I need to hear the case for why we wouldn’t 

prioritize one—at least one of the places you have funded that 

looks like it is ready to go and go with it. If you do not do that, 

you must have some view that some miracle is going to happen in 

the economy so that at least the public sector will continue funding. I can’t see that, if it is not the case that we can expect public 

funding for all parts of the country in the next, let’s say, next 5 

years. So let’s take the near term, how do you think—what do you 

think is the best way to proceed with what scarce funds you may 

receive, having received none now as far as I can tell, since the initial funding? 

We know this, that if you start, and I know this from the Department of Homeland Security. We are trying to look for public/private 

ways to finish that, because every year that we fail to complete a 

project that has already begun, we are adding literally, and I use 

my words advisedly, hundreds of millions of dollars to the original 

cost of the project. 

If that is the case, please help me to understand how one proceeds with a national network such as you have already embedded, 

knowing full well that there is no near-term prospect of funding it 

nationally, how will you have something to show to the American 

people within the next 5 years? 

Secretary LAHOOD. Well, first of all, every budget that the President has submitted for the last 4 years for transportation has included money for high-speed rail. 

Ms. NORTON. And Congress has, in turn, not funded. Did you 

really think we are going to fund high-speed rail for the 2014 budget, for example? The President will submit after he is saving us 

from going off the cliff, but is the administration thinking through 

the present funding crisis? We decided the fiscal cliff, the funding 

crisis we are building ourselves into precisely by solving the fiscal 

cliff problem. 

Secretary LAHOOD. Well, as you know, Ms. Norton, I sat in those 

chairs where you all are for 14 years, and I know this: If you keep 

after things, keep working on things legislatively, particularly if 

they are good things, particularly if they are good for the America, 

particularly if the American people want them, eventually they will 

happen. Look, we are not giving up on high-speed rail. The President will include money in his budget, in the transportation budget, for high-speed rail. Eventually I hope there is enough visionary 

people around here that see high-speed rail as the next generation 

of transportation for the next generation that—but in the absence 

of that, we are trying to get some private dollars, we are encourVerDate Aug 31 2005 15:10 Feb 07, 2013 Jkt 000000 PO 00000 Frm 00042 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\12-6-1~1\77211.TXT JEAN
33 

aging—I traveled to 15 countries over the last 4 years. Everywhere 

I went I told these companies that built the rails in Europe and 

Asia, come to America, invest in America. And many of them are 

here now. 

So in the absence of Congress not providing the money, but with 

the leadership of the President providing the money, I think we 

will get there with public money, but until we do, we are going to 

use private dollars. 

Ms. NORTON. Mr. Secretary, with all respect, there is not 15 minutes worth of vision in this Congress. The chairman likes to exclude himself, but after all, he is from Florida. 

Mr. Chairman, I very much respect, and I believe it is the way 

to proceed not to give up on high-speed rail, I beg you not to give 

up. My question really goes to priorities. If you continue to flake 

this money out because it will be so little, it will be a bunch of 

snowflakes, at the end, there will be huge criticism of the administration for having nothing to show for its funds. So my question 

very directly is, is it possible for you and the administration to 

think through a system of priorities based on a real-time, realistic 

vision of what lies ahead for us in the next 5 years so that we 

might prioritize among these projects? The projects which, for example, that have State go-aheads, the projects where you see an 

opportunity for private sector funding, on some rational basis to 

say, we are going to get to everybody. But to avoid the notion of 

having to simply disburse virtually no money everywhere, we are 

forced to use this set of criteria for prioritizing where the money 

goes first. We will reassess as the economy changes, but this is our 

priority now, it is Florida, it is California, it is the Northeast Corridor, it is Chicago, but we are not afraid to see what it is. 

Secretary LAHOOD. Yeah, no, of course we will, we will. 

Ms. NORTON. I will take that answer right there. And ask that 

the Northeast Corridor be considered. Thank you very much, Mr. 

Chairman. 

Mr. MICA. Thank you. Let me yield down to Mr. Bucshon, gentleman from Indiana. 

Dr. BUCSHON. Thank you, Mr. Secretary, for being here today. I 

will quickly draw your attention to a matter unrelated to highspeed rail, and I will submit the questions for the record. 

Secretary LAHOOD. OK, fine. 

Dr. BUCSHON. The State of Indiana recently received notice from 

the National Highway Traffic Safety Administration that Indiana 

was no longer in compliance with open container law and repeat 

offender law, and we disagree with that. NHTSA previously sent 

a letter to Indiana telling us that we were in compliance, and I will 

submit that letter for the record. 

It is my understanding we didn’t make any changes in MAP–21 

regarding these laws. Because we are now considered noncompliant, Indiana is being withheld $40 million in funding. Indiana Department of Transportation sent several letters to Administrator 

Strickland seeking clarification. As of now, we haven’t received a 

response, and Indiana State Representative Soliday, and Indiana 

State Senator Wyss, who are the respective heads of the Transportation Committees in the Indiana Legislature have submitted a letVerDate Aug 31 2005 15:10 Feb 07, 2013 Jkt 000000 PO 00000 Frm 00043 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\12-6-1~1\77211.TXT JEAN
34 

ter to your office. So I want to bring that to your attention and 

thank you ahead of time for addressing. 

Secretary LAHOOD. Well, look, I will personally look into it and 

I will personally call you and tell you where we are at with that. 

Dr. BUCSHON. I appreciate that and with that I will submit my 

questions for the record. And I ask unanimous consent to submit 

those questions as well as the previous mentioned letters to the 

record. 

Mr. MICA. Without objection. And with the concurrence of the minority we will leave the record open for 15 days. So ordered. 

Ms. Edwards. 

Dr. BUCSHON. I will yield some of my time to Mr. Denham. 

Mr. MICA. Oh, I am sorry. I thought you were concluding. 

Dr. BUCSHON. With that, Mr. Chairman, I yield the rest of my 

time to Mr. Denham. 

Mr. MICA. Mr. Denham, you are recognized, and then we will go 

to Ms. Edwards. 

Mr. DENHAM. Has the administration taken a position to waive 

NEPA on this project? 

Secretary LAHOOD. To waive NEPA? Not that I know of. 

Mr. DENHAM. Have you had a discussion about it? 

Secretary LAHOOD. I have had no discussion about that, the first 

I have heard it. 

Mr. DENHAM. Have you had any discussions with the Governor 

to waive CEQA? 

Secretary LAHOOD. No, sir. 

Mr. DENHAM. So when the Federal Government really wants to 

get something done on time, on budget, avoid some of the lawsuits, 

normally I have seen a number of times when we have waived 

NEPA, but certainly from a State perspective a Governor who has 

decided to waive NEPA or waive CEQA to get AT&T part done for 

the Bay area, or most recently, to build new football stadium, I 

would think that the two parties wanting to get high-speed rail is 

their number 1 priority, would look at, rather than having duplicative regulation and going through NEPA and going through CEQA, 

that we would try to streamline it at some point so this $98 billion 

fluctuating to $68 billion of numbers can actually get narrowed 

down to a specific. Do you have any thoughts or comments on 

waiving one of those two or at least working with the Governor to 

have that conversation? 

Secretary LAHOOD. I have never had any discussions with anybody about this, including my own staff. First I have heard of it. 

Mr. DENHAM. This is something that has come up in this committee many times, in fact, I think we have, in our bipartisan discussions, at least an interest to go with the highest level of environmental regulation rather than duplicating that, it would seem 

that this would be a very simple topic that should be at the top 

of both the State and Federal Government’s interest point if we are 

going to get this project done. Surprising that—the Governor talks 

about it all the time when he wants to do it for a ball park in one 

of the different areas of the State. I would think that for the number 1 project of the State that that would be a conversation as well 

if we are going to do this on time and on budget. 

35 

I wanted to ask you about the timeline, you said this will take 

about a decade? 

Secretary LAHOOD. Yes, sir. 

Mr. DENHAM. The High-Speed Rail Authority plan has us doing 

Madera-to-Bakersfield corridor by 2017; Merced to San Fernando 

Valley by 2021; San Jose to San Fernando, 2026; and then the final 

San Francisco to L.A. by 2028. Does the administration have a different timeline than the Authority? 

Secretary LAHOOD. Well, I believe that the timeline I was given 

was about a decade, so I will go back and see if I am incorrect on 

that. 

Mr. DENHAM. I would just be curious to see if there is a way to 

expedite this project, and certainly having it done on time would 

be of great interest to me as we are looking to try to come to some 

type of agreement so that we can fight together rather than fighting to come up with a plan that we can all agree on. 

Finally, on shovel-ready projects stimulus dollars, we are 4 years 

into this now. Any idea when we will actually have shovels on the 

ground? 

Secretary LAHOOD. You are talking about high-speed rail or 

stimulus generally? 

Mr. DENHAM. I do believe we have found some shovels for some 

of the stimulus money, but on high-speed rail we are still are using 

stimulus dollars and have no shovels in the ground. 

Secretary LAHOOD. Well, you know better than anyone the difficulties it is to start a new program. Even though California was 

well positioned with a good plan, obviously that plan changed, the 

dollars changed, the administration has changed. We went from 

one Governor to another Governor. And we have to, as I said, we 

have had spent a lot of time with our friends in the freight rail to 

get these agreements, which we are very happy we are able to get. 

I think Governor Brown wanted to put in own people in place and 

there has been a change with the Rail Authority. 

I would assume that you would want us to do this correctly rather than speedily. And doing it speedily—look, we can’t have it both 

ways, we would like to do it as fast as we could. We want to get 

it right. Our partners in this are the State government. We had a 

change in State government, a change in personnel, a change in 

the plan, a change in the money. We are positioned today now. We 

know what the plan is, we know what it is going to cost. People 

are in positions now to implement the plan, and we are going to 

move forward. 

Mr. DENHAM. What is the change? 

Secretary LAHOOD. The change is going from Schwarzenegger to 

Brown, going from new members on the Railroad Authority, changing from $99 billion to $69 billion, which it changed the plan. A lot 

of things have changed. And all of those changes have taken time. 

Mr. DENHAM. I would actually look forward to seeing a plan to 

see exactly what those changes are, other than fluctuating ridership numbers which get made up all the time, there doesn’t seem 

to be a whole lot of changes. You have two administrations that 

made it a top priority. I mean, I expect that Governor Brown wants 

this just as bad as Governor Schwarzenegger did, and both wanted 

to have a streamline fast process, but we have had anything but 

36 

that so far, and we have nothing that you could sell to Congress 

and certainly couldn’t sell them to a private company that would 

want to do this. 

I am just still looking 4 years into this and seeing a plan that 

actually makes sense that I can take back home and sell to the 

people of my district. 

One final question, we continue to hear Members talk about the 

train to nowhere, I think Mr. McCarthy would take offense to that, 

Bakersfield is not nowhere. But the question is if you get on Amtrak from my district, and want to go to southern California, when 

you get to Kevin McCarthy’s district, you have to hop off a train 

and hop on to a bus to get to the Tehachapi Mountains. What is 

the plan to get high-speed rail over to the Tehachapis? 

Secretary LAHOOD. I will be happy to submit that for the record, 

and I will also be happy to have Dan Richard come to explain the 

high-speed rail plan to you. 

Mr. DENHAM. Thank you, I yield back. 

Mr. MICA. Mr. Denham, I caution some of the terminology, after 

I saw some of the proposal early on, I remember I phrased it slow 

speed trains to nowhere, and I got a number of delegation letters, 

people from Illinois telling me how they were somewhere, so I had 

to modify my verbiage. Ms. Edwards. 

Ms. EDWARDS. Thank you, Mr. Chairman. Secretary LaHood, 

thank you so much because every time you have appeared before 

this committee, not only are you forthright about everything, but 

your passion for high-speed rail is so evident, I want you to know 

that there are plenty of members on this committee who share that 

and not just for where we live, but for a network that would eventually run across this country and I know that that is part of the 

vision. And I think that you are right, you have to start with a vision and then begin to build on that. And punch through, as I said 

before, punch through the resistance. 

Some this committee and particularly on the other side of the 

aisle talk an awful lot about a bottom-up approach and renewed 

focus on what States want and what States define for their own 

needs versus the Federal Government. And yet, in the discussion 

about high-speed rail it seems to be quite the reverse quite frankly. 

And so when the applications came in from the States to the Department, did you all have to twist arms to get applications? 

Secretary LAHOOD. Absolutely not. As I indicated earlier, when 

Florida decided not to accept $2.3 billion, we put out a notice for 

that money, we had $10 billion worth of requests. 

Ms. EDWARDS. So you didn’t force a State assembly or a Governor 

to submit an application, you didn’t force them to take the money? 

Secretary LAHOOD. We didn’t call anybody and ask them to take 

the money. We put a notice out and we were flooded with applications. 

Ms. EDWARDS. And so in California their assembly, their Governor, they are on board? They submitted the application, you reviewed the applications, just like you did for the Northeast Corridor, just like you did for my State of Maryland, and then made 

some decisions about—and those applications could have come from 

Montana to Chicago, or from anyplace else around the country. 

37 

Secretary LAHOOD. That is right, that is right, it was a free and 

open, fair competition. 

Ms. EDWARDS. And I know we started out, you described that we 

started out with essentially—it is a startup, you didn’t have staff 

expertise, you hadn’t made the grants develop the application process or review the application process, it is like having a startup 

company. 

Secretary LAHOOD. That is right. 

Ms. EDWARDS. And now here we are 4 years later really ready 

to do something; is that right? 

Secretary LAHOOD. That is correct. 

Ms. EDWARDS. Let me just ask you about the freight rail. I discussed that earlier, I understand there are agreements with the 

freight rail industry. Are you looking at technology that will enable 

this kind of dual use of the freight and the passenger rail system 

so that we can achieve the highest speeds possible? 

Secretary LAHOOD. Absolutely. Our goal is to make sure that according to the legislation, high-speed rail is defined at 110 miles 

per hour, now California will be higher. 

Ms. EDWARDS. Do you think 110 miles is a bad definition? 

Secretary LAHOOD. I think it is a pretty fast train. Look—— 

Ms. EDWARDS. In some places when you get on high-speed 

rail—— 

Secretary LAHOOD. I have been on trains in Spain and other 

countries, in China, that go 250, 300 miles; I would love to do that. 

You are never going to get a train going 250 miles an hour along 

the Northeast Corridor, nor would you want to. But in California, 

where we are building new infrastructure, do it at 200 miles an 

hour, which is what we are going to do. In Illinois, the best we can 

do is 110 miles per hour. Would we like to go 200? Of course we 

would, but it is not possible. 

Ms. EDWARDS. So it is a standard that we can live with—— 

Secretary LAHOOD. That is right. 

Ms. EDWARDS [continuing]. As high-speed rail. And then there 

has been some criticism as well that it is money that hasn’t been 

spent yet. Do you think it is actually even reasonable to have actually spent the amount of money without developing the plans and 

rigorously reviewing those and making obligations for the studies 

that are required for those, and isn’t it actually OK simply to have 

obligated the money and still ask for more because we can obligate 

more? 

Secretary LAHOOD. What I am proudest of, over the last 4 years, 

you haven’t seen any bad stories about boondoggles, earmarks or 

sweetheart deals when it came to the $48 billion, of which $8 billion was high-speed rail, none. We did it the right way, by the 

book, because, that is the way we were supposed to do it. We did 

it the way Congress asked us to do it, and we put 65,000 people 

to work over the last 4 years with the $48 billion with 15,000 

projects. Now, if people think we have been too slow, fine, I will 

take the criticism. But nobody is going to criticize us for any sweetheart deals, boondoggles or earmarks, none. 

Ms. EDWARDS. Mr. Secretary, thank you so much. We are, as others have said, 50 years behind Japan, another couple of years is 

not going to hurt us, thank you very much. 

38 

Mr. MICA. Other Members seek recognition? 

OK, I think we finished all of our regular—I am sorry, Mr.—I 

thought you had already spoken. 

Mr. Denham. 

Mr. DENHAM. Thank you, Mr. Chairman. I just wanted to go 

back to this NEPA issue, because it seems like one of the biggest 

areas that, hopefully you can get bipartisan support on, it has come 

up whether it was the transportation bill that we had debated 

here, or a number of other amendments where you have got CEQA, 

the highest environmental quality regulation in the land, why 

would you go through it twice? 

My staff pulled up a number, I guess the Federal Government 

has 179,000 NEPA waivers, a lot of those most recently on a lot 

of the wind projects. So it would only make sense to me that you 

would at least investigate this, and that staff had done 179,000 of 

them would at least maybe question this project on whether or not 

we needed—— 

Secretary LAHOOD. Look, Mr. Denham, I take your point, I think 

it is a good point. I am going to go back and talk to California 

about this. We don’t do wind projects in our department. OK? 

Mr. DENHAM. I understand that. 

Secretary LAHOOD. So if you have an example of a NEPA or 

something like that at Transportation, I would be glad to hear it. 

Your question was have I ever talked to the Governor about this? 

No, I haven’t, have I ever talked to anybody in California about it? 

No, I haven’t. Have I ever talked to anybody in my staff about it? 

No, I haven’t. I take your point. I am going to start talking to them 

about it. 

Mr. DENHAM. Thank you. I look forward to seeing a resolution 

on that specific issue. 

I still want to come back to the budget numbers. I realize, and 

I would agree with you that I would rather go slow than to try to 

speed through this and not have a full plan. And I have yet to see 

a plan, I am still looking forward to seeing that. But last time we 

were talking last year it was a $98 billion project, I know there are 

some new ridership numbers, now we are talking a $68 billion 

project with a different timeline. I know that there have been some 

changes with the Rail Authority. But on the $68 billion, the numbers I have here as Proposition 1A would be 12 percent of the 

project, the Federal funding which has already been obligated 

would be 4.8 percent of the project, the unfunded piece, $38.6 billion that was unsecured Federal funds, 56.4 percent of the project. 

Do you anticipate that that would be a request from Congress on 

stimulus dollars? Do you think it will be part of a budget? Any idea 

where that 56 percent or $38.6 billion will come from? 

Secretary LAHOOD. Well, I will just be honest with you, Mr. 

Denham, I would hope that we could find Members of Congress 

that wouldn’t prohibit the Federal Government from funding highspeed rail projects, that is a good first start. We—look, as long as 

there is language in bills that prohibits us from funding, we are 

with going nowhere. So if you would be good enough to withdraw 

your language in that appropriations bill, or tell Mr. McCarthy to 

do that, that would be a good first start for us. We are not going 

to get $1 as long as there is language in the appropriation bills 

39 

that says no Federal money can be spent on California high-speed 

rail. That doesn’t help us, that doesn’t help us get any more money 

to the project. So that is why I say we are looking for private investment. 

Mr. DENHAM. The amendments are not meant to help you, we 

agree on that. The amendments are meant to stop this project until 

we see a plan. You and I have been talking about this for 2 years 

now. 

Secretary LAHOOD. And the last time we talked about it—— 

Mr. DENHAM. I want to go back to my district and say here’s the 

plan. 

Secretary LAHOOD. The last time we talked about it, I suggested 

you sit down with Mr. Richards, Dan Richards and go over the plan 

and review it. Now I will be happy to have Mr. Richard call on you 

and sit down with you and review in detail what the plan is. So 

if he does that, will you withdraw your language? 

Mr. DENHAM. When you can show me that this project is fully 

funded and we have a private investor—— 

Secretary LAHOOD. We are not going to get it fully funded as 

long as there is language and bills that says we can’t have any 

money. How do we fully fund it? 

Mr. DENHAM. Mr. LaHood, I have been hearing this story for 

many years now. When it first came up in front of the State Senate, it was if you will just support this, we will have a private investor before it goes to the ballot. We just need to be able to show 

that the legislature supports it. 

There was no private investor. They said wait a minute, if we 

just pass it, if the voters pass it, then we will have a private investor for sure because we will show that the State is obligating these 

funds and we will be ready to go, there is still no private investors. 

They said wait a minute, if we just get the stimulus dollars, we 

will definitely have a private investor come in because now we 

have got the State, we have got the Federal and we have got the 

voters on the hook for the $33 billion. Then it became a $98 billion 

project that would take an extra decade. We said, OK, well, if we 

just have the true numbers, a private investor will come. 

So I keep hearing about these private investors, all these steps 

that if we just jump through one more step, we are going to have 

this private investor. So until we have a fully funded project, till 

we have a private investor that says look, OK, I understand you 

guys have some amendments, and I understand you guys have 

some disagreements, but here is what it is going to take, is it $36 

billion? And the private investor is going to come up with 10, 12, 

or 15? Then let’s see how that makes sense. 

Look, I am a businessman too, I run a company. I know I can’t 

go out there and borrow money or expand my business or go sell 

a new product until I have got a business plan to sell to investors. 

You are trying to sell me on a plan so that I don’t put any more 

amendments out there, I just want to see the numbers, my district 

wants to see the numbers. And I think the State that is obligated 

State dollars needs to see a plan as well. 

I am out of time, I yield back. 

Mr. MICA. The gentleman now yields to Ms. Hahn, thank you, 

and welcome to our panel. You are recognized. 

40 

Ms. HAHN. Thank you, Mr. Chairman, and let me go on record 

to say I totally, 100 percent agree with the idea of extending the 

Green Line into L.A. International Airport; there is no other international airport in the world that doesn’t have a good transportation system that goes directly into a terminal. The thought that 

people stop a mile short and try to get on a shuttle and get to the 

airport is the reason people aren’t taking public transportation, so 

I agree with you. 

Mr. MICA. I no longer will be able to stop all the projects until 

he gets that done. I will just torpedo a few. 

Ms. HAHN. I am with you on that. And Mr. Denham, I hear your 

comments about the possibility of waiving NEPA and CEQA, and 

I do remember our legislature falling all over themselves to waive 

that when it came to building a football stadium in Los Angeles. 

So I think the conversation is certainly one we ought to have, if 

there was any way that would soften your stance or get your support of our California high-speed rail, I would be the first one to 

start that conversation. I think that is something we definitely 

ought to have. 

And Mr. Secretary, it is great for me to sit here and listen to 

your passion and really believe a vision in what a high-speed rail 

would mean, not just to California, really to this country. And I 

know, Mr. Denham, I know you have a lot of concerns about this, 

although I do know that I believe you were in the legislature in 

2009 when you were on a letter that actually—you wrote to Secretary LaHood, you know, believing in the project then, agreeing 

with the project and asking for stimulus dollars to be given to California. So I know—— 

Mr. DENHAM. I voted on it, I was fooled at one time, and now 

we are trying to fix that situation. 

Ms. HAHN. That is OK, but you had the hope and you had the 

vision at that time. I think we can get back to that. I think we 

should get back to that. I hope there comes a day when our whole 

California delegation will be in support of really being the model 

for this country and making sure that Federal Government invests 

in it. And, you know, it has been called the train to nowhere, but 

Mr. Secretary, you talked about this new project where we are 

going to be building the rail cars in Illinois. 

There are already jobs that are going to be created. There is already money that is going to be into our economy as a result of 

this, even if it is a somewhat unconstructed vision that we have of 

the high-speed rail in California. So I hope to be one of the champions here in Congress a long time to continue to urge us to finally 

build the high-speed rail in California. It would be a proud moment 

for this generation. As you said, what are we going to build that 

is great and significant and has incredible impacts for jobs, for the 

economy, and for the future of transportation, for tourism. In Los 

Angeles, tourism outpaced goods movement as the number one industry. So we want to tourist dollars in California. Those are the 

dollars that matter to us. But the only thing I’m going to ask is, 

there is always a bureaucracy that has to implement the plans, the 

progress, the process, and can you tell me, Secretary LaHood, how 

has the California High-Speed Rail Authority been in working with 

your department? Have they been open? Have they been responVerDate Aug 31 2005 15:10 Feb 07, 2013 Jkt 000000 PO 00000 Frm 00050 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\12-6-1~1\77211.TXT JEAN
41 

sive? Is this a good agency as we move forward to build this significant project? 

Secretary LAHOOD. First of all, Dan Richard is an extraordinarily 

gifted chairman, very knowledgeable about high-speed rail and 

knowledgeable about how to get things done in California. I think 

Governor Brown’s other appointees are very good, are very dedicated people. I have been very impressed with the board. Jeff Morales is also a very gifted individual and very committed to doing 

this the right way, doing it correctly, and working with all the 

stakeholders in California. I think the right people are really in 

place right now. And I wouldn’t have said that a couple of years 

ago. 

I will tell both you and Mr. Denham this, on a trip that I made 

to California, I spent 3 days along the Corridor, primarily in Fresno but in the Central Valley, and I met with some farmers and as 

a former Member of Congress, I was stunned by the way they had 

been treated by the previous people that were in place, treated very 

shabbily, treated very arrogantly. And Dan was in that meeting, 

and Dan and I made a commitment to these farmers—and we met 

with some small business people in Fresno who had also been 

treated shabbily. And I don’t blame them for being against this 

project. But we told them we would make it right for them. We listened to them, Dan has gone back and listened to them, and we 

are trying to work with these people who have spent their whole 

lives in agriculture, whose farms have been in their families for 

100 years, and who have been treated very shabbily by people in 

Government. 

We made a commitment, and I think Dan has followed through 

on that. And so I experienced the hard feelings. I don’t know if 

some of those are your constituents or not, Mr. Denham, but I 

know this, these people in California were not treated right and I 

don’t blame them one bit for feeling the way they do about this 

project. We have got to get them back. And we are working on 

doing that. I don’t know if we will or not, but we are going to work 

on it. We need to do a lot better when it comes to the people along 

this corridor. 

Mr. DENHAM. Will the gentlelady yield? 

Ms. HAHN. Yes, I yield to my friend from California. 

Mr. DENHAM. You are 100 percent correct. When this was sold 

to the voters of California back when it was a proposition, I would 

say they did a very, very good job of going out and doing a lot of 

outreach to farmers throughout the Central Valley and getting a 

lot of actual support for the project at the time. And then there 

were changes that happened within the Authority and they went 

out and lost, burnt a lot of those bridges, lost a lot of those relationships, and it is going to be a difficult road to get them back on 

and supportive. But it is something that I would look forward to 

engaging with your office on because I, quite frankly, you will have 

a hard time getting my support if we can’t rectify things for those 

farmers that feel like they are going to lose their farms in this 

process. 

I yield back. Thank you. 

Ms. HAHN. Well thank you very much, Mr. Chairman, for letting 

me be part of this committee. I am an unabashed supporter of 

42 

high-speed rail, and I look forward to working with my colleague 

in California, Mr. Denham. I think not only can we get over all the 

obstacles to build this high-speed rail, I think there is a possibility 

we are going to get Mr. Denham’s support for this project. 

Mr. MICA. I thank the gentlelady for yielding back. And let me 

say in conclusion, well, let me clear up one thing for the record, because there is a lot of confusion about where I stood and others 

stood on the link in Florida which was 84 miles, and the administration came forward I think initially with a $1 billion offer, and 

it was initially rejected. The Secretary was gracious, and came 

back with a $2 billion offer and that was rejected. 

Finally, to try to make an incredibly substantial commitment, 

the Secretary, I remember the discussion we had, came back with 

I think it was close to $2.4 billion out of a $2.7 billion. And I tried 

to work with all the parties. At first it would not work at $1.7 billion even at $1.2 billion, questionable, but the Secretary did go to 

every extent. 

The problem was, and I tried—again, it was not a high-speed rail 

project, but it was an important intercity passenger lane and I 

tried to negotiate with the Governor and others and there were 

others other interests in the State that wanted to go all the way 

to Tampa. The Governor did review it. There were serious concerns 

about the link from the tourist area, Disney to Tampa, the Orlando 

to the tourist area it is a no-brainer. It should be built, it can be 

built, it can be self-sustaining, it can be a great project. But we 

couldn’t get a compromise to build it in phases. Tampa had had 

problems and still has problems, one of the few cities without a 

fixed transit system in that size category. I think there are only 

two left in the United States now. 

But the Secretary and I did all we could in our power to make 

that happen, it just didn’t happen and the money did come back, 

and I was pleased that a good portion of it did go into the Northeast Corridor but we can’t do that piecemeal, we can’t do it BandAid. We need to do it and get it done not in 30 years, but in a fraction of that time, and we can make that it happen. One reason I 

came back and will be here a very active member of this committee, even though not maintaining the chair is to get that done. 

We will figure out a way. 

If we have got a multibillion-dollar project in California, it is not 

going to be a dog, we are going to, we want success, we need a 

plan, we will work with folks, we need to expedite it if we are going 

to do it, and then we need to see that it is connected into a place 

it would serve. So we will work together. 

I thank the Secretary for his cooperation and his commitment. 

Secretary LAHOOD. Thank you. 

Mr. MICA. Publicly, I just want to say how much I have enjoyed 

our working relationship from probably the very hour you got the 

call that you were going to be Transportation Secretary to today. 

So on your birthday, congratulations. 

Secretary LAHOOD. Thank you. 

Mr. MICA. And this livened it up. It will probably add to your 

longevity. They say that stimulation is good for the heart, so we 

wish you many more prosperous and healthy birthdays. 

Secretary LAHOOD. Thank you all very much. 

43 

Mr. MICA. Thank you. We will excuse the Secretary and we will 

turn to our next panel. 

Our next panel consists of Mr. Mitchell Behm, assistant inspector general for rail, maritime and economic analysis, the U.S. Department of Transportation. Second witness is Ms. Susan Fleming, 

director of physical infrastructure, Government Accountability Office, GAO. Then we are also privileged to have as a witness the 

Honorable Paula J. Hammond, secretary of transportation for 

Washington State, chair of AASHTO High-Speed and Intercity Passenger Rail Leadership Group, and chair of the States for Passenger Rail Coalition. The Honorable Ann Schneider, secretary of 

transportation for the State of Illinois. And finally, the distinguished Mr. Ed Hamberger, president and CEO of Association of 

American Railroads. 

TESTIMONY OF MITCHELL BEHM, ASSISTANT INSPECTOR 

GENERAL FOR RAIL, MARITIME AND ECONOMIC ANALYSIS, 

UNITED STATES DEPARTMENT OF TRANSPORTATION; 

SUSAN A. FLEMING, DIRECTOR, PHYSICAL INFRASTRUCTURE ISSUES, GOVERNMENT ACCOUNTABILITY OFFICE; 

HON. PAULA J. HAMMOND, P.E., SECRETARY OF TRANSPORTATION, WASHINGTON STATE; CHAIR, AMERICAN ASSOCIATION OF STATE HIGHWAY AND TRANSPORTATION OFFICIALS HIGH-SPEED AND INTERCITY PASSENGER RAIL LEADERSHIP GROUP; AND CHAIR, STATES FOR PASSENGER RAIL 

COALITION; HON. ANN L. SCHNEIDER, SECRETARY, ILLINOIS 

DEPARTMENT OF TRANSPORTATION; AND EDWARD R. HAMBERGER, PRESIDENT AND CHIEF EXECUTIVE OFFICER, ASSOCIATION OF AMERICAN RAILROADS 

Mr. MICA. I would like to welcome all of you. I tell you that we 

appreciate your patience. As you can tell, we have had some lively 

discussion to date. There is a lot of interest in the passenger rail 

service, intercity and high-speed, we look forward to your contribution. If you have a lengthy statement that extends beyond 5 minutes, without objection, it will all be considered as part of the 

record and included in the record. 

We welcome you, and we will now begin and we will start with 

Mr. Mitchell Behm who is the assistant inspector general for rail, 

maritime and economic analysis of the Department of Transportation. Welcome, Mr. Behm, and you are recognized. 

Mr. BEHM. Mr. Chairman, members of the committee, thank you 

for inviting me to testify on the FRA’s implementation of the Nation’s High-Speed Intercity Passenger Rail Program. Since we 

raised concerns in April 2010 about FRA’s ability to meet this challenge, we have seen FRA make noteworthy progress in implementing its grants program. 

To date, FRA has awarded and obligated nearly all of the $10.1 

billion in grant funds. However, it has only disbursed about 8 percent of these funds due in part to challenges in completing key 

components of its grants management framework and stakeholder 

agreements. My testimony today will focus on these two challenges. 

To establish a sound foundation for a grants management framework, FRA developed policies and procedures for grant solicitation, 

administration, oversight and closeout. However FRA has not deVerDate Aug 31 2005 15:10 Feb 07, 2013 Jkt 000000 PO 00000 Frm 00053 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\12-6-1~1\77211.TXT JEAN
44 

veloped sufficient guidance for FRA’s staff and grantees on how to 

comply with these policies and procedures. Through our survey of 

FRA staff, we learned that grantees did not always meet the agency’s grant obligation requirements for documenting project scope, 

schedule and budget. Nine of 12 grantees we interviewed indicated 

that FRA could have provided more guidance to help them develop 

the required application documentation. 

Providing guidance on how to navigate the complex grant lifecycle process could help FRA prevent any inefficiencies, mismanagement and project delays. FRA has established work groups 

to develop this guidance, but has not established timelines for completion for all of these work groups. 

FRA’s grant management framework also lacks clear strategic 

and performance goals for assessing the grant program’s progress 

and grantees’ performance. For example, the goal to improve reliability, speed and frequency of rail passenger service does not include measures that indicate progress such as anticipated trip time 

improvements, additional trains or ridership gains. A lack of specific performance measures as well as inconsistencies across documents containing strategic and performance goals make it difficult 

for grant managers, decisionmakers and other stakeholders to 

measure progress and identify risks. 

FRA also needs to develop a comprehensive training program, 

one that incorporates its program policies and procedures to ensure 

staff appropriately and consistently administer funds across all active grant programs. 

To help fill its training gap, FRA has required its program staff 

to attend agency-provided training on grant monitoring, applicant 

outreach and other relevant topics. However, FRA has not required 

staff to complete training for recognizing common fraud schemes 

such as conflicts of interest or false statements claims and certifications. 

Historically, large scale grant projects, such as those under the 

High-Speed Intercity Passenger Rail Program, have been particularly vulnerable to these types of fraud. FRA agreed with our recent recommendation to develop a comprehensive grant management training curriculum that includes a required fraud training 

component. FRA expects to complete the curriculum by the end of 

this calendar year. 

Finally, all stakeholder agreements need to be completed in order 

for FRA to disburse obligated funds to project grantees. Prior to obligation, FRA ensured that grantees for all long-term projects completed service outcome agreements. These important agreements 

outline the benefits that will result from the infrastructure investments. 

