Hearing Of The Surface Transportation And Merchant Marine Infrastructure, Safety, And Security Subcommittee Of The Senate Commerce, Science And Transportation Committee - High-Speed Passenger Rail: How Fast Will It Get Here?

Statement

Chaired By: Senator John D. Rockefeller Iv (D-Wv)

Witnesses: Edward Rendell, Governor, State Of Pennsylvania; Robert Eckels, Chairman, Texas High Speed Rail And Transportation Corporation; Joseph Szabo, Administrator, Federal Railroad Administration; Susan Fleming, Director Of Physical Infrastructure Issues, Government Accountability Office; Joseph Boardman, President And Chief Executive Officer, Amtrak; Tom Skancke, Commissioner, National Surface Transportation Policy And Revenue Study Commission

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SEN. ROCKEFELLER: You know, we could do several things here. Often at events which are meant to be full, they just invite members of the audience to come up, make it look like there's a big crowd up here. (Laughter.) So you've got Senator Warner, you've got myself, Senator Lautenberg is on the way, and that's all you really need.

I don't want your egos to be upset. There's a lot going on today, and part of it, obviously, is what happened with the Metro-rail system. It's actually depressing -- Senator Warner -- sad that there is no current way for the NTSB or the Department of Transportation or anybody else -- they can make recommendations, but they have no enforcement authority. I did not know that until this happened.

And people can have a variety of philosophies about the federal government, but it seems to me that where you have a heavy train being hit by a -- vise-versa -- a light train being hit by a heavy train, and there, something went wrong, and yes, we know, we'll speculate, and it will all come out in the end. And in the meantime, the only thing that really counts is the, you know, all those families of the dead. And sometimes the families of the injured suffer longer. But there's no authority to tell them, they've got to run a safe train. There are recommendations, but no authority.

The chairman has arrived.

SEN. FRANK R. LAUTENBERG (D-NJ): Hello. Sorry, the train was a little late in getting here. (Laughter.)

Thank you, Mr. Chairman. Among chairmen here, he's the chairman. Thank you all for being here, and my apologies for a couple of minutes off target. What we will try to do, in order to expedite things, is to -- we'll limit opening statements to the three of us, make them short. And we'll ask the other members who may come, to include their opening statement in the record or in their question period. We want to work in five-minute cycles here.

So I will start by, once again, thanking you all for being here. The roles you play are very important, and we are pleased to have a chance to talk to you.

This hearing comes to order. And we gather here at a rather sad moment. Many lives were lost with the crash in the Metro. And there are numbers still to be computed of those who were not only perished, but those who were wounded. And what it tells us, as we see the confusion that has followed, and the effort that has followed, is how important the use of the Metro, a transit system, is. And for the last few years, what can we see that Amtrak -- because we're talking now about inter-city, but we can't ignore the contribution that transit rail makes.

The last few years we've seen Amtrak break ridership records, year after year. And in 2008, Amtrak's ridership hit more than 28 million riders, marking the sixth straight year of gains. These gains proved two important points.

It establishes the fact that the people are sick and tired of waiting in traffic, standing in line at the airport, and having dangerous emissions, and just waiting indefinitely for their travel mechanism to be there. If we provide convenient and reliable rail service, Americans will chose it.

Secondly, these gains prove that time cries out, this time cries out for major investment in high-speed rail. We need to fill a rising demand for faster and more efficient rail service. For years, we've had flights to fight, I'm sorry, to beg and call for funding for passenger rail against those who wanted to bankrupt Amtrak, even as more Americans were demanding increased Amtrak service. In this chart that we have here, in quick fashion, describes some of the hurdles we face.

For you -- (laughs) -- for you who have a problem with the discerning what each of these colors: the blue is highway investment since 1949. Aviation is the yellow. And inter-city passenger rail, you can just about see at the bottom, is that green band. And when we look at how much we've invested in our highways and our aviation system, it's obvious that we have invested too little in rail. Now, we're not suggesting that those other modes aren't important. But we need to invest more in rail.

Last year, we took a major step forward with my landmark law to prepare for the next generation ahead of the traveling demand that's obviously building. That law provides $13 billion over five years to repair and update Amtrak's infrastructure and grow its service into towns and cities that are ready for passenger rail. We also created new grant programs for high-speed rail investment.

It has been a long road. But this new law finally paves the way for a solid and ongoing federal commitment to passenger rail. Fortunately, we have strong partners in the White House in President Obama, Vice President Biden, and with the help of Secretary LaHood. They know that to keep our commuters mobile, to keep our nation competitive, and to get our economy back on track, we cannot simply rely on cars and planes to get people from place to place. We need a balanced transportation system. And high-speed rail is part of that balanced equation.

And that's why the Recovery law we passed in February contains more than $8 billion for high-speed and inter-city passenger rail. This money will not only improve rail service, it will create jobs. In this tough economy, these transportation investments are smart investments. They put people to work, reduce delays and congestion, and cut carbon emissions and our dependence on foreign oil.

President Obama and his administration have presented a great vision for a high-speed rail network here in America.

And I'm committed to working with the president to turn that vision into reality, and I look forward to hearing from our witnesses on how we can make that happen. And I turn, first, to the ranking member on the subcommittee, Senator Thune, and then we'll hear from Chairman Rockefeller and Ranking Member Hutchison.

SEN. JOHN THUNE (R-SD): Thank you, Mr. Chairman, for calling this very timely hearing, and we've got a very distinguished panel today that I want to welcome, as well. We look forward from hearing all of you, from all of you.

My state is one of the few in the country that doesn't have passenger rail, and you have to hearken back a long ways in the annals of history to a time when we did. I recall my father, who is now almost 90, talking about taking the -- back in the 30s -- taking the railroad from my hometown of Murdo to Mitchell, which is about 130 or 140 miles. And that was a fairly frequent thing. And people at that time traveled by rail a lot, passenger rail.

But it's been some time since we've had that in South Dakota. We're very dependent upon freight railroading, but so I can probably approach this issue -- (laughing)-- maybe more dispassionately than most, since it's not something that we have in our state. Although maybe with all the stimulus money we could get some. That would be nice.

But I do want to say that it is an opportunity, obviously, the funding that has been made available for high-speed rail in the president's budget. Not only the stimulus money, but also the other ($)5 billion that's in the next five annual appropriation cycles. And, but I also would argue that it poses some risks.

It's a great opportunity for advancing high-speed corridor development to address our congested corridors between major urban areas. But it's also a great financial risk to taxpayers if the selection and management of these projects is not wisely carried out. And this is the key area that I'm most interested in hearing about from today's witnesses.

In my view, the federal government generally does a poor job of deciding on how to spend its money. And this is especially true when it comes to discretionary programs, where the government has to choose between competing projects. One common result is that money gets spread thinly over a wide range of projects, and, as a result, none of them actually gets done correctly or quickly. Or, the government uses soft criteria that results in choosing unviable or unsustainable projects.

We also often find that costs spiral out of control or that the original cost estimates were unrealistically low from the beginning.

How does the Department of Transportation and the Federal Railroad Administration intend to decide between competing projects, and how will the construction of these projects be overseen?

Specifically, what I'd like to hear our panelists discuss today is, how will these projects be chosen? What criteria will be used? How will the department validate the data, such as ridership and project costs submitted by applicants? And, what oversight will occur, and how will it be carried out to ensure that projects come in on budget and on time?

I hope Congress will very closely monitor how this program is implemented. I also hope that this program succeeds. And then when we look back five years from now, and after spending as much as $13 billion as is envisioned by the administration, that we'll see great progress in advancing high-speed rail in our country. To me, success means rail passenger trains that serve real public transportation needs that have been constructed on budget and on schedule that are filled with passengers, making the routes economically viable.

I want to thank our panelists for appearing today and for sharing their testimony. Thank you, Mr. Chairman.

SEN. LAUTENBERG: Thank you very much. The chairman of the committee, Senator Rockefeller. I want to make him a general, but -- (laughter).

SEN. ROCKEFELLER: Thank you, Chairman Lautenberg. First of all, I want to apologize. I'm not on the Judiciary Committee. The White House is very anxious to have all senators meet with Judge Sotomayor before recess. I have been assigned a time of 3:15. That's kind of, for life, for her, should she win, which I think she will. And so I have to excuse myself, but I do that without any misgivings, because this is Frank Lautenberg's passion and has been for years, really more than anybody.

So I also welcome all of you, including Governor Rendell. I just told him, I never see him in person. He's always on television, and it's kind of exciting, you know, to meet somebody like that. (Laughter.)

MR. : Mr. Chairman, you don't know how exiting it is. I've worked with him.

SEN. ROCKEFELLER: Now, I agree totally with Senator Lautenberg on the excitement of high-speed passenger rail. I've spent 10, 12 years either chairing or being ranking on the Aviation Subcommittee of this body, and it just occurs to me that we're down now to relatively few airlines, with lots of problems. And, if you just look at the pattern of peoples' behavior, they want to use fast rail. They want to use rail. And they want to use fast rail. So that's what this is about.

You know, I look at West Virginia. People don't necessarily assume that there's a lot of passenger rail through West Virginia. It's actually a huge fact, as it is, obviously, in Southwestern Virginia also. In fact, our Amtrak service, which Senator Lautenberg helped so much, has increased, has doubled in one of its lines in the last year. Doubled. And the other has risen by 19 percent. Now, West Virginians don't travel endlessly. So this is a very important statement.

