GOP to press Obama for private bids on $117B rail project

Republicans on the House Transportation and Infrastructure Committee will use a Thursday hearing to press the Obama administration to rely more on private investment for a high-speed rail project in the Northeast.

Committee leaders noted the benefits high-speed rail would provide to cities in the Northeast in a memo distributed by Republican staff, and stressed that the corridor between Boston and Washington, D.C., was an ideal location for the investment.

Still, the memo also highlighted that a future project must be supported by private investors and not rely too heavily on federal funds.

“While the need and opportunity for a successful true high-speed rail project exists, the Federal government cannot carry the full financial burden of public infrastructure projects,” the memo states. “Private industry must step up and help fill the gaps in high-speed rail funding and operations.”

President Obama has made the creation of a high-speed rail line a priority of his administration, but has received backlash from Republican governors, who said they were worried their states would be hit with some of the costs for the railroad upgrades. Florida GOP Gov. Rick Scott turned aside federal funds.

The for-profit company Amtrak announced last week that it will look to private investors to help fund a high-speed rail line on the Northeast Corridor — one of the busiest rail lines in the country. But a company spokesperson said Amtrak does not know how large a percentage of the project’s funding will come from private investors and won’t know until after June 10, when proposals from interested backers are due.

“We will look to the proposals to help us generate how much private investment we think we’d be able to obtain,” Amtrak spokesman Steve Kulm said. “So we don’t have that number now.”

Transportation Committee Chairman John Mica (R-Fla.) scheduled the hearing before the Amtrak announcement, Justin Harclerode, a spokesman for the committee, said in an email. 

"Mica has long supported a strong private sector lead for high-speed rail development in the [Northeast Corridor], and has been very skeptical of Amtrak’s plan and ability to effectively deliver true high-speed service there or anywhere," Harclerode said.

According to the committee, the project will cost a “staggering” $117 billion and would take 30 years to complete.

It suggests a different public-private partnership strategy for putting together the high-speed rail project. Under the plan, bids for the system would be made by private companies, with Northeast states managing infrastructure and operations.

“There is clearly a need for federal financial support for a project of this scope and magnitude, but competition will keep the costs as low as possible,” the memo states.

Railway industry leaders, the president of a major investment firm and a fellow at the libertarian Reason Foundation will testify before the full committee on the advantages of a public-private investor partnership proposal at Thursday’s hearing.