While FRA obligated all of the funds within the ARRA-mandated 

deadline, other required agreements related to maintenance and 

construction were not complete. The deadline for extending ARRA 

funds and completing construction is September 2017, a compressed timeline for complex projects, such as creating a new rail 

corridor or expanding or reconfiguring an existing one. 

For projects with maintenance and construction agreements that 

remain outstanding, the timeline for completion becomes even more 

compressed. Short-term projects, which were intended to stimulate 

45 

economic recovery, have also been delayed. FRA originally planned 

on obligating funds for these projects by September 2010, but did 

not complete this effort until September 2011 as a result of the 

focus on completing the long-term project service outcome agreements. 

According to FRA officials, stakeholder agreement requirements 

for short-term projects were completed on a case-by-case basis instead of providing guidance for completing these agreements. 

Grantees of these projects reported that without this written guidance, they had difficulty understanding FRA’s expectations regarding the terms of the stakeholder agreements. Stakeholders also 

noted that delays in obligating funds impacted their ability to plan 

and complete their short-term projects. 

We will continue to monitor FRA’s progress in finalizing grant 

administration guidance, establishing clear program goals and 

measures, and completing a comprehensive training curriculum, all 

actions we have recommended, as well as other areas we identify 

as critical to ensuring FRA’s successful implementation of the 

High-Speed Intercity Passenger Rail Program. 

Mr. Chairman, this concludes my prepared statement. I will be 

happy to answer any questions you may have at this time. 

Mr. DENHAM. [presiding.] Ms. Fleming, you are recognized for 5 

minutes. 

Ms. FLEMING. Mr. Chairman, members of the committee, thank 

you for the opportunity to discuss the Department of Transportation’s High-Speed Intercity Passenger Rail Program. As you 

know, this program was established to provide grants to States and 

others to develop high-speed, intercity passenger rail corridors and 

projects. As of November, almost $10 billion has been obligated for 

about 150 projects. Projects range from multibillion-dollar highspeed rail systems, like that in California, to smaller projects designed to improve speed, frequency, reliability of conventional rail 

service. 

My testimony today will discuss our ongoing review of the California project. I am providing our preliminary observations on our 

work to date, mostly related to project costs. But I will also highlight some of the key challenges facing this project. 

First, based on our ongoing review, we have found that the California High-Speed Rail Authority’s cost estimate exhibits strength 

and weaknesses. We have evaluated the cost estimate according to 

GAO’s Cost Guide, which provides best practices for developing reliable cost estimates. We group these best practices into four broad 

characteristics, whether an estimate is comprehensive, accurate, 

well documented and credible. 

Based on our experience, adhering to these practices helps to reduce the risk of cost overruns, missed deadlines and unmet performance targets. Overall, we found that the Rail Authority produced generally comprehensive cost estimates including most 

project life-cycle costs. However, they are not based on a complete 

set of assumptions, such as how the Rail Authority expects to 

adapt existing high-speed rail technology to the project in California. The cost estimates are also accurate in that they are based 

on the most recent project scope including inflation adjustment and 

they contain few mathematical errors. 

46 

In regards to documentation, while most assumptions and methodologies are well-documented, in some cases, we were not able to 

trace the final cost estimate back to the source documentation. We 

also could not verify how certain cost components, such as trains 

and stations, were calculated. 

Having complete documentation is important so that changes to 

the estimates can be tracked and updated and key decisions are 

documented and defensible. 

Finally, in regards to the cost estimates’ credibility, the Rail Authority did conduct a sensitivity analysis and an independent cost 

estimate, but these were limited to the initial construction segments. 

In addition, it did not conduct risk and uncertainty analysis to 

determine the likelihood that the estimates would be met. Without 

these steps, decisionmakers cannot identify the risks that may affect the project’s costs. 

Moving on to my second point. In addition to developing reliable 

cost estimates, the California high-speed rail project faces many 

challenges. Chief among these is obtaining project funding beyond 

the initial 130-mile construction segment. While the Rail Authority 

has secured $11.5 billion from Federal and State sources, it needs 

at least $57 billion in additional funding to complete the project. 

As with any large public infrastructure project, it is relying on public funding, in this case, about 81 percent for the total construction 

costs. The remaining financing is expected to come from unidentified private investment once the system is operational. 

As a result of this financing challenge, the Rail Authority is taking a phased approach, building segments as financing is available. 

However, given that the High-Speed Intercity Passenger Rail 

Grant Program has not received funding for the last 2 years and 

future funding proposals about Federal funding will likely be met 

with some concern, the largest block of expected funds for completing this project is tentative. 

The Rail Authority will also face the challenge of developing reliable ridership and revenue forecasts. These forecasts are important 

to assessing the financial viability of the project. Factors such as 

limited data and information, especially early in a project, make 

developing such forecasts difficult. 

In addition, risk of inaccurate and biased forecasts are a recurring challenge for sponsors of the project. Research on ridership 

and revenue forecast for rail projects worldwide have shown that 

ridership forecasts are often overestimated and actual ridership is 

likely to be significantly lower than forecast. 

Among the other challenges facing the project which may increase the risk of project delays are potential legal challenges associated with State and Federal environmental laws and acquiring 

necessary right-of-way acquisition. 

Mr. Chairman, this concludes my statement. I would be pleased 

to answer any questions you and other members of the committee 

might have. 

Mr. DENHAM. Thank you. 

Ms. Hammond, secretary of transportation for Washington, 5 

minutes. 

47 

Ms. HAMMOND. Thank you. Mr. Chair, members of the committee, this is an important hearing to think about not only lessons 

learned through the development and implementation of the HighSpeed Rail Program, but looking forward to pre-ARRA authorization. We States who are responsible for delivering and operating 

the rail systems in our States are committed and encouraging you 

to continue a rail program of this kind. Passenger rail in our States 

of Oregon and Washington has been in place since 1994 where we 

have partnered from the State level with Amtrak and in our State, 

Burlington Northern Santa Fe, in a collaborative approach to an 

incremental delivery of high- and higher speed rail programs and 

service. 

So as we have been investing over the years, we see the implementation and the creation of a national vision as a very important 

part of what we are trying to deliver. 

We have a 460-mile corridor between Eugene, Oregon and Vancouver, British Columbia. We have achieved in the last year up to 

850,000 passengers, and our growth is increasing year over year in 

the 10-percent rate. 

We have, in our State, invested over $480 million in capital and 

operations in Amtrak Cascades, which is what we call our program. 

But it wasn’t until the Recovery Act came that we were able to 

make significant capital infrastructure improvements on the rail 

itself. Sidings, double-tracking, positive train control, all of those 

amenities that will benefit high- and higher speed rail and more 

frequent service for passenger rail also has ancillary benefits to our 

freight rail and freight movement in our State. 

We in Oregon are very trade-dependent nations, and one of the 

things we are very careful about in not only updating our passenger rail program and plan for the future is to look at both 

freight and passenger rail movement and how we can coexist in the 

same corridor together because that is our plan. 

We have received $800 million of the high-speed rail program 

money. We have five projects currently under construction with another five coming into construction in the next year. 

The improvements, while they bring important investments in 

our ability to increase our service, also have created jobs. More 

than 2,300 jobs will be created in just the capital infrastructure 

and the indirect benefits from those jobs. But what we are looking 

for is the long-term stable travel choice for passenger rail in our 

corridor along the I–5 corridor on the west coast because our States 

are growing. We can’t build enough lanes on the highway side nor 

do we want to to provide passenger service. 

We want trains, we want commuter rail, we want light rail, and 

we want an integrated transportation system for the 21st century 

that our citizens deserve and we need to ensure that their taxpayer 

dollars are well spent. 

We have had an overall positive experience with the high-speed 

rail implementation. We recognize that the Federal Railroad Administration was starting from being a regulatory agency trying to 

move into the grant delivery agency and we have had some challenges as have they; but, they are dedicated people. If they are 

staffed and resourced at the level that is required to have oversight 

48 

of a performance-managed system, I believe they will continue to 

do well and excel in this program. 

We do need the written guidance from the Federal Railroad Administration, it helps us State and us mainline rails know what is 

coming and know what is expected of us. That can streamline the 

delivery of the program as it moves forward. 

We also believe that with the benefits that have been made in 

the MAP–21 reauthorization as we look to PRIIA, the more we can 

streamline and coordinate things like NEPA, environmental permitting, so that all of the Federal U.S. DOT agencies can serve as 

a one DOT agency, and streamline and find that the processes and 

the environmental documents can be concurrently delivered and accepted from one agency to another, Federal Highway Administration has been in this grant business or delivery business for a very 

long time. They are good at it. We have found some efficiencies and 

streamlining there. I think we can expand that to Federal Railroad 

Administration and continue to have great success. 

The other issue we have had is needing consistent guidance from 

the Federal Railroad Administration on the Buy America program. 

We wholeheartedly agree with and encourage Buy America, manufacturing created in the United States, and to continue to grow our 

Nation’s economy in that way. But we are in a transitional period, 

and we have had some challenges in trying to get waivers for as 

much as 5 months on a clip for a rail tie that probably shouldn’t 

have taken that long as we are in this transitional period. 

So figuring out how to accommodate the goal of Buy America but 

finding a way to get there in a transition period I think would be 

good. 

I know I am out of time or getting close I would just suggest that 

as we move to PRIIA, we would love to see this program continued. 

We do know that there are prioritization-based investments that 

should and could be made. Performance-based investments are the 

way of the future. We are committed to it in Washington State. We 

support that and we think that the taxpayers should continue to 

see the benefits for the dollars invested. But we also believe that 

passenger rail is where it is at, it is where our future needs to go, 

and we appreciate the vision of the President and the administration. Thank you. 

Dr. BUCSHON. [presiding.] Thank you for your testimony. 

Ms. Schneider, secretary of transportation for the State of Illinois, 5 minutes. 

Ms. SCHNEIDER. Thank you, Mr. Chairman and members of the 

committee. I appreciate the opportunity today to submit testimony 

to you on behalf of Illinois Governor Pat Quinn to give you an update on the High-Speed and Intercity Passenger Rail Program in 

Illinois. First, I want to thank the members of the committee, the 

entire Congress and the Obama administration for supporting a 

healthy intercity passenger rail system, for your leadership on 

freight rail infrastructure needs, and for supporting improved service with words and money. 

We are grateful for the investments from the American Recovery and Reinvestment Act, which have provided more than $1.4 billion 

for Illinois high-speed rail. And I can tell you that these current 

investments in the Illinois high-speed passenger rail system are alVerDate Aug 31 2005 15:10 Feb 07, 2013 Jkt 000000 PO 00000 Frm 00058 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\12-6-1~1\77211.TXT JEAN
49 

ready supporting thousands of jobs and providing economic benefits 

with much more on the way. And we could not do it without Federal help. 

We need continued Federal funding for high-speed rail so that we 

can finish the job that we have started and keep our promises to 

travelers and taxpayers. 

These investments will continue to pay dividend, and the American people deserve no less. 

We ask that Congress appropriate additional funds for States 

making these investments including Illinois and the Midwest. 

What would have been the destiny of Illinois and the entire Midwest had the Nation’s rail system not been centered in Illinois in 

the mid-19th century. Very simply, neither Illinois nor the Midwest 

would be the transportation hub of the Nation that it is today and 

the State’s diverse economic base would not exist as we know it. 

Fortunately, Illinois was made the center of national rail development, and today, Illinois hosts a 7,300-mile rail network that 

serves as a keystone in moving passengers and freight across the 

State, the region and the Nation. 

Passenger rail service is crucial to Illinois’ multimodal transportation network and has never been more important than today. Illinois helps fund 28 Amtrak trains serving four high use corridors 

from Chicago to Milwaukee, Chicago to St. Louis and instate, from 

Chicago and Quincy to Carbondale and to the west and to the 

south. Those trains carried a record 2.2 million passengers last 

year. Ridership growth in Illinois has been exceptional, up more 

than 74 percent since 2006, and on the Chicago to St. Louis highspeed rail corridor, our passengers have increased by 224 percent 

since 2006. 

And this increasing public demand is why we were proud to 

debut higher speed service in October on the Dwight to Pontiac 

segment of the St. Louis to Chicago high-speed rail corridor with 

Secretary LaHood and Governor Quinn on the train. And by 

Thanksgiving, we began delivering that same 110-mile-per-hour experience to regular Amtrak passengers every day. 

Intercity passenger rail is already stimulating development on 

the corridor in cities like Normal, Illinois, where new multimodal 

station has attracted $200 million in related private investment 

and in Joliet, where construction of a new multimodal station is 

underway. 

Plans also include new or improved stations for six other cities 

on that corridor. And we have, as the Secretary LaHood mentioned 

earlier, created 250 new jobs in Rochelle, Illinois, where railcars for 

California and the Midwest are being built. And last week, I was 

able to witness Caltrans giving that manufacturer the notice to 

proceed. 

Illinois and the Midwest collaboration on high-speed rail began 

in 1980, but gained traction in the 1990s when a 10-State, Midwest 

rail initiative did joint studies and prepared a plan of staged development for high-speed rail to upgrade existing track, add passenger 

rail frequencies, and use new technologies to enable faster, safer 

passenger trains on all of our existing rail corridors. 

With years of solid planning in place, Illinois and its Midwest 

partners were ready to move quickly on April 16 in 2009 when 

50 

President Obama called for a national network of connected highspeed rail corridors. 

Secretary LaHood earlier properly compared the President’s vision to the 1950s blueprint for building the U.S. Interstate Highway System. The Federal Railroad Administration awarded Illinois 

$1.2 billion in January of 2010 to upgrade to 110-mile-per-hour 

passenger rail service between Dwight and the East St. Louis area. 

And Governor Quinn made Illinois a full partner in this vision with his commitment of $400 million in State funds for high-speed 

rail from his $31 billion capital program known as, ‘‘Illinois Jobs 

Now!’’. 

Federal awards that year also provided funding to construct a 

key rail fly over in the Englewood neighborhood on Chicago’s South 

Side to help improve mobility and help augment high-speed service 

for Chicago St. Louis and for the Chicago Detroit corridor which is 

the next expected high-speed route in the Midwest. In that route, 

Illinois has invested $200,000 in State funds on the tier one study 

for that corridor in cooperation with Michigan and Indiana. And 

work is progressing to provide needed positive train control by fall 

of 2015, which will enable high-speed service to commence on almost 75 percent of that 285 Chicago to St. Louis corridor reducing 

overall travel time by an hour. 

Clearly, Illinois is still moving quickly on its high-speed vision, 

a vision that Governor Quinn is passionate about and shares with 

President Obama as a key component of a world-class national rail 

system. 

Please let me reiterate at this point knowing that I’m out of time 

that continued Federal funding and support for this vision of a national high-speed rail service has never been more critical than it 

is right now. And thank you for the opportunity to testify today. 

Dr. BUCSHON. And thank you for your testimony. 

Mr. Hamberger, it is good to see you and you have 5 minutes. 

Mr. HAMBERGER. Thank you, Mr. Chairman, Congresswoman Edwards, Congressman Cummings, on behalf of the freight rail members of the Association of American Railroads, thank you for the 

opportunity to be here today. For the record, I would like to associate myself with the remarks of Secretary LaHood on the leadership that Chairman Mica has exhibited the past 2 years in this 

committee. 

As Secretary Schneider and Secretary Hammond can attest, our 

Nation’s freight railroads are successful partners with passenger 

railroads all across the country. Approximately 97 percent of Amtrak’s 22,000-mile system consists of tracks owned and maintained 

by freight railroads, and the high-speed and intercity passenger 

rail projects under development nationwide will largely, but not exclusively, utilize freight-owned facilities. 

In addition, hundreds of millions of commuter trips each year 

occur on commuter rail systems that are at least partially owned 

by freight railroads. Privately owned and operated, America’s 

freight railroads in recent years have been investing more than $20 

billion of their own capital to expand and maintain a freight rail 

network second to none. 

In simple terms, we are carrying the load so that American taxpayers don’t have to. 

51 

At a time when there is growing concern about the state of this 

country’s transportation infrastructure and who should be paying 

what to do the job and maintain it, freight railroads are making 

these record investments in the country’s rail system to be ready 

to meet America’s business needs and to help the economy grow in 

the years ahead. Our commitment to continued private investments 

supports millions of jobs across the country and spurs economic development in cities both large and small. 

Secretary LaHood and his team certainly understand that America’s economic health and global competitiveness would suffer 

greatly if the integration of future passenger rail with freight rail 

operations is not handled smartly. 

I have often heard the Secretary say and confirmed with him this 

morning that it is still his view that yes, America needs a worldclass passenger rail system, but not if it comes at the expense of 

what is already the world’s best freight rail system. 

The AAR has long advocated that true high-speed rail must operate on dedicated track and in a sealed corridor. 

In the meantime, moving to higher speed rail on a mixed-use 

basis does present significant challenges. These challenges can be 

more easily met if five key principles are followed: 

One, safety has to come first when it comes to passenger trains 

sharing track or rights of way with freight trains. Differing speeds 

and operating characteristics must be accommodated with safety as 

the number one goal. 

Second, capacity issues, including the ability to grow both freight 

and passenger service in the future, must be properly addressed. 

On some corridors, current or expected freight traffic levels may 

mean there is no spare capacity for passenger service. In these 

cases, new capacity will be needed before passenger trains can operate. 

Third, if passenger trains use freight railroad assets and property, it is reasonable for the host freight railroad to expect full and 

fair compensation. 

Moreover, freight railroads should not be subject to any new 

local, State or Federal tax liability as a result of being a partner 

in a passenger rail project. 

Fourth, freight railroads must be adequately protected from liability associated with hosting passenger service. 

Finally, each project involving passenger rail service on freightowned tracks in general and high-speed rail projects in particular 

has its own unique challenges and circumstances. To mix the two, 

agreements must be tailored to the specific needs and conditions of 

each project. 

Freight railroads support passenger rail and support Government efforts to grow passenger rail in ways that make economic 

sense and that complement freight rail growth. Freight railroads 

are, therefore, committed to working with Government officials, 

passenger rail stakeholders and others to ensure a winning result 

for all parties involved. 

Thank you for your attention. 

Dr. BUCSHON. Thank you. 

And we will get into some questions here then. 

52 

Mr. Behm, your testimony explains that the FRA staff said additional guidance is needed to help ensure compliance with policies 

and procedures. 

What efforts are underway to ensure this is occurring and what 

also are the risks if we don’t have further guidance to the States? 

Mr. BEHM. We have made recommendations to the FRA to enhance the guidance that they provide to the States to both their 

FRA staff as well as the State grantees. I think that it wasn’t a 

matter that FRA was not willing to provide this guidance, but obviously considering the challenges that they were faced with in establishing this program from the ground up, ultimately one of the 

largest discretionary grant programs, really addressing things on 

kind of a critical-path basis, and first identifying and developing 

the policies and procedures and then going ahead and proceeding 

with developing this guidance was the way that they approached 

it. 

Basically they have agreed to develop work groups at our recommendation and additionally to get feedback from the State 

grantees as well as FRA staff in order to ultimately establish better 

guidance. 

Dr. BUCSHON. Thank you. Ms. Fleming, you explained that the 

estimates will change as the project moves into construction. Does 

that mean that it is fair to say that costs will increase? Do you 

have a way to predict future cost growth in projects like this? 

Ms. FLEMING. No. I don’t have a crystal ball in that regard. But 

I think our bottom line is that the project is still in the early 

stages, and we would like to see some of the weaknesses that we 

have identified addressed, such as the need for the Authority to undergo a risk analysis that would help determine whether or not the 

estimate is too high, too low, and by how much. That would also 

identify what the key risks are so that policymakers and decisionmakers can try to mitigate those risks. So at this point, we don’t 

know if—you know, the number will change obviously. The project 

scope will change, there will be refinements constantly to both the 

costs as well as the ridership forecasts. That is normal with this 

project. The Authority is trying to make those changes for each of 

the upcoming business plans. But the numbers will change. The 

tests will help try to determine the magnitude in terms of the risk 

and how to address that. 

Dr. BUCSHON. Mr. Hamberger, in your view, what are some of 

the—and you explained some of this in your testimony, technological, legal and logistical hurdles that we are going to need to 

overcome if we are going to share existing freight rail right-of-way 

with passenger rail trains. 

Mr. HAMBERGER. One of the biggest concerns, frankly, is safety. 

If you have a disparate set of speeds you know from your highway 

experience that that increases exponentially the risk of accidents. 

It is true on railroads as well that a faster train will close the gap 

with a slower train faster than expected. Many grade crossings are 

set to react to a certain train speed. If you have a faster train and 

a slower train moving on the same corridor, how do you operate a 

system so that the gates go down in time? 

In addition, there are different classes of track. As passenger 

trains operate at higher speeds, the track has to be maintained to 

53 

a much greater standard and frequency. Moreover, a heavier train, 

for example a grain train, would exhibit forces on the track that 

might make it unsuitable for the higher speed passenger train. So 

all of these things need to be taken into account. 

Dr. BUCSHON. I think sometimes there is this impression we are 

using existing track and using existing right-of-way is easier and 

cheaper than just building new track. The same thing is true with 

highways, I think. And obviously, it sounds like with a lot of the 

logistical hurdles with train speeds just assessing that, and 

straightening all that out, as you pointed out, is going to be something that is very difficult and costly. 

Mr. HAMBERGER. Indeed and you also asked about the legal and 

contractual issues. Obviously, the freight railroads are in operation 

to serve America’s communities, to serve America’s farmers and 

manufacturers, and get their goods to market. And so, as I mentioned under the capacity principle, we have to make sure that 

there is adequate capacity to keep America’s economy moving as 

well. 

Dr. BUCSHON. Thank you. I yield to Ms. Edwards. 

Ms. EDWARDS. Thank you, Mr. Chairman, and thank you to our 

witnesses and also for your patience today. As you can tell, there 

is a lot of interest on this committee, even on an off day around 

high-speed rail. So thank you very much. 

Secretary Hammond, some on this committee have criticized the 

administration for providing Federal funding for higher speed rail. 

I wonder if you can tell us about some of the improvement riders 

would see as a result of investments that are investing in higher 

speed rail and not just high-speed rail, and why that would be important. 

Ms. HAMMOND. As I mentioned, in Washington State since 1994, 

we have been working on an incremental approach to growing passenger rail service in our State. As we have additional round trips, 

additional speeds and additional reliability of service, we are finding our ridership growing year over year. And when you think 

about the unique characteristics of different States, for us in Oregon, the Pacific Northwest and the I–5 Corridor the West Coast 

Corridor for us is linking between some pretty rural areas but between Seattle; Vancouver, BC; Seattle and Portland, Oregon; and 

Eugene, Oregon; we have some major business markets and the opportunity for travelers who are tourists to enjoy our rail. 

For us, it wasn’t going to work to start from scratch and immediately institute a high-speed rail line. We have too many communities linking throughout that West Coast Corridor that wanted to 

enjoy the benefits of rail and wanted us as a State who is contributing and putting our own State dollars into it, they wanted to see 

the benefits in that incremental fashion. 

So for us, I think that Washington State will always be a higher 

speed or at least in the next 20 to 30 years, be a higher speed passenger rail program, but it works for us and it works for our businesses and our major communities that it links. 

Also, I would like to say that as we work closely with Burlington 

Northern Santa Fe on this notion of sharing the corridor, it is a 

decision that we made, Burlington Northern Santa Fe has bought 

into it and the notion for us in the amount of increments and pasVerDate Aug 31 2005 15:10 Feb 07, 2013 Jkt 000000 PO 00000 Frm 00063 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\12-6-1~1\77211.TXT JEAN
54 

senger trips that we intend to make, the investments we are making on that freight rail line will not only benefit passenger travel, 

but our freight movement in our State, as we are a most dependent 

trade State. And as the economy recovers and their business continues to grow, we think the investments are going to help us be 

very compatible and help continue service in both areas. 

Ms. EDWARDS. Let me turn first to Ms. Fleming on this question 

of sort of estimating ridership as a way to determine whether it 

makes sense to develop a line because I think as Secretary Hammond has pointed out, they started out with the vision, but then 

over time, because of the investments they have made, the ridership has increased which then begs for more investments at different speeds. 

How is that factored into your analysis about whether there is 

an efficiency investing and whether it is the California Corridor or 

another? 

Ms. FLEMING. We are still assessing California’s process, the 

California process for developing its ridership and revenue forecasts. But our sense is that they have largely followed best practices. And in fact, the inspector general has put a really nice guide 

out there. But ridership and revenue forecasting is inherently 

risky. You are forecasting the future, it is an extremely complex 

undertaking. But that being said, it is critical to determining the 

viability of a project. And I think the key to this is that you have 

to be continually refining the estimates as the project scope 

changes, as things change, you just update the model, as the economy changes, so you are just constantly updating and refining. So 

that is the process that I think California is undertaking as well. 

Ms. EDWARDS. Thank you. Let me just turn, before my time expires, to Mr. Hamberger because I have expressed a lot of concern 

about the sharing of freight rail. I understand why we need to do 

this sharing in various places, but I wonder if you—if the freight 

industry has done some assessment about what that means in 

terms of its own productivity, competitiveness and those things because I share the concerns that the Secretary expressed when he 

was hear that we have a great freight system, it is private, it has 

great investment, and we don’t want to do anything to damage 

that; at the same time, we do want to develop a high-speed rail. 

And then can you talk to me about the technology developments 

that actually are going to allow us to better share those systems? 

Mr. HAMBERGER. Yes. I see we have 4 seconds left, so let me get 

into that. 

Ms. EDWARDS. But I am sure that the chairman will let you finish your answer. 

Mr. HAMBERGER. Thank you, Mr. Chairman. 

Those issues—what are the impacts of passenger rail traffic on 

freight needs—are actually examined through a very site-specific 

analysis. The report by the inspector general indicated that some 

of these negotiations dragged on. Well, indeed they did. And they 

did because there were four parties sitting around the desk—the 

State, Amtrak, the Federal Government and the freight rail rightof-way owner—each of whom was looking at this through its own 

prism. The freight railroads wanted to make sure that not only 

could they continue to serve their customers today, but that they 

55 

would be able to continue to serve their customers for the foreseeable future. That meant having models to assess what would be the 

growth of traffic for freight and what would the impact be of having passenger rail service added knowing that maybe that passenger service, if it was commuter service, would be heavy at certain times of the day. So how do you model that and find agreement? 

So yes, those discussions did drag on for some time. But they did 

come to successful conclusions. And so I think that says a lot about 

the freight railroads’ desire, not only to serve their customers, but 

also to be willing participants and to work toward getting to ‘‘yes’’; 

on doing the right thing to help enable passenger rail, but again, 

not at the expense of freight rail. 

With respect to the technologies, I know you know about positive 

train control, but there are so many other issues that I tried to reference in response to Chairman Bucshon’s question about sharing 

track at higher speeds. There is a general view that there is no 

issue really up to 79 miles per hour. And there are some corridors, 

again, based on specifics—and were you on that train? I understand you were—where I understand the train went to 111 mph actually. 

Ms. SCHNEIDER. I was. 

Mr. HAMBERGER. So it can be done. But again, a lot of resources 

need to be focused on it and a lot of cooperation and planning. It 

depends on the topography and on the freight rail traffic and geometrics. At some point, and we believe certainly 110 mph is it, that 

it becomes almost impossible to share passenger and freight traffic 

on the same track. And that is why for true high speed—and I inferred from your question to the Secretary that you don’t consider 

110 mph to be true high speed—there needs to be dedicated track, 

dedicated right-of-way and a sealed corridor. 

Dr. BUCSHON. I recognize Mr. Cummings. 

Mr. CUMMINGS. Thank you very much, Mr. Chairman, and I 

want to thank all of you for your testimony. 

Mr. Hamberger, I want to talk a little bit about Amtrak we had 

a very lengthy hearing a few days ago concerning Amtrak. 

Mr. HAMBERGER. Yes, sir. 

Mr. CUMMINGS. And some in Congress have proposed mandating 

that States auction off Amtrak’s long-distance and State-supported 

routes to the lowest private bidder. Although Amtrak could compete for the service, it is unlikely Amtrak would be the lowest bidder since it provides good wages and benefits to its workers. 

What is your position on that type of proposal? 

Mr. HAMBERGER. The Association has long held the position that 

there should be one operator of intercity passenger rail, and that 

that operator should be Amtrak. There are a number of reasons for 

that, and you won’t be surprised that we start with safety. Amtrak 

has the same safety culture that the freight railroads have. The 

freight railroads operate, in many cases, to the same safety standards. They have had 40-plus years of operating experience with 

Amtrak, and they are convinced that Amtrak has the same dedication to safety. 

Second, really, is security. Amtrak and the freight railroads, 

again, have a very good working relationship not only between 

56 

themselves, but also with local law enforcement, and just as importantly, with the FBI’s National Joint Terrorism Task Force Centers 

around the country. 

Freight railroads also know that Amtrak understands the operating characteristics that are necessary to have freight and passenger service work together. 

Freight railroads have had, again, a 40-year partnership with 

Amtrak, and there is concern about how the current contracts, the 

current labor agreements, and the various crew change agreements 

that are out there, would all be handled if the Amtrak intercity 

network were parceled out to other operators. 

And finally, I’m inferring from your question that you believe 

that perhaps the other bidders would not be covered by railroad retirement. 

Mr. CUMMINGS. Yes, I’m very concerned, you read my mind. That 

is very good. 

Mr. HAMBERGER. That would be, in our opinion, a major problem 

not only for our current employees, but for retirees. As you well 

know from when we passed railroad retirement reform 10 years 

ago, the railroad retirement system is already upside down six to 

one—that is, six retirees for every one employee. And Amtrak is 10 

percent of the current railroad workforce. If that workforce were 

not part of the railroad retirement system, the payments into the 

system would perhaps not be enough to maintain the necessary 

payments to retirees. Also, under the law passed 10 years ago, 

there is an automatic increase in taxes both on current employees, 

up to 4.9 percent of their paycheck, and on the railroads to make 

sure that there is enough money in there to pay retirees. 

So again, that would be, from our standpoint, a major problem. 

We believe that steel wheel on steel rail means you are a railroad 

and therefore you should be paying into railroad retirement. 

Mr. CUMMINGS. Director Fleming, you mentioned in your testimony that California high rail speed project is, by far, the largest 

high-speed rail undertaken in the country. Tell us what steps can 

be taken to apply to the lessons learned in California to other 

projects of this nature? 

Ms. FLEMING. The project is still in fairly early stages, but obviously has improved in terms of its management structure. I think 

we heard earlier that with the current management structure folks 

feel pretty comfortable and confident, but it doesn’t mean there still 

aren’t improvements needed. I think that the modeling that they 

have undertaken, they have been working very closely with different academics as well as peer review groups to constantly refine 

and fine-tune the models and processes they are using, and so people are feeling that they are very open to addressing those types 

of comments and criticisms. 

I think that they have been working pretty closely with FRA as 

well. FRA just hired and put a senior executive in Sacramento to 

work hand in hand and to help oversee the project. So I think these 

types of things are probably lessons that could be applied to other 

projects in the country. 

Mr. CUMMINGS. Thank you very much. I see my time has expired. 

57 

Dr. BUCSHON. We are going to have another round of questioning 

here. I’m going to start with Ms. Schneider since I grew up in Illinois about 20 miles south of Springfield in a town called Kincaid, 

Illinois, and I lived in Chicago from 1984 to 1988, that kind of 

dates me a little bit. I used to take the train from Chicago to 

Springfield; my parents would pick me up because I didn’t have a 

car when I lived there, I was going to med school so I am going 

the address this question to you. 

When we are talking about high-speed rail, we are talking about 

maximum speed, at some point along the track we will get to 110 

miles per hour. But the question I have is average speed and time 

savings going different distances, for example, going from Chicago 

to Springfield, I can’t recall exactly, but we had a couple other 

stops in suburban Chicago, and I think Joliet and Normal and 

other places. 

So investments in, and Ms. Hammond, I will ask you about this 

too, investments in increasing our top speed to 110 miles per hour 

could cost us quite a bit of money, but when you start looking at 

average speed, and then you start excluding communities that will 

have access to train, because you are going to go from Chicago to 

St. Louis, and you are going to have a high-speed train, I get that. 

But to do that and do that, in my view, to be true high speed, you 

are going to have to exclude a bunch of these people in the middle 

and have a separate service for that. So is it worth, you think in 

certain areas, would it be worth the cost to get the average speed 

up, I mean, to get the top speed up to a certain level but really the 

average speed and the time it takes you to get from here to there 

doesn’t really change much? 

Ms. SCHNEIDER. Actually by 2015, when we are complete with 

the high-speed rail corridor between Chicago and St. Louis that 

travel time is going to drop from 51⁄2 hours to 41⁄2 hours that is a 

significant change in travel times. And we are doing that without 

removing any of the station stops that are currently along that corridor. And in fact, many of the communities that have station stops 

currently are making significant investments in the areas around 

where those stations are, and where those stations will be located. 

For instance, in Alton, they are working on developing a transitoriented development around the station that will be built to accommodate the high-speed rail corridor there, they are going to 

move from their current location to this new station. 

So we are experiencing, through our investments, that type of 

improvement in travel time. And if we complete the buildout of 

that corridor as we currently have an EIS with FRA to doubletrack that entire corridor, if we are able to identify the financing 

to do that double-tracking, we are going to be looking at travel 

times from Chicago to St. Louis that are less than 4 hours, and 

currently they are at 51⁄2. So I think that points to a very significant improvement. 

And I think that is also why we are seeing this increase in ridership of 224 percent over 6 years on that corridor because of those 

changes that people are anticipating. 

And I know personally for a fact that when I have tried to get 

on Amtrak coming back to Springfield from Chicago, when I am in 

58 

Chicago, many times the train is full and you can’t get on it, so 

there is excess demand that currently exists that can’t be met. 

Dr. BUCSHON. Ms. Hammond. 