Earlier this year, Senator Lautenberg and I joined, as he indicated, with the Vice President, the $1.3 billion allocation to the stimulus package. It was cold. The speeches were not very interesting. But the money is real, and that's what counts. And I have to say, in a non-partisan fashion, that it is really thrilling to have, as Senator Lautenberg pointed out, somebody in the White House who really wants this, who really cares about it, who doesn't like that level of green up there, who wants to increase the green, and, in fact, has already done that.

I want to make a special point today to say that I believe that passenger rail can do so much for us as a country. That's not just a cliché. We need to increase the use of passenger rail, enormously. Not just for passengers but for freight. And we need to do it as fast as we possibly can. It affects our climate change, it affects one- third of our greenhouse emissions in this country. The Department of Energy's Oak Ridge National Laboratories says that inter-city passenger rail is 17 percent more efficient than air travel, that it is 21 percent more efficient than auto travel. That says something.

So, encouraging greater user of it is terribly important. I'll do everything I can, Senator Lautenberg, to work with you to make sure that we can do this. And we will. It's inevitable. It's part of America's destiny.

I thank the chair, and I apologize to the audience and to the witnesses.

SEN. LAUTENBERG: Thanks very much, Senator Rockefeller. Your position as chairman of this committee is one that gives us encouragement that we can achieve this goal of ours of having a more important rail link to our transportation system. And we thank you very much for your encouragement.

Senator Hutchison.

SEN. KAY BAILEY HUTCHISON (R-TX): Thank you, Mr. Chairman. And I am very pleased too to be at this hearing and also to have the opportunity to have a Texas presence at the hearing because you and I, Mr. Chairman, have worked for a long time on Amtrak, keeping Amtrak viable. And I will say that we have had a very productive partnership at keeping the national part of Amtrak also viable.

And I think that is essential, and now that we are beginning to see the possibilities for high-speed rail, I think it becomes even more important to have the national part of the system also have the opportunity for high-speed rail to connect into Amtrak and therefore provide really better synergism and ridership and service to both Amtrak and the high-speed rail that I do think will help ease the traffic congestion in many parts of our country.

I was very pleased you mentioned the Amtrak Reauthorization bill last year. The first Amtrak authorization bill before this last one was 1997, and I sponsored that one as chairman of the Surface Transportation subcommittee. And I think we did some great reforms in last year's to begin the process of having a federal partnership for capital grant programs for states to be able to invest in rail.

And I think that is an important step forward to making it more viable, because any successful rail project is going to have to have multi partners. It's going to have to have private sector, federal, state, because it's so expensive. And the early investment is expensive, but then it becomes much more efficient after it is finally built and established.

I am pleased to welcome Mr. Szabo, who will appear for the first time in your new position as FRA administrator, and we're glad to have you here. You'll play a major part in this. And I'm glad that you're going to have seven regional meetings to determine what the parameters for high-speed rail should be. And I think having them all over the country is another good sign.

I just want to say that Robert Eckels, who is the former county judge, which is the county executive in Texas, of our largest county, Harris county, and he is now heading up the effort for a high-speed rail corridor, called the Texas T-Bone. And it's a great plan that is coming forward and I think could go right into Amtrak. It can have a lot of great results. And I hope that it is one of the first projects that can get some of the stimulus funding that would be available. And I think that it's great that he is here to talk about the national system.

And I just want to recognize Governor Rendell, who also is someone with whom I've worked a long time. And his brother is actually my constituent in Dallas, Robert, and also a good friend and someone with whom I have worked also in Dallas and in Texas. So we have a lot of interest here, and I look forward to hearing from the witnesses. And it's a very distinguished panel.

Thank you very much, Mr. Chairman.

SEN. LAUTENBERG: Thank you very much. We made a decision before that because of the size and the quality of the witnesses here today, that we would forgo additional opening statements. And we'll try to deal with this expeditiously and have just five-minute rounds or six- minute rounds, maybe to give just an extra minute there for use as the members see it.

And I'd like to introduce the witness panel.

A good friend and Governor Ed Rendell of Pennsylvania. Just like the people of New Jersey, our neighbors from Pennsylvania rely on trains on a daily basis. Governor Rendell has been a vigorous advocate for passenger rail, and I recall clearly his satisfaction, but his energy in getting a new rail link between Philadelphia and Harrisburg. And it met with almost immediate success. And that's the kind of stories that we expect to see constantly.

The Honorable Joseph Szabo, the FRA administrator. This is the first time you've been before this committee since your confirmation. We're looking forward to hearing how you are working to develop first- class rail passenger service for our nation. I know your head and your heart are behind that.

And the Honorable Judge Robert Eckels, Chairman of the Texas High Speed Rail and Transportation Corporation.

Ms. Susan Fleming, Director of Physical Infrastructure Issues at the Government Accountability Office.

And Tom Skancke, Commissioner of the National Surface Transportation Policy and Revenue Study Commission, President and CEO of the Skancke Company.

And we thank you all for being here. And Governor Rendell, if you would, please, take five minutes to summarize. Try to meet the target if we can.

GOV. RENDELL: Mr. Chairman, you forgot Mr. Boardman.

SEN. LAUTENBERG: Oh, my god. I looked at Joe and -- (laughter) -- now, all right. We'll fire that person. (Laughter.)

MR. : He's only been here six months.

SEN. LAUTENBERG: You know -- and that's what happened. Take advantage of relationships. I know -- (laughs).

We're glad to have you, Joe. You've done a great job at Amtrak. We're proud of you. And I'm sorry. And I thank you, Governor, for the reminder. We will start you off at a fresh for a five minute --

GOV. RENDELL: Mr. Chairman and Ranking Member Thune, and all of the members of the committee, it's a pleasure to be here. I think this is a momentous opportunity for the country. And I would analogize it to the opportunity we had when we built the federal highway system. But we need to do it right.

I come here today wearing three hats: as governor of Pennsylvania, as chairman of the National Governors Association, and as co-chairman of Building America's Future, an organization dedicated to improving and investing in America's infrastructure, that I started with Governor Schwarznegger and Mayor Bloomberg, a bipartisan organization. And we believe that promoting inter-city rail is a key priority for America's overall infrastructure plan.

Mr. Chairman, you talked about the success Pennsylvania has had. Teamed-up with Amtrak, we have invested $145 million and improved the time on the Philadelphia to Harrisburg line from 120 minutes to 90 minutes, and in two short years our ridership has gone from 898,000 to nearly 1.2 million, as a result of that change. If we build it right, people will ride it. I have absolutely no doubt about that.

There has been similar progress all around the country and a lot of emphasis on doing what we did. The Harrisburg line has been improved to 110 miles an hour, and I want to talk about that in a second. But I believe, as we look at inter-city passenger rail, we can't be content as a nation to build out 110-mile systems. If we do that, we are absolutely consigning ourselves to second-class citizenship compared to Asia and Europe. We have to find a way to build and finance true high-speed rail.

As you know, the Maglev train in Shanghai runs at 268 miles an hour. The Japanese bullet trains are at 170 miles an hour. The French TGV is at 160 miles an hour. We can't be content to just build out a ordinary system.

Now, what will high-speed rail do for us, in addition to moving passengers and helping our climate control? It will create jobs for our citizens, jobs in building out the system and orders for American factories.

Now let me stress the importance of that. In Pennsylvania alone, we have general electric transportation in Erie, and most of these factories tend to be in hard hit areas of the country. In Erie, Pennsylvania, they employ over 4,000 people. They are ready to build the next generation of high-speed locomotives.

In Steelton, a little town across from Harrisburg, Mittal Steel, the biggest steel corporation in the world, has a plant that builds railroad tracks. It has 400 workers. With just this $13 billion investment, they intend to increase, maybe double or triple, the size of their workforce in doing such.

TGV, the French rail system, is run by a company called SNCF, the national rail company. They employ over 200,000 people in good-paying jobs. And let me remind you, France is a country one-fifth of the size of the U.S. So just imagine the number of jobs that would be -- permanent jobs -- in building this high-speed rail system, as well as all of the construction jobs and the orders for the factories, in building out the system itself.

But, if we're going to do this, we have to do it right, and we have to do it at scale. Thirteen billion, and I know what Senator Thune said, and he's right. In one sense, $13 billion is a lot of money.

But in another sense, it's a small amount of money to do what needs to be done.

To build a high-speed rail up the California coast, it's estimated to be a $45 billion cost factor. To build a high-speed train from Philadelphia to Pittsburgh, which would link the mid- Atlantic core to the Midwest, would cost between $20 (billion) and $25 billion alone.

A couple actually of weeks ago, Vice President Biden had a meeting with six governors. And it was a very interesting meeting. The governors all were pushing for their own projects, 100-mile projects. The Midwest governors said that they have a plan to link the Midwestern cities up at 100, 110 miles an hour. Governor Kaine said that there's a plan to link Richmond and Washington with 100, 110 mile-an-hour train. And then Governor Nixon of Missouri spoke up, and Governor Patrick of Massachusetts and myself joined him and said, "Slow down."

We can't make this effort, building a 100-mile-an-hour train systems, or else we are truly consigning ourselves to be a second- class nation when it comes to transporting our citizens. We have to look at the maglevs. We have to look at the bullet trains. We have to look at improving the Acela.

If we did the work we needed on the Acela line on Amtrak, we could go from New York to Washington in a hour and thirty minutes. We could go from New York to Philadelphia in 33 minutes. We could consign the shuttle to the rust heap, and by doing that we would improve east-west air traffic all over the eastern seaboard. We shouldn't be flying people 500 miles or less. We should be putting them on high-speed trains.

