NRC’s Baker outlines recovery act’s impact on freight rail during Webcast

By Jeff Stagl, Managing Editor

Although no funding or explicit funding programs are dedicated to freight rail in the federal stimulus bill, freight railroads still have three options to potentially obtain stimulus dollars.

They can receive a share of $27.5 billion in highway funding that’s been allocated to state departments of transportation (DOTs) and local metropolitan planning organizations (MPOs) to be “flexed” to fund freight- and passenger-rail projects; tap into $1.5 billion in surface transportation infrastructure discretionary grants that are managed by the U.S. DOT and include eligibility for freight-rail projects; and solicit some of the $8 billion in intercity passenger and high-speed rail funding that has ancillary benefits for freight-rail networks.

That’s the message National Railroad Construction & Maintenance Association President Chuck Baker shared April 22 during a Progressive Railroading-hosted Webcast on stimulus funding. Sponsored by Ansaldo STS, Colo Railroad Builders, Danella Rental Systems Inc. and Herzog Contracting Corp., the event provided a review of the recovery act’s impacts on the freight- and passenger-rail industries. For a review of passenger-rail impacts, see this month’s cover story.

So far, a number of states have flexed stimulus funds for freight-rail projects, including Iowa, Kansas, Oregon, Texas and Washington. But states “haven’t flexed as much as we’d like,” said Baker.

“Some DOTs still are essentially highway departments and have unmet highway needs,” he said.

Ohio out on top

Perhaps the most aggressive state to date is Ohio, which has flexed about $68 million of its highway monies for freight-rail projects, said Baker. The appropriations include $20 million to CSX Corp. for its National Gateway double-stack corridor; $20 million to Norfolk Southern Corp. for a line relocation project; $1.3 million to R.J. Corman Railroad Group to rehabilitate a western Ohio line; and $1.2 million to the Wheeling & Lake Erie Railway to rehabilitate rail in the Akron/Canton area.

CSX and NS have spent a lot of time in the state promoting their projects, and the Ohio DOT secretary is Jolene Molitoris, a former FRA administrator “who clearly gets rail,” said Baker.

The first half of potential highway funds that will be flexed by state DOTs and MPOs for freight-rail projects must be obligated by June 30, with the other half obligated by March 2, 2010.

At the government’s discretion

Meanwhile, the USDOT is trying to figure out what to do with the $1.5 billion discretionary grant program since it’s a new fund, said Baker. Projects with a “significant impact on the nation, a metro area or region” will be given more weight.

The USDOT planned to issue regulations and criteria on the grants by May 17, accept applications by Nov. 13, make funding decisions by Feb. 11, 2010, and provide funds through Sept. 30, 2011, said Baker.

“PPPs would make great applicants,” he said, adding that the Chicago Region Environmental and Transportation Efficiency Program could be a “high-profile” applicant.

However, because port, passenger-rail and highway projects also are eligible for the grants, Baker believes individual awards won’t top much more than $100 million.

“I anticipate a massive over-subscription of interest for the highly competitive program ... perhaps 10 times an over-subscription,” he said.

Freight railroads also could benefit from some of the $8 billion set aside for intercity passenger and high-speed rail funding, since much of the country’s intercity passenger-rail services operate over freight-rail tracks.

In addition, some of those funds might be used for positive train-control system installations, especially those installed on existing freight tracks, said Baker.

“I see this as a legitimate use of stimulus funds,” he said.