Ms. HAMMOND. I think you have hit upon something that is an 

interesting tension as you develop passenger rail program. We also 

have a commuter rail program in Central Puget Sound that we 

have a regional transit agency that delivers that service. But as 

you increase and grow, service, reliability and speeds, every community along the way wants to have a stop. So, as we are being 

very careful and deliberative about how our higher speed rail will 

work as we move along and as we, in Oregon, have now just created a plan that will integrate our operations, so that departure 

times and arrival times all the way from Eugene up through to 

Vancouver, BC, are better and more concentrically delivered. It is 

more of a streamline service now. We used to have gaps in Seattle 

and gaps in Portland of time. So as we are trying to streamline the 

operations of that, we are looking carefully, for example, in the four 

and will soon have six roundtrips between Seattle and Portland, 

how many of those do stop at some of those intermittent communities? And how many are direct and high-speed, truly higher 

speed, rail that is a streamlined or express service between Seattle 

and Portland, that works for business people, in the morning and 

evening kinds of routes and commutes. 

And we are trying to operate this much like the airlines do, as 

they think about service and times and where they have their directions of service. So it is turning into a much better integrated 

system, all the way from Eugene up to Vancouver, BC. 

Dr. BUCSHON. Thank you. 

I yield to Ms. Edwards. 

Ms. EDWARDS. Thank you, Mr. Chairman, and thank you for this 

second round of questions. 

Secretary Schneider, I hated that the program that you oversee 

has been dubbed, ‘‘Train to Nowhere,’’ I think it is so incredibly disparaging. And so I actually want to ask you about the benefits 

when the recovery money was invested, because I understand that 

Governor Quinn announced the purchase of, a multistate purchase, 

of new passenger rail cars that are going to be manufactured in a 

new plant in Illinois. So those are new jobs, new train—new rail 

cars. And in fact, California is also purchasing some of those cars, 

and so we have created a piece of the industry that is really important to our manufacturing core. Can you talk about this and some 

of the other success stories in more detail so that we can name 

your program something else? 

Ms. SCHNEIDER. Thank you very much. 

I appreciate that, because I think the communities in Illinois feel 

very strongly that are being served by higher speed trains that 

they are someplace. 

In terms of the rail equipment, we have partnered with the California Department of Transportation; the State of Illinois represented the Midwest Consortium, so we represented the States of 

Michigan and Missouri in that procurement. And as a result of that 

procurement, a new manufacturer that has chosen to locate in the 

State of Illinois, because Governor Quinn actually aggressively 

went after that manufacturer before it was even known that they 

59 

would be building any rail cars for this initiative Nippon Sharyo 

located in their facility in Rochelle, Illinois, and they have hired 

250 people, and this is from nothing. We weren’t competing with 

other States for those jobs; those jobs are new jobs to the United 

States, new jobs to Illinois. So that is clearly a success story there. 

That facility also is making some transit cars for Metro, which 

is the suburban Chicago fixed rail system for commuters, so that 

is a big success story. 

And I think I talked briefly about Normal, Illinois, in my comments. Normal, Illinois, is the home to Illinois State University, 

and that, in Illinois, is the station with the second highest ridership, second only to Chicago, and that is because they have built 

this wonderful station; they used TIGER funds to build this station. That is a station that connects the riders getting off of the 

train with transit so that they can get to their locations inside 

Bloomington-Normal. Off of the high-speed rail corridor, in some of 

the intercity passenger rail corridors, much of them serve our university towns, and Macomb, Illinois, which is a small town in western Illinois, is home to Western Illinois University. And they have 

seen a decrease in students that register vehicles on campus from 

80 percent of their student body to 60 percent of student body, and 

that is because of the train service coming out of Chicago, it is 100 

percent on-time performance, typically we track that from week to 

week, and that is one of the best performing routes in Illinois. And 

there is that transit-oriented facility at the end of that run, where 

they can take transit to get where they need to be. 

So we think that this has been a successful program in Illinois. 

We are excited about the future of it. In fact, the State actually invested $1.25 million in a 220-miles-per-hour study that looked at 

220 train service from Chicago to Champaign, Illinois, where the 

University of Illinois flagship campus is, and then with legs going 

to Indianapolis and to St. Louis from there. 

We are also excited because our partner States are also participating, Governor Snyder, not Schneider, in the State of Michigan, 

we are working on high-speed rail corridor between Chicago and 

Detroit. Right now, there is 80 miles of that corridor that is currently at 110 miles per hour between Porter, Indiana, and Kalamazoo, Michigan. 

There is a lot of work to be done in the Chicago area on the CREATE program to help facilitate faster speeds to all of our corridors. 

So I think we do have a record of success, and we are building on 

that record of success. We are doing this incrementally, and we are 

doing it in a way that we have planned and makes sense to make 

sure that when we do deliver this service, that it is something that 

people are going to appreciate and demand. 

Ms. EDWARDS. Thank you. And we will make sure to describe it 

not only as a train to somewhere, but that train happens to be the 

21st century. So thank you very much. 

As I close here, I would urge, Ms. Fleming, I don’t know whether 

this is true or not, but as I read through your testimony, it occurred to me, that just in terms of figuring out some of the modeling, I don’t know how much you used models that that have been 

sort of well developed with some of our international allies and 

their development of rail, because I think that they have learned 

60 

a lot and just in terms of assessing ridership and costing, and those 

are things that we could learn as we develop our programs. 

Thank you very much, Mr. Chairman. 

Dr. BUCSHON. Mr. Cummings. 

Mr. CUMMINGS. Mr. Behm, one of the chief concerns in managing 

high-speed rail grant program is that some of the money that was 

intended to stimulate the economy through these projects has not 

actually been delivered, due to failure to complete service outcome 

agreements. It is one thing to apply for and receive grants, but 

quite another to get the job done. And so I am simply concerned 

about the confusion over implementation of the these projects. The 

FRA says that they made great strides in this regards since the 

IG’s audit was completed. So can you tell us if they have taken all 

appropriate action to assure that these projects finally get underway? What else would need to be done? 

Mr. BEHM. Well, I think one thing we point out in our report that 

is very important, and we thought it was a great thing they did to 

require these service outcome agreements to be reached before the 

funds were obligated. Because it is those agreements that ultimately ensure that the Federal investment that is being made is 

actually going to achieve the results that were intended to be 

achieved. 

That being said, again, this being a brand new program and 

these funds that need to be ultimately disbursed by September 

2017, which may seem a long time from now, but these are very 

complex projects, and the fact that a lot of time was spent with the 

negotiating of agreements, we are almost 4 years beyond the time 

that ARRA was originally passed; it is just a concern surrounding 

the fact of getting these projects going and completed, and getting 

beyond the meeting—completing the agreements. It is important 

the agreements be met, as Mr. Hamberger stated. There are many 

stakeholders involved here. Obviously, you have the Federal Government—FRA, you have FRA. You have the freight railroads in a 

shared infrastructure circumstance, and you have the States that 

are grantees themselves as well as the operator of the train. 

So I think all we were trying to get across is that, while we still 

are close to 5 years from the time when the money needs to be disbursed, that time for these types of projects isn’t all that much. 

Mr. CUMMINGS. Well, I know this has been quoted before, but 

you wrote in your testimony that the FRA mechanism for assessing 

grantee performance lacking civic authority lacks an effective tool 

to help staff track and manage monitor grantee compliance with 

documentation requirements including FF, Federal financial reports and various Recovery Act requirements and so on and so on. 

Let me ask you this, is this a situation in which grantees are not 

in compliance, or just that FRA doesn’t have a tool to track compliance? 

Mr. BEHM. I think it was, in general, really a learning process. 

I think, again, this was a situation where FRA had to generate and 

develop these policies and procedures from scratch. This is an entity with limited resources that was primarily focused on safety that 

had to develop this major discretionary grant program. So I—we 

didn’t identify any fraud, waste or abuse. I think that there potentially were some inefficiencies, but I think, again, that can be exVerDate Aug 31 2005 15:10 Feb 07, 2013 Jkt 000000 PO 00000 Frm 00070 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\12-6-1~1\77211.TXT JEAN
61 

pected by virtue of the fact that this program was created from 

scratch. I think that, in general, I would laud the efforts that FRA 

has done under these tight timeframes that they have been presented with in developing this program. 

Mr. CUMMINGS. And so, where are we right now? Do you feel 

comfortable with where we are? Or do you feel that we still have 

a ways to go, FRA that is? 

Mr. BEHM. I feel comfortable where we are right now. I think the 

fact that there has been a lag in additional appropriations being 

made has benefitted the FRA. In other words, I think that, again, 

based on limited resources, they first had to focus those resources 

on evaluating and awarding the applicants and developing policies 

and procedures. Now they are shifting their focus into providing 

oversight over those funds. So I think that the time allowing them 

to see these $8 billion or in excess of $10 billion through has given 

them the ability to develop a program from beginning to end that 

ultimately should be successful. 

Mr. CUMMINGS. Is there any additional advice that you would 

have for them? 

Mr. BEHM. No, I think it is important, one of the things we identified was for them to develop some strategic and programmatic 

goals that are a little bit more consistent, along with some performance measures that would allow stakeholders, such as yourself, to 

identify whether or not the program is meeting its intended purposes. 

Mr. CUMMINGS. Thank all of you for your testimony. 

Dr. BUCSHON. Thank you very much. 

Are there any further questions from members of the committee? 

Seeing none, I would like to thank each of the witnesses for their 

testimony today. Your contribution to the discussion has been very 

informative and will be helpful to Congress. 

I ask unanimous consent that the record of today’s hearing remain open until such time as our witnesses have provided answers 

to any questions that may have been submitted to them in writing 

and unanimous consent that the record remain open for 15 days for 

additional comments and information submitted by Members or 

witnesses to be included in the record of today’s hearing. 

Without objection, so ordered. 

Again, I would like to thank the witness for their testimony, and 

with no other Members having anything to add at this point, the 

committee stands adjourned. 

[Whereupon, at 12:44 p.m., the committee was adjourned.] 

62 


Insert offset folio 15 here 77211.015

Congresswoman Janice Hahn 

Opening Statement 

Transportation and Infrastructure: High-Speed and 

Intercity Passenger Rail 

Thank you Mr. Chairman and Ranking Member for allowing me 

to participate in this hearing today. Although I have only been 

in Congress for a short time, I have been deeply involved in 

transportation policy during my ten years on the Los Angeles 

City Council. 

During that time, I realized the importance of adding high-speed 

rail to my state's transportation options. 

In California, high-speed rail will (1) reduce congestion; (2) 

create jobs, and (3) modernize the entire state's rail system. 
63 


Insert offset folio 16 here 77211.016

Reduce Congestion 

First, high-speed rail will reduce congestion. Transportation 

congestion is strangling the business potential of my state, and 

weighing down the economic activity that isn't just critical to 

the success of California, but to the nation as a whole. 

I am not sure how many of you have ever driven on the freeway 

between my hometown of Los Angeles and San Diego. It takes 

anywhere from two hours to four hours in traffic. 

Turning to aviation, there are delays there as well. Flying 

between Los Angeles and San Francisco, in theory, takes an 

hour. But, one out of every four flights between Los Angeles 

and San Francisco - the busiest short-haul market in the U.S.-

are late by close to an hour or more. And that doesn't include the 

time of going through security! 

2 
64 


Insert offset folio 17 here 77211.017

Our transportation network is already overburdened, and that's 

long before you start factoring in the projected increase in 

travelers. But in many cases, there is no physical space to 

expand a freeway or build a new runway to take into account all 

of the projected growth in travelers. In many cases, the 

communities do not want to expand airports. The community 

surrounding LAX is already mobilizing against expansion. 

As the population grows, we need to construct new 

transportation options to reduce congestion - options that won't 

just continue to patch our existing system, but break open a new 

transportation future. High speed rail is that option. 

Create Jobs 

Second, there's no doubt that high-speed rail is a job creator. At 

a minimum, the construction will create 20,000 jobs each year 

for five years. This is great for the state of California that was 

hit hard by the recession, and that's before you factor in the jobs 

that the new system will generate. 

3 
65 


Insert offset folio 18 here 77211.018

Modernize California's Rail System 

Third, the plan will modernize the state's rail system. They 

have created a "blended" system that will begin construction on 

high-speed rail while improving other rail systems throughout 

the state. This will allow for the high-speed rail system to 

connect to the intercity and regional rail systems - called the 

"bookends. " 

Also there are connectivity funds for rail projects throughout 

California including Caltran's Positive Train Control and Los 

Angeles's Metrolink upgrade in my part of the state. 

The railroad will get needed upgrades and swap out diesel 

engines for an electrified system that's cleaner and faster. 

High-speed rail would not happen without the federal 

government's support - including legislation passed by 

Congress to authorize this program. 

4 
66 


Insert offset folio 19 here 77211.019

If the United States is going to maintain our position of 

economic leadership, we need to have the best infrastructure in 

the world. That will not be true if we do not invest in highspeed rail. We cannot wait until our highways are completely 

congested and our airports cannot expand any more to start 

thinking of other long-distance transportation options. 

We need to catch up to Germany, France, and Japan. We cannot 

allow China to surpass us in our next generation of 

infrastructure. Tourists from across the world will visit our highspeed rail to marvel at our civic engineering and technological 

prowess. 

This is not just about transportation, but about changing and 

revitalizing cities along the route. 

In conclusion, I strongly support high-speed rail in California 

and the federal program that helps make it possible. 

5 
67 


Insert offset folio 20 here 77211.020

Thank you, Mr. Chainnan. 

6 
68 


Insert offset folio 21 here 77211.021

STATEMENT OF 

THE HONORABLE RAY LAHOOD 

SECRETARY OF TRANSPORTATION 

BEFORE THE 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

U.S. HOUSE OF REPRESENTATIVES 

An Update on the High Speed and Intercity Passenger Rail Program: 

Mistakes made and Lessons Learned 

December 6, 2012 

Chairman Mica, Ranking Member Rahall and Members of the Committee: It is my honor to 

appear before you today to discuss the High-Speed and Intercity Passenger Rail (HSIPR) 

program. I last testified before this Committee on this topic exactly a year ago today, and we've 

made great strides in the program since then. I am proud to update the record on our 

accomplishments from the past year, and answer your questions on how the program will serve 

the American people in the future. 

I thank the Committee for your interest in the HSIPR program, which is extremely timely should 

Congress undertake legislation to reauthorize the Passenger Rail Investment and Improvement 

Act of 2008 (PRIIA) next year. In this testimony, I will explain why we believe HSIPR is 

critical to our transportation future, and then give a current accounting of the progress we have 

made in the program in the past year. I will conclude by describing the path forward for the 

HSIPR program and the United States' passenger rail network. 

Reasons for Investment 

The significance of transportation infrastructure to global economic competitiveness is 

indisputable. The World Economic Forum (WEF) notes, "Extensive and efficient infrastructure 

is critical for ensuring the effective functioning of the economy ... Well-developed infrastructure 

reduces the effect of distance between regions, integrating the national market and connecting it 

at low cost to markets in other countries and regions." 1 However, the WEF currently ranks the 

U.S. as 24th in quality of overall infrastructure, down from t h in 1999 and below nearly all 

western European nations as well as several Asian and Middle Eastern nations.2 

Even in challenging fiscal scenarios, it is imperative that the United States continue to invest in 

the infrastructure that will enable the country to maintain and strengthen its position as a global 

economic leader in the 21 st century and beyond. I would also like to thank the Committee for 

I World Economic Forum, Global Competitiveness Report. 2010-2011, 2010. 

World Economic Forum, Global Competitiveness Report. 2011-20P, 2011. 
69 


Insert offset folio 22 here 77211.022

their work on our reauthorization bill, Moving Ahead for Progress in the 21 st Century, or 

MAP-21, and the FAA Reauthorization - two key pieces of legislation that show how Congress 

can succeed by working together and investing in our economy. 

Studies have shown that construction dollars multiply in the economy. An American Public 

Transportation Association (APTA) report from July 2012 showed that continuing HSIPR 

investments will generate $26.4 billion in net economic benefits over the next forty years. 3 

Maintaining economic competitiveness over the long-term will require the u.S. to address a 

number of interconnected transportation challenges: 

• Population growth-By 2050, the U.S. Census Bureau projects that an additional 

100 million people will reside in the United States. The vast majority of this growth will 

be concentrated in a small number of "megaregions." The U.S. DOT and Department of 

Commerce have found that 40 tons of freight is moved through the U.S. for each resident. 

Thus, this population increase will mean an extra 4 billion tons of freight moved each 

year, an increase of35 percent over 2010 levels.4 

• Congestion and Mobility-Highway and aviation congestion continues to rise, with an 

estimated economic impact growing from $24 billion in 1982 to $125 billion in 2010 in 

lost time, productivity, and fuel. 5 In many places with the worst congestion, expanding 

airports and highways is difficult, as land is limited and environmental/community 

impacts are significant. 

• Energy consumption-In 2010, the United States used more than 13 million barrels of 

oil every day for transportation. U.S. citizens consume nearly twice the oil per capita as 

citizens of Organization for Economic Cooperation and Development (OECD) member 

nations, and approximately 53 percent of this oil is imported.6 

• Energy costs-The inflation-adjusted cost of oil increased 129 percent from 1990 to 

2010. As a result, Americans spent $630 million more per day on oil for transportation 

than they did 20 years earlier-an average annual increase of nearly $750 for every 

American. The Energy Information Administration expects crude oil prices to rise an 

additional 50 percent between 2011 and 2035. 7 

• Environmental protection-The 2012 Inventory of u.s. Greenhouse Gas Emissions and 

Sinks report found that the U.S. emitted 10.5 percent more greenhouse gases in 2010 than 

it did in 1990.8 Thirty-two percent of all greenhouse gas emissions are now from the 

transportation sector. 

3 "Opportunity Cost of Inaction - High Speed Rail and High Performance Passenger Rail in the United States" -

http://www.apta.com/resources/reportsandpublications/DocumentsIHPPR-Cost-of-Inaction.pdf 

4 U.S. Depattment of Transportation, U.S. Department of Commerce, Commodity Flow Survey. 

5 Texas TranspOltation Institute, 2011 Urban Mobility Repor!, Sept 27, 201 1. 

6 U.S. Central Intelligence Agency, World Factbook: United States, August I, 2012. 

1 U.S. Energy Information Administration, AE02012 Early Release Overview, January 23, 2012. 

a U.S. Environmental Protection Agency, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-20 I 0, 

April 2012. 
70 


Insert offset folio 23 here 77211.023

In recognition of these challenges and the critical role that rail must play in meeting them, 

Congress crafted the landmark PRIIA legislation in 2008, which created a framework for 

advancing the role of rail in the nation's intennodal transportation network. Since this 

legislation was passed with broad bipartisan support, the need for more and improved rail to 

bolster our transportation network has only grown: 

• The U.S. added an estimated 9.4 million people from 2008-2012 - more than the entire 

population of New Jersey or Virginia. 

• Highway congestion in the Nation's largest cities increased 5 percent from 2008 to 2010, 

resulting in an annual congestion cost increase of $226 million.9 

For these and other reasons, the Administration has continued to include funding for the HSIPR 

program in the President's annual budget request. We believe it is imperative to our economy, 

our quality-of-life, our environment, and our mobility that we address these challenges, and that 

we do so now. I look forward to working with this Committee and others in Congress to develop 

creative approaches for making America's rail network the best in the world. 

The American People Want Rail Investment 

Americans are choosing rail in record numbers-Demand for passenger rail is surging across 

the United States. Ridership levels have set new records in nine of the past ten years. In FY 

2012, Amtrak carried a record 31.2 million passengers-a 3.5 percent increase from the year 

before-and also achieved the highest on-time perfonnance in 12 years (83 percent). 10 These 

ridership levels are being achieved even before the substantial service improvements funded in 

recent years begin to come online. Once new trains are added and trip times and delays are 

reduced, the system will attract even higher levels of ridership. 

9 Texas Transportation Institute, 2011 Urban Mobility Report, Sept 27,2011. 

10 Amtrak, Amtrak Sets New Ridership Record, October 10,2012. 
71 


Insert offset folio 24 here 77211.024

RIDERSHIP GROWTH ON SELECTED PASSENGER RAIL CORRIDORS, 

FISCAL YEAR 2000 TO 2012 

+69% 

-

CDpltofCorrldor 15a";">E/(J,_ 'W,.""'""",, ilabuml 

=_:"':S:"""!rt:";"":":'"·":rtlrt._:::1:~~:~":~:;",~~7% 

Source: Amtrak 

CHKA.Go.MtLWAUKEE 

:"'+95% 

Oklah"mdCOly 

, 0.','"'0"";)' 

LEGEND 

.fY2000rtd~f1Nj) 

• "Y2012nd'1f!;h'p 

+196% 

Americans' travel habits are changing-Reports show that since 2005, Americans have been 

driving fewer miles each year. In 2011, the average American drove six percent fewer miles 

than they did in 2004. What's even more significant is that studies show the trend away from 

driving is being led by youth. Between 200 I and 2009, Americans ages 16 to 34 decreased their 

average number of vehicle-miles traveled by 23 percent and increased their passenger miles 

traveled on trains and buses by 40 percent. Factors causing these changes may include new 

communication technology, shifts in driving laws, and higher fuel prices. And while the Great 

Recession had some role in influencing habits, research indicates that travelers will continue to 

look for transportation alternatives even as the economy recovers. II 

II U.S. Public Interest Research Group and Frontier Group. Transportation and the New Generation: Why Young 

People Are Driving Less and What It Means for Transportation Policy. AprilS, 2012 

4 
72 


Insert offset folio 25 here 77211.025

Rail is a vital part of a multimodal transportation network-The American Road & 

Transportation Builders Association (ARTBA) has written: "The U.S. public transportation, rail 

transit, intercity passenger rail, and freight rail systems are integral and vital components of the 

nation's intermodal transportation network ... These systems must be expanded to meet public 

demand, and continue to be integrated into the overall surface transportation planning process." 12 

Communities across the nation are competing for rail investment dollars-Almost every 

region in the U.S. has demonstrated demand for investments in passenger rail services. Between 

August 2009 and April 20 II, the Federal Railroad Administration (FRA) evaluated nearly 500 

applications submitted by 39 states, the District of Columbia, and Amtrak, requesting more than 

$75 billion for rail projects. Over four rounds, the Transportation Investment Generating 

Economic Recovery (TIGER) program has received more than 85 applications requesting over 

$3.5 billion for intercity passenger rail projects, and more than $4 billion in flmding has been 

requested for freight rail-related projects. 

Publie support for rail is increasing-Public opinion polls consistently reveal strong support 

for intercity passenger rail. A 2011 Harris Poll survey revealed that nearly two-thirds of 

Americans (62 percent) support using Federal funds to develop high-speed rail. 13 The National 

Association of Realtors' 2009 Growth and Transportation study showed only 20 percent of 

Americans favored building new roads to deal with congestion, while 47 percent believe that 

improvements in public transportation would better mitigate congestion and accommodate future 

u.s. population growth. 14 Additionally, polls show that almost 19 of20 people are concerned 

with the state of America's infrastructure, and approximately 84 percent support infrastructure 

investments. 15 

Rail has demonstrated public benefits, domestically and internationally-Strengthening 

passenger rail services can help balance the Nation's transportation network, as demonstrated on 

the Northeast Corridor (NEC). Since the introduction of the Acela service 10 years ago, Amtrak 

has almost tripled its air/rail market share on the NEC, carrying 75 percent of travelers between 

New York and Washington. 16 These changing travel patterns can free airport capacity for more 

cost-efficient long-distance flights. 

12 American Road & Transportation Builders Association (ARTBA), Railroad/Transit Policy, June 2010 

13 Harris Poll survey conducted between January 17, 20 II, and January 24, 2011. 

14 National Association of Realtors and Transportation for America, 2009 Growth and Transportation Survey. Hart 

Research Associates, Jan. 5 to 7, 2009. 

" U.S. Department of the Treasury and Council of Economic Advisers, An Economic Analysis oflnfrastructUl'e 

Investments, October 11,2010, quoting survey from The Building America's Future National Survey, Luntz el 

a1.,2009. 

16 Amtrak, "State-Supported Corridor Trains, fY20 11-12," April 2012. 
73 


Insert offset folio 26 here 77211.026

HSIPR Program Successes 

Successful launch of a new, highly complex program: In the short time since Congress 

enacted PRIIA, the American Recovery and Reinvestment Act of 2009 (ARRA or the Recovery 

Act), and the FY I 0 Department of Transportation Appropriations Act, the Federal Railroad 

Administration has established one of the largest discretionary infrastructure investment 

programs in U.S. history. In so doing, FRA identified worthy projects, obligated almost $10 

billion in project funding using objective data-driven processes, applied innovative and 

appropriate risk management practices, and began effective grant oversight. FRA accomplished 

these actions within unprecedented resource constraints and within tight time limitations. In 

recognition of these efforts, the American Association of State Highway and Transportation 

Officials (AASHTO) passed a resolution lauding FRA's efforts in building this historic program 

from scratch. 17 

Investment decisions and financial obligations made in prudent, timely manner: Between 

August 2009 and April 201 I, FRA evaluated nearly 500 applications submitted by 39 states, the 

District of Columbia, and Amtrak, requesting more than $75 billion. The portfolio of projects 

selected from this vast pool comprehensively addresses all aspects of passenger rail 

development, including: 1) designing and building world-class systems operating at over 200 

mph; 2) improving speed and reliability and increasing frequencies on existing services through 

enhanced track, signal systems, and station facilities; and 3) planning for new services and 

developing a pipeline of future projects. GAO reviewed FRA's selection process and found that 

"FRA established a fair and objective approach for distributing [Recovery Act] funds and 

substantially followed recommended discretionary grant award practices used throughout the 

government. ,.18 

These projects will ultimately lay thousands of miles of track and ties, build new stations and 

make existing facilities more functional, comfortable, and accessible for all passengers, install 

advanced signaling and communications systems, and procure hundreds of modern and more 

efficient and comfortable locomotives and passenger cars. These investments will increase the 

number of corridor route miles with top speeds of 110 miles per hour or higher by more than 80 

percent. 

Since the first project selections were announced in January 2009, FRA and its grantees have 

been hard at work refining project scopes, budgets, and schedules as part of the award obligation 

process. To date, FRA has obligated 99 percent oftotal HSIPR funding, including 100 percent 

of Recovery Act funding, ahead of statutory deadlines. With the passing of this important 

17 AASHTO Board of Directors. Administrative Resolution AR-3-09: Commendation of Federal Railroad 

Administration's Partnership and Hard Work with State Departments of Transportation for the American RecovelY 

and Reinvestment Act of2009 (.4RRA). October 26,2009 

18 U.S. Government Accountability Office, Intercity Passenger Rail: Recording Clearer Reasons for Awards 

Decisions Would improve Otherwise Good Grant Making Practices, GAO-l 1-283, May 2011. 
74 


Insert offset folio 27 here 77211.027

milestone, we are now starting to see real, tangible, on-the-ground accomplishments throughout 

the nation. 

The map below highlights the key corridors in which Federal and states investments have been 

made to date. 

CURRENT HIGH-SPEED AND INTERCITY PASSENGER RAIL PROGRAM 

INVESTMENTS 

LEGEND 

_ (on,> Express 11~$'l1i}~mtit) 

Eff'!Iijfgmg (lJpt;ll~! 

E~$-ting Il'Ittl>t{ity RaM Rotit,¢$ 

Stat~ fWc@lving HSIPR Gr-ants 

Construction is underway throughout the U.S.: In 17 states, approximately $1.7 billion in 

HSIPR construction projects are either underway or complete, and an additional $1.5 billion in 

construction projects in two states and the District of Columbia will get underway in the next six 

months, creating jobs and supporting local economies and construction businesses, as well as 

domestic rail manufacturers. 

For example, a project was recently completed in Yennont that rehabilitated bridges, improved 

grade crossings, and upgraded 190 miles of track to provide for shorter travel times, greater 

reliability and higher safety standards on the historic Vermonter corridor. The Illinois DOT 

recently completed substantial track, signal, and roadbed construction work, allowing for a test 

run of passenger trains operating at speeds up to 110 mph on the Chicago to St. Louis corridor; 

revenue service is slated to begin later this month. 

In Maine, extension of the Boston-Portland service to Brunswick, ME was just completed with 

revenue service in place now. Brunswick has seen $100 million of real estate investments in the 
75 


Insert offset folio 28 here 77211.028

area around the station, in anticipation of the new rail service. Relocation of the historic 

Vermonter corridor in western Massachusetts was completed very recently. Other construction 

is underway in North Carolina, Oregon, and Minnesota. 

Construction is also occurring in California, where citizens are seeing the birth of America's first 

world-class high-speed rail system. The California legislature approved funding for that 

California High-Speed Rail Authority's first construction segment in the Central Valley, and 

hundreds of people are at work building a new landmark in downtown San Francisco, the 

Transbay Terminal Center. Major environmental benchmarks have been reached, and a Record 

of Decision was issued for the alignment that includes the first construction package. A Request 

for Proposals (RFP) has been issued and proposals are due in January for the first construction 

that would begin in Fresno, CA. 

Aging and obsolete equipment is being replaced: Partially through FRA's participation on the 

Next Generation Equipment Committee (NGEC) established in PRIIA and its awarding of grant 

funds, FRA is playing a central role in developing a comprehensive strategy to coordinate 

procurements, manage fleets across corridors and states, and develop technical specifications to 

promote equipment standardization. 

In fact, one of the largest-ever investments in new intercity passenger locomotives and rail cars is 

currently underway through $1.7 billion in HSIPR, Amtrak, and state funding. On November 6, 

2012, the California Department of Transportation (Caltrans) issued a Notice of Contract Award 

to Nippon Sharyo for the procurement of 130 bi-level passenger cars that comport with the 

NGEC standards. These cars will be used on corridors in both Califomia and throughout the 

Midwest, replacing vehicles that in some cases are several decades old. 

Additional HSIPR funding will fund the purchase of next-generation locomotives that comport 

with the NGEC standard, with the procurement expected for release in late 2012. Finally, 

Amtrak is procuring 130 single-level passenger cars for use on long-distance routes, and U.S. 

DOT recently approved a loan to Amtrak for the purchase of70 locomotives for use on the 

Northeast Corridor. Cumulatively, these investments will result in upgraded equipment on 

nearly every U.S. rail corridor, improving reliability and passenger comfort for millions of 

travelers. 

Domestic rail manufacturers are receiving a boost: The railway supply industry is big 

business in the United States. With nearly 2,700 facilities across the United States, there are 

more railway supply locations than Macy's and Target Stores combined. The industry employs 

an estimated 94,000 people in 49 out of the 50 states and the District of Columbia. 

Dozens of manufacturers and suppliers are receiving orders from project sponsors, delivering 

jobs and other economic benefits to a variety of states and communities, even those without 

HSIPR projects in their regions. 
76 


Insert offset folio 29 here 77211.029

Nippon Sharyo opened its first American railcar manufacturing plant in Rochelle, IL earlier this 

year and competed to produce the next generation of American-built trains. According to the 

company, the new factory will employ 250 workers by the end of next year and create additional 

jobs throughout the company's American supply-chain. Nippon Sharyo has already identified 

more than 200 potential suppliers and vendors in the Midwest region alone. As discussed above, 

Caltrans has issued a notice of contract award to build 130 new railcars that will serve California 

and Midwest corridors. 

Potential Component Supplier Pool for the HSIPR·Funded Bilevel Passenger Car Procurement 

At Cleveland Track Material, Inc., in Cleveland, Ohio, workers designed and manufactured new 

turnouts for Maine's Downeaster project. Cleveland Track was one of 53 companies across 20 

states that received a supply order from Maine. The orders for tumouts, as well as other orders 

from Amtrak and several transit agencies, kept Cleveland Track's production schedule busy. 

Over the last year, the company has invested over $5 million in new production equipment at the 

plant. Cleveland Track has nearly 300 employees that work in the company's four facilities in 

Ohio, Tennessee, and Pennsylvania. The company was started with five employees by disabled 

Vietnam Veteran Bill Willoughby in 1984 in an impoverished section of Cleveland. 

The economic benefits of the Chicago-St. Louis COlTidor construction are being felt nearly 2,000 

miles west in Spokane, WA, at L.B. Foster's CXT Concrete Tie plant. To date, over 600,000 ties 

have been installed on the Illinois project. L.B. Foster, which has factories in Arizona, Indiana, 

9 
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Pennsylvania and Ohio, makes several other rail products, and will have many new opportunities 

to compete for business. 

Planning and engineering projects are creating a pipeline offuture service improvements: 

Although.planning projects represent only a small fraction ofHSIPR funding (about 1 percent), 

the completion of these studies is vital to identifying cost-beneficial investments and maintaining 

a "pipeline" of projects, as well as for developing rail engineering and project development 

expertise at the State and local levels. The first step, as required by PRlIA, is to develop a State 

rail plan that comprehensively defines a vision for the future role of rail and identifies projects 

that will promote these goals. To date, 45 State rail plans have either been completed or are 

underway, with many of these funded through HSIPR grants. Additionally, 25 corridor plans are 

underway, evaluating how best to implement new rail services or improve existing services. 

Agreements with key infrastructure owners have been reached: The HSIPR program is like 

few others in the Federal government, in that much of the underlying infrastructure for the U.S. 

passenger rail system is owned by private corporations. While the rail industry's ownership 

structure is unique, FRA was able to draw lessons from established grant management best 

practices, apply them with ingenuity and creativity, and create innovative mechanisms to 

safeguard project benefits. 

As part of this process, FRA has helped facilitate critical multi-party, performance-based 

agreements with host railroads that are effective and enforceable. These agreements ensure that 

HSIPR projects will protect taxpayer investments by delivering real and lasting public benefits 

while also recognizing the core business needs of the freight railroads. 

In prioritizing these stakeholder agreements as a critical pre-requisite to obligating major HSIPR 

grants, FRA relied heavily on recommendations from the Government Accountability Office. 

(GAO) and the U.S. Department of Transportation Office of Inspector General (OlG) from 

previous studies. GAO and OlG have repeatedly emphasized performance metrics and 

accountability as an essential element of grant program success. FRA embraced this perspective 

as it implemented HSIPR and used it to shape and focus its activities. 

While some have expressed concerns over the length of time it took to negotiate and finalize 

these agreements, it is difficult to overstate just how critical these agreements were to meeting 

Congress' objectives in PRlIA and ARRA. These agreements established an entirely new set of 

relationships and commitments among States, freight railroads, Amtrak, and the federal 

government, and as such needed to be done carefully and in a way that allowed for adequate 

discussion among all stakeholders on a variety of complex topics. FRA believes it was 

imperative to get these agreements right from the beginning, as they will set long-term 

precedents for passenger rail throughout the country. 