Now, Ranking Member Thune asked a very good question. How are we going to decide which of these projects -- whether it's ($)13 billion or ($)400 billion -- how are we going to decide which project should be given priority?

I suggest that we create a national infrastructure bank, staffed by professionals, not necessarily professionals, all of them in transportation -- it could be some former members of Congress, some former secretaries of transportation -- and rank projects on a cost- benefit analysis, rank projects on priority, what they do for transporting people, how many people, the effect on climate change -- all of those things. An independent ranking system. Because the public wants that. The public does not want transportation dollars authorized to the same old system, and certainly not for projects on this magnitude.

And lastly, how are we going to pay for it? Because $13 billion, as Ranking Member Thune said, is a lot of money. But it's just a drop in the bucket. How are we going to pay for building a high-speed rail system in this country?

I think, two ways. I would recommend that the Congress consider using some of the money that comes from national climate change law to do just that. What better way could we help our climate than getting cars off the road, trucks off the road, buses off the road, by building a high-speed rail system?

Or, secondly, if that money is going to be spoken for elsewhere, or if that bill never comes to pass, I think the time has come to look at a federal capital budget. You know, the federal government is the only political entity in the United States that does not have a capital budget. To have a capital budget, to do the things we could do with a capital budget, you have to change the way that the CBO and the OMB score.

They can't score the total investment. They've just got to score the debt service, like we do in Pennsylvania. We score what we pay for in that year. A federal capital budget, even if the federal capital budget doesn't fund the total infrastructure picture, but just funds the infrastructure bank, it could work.

So the time is, in my judgment, the time calls for bold and strong actions. If we do this, the Obama administration and this Congress will be remembered in the same way that President Eisenhower and the Congress he worked with is remembered for building the national highway system.

SEN. LAUTENBERG: Thank you very much. I didn't want you to speak up at the end, but you got me so excited about high speed that I -- (laughter). Thanks very much. And now for Mr. Szabo. We'd like to hear from you.

MR. SZABO: Thank you, Chairman Lautenberg, Senator Thune, Senator Hutchison and members of the committee. It's certainly an honor to appear here today on behalf of President Obama, Vice President Biden and Secretary LaHood to discuss the future of high speed rail.

The Obama administration has a vision that ensures safe and efficient transportation choices, one that builds a foundation for economic competitiveness, one that promotes energy efficiency and environmental quality, and one that supports interconnected, livable communities. In each case, passenger rail is an integral part of that vision. In many cases, even modest investment in existing right of ways can result in high speed rail with competitive trip times, and continue rail's unmatched safety record.

Transportation is the lifeblood of any economy, and not only will the high speed rail vision improve mobility, but obviously, the construction will create many short term jobs, but more importantly, the sustained investment will revitalize domestic rail suppliers in the manufacturing industry. Rail is already among the cleanest and most energy efficient means of moving goods and people. In fact, one study indicates that implementing the current federally designated high speed rail corridors would result in an annual reduction of six billion pounds of CO2.

A network, taking our national rail system as a foundation with traditional speeds, and then overlaying high speed rail corridors, commuter rail systems and providing connections with transit will provide those interconnected communities that we seek. Senator Hutchison mentioned the fact that we had been doing extensive outreach, and we feel that that's critical. In the development of our guidance and as we continue to move forward with the national rail plan, we believe that that's fundamental, that we need to reach out and engage the very stakeholders, right from the inception of all this.

I'm particularly pleased that in the seven outreach sessions that we've conducted so far, nearly 1,200 people participated with a high level of enthusiasm and with a great deal of very, very beneficial comments that were, in fact, incorporated into the guidance that we just released. Our success if going to be determined by these partnerships, and like the construction of the highway system, states are going to play a very critical role. We're on track and we're using essentially the same model that the Europeans did in their rolling out of high speed rail.

Our near term strategy seeks to advance new express high speed corridor services, at speeds over 150 miles per hour in corridors of 200 to 600 miles, and then for corridors of 100 to 500 miles, we seek to develop both emerging high speed rail corridors at speeds of 90 to 110 miles an hour on tracks shared with freight operations, and also develop high speed rail corridor systems at speeds of 110 to 150 miles an hour on dedicated tracks.

In addition, we'll be looking to upgrade the reliability and quality of traditional 79 mile an hour intercity service. I'm pleased to report that our guidance document is out. It was out on time, and it provides four tracks for possible funding -- projects that are individual projects that have individual utility and individual benefits. A track for corridor programs, which is more comprehensive on implementing a full build out of a corridor plan.

A track for planning to assist those states that aren't quite as far along but still have a keen interest in implementing high speed rail plans, and then an area for projects that will provide for a 50/50 split that will allow those states that are willing to help match dollars, allow us to stretch our dollars further. The criteria for selection will be based strictly on merit. We will be measuring the public benefits, those that are measureable, achievable and cost effective.

The key element of that will be the applicants' ability to mitigate risk, the applicants' ability, their fiscal capacity, to carry out the project, their fiscal ability to cover capital and operating expenses, and their ability to have adequate project oversight. This is a transformation for FRA. Historically, we've been a safety agency and safety remains our top priority, but it's important to note that our passenger rail staff is, you know, our staffing levels are from a quieter era when all we had to do was issue a couple of grants to Amtrak or perhaps to a short line railroad, and clearly, that's changed.

We're asking the members of this committee to support the president's fiscal year 2010 budget that starts to address the staffing problems that, you know, managing a program of this magnitude will bring to the agency. And then we also ask that project oversight takedown be consistent with the more traditional one percent instead of the quarter of one percent that was authorized for us in the Recovery Act. And with that, I look forward to your questions.

SEN. LAUTENBERG: Thank you very much.

And now, Mr. Joe Boardman, the president and CEO of Amtrak, he is the current CEO, former FRA administrator, former state transportation official. Joe, forgive me again for leaving you at the station when the train was pulling out but -- (laughter) -- I'm back, apologizing.

MR. BOARDMAN: All is forgiven, and I hope never to leave you at the station, Senator. (Laughter)

Thank you, Mr. Chairman, and senators all. Amtrak has been providing intercity passenger service for nearly 40 years and we regard ourselves as the leaders in the field. About half of our 310 daily trains operate on some part of the Northeast Corridor, which is currently the only high speed railroad on the continent. In its operation, we've built gradually but surely into a 150 mile an hour railroad. This has given us a unique and unparalleled experience in the operation of service above 100 miles an hour under North American conditions.

I recently returned from an extensive tour of our western operations, in fact, 9,000 miles' worth of riding the train and 47 Amtrak prepared meals. They were all good -- (laughter) -- but I would have had a little more variety.

I can assure you that the mood of our employees and our supporters is optimistic. People are excited about the future of Amtrak and intercity passenger rail, and there's a real sense that we have a historic opportunity ahead of us. The Passenger Rail Investment and Improvement Act, or PRIIA, establishes a new partnership between the federal government, the states, Amtrak and the free railroads.

This committee played a pivotal role in the development and enactment of legislation. This is my first appearance before this committee as president of Amtrak, and so on behalf of the company and all of our supporters, I would like to thank the committee, and in particular, Senator Lautenberg and Senator Hutchison, for your wisdom and your efforts on our behalf.

Under PRIIA, each entity has a clearly defined role. The states are the strategic planners. They decide which markets should be served by rail and they fund the operating costs for newer expanded corridor services. While the federal matching program provides funding for capital projects, states will need to provide the annual funding for those portions of the operating costs that are not covered by revenues. The U.S. Department of Transportation coordinates state efforts and administers the federal capital fund for corridor development.

Amtrak is the nation's rail operator. It designs and provides service on behalf of the states and the federal government in cooperation with the host companies, which own much of the railroad right of way. This is an extraordinary vision and a lot of the ideals that are contained in it will probably be components of the transportation re-authorization bill that's going to come before Congress in the coming years.

The American Recovery and Reinvestment Act, or ARRA, builds on this vision and expands on it. It provides Amtrak with a direct grant of $1.3 billion for capital improvements. It funds the High Speed Rail, Intercity Passenger Rail and Rail Congestion Mitigation Grant Programs with $8 billion of capital fund. ARRA will focus attention and funding on those projects that can be accomplished in the nearer term, essentially in the next five to seven years.

To address longer term development needs, President Obama has proposed to make about a billion dollars a year available for grant funding. A lot of the discussion that has followed has been about speed, but the real issues are trip time and market relevance and the natural yardstick for comparison is the automobile. So when we talk about improving speeds, we need to be thinking about those increases in the context of their effect on trip times.

Frequency is also a major component of relevance and we need to make sure that we're developing a sufficient number of frequencies on our services to provide travelers with a range of choices. There are really three ways to build, develop or improve passenger train speeds. The best know method is one that a lot of people have in mind when they say high speed rail, and it's by an order of magnitude the most expensive and time consuming -- trains that operate routinely in the 150 to 220 mile an hour range.

These projects require a new right of way with very high standards of engineering, are dedicated passenger railroads that require the newest and most modern equipment, are electrified and serve relatively few intermediate points. They're basically end point focus services. Another model is the higher speed service that's developed incrementally on an existing railroad. To do this, track and infrastructure upgrades are upgraded to an existing line.

Depending on the route, this could also entail some smoothing out of curves and perhaps grades, as well as some improvement to grade crossings and signaling systems. This is exactly the process that began in the Northeast Corridor after 1976, when Amtrak gained control of it, and over the years, we've gradually raised speeds to 125, and then in places to 135 and 150 miles an hour.

