U.S. to rebid $2.4 billion in Florida rail funds

Reuters News
Posted: Mar 21, 2011 3:28 PM
U.S. to rebid $2.4 billion in Florida rail funds

By John Crawley and Lisa Lambert

WASHINGTON (Reuters) - The Obama administration will rebid nearly $2.4 billion in high-speed rail grants recently rejected by Florida, one of three states to conclude "bullet train" projects are too expensive in a tough economy.

California and several Northeastern states have expressed interest in the money, much of which came from $8 billion in rail grants from the 2009 U.S. economic stimulus package.

"States across the country have been banging down our door for the opportunity to receive additional high-speed rail dollars," Transportation Secretary Ray LaHood said on Friday in announcing his agency would rebid the funds initially awarded to Florida but declined by Governor Rick Scott.

Proposals are due on April 4.

A regional rail authority in Florida not affiliated with the state government is also interested in applying for the funds, according to Florida U.S. Senator Bill Nelson.

Florida had received a small fraction of the money for preliminary work on a proposed east-west line linking Orlando and Tampa.

Wisconsin and Ohio have also declined high-speed rail funds, and New Jersey separately rejected billions in federal funds for a new rail tunnel to New York City.

Florida and the other states said potential cost overruns made the projects unaffordable.

LaHood's decision to rebid the money followed attempts by Florida's congressional delegation and city mayors to try and redirect or otherwise salvage the grant.

The money is considered by rail supporters to be essential for job creation in Florida.

Introducing high-speed trains like those found in Europe and Asia to the United States is President Barack Obama's signature transportation priority. He has proposed to spend $53 billion over six years to further existing projects and launch new ones.

However, leading Republicans in Congress, especially in the House of Representatives, doubt the potential of high-speed rail and are wary of the massive capital investment in an era marked by budget shortfalls for existing priorities.

Stephen Gardner, Amtrak's vice president for policy and development, told a congressional hearing on Friday that high-speed rail will be expensive, take years to build and profits are not assured.

Amtrak is the nation's only provider of long-haul passenger rail service, and its Acela train between Boston, New York and Washington, D.C., is the closest thing to high-speed rail available to U.S. travelers.

John Mica, a Florida Republican who has influence over rail development as chairman of the House Transportation Committee, believes building high-speed service in the heavily traveled Northeast would be worthwhile.

Mica is a strong proponent of private investment, which Gardner said was not "the silver bullet" for success that some believe.

"Not surprisingly, potential private sector participants in high-speed rail service have emphasized that significant public funding is an essential prerequisite" to their involvement, Gardner said.

LaHood said he has secured commitments from 30 overseas and domestic rail manufacturers to locate or expand business in the United States if they receive high-speed rail contracts.

(Editing by Dan Grebler; Editing by Leslie Adler)