10 
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Looking to the Future 

The HSIPR program is currently focused on three key priorities: 

I. Managing and executing high-quality projects; 

2. Advancing market-based service improvements; and 

3. Laying the foundation for sustainable long-term passenger rail improvements 

Priority #1. Managing and executing high-quality Projects 

First and foremost, FRA is focused on ensuring that the current $10.19 billion grants portfolio 

results in high-quality projects that are delivered on-time and on-budget. With 99 percent of 

HSIPR funding currently obligated, construction, planning, and engineering activities are now 

underway across the country. 

In April 2012, FRA implemented a new risk-based approach to monitoring, which, along with 

prior monitoring visits, led to the monitoring of over half of HSIPR funding to-date. Improving 

and expanding upon the FY 2012 pilot, in October 2012, FRA assessed all active loans and 

grants in a risk priority model and selected over 80 percent of all active funding for monitoring 

in FY 2013. FRA's HSIPR oversight approach leverages the best practices from other grantmaking agencies, and seeks to strike the appropriate balance between protecting taxpayer 

investments while still providing grantees with the necessary flexibility to adapt to changing 

conditions and project innovations. A key element of this approach is fostering strong 

partnerships between FRA and the grantees. 

By working collaboratively to track milestones, identify emerging issues, and evaluate 

challenges, FRA and the grantees are working together to resolve concerns in the most efficient 

and effective manner possible. To enable efficient project oversight, FRA launched the Project 

Management Tool (PMT) as a low-cost platform for team collaboration and a centralized 

repository for project data and documents in July 2012. The PMT currently houses over 2,000 

project deliverables, facilitating the timely review of deliverables and the fulfillment of project. 

delivery responsibilities. 

The California high-speed rail project is among the most ambitious and complex infrastructure 

projects in the nation's history. FRA believes that the scrutiny such a project receives from both 

within and outside the government is healthy and appropriate, and we fully support the GAO's 

ongoing review of the effort. FRA is taking a number of steps to mitigate the potential risks in 

delivering this project, including: 

• hiring a full-time, senior staff person based in California with the sole responsibility of 

providing Federal oversight; 

• engaging a consultant to conduct an independent review of the budget and schedule for 

the Initial Construction Segment; 

11 
79 


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• staying in continual contact with the California High-Speed Rail Authority and other 

stakeholders in order to fully understand all potential risks and challenges as soon as they 

arise during the project delivery process. 

While no infrastructure grant is without risk, FRA's approach to monitoring and oversight, in 

conjunction with frequent and substantive communications between FRA and its grantees, 

ensures that those risks can be identified and mitigated early in the project delivery process so 

that projects are completed on time and on budget. 

Priority #2. Advancing market-based service improvements 

Matching service improvements to the needs of specific travel markets is a central principal of 

the HSIPR program. A "one size fits all" approach to rail investment is neither desirable nor 

feasible - the highest-speed services, for example, may not be appropriate from financial or 

transportation perspectives in every market. 

The HSIPR program will continue to focus on identifying the market needs of specific regionsbased on current and projected travel patterns, demographic changes, geography and distances, 

and other factors-and investing in a level of rail service appropriate for meeting that need. In 

some places, numerous trains per hour operating at speeds above 125 mph will best address the 

market need; in others, incremental upgrades to existing services will be the appropriate 

solution. 

Many of the markets that are best suited for passenger rail service can be found in multi-state 

"mega regions" - dense networks of metropolitan areas that encompass only 26 percent of total 

U.S. land area but contain nearly 75 percent of the Nation's population. Addressing the market 

needs of these complex, multi-jurisdictional mega regions will continue to require significant 

Federal, State, and local collaboration and coordination. 

Priority #3. Laying the foundation for sustainable long-term passenger rail improvements 

Finally, FRA is developing the organizational and institutional tools and strategies that will 

ensure a solid long-term foundation for continued improvement of the nation's passenger rail 

network-where these improvements make financial and transportation sense--regardless of 

whether those improvements are made through HSIPR grants, state projects, or private sector 

investments. 

Northeast Corridor planning and environmental studies: The Northeast Corridor 

(NEC) is the nation's busiest passenger rail service, and serves as a critical transportation 

backbone for a region of over 50 million people. Rail now serves 73 percent of the 

air/rail market between New York and Washington, D.C., and demand clearly exists for 

further service improvements. While the NEC has received nearly $1.8 billion from the 

12 
80 


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HSIPR program and Recovery Act grants through Amtrak (in addition to a $563 million 

loan from the Railroad Rehabilitation and Improvement Financing (RRIF) program), it is 

clear that a consensus long-term vision-and a strategy for achieving that vision-is 

needed. 

The NEC FUTURE program will identify and evaluate a full range of alternatives to 

develop an investment program for the future of passenger rail development in the 

Northeast Corridor. FRA initiated the NEC FUTURE to help determine the 

improvements needed for the NEC to meet the capacity and growth needs ofthe region 

through 2040. The scope of study has two major components: 

o A Service Development Plan (SOP) that proposed rail service through 2040. 

o A Tier I Environmental Impact Statement (EIS) that addresses the broad corridor 

wide impacts of the proposed improvements. 

Together, these components form a Passenger Rail Corridor Investment Plan (PRCIP), in 

accordance with the guidelines established by PRIIA. The PRClP is a foundation for 

future project development, including engineering design, project level environmental 

analysis, environmental permitting and construction. 

Other planning analyses: FRA is undertaking a variety of analytical studies and evaluations 

that will help states and industry stakeholders better integrate passenger and freight rail projects 

into regional transportation networks. For example. FRA has been leading an intensive multistate rail study in the Southwest that is yielding important tools and best practices for regional 

rail development plans. This study is developing ways to analyze market potential for various 

classifications of rail investments, as well as assessing different institutional models for planning 

and developing multi-state rail networks. 

Conclusion 

The Administration remains fully committed to providing the American people with the 

improved rail transportation they want and need. Thirty-two states, the District of Columbia, and 

Amtrak are hard at work on over 150 projects. many of which are among the most substantial 

capital improvements to the nation's rail network in decades. Americans are already beginning 

to see signifieant travel time, frequency. and reliability improvements, in addition to upgraded 

stations and equipment. The simple fact is that the transportation challenges that are driving 

increased demand for rail are not going away. DOT looks forward to working with Congress 

and all stakeholders to ensure we find the most innovative. cost-effective. and practical policies 

for building a world-class rail network. 

# 

13 
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REPUBLICAN MEMBER QUESTIONS FOR THE RECORD 

To Secretary LaHood, Dept. of Transportation 

Full T&I Committee Hearing The Federal Railroad Administration's High Speed and Intercity 

Passenger Program: Mistakes Made and Lessons Learned 

Thursday, December 6, 2012 

From Chairman Mica: 

l. During the hearing on December 6, we discussed that only 7.5% of the total funding 

for the High Speed Intercity Passenger Program has actually been reimbursed or 

paid out to states, even though nearly 99')10 of the funds have been obligated. As 

requested at the hearing, could you provide for the record a graphic description that 

breaks out the timeframe for expenditure/reimbursement of the grants themselves'! 

RESPONSE: Congress recognized that the newly-established HSfPR grant program would be 

funding nUmerous complex, long-term projects, and thus provided for a later ARRA expenditure 

deadline than many other programs. Now that the vast majority of obligations and agreements 

are complete and project budget and schedules are established, many projects have begun 

construction work or are preparing to break ground in the near future. As a result, FRA expects 

grantee expenditures and Federal reimbursements to increase significantly in FY 13 and the 

ti)lIowing years, slowing in FY 17 and beyond as the largest ARRA pr~jeets and a tew long-term 

FY 20 I 0 projects are tinished. Estimated reimbursements arc shown in the graph below, but 

care should be taken in interpreting this information, as described below. 

$10 

;;:; 

~ $8 

" <Ii 

E $6 

~ 

" .Q 

.~ $4 

0:: 

$2 

ry 13 

Estimated HSIPR Reimbursements 

Estirnates are based on information 

available as of Dec 2012 and will be 

revised as needed. 

FY14 FYlS FY16 

reimbursed 

FY1? FY18 FY19 FY20 FY21 
82 


Insert offset folio 35 here 77211.035

The reimbursement estimates sbown above are based on project schedules and budgets 

developed by IlSIPR grantees. These project management materials represent the best 

information available to FRA and HSIPR grantees at this time. While FRA does not expect 

major changes in project schedulcs, schedule revisions arc a standard practice and may occur for 

any number of reasons, many of which do not threaten successful project delivery. In addition. 

these reimbursement estimates are adjusted for the natural but variable lag between when a 

grantee incurs an expense and when the grantee initiates the reimbursement process. As a result, 

these estimates should be considered a snapshot of current expectations, but FRA will review 

and update these estimates regularly as projects progress. 

2. You stated during the hearing that you were "absolutely" open to having the private 

sector participate in the California project and on corridors from a financing, 

construction and operational stand point. What are the Administration's plans to 

partner with the private sector andlor involve the private sector on the Northeast 

Corridor? 

RESPONSE: The California High-Speed Rail Authority'S Business Plan calls for substantial 

private participation in the final design and construction, operation and investment in the project. 

We will fully support the private investment goals of the Authority in whatever way we can. For 

example, our RRIF loan program can be a vehicle to facilitate private investment. A similar 

approach is contemplated by Amtrak's recently released Vision for the Northeast Corridor. 

While these plans for the NEe are not as far along as those for California, we already have been 

working closely with private sector entities in the development of rail stations along the 

Corridor, including Washington Union Station, Moynihan Station in New York City and 

Boston's South Station. 

3. Similarly, you stated that "We know that this (California High-speed Rail] project 

cannot or will not be built with total federal dollars. We don't have enough money 

here to do that. We need private investment .... There are lots of private investors 

working with the state of California, the Governor's office, and others about the 

ability to privately invest in this project." With respect to that project, please detail 

the Authority andlor the Administration's plans for partnering with the private 

sector in the future and identify the private sector entities interested in the project. 

RESPONSE: According to the Califomia High Speed Rail Authority'S (the Authority) 2012 

Revised Business Plan. the attraction of private investment is anticipated at the start of service in 

2022 and the Authority has begun engaging the private sector through workshops and business 

opportunities. FRA encourages this dialogue and early sharing of risk and cost with the private 
83 


Insert offset folio 36 here 77211.036

sector through public private partnership. The following companies have been in discussion with 

the Authority about involvement in the project in some way: 

Acciona Conccssions Canada Inc 

ACS Infrastructure Development, Inc. 

ADIF 

ALSTOM Transportation Inc. 

Atkinson Construction 

Bechtel Infrastructure Corporation 

Bombardier Systems Division 

Bouygues Travaux Publics 

CC Myers, Inc. 

China Construction America, Inc. 

China Railway Construction Corp. 

Cintra 

Dragados-USA 

East Japan Railway Company 

FCC Construccion SA 

Ferrovial Agroman 

Flatiron Constructors Inc. 

Fluor 

GE Infrastructure Transportation! CSR 

Global Via Infrastructure USA 

GS Engineering & Construction Group 

Herzog Contracting corp. 

Hitachi 

HSBC Infrastructure (now InfraRed) 

John Laing 

Kawaski Heavy Industries 

Kiewit 

Korea Consortium for CAHSR 

Macquarie Capital Advisers 

Max Bogi International SE 

Meridiam In frastructure 

Mistubishi 

Nokia Siemens Networks 

Nippon Sharyo 

Obayashi Corporation 

Odebrecht 

OHL USA 

Rail.One GmbH 

Renfe 

SACYR Vallehermoso 
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Samsung 

Serco 

Shimmick Construction Co., Inc 

Siemens Industry, Inc. 

Siewert Heavy Industries 

Skanska 

SNC-Lavalin Capital 

Sumitomo Corporation 

Tutor Perini 

u.s. Railway Project Working Group Ministry of Railways, 

PRC (Shanghai Railway Bureau, China Railway 

Construction Corporation, CSR Corporation, and Third 

Railway Survey and Design Institute) 

Veolia Transportation/ Tren Italia 

Vinci Concessions 

Virgin Rail Group 

4. Could you please clarify what you meaut wheu you stated at the hearing that "The 

goal is to complete a high-speed rail corridor in California over the next the 10 

years"? 

RESPONSE: Initial operations of the California High-Speed Train (HST) System, anticipated 

from Merced to the San Fernando Valley, would start service in 2022 according to the Authority. 

This would be the first high-speed rail operations in California. 

5. Regarding the Grant Agreement No. FR-HSR-0009-10-01-00, applicable to the 

California High-Speed Rail project, could you please explain the difference in 

meaning for the General Provisions, Attachment 2 Section 7(g) "De-obligation of 

Funds" and Section 23 "Right of FRA to Terminate"? Could the FRA de-obligate 

funds, but not terminate the grant agreement under these provisions? Please 

explain when such an occurrence could happen. Also, please define the meaning of 

the terms "unspent FRA fuuds" and "Project closeout" as used in those sections. 

RESPONSE: De-obligation of funds is the return of once-obligated funds to the agency fund 

account or the Treasury (as dictated by statute) when the actual cost of completing the Project is 

less than anticipated. De-obligation occurs at the conclusion of a project as part of project 

closeout, which is the process by which the FRA and a grantee perform final actions that 

document completion of work, administrative requirements, and financial requirements of the 

grant agreement. 

Because de-obligation occurs at the conclusion of a projcct, the grant agreement is rarely 

terminated when funding is de-obligated. FRA does have the right to terminate financial 
85 


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assistance as a remedy for non-compliance prior to project completion, I) if the grantee violates 

the terms of the grant agreement, and/or 2) ifFRA determines the grantee is unable to make 

reasonable progress on the Project, or the purposes of the statute under whieh the Project is 

authorized would not be adequately served by the continued provision of Federal financial 

assistance. 

6. At the December 6 hearing, we discnssed the fact that the California High-Speed 

Rail Project is now planning to use non-high-speed-rail-dedicated alignments into 

the major population centers of San Francisco and Los Angeles, in what the 

Authority refers to as the "blended approach. What are the impacts on train speeds 

aud trip times of using current right of ways on those North and South ends, and 

given the blended approach will the project meet its time and speed goals set forth 

in Proposition 1A? 

RESPONSE: The blended approach anticipates shared corridors in the San Francisco to San Jose 

and LA to Anaheim sections of the HST System, as defined in the Authority'S 2012 Revised 

Business Plan. FRA is not aware of any concerns with meeting the time requirements of 

Proposition I A. 

7. In a sworn declaration dated Oct. 31, 2012, filed in the Superior Court ofthe State 

of California, County of Sacramento, in County of Madera, et aI., v. California 

High-Speed Rail Authority (Lead Case No. 34-2012-80001 1 65-CU-WM-GDS), John 

Popoff, Deputy Program Director for the northern California portion of the 

California High Speed Rail Authority's California High --Speed Train Program, 

states the following with regard to the terms of the Federal government's American 

Recovery and Reinvestment Act (ARRA) grants must bc spent: 

RESPONSE: Under the terms of [the] current grant agreement, the ARRA funding 

expires if FRA does not pay it out by September 30, 2017. Per the terms of the 

current extant ARRA Grant, the funding is on a reimbursement basis the Authority 

has to incur an expense and actually pay it before it gets reimbursed (approximately, 

50 cents reimbursed for every dollar the Authority spcnds) by FRA. Accordingly, in 

order for FRA to payout all the ARRA funding by September 30, 2017, the Authority 

actually has to incur expenses and pay them well before September 30, 2017, to 

provide time for FRA to reccive and process associated invoices. and issue 

reimbursement payment by September 30, 2017. To accomplish this, the Authority 

will need to complete all construction funded by ARRA by March 31, 2017, in order 

to get invoices to FRA by July 31, 2017, as required in Attachment 1 B. Section 8, of 

the current ARRA Grant Agreement. 
86 


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8. Regarding this statement, must all invoices of the Authority be submitted to FRA by 

the July 31, 2017 deadline mentioned above? Please explain what will happen if an 

invoice is submitted after the July 17,2012 deadline. 

RESPONSE: According to the terms of the ARRA cooperative agreement, the fixed 

appropriation account for funds made available under ARRA closes on September 30, 2017. and 

any remaining balance (whether obligated or unobligated) in that account will be cancelled and 

thereafter shall not be available for obligation or expenditure for any purpose. Therefore, the 

grantee is responsible for submitting to FRA all materials necessary for Project ARRA closeout 

and meeting all other requirements for payment under 49 C.F.R. Part 18 with sufficient time for 

the completion of closeout and payment no later September 30,2017. The ARRA cooperative 

agreement states that FRA will process all such materials, and complete final closeout and 

reimbursement by September 30,2017, provided that FRA receives such materials from CHSRA 

and determines those materials are consistent with the requirements above by July 31,2017. The 

Authority's estimate likely reflects their assumptions of appropriate time for invoice accrual, 

approvals, and development of all necessary materials to be submitted to FRA. 

9. Does FRA have the discretion to accept invoices after the July 31, 2017 deadline 

passes? If so, when must FRA make the decision to allow invoices to be submitted 

after July 31, 2017? How will the Authority be notified of such decision? 

RESPONSE: See September 30, 2017, deadline detailed above. FRA is working closely with 

each grantee to ensure appropriate timelines for necessary approvals and payments such that 

exceptions to the deadlines are not necessary. 

10. Is Mr. Popoff correct that the ARRA Grants referenced above are paid on a 

reimbnrsable basis? If so, is he also correct in the ratio of how much of the 

Authority's expenses may be reimbursed at one time, namely that the Authority 

may have "approximately 50 cents reimbursed for every dollar the Authority 

spends"? If he is correct, please explain why and identify the section of the grant 

agreement that supports your response. If he is incorrect, please explain why and 

identify the section of the grant agreement that supports your response. 

RESPONSE: The terms of the ARRA cooperative agreement are reimbursable, and provide 

flexibility to the Authority for fund sources to be spent at a non-proportional rate for each 

individual payment request, while maintaining the proportional Federal funding with state match 

over the life of the project. The Authority incurs the expense, provides proof of the expense, and 

FRA issues the payment for approved expenses. This payment method is supported in 49 CFR 

18.21. These terms are included in the cooperative agreement sections: ARRA Grant 

Attachment I, § 5(j) (Cooperative Agreement Pay clause) and ARRA grant, Attachment I, §7 

(Payment method). 
87 


Insert offset folio 40 here 77211.040

II. Under the current applicable grant agreements, may the Authority submit an 

invoice and receive a full reimbursement on that invoice from the federal ARRA 

funds covered by the grant(s) referenced above? If not, what is the maximum 

reimbursement the Authority may receive under the applicable grant agreements? 

For both question, please support your response with citation to thc applicable 

scction(s) of the applicable grant agreement(s). 

RESPONSE: See previous response for terms of payment. 

12. Based on the Administration's experience with the grant program, is Mr. Popoff's 

calculation correct that the Authority must complete all construction funded by 

ARRA by March 31, 2017 to receive reimbursement? If not, based on the 

Administration's experience, when must construction funded by the ARRA grants 

be complete to ensure the Authority will be reimbursed by the Federal government 

under those grants? 

RESPONSE: The Authority must plan for the necessary time to produce all 

documentation/materials for project closeout and reimbursement by September 30, 2017, taking 

into account their own state processes as well as FRA's process for review and approval of 

payment requests and closeout infonnation. FRA has indicated in its ARRA grant agreements 

that all materials must be provided by July 31,2017, to complete closeout and issue payment 

before September 30, 2017. 

From Rep. Larry Bucshon: 

1. What due process do States have to object to the National Highway Traffic Safety 

Administration's review? What is the timeline for appeals and how soon should a 

State expect to receive feedback from the National Highway Traffic Safety 

Administration? 

RESPONSE: All States receive an official notification of non-compliance with a 30-day 

response period that allows a State to provide additional information to the agency for 

consideration before a final determination is made. By the end of January, all States that 

received a reservation of funds under the programs due to identified compliance issues will have 

received an official notification from the agency. Indiana, for example, received its official 

notification on December 26, 2012. 

2. If the National Highway Traffic Safety Administration assumes a measurement for 

repeat DUI offenders, but it is nowhere in Federal or State laws, are States held to 
88 


Insert offset folio 41 here 77211.041

their same assumed internal measurement? For example: If NHTSA assumes an 8 

hour community service work day and a State assumes a different amount of hours 

but a "day" is not defined anywhere in laws or regulations. 

RESPONSE: The agency has consistently applied under the repcat intoxicated driver laws 

program (23 U.S.C. § 164) a 24-hour standard and an 8-hour standard to detcrmine the minimum 

sentence rcquirements that apply to sentences of imprisonment and community service, 

respectively. Imprisonment consists of confining an individual to a particular location for a 

continuous period oftimc. Conversely, community service is considered to be labor provided to 

a State in lieu of imprisonment and is generally undertaken during normal working hours and 

supervised. From these basic approaches, the agency developed different hourly measurements 

in order to give effect to the statutory requirements. From the program's inception in 1998, 

States have not been permitted to meet the requirements using hourly measurements different 

than these. 

3. Why was a previous 2005 determination of compliance by the National Highway 

Traffic Safety Administration overturned when no new Federal laws or Indiana 

laws were enacted to change or modifY open container regulations? 

RESPONSE: The agency conducted a review of the repeat intoxicated driver laws program to 

identifY whether any States had changed their compliance status as a result of MAP-21 statutory 

changes. During this review, it was discovered that several States had revised their laws in noncompliant ways without submitting new certifications as they are required to do under the 

agencies' implementing regulation. This discovery raised enough concern to warrant reviews of 

all other alcohol-based grant programs (23 U.S.C. § 154, open container requirements; 23 U.S.C. 

§ 158, national minimum age drinking law; 23 U.S.C. § 161, operation of motor vehicles by 

intoxicated minors (zero tolerance); and 23 U.s.C. § 163, .08 BAC laws). The agency identified 

additional issues as a result of reviewing all grant programs. 

4. If the National Highway Traffic Safcty Administration overturns a prcvious 

determination of compliance, will there be a reasonable period of time to comply to 

their standards without penalty to Indiana? 

RESPONSE: The Federal statutc rcquires that a State have a compliant law on October I of 

each year in order to avoid a transfer of funds. Under the statute, the agency does not have 

authority to grant additional time to a State to come into compliance with the requirements. 
89 


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5. If deemed to be in compliance after modifications to State laws, what securities does 

a State have to prevent a previous rcview from being arbitrarily overturned? 

RESPONSE: The agency seeks, wherever possible, to apply the Federal statute and 

implementing regulation to minimize disruption of State operations. While seeking to minimize 

the adverse impact on States, the agency is required to apply the law and regulation in a manner 

consistent with thc statutory requirements. As a result of the recent review, the agency has 

sought clarification in a few cases regarding the meaning and application of a State law that was 

previously reviewed. The agency will consider all documentation provided by the State before 

issuing a final determination. 

6. How are capricious administrative reviews eonsistent with the legislative aetion in 

MAP-21 that promoted expedited project delivery, streamlining, transferability of 

funds and program consolidation? 

RESPONSE: The review proccss was required as a result of substantive changes to the statutory 

basis for compliance under the repeat intoxicated driver laws program of MAP-21, and is 

consistent with our stewardship responsibilities for federal grant funds. 

From Rep .• leffDenham: 

1. Regarding the California High-speed Rail Project and as discussed at our hearing, 

currently, if you get on the Amtrak from my district and want to go to Southern 

California, when you get Bakersfield, you have to hop off of the train and hop on to 

a bus to get over to the Tehachapi Mountains. What is the plan to get high-speed 

rail over the Tehachapis? 

RESPONSE: The Authority indicated in their 2012 revised Business Plan that closing the 

intercity rail gap across the Tehachapi Mountains between Bakersfield and Palmdale is a priority 

to connect the state via rail and that this connection would occur prior to the start-up of initial 

high-speed rail operations in 2022. 
90 


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QUESTIONS FOR TilE RECORD 

To 

THE HONORABLE RAy LAHoOD 

SECRETARY, U.S. DEPARTMENT OF TRANSPORTATION 

FROM 

THE HONORABLE CORRINE BROWN 

RANKING DEMOCRAT, SUBCOMMITTEE ON RAILROADS, PIPELINES AND HAZARDOUS 

MATERIALS, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

HEARING ON 

"AN UPDATE ON THE HIGH SPEED AND INTERCITY PASSENGER RAIL PROGRAM: 

MISTAKES MADE AND LESSONS LEARNED" 

DECEMBER 6, 2012 

1. Some Members have criticized the administration for providing federal fuudiug for 

projects that upgrade existing rail infrastructure to 110 miles per hour, pointing to 

President Obama's Vision for High-Speed Rail, where he set a goal of providing 80 

percent of Americans access to high-speed rail within the next 25 years. Isn't it true 

that it was Congress - not the Administration - that set the definition for high-speed 

rail in the Passenger Rail Investment and Improvement Act of 2008 as "being able 

to reach speeds of at least 110 miles per hour"? Second, what benefits will we see 

from these investments? 

RESPONSE: Yes, Congress established a definition of "high-speed rail", codified at 49 USC 

26106 (4), which applies to ccrtain passenger rail improvement grants made under that section. 

That definition reads: "The term 'high-speed rail' means intercity passenger rail service that is 

reasonably expected to reach speeds of at least 11 O-miles per hour." 

FRA continues to focus on supporting market-based service improvements that best address 

current and future rail transportation needs. This cost-effective approach recognizes that each 

corridor requires different levels of investment in order to make rail a more competitive travel 

option. While the vast majority of HSIPR funding has been dedicated to advancing high-speed 

rail projects that will significantly reduce travel times, these investments are also yielding other 

critical service improvements, such as improving reliability, adding more frequent trains, and 

upgrading stations and equipment. Domestic and international experience has proven that these 

types of improvements often lead to dramatic ridership growth, thus resulting in substantial 

transportation, economic, and environmental benefits. 

2. Some Members have stated that this program is a "Train to Nowhere". But in 

November you announced federal funding for a multi-state purchase of new 

passenger rail cars, which will be manufactured at a new plant in Illinois. Without 

the Recovery Act investments from the high-speed rail program, this plant would 

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never have opened and those hnndreds of jobs would not have been created. Can 

you talk about some of these success stories in more detail? 

RESPONSE: US DOT's "Buy America" policy means Amcrican-based companies and 

American workers will receive maximum benefit from our investments in rail. Dozens of 

manufacturers and suppliers are beginning to receive orders from project sponsors, delivering 

jobs and other economic benefits to a variety of states and communities, even those without 

HSIPR projccts in their regions. 

Nippon Sharyo opened its first American railcar manufacturing plant in Rochelle, IL earlier this 

year to be eligible under "Buy America" to build the next generation of American built 

trains. According to the company, the new factory will employ 250 workers by the end of next 

year and create additional jobs throughout the company's American supply-chain. Nippon 

Sharyo has already identified more than 200 potential suppliers and vendors in the Midwest 

region alone. This fall, the company received an award from the State of California to purchase 

130 new railcars that will serve corridors California and Midwest. 

At Cleveland Track Material, Inc. in Clcveland, OH, workers designed and manufactured new 

turnouts for Maine's Downeaster project. Cleveland Track was one of 53 companies across 20 

states that received a supply order from Maine's project. The orders for turnouts as well as other 

orders from Amtrak and several transit agencies kept the production schedule busy during the 

economic downturn. Over the last year, the company has invested over $5 million in new 

production equipment at the plant. Cleveland Track has nearly 300 employees that work in the 

company's 4 facilities in Ohio (2); Tennessee; and Pennsylvania. The company was started with 

5 employees by disabled Vietnam Veteran, Bill Willoughby in 1984 in an impoverished section 

of Cleveland. 

The economic benefits of Chicago-St. Louis corridor construction are being felt nearly 2000 

miles west in Spokane, WA at L.B. Foster's CXT Concrete Tie plant. To date over 600,000 ties 

have been installed on the Illinois project. L.B. Foster, which has factories in Arizona, Indiana, 

Pennsylvania and Ohio, makes several other rail products, and will have many new opportunities 

to compete for business as other projects begin construction. 

The railway supply industry is big business in the United States. With nearly 2700 facilities 

across the United States, there are more railway supply locations than Macy's and Target Stores 

combined. The industry employs an estimated 94,000 people in 49 out of the 50 states and the 

District of Columbia. 

3. The DOT's Office of Inspector General criticized FRA for completing service 

outcome agreements with the States and passenger and freight railroads prior to 

obligating funds on long-term and short-term projects, citing eoncerns with delays. 

However, Congress directed FRA in the Passenger Rail Investment and 

Improvement Act of 2008 to provide federal fnnding to only those projects where 

there is "a high degree of confidence that the proposed projects will result in certain 

benefits, including reduced trip time and on-time performance." I am guessing that 

had you chosen NOT to take the time to complete these service outeome agreements 

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prior to disbursement of federal funds you would also be in hot water. Why are 

these service outcome agreements so important and what exactly to they provide 

for? 

RESPONSE: [n general, the Passenger Rail Investment and Improvement Act of2008 (PRIlA) 

requires that certain conditions be in place for the support of projects funded under Section 30 I, 

which roughly correspond to the following agreement terms: 

I. Project benefit terms, which define the intended benefits of new or improvement rail 

service. 

2. Maintenance-related terms, which address the responsibilities for maintaining the asset 

for twenty years in a state of good repair. 

3. Construction-related tcrms, which address the responsibilities related to construction of 

the improvements. 

Ensuring that all interested stakeholders agreed to these terms before starting construction on a 

project is critical to protecting the taxpayer investment and resulting public benefits, such as 

safer, faster, more reliable train services, environmentally-sustainable transportation options, and 

enabling increased mobility of people and goods around America. 

When building out the requirements for the High-Speed Intercity Passenger Rail (HSIPR) 

Program, FRA developed internal guidelines for executing stakeholder agreements that met the 

requirement of PRIIA, but also included a risk-based approach for agreement execution based on 

further review of the projects selected for funding. This approach balanced the need to protect 

project implementation and public benefits with the desire to obligate funding expeditiously. 

FRA identified early on that agreements focused on project benefits were key to long-term 

project effectiveness and were likely to be the most challenging agreements to reach because 

they required grantees, infrastructure owners, and passenger rail operators to make 

unprecedented commitments in order to fully achieve public benefits. Therefore, FRA has 

consistently required that these agreements be in place prior to the obligation of program funds. 

While construction and maintenance agreements are also critical to project success, they are 

more commonplace, with states routinely implementing projects with master 

construction/maintenance agreements in place with host-owning railroads. To that end, FRA has 

permitted these agreements to be executed after obligation, but has eonsistently required these 

agreements before reimbursing grantees for construction expenses. 

FRA believes that this approach to executing agreements has allowed FRA to maintain a firm 

negotiating position as project benefit agreements were finalized, while allowing low-risk 

preparatory activities to continue (e.g., environmental and engineering work) to reduce project 

schedule delays. FRA also believes this approach is in-keeping with recommendations from the 

Government Accountability Office and the DOT Office of the Inspector General from previous 

studies, which repeatedly emphasize the need for the government to take steps to integrate 

enforceable performance and accountability standards in federally funded programs and projects. 

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4. GAO points out the fact that Congress has failed to provide the high-speed intercity 

passenger rail program with any federal funding for the last 2 fiscal years. With 

future funding still uncertain, can you please explain why funding is so important 

and without it, what is at risk in the passenger rail program and the nation? 

RESPONSE: Several economic and demographic trends including a growing and aging 

population, rising energy costs, and increased highway and airport congestion - are substantially 

increasing the demand for improved and expanded rail transportation options. Ridership has 

been surging across the U.S., setting new records in 9 of the past 10 years, including a record 

31.2 million passengers in FY 2012. 

Sustaining this growth and meeting cver-increasing rail travel demands will require significant 

investments in the Nation's rail system. For half a century, the U.S. has funded rail 

infrastructure at a small fraction of the levels invested in other modes, thus allowing our network 

to fall into a degraded state of disrepair. If we continue this underfunding, it will lead to service 

degradation (fewer trains, reduced reliability, reduced speeds), while also contributing to road 

and airport congestion challenges. 

While current Federally-supported rail projects have independent utility and will result in public 

benefits, building upon these initial investments will result in exponentially greater 

improvements and benefits over time, due to the strong foundation that has been established on 

many corridors. In the past four years, significant momentum has also been generated in the rail 

industry. State and local governments are dedicating more time, resources, and funding to rail 

issues, now that they have a committed Federal partner. American factories are expanding or 

retooling to meet rail procurement needs. Engineers and other technical experts are again 

attracted to advancing rail innovation and technology. Allowing this important momentum to 

stall will set the Nation's rail industry back many years. 

5. A witness on the second panel will testify that her State's number one concern with 

the high-speed and intercity passenger rail program has been the lack of guidance 

from FRA. In fact, she says: "When asked to provide FRA with information on 

project agreements and other documents they can't give us specifics of what they 

want or need; instead they tell us no to what we give them until we hit upon the 

right information that seems to meet their needs." The DOT's Office of Inspector 

General seems to have similar concerns. 

RESPONSE: Since the beginning of the HSIPR Program and consistently thereafter, FRA has 

balanced effective oversight practices with a strong commitment to proactive, customer-service 

oriented support of grantees as they work toward rail project delivery. 

As part of this eustomer-service-oriented approach, FRA has established regional teams, 

composed of a lead regional manager and including a grant manager, engineering specialist, 

environmental specialist, attorney, and other technical experts tailored to regional and projectbased needs. The lead regional managers are in frequent and sometimes daily contact with 

grantees to provide on-going support and expertise in conjunction with other regional team 

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members. FRA has also engaged technical consulting teams to provide state agencies qualified 

technical assistance when necessary. This regional team approach has allowed FRA to give 

grantees hands-on, integrated, timely, and high-impact assistance and guidance. 

In addition to routine assistance, FRA has established a risk-based monitoring program that 

includes intensive on-site and desk-based reviews of programs to consistently identify and 

resolve barriers to effective project implementation. Grantees receive well-timed feedback from 

these reviews and technical support as necessary. 

Further, FRA has developed a grantee technical assistance web page that includes content such 

as written guidance on effective grant management practices. FRA plans to continue publishing 

written guidance, much like State Rail Plan guidance (already issued for public comment and 

scheduled for final release in early 2013), to provide detailed requirements and guidelines for 

effective project development and delivery. Internally, FRA has developed staff tools such as a 

"deliverables guidebook" to ensure that grantee deliverables are effectively tracked, consistently 

reviewed, and returned to grantees for revision (if necessary) in a timely manner. 