There is, however, a natural sweet spot at 110 miles an hour that offers some significant advantages. You don't need to close or separate grade crossings, you can operate diesel powered service with existing equipment. Most importantly, you don't necessarily need a dedicated track or right of way, although in some circumstances, they might be desirable. Those are formidable cost advantages and 110 mile an hour service still allows reduced trip times that make rail service competitive in certain markets.

Finally, there's a third strategy to improving service. It's reducing the portions of your journey that trains cover at a low or very low speeds. Our goal is not raw speed, but it's rather an economical, reliable and trip time competitive service. A big part of reducing trip time involves finding ways to raise operating speeds at that low end of the range.

We recently replaced a heavily trafficked crossing in Chicago's Brighton Park. There was no interlocking protection, so trains actually had to come to a stop before getting the signal to proceed at 10 miles an hour. We can now move trains through that interlocking at 40 miles an hour, and this has allowed us to lop several minutes off the average operating time through this section.

I hope the committee will keep Amtrak and intercity passenger rail in mind as it considers some of the impending legislation we expect to see in the coming months. Transportation emissions need to be addressed in any proposed climate change policy solution, and that we believe expanded intercity passenger rail offers significant opportunities to reduce carbon emissions.

I want to commend Chairman Rockefeller and Chairman Lautenberg for their recently introduced Surface Transportation Policy Bill. This bill is an excellent framework for the re-authorization and it moves us in a direction of a mode and neutral program that uses policy outcomes to guide transportation investments. Transportation policy that's focused on outcomes will allow the federal government to focus its limited resources on investments that achieve real benefits.

SEN. LAUTENBERG: Thank you.

MR. BOARDMAN: Thank you.

SEN. LAUTENBERG: And Mr. Eckels, we're pleased to have you with us. I didn't mention before that the High Speed Rail Program Transportation Corporation that you're with is a Texas facility, and we have had the good fortune to work with Senator Hutchison over the years.

I must say that she was a light at the end of the tunnel on a few really tough moments that we've had, and it was a pleasure to work with you.

Thank you. Mr. Eckels, please.

MR. ECKELS: Sir, we have enjoyed working the Senator Hutchison over the years on high speed rail, back from the days of the authority in Texas and into our current planning process.

And before you fire your staff for missing Mr. Boardman on your list, I wanted to thank them for their help to me as a party person getting in my testimony today on air claims, and their very helpful and I appreciate their support and assistance.

I also want to thank the ranking member -- are we on? There we go -- Ranking Member Thune and all the senators for being here today and the interest that you have in this project in our state and these projects across the country.

I believe that this technology will transform transportation and mobility in the United States and I know that I am, by no means, alone in this belief and I'm encouraged by the comments we're hearing here today. Our Governor Rendell made the good point about high speed intercity rail and passenger service, defined at 195 miles per hour and higher, is, we think, the most important thing to remember as we talk about high speed rail, as evidenced by the examples around the world, and the projects that actually work, that provide real and significant potential to reduce the congestion in our crowded skies and highways, reduce carbon emissions, reduce our demand for foreign oil, create hundreds of thousands of jobs and stimulate and orchestrate economic development and growth across our country right now.

I was not invited here to talk about that. We're preaching to the choir, though, for high speed rail. You're aware fop the benefits and we've all talked about that today. I was brought here more to discuss how close we are to seeing these benefits and what much be done to ensure that we get to where we want to be. The president and Secretary LaHood have made their vision clear. They want world class, high speed rail in this country.

To reap the kinds of benefits that we're talking about today, and certainly to justify the tremendous investment that has already begun, and if increased as recommended by Chairman Oberstar, Ranking Member Mica, a and this committee, we must set that bar incredibly high. Again, Governor Rendell has commented that our country is ready for and much have truly fast and efficient passenger travel, trains that are capable of speeds of 185 miles per hour or more.

When President Kennedy declared to this country we'd put a man on the moon before the end of the 1960s, he knew that his bold and aggressive promise would require a new culture, a new mindset, and ultimately a new administration and NASA to become a reality. This kind of example is something that I think we should be mindful of today. Don't misunderstand me. I have complete confidence in the United States Department of Transportation and Secretary LaHood, and his colleagues at the Federal Railroad Administration.

I have no doubt that the president has assembled a team, including Administrator Szabo. We've not had a chance to work together but with the Deputy Administrator Karen Craig, we had the pleasure of being with her a few weeks ago in Houston at one of the outreach sessions, they're fully capable of developing the system through the nation. In order for America's, in the broadest sense of the term, moon shot, to become a reality, we, and that is all of us here as well as members of Congress, must work in concert with the same bold vision.

We must consider this revolutionary initiative in its proper context and recognize that the clear view of this administration and Congress, combined with the mounting public and private sector support for groups such as the Texas High Speed Rail and Transportation Corporation, the California High Speed Rail Authority, the Florida High Speed Rail Authority, among many others, working closely with Rod Deerdron (sp?) and Bill Miller and AFTHA (sp?), with other organizations, represent a wealth of this century's opportunities to make a real and positive impact on our country's transportation and economic development landscape.

Let's be certain that we all have our eyes on the same prize --- passenger trains traveling at, at least, 185 miles an hour or more on a new, dedicated, as Mr. Boardman talked about, track system and high speed rail infrastructure. If we have that separate infrastructure, we improve safety, reduce collisions and improve economic benefits to the community. As we look to build this new system, it's important to remember that we're breaking new ground in this nation.

It would be wise to provide flexibility in the use of federal funds to provide for market studies and route engineering and environmental studies. In all the projects I've been involved with at the local level, it's primarily been traffic and toll road. We're the only county run toll road system in the nation. It's over 500 miles, away miles of system. We always built the projects ahead of schedule and under budget. But the key to being ahead of schedule and under budget was having the right schedule and the right budget and doing the studies beforehand so that we knew what we'd be spending in the end.

The market and environmental studies are important, if we're to attract private investment as well. In all the discussions up until most recently, we haven't discussed private investment and public/private partnerships. There are places in the world where high speed rail is at least covering its operational costs and making a profit for investment. There are places in America, too, where high speed rail can also make sense for private investment, and to attract these investors, we must show that the routes are viable and that they may at least cover cost.

To encourage private investment, we should offer tax exempt, additional tax exempt private activity bonds, additional TIFIA funding and other financial mechanisms that might be available from the federal level. Also, I'd encourage you that as we look to different projects, we don't try to put in one formula for the entire country. Innovative project delivery systems are important. There are different needs in the Northeast Corridor, California, Illinois, and Texas.

In Texas, we have a linear airport kind of model where -- and again Senator Hutchison has been very close working with us -- that in every part of the country, whether it's a train system, an airport or a seaport, all of those are owned and operated by cities or counties. If you will give local governments the opportunity to connect our airports, our seaports and our metro transportation systems, we will, for the first time, breathe life into a truly viable interconnected mobility system.

We are very grateful of the support of the administration's vision for high speed rail and are encouraged by the size of the financial commitment under discussion for the next surface transportation bill. We're not working under the assumption that the federal government or any state governments alone are prepared to cover the cost of these projects to our country. I do think the Governor had good comments about being able to sustain the systems that we build, but we believe that the cities and counties have a role to play in that and are coming together to try to make that work.

We do have a local government corporation and the capacity to bring that coalition together to help deliver this project for our state and provide service for the 440 mile Texas T-bone Corridor that Senator Hutchison mentioned. It would bring 16 million Texans today living together, connect us along the Gulf Coast corridor to New Orleans, Atlanta and the east coast and on the Southcentral Corridor into Oklahoma City to interlock and up into Memphis, and ultimately into the Midwest.

This Texas project, while impressive in itself, it will require a unique partnership of federal, state and local officials, as well as the private sector, and we would very much look forward to working with this committee and with FRA and Amtrak to make that happen. So thank you very much for having us here and I look forward to questions.

SEN. LAUTENBERG: Ms. Fleming, we welcome you and ask you to make your remarks now, please.

MS. FLEMING: Mr. Chairman, ranking member Thune, ranking member Hutchison and members of this subcommittee.

Thank you for the opportunity to discuss high speed intercity passenger rail and the American Recovery and Reinvestment Act. The $8 billion (dollars) provided by the Act for high speed and other intercity passenger rail projects has focused more attention on and generated a great deal of anticipation about the possibility of developing high speed rail systems in the Unites States. My testimony has two parts. I will discuss the factors that we have identified that affect the economic viability of high speed rail projects, and how FRA's strategic plan incorporates these factors.

First, while the potential benefits of high speed rail projects are many, these projects are costly, take years to develop and build and require substantial up front public investment, as well as potentially long term operating subsidies. Determining which, if any, high speed rail projects may eventually be economically viable, will rest on the factors such as ridership potential, cost and public benefits.

High speed rail is more likely to attract riders in densely and highly populated corridors, especially where there is congestion on existing transportation modes. Characteristics of the proposed service are also important, as high speed rail attracts riders where it compares favorably to transportation alternatives in terms of door to door trip times, frequency of service, reliability, safety and price. Costs largely hinge on the availability of rail right of way, land use patterns and a corridor's terrain.

Once projects are deemed economically viable, project sponsors face the challenging task of securing the significant upfront investment for constructions costs and of sustaining public and political support and stakeholder consensus. We found that in other countries with high speed rail systems, the central government generally funded the majority of upfront costs of high speed rail lines.

