Rail Sector Continues to Plan for Future, Despite Lack of Funding Support

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Researched by Industrial Info Resources (Sugar Land, Texas)--While the rail sector was hoping for the best with the change of administrations last year, they also were pessimistic that anything significant would be done to highlight the lack of federal funding allocated for rail-related projects in the United States. The passage of the stimulus package gave some false hope for those funds to become available and to spark a renaissance of rail project activity; however, the red tape that an agency had to deal with to receive the money was daunting. But despite these letdowns, planning continues for rail projects that will best serve the transportation needs of the country in the future.

Currently, Industrial Info is tracking 83 light, commuter or freight rail projects in the U.S. that are worth an estimated $99.4 billion and are expected to begin construction in the future. These types of lofty planned project numbers are typical for a sector that tosses around $1 billion projects as if they weighed nothing. The significant costs related to rail projects are one of the major issues facing agencies that must ask for help to get these necessary projects funded at the local, state or federal level.

Some of the money in the stimulus package has indeed been allocated and spent; however, due to the time limits placed on sending these funds, they typically do not affect the major projects that are planned. Essentially, the money had to be applied for, received and spent very rapidly; for a sector that typically takes five years to take an idea to the construction stage, things simply could not move that fast.

Some of the funding has gone to promoting and helping to develop high-speed rail corridors across the country. However, this was a separate allocation of $8 billion that has been divided up among most of the 10 corridors outlined by the Obama administration. This money will come in handy for helping to develop these corridors and to assist in making high-speed rail a reality at some point in the future, but they are really a drop in the bucket of what is actually needed. For example, the state of California received a $2.25 billion portion of that $8 billion to help develop the state's proposed $40 billion high-speed rail system.

Despite funding issues, planning and development moved at its own slow pace. Due to the complexities involved with developing a new rail project, the permitting on such a project can take three or four years. Still, new projects are added to the queue almost daily, while the developing agencies struggle to find ways to come up with the necessary funding.

In addition, some areas of the country are more receptive to rail projects than others. The West Coast is one of the leading rail proponents. Of the future rail projects currently being tracked, 21 of them, worth an estimated $62.7 billion, are planned for that region. In comparison, the Southeast region is currently home to only seven planned projects worth $2.2 billion, while the Southwest region has four projects worth $3.4 billion within its borders.

Rail spending is critical to U.S. transportation needs. In the future, both passenger and freight rail transportation will become increasingly essential as the U.S. attempts to move further from fossil fuels. In addition, with the nation's roads becoming more congested each year, rail travel will need to become a viable option at some point. The development of a national rail system that is reliable and timely will be crucial to the U.S. within the next 50 years, but it takes coordination of effort from those who develop the projects and the government officials who have to help finance them.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.