Finally, FRA relies on other proactive communication tools, such as a monthly webinar for 

stakeholders. These webinars provide technical assistance and also offer grantees the opportunity 

to receive updates on FRA programs, share best practices with one another, and to pose 

questions of FRA leadership. 

6. GAO and the DOT Inspector General have recommended that FRA develop specific 

and detailed guidance for the preparation of high-speed and intercity passenger rail 

ridership and revenue forecasts. What is DOT's response to these 

recommendations? 

RESPONSE: FRA has taken several steps to develop detailed guidance for the preparation of 

passenger rail ridership and revenue forecasts. Specifically, FRA is providing funding to the 

Transportation Research Board's National Rail Cooperative Research Program to conduct 

research and develop a handbook of analytical tools and application procedures that will assist 

state, regional, and local transportation agencies in, among other things, forecasting ridership and 

revenue. The handbook is part of project NRCRP 3-0i: Handbook of Tools and Procedures for 

Planning and Developing intercity Passenger Rail Service. FRA has a direct liaison for this 

project, who will oversee the development of the project's Statement of Work and eventually its 

execution. The Handbook's analytical tools will include passenger demand and rolling stock 

forecasting models; risk and uncertainty analysis; and revenue and cost modeling, including 

capital, operating, and maintenance. More information about this project, including the full 

research objective, can be found on the TRB website. 

7. Some of the states and the DOT Office of Inspector Gcncral have reported to this 

Committee that FRA appears to lack resources for implementing the HSIPR 

program, which slows progress. I know that the DOT requested a level of staffing 

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that did were not appropriated. Do you have the resources you need for an effective 

program? If not, what do you need? 

RESPONSE: FRA continues to effectively implement the HSIPR Program despite resourcing 

levels that are far below those staffing levels set at other federal agencies that arc charged with 

effectively managing and overseeing programs of similar size and/or complexity. FRA's 

resources are further and consistently stretched with the execution of programs and activities that 

are required by PRIIA. 

The President's FY 2012 budget funded 91 Full-Time Equivalents (FTE) for the Office of 

Railroad Policy and Development (RPD), which oversees FRA's capital project funding 

programs, as well as the majority ofPRIIA implementation. Under the current Continuing 

Funding Resolution, FRA may not be able to fully fund ncw positions from FY 2012. 

The President's FY 2013 budget request includes 98FTE for FRA's RPD to ensure filII 

implementation of PRIIA and to manage the HSIPR Program during the peak construction years 

ofFY 2013-2016. 

8. Tbe Committee bas received credible reports tbat tbe rail safety program at tbe 

FRA bas essentially taken a backseat to implementation oftbe HSIPR program. In 

fact, we've received reports tbat FRA field inspectors bave bad very limited ability 

to travel, wbicb limits their ability to conduct appropriate safety inspections. Tbe 

reports maintain tbat while their ability to travel is limited, FRA headquarters staff 

continues to utilize scarce resources for participating in conferences tbat have 

limited value. Wbat is your response to tbis and is tbis sometbiug you would 

commit to looking into further? 

RESPONSE: In 2012, the railroad industry achieved its highest level of safety in its history. At 

FRA, safety is our number one priority. Rail safety statistics continue to improve because FRA 

is steadfastly committed to both a collaborative partnership with the industry to identify and 

pioneer innovative ways to achieve safety improvements and to rigorously enforce compliance 

with existing safety laws and regulations through field inspections, audits and 

investigations. Since the High Speed and Intercity Passenger Rail Program was first created in 

2008, casualties have declined 19 per cent and the overall rail-related accidents/incidents rate has 

declined by 14 per cent. 

FRA will continue to work to improve and enhance safety. Our goal continues to be to strive for 

zero incidents and accidents. 

FRA has also taken important steps to meet the goals of the President's 20 II Executive Order 

(EO) 13589 "Promoting Efficiency Spending." This EO requires that all Federal agencies 

minimize costs and to carry out mission critical functions in efficient and cost effective 

ways. From FY 20 I 0 to FY 2012, FRA reduced overall spending on travel and transportation by 

25 percent, however, mission critical travel such as for field safety inspectors and investigators 

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was increased by 12 per cent to meet those essential needs, predominantly through curtailing 

attendance at non-mission critical conferences and by using video, phone, and web technology to 

reduce travel requirements. 

9. The IG states that FRA lacks effective mechanisms for assessing program and 

grantee performance. Do you have a response to that? 

RESPONSE: FRA believes it has a robust performance management program for the tracking. 

analyzing, and reporting on grantee and program performance. 

FRA has mapped each of its program milestones in detail and has begun tracking these 

milestones and associated deliverables through its Project Management Tool (PMT). The PMT 

allows managers to have a dashboard of grantee accomplishments, upcoming deadlines, and 

overall with reporting requirements. The PMT along with accompanying policies and 

procedures, allow FRA to have an overall picture of a grantee's adherence to project scope, 

schedule, and budget and facilitates the effective management of over 2,300 deliverables 

expected as part of the HSIPR program implementation. 

As mentioned in an earlier response, FRA also conducts hands-on assessments of grantee 

performance and compliance through its risk-based monitoring and technical assistance program. 

At an aggregate program level, FRA has established and consistently reports on several key 

program measures ranging from program-fund obligation rates, construction progress, and 

project outlay rates. FRA publically reports on these measures through its website, as well as 

quarterly briefings to the Office of Management and Budget, and monthly calls with 

Congressional staff. FRA also reports on program status on the Performance.gov website. 

Beyond program-level measures, FRA also tracks broader performance ofthe national rail 

system, with performance measures ranging from on-time performance on various corridors, to 

the number of Americans serviced by high-performance rail. 

10. What is the timeline for the Initial Operating Segment of the California High-Speed 

Rail project to be complete with trains operating on the infrastrncture? What is the 

timeline for the completion of the "fnll build-out" of the entire project? 

RESPONSE: In the California High-Speed Rail Authority revised Business Plan 2012, the 

Authority indicated their plan is to connect the First Construction Section in the Central Valley 

to the San Fernando Valley and start service by 2022. The 2012 Business Plan states that Phase 

1 (blended) of the California High-Speed Train System (connecting San Francisco, the Central 

Valley, and Los Angeles! Anaheim through a combination of dedicated high-speed rail 

infrastructure blended with existing urban system) is anticipated to be in operation by 2029. 

11. When will constrnction begin on the California High-Speed Rail project? 

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RESPONSE: Notice to proceed to final design and construction for the first construction package 

in the Central Valley is anticipated for July 2013. 

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Before the Committee on Transportation and Infrastructure 

United States House of Representatives 

For Release on Delivery 

Expected at 

9:30am. EST 

Thursday, December 6, 2012 

CC2013-004 

A Grants Management 

Framework and Stakeholder 

Agreements Are Key to Fully 

Implementing FRA's High 

Speed Intercity Passenger 

Rail Program 

Statement of 

Mitchell Behm 

Assistant Inspector General for Rail, Maritime 

and Economic Analysis 

U.S. Department of Transportation 
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Chainnan and Members of the Committee: 

Thank you for inviting me here to discuss the Federal Railroad Administration's 

(FRA) progress in implementing the Nation's $10.1 billion High Speed Intercity 

Passenger Rail (HSIPR) program. Legislation enacted in 200S dramatically 

expanded FRA's role and responsibilities from primarily providing railroad safety 

regulations to overseeing a large grant program. In April 2010, we testified that for 

FRA to successfully implement HSIPR, it would need to address several 

challenges, including developing written policies and practices to guide the 

program's grant lifecyc1e process and oversight activities, and obtaining adequate 

staff to oversee implementation. 

We continue to monitor FRA's efforts to carry out its traditional and new roles. 

While we have seen FRA make noteworthy progress in implementing the HSIPR 

program-including establishing certain stakeholder agreements for long-tenn 

projects prior to obligating funds-challenges remain. To date, FRA has awarded 

and obligated 99 percent of HSIPR grant funds but has only disbursed about 7 

percent due in part to these challenges. My testimony today will focus on FRA's 

(1) progress in establishing a grants management framework and (2) ongoing 

challenges in disbursing grant funds. 

IN SUMMARY 

FRA has made significant progress in establishing a grants management 

framework but key components to ensure effective program implementation 

remain incomplete. These include finalizing grant administration guidance to help 

ensure FRA staff and grantees comply with policies and procedures, establishing 

clear program goals and measures to assess HSIPR program progress, and 

completing a comprehensive training curriculum to ensure staff appropriately 

administer funds across all active grant programs. Completing stakeholder 

agreements is also needed for the Agency to disburse obligated funds to project 

grantees and ensure intended benefits are achieved by required deadlines. 

BACKGROUND 

The Passenger Rail Investment and Improvement Act of 200S1 (PRIIA) directed 

FRA to establish a grant program to fund various types of intercity passenger rail 

improvements, while it continues to carry out its prior responsibilities, including 

its oversight of Amtrak. Four months after PRIIA's enactment, the American 

Recovery and Reinvestment Act of 20092 (ARRA) appropriated $S billion to FRA 

to develop and implement the HSIPR grant program. FRA awarded the majority of 

I P.L. No. 110-432, Div. B. 

2 P.L. No. 111-5. 
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the $8 billion in ARRA funds to two types of HSIPR projects: short-term, "readyto-go" projects-almost ready for construction-and long-term projects to develop 

high speed rail corridors. ARRA established aggressive timelines for FRA's 

obligations and grantees' expenditures for both types of projects. 

To disburse the funds for HSIPR projects, FRA requires three types of agreements 

between the freight railroads, which own the majority of the infrastructure on 

which HSIPR grants will be spent, and other stakeholders: (1) service outcome 

agreements (SOA), (2) construction agreements, and (3) maintenance agreements. 

SOAs outline rail owners' agreements on services and benefits that will be 

provided once projects are completed. For example, SOAs address passenger rail 

service frequency, schedule and trip time, and maximum delay minutes.3 

Construction agreements outline stakeholders' roles and responsibilities for 

managing and completing project construction. Maintenance agreements address 

stakeholders' financial and operational responsibilities for maintaining project 

property in a state of good repair for at least 20 years. 

Our previous audits and testimonies have highlighted FRA's efforts to develop 

written policies and procedures and obtain adequate staff to administer the HSIPR 

grant program. In April 2010, we testified that FRA's expanded role and 

responsibilities significantly challenged the Agency to effectively implement the 

high speed rail program, improve intercity passenger rail services, and enhance 

safety initiatives-challenges that were exacerbated by ARRA's accelerated 

timelines.4 In September and November 2012, we issued reports on the status of 

FRA's progress in implementing the HSIPR program. Our September report 

focused on FRA's efforts to develop a grants management framework, which is 

needed to establish policies, procedures, a workforce structure, performance 

measurements, and grant oversight.5 Our November report focused on FRA's 

efforts to assist in developing stakeholder agreements. 6 

FRA HAS MADE PROGRESS IN ESTABLISHING A GRANTS 

MANAGEMENT FRAMEWORK, BUT KEY COMPONENTS FOR 

EFFECTIVE IMPLEMENTATION ARE INCOMPLETE 

FRA completed its Grants Management Manual for HSIPR grant administration, 

but it has not developed sufficient guidance for grantees and FRA staff to comply 

3 Delay minutes refer to the average amount of time that a passenger train is delayed on a specified route and the 

identified cause of that delay for purposes of determining responsibility. 

4 Federal Railroad Administration Faces Challenges in Carrying Out Expanded Role, April 29, 2010. OIG testimonies 

and reports are available on our Web site at http://www.oig.dot.gov/. 

5 Completing a Grants Management Framework Can Enhance FRA 's Administration of the HSIPR Program, Sept. II, 

2012. 

6 FRA's Requirements for High Speed Rail Stakeholder Agreements Mitigated Risk, but Delayed Some Projects' 

Benefits, Nov. 1,2012. 

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with the policies and procedures set forth in the manual. At the same time, FRA 

has yet to develop clear goals, measures, and other mechanisms for assessing 

program and grantee performance. While FRA has almost met its staffing 

requirements, it continues to work on developing a comprehensive training 

program that incorporates HSIPR policies and procedures. 

FRA Lacks Sufficient Guidance To Ensure Staff and Grantees Comply 

With HSIPR Grant Administration Policies and Procedures 

FRA began drafting its Grants Management Manual, which sets forth the policies 

and procedures for HSIPR grant management, in April 2010 and released the 

completed manual in April 2012-almost 3 years after it assumed responsibility 

for administering HSIPR funds. During this period, the Agency obligated nearly 

$9.6 billion of HSIPR funds to comply with ARRA timeframes. FRA officials told 

us that due to staff constraints they needed to prioritize HSIPR grant awards and 

obligations over the manual's completion. 

The manual includes chapters on grant solicitation, administration, oversight, and 

closeout. The manual also provides some guidance on how to manage HSIPR 

grants. However, according to FRA staff we surveyed, additional guidance is 

needed to help ensure compliance with policies and procedures (see Figure 1). 

Figure 1. FRA Regional and Grant Managers Responses to Selected Survey Questions 

Do you currently have sufficient resources to allow you to 

execute all duties required of you as a regional manager? 

Do you currently have sufficient resources to allow you to 

execute all duties required of you as a grant manager? 

Could FRA provide you with more guidance to better assist 

you in successfully executing all duties required of you as a 

regional manager? 

Has FRA provided you with guidance to assist you in 

successfully executing all duties required of you as a regional 

manager? 

Has FRA provided you with guidance to assist you in 

successfully executing all duties required of you as a grant 

manager? 

Source: OIG Survey 

Num beraf Survey Respondenls 

',NO .YES 

Several FRA grant managers told us that grantees have had trouble completing 

required grant documentation correctly and in a timely manner due to the lack of 

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detailed guidance. For example, seven regional managers informed us that 

grantees could use more guidance on the Agency's requirements for grant 

obligation, such as project scope, schedule, and budget, as well as general grant 

management practices. Nine of 12 grantees we interviewed also indicated that 

FRA could have provided more guidance to help them develop the required 

application documentation. For example, one grantee stated that due to a lack of 

detailed guidance, his State had to draft 10 iterations of a statement of work7 in 

order to meet FRA's application requirements. A template could have minimized 

this type of rework. While FRA provides general grant application guidance to 

HSIPR grantees through its Notice of Funding Availability announcements and 

Webinars on the application process, the guidance does not explain how to 

navigate the complex grant lifecycle process, which could result in inefficiencies, 

mismanagement, and project delays. 

FRA acknowledged that additional clarification is needed and established 

workgroups to develop this guidance, but it did not establish time lines for 

completion for all workgroups. 

FRA Continues To Lack Effective Mechanisms for Assessing 

Program and Grantee Performance 

Between April 2009 and February 2012, FRA issued 10 documents containing 

strategic and performance goals for assessing HSIPR program progress. However, 

some are inconsistent across these documents, and these inconsistencies cannot be 

reconciled. For example, several goals in DOT's assessment of FRA's 

performance and performance plans appear to support a goal in FRA's fiscal year 

2013 budget request to improve rail transportation experience. However, the 

relationship among the goals is not clear (see Table 1). Such inconsistencies make 

it difficult for grant managers and decision makers, including Congress, to know 

what goals the program is to achieve. 

7 A statement of work describes the programmatic aspects of a grant project, including the project itself, a work 

schedule, deliverables, and any stipulations that require a grantee to complete and submit environmental 

documentation. 

S A Notice of Funding Availability formally announces the availability of Federal funding and solicits grantee 

applications. 

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Table 1. Example of Goals Across FRA Planning Documents 

t:RA's fiscal year 2013 DOT's assessment of FRA's DOT performance plans 

Goal(s) 

budget request performance 

Improve rail transportation • Improve employment, 

experience safety, livability, and travel 

time 

• Improve ridership, reliability, 

and market share for rail 

passenger service 

• Decrease fuel 

consumption 

• Increase HSIPR 

ridership 

Moreover, the goals' performance measures are not specific enough to determine 

overall program progress. For example, the goal to improve reliability, speed, and 

frequency of rail passenger service, which appears on FRA's Web site, does not 

include measures that indicate progress, such as anticipated trip time 

improvements, additional trains, and ridership gains. Some goals that are critical to 

measuring progress are simply missing. Notably, FRA does not have a goal to 

determine the extent to which HSIPR is achieving its intended results. 

FRA mechanisms for assessing grantee performance are similarly lacking. 

Specifically, FRA lacks an effective tool to help staff track, manage, and monitor 

grantee compliance with documentation requirements, including Federal Financial 

Reports and various ARRA requirements for reporting and certification. In 

January 2012 we reviewed FRA's tracking tool, which at the time only captured 

the date a deliverable was received, not the number of days it is overdue-key 

information for determining the severity of noncompliance. According to FRA 

officials, a more comprehensive project management tool to track and monitor 

grantees is under development. 

FRA also completed its monitoring plan in March 2012. According to FRA 

officials, the plan includes information on monitoring timeframes, responsibilities 

for monitoring personnel, and other components to ensure monitoring activities 

will be completed-which its interim plan did not include. We have yet to assess 

the completed plan but will do so in the future. 

FRA Lacks a Comprehensive Training Program for Its HSIPR Staff 

FRA has not ensured its staff can effectively administer HSIPR grant funds across 

all its active programs. The Agency updated its workforce plan based on the 51 

positions Congress authorized for the division responsible for HSIPR oversight. 

According to FRA officials, 91 percent of these positions have been filled, 

including those that the agency previously had difficulty filling. 9 

9 In March 2012, FRA officials cited difficulty in hiring candidates with appropriate expertise to fill specialized 

positions, such as grant managers. 

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However, the Agency continues to lack a comprehensive training curriculum--due 

in part to delays in developing its Grants Management Manual. According to FRA 

officials, in lieu of a curriculum centered around the policies and procedures set 

forth in the manual, HSIPR personnel have been required to attend Agencyprovided training sessions on certain topics, such as grant monitoring and 

applicant outreach. Officials also stated that grant managers and other personnel 

have access to external training opportunities. However, FRA does not require 

personnel to complete fraud awareness training to help staff recognize common 

fraud schemes, such as conflicts of interest or false statements, claims, and 

certifications. Historically, large-scale grant projects such as those under the 

HSIPR program have been particularly vulnerable to these types offraud. 

With the recently completed Grants Management Manual, we recommended in 

our September 2012 report that FRA develop a comprehensive grants management 

training curriculum for HSIPR staff that includes a required fraud training 

component. FRA concurred with our recommendation and stated that the 

curriculum would be completed by December 2012. 

SOME AGREEMENTS FOR LONG- AND SHORT-TERM 

PROJECTS ARE NOT COMPLETE, DELAYING DISBURSEMENT 

OF FUNDS 

Prior to obligating funds on long-term projects, FRA ensured project grantees 

completed SOAs with their freight partners. While this action helped mitigate 

certain risks, completing the SOAs required significant FRA involvement and time 

and impacted FRA's ability to review and approve stakeholder agreements for 

other long- and short-term projects-which, in tum, delayed finalizing these 

agreements and the disbursement of funds. 

FRA worked with stakeholders on the 13 long-term corridor projects to develop 

SOAs and, as of September 2011, had obligated $3.2 billion in ARRA funds to 

these projects. However, project stakeholders found the SOA process challenging, 

in part because FRA's guidance provides little detail on how to structure 

stakeholder agreements. Ultimately, the process led to repeated rejections of 

multiple versions of agreements, which resulted in FRA intensifying its assistance 

to grantees. 

This focus on the SOAs delayed FRA's review and approval of stakeholder 

maintenance and construction agreements, which PRIIA requires prior to fund 

disbursement. While FRA obligated all of the funds within the ARRA-mandated 

deadline, the agency is still working with State grantees and other project 

stakeholders to complete maintenance and construction agreements. The deadline 

for expending ARRA funds and completing construction is September 30, 2017-

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a compressed timeline for complex projects such as creating a new rail corridor or 

expanding or reconfiguring an existing one. For example, an external peer review 

questioned California's ability to meet ARRA's 2017 deadline, even though 

California has all required project stakeholder agreements in place. 1O For projects 

with maintenance and construction agreements that remain outstanding, the 

timeline for completion becomes even more compressed. 

Short-term projects-and the economic recovery benefits these projects were 

intended to stimulate-have also been delayed. FRA originally established a 

deadline of September 30, 2010, to complete short-term project obligations but did 

not complete obligating funds to these projects until September 2011. According 

to FRA officials, stakeholder agreement requirements for short-term projects were 

completed on a case-by-case basis instead of publishing guidance that would 

provide common instruction on how to complete these agreements. Grantees of 

short-term projects reported that without written guidance, they had difficulties 

understanding FRA's expectations regarding the terms for their project 

stakeholder agreements. Short-term project stakeholders also noted that delays in 

obligating funds impacted their ability to plan and begin construction on their 

projects. 

In closing, finalizing grant administration guidance, establishing clear program 

goals and measures, and completing a comprehensive training curriculum-all 

actions we have recommended-would better position FRA to effectively carry 

out the responsibilities of its expanded role, ensure the timely implementation of 

HSIPR, and spur continued interest in high speed rail. We will continue 

monitoring FRA's progress ip. these areas, as well other areas we identifY as 

critical to ensuring FRA's successful implementation ofHSIPR. 

Mr. Chairman, this concludes my prepared statement. I am happy to answer any 

questions you may have at this time. 

10 California High-Speed Rail Peer Review Group Report to California State Legislature, lao. 3, 2012. 

7 
106 


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REPUBLICAN MEMBER QUESTIONS FOR THE RECORD 

To Mitchell Behm, Assistant Director, Office ofInspector General, Dept. of Transportation 

Full T&I Committee Hearing The Federal Railroad Administration's High Speed and Intercity 

Passenger Program: Mistakes Made and Lessons Learned 

Thursday, December 6,2012 

1. Secretary Hammond noted at the hearing that there is a need for more guidance 

from FRA to States on what is expected of them. Has this concern heen common 

among States you've spoken with? Could you please explain? How has the agency 

addressed those concerns? 

We interviewed 12 of the 38 High Speed Intercity Passenger Rail (HSIPR) grant 

recipients regarding their experiences with program administration. This accounted for 

90 percent of the total HSIPR funds awarded. Nine of the 12 grantees we interviewed 

indicated that FRA could have provided more guidance to help them develop the required 

application documentation. While FRA provides general grant application guidance to 

HSIPR grantees through its Notice of Funding Availability announcements and Webinars 

on the application process, the guidance does not explain how to navigate the complex 

grant lifecycle process. Without guidance from FRA on how to prepare key grant 

documentation such as statements of work, environmental documents and project 

management plans, inefficiencies, mismanagement of funds, and ultimately project 

delays could result. 

To address the issue of limited guidance, FRA created workgroups to help identify and 

develop standard operating procedures, templates for required documents, and technical 

guidance for use by both its grants staff and grantees. In addition, the Agency plans to use 

the I1SIPR grants management guidance that the workgroups develop to help administer 

its other grant programs. 

2. Your testimony explains that FRA staff said "additional guidance is needed to help 

ensure compliance with policies and procedures." What efforts are underway to 

ensure this is occurring? Also, what are the risks ifthere is no such guidance? 

To address the issue oflimited guidance, FRA created workgroups to help identify and 

develop standard operating procedures, templates for required documents, and technical 

guidance for use by both its grants staff and grantees. 

With regard to the risks associated with a lack of guidance, many grantees noted a very 

inefficient review process which they characterized as highly iterative without 

substantive change, resulting in a lack oftimelincss and missed project deadlines. 
107 


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3. The written testimony explains that a vast majority of grantees, 9 of the 12 

interviewed, claimed that FRA could have given more guidance on the application 

documentation. What are somc of the problems this lack of guidance caused for the 

grantees? 

The challenges the lack of guidance caused for grantees amounted to loss of time or 

project delays, and in many cases, additional costs to grantees. For example, officials we 

interviewed from one state department of transportation told us that due to the lack of 

guidance from FRA on how to navigate the HSIPR application process, it had to hire a 

number of outside consultants to assist its small rail staff in preparing the required 

documentation. In assessing their llSIPR application phase consultant fees, these state 

officials told us that they could have paid a full-time-equivalent employee's salary for 

two years for what it cost them to apply for HSIPR grants. Another state rail planning 

office told us that FRA's lack of formal processes, procedures, and guidelines was its 

greatest challenge and placed these challenges into dollar context. For example, state 

officials told us that delays in FRA approval of documentation and lack of timely 

guidance on key parts of the grants process resulted in $500,000 in extra costs to that 

DOT. 

4. Your report and testimony notes that the program's goals were "inconsistent" and 

that "some goals that are critical to measuring progress are simply missing." What 

problem(s) has this created for the program and stakeholders? How is the FRA 

addressing those problems? 

While we have no specific examples of problems that inconsistent goals have created for 

the program and/or stakeholders, missing outcome-bascd goals make it difficult for 

decision-makers, including Congress, to determine if the program is achieving its 

intended benefits. FRA has typically set obligation offunds as a goal and has monitored 

HSIPR program performancc over time in terms of the percentage of available funds 

which have been obligated to date. This goal is effective in helping FRA staff manage its 

funding and obligation deadlines, but it is not the type oflong-term program performance 

based goal that can help the Agency and the Congress determine the extent to which 

HSIPR is achieving its intended rcsults. 

One example of what we would consider a more meaningful long-term performance goal 

could include using the strategic goal President Obama announced for the HSIPR 

program in his 2011 State of the Union Speech. The President stated that "within 25 

years, our goal is to give 80 percent of Americans access to high speed rail." FRA could 

develop a long-term performance goal for the HSIPR program to measure the percentage 

of Americans that access high speed passenger rail service each year. 

In our report, we recommended that FRA establish clear program goals that contain 

measures to assist managers and decision makers in assessments of HSIPR goals 

achievement and overall program progress. We are currently reviewing documentation 

recently received from FRA that address this recommendation and will soon determine if 

they have taken the appropriate actions to address our concerns. 
108 


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GAO 

For Release on Delivery Expected at 9:30 .. m. EST Thursday, December 6, 2012 

GAO·13·163T 

United States Government Accountability Office 

Testimony 

Before the Committee on 

Transportation and Infrastructure, 

House of Representatives 

HIGH-SPEED 

PASSENGER RAIL 

Preliminary Assessment of 

California's Cost Estimates 

and Other Challenges 

Statement of Susan A. Fleming, Director 

Physical Infrastructure Issues 

GAO 

Accounlabllity * Integrity * Reliability 
109 


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HIGH-SPEED PASSENGER RAIL 

Preliminary Assessment of California's Cost 

Estimates and Other Challenges 

Based on an initial evaluation of the California High Speed Rail Authority's 

(Authority) cost estimates, GAO found that they exhiM certain strengths and 

weaknesses when compared to best practices in GAO's Cost Guide, Adherence 

with the Cost Guide reduces the risk of cost overruns and missed deadlines, 

GAO's preliminary evaluation indicates that the cost estimates are comprehensive 

in that they include major components of construction and operating costs, 

However, they are not based on a complete set of assumptions, such as how the 

Authority expects to adapt existing high-speed rail technology to the project in 

California, The cost estimates are accurate in that they are based on the most 

recent project scope, include an inflation adjustment, and contain few mathematical 

errors, And while the cost estimates' methodologies are generally documented, in 

some cases GAO was unable to trace the final cost estimate back to its source 

documentation and could not verify how certain cost components, such as stations 

and trains, were calculated, Finally, the Authority evaluated the credibiltty of its 

estimates by performing both a sensitivity analysis (assessing changes in key cost 

inputs) and an independent cost estimate, but these tests did not encompass the 

entire cost estimate for the project For example, the sensitivity analysis of the 

construction cost estimate was limited to 30 miles of the first construction segment. 

The Authority also did not conduct a risk and uncertainty analysis to determine the 

likelihood that the estimates would be met. The Authority is currently taking some 

steps to improve its cost estimates, 

The California high-speed rail project faces many challenges, Chief among these 

is obtaining project funding beyond the first 130-mile construction segment. While 

the Authority has secured $11.5 billion from federal and state sources, it needs 

almost $57 billion more, Moreover, the HSIPR grant program has not received 

federal funding for the last 2 fiscal years, and future federal funding is uncertain, 

The Authority is also challenged to improve its ridership and revenue forecasts, 

Factors, such as limited data and information, make developing such forecasts 

difficult. Finally, the environmental review process and acquiSition of necessary 

rights-of-way for construction could increase the risk of the project's falling 

behind schedule and increasing costs, 

_____________ United States Government AccQuntability Office 
110 


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United States Government Accountability Office 

Washington, DC 20548 

Chairman Mica, Ranking Member Rahall, and Members of the 

Committee: 

Thank you for the opportunity to be here today as the committee 

examines the Department of Transportation's (DOT) High Speed Intercity 

Passenger Rail (HSIPR) program.' As you know, this program was 

established to provide grant funds to states and others to develop highspeed intercity passenger-rail corridors and projects. HSIPR is 

administered by the Federal Railroad Administration (FAA), and, as of 

October 2012, almost $10 billion has been obligated for 150 projects 

under this program, though it has received no appropriations since fiscal 

year 2010. The projects range from multibillion dollar high-speed rail 

systems, like that in Califomia, to smaller projects designed to improve 

speeds, frequency, and reliability of conventional intercity passenger-rail 

service. 

My statement today will discuss our ongoing examination of the California 

high-speed rail project-the largest recipient of HSIPR grant funds to 

date. We are providing preliminary observations based on our work to 

date, particularly related to the California High Speed Rail Authority's 

(AuthOrity) project cost estimates. We also identify some of the key 

challenges facing the project. Our ongoing review, which this committee 

and other Members of the House requested, focuses on assessing the 

reliability of the project's cost estimates and financing plans, evaluating 

the reasonableness of ridership and revenue forecasts, and examining 

the comprehensiveness of potential project economic impacts. As such, 

we are assessing the quality of the information used by policymakers and 

not evaluating the merits of the project itself, which should be considered 

in light of whether this project best meets the transportation needs of the 

estimated 51 million Californians in 2050. 

This testimony is based on our preliminary assessment of the first phase 

of the project's cost estimates using GAO's Cost Estimating and 

Assessment Guide'- (Cost Guide). While FRA did not require HSIPR grant 

1The program was authorized under the Passenger Rail Investment and Improvement Act 

of 2008 (PRIIA). Pub. L. No. 110-432, Div. B (Oct. 16, 2008). 

'GAO, GAO Cost Esffmating and Assessment Guide: Best Practices for Developing and 

Managing Capital Program Costs, GAO-09-3SP (Washington, D.C.: March 2009). 

Page 1 GAO-13·1S3T 
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Background 

applicants to follow the Cost Guide, the Cost Guide identifies best 

practices that help ensure cost estimates are well documented, 

comprehensive, accurate, and credible. The Cost Guide has been used to 

evaluate cost estimates across the government, including infrastructure 

projects. We also assessed the Authority's analysis of the project's 

finance plans as outlined in the Authority's April 2012 revised business 

plan. We analyzed the extent to which the project's cost estimates 

adhered to the best practices contained in the Cost Guide and 

interviewed Authority officials, its contractors, and other federal officials. 

To identify key challenges, we reviewed pertinent legislation, federal 

guidelines and best practices related to ridership and revenue 

forecasting, prior GAO reports on the topiC of high-speed passenger rail 

and reports published by the DOT's Office of Inspector General (OIG). In 

addition, we interviewed federal, state, and local officials associated with 

the project as well as members of the ridership and revenue peer review 

panel established by the Authority. We also reviewed the status of the 

project's environmental reviews and sought to identify legal challenges to 

the project as well as interviewed officials from the Authority, the 

California Department of Transportation, and other state officials about 

right-of-way acquisition. 3 We conducted our work in accordance with 

generally accepted government auditing standards. We plan to report the 

final results of our work in early 2013. 

While high-speed passenger rail has been in operation in Europe and 

Asia for several decades, it is in its relative infancy in the United States. 

The Passenger Rail Investment and Improvement Act of 2008 (PRIIA) 

called for development of high-speed rail corridors in the United States 

and led to establishment of the HSIPR program. FRA administers the 

HSIPR program as a discretionary grant program to states and others. 

This program was appropriated $8 billion in funding from the American 

Recovery and Reinvestment Act (Recovery Act) in 2009 and an additional 

$2.5 billion in funding from the fiscal year 2010 DOT Appropriations Act' 

According to FRA, as of October 2012, about $9.9 billion has been 

3ThiS project win construct new rail right of way to provide service, some of which may 

require acquisition of privately owned land. 

'Pub. L. No. 111-5, 123 Stat 208 (Feb. 17,2009); Pub. L. No. 111-117, 123 Stat 3056 

(Dec. 16, 2009). For fiscal years 2011 and 2012, no appropriations were made to the 

program. For fiscal year 2011, $400 million in unobligated funds were rescinded. PUb. L. 

No. 112-10, § 2222 (Apr. 15,2011). 

Page 2 GAO-13-163T 
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obligated for 150 projects.s The California high-speed rail project is the 

largest recipient of HSIPR funds, with approximately $3.5 billion (about 35 

percent of program funds obligated). We have previously reported on 

high-speed rail and the HSIPR program. For example, in March 2009 we 

reported on the challenges associated with developing and financing 

high-speed rail projects. These included securing the up-front 

investments for such projects and sustaining public and political support 

and stakeholder consensus.· We concluded that whether any high-speed 

rail proposals are eventually built hinges on addressing the funding, 

public support, and other challenges facing these projects. In June 2010, 

we reported that states would be the primary recipients of Recovery Act 

funds for high-speed rail, but many states did not have rail plans that 

would, among other things, establish strategies and priorities of rail 

investments in a particular state.' 

California's high-speed rail project is poised to be the first rail line in the 

United States designed to operate at speeds greater than 150 miles per 

hour.' The planned 520-mile line will operate between San Francisco and 

Los Angeles at speeds up to 220 miles per hour (see fig.1). At an 

estimated cost of $68.4 billion,' it is also one of the largest transportation 

infrastructure projects in the nation's history. The project's planning began 

in 1996 when the Authority was created but began in earnest after initial 

funding was approved in 2008 with the passage of Proposition 1A, which 

authorized $9.95 billion in state bond fUnding for construction of the highspeed rail system and improvements to connections (see fig. 2). 