The $8 billion in Recovery Act funds for high speed rails represents a significant increase in federal funds available to develop new or enhanced intercity passenger rail service. This amount, however, represents only a small fraction of the estimated costs for starting or enhancing service on the 11 federally authorized high speed rail corridors. Furthermore, the challenge of sustaining public sector support and stakeholder consensus is compounded by long project lead times, the diverse interests of numerous stakeholders and the absence of an established framework for coordination and decision making.

Moving on to my second point, FRA's strategic plan attempts to address the absence of an institutional framework for investments and high speed rail. In our recent report, we discussed the need for clear identification of expected outcomes, ensuring the reliability of ridership and other forecasts to determine the viability of high speed rail, and including high speed rail with a re-examination of other federal surface transportation programs to clarify federal goals and roles, link funding to needs of performance and reduce modal funding stovepipes.

FRA's strategic plan is more a vision than a plan. For example, it does not define goals for investing in high speed rail, how these investments will achieve them, and how the federal government will determine which corridors it should invest in. FRA views its strategic plan as a first step in planning federal involvement. FRA has emphasized that it will involve stakeholders to help it flesh out its approach to developing high speed rail there under its control.

FRA officials also told us that it plans to spend Recovery Act funds in ways that show success to help keep long term political support for these projects at the local level. In conclusion, the infusion of up to $8 billion in Recovery Act funds is only a first step in developing potentially viable high speed rail projects. The host of seeming intractable issues such as their high cost, uncertain ridership and need for broad political support that have hampered development of these projects is still with us and these issues will need to be resolved to effectively spend Recovery Act funds.

Surmounting these challenges will require federal, state and other stakeholder leadership to champion the development of economically viable high speed rail corridors and the political will to carry them out. It will also require clear, specific policies and delineations of expected outcomes and realistic analysis of ridership costs and other factors to determine the viability of projects and their transportation impact.

Mr. Chairman, this concludes my statement. I would be pleased to answer any questions you or other member so the subcommittee might have.

SEN. LAUTENBERG: Thank you very much, Ms. Fleming.

And, now, Mr. Skancke, we welcome you and invite you to give your testimony.

MR. SKANCKE: Thank you, Mr. Chairman. The tough part about being the caboose is that you cover a lot of track that the previous trains covered. (Laughter) Keeping in light with all the other --

SEN. LAUTENBERG: Get that mic a little closer, please.

MR. SKANCKE: Is that better?

SEN. LAUTENBERG: Yeah.

MR. SKANCKE: Good afternoon, Chairman Lautenberg, Ranking Member Thune, and members of the committee.

Thank you for allowing me to have the opportunity to testify today. In 2005, I was appointed to the National Surface Transportation Policy and Revenue Study Commission by Senate majority leader, Harry Reid. In January of 2008, after two years of meetings, hearings and research, our commission recommended to Congress, a vision for transportation policy and funding in America, a new vision which includes a framework that will reform and hopefully revolutionize the way we do transportation policy and funding for the next 50 years.

One of our recommendations was substantive reform of our passenger rail system. Over the next half century, the United States is projected to add 150 million new residents, a 50 percent increase over its current population. This increase will cause travel to grow at an even greater rate than the population will. We will need to provide new modal choices which will require a cultural shift for the traveling public. We presented our report to Congress in January of 2008. We recommended that the entire country should be connected by passenger rail by the year 2050.

The recommendations also defined that the passenger rail corridor should connect population centers within 500 miles of each other. Just 11 months later, the GAO concluded that the existing intercity passenger rail system is in poor financial condition and the current structure does not effectively target federal funds to where they provide the greatest public benefit, such as transportation congestion relief. Corridor routes, generally less than 500 miles in length, have higher ridership, perform better financially and appear to offer greater potential for public benefit.

We also recommended to Congress that our nation invest at least $8 billion per year over the next 50 years in passenger rail systems. President Obama and Sensatory Reid and this Congress realized that that investment in passenger rail is needed now, not over the next 50 years. So $8 billion was put into the Stimulus Bill to not only create jobs, but to kick start the program to begin a valiant new vision for America's transportation modes.

I think this President and Senator Reid and this Congress have a vision for transportation in our nation, and it is much like that of President Eisenhower, which is connecting America. The United States is way behind the curve in passenger rail service, as we all know. The Far East, Near East, Europe and the Middle East have been investing billions in passenger and freight rail systems for many years. Our lack of vision and investment is deteriorating our global competitiveness and our quality of life.

The nation's new vision should not just focus on existing passenger rail lines, but should expand beyond the current corridors. In my opinion, the vision should include a western connection, much like the recommendation of our commission. Connecting all 22 western states in phases as a system, not as pieces, should be a priority.

The first phase of a western connection is currently being considered and underway, which is the Desert Express High Speed Rail Passenger Corridor, connecting Victorville, California to Las Vegas. This project will ultimately connect Victorville to Palmdale, California, thus tying into the California high-speed rail system from Los Angeles to San Francisco. The project will eventually connect three major western metropolitan mega-regions, each project meeting the criteria of our commission, and the GAO for being corridors of 500 miles or less. This vision is one that takes leadership and courage to get it done. It can be done and it should be done.

I know, having grown up in Sioux Falls, South Dakota, it sure would've been nice to have taken a 40 or 60-minute train ride to Minneapolis for my Thanksgiving holidays or a Vikings game, but instead, I was stuck at home in a blizzard because we had to travel by car. Yes, the systems will be costly to design, fund and construct, but we can do this. This I the United States of America.

Mr. Chairman, I have three policy changes for this committee to consider in the new authorization. First, we just agree upon a bold new vision and make the cultural shift in the way we do transportation. A vision the American people can invest in and believe in that includes passenger rail that connects America much like the Eisenhower interstate highway system did. We must do today what our parents and our grandparents did for us, invest in a new vision, reform the current program, and revolutionize the way we do transportation policy and funding.

Second, we must reduce the time it takes to deliver a rail project in this country. Twenty years in new starts is just too long. We need to get our projects delivered in three to five years. This is not environmental streamlining, as some would like to call it. It's process delivery. Agencies cannot just sit on projects. We do not need to create an oversight office. We just need to get the projects out. We don't need to open up the NEPA process to get this done. It can be done by reviewing duplicative services.

Third, the system must be performance based and outcome driven. Key performance measures for rail systems would include reliable on- time performance, congestion mitigation, safety and environmental benefits, improved choices, mobility options for all communities, and reduced energy use. The systems need to be in their own rights of way, have a minimum amount of shared track in metropolitan areas, and on-time delivery for passenger predictability. It needs to be reliable or the public won't use it.

In closing, Albert Einstein once said, and I quote, "Without changing our patterns and thoughts, we will not be able to solve the problems we created with our current patterns and thoughts. So let's change our patterns and thoughts so that we can solve the problems we created with our current patterns and thoughts."

Mr. Chairman, you should be commended for having this hearing today to talk about high-speed passenger rail. Your leadership demonstrates the change is in Washington, D.C., and is right here in this committee. Passenger rail is the future for moving Americans, and now is the time to make that investment. We need to restore hope in performance in our transportation system. Our fellow citizens are counting on us to get it done. Thank you.

SEN. LAUTENBERG: Thank you all very much for your excellent testimony. We're going to start with a -- I think what we'll do is allow six minutes for each person.

And I would ask Governor Rendell a question, and this is President Obama has made high-speed rail a priority. He started with $8 billion in the Recovery Act. The president's also proposed $1 billion for each of the next five years for high-speed rail. Now, what sources of funding might Congress consider for these future high- speed rail investments? But before I ask you to answer, I would say you've got to be a little cautious with the climate change money. We are working arduously to say that there are many problems, some of them more severe than others.

Among them is our infrastructure focused today on rail, but also on climate change to make it possible for generations that follow to be able to breath the air and conduct a healthy life with climate change. And one of the best change for climate change is, I think you said, is rail, high-speed rail, efficient rail.

So what sources of funding might congress consider for these future high-speed rail systems? And you said earlier, and I concur with you, that $13 billion is not a lot of money when you think of the neglect that's taken place over these years. What we've invested in rail is pitiful by comparison, and to the needs not only of more efficient operations and less importation of oil et cetera, but the security needs for the country to be able to function in times of emergency. So again, should passenger rail and development of high- speed service receive dedicated federal funding like our interstate highway system or aviation system? That is really the first part of the question I ask.

GOV. RENDELL: Well, there's a sportswriter in Philadelphia who writes a column once a month, and he entitles it "If I Were King of the World." And he delineates all the changes he would make in sports, professional sports. Well, if I were king of the world, we'd stop messing around. Every one of the G-7 nations has undertaken massive infrastructure repair programs. Japan and Germany, countries a fraction of our size have spent over $1 trillion at one time in a five to ten-year infrastructure repair program.

That's what we should be doing as a nation. We should finance it through a capital budget, and we should change the way we score such financing mechanisms. It's the only way we're going to ever get this done. We're kidding ourselves. We're doing something to pat ourselves on the back and say boy -- I heard Secretary LaHood, who I think is terrific, he said, "Thirteen billion dollars is terrific. It's better than we've ever had. Thirteen billion dollars is better than nothing." Well, sure it is, but it doesn't get us anywhere down the road. We can't do infrastructure on the cheap. We have to invest what we need to invest, and we have to find a way to do it. And we have to find the political courage to find a way to pay for it.

