September 04, 2012

Amtrak lays it on the line for the NEC

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Amtrak's revised vision for the Northeast Corridor calls for bold investments of $US 110bn to improve existing infrastructure and to construct a new dedicated high-speed line over the next 30 years. Kevin Smith examines the plans for North America's most important passenger railway.

THE northeast of the United States is the country's most densely populated region and its economic powerhouse. Around 50 million people live in the megatropolis that stretches along the eastern seaboard from Washington DC, to Baltimore, Philadelphia, New York and Boston, with its economy worth $US 2.6 trillion, or 20% of the US' entire GDP.

However, with the population expected to increase by 30% to 65 million by 2030, existing infrastructure is not expected to cope with the anticipated spike in demand, stifling economic growth and prosperity. Already highways are clogged with cars and trucks during peak hours while many of the region's airports and railways are at capacity. Rail services are also compounded by relatively slow line speeds when compared with similar urban areas in other developed countries. Delays are frequent with even minor problems having a rippling effect on reliability across the region.

Federally-held passenger operator Amtrak owns most of the railway infrastructure that makes up the 735km Northeast Corridor (NEC), the region's primary railway artery. In addition to its 30 million annual passengers, more than 200 million commuters on eight operators' services travel on 2000 daily passenger trains on the route along with 70 freight trains.

While the NEC's ridership is impressive, its services often are not. The average speed on the entire route is 135km/h with only short sections in Rhode Island and Massachusetts capable of accommodating the Acela Express' top speed of 240km/h. Amtrak has long recognised the need to improve the NEC, particularly with ridership projected to increase by 60% by 2030, and ageing infrastructure, much of which dates back to the late 19th century, incapable of supporting the levels of service required for successful operation.

The NEC Infrastructure Master Plan released in May 2010 presented a strategy for required system repairs, upgrades and some capacity enhancement to help handle growing traffic levels. The plan called for a $US 52bn investment, and as a collaborative effort between 12 states and the District of Columbia, Amtrak, the Federal Railroad Administration (FRA), eight commuter operators and three freight railways, it demonstrated widespread support for improvements to NEC infrastructure.

Amtrak considers greater division of high-speed, inter-city and regional services as the solution to the capacity constraints experienced on the NEC. It subsequently followed up the Master Plan with its September 2010 document A Vision for High Speed Rail in the Northeast Corridor which presented the concept of a new 687km dedicated double-track high-speed line from Washington DC to Boston. The $US 117bn line would be designed for 354km/h operation with five hub stations, four city stations, and 10 regional or intermodal stations with connections and integrated operations with the existing NEC route. Super Express, Express, Keystone Express, and Shore Line Express services are envisaged, dramatically increasing the range of services on offer and significantly reducing Washington - New York and New York - Boston journey times to 1h 34min compared with around 6h 40min for the entire trip at present.

Its latest document, The Amtrak Vision for the NEC, which was released in July, effectively combines the short and long-term vision of these two plans to create an NEC Capital Investment programme. The result is a strategy comprising five "stair steps" for improvements to the corridor, taking into account the expected 25% increase in ridership since the 2010 documents were released, which would be implemented up to 2040. The plan is divided into two phases, beginning with improvements to existing infrastructure through NEC Upgrade (NEC-UP) which runs until 2025 and followed by NEC Next Generation High Speed Rail (NextGen) which involves building a brand new dedicated high-speed railway by 2040.

The NEC-UP plan encompasses infrastructure improvements to the existing NEC worth a total of $US 33.5bn, including $US 14.5bn for the New York to Washington line and the branch to Harrisburg, Pennsylvania, $US 3.9bn on the New York to Boston section including the Springfield, Massachusetts, branch and $US 14.9bn on the Gateway Programme from Newark to New York (see panel below). It begins with the purchase of 40 additional Acela trains to serve the route, and includes infrastructure improvements which will ultimately increase the frequency and average speeds of the existing hourly Acela service between Washington DC and Boston.

Amtrak aims to complete NEC-UP by 2025 at which point NexGen would begin, initially with Phase 1 of the new dedicated high-speed line from Washington to New York which would be completed by 2030 at a cost of $US 51.4bn. The $US 58bn New York - Boston segment would follow with operations beginning in 2040.

Financial support

Securing financial support could present the major hurdle to meeting the estimated overall $US 151bn cost of improving the NEC. Nevertheless, Amtrak is confident that this investment will pay off. It says that improving journey times, service frequency, reliability and passenger amenities such as new trains will attract new ridership, improve the image of rail transport, and most importantly increase revenues. It also says that the economic benefits of improving mobility for corridor residents and businesses will build the solid financial performance and public backing necessary to generate public and private investment in an enhanced NEC service.

Amtrak began working on an NEC Business and Financial plan in 2011 and Mr Andrew Wood, Amtrak's chief of Next Generation Integration of HSR, NEC Infrastructure and Investment, told IRJ at the UIC World High Speed Congress in Philadelphia that the 2012 revised construction plan is designed with affordability in mind.

"The new plan tries to get the annual funding requirement down to between $US 3bn and 4bn in the peak years of construction during the 2020s from the $US 10bn in the original plan, which was unfundable," Wood says. "The new plan is also a phased project which will generate extra revenue which will be used to help fund later phases. The new projection sees an increase in annual revenue from $US 3.29bn to $US 4.68bn for 2040."