Construction is expected to occur in phases beginning with the 130-rnile 

first construction segment from just north of Fresno, California, to just 

north of Bakersfield, California. In July 2012, the California legislature 

appropriated $4.7 billion in state bond funds. The process of acquiring 

"GAO, High Speed Passenger Rail: Future Development Will Depend on Addressing 

Financial and Other Challenges and EstabUshing a Clear Federal Role, GAO-09-317 (Washington, D.C.: Mar. 19,2009). 

7 GAO, High Speed Rail: Learning From Service Starl-Ups, Prospects for Increased 

Industry Investment, and Federel Oversight, GAO-10-625 (Washington, D.C.: June 17, 

2010). California has a state rail plan that is in the process of being updated. 

8 Amtrak's Acela service is capable of operating at speeds greater than 150 miles per hour 

but is not currently authorized by FRA to do so. 

SAil costs are in year-of-expenditure dollars unless otherwise noted. 

Page 3 GAO·13·l63T 
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property tor the right-ot-way and construction is expected to begin soon. 

Request tor proposals to select construction contractors and right-ot-way 

acquisitions were issued in March and September 2012, respectively. 

According to the Authority, a design-build contract tor the first 

construction segment is expected to be awarded in June 2013 with 

construction potentially commencing no earlier than summer 2013. 

Figure 1: Map of Planned California High-Speed Rail System and Construction 

Timeline 

SOOfees.: California High Speed RaH Authctity and GAO. 

an,e lOS includes the first construction segment. The construction southward of the lOS will continue 

as funding becomes available (anticipated after 2015). 

hEarly investments will be made in the bookends of the system (San Francisco peninsula and in the 

Los Angeles basin) beginning In 2013. 

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Flgur. 2: Timeline of California High Speed Rail Project 

200S: FRA establishes the H5!PR program, and Congress appropriates 

$8 bmlon for high.spood rail projects as part of Recovery Act 

Congress appropriates an additional $2.5 billion to the HS!PR program. 

September 2011: Recovery Act funds expire and all funds must 

baexpended. 

Sourca:GAO. 

The project underwent substantial revision earlier this year after the 

Authority issued its November 2011 draft business plan in response to the 

initial high cost and other criticisms. Most significantly, the Authority 

scaled back its plans to build dedicated high-speed rail lines over its 

entire length. Instead, the April 2012 revised business plan adopted a 

"blended" system in which high-speed rail service would be provided over 

a mix of dedicated high-speed lines and existing and upgraded local rail 

infrastructure (primarily at the bookends of the system on the San 

Francisco peninsula and in the Los Angeles basin). This change was 

made, in part, to respond to criticism that the cost of the full-build system 

contained in the November 2011 draft business plan-$98.5 billion-was 

too high. The revised cost in the April 2012 plan was $68.4 billion. In 

addition, the ridership and revenue forecasts in the April 2012 revised 

business plan reflected a wider uncertainty range than the forecast 

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presented in the November 2011 plan.'· For example, in the November 

2011 draft business plan, the Authority estimated 2030 ridership to be 

between 14.4 million and 21.3 million passengers and annual revenues of 

the high speed rail system to be between $1.05 billion and $1.56 billion." 

This range increased in the April 2012 revised business plan, to between 

16.1 million and 26.8 million passengers and annual revenues to be 

between $1.06 billion and $1.81 billion." The Authority attributed the 

increase in the uncertainty range to additional conservatism in the low 

ridership estimate and the ridership changes to several factors such as 

the adoption of the blended approach which, among other things, allows 

one-seat service from San Francisco to Los Angeles to begin sooner than 

the original full-build approach. However, over time ridership forecasts 

under the blended approach are less than the original fUll-build approach. 

To date, the state of California and the federal government have 

committed funding to the project. In July 2012, the California state 

legislature appropriated approximately $4.7 billion dollars in Proposition 

1A bond funds, including $2.6 billion for construction of the high-speed 

rail project and $1.1 billion for upgrades in the bookends." The federal 

government has also obligated $3.3 billion in HSIPR grant funds." Most 

of the HSIPR money awarded to the project was appropriated under the 

Recovery Act and in accordance with governing grant agreements must 

be expended by September 30,2017. In addition, approximately $945 

million in fiscal year 2010 funding was awarded to the project by FRA and 

is to remain available until expended. 

'"rhe AuthOrity retained Cambridge Systematics-a transportation consulting firm that provides ridership forecasting and modellng services-to develop a travel-demand model 

that was used to generate the November 2011 ridership and revenue forecasts. 

Cambridge Systematics also prepared the updated ridership and revenue forecasts that 

were included in the April 2012 revised business plan. 

11These revenue forecasts are in 2010 dollars. 

12These revenue forecasts are in 2011 dollars. 

13 AI1 additional $819.3 million was appropriated by the state legislature for connectivity 

projects and about $252.6 million for environmental, system deSign, and preliminary 

engineering work, 

"Approximately $231 million in additional HSIPR grants have also bean awarded 

primarily for environmental review and preliminary engineering work. In addition, $400 

million was awarded to the Transbay Joint Powers Board for construction of a train box at 

the Transbay Transit Center in San Francisco. The Trensbay Transit Center is the 

expected northern tenninus of the California high speed rail line. 

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Preliminary 

Assessment of 

California's Cost 

Estimates 

The Authority estimates that the high-speed rail project in California will 

cost $68.4 billion to construct and hundreds of millions of dollars to operate 

and maintain annually. Since the project is relying on significant 

investments of state and federal funds-and, ultimately private funds-it is 

vital that the Authorily, FAA, and Congress be able to rely on these 

estimates for the project's funding and oversight (see table 1 below for a 

summary of the sources of funding). GAO's Cost Guide identifies best 

practices that help ensure that a cost estimate is comprehensive, 

accurate, well documented, and credible. 

• A comprehensive cost estimate ensures that costs are neither 

omitted nor double counted. 

• An accurate cost estimate is unbiased, not overly conservative or 

overly optimistic, and based on an assessment of most likely costs. 

• A well-documented estimate is thoroughly documented, including 

source data and Significance, clearly detailed calculations and 

results, and explanations for choosing a particular method or 

reference. 

• A credible estimate discusses any limitations of the analysis from 

uncertainty or biases surrounding data or assumptions. 

These four characteristics help minimize the risk of cost overruns, missed 

deadlines, and unmet performance targets. Our past work on high-speed 

rail projects around the world has shown that projects' cost estimates tend 

to be underestimated." As such, it is important to acknowledge the 

potential for this bias and ensure that cost estimates are as reliable as 

possible. 

Based on our ongoing review, we have found that the Authority's cost 

estimates exhibit strengths and weaknesses. The quality of any cost 

estimate can always be improved as more information becomes 

available. And based in part on evaluations from the Peer Review Group, 

the Authority is taking some steps to improve the cost estimates that will 

be provided in the 2014 business plan. 

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The Authority followed best practices in the Cost Guide to ensure 

comprehensiveness, but also exhibited some shortcomings. The cost 

estimates include the major components of the project's construction and 

operating costs. ,. The construction cost estimate is based on detailed 

construction unit costs that are, in certain cases, more detailed than the 

cost categories required by FRA in its grant applications. However, the 

operating costs were not as detailed as the capital costs, as over half of 

the operating costs are captured in a single category called Train 

Operations and Maintenance. In addition, the Authority did not clearly 

describe certain assumptions underlying both cost estimates. For 

example, Authority officials told us that the California project will rely on 

proven high-speed rail technology from systems in other countries, but it 

is not clear if the cost estimates were adjusted to account for any 

challenges in applying the technology in California. 

The AuthOrity took a number of steps to develop accurate cost estimates 

consistent with best practices in the Cost Guide. The estimates have 

been updated to reflect the new "blended" system which will rely, in part, 

on existing rail infrastructure; they are based on a dataset of costs to 

construct comparable infrastructure projects; they contain few, if any, 

mathematical errors; and they have been adjusted for inflation. For 

example, the Authority's contractor used a construction industry database 

of project costs supplemented with actual bid-price data from similar 

infrastructure projects. However, the cost estimates used in the April 2012 

revised business plan do not represent final design and route alignments, 

and the estimates will change as the project moves into construction and 

operation. The Authority did not produce a risk and uncertainty analysis of 

its cost estimates that would help antiCipate the impact of these changes. 

The Cost Guide recommends conducting a risk and uncertainty analysis 

to determine the primary risk factors and assess the likelihood that they 

may occur, helping to ensure that the estimate is neither overly 

conservative nor optimistic. 

The Authority followed some, but not ali, best practices in the Cost Guide 

to ensure that the cost estimate is well documented. In many cases, the 

methodologies used to derive the construction cost estimates were well 

documented, but in other cases the documentation was more limited. 

For example, while track infrastructure costs were thoroughly 

160peratlng costs include maintenance costs. 

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documented, costs for other elements, such as stations and trains, were 

supported with little detail or no documentation. Additionally, in some 

cases where the methodologies were documented, we were unable to 

trace the estimates back to their source data and recreate the estimates 

using the stated methodology. For example, we were unable to identify 

how the operating costs from analogous high-speed rail projects were 

adjusted for the California project. 

The Authority took some steps consistent with our Cost Guide to ensure 

the cost estimates' credibility, but not with respect to some best practices. 

In order to make cost estimates credible, GAO's Cost Guide 

recommends: 

• testing such estimates with sensitivity analysis (making changes in 

key cost inputs), 

• a risk and uncertainty analysis (discussed above), and 

• an independent cost estimate conducted by an unaffiliated perty to 

see how outside estimates compare to the original estimates. 

While the AuthOrity performed a sensitivity analysis for the first 30 miles of 

construction and an independent cost estimate for the first 185 miles of 

construction in the Central Valley, neither covered the entire Los Angeles 

to San Francisco project. For the operating-cost estimate, the Authority 

conducted a sensitivity test under various ridership scenarios; however, 

this test was designed to measure the ability of the system to cover 

operating costs with ticket revenues and not to determine the potential 

risk factors that may affect the operating-cost estimate itself. The 

Authority also did not compare their operating-cost estimate to an 

independent cost estimate. Finally, as noted above, the Authority did not 

perform a risk and uncertainty analysis, Which would improve the 

estimates' credibility by identifying a range of potential costs and 

indicating the degree of confidence decision-makers, can place on the 

cost estimates. 

The Authority is taking steps to improve its cost estimates. To make its 

operating-cost estimate more comprehensive and better documented, the 

Authority has contracted with the International Union of Railways to 

evaluate the existing methodology and data and help refine its estimates. 

In addition, to improve the construction cost estimates, the Authority will 

have the opportunity to validate and enhance, if necessary, the accuracy 

of its cost estimates once actual construction package contracts are 

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California High-Speed 

Rail Project Faces 

Financial and Other 

Challenges 

Challenges To Securing 

Project Funding 

awarded for the initial construction in the Central Valley in 2013. The bids 

for the first 30-mile construction package are due in January 2013 and will 

provide a check on how well the Authority has estimated the costs for this 

work as well as provide more information on potential risks that cost 

estimates of future segments may encounter. 

In addition to challenges in developing reliable cost estimates, the 

Califomia high-speed rail project also faces other challenges. These 

include obtaining project funding beyond the first construction segment, 

continuing to refine ridership and revenue estimates beyond the current 

forecasts, and addressing the potential increased risks to project 

schedules from legal challenges associated with environmental reviews 

and right-of-way acquisitions. 

One of the biggest challenges facing California's high-speed rail project is 

securing funding beyond the first construction segment. While the 

Authority has secured $11.5 billion from federal and state sources for 

project construction, almost $57 billion in funding remains unsecured. A 

summary of funding secured to-date can be found in Table 1. 

Table 1: Funding Secured for Constructing the High-Speed Rail Project 

(Dollars in billions) 

State high speed rail bonds $8.2' 

Federal HSIPR grants 

Total secured funding $11.5 

SOur<:e: GAO analysis of FRA grant informa~on and the Califomia High Speed Ral! Au!h¢fity April 2012 Revlsed Bl/$inss$: Plan 

'"The Authority expects approximately $8.2 billion in proceeds from the $9.95 in authorized 

Proposition 1A high-speed rail bonds to be available for construction of hlgf1..speed rail. The 

remainder Is for connectivity projects and engineering and environmental work. 

bApproximately $3.3 billion of $3.5 in obligated HSIPR grants is available for construction of highw 

speed rail project The remainder is for engineering and environmental work. 

As with other large transportation infrastructure projects, including highspeed rail projects in other countries, the Authority is relying primarily on 

public financial support, with $55 billion or 81 percent of the total 

construction cost, expected to come from state and federal sources. A 

summary of the Authority's funding plan can be found in table 2. 

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Table 2: California's Funding Plan for Construction of the High-Speed Rail ProleetDleeomlng to the April 2012 Revised 

Business Plan 

(Dollars in billions) 

Funding source 

Federal 

State high-speed rail bond 

locally generated 

Subtotal public 

Private investment 

Operating cash flow 

Subtotal private investment 

and operating cash flow 

Total 

First Initial operating Phas.l 

construction segment Bay-to-Basin blended Total 

$3.3 $20.3 $8.4 $10.0 $42.0 (61%) 

2.7 4.4 0.0 1.1 8.2 (12) 

0.0 0.7 1.2 3.1 5.0 (7) 

6.0 26.4 9.6 14.2 55.2 (81%) 

0.0 0.0 10.1 3.0 13.1 (19) 

0.0 0.0 0.2 0.0 0.2 (0) 

0.0 0.0 10.3 3.0 13.3 (19%) 

$6.0 $25.4 $19.9 $17.2 $68.5 (100%) 

Source: GAO ana!y$l$ «California High S~ Alilhority's Apn! 2012 revised business plan. 

Of the total $55 billion in state and federal funding, about $38.7 billion are 

uncommitted federal funds, an average of over $2.5 billion per year over 

the next 15 years. Most of the remaining funding is from unidentified 

private investment once the system is operational-a model that has 

been used in other countries, such as for the High Speed One line in the 

United Kingdom. As a result of the funding challenge, the Authority is 

taking a phased approach-building segments as funding is available. 

However, given that the HSIPR grant program has not received funding 

for the last 2 fiscal years and that future funding proposals will likely be 

met with continued concern about federal spending, the largest block of 

expected funds is uncertain. The Authority has identified revenues from 

California's newly implemented emissions cap and trade program in the 

event other funding is not made available, but according to state officials, 

the amounts and authority to use these funds are not yet established,'1 

17 California's Legislative Analysfs Office has evaluated the risks of applying cap and trade 

revenues to the high-speed rail project, See Legislative Analysfs Office, The 2012-2013 

Budget: Funding Requesls for High Speed Rail (Sacramento, CA: Apr. 17, 2012). 

Page 11 GA().13-163T 
121 


Insert offset folio 74 here 77211.074

Challenges to Developing 

Ridership and Revenue 

Forecasts 

Developing reliable ridership and revenue forecasts is difficult in almost 

every circumstance and for a variety of reasons. Chief among these are 

(1) limited data and information, (2) risks of inaccurate assumptions, and 

(3) accepted forecast methods vary. Although forecasting the future is 

inherently risky, reliable ridership and revenue forecasts are still critical 

components in estimating the economic viability of a high-speed rail 

project and in determining what project modifications, if any, may be 

needed. For example, the financial viability of California's high-speed rail 

project depends on generating sufficient ridership to cover its operating 

expenses. Ridership and revenue forecasts enable policymakers and 

private entities to make informed decisions on policies related to the 

proposed high-speed rail system and to determine the risks associated 

with a high-speed rail project when making investment deciSions. 

Addressing these challenges will be important for the Authority as it works 

toward updating its ridership and revenue forecasts for the 2014 business 

plan. 

Limited data and information, especially early in a project before specific 

service characteristics are known, make developing reliable ridership and 

revenue forecasts difficult. And to the extent early stage data and 

information are available, they need to be updated to reflect changes in 

the economy, project scope, and consumer preferences. For example, in 

developing the ridership and revenue forecasts for the April 2012 revised 

business plan, the Authority updated several assumptions and inputs 

used to develop the initial ridership and revenue forecasts that were 

presented in the November 2011 draft business plan. Authority officials 

said this update was done, in part, to build in additional conservatism in 

the ridership forecasts, in particular in the low scenario, and to avoid 

optimism bias. Among other updates, the Authority revised model 

assumptions to reflect changes in current and antiCipated future 

conditions for airfares and airline service frequencies, decreases in 

gasoline price forecasts, and anticipated declines in the growth rates for 

popUlation, number of households, and employment. Peer review groups, 

such as the Ridership and Revenue Peer Review Panel (Panel) 

established by the Authority, and academic reviewers have examined the 

Authority's ridership and revenue forecast methodology. These reviewers 

Page 12 GAO·13·1S3T 
122 


Insert offset folio 75 here 77211.075

recommended additional improvements to the model going forward.'" For 

example, in developing the forecasts used for the April 2012 revised 

business plan, the Authority relied on data from a 2005 survey that was 

conducted at airports, rail stations, and by telephone from August to 

November 2005." In a May 2012 report to the Authority, the Panel 

pointed out limitations with this data source and recommended that new 

data be collected to supplement the existing data for model enhancement 

purposes. Authority officials stated that they are currently developing a 

new revealed-preference and stated-preference survey to update the 

2005 survey data and that they plan to begin collecting this new survey 

data in December 2012.2° Portions of the new 2012 data will be used to 

re-estimate and re-calibrete the ridership model to develop updated 

ridership and revenue forecasts for the 2014 business plan. The Authority 

also plans to develop a new version of the model that will make full use of 

the new 2012 survey data; however, the new model is not expected to be 

developed in time for the 2014 business plan. It will be important to 

complete these future model improvements as the project is developed. 

Risks of inaccurate forecasts are a recurring challenge for sponsors of the 

project. Research on ridership and revenue forecasts for rail infrastructure 

projects have shown that ridership forecasts are often overestimated and 

actual ridership is likely to be lower. For example, a recent study 

examined a sample of 62 rail projects and found that for 53 of them, the 

demand forecasts were overestimated and that actual demand was lower 

than forecasted demand?' According to the Authority, the ridership and 

1sSeveral groups have examined the Authority's ridership and revenue forecast 

methodology including the Ridership and Revenue Peer Review Panel-a panel 

convened by the Authority to conduct an independent review of the Authority's ridershipBnd revenue-.forecasting process and outcomes. In addition, academic experts from the 

University of California Berkeley's Institute of Transportation Studies conducted a review 

of ridership and revenue forecast models used to develop forecasts in June 2010. 

19This survey data included revealed-preference and stated~preference mode choice data 

from alr, rail. and auto trip passengers. These data were used to construct a model of 

travelers' choices among different modes of travel, including high-speed rail, for different segments of the market. 

""In addition, the Authority conducted a supplemental trip-frequency survey in May 2011. 

These survey data were not used to replace the 2005 survey data but were used to 

enable recaJibration and validation to more recent conditions. 

"Sent Flyvbjerg. "Quality Control and Due Diligence in Project Management: Getting 

Decisions Right by Taking /he Outside View," International Journal of Project Management 

(November 2012), http://dx.doLorgI10.1016/j.ijproman.2012.10.007. 

Page 13 GA()"13·1&3T 
123 


Insert offset folio 76 here 77211.076

revenue forecasts, in its April 2012 revised business plan, include a wider 

range of ridership and revenue forecasts and lower ridership and revenue 

forecasts compared to earlier forecasts, to help mitigate the risks of 

optimism bias, In addition, the Authority performed a sansitivity analysis 

of an extreme downside scenario to test the ridership and revenue 

implications of a series of downside events coinciding, such as increased 

average rail-travel time from Merced to the San Fernando Valley and 

lower auto-operating costs, Based on this analysis, the Authority 

determined that an extreme downside scenario would be expected to 

reduce ridership and revenue forecasts by 27 percent and 28 percent, 

respectively, below that shown for the low forecasts in the April 2012 

revised business plan, According to the Authority, these forecasts would 

still be sufficient to cover the Authority's estimated operating costs and 

would not require a public operating subsidy. Authority officials stated that 

they intend to conduct additional sensitivity analyses going forward. 

Finally, accepted forecasting methods vary, and FRA has not established 

guidance on acceptable approaches to the development of reliable 

ridership and revenue forecasts. Industry standards vary, and FRA has 

established minimal requirements and guidance related to information 

HSIPR grant applicants must provide regarding forecasts. As we have 

previously reported, different ridership-forecasting methods may yield 

diverse and therefore uncertain results." As such, we have 

recommended that the Secretary of Transportation develop guidance and 

methods for ensuring reliability of ridership forecasts. Similarly, the DOT 

OIG has also recommended that FRA develop specific and detailed 

guidance for the preparation of HSIPR ridership and revenue forecasts." 

Best practices identified by various agencies and transportation experts 

have identified certain components of the ridership- and revenueforecasting process that affect results more than others and that are 

necessary for developing reasonable forecasts. Among others, key 

components include processes for developing trip tables:' developing a 

"DOT OIG, FRA Needs to Expand Its Guidance on High Speed Rail Project Viability 

Assessments, CR-2012-083, (Washington, D.C,: Mar. 28, 2012). 

"Trip tables are estimates of numbers of trips taken between specific locations. Top 

tab!es, in conjunction with mode-choice mode!s, provide the foundation for ridership 

forecasts. 

Page 14 GAO·13·163T 
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Insert offset folio 77 here 77211.077

Environmental Review and 

Right-of-Way Acquisitions 

May Increase Risk of 

Project Delays 

mode-choice model," conducting sensitivity analyses, and conducting 

validation testing. The Authority's forecasts included each of these key 

components in developing the ridership and revenue forecasts for the 

April 2012 revised business plan." While addressing these components 

does not assure ridership and revenue forecasts are accurate, it does 

provide greater assurance that the Authority's processes for developing 

these forecasts are reasonable. In our ongoing review of the California 

high speed rail project, we are evaluating the extent to which the 

Authority's ridership and revenue forecasts followed best practices when 

completing each of these tasks. We will present the results of our 

assessment of the Authority's process in our 2013 report on this subject. 

Among the other challenges facing the project, which may increase the risk 

of project delays, are potential legal challenges aSSOCiated with the 

environmental laws. Under the National Environmental Policy Act (NEPA) 

and the Califomia Environmental Quality Act (CEQA),27 government 

agencies funding a project with significant environmental effects are 

required to prepare environmental impact statements or reports (EIS/EIR) 

that describe these impacts.28 Under CEQA, an EIR must also include 

mitigation measures to minimize significant effects on the environment. The 

Authority is taking a phased approach to comply with NEPA and CEQA by 

developing EISIEIRs for both the project as a whole as well as for particular 

portions of the project. To date, program level EISIEIRs have been 

prepared for the project as a whole (August 2005) and for the Bay Area to 

Central Valley (initial certification by the Authorlly in July 2008 and a 

revised final EISIEIR issued in April 2012). Project level EISIEIRs have 

been prepared for the Merced-to-Fresno portion of the project (issued April 

2012), and a draft EIS/EIR has been prepared for the Fresno-to-Bakersfield 

portion of the project (initial draft issued in August 2011 and revised final 

issued July 2012). Environmental concerns have been the subject of legal 

25Mode..f;hoice models estimate how many travelers would choose the high-speed rail 

option versus other available modes of travel. 

26This includes validation testing of the ridership model, testing tha~ according to the 

Authority, was performed in January 2012 through a comparison of acrual ridership (2008) 

and 2030 forecasts on Amtrak's AceJa service on the Northeast Corridor. 

2742 U.S.C. § 4321 etseq. (NEPA); Cal. Pub. Res.Code § 21000 et seq. (CEQA). 

"Under NEPA, the dccument is referred to as an EIS. while under CEQA it is called an EIR. 

Page 15 GAO.13·163T 
125 


Insert offset folio 78 here 77211.078

challenges. For example, a lawsuit was filed in October 2010 against the 

Authority challenging the decision to approve the Bay Area to Central 

Valley segment based on an EIR alleged to be inadequate. Several 

lawsuits have been filed and these cases are still pending. 

The project also faces the potential challenge of acquiring rights-of-way. 

Timely right-of-way acquisition will be critical since some properties will be 

in priority construction zones. Property to be acquired will include homes, 

businesses, and farmland. Not having the needed right-of-way could cause 

delays as well as add to project costs. Acquisition of right-of-way will begin 

with the first construction segment, which has been subdivided into 4 

design-build construction packages. There are a total of approximately 

1 ,100 parcels to be acquired for this segment; all of which are in 

California's Central Valley. In September 2012, the Authority issued a 

Request for Proposals to obtain the services of one or more contractors to 

provide right-of-way and real property services. The Authority estimated in 

its April 2012 revised business plan that the purchase or lease of real 

estate for the phase I blended system will cost between $3.6 billion and 

$3.9 billion (in 2011 dollars). According to the Authority, the schedule for 

right-of-way acquisition will be phased, based on construction priorities with 

delivery of all required parcels in the Central Valley no later than spring 

2016. Acquisition is anticipated to begin in February 2013. The timely 

acquisition of rights-of-way may be affected by at-risk properties-that is, 

those properties that the Authority considers at-risk for timely delivery to 

design-build contractors for construction. 29 There could be a significant 

number of at-risk properties. For example, Authority officials told us there 

are about 400 parcels in the first construction package, about 200 of which 

are in priority construction zones. Of these, about 100 parcels (50 percent) 

are considered to be potentially at-risk for timely delivery. Since right-ofway acquisition has not yet begun, the extent that at-risk properties will 

ultimately affect project schedules or cost is not known. However, there 

may be an increased risk given the initial high percentage of at-risk parcels. 

29There could be a number of reasons why a property is deemed atMrisk, including 

instances where a property owner is contesting a property valuation or a property owner 

has not yet vacated a property. 

Page 16 GAO-13-163T 
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GAO Contacts and 

Staff 

Acknowledgments 

(<4"02) 

Chairman Mica, Ranking Member Rahall, this concludes my prepared 

remarks. I am happy to respond to any questions that you or other 

Members of the Committee may have at this time. 

For future questions about this statement, please contact Susan Fleming, 

Director, Physical Infrastructure, at (202) 512-2834 or flemings@gao.gov. 

In addition, contact points for our Offices of Congressional Relations and 

Public Affairs may be found on the last page of this statement. Individuals 

who made key contributions to this statement include Paul Aussendorf, 

(Assistant Director), Russell Burnett, Delwen Jones, Richard Jorgenson, 

Jason Lee, James Manzo, Maria Mercado, Josh Ormond, Paul Revesz, 

Max Sawicky, Maria Wallace, and Crystal Wesco. 

Pag917 GAO·13-163T 
127 


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128 


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A 

~GAO c Accountability" Integrity" Reliability 

United States Government Accountability Office 

Washington, DC 20548 

December 28,2012 

The Honorable John L. Mica 

Chairman 

The Honorable Nick J. Rahall 

Ranking Member 

Committee on Transportation and Infrastructure 

United States House of Representatives 

Subject: California High Speed Rail: Responses to Questions for the Record 

On December 6,2012, we testified before your committee with our preliminary 

assessment of the California High-Speed Rail project's cost estimates as well as our 

assessment of other challenges for the project at this time. 1 Members of the committee 

requested that we provide additional comments to a number of post-hearing questions. 

The questions and our answers are provided in enclosure 1. The responses are based on 

an ongoing assessment of the California High-Speed Rail project. We conducted this 

work in accordance with generally accepted government auditing standards. 

If you have any questions about this letter or need additional information, please contact 

me at (202) 512-2834 or flemings@gao.gov. 

Susan Fleming 

Director 

Physical Infrastructure 

Enclosure 

'GAO, High-Speed Passenger Rail: Preliminary Assessment of Califomia's Cost Estimates 

and Other Challenges, GAO-13-163T (Washington, D. C .. Dec. 6, 2012). 
130 


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Enclosure 

REPUBLICAN MEMBER QUESTIONS FOR THE RECORD 

To Susan Fleming, Director, Physical Infrastructure, GAO 

House Committee on Transportation and Infrastructure Hearing 

"The Federal Railroad Administration's High Speed and Intercity Passenger Program: 

Mistakes Made and Lessons Learned" 

Thursday, December 6, 2012 

1. Your testimony discussed the strengths and weaknesses ofthe Rail Authority's cost estimates, 

but what is your bottom line? 

Our evaluation is still ongoing, but based on our evaluation to date, wc found that the 

Rail Authority has produced a detailed construction cost estimate, but the operating cost 

estimate could be more detailed and better documented. In addition, the Authority did 

not conduct a risk and uncertainty analysis-and other tests-that would identifY the 

factors that could affect the reliability of the estimates and better ensure that that the cost 

estimates (both construction and operating) are neither overly conservative nor 

optimistic. 

2. From your review, what do you believe is California's greatest challenge in undertaking this 

project? 

One of the biggest challenges facing California's high-speed rail project is securing 

funding beyond the first construction segment. While the Authority has secured $11.5 

billion from federal and state sources for project construction, almost $57 billion in 

funding remains unsecured, based on current estimates. Ofthese unsecured funds, $38.7 

billion is currently expected to come from the federal government; however, Congress 

has not appropriated any funds for the High Speed Intercity Passenger Rail Program since 

fiscal year 2010. As a result ofthis challenge, the Authority is taking a phased 

approach-building segments as funds are available. The Authority has also identified 

funds from the state's newly implemented emissions cap-and-trade program, but the 

amounts and authority to use these funds have not yet been established. 

3. Your written statement notes that the Authority did not produce a risk and uncertainty analysis of 

the cost estimate, so what could that mean to the estimate? 

Page 1 

Because cost estimates predict future program costs, uncertainty is always associated 

with them. Recognizing the potential for error and deciding how best to quantifY it is the 

purpose of risk and uncertainty analysis. A risk and uncertainty analysis helps to 

determine the primary risk factors that affects costs and assesses the likelihood that they 

may occur. Doing so, helps assure policymakers, sponsors, and the public that cost 

estimates (both construction and operating) are neither overly conservative nor 

optimistic. 

GAO Responses to Questions for the Record 
131 


Insert offset folio 84 here 77211.084

Enclosure 

4. In your testimony, you state that "the Authority did not clearly describe certain assumptions 

underlying both cost estimates. For example, Authority officials told us that the California 

project will rely on proven high-speed rail technology from systems in other countries, but it is 

not clear if the cost estimates were adjusted to account for any challenges in applying the 

technology in California." Ifthe estimates were not properly adjusted, what would that mean for 

the estimates 0 f the costs? 

Our evaluation is still preliminary, but we could not determine how the cost estimates 

were adjusted to reflect certain key assumptions, including assumptions about how the 

construction and operation of high-speed rail technology in California might be different 

than has occurred in Europe and Asia and how these differences might affect California's 

cost estimates. 

5. To varying degrees, it seems that the GAO's three best practices for reliable cost estimates were 

not employed regarding the CHSR project, so what impact could that have on the cost estimates? 

As noted above, cost estimates predict future program costs and, therefore, uncertainty is 

always associated with them. Adherence with GAO's Cost Guide reduces the risk of cost 

overruns and missed deadlines. Further, the quality of any cost estimate could be 

improved as more information becomes available. 

Based on our initial evaluation ofthe Authority's cost estimates, GAO found that they 

exhibit certain strengths and weaknesses when compared to best practices in GAO's Cost 

Guide. The Authority is currently taking some steps to improve its cost estimates, such 

as by contracting with the International Union of Railways to assess and potentially 

revise their operating cost estimates. 

6. Your testimony noted that the Authority has identified revenues from California's State cap-andtrade program as a back-up source offunding. From your review, what are some concerns about 

that source of funding for this project? 

There are three potential obstacles to securing funding from California's cap-and-trade 

program: 

• Amounts that might be raised by the program have yet to be determined. 

Revenues are not currently earmarked to high-speed rail; funds would have to be 

appropriated to the project. 

• California's Legislative Analyst's Office has raised concerns that high-speed rail may not 

be eligible for cap-and-trade revenues because it does not meet the goals ofthe state's 

greenhouse gas reduction program. 2 

2 See legislative Analyst's Office. The 2012-2013 Budget: Funding Requests for High Speed Rail (Sacramento. CA: 

Apr. 17. 2012). 

Page 2 GAO Responses to Questions for the Record 
132 


Insert offset folio 85 here 77211.085

Enclosure 

7. How has the Authority planned for mitigating the risk ofNEPA review or right-of-way 

acquisition holding up the project's construction schedule? 

Page 3 

As we testified, the lawsuits that have been filed are still pending. In addition, right-ot: 

way acquisition has not yet started. As a result, the potential risk of schedule delays from 

either issue is unknown. However, both represent potential risks for the project. The 

Authority's April 2012 Revised Business Plan recognizes both environmental issues and 

right-of-way acquisition as potential project risks. The plan identifies a number of 

possible mitigation strategies, including ensuring the right-of-way and environmental 

approval processes are legally compliant and aligned to project delivery schedules, 

pursuing methods to transfer risk related to obtaining permits and other governmental 

approvals to design-build contractors, and engaging right-of-way firms with significant 

experience. 

GAO Responses to Questions for the Record 
133 


Insert offset folio 86 here 77211.086

Enclosure 

QUESTIONS FOR TIlE RECORD To Ms. SUSAN FLEMING 

DIRECTOR, PHYSICAL INFRASTRUCTURE, GOVERNMENT ACCOUNTABILITY OFFICE 

FROM THE HONORABLE CORRINE BROWN 

RANKING DEMOCRAT, SUBCOMMITTEE ON RAILROADS, PIPELINES AND HAZARDOUS MATERIALS 

COMMITrEE ON TRANSPORTATION AND INFRASTRUCTURE 

HEARING ON 

"AN UPDATE ON THE HIGH SPEED AND INTERCITY PASSENGER RAIL PROGRAM: 

MISTAKES MADE AND LESSONS LEARNED" 

DECEMBER 6, 2012 

1. GAO reviewed FRA's selection process and found that "FRA established a fair and objective 

approach for distributing Recovery Act funds and substantially followed recommended 

discretionary grant award practices used throughout the government." Can you elaborate on 

your findings? 