I think a capital budget is long overdue. I testified as mayor of Philadelphia --

SEN. LAUTENBERG: I ran a pretty good sized company, and I can tell you that if we were operating --

GOV. RENDELL: No company would ever --

SEN. LAUTENBERG: -- on a cash basis, it would've been --

GOV. RENDELL: You wouldn't finance your capital needs out of operating costs, and we do. We finance building a bridge or a train system the same way we purchase paper clips in the federal government. It's nuts. It's time to change. It's time to change, and we better do it soon because infrastructure is a lot like that Fram Oil commercial. You can pay me now, and he holds up the can of -- oil filter, $8.75, or you can pay me later. And he points to the dilapidated car, $4,625. It's not getting cheaper. Not getting cheaper.

SEN. LAUTENBERG: You and I area very much on the same page, and all we have to do is convince about 85 others here that we're doing the right thing there.

Ms. Fleming, in your March 2009 report, you studied high-speed rail service in France, Japan and Spain. Each of these countries has committed significant government support for its high-speed rail system. Is it realistic to expect a high-speed passenger rail service to be successful without government contributing to our capital and/or operating expense?

MS. FLEMING: What we found is that there was a real commitment and priority in France, Spain and Japan. And the majority of upfront construction cost was born by the federal government, the central government in these countries, without the expectation that they would recoup the initial investment.

And most of these countries, what they did was they built an initial trunk line in order to show success and then build upon that. So the commitment followed with the significant amounts of money, and what that allowed to do, that model allowed them to begin initial construction relatively quickly, then if they didn't have that large investment by the central government.

SEN. LAUTENBERG: Thank you. I'd like to ask you a question, Mr. Boardman, and hope that we can get a quick response. My understanding that foreign owned manufacturers of passenger cars, high-speed rail equipment are interested in competing for the $8 billion that are provided in the Recovery Act. What can we do to encourage more American companies to enter into the high-speed rail manufacturing market?

MR. BOARDMAN: Mr. Chairman, I was encouraged yesterday to see that -- in the field hearing that (he and I had ?) GE Locomotive provided testimony where they are ready, they said, to build the next generation of diesel high speed, and their definition was 110 to 124. They had their CEO, Lorenzo Simonelli, at the hearing in Pittsburgh. And so I think they are catching on to the fact that there's a commitment here in this country, and I think that's the most important part of that.

GOV. RENDELL: And the commonwealth's investing $7 million in helping to build that technology, Senator.

SEN. LAUTENBERG: Thank you. I'm going to turn to my ranking member here, Senator Thune, for you, sir, to ask your questions.

SEN. THUNE (R-SD): Thank you, Mr. Chairman.

Governor, Senator Wyden and I have a proposal called "Build America Bonds," which I think is sort of geared at what you're talking about. It's a way of bonding for capital improvements. I agree entirely that the way we budget around here defies any sort of common sense or, you know, rational basis for making these types of decisions. It's clearly not the way that these decisions would be made in a private sector if you're running a private business. And so I appreciate your observations about that.

And I would say to Mr. Skancke that if Brett Favre is playing for the Vikings next year, there are going to be a lot more people who want to get from Sioux Falls to Minneapolis, and preferably quickly and without have to drive through a blizzard.

If I might direction a question to -- this would be to Mr. Szabo and Ms. Fleming. The main thought, I guess, I take away from the GAO's testimony is the problem with developing reliable projections for ridership and cost. The concern is that overly optimistic project proponents are going to overestimate ridership and underestimate cost. And if the federal government makes investment decisions based upon faulty forecast, we're going to fund projects that won't be successful.

So I guess the question -- and maybe I direct this first to Mr. Szabo -- is how are you going to evaluate such projections for proposed projects? And are you going to use your own projections or rely on the project sponsor for those?

MR. SZABO: Well, first off, one of the key components that we will be ranking the applications on will be their proposed management plan, and their management of risk, which includes covering all of the operating costs and any cost overruns. Those responsibilities belong to the applicant, not the federal government. So clearly, it's in their best interest to protect themselves to ensure that those forecasts are accurate.

One of the things that we plan to do is to use a template where essentially, applicants will provide the data to us, but we'll run that data through our own calculations to ensure that as we compare the projects, we're getting a apples to apples comparison. We believe that that will help ensure the integrity of the data, and help us make sure that we have accurate forecasts.

Clearly at FRA, we understand that fact that the projects that we choose are going to have to be successful. We understand that we cannot squander this opportunity. That if we are not, in fact, very careful about the projects we select and ensuring the success of the projects that we've selected. If we fumble that ball, there won't be a next generation on this. So we understand the responsibility that we have, and we're prepared to take that challenge.

GOV. RENDELL: Senator, can I add something quickly to that question?

SEN. THUNE: Yes.

GOV. RENDELL: One of the ways to ensure that you're getting accurate estimates is if a state's recommending it, make the state chip in some money so that they bear the risk as well. Amtrak and Pennsylvania shared the $145 million cost of the expansion of Philadelphia to Harrisburg.

SEN. THUNE: That's a good suggestion, and one that we ought to, I think, take to heart if we do -- when we start looking and evaluating these projects.

MR. SZABO: Senator, it is a key part of our plan.

SEN. THUNE: It is, okay.

And let me ask Ms. Fleming as sort of a follow up to that question too. Do you think the department should take or make sure these forecasts -- when it relies on this information, that you want to make them as accurate as possible. And I guess my question more directly is do you believe there ought to be some outside neutral party that evaluates these forecasts too in addition to having the --

MS. FLEMING: Well, as you can imagine, ridership and other forecasts are key factors to determine whether a project or system is going to be economically viable. And unfortunately, you know, statistics and results have shown that ridership tends be overestimated and cost tends to be underestimated. So we feel that there are several ways to try to get at and provide more reliable statistic.

The first would be kind of following Governor Rendell, which is really obligating the state and local governments to share some of the risk of underestimated cost for those projects where they're seeking federal assistance. Another way would be to obtain estimates and forecasts from independent sources where there isn't a state and a specific project that's being considered. And lastly, making the forecast subject to peer review, and maybe even making the data publically available. So I think those three things would maybe better ensure that the information would be more reliable.

SEN. THUNE: Mr. Szabo, after we spend $13 billion that's likely to be appropriated for high-speed rail over the next five years, do you expect the United States to have at least one corridor of substantial length that's served by a Japanese or European style high-speed railroad?

MR. SZABO: I think it's important that first off, we wait and see what is applied for. You know, obviously, I can't start commenting on what we're going to do until applications come forward and are weighed, you know, graded and then approved.

But clearly, again, I think we understand the need to ensure that we have very tangible, very, you know, substantial successes. And, you know, clearly, again, our vision is to follow the model of what the Europeans have advanced.

You know, keep in mind, when the system in Spain first opened up, you know, again, Ms. Fleming talked about how essentially, they began with one trunk line. They did. They began with their one trunk line. Essentially, it was six to eight trains a day running about 125 miles an hour. And from that, they were so successful that they incrementally made the improvements that got them to roughly 20 trains a day at speeds of 200 miles an hour.

So this is going to take a build out. You know, a build out much like the construction of the Interstate Highway System. And again, we need to understand, again, the TTB system in France today, if you ride from Paris to Strasbourg, you know, when you come out of Paris, you're doing approximately 200 miles an hour on dedicated right of way. But two-thirds along the way, you flow onto what they call "traditional track," and you're doing speeds of about 125 miles an hour. So it's not this either or proposition.

SEN. THUNE: Mr. Chairman, my time has expired. And I thank you all very much for your testimony.

SEN. LAUTENBERG: I'm called elsewhere, and Senator Udall is going to take over, and Senator Boxer will be next, Senator Hutchison, and then it's all up to Senator Udall from New Mexico. He's going to fix the whole problem, so -- (laughter.)

(Off mike.)

SEN. BOXER (D-CA): Senator Lautenberg, on your way out the door, I just want to thank you very much for this hearing, sir, and high-speed rail is critical. It's just really critical.

I want to pick up on Senator Thune's comment about the funding. And Senator Thune, I just wanted to pick up on your point about the funding because it's very critical. This $13 billion standing alone just can go so far, but in my state, we had an election about putting a $9 billion funding package, and the people voted "I," which was kind of remarkable given the latest votes that we had.

So, you know, the people there really understand it. I bet most everybody in this room has been to my state. It will eventually connect Sacramento, our state capital, to San Diego in the south. The first phase would be between Los Angeles and San Francisco, and points in between.

I also want to point out the private sector has to be leveraged into this too. In California, we're working with the private sector. So you take the $13 billion, you add the $9 billion from my state, hopefully billions from other states and hopefully billions from the private sector that you can get involved in it, and it starts to look like something on the scale -- not quite what Governor Rendell wants, I don't think because I think he is going to have a bigger plan. But I think you start to leverage and you start to see some real things happening.

And I wanted to just point out that our studies -- and if I am saying something that has been disproven, let me know -- show that our high-speed rail in California's predict save 12.7 million barrels of oil a year by 2030, and reduce CO2 emissions by 12 billion pounds per year. Supposed to be 160,000 construction jobs, and literally they're saying California, hundreds of thousands of permanent jobs by 2035. So I think if we look at a lot of the problems facing us, this great recession, the CO2 problem, the need to be energy independent, the need to make people feel comfortable getting out of their car, this seems to be one place.

And so I have two questions. The first one -- both of them, actually, are to Administrator Szabo. What is your long-term plan for development of high-speed rail nationally? And what factors do you consider the most important when it comes to funding? Where a state contribution bears some weight here.

MR. SZABO: Yes. In the guidance that we issue, that is one of the elements that while not mandatory in most of the tracks that -- the funding tracks that we provide, it certainly is something that is weighted, and certainly is something that is encouraged.