Amtrak forecasts the increase in revenues would provide an annual surplus of $US 1.65bn by 2040, much of which would be reinvested in infrastructure. Amtrak has also proposed measures to limit upfront costs, including deferring $US 57bn in capital expenditure by 2040 by delaying some segments of the high-speed line and construction of new stations until later phases.

Access fees are another means of raising additional funds for construction, particularly when existing users of the line will benefit from the proposed improvements. Gaining private sector support is also considered vital to the programme's success. Early involvement is expected through design-build arrangements whereby some delivery risk is transferred to the private sector. And while Amtrak admits that it might take until 2030 to attract sufficient private support for a PPP funding model, this could become an increasingly useful tool after the Washington - New York phase is complete.

Working with local and state governments to generate funds is another option. The plan suggests tapping into sales and petrol taxes, and vehicle registration fees. Setting up a Tax Increment Financing (TIF) district around the new or redeveloped corridor where taxes on new businesses moving into the area are used to improve its surrounding infrastructure is also under consideration.

Increasing taxes is always highly contentious, particularly during a period of austerity when the public is feeling the pinch. Yet the appetite for improvements to the NEC corridor is strong in communities throughout the region.

Newspaper editorials resoundingly back the Amtrak plan, while local and state politicians praise the potential job boost the investment will bring in areas suffering from high unemployment. Significantly-reduced journey times also have politicians and property agents in towns and cities previously considered beyond the commutable region drooling at the prospect of attracting big-spending city commuters to their neighbourhoods.

While there is strong support for the project locally, the situation at the federal level is a lot more volatile. Like any high-speed or rail infrastructure project, the NEC is heavily reliant on central government support. Amtrak projects that 50-80% of funds should come from the federal government as they do for equivalent road, transit and aviation projects, and is naturally keen to avoid the partisan political bickering over continued funding that has plagued President Obama's high-speed rail programme since it was announced as part of the American Recovery and Reinvestment Act of 2009.

Republican governors in Florida, Ohio and Wisconsin all returned funds allocated to their states for high-speed rail projects in the stimulus bill, while subsequent funding for the programme included in Obama's budget proposals have been used by House Republicans and Democrats as a bargaining chip in recent struggles to pass the federal government budget. No funds at all were allocated in 2011 or 2012 despite Obama's February 2011 pledge to allocate $US 53bn to improve passenger services over the next six years.

The NEC was one beneficiary of the returned funds. $US 450m is now being spent on improving track, signalling and electrification systems between New Brunswick and Trenton which will increase speeds to 257km/h. In Maryland $US 22m is being spent to replace the Susquehanna bridge, while $US 295 million was allocated to construct a new line in the New York borough of Queens allowing Amtrak services to bypass a busy passenger junction.

Yet Amtrak recognises that securing funds in this manner is not sustainable for an infrastructure project like the NEC. It favours a long-term funding structure which provides consistent support throughout the duration of the project by avoiding the uncertainty of an annual appropriations process. Tax credits and federal funding guarantees for private investors could also be used to encourage support.

The outcome of this November's presidential election might ultimately prove crucial to the realisation of the entire programme, particularly with Republicans continuing to label infrastructure projects as too expensive, and dismissing Amtrak's ability to deliver.

Mr Pat Toomey, a conservative Republican on the Senate's transportation committee, might be best placed to alter this mindset. Yet this does not seem likely. "The idea of high-speed rail is intriguing," he told the Philadelphia Inquirer in July, "but I have doubts that Amtrak has demonstrated the ability to manage and execute it in an economically-friendly manner."

In light of such sentiments Amtrak recognises that one way to gain momentum is by delivering some early successes. Elements of the Gateway programme and NEC New Jersey section improvements certainly provide the opportunity to do this. Portions of dedicated high-speed route are also thought to provide sufficient benefits to guarantee long-term support at an early stage.

It is clearly now or never for Amtrak and the NEC. The Amtrak Vision for the Northeast Corridor is a strong start. It provides a focused and realistic vision to solve existing problems and offer the reliable and fast inter-city and high-speed rail services so desperately needed in one the of United States' most important economic regions. But Amtrak must now build on this to convince as many investors, residents, and politicians as possible that this particular American high-speed dream should one day become a reality. The fight for the NEC is on.

A new Gateway to New York City

A MAJOR element of Amtrak's plans to revamp the NEC is improving access to Manhattan for NEC and commuter services by 2025. Its new $US 14.7bn Gateway Programme to New York City is an alternative to the Access to the Region's Core (ARC) project which was shelved by the state of New Jersey in November 2010.

Like the ARC, the Gateway programme involves constructing two new rail tunnels under the Hudson which would provide a direct connection to a consolidated Amtrak operation on the west side of Manhattan at the expanded Moynihan-Penn station complex. This involves a two-level expansion of the existing Penn station tracks and platforms as well as a direct connection to the new Moynihan terminal, an extension of the existing Penn station across 8th Avenue into the Farley Post Office building.

Other improvements in New Jersey include construction of two bridges over the Hackensack River to replace the existing 100-year-old moveable portal bridge, doubling capacity. The Newark - Seacaucus section of the NEC would also be improved to include a four-track segment, better connections to NJT Morris and Essex lines, and various bridge enhancements. A number of NEC stations would likewise be upgraded to handle greater capacity.

Amtrak says that the plan is flexible so as not to preclude a range of design and operational options. This could include additional Trans-Hudson tunnels beyond 2040, and further capacity improvements, including at Penn station. The stair-step phasing strategy also proposes an extension of the new Trans-Hudson tunnels to the north to connect with the new high-speed line to Boston.

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