In March 2011, we reported on the Federal Railroad Administration's (FRA) grantmaking practices related to administration of appropriations for high-speed and 

conventional-speed passenger rail projects. We found that FRA substantially followed 

recommended practices when awarding grants. These practices included communicating 

key information to applicants prior to the competition, planning for the competition, 

using a merit review panel with certain characteristics, assessing whether applicants were 

likely to be able to account for grant funds, notifYing applicants of award decisions, and 

documenting the rationale for awards decisions (albeit generally). We also found that 

FRA had applied its established criteria during the eligibility and technical reviews. 

However, we could not verifY whether it applied its final selection criteria because the 

documented rationales for selecting projects were typically vague. We concluded that 

without a detailed record of selection decisions, FRA leaves itself vulnerable to criticism 

over the integrity ofthose decisions. Our report recommended that FRA create additional 

records to document substantive reasons behind award decisions to better ensure 

accountability for federal funds. For more information, a copy ofthe report can be found 

at http://www.gao.gov/products/GAO-II-283. 

2. To clarifY the use ofthe GAO's Cost Estimating and Assessment Guide, are the guidelines 

standard requirements for federally funded transportation projects? Ifnot, was the California 

High Speed Rail Authority under any obligation to use those guidelines? 

Page 4 

GAO's Cost Estimating and Assessment Guide presents the best practices for cost 

estimating, but do not constitute requirements. GAO developed the Cost Guide as a best 

practice for cost estimators, and it has been used to evaluate the reliability of cost 

estimates oflarge acquisitions across government. Therefore, FRA does not require the 

California High-Speed Rail Authority or any other HSIPR recipient to adhere to the Cost 

Guide. 

GAO Responses to Questions for the Record 
134 


Insert offset folio 87 here 77211.087

Enclosure 

3. Follow-up: In spite of not being required to follow the GAO Cost Guide, it appears from your 

written statement that the Authority's process was very consistent with your guidelines, is that 

correct? In other words, is it fuir to say that the California High Speed Rail Authority has used 

what would be considered best practices in its work? 

Our evaluation is still preliminary; however, the California High Speed Rail Authority's 

cost estimates exhibit strengths and weakness with respect to the best practices in GAO's 

Cost Guide. For example, the Rail Authority has produced a detailed construction cost 

estimate. However, the operating cost estimate could be more detailed and better 

documented. More importantly, the Rail Authority did not conduct a risk and uncertainty 

analysis that would help ensure that that their cost estimates (both construction and 

operating) are neither overly conservative nor optimistic. 

4. As you have been working on your assessment of the California high-speed rail project, has the 

California High-Speed Rail Authority been open and responsive? 

The California High Speed Rail Authority has been open and cooperative throughout our 

review. Authority officials and their contractors have been made available to GAO and, 

thus far, have answered all of our questions. In addition, all requested documents have 

been given to us on a timely basis. 

5. You mentioned that the California High-Speed Rail Authority is taking steps to improve its cost 

estimates in those areas that you found weak. Can you please elaborate on what the Authority is 

doing to improve these estimates? 

Page 5 

Our review is ongoing, but the Rail Authority is improving its operating cost estimates by 

contracting with the International Union of Railways to evaluate the cost model and 

provide recommendations. For example, this evaluation will include a new set of 

operating unit costs derived from their evaluation of foreign high-speed rail systems. In 

addition, the Rail Authority will have the opportunity to update the construction cost 

estimates with the results of contractor bids for the initial construction projects in the 

Central Valley. And Authority officials told us that they are in the process of developing 

a sensitivity analysis oftheir second construction package (beyond the first 30-mile 

construction package). 

GAO Responses to Questions for the Record 
135 


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AMERICAN ASSOCIATION OF 

STATE HIGHWAY AND 

TRANSPORTATION OFFICIALS 

AASH 0 THE VOICE OF TRANSPOR ATION 

TESTIMONY OF 

Paula}. Hammond, P.E. 

Secretary of Transportation, Washington State 

ON BEHALF OF THE 

American Association of State Highway and Transportation 

Officials (AASHTO) 

REGARDING 

An Update on the High Speed and Intercity 

Passenger Rail Program: Mistakes Made and 

Lessons Learned 

BEFORE THE 

Committee on Transportation and Infrastructure 

of the United States House of Representatives 

ON 

December 6, 2012 

American Association of State Highway and Transportation Officials 

444 North Capitol Street, N.W., Suite 249 

Washington, D.C., 20001 

202-624-5800 

www.transportation.org 

info@aashto.org 
136 


Insert offset folio 89 here 77211.089

I-I u u s l,.' Co III In Itt c ('on T ran ~ II t) r! n t 1 (\ n ,;!1 d 1:1 t r ,1 :; ; rue I u r c Page I 2 

Thank you, Chainnan Mica and Ranking Member Rahall, for inviting me to participate in this 

important and timely hearing. The states are the ones responsible for delivering projects funded 

through the High-Speed and Intercity Passenger Rail (HSIPR) Program and we have an 

interesting and unique story to tell. Washington State is fortunate to have two members of our 

congressional delegation who serve on this distinguished panel Representatives Rick Larsen 

and Jaime Herrera Beutler. They are tenacious advocates for our state's transportation system 

and our interests are certainly well represented here in the "other" Washington. 

I am here today wearing three hats - as the Transportation Secretary for Washington State, the 

Chair of AASHTO's High-Speed and Intercity Passenger Rail Leadership Group, and as Chair of 

the States for Passenger Rail Coalition, a coalition of 34 states that work together to support the 

development and growth of intercity passenger rail service for America. The HSIPR Program 

has been a positive development for Washington State and for states across the country. In 

Washington it is helping us make significant improvements to our existing intercity passenger 

rail service to get to what I like to call "higher-speed" rail, while in other states it is building true 

high-speed rail. 

The program provides many benefits for the nation and states, but like all new programs, there 

have been significant challenges and there is room for improvement. Today I'll address four 

issues: 1) Washington's experience with the HSIPR Program and the experience of my 

colleagues in other states; 2) thoughts on where the program has succeeded and where it can be 

improved; 3) the great relationship between Washington and our Class I freight railroad host; and 

4) policy suggestions for reauthorization of the Passenger Rail Investment and Improvement Act 

(PRIIA) next year. 

AMTRAK CASCADES SERVICE 

First, I'd like to share some background on our passenger rail service in Washington. The 

Washington State Department of Transportation (WSDOT) oversees the management of the 

Amtrak Cascades intercity passenger rail service along the Pacific Northwest Rail Corridor, one 

of 11 federally-designated high-speed rail corridors in the U.S. The corridor is 467 miles long, 

stretching from Vancouver, British Columbia in Canada south through Seattle and Portland to 

Eugene, Oregon. 

WSDOT and the Oregon Department of Transportation (ODOT) currently pay for the majority 

of the costs of the Amtrak Cascades and we will soon take over the full cost of this statesponsored service. Amtrak is our partner and operator. We first partnered with Amtrak to offer 

the Cascades service between Seattle and Portland in 1994, nearly 20 years ago. That service has 

since expanded south to Eugene and north to Vancouver. We currently offer 11 daily trips - four 

daily round trips between Portland and Seattle; one daily round trip between Seattle and 

Vancouver, B.C., and one between Portland and Vancouver, B.C.; and daily service between 

Eugene and Seattle, via Portland. As of December 2011, Washington State has invested nearly 

$478 million of its own funds in the service, for both capital projects ($221 million) and 

operating costs ($257 million). During that same time, Oregon has invested $115.3 million of its 

funds in the service ($42.6 million for planning and capital, and $72.7 million for operations). In 

1994 we served 180,209 passengers and our ridership has grown steadily since then in 2011 we 

served nearly 850,000 passengers. Our farebox recovery has increased to nearly 66 percent. 

Testimony of Paula J. Hammond, P.E. 

Secretary of Transportation, Washington State 
137 


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j-!ouse- CnmJnittce on Transportation and Inl'rastructure Page I 3 

PARTNERSHIPS AND A CORRIDOR ApPROACH 

Operating intercity passenger rail service requires many partnerships - we work with Oregon, 

British Columbia, Amtrak, three railroads, including BNSF, a train manufacturer, and 

international customs and border control agencies. These partnerships are managed through 

constant collaboration, service contracts and operating agreements. We are working with our 

partners to develop agreements to manage the service using a corridor approach, rather than each 

state or province managing its own segment. 

Recognizing that passenger rail corridor development is a cooperative effort, this past spring 

WSDOT and ODOT entered into a Memorandum of Understanding (MOU) establishing the 

development of a Pacific Northwest Rail Corridor plan between the states. The plan will result in 

a documented process by which WSDOT and ODOT will work together. The Corridor 

Management Plan will be consistent with both state rail plans, and will serve as an element of the 

FRA-required Service Development Plan. We will continue to work with British Columbia to 

add them to the partnership. Managing the service using a corridor partnership approach has 

many advantages for planning and funding support that would not occur otherwise. 

WASHINGTON'S EXPERIENCE WITH THE HSIPR PROGRAM AND JOBS SUPPORTED 

While WSDOT has invested a substantial amount of state funds into our passenger rail service 

over the years, it wasn't until creation of the HSIPR Program and its funding through the 

American Recovery and Reinvestment Act (Recovery Act) that we were able to begin to make 

the necessary capital improvements to significantly improve our service. WSDOT is investing 

nearly $800 million in HSIPR funds with the goal of providing faster, more frequent Amtrak 

Cascades service with better schedule reliability. While some states are able to pursue true highspeed rail today, and that is the right choice for them, Washington will use our federal funds to 

take a more incremental approach to increase our service, speed and reliability, what is called 

"higher-speed rail." 

The HSIPR grant program has allowed us to begin to make critical improvements to the 

Washington segment of the Pacific Northwest Rail Corridor that wouldn't have been possible 

without the federal funds. The projects include additional rail-line capacity and upgraded tracks, 

utilities, signals, passenger stations and advanced warning systems. WSDOT will also purchase 

eight locomotives and one new trainset. These projects, all scheduled to be complete by 2017, 

will result in two additional round trips, improved on-time performance for business and leisure 

travelers (88% on-time performance), and reduced travel time between Seattle and Portland (10 

minutes). 

FRA has approved 11 projects to begin design andlor construction (see the attached project list), 

and five federally-funded projects are under construction: 

• Tacoma 0 to M Street New Sounder commuter rail service to Lakewood, W A began 

October 8'h(Complete). 

• King Street Station Seismic Improvements - Scheduled for completion in May 2013 

(Underway). 

• Port of Vancouver Freight Access Improvements - Scheduled for completion in winter 

2015 (Underway). 

Testimony of Paula J. Hammond, P.E. 

Secretary of Transportation, Washington State 
138 


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1-1 (.) U .s c C (l m 111 i 1 t C ('on T I ,\ II S po r 1 ,J 1 I l\ 11 C\ 11,J I n I ;... \ rue t u r c 

• Everett Storage Track - Track laying will be completed in December, with the tracks 

operational by the end of the year (Underway). 

• Corridor Reliability South - Track replacement began in October 2012 (Underway). 

Five more projects will begin construction in 2013 and more than $55 million in construction 

spending is anticipated by the end of2013. To date, WSDOT has received $13.2 million in FRA 

reimbursements and expects reimbursements to increase significantly as more projects move into 

construction next year. 

Additionally, WSDOT and FRA published the Environmental Assessment for the Point Defiance 

Bypass Project and completed the public review period in November. The Point Defiance 

Bypass is a capital rail project proposing to reroute trains from the BNSF Railway main line that 

runs along southern Puget Sound to an existing rail line along the west side ofInterstate 5, and was 

included in the Obama Administration's "We Can't Wait" Initiative. Per that Initiative, FRA is 

expected to issue its environmental decision document by the end of2012. A favorable decision 

would allow WSDOT to move forward with final design of the project by the end of 20 14 and 

construction would begin in 2015. New service on the bypass would start in 2017. 

WSDOT has worked with the Governor's Office of Financial Management Forecast Division to 

estimate the job impact associated with our high-speed rail program. Calculations conclude these 

investments supports more than 2,300 direct, indirect or inducedjobs over the life o/the 

program. 

HSIPR PROGRAM EXPERIENCES OF OTHER STATES 

States across the country are investing HSIPR dollars to both improve existing passenger rail 

service and move to high-speed service. 1'd like to share a few examples of how states are 

investing these valuable dollars: 

• In Michigan, they're investing over $400 million from the HSIPR Program to refurbish or 

build new stations, provide a new connection track for passenger operations in West 

Detroit, and to purchase and improve a 135-mile segment of the Chicago Hub HighSpeed Rail Corridor between Kalamazoo and Dearborn. The improvements between 

Kalamazoo and Dearborn in order to reach 110 mph passenger operations will complete 

nearly 80 percent ofthe route between Detroit and Chicago; this work will result in a 30-

minute reduction in travel time, improved reliability and on-time performance. 

Currently, Amtrak's Wolverine and Blue Water services run on this line, and as you 

know, Michigan reached 110 mph speeds on Amtrak-owned track between Porter, IN and 

Kalamazoo, MI in February of this year. Investment in intercity passenger rail will 

provide economic benefits to Michigan citizens including increased job growth, increased 

property values, expanded labor markets, increased safety and reduced emissions. 

Improvements at rail stations are also crucial. Modernizing stations and rail travel in 

general will help business development and increase job growth. 

• Vermont recently completed upgrades and repairs along 190 miles of track between St. 

Albans, Vermont and the Massachusetts border for Amtrak's Vermonter Service. It was 

one of the first major rail corridor projects completed with HSIPR funds, and invested 

$52.7 million in federal funding that was matched with $20 million from a private rail 

Testimony of Paula J. Hammond, P.E. 

Secretary of Transportation, Washington State 
139 


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Ii 0 usc Com m i 11 C l' 0 n T r ,) J) S P 0 r t :! l j ,) n '-I n J I n r r J :.. 1 rue I u r c Page I 5 

partner. The improvements will result in increased speeds, reduced travel time, greater 

reliability, and an increased number of trains traveling each day. The Vermonter project 

also represents one segment of a well-coordinated, multi-state effort to improve and 

expand the use of rail, both passenger and freight, in the Northeast and is a precursor to 

restoring an international passenger rail connection that will facilitate trade and travel 

between the region and Montreal, Canada with direct access into the Northeast Corridor. 

• Just last month, the Northern New England Passenger Rail Authority (NNEPRA) 

expanded its Downeaster Service northward by launching its new Brunswick to Freeport, 

Maine service. The project was made possible by $38.3 million in HSIPR funding and 

required improvements to more than 30 miles of rail, owned primarily by Pan Am 

Railways between Portland and Brunswick, rehabilitation of 36 crossings and 

construction of two station platforms. The HSIPR Program has been a "game changer" 

in Maine and the new service is expected to add 36,500 more passengers each year. 

• North Carolina is investing $546.5 million in federal Recovery Act HSIPR funding, $21 

million in HSIPR funding from the appropriations process, and has obligated $600 

million for its Piedmont Improvement Program including these sources. In addition, 

efforts are under way to enter into a joint developer contract for the Charlotte Gateway 

Station project and $60 million in Recovery Act, TIGER, state and local funds have been 

allocated for its Raleigh Union Station project. The Piedmont Improvement Project will 

improve the safety and efficiency of the rail system and includes approximately 12 

highway overpasses and underpasses of the railroad, approximately 30 miles of railroad 

roadbed grading, structures projects, and railroad track and signal projects. There are 

also rail equipment improvements, passenger station improvements, and equipment 

maintenance facility improvements included in the program. Three current frequencies 

of the Piedmont and Carolinian passenger rail services now serve more than 450,000 

passengers annually between Raleigh and Charlotte. When completed, the Piedmont 

Improvement Program will expand service along the Piedmont Corridor to five daily 

round trips. 

HSIPR PROGRAM SUCCESSES AND ROOM FOR IMPROVEMENT 

Washington's experience with the HSIPR Program has consistently progressed and overall has 

been a positive experience. The program's benefits are numerous, including job creation, 

economic benefits around station re-development, improvements to clean air by emissions 

reductions, and rail manufacturers increasing their production capacity and creating family-wage 

jobs here in the U.S. It's helping states make rail an even safer, faster, and more efficient travel 

option. More states are working with Amtrak to improve the services they support and 

passengers are responding in record numbers. Amtrak reports record-breaking ridership 

nationally in 2012 and since fiscal year (FY) 2000, Amtrak ridership is up 49 percent. We're 

seeing increases in revenue and growing farebox recovery. 

While we are seeing many successes, with any new program there is room for improvement. It's 

been a challenge for a safety agency to quickly become a grant-making agency, with very limited 

staff. Let me be clear, FRA staff are dedicated and doing an admirable job standing up a new 

program. I have the following suggestions for how the program can be improved. 

Testimony of Paula J. Hammond, P.E. 

Secretary of Transportation, Washington State 
140 


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I-lou,:,c COml1l111Ce (.)11 Transportatiull itnd !nf'<lstrllclUrC Page I 6 

Improve FRA Guidance 

Washington's number one concern with the HSIPR Program has been the lack of guidance from 

FRA. Because this is such a new program, all of the necessary guidance has yet to be established 

and FRA staff is hamstrung by the lack of established procedures and seem unable to confidently tell 

us what information we need to provide them with. Instead we get caught up trading information that 

is off the mark. At WSDOT, we have named it the "bring me a rock; no, not that rock" 

syndrome. When asked to provide FRA with information for project agreements and other 

documents they can't give us specifics of what they want or need; instead they tell us no to what we 

give them until we hit upon the right information that seems to meet their needs. We have written 

process guidance for Washington's program for FRA's review and approval in an effort to keep 

projects moving forward. 

Suggestion: Develop program delivery guidance. 

Increase FRA Resources 

Similar to the lack of guidance, FRA appears to lack the resources to be able to commit to and 

keep to a schedule. FRA has been unable to commit to schedules due to a lack of resources, 

which slows progress. Following the Presidential Directive, the "We Can't Wait" Initiative, FRA 

re-allocated resources to the Point Defiance Bypass Project Environmental Assessment, which 

reduced the project schedule by six months. 

Suggestion: A stronger use of consultants may augment FRA staff workloads to provide 

effective scheduling and speed review times and approval processes. 

Improve Coordination between Modal Agencies 

There could be better coordination between FRA, FHWA and FT A, particularly on NEP A 

documents. For instance, there are times when FRA could significantly speed up the NEPA 

process by adopting another USDOT modal agency decision document. As an example, 

WSDOT has had that experience with our Point Defiance Bypass Project, where FHW A 

approved a Documented Categorical Exclusion (CE) in 2008 and when we were later awarded 

HSIPR funds in 2010, FRA notified us that it could not accept the Documented CE and that we 

must prepare an Environmental Assessment instead. IfFRA had the ability to rely on another 

USDOT agency's decision for the same federal action, we believe the project would have been 

completed in tandem with the other corridor improvements coming on-line this year. 

FRA recently proposed seven new CEs in a Federal Register notice, and we agree all seven are 

needed, but we encourage FRA to go further. We suggest FRA consider adding a provision that 

allows the agency to make use of other USDOT modal agency CE lists, and we would like to see 

FRA obtain similar authority to that of FHW A for the issuance of Documented CEs for activities that 

are not explicitly listed as categorically excluded. Finally, we would like to see FRA obtain the 

authority to adopt another USDOT modal agency decision document, including adopting 

Documented CEs. 

Suggestion: Provide FRA the ability to rely on another USDOT agency's decision for the same 

federal action. Additionally, USDOT should continue to press for alignment between its modal 

agencies, so that each agency can take advantage of the expertise from its sister agencies. USDOT, 

Testimony of Paula J. Hammond, P.E. 

Secretary of Transportation, Washington State 
141 


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I-louse CommittC'l' 011 TfJn .... pollalioJ] .)ild !nrra:"lruclufc Page I 7 

like many state DOTs across the country, is working to improve its "one DOT" approach within its 

modal divisions, and these changes would aid those efforts. 

Buy America Waivers 

The need for Buy America waivers in certain circumstances has also proved challenging. While 

rebuilding America's rail manufacturing industry is a commendable goal, the reality is FRA's 

lack of Buy America waivers has hindered our ability to deliver projects. As an example, earlier 

this year we worked with BNSF to submit a Buy America waiver for two small parts used to 

attach rail to concrete ties at a cost of $6 each. These parts are only made in Germany and were 

necessary for our $3.5 million Everett Rail Yard Project. Unfortunately the process to obtain the 

needed waiver took five months and required a justification of each individual part. While we 

ultimately obtained the waiver, FRA's inconsistent guidance on the approval process almost 

delayed construction for a year as we nearly missed the construction season window for BNSF to 

schedule the track laying equipment. 

Suggestion: Allow time to transition to 100 percent Buy America. In the meantime, provide 

states with consistent guidance from FRA on how to obtain necessary waivers. 

Performance-Based Program 

Finally, the HSIPR Program should be a performance-based program. FRA should be concerned 

that we meet our performance outcomes, per the service outcome agreements we have signed, 

not what type of rail tie clips we're using. FRA's interest in the minute detail of our projects 

means our schedules and deadlines often slip. All too often deadlines are missed because FRA 

staff want one last look at a document or submit additional edits to a document we thought was 

final. States build multi-million and billion dollar transportation projects every year and we 

know what we're doing. 

Suggestion: Allow states to manage the risk and deliver the projects we have committed to 

deliver. 

RELATIONSHIP BETWEEN WSDOT AND BNSF 

In addition to our partnership with FRA to deliver projects through the HSIPR Program, delivery 

of those projects wouldn't be possible without our strong partnership with host railroad BNSF, as 

our service runs along their mainline. While I can't speak for the experience of other states and 

their host freight railroads, we have found BNSF to be a valuable partner in helping us reach our 

goals for improved service, speed and reliability. BNSF has assembled a skilled team to deliver 

WSDOT's projects, and has been flexible to meet the federal funding requirements. Through our 

construction and maintenance agreement with BNSF, we have committed to pay our share of the 

maintenance costs on their mainline for twenty years. This means BNSF is in no way required to 

subsidize passenger rail. 

PRIIA REAUTHORIZATION SUGGESTIONS 

Finally, as I mentioned in my introduction, this hearing is very timely. It is a great opportunity 

to discuss where the HSIPR Program has been and where it should go, particularly given the 

need to reauthorize PRIIA next year. Both the States for Passenger Rail Coalition and AASHTO 

Testimony of Paula J. Hammond, P.E. 

Secretary of Transportation, Washington State 
142 


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Ituu,",c CommIttee on Trall:,:p(\l"latlon and Infrastructure 

will be submitting fonnal suggestions for PRIIA reauthorization early next year, but I would like 

to mention a few policy proposals we plan to submit for your consideration. 

• PRIAA reauthorization should continue the same level of funding as the level authorized 

for FY 2013 for the Capital Assistance for Intercity Passenger Rail Service (Section 301), 

Congestion Grants (Section 302) and High-Speed Rail Corridor (Section 501) programs. 

• As the Congress considers providing additional dedicated capital investment for 

transportation, please include a dedicated source of capital funding for the HSIPR 

program. This would bring modal parity by providing dedicated revenue similar to what 

the federal government already provides for highways, transit and aviation. 

• Make intercity passenger rail eligible for Transportation Development Credits (i.e. toll 

credits). We encourage you to expand the use of Transportation Development Credits to 

allow states to use the credits toward the non-federal share for the completion of intercity 

passenger rail projects. Current law allows states to utilize this funding tool for a variety 

of highway and transit projects. By allowing the use of Transportation Development 

Credits for intercity passenger rail projects, states will be provided the freedom and 

flexibility to stretch their transportation dollars further. 

• Allow the use of Section 301 funds for operating costs during the transition required in 

PRIIA Section 209. This will allow states the time to obtain the state funding necessary 

to take over the full cost of state-supported Amtrak service, as called for in PRlIA. 

• Provide intercity passenger rail with the same environmental and historic preservation 

regulations as other modes were provided in SAFETEA-LU and MAP-21. 

• Direct FRA to accelerate the distribution of guidance for the HSIPR Program. 

CONCLUSION 

Thank you for the opportunity to share Washington's experience with this valuable program. 

Despite a fragile national economy, intercity passenger rail ridership continues to grow across 

America. As the retail price of motor fuel continues to rise without predictability, people are 

turning to rail to help meet their mobility needs. The challenges for states include delivering the 

projects, keeping the planning and environmental documentation efforts on track, agreeing to a 

new cost accounting regime with Amtrak (PRlIA Section 209), and bringing on line a new 

generation of equipment. These are things states are experienced at: we build strong 

infrastructure, plan, develop, and purchase capital goods. We will continue to work hard to 

maintain a strong working relationship with our freight hosts and partners. 

The IiSIPR Program is helping to create and save good-paying jobs as we work to modernize the 

nation's rail infrastructure and it is revitalizing rail manufacturing in America. These 

investments will help make intercity train services more frequent and reliable, providing more 

people better travel options. Lack of funding for the HSIPR Program in FY 2011 and FY 2012 

put a pause button on the program and allowed FRA and states to get funding obligated and 

projects underway. The program should be funded again moving forward. As states construct 

Testimony of Paula J. Hammond, P.E. 

Secretary of Transportation, Washington State 
143 


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House COlllmitlcc on TranSpOr!<it!OIl Clnd !nfrd:-rlructure Page I 9 

their projects, create jobs, and prove how successfully we can invest federal funds, we need 

Congress to continue to partner with us and provide additional funding so we have a long-term, 

predictable source of federal matching funds. HSIPR is an investment worth making. As a state 

official, I respect the budgetary challenges facing Congress. I believe that investments in 

intercity passenger rail will provide a positive rate of return for the nation both now and well into 

the future, and urge your support for continuing the HSIPR Program. 

Testimony of PauIa J. Hammond, P.E. 

Secretary of Transportation, Washington State 
144 


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I J ,) U" C (. \) n1 111 i 1 i L' C (11~ I j d 11" P \11 t;! 1) I' 1; d n d ! ,1 f, d" II II ,-' 111! \.' 

..!. ~ 

Project Name Funding Current work 

Amount phase 

Tacoma - D to M St. $21.3 Construction 

Connection million 

Tacoma - Point $89.1 Environmental 

Defiance Bypass million 

Vancouver - Rail Yard $28.5 Design 

Bypass million 

Kelso Martin's Bluff- $36.5 Design 

ToteffSiding million 

Kelso Martin's Bluff- $34.7 Design 

New Siding million 

Kelso Martiu's Blnff- $123 Design 

Longview Jct. million 

Everett - Storage Track $3.5 million Construction 

Corridor Reliability $91.8 Construction 

South million 

Advanced Wayside $60.1 Construction 

Signal System million 

King Street Station $50.4 Design 

Tracks million 

New Train Set $23.5 Procurement 

million planning 

Program Management $30 million N/A 

Corridor Reliability $57.3 Design 

Upgrades North million 

Vancouver - New $10 million Design 

Middle Lead 

Blaine Swift Customs $5 million Design 

Facility 

New Locomotives $46.7 Procurement 

million planning 

Corridor Reliability $16.1 Design 

Supplemental Work million 

Vancouver Port Access $15 million Construction 

Rail Improvements 

Mount Vernon Siding $3.3 million Design 

Extension 

Tukwila Station $7.9 million Design 

King Street Station $16.7 Construction 

Seismic Retrofit million 

Testimony of Paula J. Hammond, P.E. 

Secretary of Transportation, Washington State 

Begin 

construction 

October 2010 

March 2015 

March 2013 

April 2014 

April 2014 

April 2014 

April 2012 

October 20 II 

November 2012 

July 2014 

November 2015 

N/A 

November 2013 

March 2013 

August 2013 

November 2015 

June 2014 

June 2012 

July 2013 

March 2013 

March 2012 

1':: c I 10 

-;;;;"'~"'CUlI" 

Open for 

service 

October 2012 

June 2017 

July 2015 

August 2015 

August 2017 

August 2017 

December 2012 

September 2016 

November 2015 

May 2016 

June 2017 

N/A 

May 2016 

December 2014 

October 2014 

June 2017 

August 2016 

November 2014 

August 2014 

March 2014 

May 2013 
145 


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House Committee on 

Transportation and Infrastructure 

Chairman John L. Mica 

Hearing on: 

An Update on the High-Speed 

and Intercity-Passenger-Rail-Program 

Statement for the Record by: 

Ann L. Schneider 

Secretary 

Illinois Department of Transportation 

December 6,2012 

Wof ~11nois~ TranspOrtatIon 
146 


Insert offset folio 99 here 77211.099

Chairman and Members of the Committee, I appreciate the opportunity to submit 

testimony on behalf of Illinois Govemor Pat Quinn conceming An Update on the 

High-Speed and Intercity-Passenger-Rail Program to the House Committee on 

Transportation and Infrastructure. 

I would like to thank the Members of this Committee, the House of Representatives, 

the Senate, and the Obama Administration for supporting a healthy intercitypassenger-rail system, for their leadership on attending to freight rail infrastructure 

needs and for supporting passenger rail service with words and money. We are 

very grateful for the investments from the American Recovery and Reinvestment Act 

which yielded over $1.4 billion for Illinois high-speed rail. 

If there is one thing I want to leave you with it is the following: investments in Illinois' 

high speed passenger rail system have grown our economy and we could not have 

done it without the federal govemment's help. We need more funding for high speed 

rail - including the TIGER grants and Projects of Regional and National Significance 

- so that we can finish the job that we have started. These are investments that will 

pay dividends and the American people deserve no less. I am asking Congress to 

appropriate additional dollars for states that are making these investments, including 

Illinois. 

My predecessor began his remarks at a 2010 hearing in Chicago on high-speed rail 

with the following question: What would have been the destiny of the State of Illinois, 

and the entire Midwest, had the nation's rail system not been centered in Illinois in 

the mid-nineteenth century? Without reservation, I can tell you that neither Illinois 

nor the region would be the transportation hub of the nation that it is today; it would 

not be known for its diverse economic base and mix of urban and rural settings that 

make it a microcosm of the nation. In 1850, just over 100 miles of strap rail were in 

service in Illinois. By 1860, a 2,790"mile rail system bound the state together. 

Today, Illinois hosts an extensive rail network of more than 7,000 miles of track 

transporting both passengers and freight. 

Amtrak service in key travel corridors is an important component of Illinois' current 

multimodal transportation network. Amtrak operates 58 trains within, and 

throughout, our state, of which 38 trains provide service along four corridors: 

Chicago to Milwaukee; Chicago to Springfield to St. Louis; Chicago to Galesburg to 

Quincy; and Chicago to Champaign to Carbondale. Illinois is proud to provide 

operating support for 28 of those 38 trains, which carried 2.2 million passengers in 

the federal fiscal year that ended September 30, 2012. Ridership growth in Illinois 

has been exceptional over the last several years-a 5.6 percent increase in the last 

year, and more than 74 percent in the last 6 years. While ridership on every Illinois 

corridor has grown, the surge on the Chicago to St. Louis Corridor has led the way, 

with 10.8 percent growth last year and 224 percent growth since 2006. That is why 

we are so excited about 110 mile per hour service coming to the corridor in 2015, 

and why we were so proud to debut this higher-speed service on October 19, 2012, 

along the Dwight to Pontiac segment of the corridor with Secretary LaHood and 

Secretary Ann L. Schneider 

Illinois Department of Transportation Update on High-Speed and Intercity Passenger Rail 

December 6, 2012 

PAGE 2 OF 11 
147 


Insert offset folio 100 here 77211.100

Governor Quinn on the train. We are particularly excited that this past Thanksgiving, 

we were able to begin and deliver to our customers - the general public- that 110 

mile per hour experience along that segment. 

Intercity passenger rail is an integral part of our state, regional and national 

transportation systems. Passenger rail stimulates economic development as we 

have seen along the Chicago to St. Louis corridor most visibly in the town of Normal 

where a new multi-modal station has been constructed, and soon in Joliet where we 

have just begun construction on a new multi-modal station. 

Just as important, passenger rail promotes energy conservation and provides 

environmental, safety, mobility and security benefits that complement our highway, 

mass transit and aviation systems. Even more to the point, passenger rail 

represents a critical asset at a time when increasing congestion within the highway 

and air transportation modes is inducing states to search for cost-effective ways to 

provide increased transportation capacity. 

Illinois is a leader among the states providing passenger-rail service to our citizens. 

We are proud of the support provided by the Illinois General Assembly that has 

enabled us to sponsor this important service for nearly 40 years. As you are aware, 

passenger rail in the past has been chronically underfunded. In the late 1990s when 

federal support for Amtrak was severely constrained, the Illinois Department of 

Transportation (IDOT) implemented cost-reduction strategies and negotiated new 

state-supported contracts with Amtrak. 

Illinois can also lay claim to the largest one-time service expansion in the nation. In 

October 2006, through a combination of local initiatives, grassroots efforts and the 

responsiveness of the Illinois General Assembly, the state doubled its investment in 

rail operations from $12 million to $24 million. We were able to add one daily round 

trip each to the Chicago to Carbondale and the Chicago to Quincy corridors and two 

round trips on the Chicago to St. Louis corridor. The ridership growth that I 

mentioned earlier is a testament to the success of that additional investment in more 

options for the people of Illinois-so much so that between State Fiscal Years 2010 

and 2011, higher ridership actually led to a $2 million decrease in state operating 

support. The illinOis passenger-rail program is now the second largest on Amtrak's 

system, following California, in terms of both operations and funding. 

And for those who use the service, it is an affordable means of getting from one part 

of the state to another especially given high gas prices that are squeezing middle 

class families already struggling on tight budgets. 

I believe that the increase in ridership was a direct response to the largest service 

expansion in the Midwest in more than a decade and that there is Significant unmet 

demand for passenger-rail service that will only continue to increase as reduced 

travel times, improved reliability and new passenger-rail eqUipment entice travelers 

to discover the advantages of taking the train. 

Secretary Ann L. Schneider 

illinois Department of Transportation Update on High-Speed and InterCity Passenger Rail 

December 6, 2012 

PAGE 3 oFll 
148 


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High-speed passenger-rail service in Illinois and across the nation represents the 

natural and logical evolution of the nation's transportation network. National interest 

in faster trains began in the late 1970s, and an early study estimated that the cost to 

construct a new dedicated passenger-rail corridor of some 300 miles would be in the 

range of $2 billion in those days. Illinois' involvement in the movement began in 

1980 when it joined the seven-state High-Speed Rail Compact, and participated in 

the first studies of high-speed rail service in the Midwest. Facing the unlikely 

prospect of assembling resources to invest such a staggering amount - into the 

billions of dollars - instead, Illinois and the other Midwest states chose to pursue a 

strategy of "incrementalism," planning for manageable investments over time to 

enhance the existing system at higher speeds that would beat the automobile. 