You know, our vision, frankly, matches what they have done in Europe, and I think it's important to note. You can compare it a little bit to the road system where you have local roads, you have county roads, you have state highways, you have U.S. highways and you have an interstate system. And all play a very, very important role, and they all interconnect with each other to provide hopefully a first-class road system.

Our approach will need to be the same on rail, just like it is in Europe. You know, in Europe, in Japan, not every train is going 200 miles an hour. Many of them are, but there continues to be a niche in the market for 110-mile service, there continues to be a niche in the market for traditional --

SEN. BOXER: Okay. But --

MR. SZABO: -- 79 mile an hour --

SEN. BOXER: -- my main point is will state effort matter?

MR. SZABO: Absolutely.

SEN. BOXER: Okay. That's my question.

MR. SZABO: Absolutely critical in elements.

SEN. BOXER: Right.

MR. SZABO: Yes.

SEN. BOXER: Okay.

MR. SZABO: Absolutely.

SEN. BOXER: I said I had two questions, and I have three. That's one.

The second one is to Mr. Skancke, who served as a commissioner on the National Surface Transportation Policy and Revenue Study Commission. He's been very important in advising us in the EPW Committee on how to proceed with the next highway bill, et cetera. And then I have the last question to Mr. Szabo.

So, Mr. Skancke, do you believe DOT has a realistic and workable plan to implement high-speed rail nationally? And what steps must they take to ensure we have a sustainable system in the U.S.?

MR. SKANCKE: Senator Boxer, I don't think the nation as a whole has a plan for high-speed rail. You know me very well to know that I am very candid when I answer questions, so I'll try to be as --

SEN. BOXER: Well, that's why I asked it.

MR. SKANCKE: I think our nation lacks a vision on how we're going to move our American public out to 2050. It's why this Congress, in safety lieu, created the Transportation Commission. And I think the way we get there is we have to sell the American public particularly on rail as we get people out of their own horse and buggy, which we have forced them into. That it is a cultural shift. We've got to convince the American public that high-speed passenger rail is going to be predictable, that it's going to be on time, and it's going to be reliable.

And we do that two ways. One, we just make the investment. We don't talk about what the program's going to look like or how it's going to -- we've done that. We've studied corridors. We know what the alignment should look like. I believe that we just need to do it. We need to step up, fund it, find the funding mechanisms that are needed, and make the necessary investment.

SEN. BOXER: Okay.

MR. SKANCKE: I think it's just that simple.

SEN. BOXER: Okay.

So my last question, you said predictable, reliable, and you had another word.

MR. SKANCKE: Dependable I think is what I said.

SEN. BOXER: Predictable and reliable. But you didn't say safe, and of course you -- it's obvious.

MR. SKANCKE: Yes, obviously safe.

SEN. BOXER: Safe. It's got to be safe.

So my last question deals with this tragedy that just occurred on the metro liner here. And we just wrote a letter, Senator Rockefeller and I, to talk about the need to move forward with positive train control and other life-saving measures because we really are going to have to address this. This was awful, and we've seen these things happen in my state.

So my question to you -- and my last question is do you intend to move forward with positive train control and do it quickly so that we can let people know we're moving forward on the safety question?

MR. SKANCKE: Yeah, absolutely.

First off, we have a congressional mandate to ensure that positive train control is implemented by the year 2015, and it's our intent to make sure that that deadline is met. Secondly, it's impossible to talk about high-speed rail without at the same time talking about positive train control.

Again, using the European models, you know, they have their European train control. You can't have trains going 200 miles an hour --

SEN. BOXER: Right.

MR. SKANCKE: -- if you don't have some element of positive train control.

SEN. BOXER: Yeah, but we've got to --

MR. SKANCKE: Fundamental.

SEN. BOXER: We've got to fix it for the ones we've got going now, so I hope you'll move quicker than 2015. That was some place I have to compromise, but I think it needs to be swifter than that.

Thank you so much, Mr. Chairman.

SEN. UDALL: Thank you, Senator Boxer.

Senator Hutchison.

SEN. HUTCHISON (R-TX): Thank you, Mr. Chairman.

Let me start with Judge Eckels and just ask that -- well, let me first state that I hope that there will be funding for projects other than those that are maybe further along that the Texas T-bone. And if you could apply right now for federal funding in part of this stimulus, what would you ask for it to do?

MR. ECKELS: Today, our biggest lead is the market and LAWT (ph) environmental and engineering studies. Before we go on the ground with a system, we want to make sure it's a system that will be viable, will have the market that will support the system.

But unlike the east coast, we don't have a regular service between Houston and Dallas today. And so to develop one, we need to make sure that we are building a system which could be priced so that we can compete with the automobiles and the aircraft, and also to keep an operational system.

I do think bringing the discipline of the marketplace to the system can help set a fair schedule and a construction -- you know, the technology that will make sense and would be viable for the long term for the state.

SEN. HUTCHISON: Let me ask Mr. Szabo. I'm looking at a map of basically the Amtrak system with the high-speed corridors that have been designated, the 11 that have been designated in the darker red. And is this the beginning of a planned system, that those are investments that are already being made? And do you favor the ones that are already in the Amtrak system being upgraded to high-speed, or are you looking at other factors, like a new high-speed rail project that might feed into Amtrak, and therefore enhance Amtrak's capabilities?

MR. SZABO: One of the next steps that we absolutely must take is the development of a national rail plan. And when I say that, I mean it from a most comprehensive standpoint. We have to understand how high-speed rail is going to overlay on traditional inner-city rail, how commuter rail is going to overlay on top of that. And frankly, we have to understand how it's going to interact with the freight-rail network. So there are all these components that need to be looked at to ensure that we have a comprehensive strategy when it comes to rail. You can't talk about high-speed rail without talking about the impact on the freights.

You know, that map is a document that happens to exist today, but certainly, there's the need for a much bolder, clearer vision, and a national strategy on how to get there.

SEN. HUTCHISON: Have you ever talked, or even put on the table, with the Amtrak corridors that do share freight-rail lines, which make for problems --

MR. SZABO: Yes.

SEN. HUTCHISON: -- of on-time service, which then cause problems at the fair box. Have you ever put on the table sharing the space and adding a line on the same corridor as the freight rail, which if you could get a reasonable deal, like maybe free use of that space in exchange for getting out of the freight rail system, which they would -- would certainly benefit them because they don't like dealing with Amtrak. Have you ever thought about trying to get a second rail on the same right of way as one of the ways for higher speed rail service in highly congested corridors?

MR. SZABO: Well, I think clearly there is multiple options. The key is that whatever we do -- and clearly, if we're going to have high-speed rail, true high-speed rail, it has to be on a dedicated corridor. But whatever we do, we're going to have to make sure that we achieve a win-win relationship with the freight industry. We have an obligation to make sure that if the passenger trains are operating that they're operating on time. You know, clearly reliability is a very critical component of ensuring a high-quality passenger rail operation and growing ridership.

SEN. HUTCHISON: Have you -- have you looked at having a separate track, though, to make that happen? I mean, you can talk about it, but in reality, at least on the Sunset Limited and the Texas Eagle that I know so well, the experience has not been good.

MR. SZABO: Yeah. I mean, again, any of these options can be considered.

SEN. HUTCHISON: Well, I would ask if in the parameters of the spending of this stimulus money if that is a factor -- if -- looking at those congested areas where you might be able to get a more streamlined service for high-speed rail if that might be an option.

MR. SZABO: Certainly that could be a component that would be measured in a state's application to us. You know, there are clear advantages to that as far as reliability, which is one of the components we -- you know, we measure safety, which is one of the components we measure. So, again, if that was part of an application it's a criteria that could be viewed very favorably.

SEN. HUTCHISON: So a state effort is one criteria that would be very important for matching funds and then possibly if you could ease congestion for better service and higher-speed rail in a state application that that would be also a good factor?

MR. SZABO: That's right. Yes.

SEN. HUTCHISON: Judge Eckels, let me just ask you if -- obviously, the Texas T-Bone is not going to be looking at an Amtrak route but are there options on the Texas T-Bone that might provide a dual rail with freight line or are you looking at a different all new right of way?

MR. ECKELS: Senator, in the very fast track portion of the system -- and again, as Mr. Szabo point out -- Administrator Szabo -- the system would have to have its own tracks and we think the whole system should be a separate track anyway. But as you describe, within the urban corridors, particularly as we're working our way into the cities on the Highway 290 corridor coming into Houston or on the Hardy Toll Road corridor on the north we tie in and partner with the Harris County Toll Road Authority, the Texas Department of Transportation, Union Pacific Railroad, the Houston Harris County Metropolitan Transit Authority -- the metro service provider -- and the high-speed rail in right of way and share a common corridor, and the idea where it's appropriate to lay a track adjacent to the freight railroads. And there's a number of places where that makes a lot of sense. Particularly in those urban (cores ?) where you have a constricted right of way to get into the city through the population centers it makes the most sense for us.

As we move out, it depends on the demand that we get from the freight side for the increased capacity in the future. We have found them to be very reluctant to give up that right of way, claiming that they need that for future development and it's theirs, and so it's a continuous problem. But we think it makes great sense. We're not (protecting ?) a lot of new right of way. We'd like to consolidate as much as possible with TexDOT on their right of way and with the rail lines to the extent that we can meet the curvature requirements and the technical requirements.

SEN. HUTCHISON: Yes. That's why I just think coming to some realistic terms with the freight rail is going to be in everyone's interest because they have a business to run and you can understand their wanting to keep control of their tracks. That's why I think getting sort of separated out where we can but not having the huge expense of eminent domain and those issues.

MR. ECKELS: There are many places, Senator, where it's cheaper for us to relocate the freight rail and buy them a new right of way and a new freight rail corridor and new yards and take over their right of way than for us to go try to condemn a new right of way somewhere along the line, and there's places where that makes sense for the freight rail as well and we're working on that in Texas.

SEN. HUTCHISON: Well, thank you very much. My time is up but I appreciate all of your coming in and helping us get through this because it is a very important new capability for America to have true multimodal planning for transportation. Thank you.

MR. ECKELS: Thank you, Senator.

SEN. UDALL: Thank you, Senator Hutchison. As Senator Boxer was leaving, she mentioned the letter between she and Senator Rockefeller and asked that it be put as part of the record. That was the letter on the positive train control. If there's no objection it will be ordered to be part of the official record. Governor Rendell, appreciate your enthusiasm for capital budgets and also for high-speed rail.

I can see you're obviously a very knowledgeable supporter of these. I wish, in a way, we could get the same kind of enthusiasm in the West and one of my questions here was, you know, why no high-speed rail corridor in the Southwest. We have good-sized population centers and El Paso, Albuquerque, Denver as I look at the map here.

It looks like that would make sense and so I'm wondering -- Congress, we haven't designated or (they ?) haven't authorized this eleventh -- we've authorized 11 high-speed rail corridors yet the Department of Transportation has only designated 10. I hope you're reserving that last one for the Southwest. But could you tell me a little bit of the thinking on the eleventh and where you are and what's the -- what your thoughts are on an El Paso-Albuquerque-Denver corridor?

MR. SZABO: I'm assuming that's to me.

SEN. UDALL: Yes. Yes, it is, Mr. Szabo.

MR. SZABO: Frankly, there is no position to announce at this time relative to any eleventh high-speed rail corridor but the important news is is that it's not necessary in order to be an applicant under the grant guidance that we've issued. I think most of this gets addressed again as we start taking a look at a national rail plan.

Quite frankly, it's possible that there's the need for more than 11. We need to take a look at where are those markets where there's good potential, what is the interest from those states, and historically, there has not been a strong interest from the Southwest. But it sounds like the level of enthusiasm, quite frankly, nationwide is changing considerably. So I think the issues of whether there's an eleventh corridor, a twelfth corridor, a thirteenth, whatever, will get flushed out as we put together a national rail plan.

SEN. UDALL: (Inaudible.)

GOV. RENDELL: Senator, can I take a shot at that?

SEN. UDALL: Yes, please, Governor Rendell.

GOV. RENDELL: I think the way this is going to happen is to do it. I think that's what Mr. Skancke said, and it's up to Congress and the president to find the funding to do this in scale, and the states and local governments should chip in. But I think it comes incrementally. So, for example, if I could -- and I've thought and thought and I've had Wall Street people in to try to see how I could finance high-speed rail from Philadelphia to Pittsburgh -- 200-mile- an-hour rail -- because if we built that there's no doubt in my mind that the seller would then be 200 miles an hour, and then from Pittsburgh into Detroit and Chicago it would come.

So the Texas T-Bone may be your best shot. If they can build a Texas T-Bone and prove that it works then how tough is it to take it -- I don't know if El Paso's on it or not.

MR. ECKELS: El Paso is not but, Senator, the -- El Paso is one of our strongest supporters in Texas of a high-speed rail, not that they expect to see the 900 miles from Houston to El Paso built as a high-speed line -- it's longer than we think works on these kinds of systems -- but it's the line from El Paso to Albuquerque to Denver that you talk about, and they see that as a real possibility and they see the proof in the system on the T-Bone -- the Houston-Dallas -- to be the next step that would then provide the capacity to move forward and build the El Paso route to Albuquerque and on to other points in the West.

SEN. UDALL: Yeah. Well, the -- one of the things that's been fascinating in New Mexico, Governor Richardson stepped up and did commuter rail, and there were a lot of doubts. An earlier governor had talked about doing it and was ridiculed by the press, but he stepped up and did it and on time, on schedule, and ended up -- it's been going about nine months now.

It's passed the two millionth passenger and in a very short period of time, and one of you -- I think it was Mr. Skancke -- mentioned reliable. You used the term reliable ridership and predictions. I don't think anybody would have predicted in New Mexico. Now, granted, this is the same period where we hit the $4 gasoline, and we're a terribly rural state and people are known to travel 120, 150 miles a day to work just to commute.

But that -- and it sounds a little bit like Governor Rendell. You know, you build it and the people are going to come, I think, (with ?) looking at our energy future. I don't know if any of you have any comments on that -- that it may be very hard to predict what reliable ridership is right now. Please, Governor Rendell.

GOV. RENDELL: If OMB, CBO, and the GAO were predicting the success of Columbus' venture, if they were advising Queen Isabella, we'd all be speaking Italian. (Laughter.) I guarantee you. You got it -- you hit it right on the head, Senator. Some of this we've got to do because, A, we know it works in other parts of the world, and some of this we got to do on fate. Where I invested the $74 million of Commonwealth funding -- that's not a lot of money down here.

As Vice President Mondale once said, we spend that sum of money before breakfast in Washington. But for the Commonwealth that's still a nice hunk of change. I wasn't sure. There wasn't any study that said we were going to jump up ridership that much.

But I just -- I knew we had to try. This was our best shot. If you look at the topography of Pennsylvania, this was our best shot to prove that there was a market for high-speed rail, and it worked, and it worked. So sometimes you just have to, as Mr. Skancke said, you just have to do it.

SEN. UDALL: Yeah.

MR. ECKELS: Senator, in the Texas-New Mexico connection there it's not just about the train system. We spend a lot of time talking about moving passengers but it's also about the transit-oriented development and the induced demand and the additional economic activity that comes in that megapolis that we refer to in these urban areas that would grow as a result of that infrastructure being in place, and that is one of those things that's hard to measure until it's in place.

SEN. UDALL: Mr. Skancke, did you want to talk about that reliable --

MR. SKANCKE: Thank you, Senator.

SEN. UDALL: -- reliable ridership issue or comment on this?

MR. SKANCKE: I think we have studied ridership in this country for hundreds of millions of dollars -- I didn't say years -- hundreds of millions of dollars, and as I said, it -- we have to stop studying.

We know on all of the Amtrak corridors throughout the country that there is a need and a demand, and as fuel prices go up ridership goes up.

As congestion goes up, ridership goes up. We don't have to guess. The problem that we have is we're afraid to do it because it may fail. What we need to do is not set up our high-speed rail and transit systems to fail. Let's set them up to succeed. Create systems that work, not pieces.

So as we've all said, instead of doing 100-mile segments let's try a 500-mile segment. Let's actually -- I'll be a little partisan for a second -- let's build a line from Los Angeles to Las Vegas. Let's build a line from Phoenix to Las Vegas.

Let's go from Albuquerque to Denver. Let's try it. What do we have to lose? Nothing. If we fail then we fail. But we don't even know what failure is yet because we haven't gotten there.

SEN. UDALL: Yeah.

MR. BOARDMAN: Mr. -- Senator Udall --

SEN. UDALL: Mr. Boardman, go ahead.

MR. BOARDMAN: -- Joe Boardman from Amtrak. As the good governor was saying to me, who was that guy there that build a 110-miles-an- hour service -- I said David Gunn. He was -- it's the only good thing he did for Amtrak. (Laughter.) But that's not true, and I want to say that because David and I are friends and I talked to him a couple of days ago and I accused him of using the money from the Turbo project in New York to get that done.

But I know he got also Pennsylvania money. I think what Tom is talking about is absolutely true with an exception, and that is that the culture in this country is not a train-riding culture. In the Northeast Corridor, about 43 million people live within about 40 miles of where we operate Acela. Acela is a success. In 2000, we had about 37 percent -- this was before Acela started -- of the air-rail market was with rail.

Today, in 2008, we have just the opposite of that. We have 63 percent of the rail-air market and that's with service that's two hours and 45 minutes from New York to Washington. And on north end, from New York to Boston, it was at about 20 percent and is now -- or 22 percent -- it's now at about 49 percent in the same way.

So we are demonstrating success. But the piece that we can't miss, and I think Administrator Szabo really pointed it out, is that we need to do both. We need to talk about having very high speed and it needs to connect. T-Bone needs -- and I listened carefully, Judge. I didn't hear it connecting to Amtrak, and it might.

But Amtrak is the only connected inner-city service coast to coast, border to border in the United States, and we need the incremental improvements to the 90 to 110 so that people build a culture of riding the train so they fill up the high-speed trains that are connected in some fashion -- and it might even be in an airport but it could be somewhere else -- where you connect our system. People want to be seamless.

They don't want to go to the border of Pennsylvania and New York at Route 15 when we had to build the Presho connection, if you remember, Governor, to make sure that New York kept up with the leadership that was coming out of Pennsylvania to make that interstate connection. And that's the difficulty we have today with railroads. We don't always connect.

SEN. UDALL: Well --

MR. ECKELS: Let me just -- if I may -- with (Commissioner ?) Boardman of the -- of Amtrak, Texas T-Bone does connect into the -- sorry. The Texas T-Bone will connect into the Amtrak Houston metro multimodal facility in downtown Houston.

SEN. UDALL: Great. Well, that's a -- it's a good way to finish and we very much appreciate this panel. It's very informative and thank you very much and I will --

GOV. RENDELL: Thank you, Senator.

SEN. UDALL: -- adjourn. Thank you.

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