Since then, Illinois has focused on a staged development of high-speed rail which 

would upgrade track shared with freight operations, add frequencies and use new 

technologies to allow passenger trains to go faster, safely, on existing railroad 

corridors. 

On April 16, 2009, President Obama announced a new vision for developing highspeed passenger-rail in America. The vision called for a collaborative effort among 

the federal govemment, states, railroads, and other key stakeholders to help 

transform America's transportation system through the creation of a national network 

of high-speed rail corridors. I believe it is a vision similar to What U.S. Transportation 

Secretary LaHood shared with this Committee last year when he compared the 

blueprint for building high-speed rail with America's previous blueprint for building 

the highway system in the United States. Secretary LaHood was correct in outlining 

that we did not know in the 1950s where every interstate would eventually be built 

but we knew we had to begin somewhere. What was important then and now is that 

we have the vision to move this nation away from our dependence on foreign oil, 

and towards congestion relief, by giving people more options, and towards a 21 51 

Century transportation network of roadways, runways, railways, and rivers. 

The Federal Railroad Administration (FRA) launched the High-Speed IntercityPassenger-Rail (HSIPR) Program in June 2009 as part of the American Recovery 

and Reinvestment Act (ARRA). On January 28, 2010, Illinois was selected to 

receive $1.2 billion for high-speed passenger-rail service between Dwight and the 

East st. Louis area. Governor Quinn ensured that an additional $400 million for 

high-speed rail was included In his $31 billion capital bill called Illinois Jobs 

Now! - the largest in Illinois' history and the first such capital program in 10 

years. In December 2010, an additional $42.3 million was made available for 

additional construction upgrades. The extra funding went for capacity increases on 

the St Louis-Chicago Corridor. In January 2012, as the result of federal funds being 

rejected from the states of Florida, Ohio and Wisconsin, illinoiS received an 

additional $186.3 million for corridor improvements between Joliet and Dwight. 

Illinois responded by committing an additional $62 million from Illinois Jobs Now! to 

provide the state match for these additional funds because we believe these are 

investments in our communities all along the corridor. 

Secretary Ann L. Schneider 

Illinois Department ofTransportation Update on High-Speed and InterCity Passenger Rail 

December 6, 2012 

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ILLINOIS INVESTS IN ITS FUTURE - MULTI-MODAL APPROACH 

The Chicago to St. Louis High-Speed Rail Corridor project has focused on providing 

multi-modal connections, sustainability and human capital investment for the future 

of transportation. 6,000 jobs will be or have been created and are currently funded 

for this project. 

Governor Quinn's vision is that all the transportation modes in Illinois shall be 

integrated, coordinated, planned and built with the idea that present and future travel 

options are focused on the people that use the system coupled with the need to 

ensure that these are serving as economic drivers while protecting and improving 

our environment. This multi-modal approach will integrate our modes and address 

the needs of commuters, long-distance travelers and freight logistics. 

As a result of the investments in high speed rail, there are plans for new stations 

along the Chicago-St. Louis corridor in Alton, Carlinville, Joliet, Pontiac and Dwight, 

with the Springfield and Lincoln stations set for renovations. All stations will be 

integrated with bicycle and pedestrian options to encourage more energy-efficient 

travel and to improve community life. Stations also are being designed to include 

adequate parking facilities based on anticipated ridership, and all stations will be 

fully ADA accessible. In addition to the city of Normal's new multimodal station that 

opened in July 2012, the city of Joliet also received funds from Illinois Jobs Now! for 

a new multi-modal station, the construction of which began on September 21, 2012. 

IDOT also is working with the city of Alton to integrate its planned high-speed rail 

station with the community's plans for a multi-modal facility designed to be the 

centerpiece of a transit-oriented development. 

CHICAGO-TO-ST. LOUIS: THE FIRST CORRIDOR 

The inaugural 110 mile per hour corridor demonstration that Amtrak ran last on 

October 19th attracted national attention and rightly so. New class VI rail and 

concrete ties have been installed by Union Pacific Railroad on the corridor since 

2010, and we have installed four-quadrant gates at virtually all public gradecrossings between Dwight and Alton to prevent vehicles from driving around closed 

gates, and increase safety. 

Our next big challenge is the installation of Positive Train Control (PTC), which, as 

you know, is a federal mandate required by the end of 2015. Union Pacific Railroad 

is working closely with more than 20 other freight railroads nationwide, as well as 

Amtrak, on successfully implementing PTC for our 110 mile per hour service by Fall 

2015. When PTC installation is complete, we will be able to offer 110 mile per hour 

service on almost 75 percent of the Chicago to St. Louis corridor, 285 miles, bringing 

travel times down from the current five and one half hours to under four and one half 

hours - giving people more travel flexibility and time to be where they need to be -

at home, work, school, or another destination. And perhaps even more important, 

thanks to agreements negotiated with the FRA, Amtrak and the Union Pacific; 

reliable on-time performance will be guaranteed at minimum levels of 80 to 85 

percent. 

Secretary Ann L. Schneider 

Illinois Department ofTransportation Update on High-Speed and Intercity Passenger Rail 

De<:ember 6, 2012 

PAGE 5 OF 11 
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Additionally, Illinois will purchase 88 new railcars thanks to three separate federal 

grants from the U.S. Department of Transportation. A joint, multi-state procurement 

managed by the Califomia Department of Transportation and the Illinois Department 

of Transportation, representing the Midwest Consortium and the FRA, will mean the 

availability of new railcars for people who ride our trains. Sumitomo and NipponSharyo which is located in Rochelle, Illinois-about 80 miles west of Chicago - won 

with the lowest bid on this procurement, resulting in new jobs at the manufacturing 

plant and across the Illinois supply-chain network. Because the United States and 

Illinois made a commitment to invest in high speed rail, Nippon-Sharyo made an 

investment in the United States and Illinois by building a plant in our state, which 

created 250 new jobs. 

Our new infrastructure improvements will be able to support the use of locomotives 

capable of speeds up to 125 miles per hour, and there will be no need to remove 

any existing infrastructure to move from 110 miles per hour to 125 miles per hour in 

the future. Moving to higher speeds will require more frequent inspections of track to 

ensure safe operations, as well as new maintenance agreements and service 

outcome agreements with the host railroad, Union Pacific, but we will meet those 

challenges so we can continue to deliver a better product to the people who ride our 

trains. 

DEMONSTRATION OF 111 MPH IN ILLINOIS 

On Oct. 19,2012, Governor Quinn and I were joined by U.S. Transportation 

Secretary Ray LaHood, Federal Railroad Administrator Joe Szabo, Amtrak 

Chairman Tom Carper, and local elected leaders to celebrate the start of 110 mile 

per hour rail service in Illinois through a 15-mile demonstration run that recorded a 

top speed of 111 miles per hour between the approved test segment from Dwight to 

Pontiac. We believe this reflects a critical step toward establishment of the ChicagoSt. Louis Corridor that will add to Illinois' position as the Midwest's transportation 

hub. The upgrades included state-of-the-art signaling, rail and track upgrades, and 

significant technological and safety advancements. And thanks to that test segment, 

Illinois was able to offer 110 mile per hour train service to regular Amtrak 

passengers beginning over the Thanksgiving holiday. 

The October demonstration run began next to the construction site of the Joliet 

Union Station and ended at Normal's new multi-modal station, which has attracted 

more than $200 million in private investments to the downtown area. This will 

be replicated in other cities along the corridor. Thanks to the $22 million TIGER 

(Transportation Investment Generating Economic Recovery) grant from the U.S. 

Department of Transportation, this project was completed and is now operational, 

serving as the new City Hall and a major multi-modal hub for Normal. 

Secretary Ann L. Schneider 

Illinois Department of Transportation Update on High-Speed and Intercity Passenger Rail 

December 6,2012 

PAGE 6 OF 11 
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Other TIGER grants received include: 

CREATE Program Projects 

Normal Multimodal Transportation Center 

Southwestern Illinois Intermoda) Freight Transportation Hub 

Warehouse District Complete Streets Project (Peoria) - Capital Grant 

Moline Multimodal Station - Capital Grant 

US-14 Underpass (Barrington) - Planning Assistance Grant 

Chicago Transit Authority Blue Line/Chicago Bike Share Program 

Multimodal Transportation Center - Alton 

Illinois Route 83 (I 57 and I 294 Interchange work) 

TIGER TOTAL 

$100,000,000 

$22,000,000 

$6,000,000 

$10,000,000 

$10,000,000 

$22,800,000 

$20,000,000 

$13,850,000 

$10,438.000 

$195,088,000 

CHICAGO-MOLINE AND CHICAGO-ROCKFORD·DUBUQUE 

A $177 million U.S. Department of Transportation rail grant, combined with a $45 

million state match from Governor Quinn's capital program, is being used now to 

build additional Amtrak service between Chicago and the Quad Cities. Our partners 

at the Burlington Northern Santa Fe and Iowa Interstate railroads are busily 

collaborating with us on engineering and design. and with construction expected to 

begin next spring. 

The same goes for a new Chicago-Rockford-Dubuque Amtrak route, which is 

planned for construction without a dime of federal funding. Rather, this route, which 

traverses the far northern edge of Illinois through Galena and on into Dubuque, 

Iowa, is being constructed by funds from Illinois Jobs Now! We are now in 

negotiations with the host Canadian National Railroad on the build-out of that 

corridor, and our goal is to start construction in 2013. 

BENEFITS OF HIGH·SPEED RAIL IN ILLINOIS 

Multi-Modal Transportation Option, Sustainability, Global Competitiveness and 

Human 

Capital Investment 

• Achieves reductions in travel times and improves service reliability. 

• Promotes livable communities. 

• Stimulates job growth and creation. 

• Provides major capital investments in rail infrastructure to improve passenger 

and freight train effiCiency, safety, and reliability on shared rights-of-way. 

Safety Features 

• Enhanced grade crossing waming devices: four-quadrant gates, pedestrian 

gates and private crossing gates. 

• Implementation of enhanced rail-traffic signal and crossing waming systems. 

• Installation of new premium rail and concrete ties to safely support higher speec 

operations. 

• Right-of-way fencing. 

New Passenger Cars and Locomotives 

• Purchase of new high-speed equipment for improved ride quality and passenge 

comfort. 

Secretary Ann L. Schneider 

Illinois Department of Transportation Update on High-Speed and Intercity Passenger Rail 

December 6, 2012 

PAGE 7 OF 11 
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• New state-of-the-art coach and business class seating. 

• Premium onboard amenities: Wi-Fi, variable message signs, improved 

food/beverage service and automated announcements. 

• Interim upgrades of existing passenger cars for use until new equipment arrives. 

Environmental 

• Improves air quality and energy efficiency. 

• Reduces greenhouse gases. 

• Reduces Illinois' demand for oil, which has the concomitant benefit of improving 

our nation's security. 

• Alleviates demands on the highway system, which can help extend the life of the 

asset. 

Service Reliability and Time Savings 

• Faster and more convenient travel. 

• Reduced congestion. 

• The existing five daily round trips will include three high-speed round trips. 

• On-time performance of 85 percent or better. 

LESSONS LEARNED 

No major capital project is perfect. As we rebuild highway bridges in Illinois, we take 

care to follow the state's Complete Streets guidelines, and we have even put that 

requirement into state law for roads owned by the state. This means that under new 

or rebuilt bridges, we install wider sidewalks, better access for persons with 

disabilities and wider traffic lanes as well. 

Public engagement has been a key element in the success of the Chicago to St. 

Louis High-Speed Rail Program. The project engages the public through 

informational meetings and print materials as well as electronic and social media. To 

date, we have conducted more than 13 public meetings, five public hearings, and 22 

media briefings. In addition, we have completed 32 outreach events and 

presentations to area schools and stakeholder groups. 

We also want to ensure that all of Illinois' rail projects share safety as a top priOrity. 

Positive Train Control will be featured, as will "four-quadranf gates that will be 

installed at all public grade crossings. "Four-quadranf gates block all lanes of traffic 

to ensure that vehicles awaiting trains cannot drive around closed gates and try to 

cross the tracks. In the early 2000's, Illinois installed these four-quadrant gates along 

an approximately 60-mile stretch of the Chicago-51. Louis Corridor; since their 

installation, there have been no vehicle-related incidents of any kind at any of those 

crossings. 

OTHER LESSONS LEARNED AND CHAl.LENGES • Maintaining regular communications with the FRA and other federal oversight 

agencies is critical in the development of timely resolutions to issues keeping the 

project on track. 

Secretary Ann L. Schneider 

Illinois Department ofTransportation Update on High-Speed and Intercity Passenger Rail 

Decemher6,2012 

PAGE 8 OF 11 
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• Relationship building among project partners, public and elected officials and the 

host railroad (Union Pacific) is key. Having skilled and experienced negotiators is 

also necessary. 

• Emphasis on improved customer service for passengers is essential. Service 

enhancements to customer relations and on-board service offerings were 

developed through a collaborative approach with Amtrak. 

• Early initiation of preliminary design and National Environmental Policy Act 

(NEPA) is critical. 

• Important to define and coordinate non-rail regulation requirements and policy 

impacts early in the process, such as ADA, Complete Streets, and historic 

preservation. 

• Project phasing allows construction to advance in straightforward areas while 

resolving environmental and design issues in complex areas. 

• Use of multi-state procurement for equipment allows for cost efficiencies and 

future maintenance consistency. 

• Vigorous project management controls are needed to manage the project risks, 

schedule and costs. 

• Vigorous quality assurance and quality compliance are needed to protect 

taxpayer investments and ensuring the highest quality materials and methods are 

used. 

MIDWEST REGIONAL RAIL INITIATIVE 

Illinois has been in the vanguard of efforts to plan and develop an improved Midwest 

passenger-rail system since 1996, when nine Midwest states -Illinois, Indiana, Iowa, 

Michigan, Minnesota, Missouri, Nebraska, Ohio and Wisconsin - together with 

Amtrak and the FRA, formed a partnership to evaluate the potential for a Midwest 

regional rail system. Since then, the Midwest Regional Rail Initiative (MWRRI) has 

advanced from a series of service concepts covering operating speeds, train 

frequencies, connectivity and reliability, into a well-defined vision to create a 21 st 

Century regional passenger-rail system. The network envisioned for the Midwest 

region encompasses approximately 3,000 route miles. Based on a hub-and-spoke 

concept to build on regional synergies and maximize operating effiCiency, the 

Midwest Regional Rail System will provide convenient access for 80 percent of the 

region's 65 million residents. 

Through the MWRRI, the Midwest states have led the nation in planning and 

developing passenger-rail service from a regional perspective. With the Midwest 

population expected to grow by 30 percent by 2050, we know that more 

transportation options will be needed. Already, ridership has increased on key 

corridors by more than 70 percent since 2000. 

All railcars traveling through the Midwest corridor will be made in America, providing 

additional support for U.S. businesses and workers. Many of those will be built by 

Nippon-Sharyo in Rochelle. 

Secretary Ann L. Schneider 

Illinois Department of Transportation Update on Hlgh·Speed and Intercity Passenger Rail 

December 6, 2012 

PAGE 9 OF 11 
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Long-term plans call for connecting more than 40 Midwest cities with fast. frequent 

and reliable service. By working with federal. state and local partners. this vision is 

becoming a reality - creating construction and manufacturing jobs today. while 

positioning the Midwest for even greater economic expansion over the next 

generation. 

AMERICA'S RAIL NETWORK: Midwest Region 

Route Current Service Levels Long-Term Regional Vision· 

Chicago to Detroit 

Chicago to St. Louis 

Chicago to Iowa City 

Chicago to Milwaukee 

6 hours 20 minutes 

3 trips daily 

5 hours 30 minutes 

5 trips daily 

N/A 

1 hour 29 minutes 

8 trips daily 

• Projected Service in Midwest Regional Rai/lnitiative 

•• Considered in Chicago-Milwaukee EIS 

WHAT'S NEXT? 

Illinois' second ARRA award 

for $1.25 million funded a 

study to help resolve 

environmental issues related 

to the re-installation of a 

second main track between 

Chicago and SI. Louis. This 

would allow the operation of 

additional high-speed train 

frequencies. The completion 

of this work will pOSition lOOT 

to compete for additional 

funds needed to complete the 

final project objectives. lOOT 

expects to complete the 

remaining work to reach the 

full corridor build-out with 

3 hours 46 minutes 

9 trips daily 

3 hours 50 minutes 

9 trips daily 

Trip time TBO 

5 trips daily 

Trip time TBO" 

11 trips daily 

eight high-speed round-trips and realize travel times from Chicago to St. LOUis of 4 

hours or less by the year 2020. We believe this is a realistic timetable which. with 

staged implementation. will provide ongoing benefits to the traveling public and to 

the economies of station communities. the state and the Midwest region. 

Secretary Ann L. Schneider 

Illinois Department of Transportation Update on High-Speed and InterCity Passenger Rail 

December 6, 2012 

PAGE 10 OF 11 
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Furthermore, in recognition of the continuing need to improve Chicago to St. Louis 

after the current project is complete, the state has decided to seize the momentum of 

the recently completed Tier 1 EIS for double-tracking the entire corridor by releasing 

three Tier 2 EIS's for bid: The Rock Island corridor running between Chicago-Joliet 

(the preferred route chosen in the EIS), Alton-St. Louis (including a new Mississippi 

River Rail Bridge), and a major rail-over-rail f1yover just south of Springfield, Illinois. 

The state will be funding these studies in their entirety to put Illinois in a stronger 

position if and when there is another competitive HSR award program. 

Illinois' third ARRA award provided $126 million to construct a rail f1yover in 

Englewood on Chicago's south side as part of the CREATE freight rail infrastructure 

improvement program. Illinois Jobs Now! is providing $6.6 million to match the $126 

million federal grant for the Englewood Flyover. CREATE's primary objectives were 

to expedite passenger and commuter rail traffic while reducing freight congestion 

and improving mobility in the region. In areas where the first 14 of 70 CREATE 

projects have been completed, passenger trains already are experiencing 33 

percent fewer delays and freight trains 28 percent fewer delays. The Englewood 

Flyover, now under construction, also will be the first investment in Illinois to help 

reduce travel times and improve reliability on the Chicago-Detroit Corridor, expected 

to be the next 110 mph route developed in the Midwest. 

Our colleagues at the Michigan Department of Transportation (MOOT), under the 

leadership of Govemor Rick Snyder, are busily working with Amtrak and the NorfolkSouthern Railroad to make this a reality, and already have completed more than 80 

miles of 110 mph track in southwestern Michigan. We are proud to be investing 

$200,000 of Illinois state funds in the Tier 1 EIS being led by Michigan DOT. 

CONCLUSION 

Governor Quinn shares President Obama's vision for high-speed rail to create a 

world class rail system for the United States. A partnership of states and the federal 

government can get this done and, because we have not made this level of 

investment before, we have a lot of work to do now. Just as the Interstate highway 

system developed over time so will our passenger rail network. Our ridership in 

Illinois is exploding, giving us the indication that people are demanding the services 

and will use additional, more reliable services. With gas prices climbing we must find 

alternative, energy-efficient alternatives to get people where they need to go, 

because we cannot build enough roads to ease all the congestion in Illinois. 

Our focus on building out our 110 mile per hour service is helping us establish 

a solid foundation for America's rail renaissance. We believe these improvements 

will continue to build ridership, support the economy, and contribute to economic 

growth by putting people to work and spurring economic development with new 

stations and additional reliable high-speed train service. We are grateful for our 

partnership with Congress and the Obama administration and we hope to do more. 

I thank you for the opportunity to testify and would be happy to answer any questions. 

Secretary Arm L. Schneider 

Illinois Department of Transportation Update on High-Speed and Intercity Passenger Rail 

December 6,2012 

PAGE 11 OF 11 
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House Committee on 

Transportation and Infrastructure 

Chairman John L. Mica 

Hearing on: 

An Update on the High-Speed 

and Intercity Passenger Rail Program 

Illinois Department of Transportation 

Post-Hearing Questions For The Record 

Ann L. Schneider 

Secretary 

Answers to Members Questions 

Illinois Department of Transportation 

December 20,2012 

~ W Ilrmois Department of TranspOrtation 

Secretary Ann L. Schneider - Secretary 

Illinois Department of Transportation - Answers to Member Questions on High-Speed and Intercity Passenger Rail 

Page 1 of 3 
157 


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REPUBLICAN MEMBER QUESTIONS FOR THE RECORD 

To Secretary Ann L. Schneider, Illinois Department of Transportation 

1. Question: 

At the hearing on December 6, 2012, Secretary Paula Hammond (State of Washington 

Department of Transportation) described some issues her state and other states have 

experienced with the environmental review process. Your office also commented on and 

concurred with AASHTO's comments on a recent FRA categorical exclusion rulemaking 

styled Docket No. FRA-2012-0016. So, could you explain some of the room for 

improvement in FRA's environmental review process? 

Answer: 

AASHTO's comments on the recent FRA Categorical Exclusion (CE) rulemaking outlined 

the procedures that are included in the joint FHWAIFTA regulations but are not included in 

the proposed FRA procedures. As Illinois works to implement the many rail corridors in our 

state, the provision to acquire land for hardship or protective purposes may be a very useful 

tool to ensure that we are acquiring land cost-effectively. That said, we applaud FRA's 

recent FRA CE rulemaking and are excited to put these to use on our corridors. Especially 

the provision to allow for station improvements (under 10 acres) to move forward as a CE. 

This will greatly improve the timelines for implementation of many of our station projects. 

2. Question: 

Could you please explain, as noted in your testimony, why early initiation of preliminary 

design and NEPA review is critical and, similarly, why project phasing is an important to 

such construction projects? 

Answer: 

A key element in the implementation of a rail program has been the interrelationship of the 

preliminary design and the NEPA process. Early initiation of these activities allows the 

preliminary design team to develop an "environmental footprint" that can be used as part of 

the NEPA process. The early development of preliminary design allows the designers to 

identify impacts and then work to avoid, minimize or establish mitigation for those impacts. 

This early interaction is a key to preserving and protecting key environmental resources. 

3. Question: 

Could you elaborate on Illinois DOT's concerns raised in that FRA rulemaking on categorical 

exclusions where you noted that "consistency in rulemaking across all three agencies (FRA, 

FHWA, and FTA) would greatly facilitate NEPA compliance for small-scale projects that 

require approvals from multiple USDOT agencies"? 

Answer: 

On many of the Illinois rail corridors, there are related projects in the vicinity of the FRA 

funded projects. As a result, sometimes it is necessary to adopt by reference NEPA 

documents (for example, as approved by FTA) into the FRA-Ied NEPA documents. 

Consistency in the types of project activities that are categorically excluded across the 

agencies allows for a more seamless approval of these NEPA documents. 

secretary Ann L. Schneider - Secretary 

Illinois Department ofTransportation - Answers to Member Questions on High-Speed and Intercity Passenger Rail 

Page 2 of 3 
158 


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4. Question: 

Will your State system be able to meet the PTe deadline in 2015? Why or why not? If not, 

please explain the challenges your State faces. 

Answer: 

Illinois is working closely with the FRA, the Union Pacific Railroad, Amtrak, program 

managers at Parsons Brinckerhoff, and subconsultant managers at General Electric, on 

meeting the 2015 PTC deadline. lOOT appreciates the FRA for facilitating discussions 

between PTC consultant Wabtech and Illinois signaling consultant GE on designing an 

interface between PTC and the grade crossing protection system in Illinois that will satisfy 

both FRA and Illinois Commerce Commission requirements. 

5. Question: 

Your testimony mentioned station development opportunities in Normal, Illinois, has Illinois 

explored leveraging station and station-area development to provide a funding source for rail 

improvements? 

Answer: 

Illinois is using FRA HSR grant funds, as well as state matching funds, to work with 

communities in all three corridor projects (St. Louis HSR, Moline, and Rockford-Dubuque) in 

redesigning and reinvigorating their train station to help them revitalize their downtown areas 

similar to how Normal achieved its remarkable downtown transformation. It is Illinois' view 

that the higher tax revenues created as an indirect by-product of economic development in 

these communities will be of great assistance in helping the state meet all its financial 

obligations. 

Secretary Ann L. Schneider - Secretary 

Illinois Department of Transportation - Answers to Member Questions on High-Speed and InterCity Passenger Rail 

Paae 3 of 3 
159 


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STATEMENT OF 

EDWARD R. HAMBERGER 

PRESIDENT & CHIEF EXECUTIVE O.FFICER 

ASSOCIATION OF AMERICAN RAILROADS 

BEFORE THE 

U.S. HOUSE OF REPRESENTATIVES 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

HEARING ON HIGH-SPEED AND INTERCITY PASSENGER RAIL 

DECEMBER 6, 2012 

Association of American Railroads 

425 Third Street SW 

Washington, DC 20024 

202-639-2100 
160 


Insert offset folio 113 here 77211.113

Introduction 

On behalf of the members of the Association of American Railroads (AAR), thank you 

for the opportunity to testify today. AAR members account for approximately 82 percent of U.S. 

freight rail mileage, 95 percent offreight rail employees, and 97 percent offreight rail revenue. 

Amtrak and several commuter passenger railroads are also members of the AAR. The AAR is 

presenting this testimony on behalfofits freight railroad members only. 

Our nation's privately-owned freight railroads are already partners with passenger 

railroads all across the country. Nearly 97 percent of Amtrak's approximately 22,OOO-rnile 

system consists of tracks owned and maintained by freight railroads. Freight railroads also 

furnish other essential services to Amtrak, including train dispatching, emergency repairs, station 

maintenance, and, in some cases, police protection and communications capabilities. 

In addition, hundreds of millions of commuter trips each year occur on commuter rail systems 

that operate at least partially over tracks 

or right-of-way owned by freight 

railroads; and most of the high speed 

and intercity passenger rail projects 

under development nationwide will 

utilize freight-owned facilities. 

Association of American Railroads 

Passenger Railroading in the United States 

_ Amtrak intercity 

A Proposed commuter 

DeSignated high-speed corridors 

- (most are existing Amtrak routes) 
161 


Insert offset folio 114 here 77211.114

Freight Railroads Are Critical to America's Economic Future 

As everyone here knows, reshaping the nation's passenger transportation system with 

expanded rail choices entails significant challenges. There has been a great deal of discussion in 

recent years - and a great deal of disagreement - on how to deal with these challenges. I 

respectively suggest, however, that there should be no disagreement that America's economic 

health and global competitiveness would suffer greatly if the expansion of passenger rail service 

were to impede our nation's freight railroads. 

Today, whenever Americans grow something, eat something, mine something, make 

something, turn on a light, or get dressed, freight railroads were probably involved somewhere 

along the line. We're proud that America's freight railroads are the envy of the world, providing 

a huge competitive advantage for our nation's firms in the global economy and providing an 

important source of higher standards ofliving for America's consumers. 

Over the coming decades, population and economic growth will mean sharply higher 

demand for freight transportation. For example, the Federal Highway Administration (FHWA) 

recently estimated that demand for freight transportation in the United States will rise 50 percent 

from 2010 to 2040. Railroads are the best way to meet this growing demand. Their combination 

of efficiency, affordability, comprehensiveness, safety, and environmental friendliness is 

unmatched among freight transportation modes. Overwhelmingly privately-owned and operated, 

America's freight railroads in recent years have been reinvesting more than $20 billion per year 

(of their own funds, not government funds) to create a freight rail network that is second to none 

in the world. These record investments are being made expressly because freight railroads want 

to be ready to meet their customers' needs and help the economy grow in the years ahead. 

Thus, for passenger rail expansion to succeed, all parties policymakers, railroads, and 

others - must understand that America's economic health and global competitiveness would 

Association of American Railroads 
162 


Insert offset folio 115 here 77211.115

suffer greatly if the integration of freight service with expanding passenger service is not planned 

and implemented to ensure the ongoing success of both services. This point has been recognized 

by the U.S. Department of Transportation Secretary Ray LaHood, who has observed many times 

that we will not create a world-class high-speed rail system at the expense of our world-class 

freight rail system. 

Through their ownership of the vast majority of the rights-of-way over which expanded 

intercity passenger rail would take place, freight railroads provide the literal foundation for 

passenger rail. That's why great care must be taken to ensure there will be a regulatory and legal 

framework that protects the business needs and responsibilities of all parties. 

In that regard, freight railroads strongly support existing federal guidelines that stipulate 

that states receiving federal grants for intercity and high-speed rail projects must have written 

agreements up front with host freight railroads. The issues addressed - such as safety, capacity, 

compensation, and liability - help to ensure that all parties are on the same page, protect all 

parties' interests, and avoid unpleasant surprises later. 

Principles to Guide the Expansion of Passenger Rail 

Freight railroads agree that passenger railroading can playa key role in alleviating 

highway and airport congestion, decreasing dependence on foreign oil, reducing pollution, and 

enhancing mobility and safety. At the same time, however, the ultimate success of passenger rail 

in this country, and including especially high-speed rail, will depend on the willingness of 

policymakers to address, in a serious and realistic fashion, the numerous financial, legal, and 

operational issues associated with passenger rail. 

Perhaps most importantly, once policymakers in the Administration, Congress, and the 

various states agree on the nature and scope of passenger railroading in this country, they must 

Association of American Railroads 
163 


Insert offset folio 116 here 77211.116

be willing to commit public funds on a long-tenn basis commensurate with that determination. 

The AAR has long advocated that true high speed rail must operate on dedicated track and in a 

sealed corridor. In the meantime, moving to higher speed rail on a mixed use basis presents 

significant challenges. We believe these challenges can be more easily met if five key principles 

are followed. 

One, safety comes first. Railroads are an extremely safe way to move both people and 

freight, and everyone involved in railroading wants to keep it that way. That's why safety has to 

come first when it comes to passenger trains sharing track or rights-of-way with freight trains. 

Under certain conditions (case-by-case evaluations are always necessary) passenger trains 

operating at speeds over 79 miles per hour may be able to safely share tracks with freight trains. 

Of course, as this Committee well knows from its experience with highways, vehicles operating 

at much different speeds present both safety and capacity concerns, leading to our second 

principle. 

Second, capacity issues, including the ability to grow freight and passenger service, must 

be properly addressed. As noted above, over the coming decades, population and economic 

growth will mean sharply higher demand for freight transportation, and railroads are the best 

way to meet this demand.] But if passenger rail impedes freight rail and forces freight that 

otherwise would move by rail onto the highway, many ofthe primary reasons for having 

passenger rail in the first place - enhanced mobility, reduced congestion, and environmental 

benefits - would be compromised. 

On many corridors, current or expected freight traffic levels usually mean there is no 

spare capacity for passenger trains. In these cases, new capacity will be needed before passenger 

I For a summary of some ofthe key reasons why moving more freight by rail represents good public policy, see 

pages 2-6 ofthe April 7,2011 testimony of Edward R. Hamberger before the House Transportation Subcommittee 

on Railroads, Pipelines, and Hazardous Materials. 

Association oj American Railroads 
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trains can operate. New infrastructure built for passenger trains should fully preserve both the 

ability to operate freight trains as needed and the opportunity to expand further freight service as 

the need arises in the future, including the ability of the freight railroad to access new customers 

along the right-of-way. Tn other words, passenger rail projects cannot "box in" the freight 

railroad so that new freight customers cannot access the freight railroad. This would limit the 

ability of the freight railroad to grow and subvert good public policy by potentially forcing this 

business to go by truck over road. 

Third, if passenger trains use freight railroad assets and property, it is reasonable for the 

host freight railroad to expect full and fair compensation. Simply put, freight railroads should 

not be expected to subsidize passenger rail any more than firms that provide locomotives, fuel, or 

food for dining cars. Tracks on which passenger trains operate, particularly high-speed trains, 

must meet different standards requiring significantly higher and more expensive maintenance 

than tracks on which freight trains operate. Host freight railroads should be fully compensated 

for these and any other added costs involved.2 Moreover, railroads should not be subject to any 

new local, state, or federal tax liability as a result of a passenger rail project. 

Fourth, freight railroads must be adequately protected from liability that would not have 

resulted but for the added presence of passenger rail service. It is almost inevitable that some 

accidents will occur on railroads, despite railroads' best efforts to prevent them. An accident 

involving passenger trains - which are generally far lighter than freight trains, often travel at 

much higher speeds, and, most importantly, have passengers on board - is far more likely to 

2 By statute, access fees that Amtrak pays to operate over the freight railroads' tracks are only required to cover the 

"incremental" costs associated with Amtrak's operations - that is, the additional costs that arise solely because of 

Amtrak's presence. Amtrak is not required to contribute to the freight railroads' tixed costs or to the shared costs 

for which Amtrak operations have a responsibility. Consequently, Amtrak's "track rental fee" is low and is, for all 

intents and purposes, an indirect subsidy paid by freight railroads to Amtrak. This means that the current structure 

by which Amtrak "rents" freight tracks should not necessarily serve as a guidepost for the future. 

Association of American Railroads 
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involve significant casualties than an accident involving only freight trains. Passenger 

operations also bring more people onto railroad property, resulting in a corresponding increase in 

risk. These potentially ruinous risks make frcight railroads extremely reluctant to allow 

passcnger trains on their tracks without adequate protection from liability. 

Finally, there can be no onc-sizc-fits-all approach. Each project involving passenger rail 

on freight-owned tracks in general, and high-speed rail projects in particular, has its own unique 

challenges and circumstances. Freight railroads currently and will continue to do their best to 

work with policymakers and passenger rail operators to overcome these challenges. For this to 

happen, agreements must be tailored to the specific needs and conditions of each project, which 

is why each project mllst be evaluated on a case-by-case basis. 

Conclusion 

To reiterate, freight railroads want passenger railroads to sllcceed, they work 

cooperatively with passenger railroads to help make this happen, and they support government 

efforts to grow passenger rail in ways that make economic sense and that complement freight rail 

growth. 

At the same time, America's economic health and global competitiveness depends on 

having a healthy freight rail system. Expanding passenger rail on corridors owned by freight 

railroads will require a partnership between freight and passenger railroads that strikes the right 

balance and protects the business needs and responsibilities of both parties. Freight railroads are 

committed to working with government officials, passenger rail stakeholders, and others to 

ensllre a winning result for all parties involved. 

Association oj American Railroads