Hotline #717 - July 29, 2011

A study released by the American Society of Civil Engineers found that insufficient investment in transportation is costing the average American family $1,060 last year.

ACSE’s “Failure to Act: The Economic Impact of Current Investment Trends in Surface Transportation Infrastructure” finds that while the effects of inadequate transportation funding are diffuse to the point that it is difficult for the public to take note of the deterioration that is happening all around them. The study shows the effects are quantifiable, however, and that it is costing the U.S. billions.

ACSE found that American businesses and families were saddled with more than $129 billion in added costs in the year 2010. That figure includes: $32 billion in travel delays due to congestion and inadequate transit; $97 billion in damage to vehicles by poorly maintained roads; $1.2 billion in safety costs; and $590 million in environmental costs.

“This report should serve as a wake-up call to policy makers and politicians alike,” former Pennsylvania Governor Ed Rendell told reporters in his role as co-chair of Building America’s Future, a bi-partisan group advocating for increased investment in U.S. infrastructure. “The consequences of inaction are quite clear: Failure to make smart investments in our infrastructure will erode our nation’s economic competitiveness and leave an indelible mark on the quality of life for every American.”

The study has economic forecasts that should give legislators pause. If we fail to fundamentally change how we pay for transportation infrastructure, ACSE predicts by 2020, American businesses will be forced to pay an extra $430 billion in transportation costs, household incomes would fall by $7,000, and U.S. exports will fall by $28 billion. So while some Members of Congress focus all their attention on cutting spending with an eye towards the deficit, they are unwittingly leading us into a decade of economic stagnation and decrepitude.

“You run a deficit both when you borrow money and when you defer maintenance that needs to be done,” said Larry Summers, former director of the National Economics Council. “Either way, you’re imposing a cost on future generations.”


While the U.S. House has passed Majority Leader John Boehner’s (R-OH) debt plan on a 218 to 210 vote—with 20 Republicans voting against and no Democrats voting for—it has no chance to pass the Senate.  As Senate Majority Leader Harry Reid (D-NV) readies his counter proposal, there is a rising likelihood that Congress will pass the deadline to reach a compromise without a passing legislation.

In the event that Congress is unable to raise the debt ceiling and government outlays halt, it is likely Amtrak service would continue at least through September since the company will be able to continue for a short while on income from ticket sales and other forms of revenue.  It is not clear how long Amtrak would be able to operate if there was an extended government shutdown.


A deadly rear-end collision involving two high-speed trains on China’s new Ningbo-to-Wenzhou line killed 39 and injured almost 200 people last Saturday night (July 23). The crash has given credence to critics who questioned whether China’s government cut corners in an attempt to accelerate the completion of the nation’s ambitious goal of the world’s largest network of high-speed rail.

The Financial Times reported today:

This train crash and the opaque and clumsy management of its aftermath have resonated so strongly [in China] in part because the country’s ambitious high speed rail programme has been promoted as a symbol of Chinese technological prowess and national pride… Even China’s tightly controlled state media have lambasted government officials for their arrogance and incompetence and the country’s most conservative newspaper, Communist party mouthpiece the People’s Daily, called in an editorial for an end to the country’s blind pursuit of ‘blood-smeared GDP.’

Japanese Shinkansen high-speed trains have carried more than 9 billion passengers over 44 years without a single train related fatality. France’s TGV high-speed trains have operated for 27 years without a single train-related fatality, currently carrying more than 100 million passengers a year.

Reports coming out of China indicate that a lightning strike brought a train to a halt on the Shanghai Railway line. For reasons that aren’t yet clear, the next train did not receive a signal to stop and smashed into the first train from behind, with the force of the collision sending rail cars into the air and off of the rail bridge upon which the first train had stalled. The head of the Shanghai railway bureau said yesterday the following train sped past a green signal that failed to turn red after being struck by lightning. “Ari Lusheng also blamed human error, saying that duty staff at the nearest railway station in the eastern city of Wenzhou had not thought to check whether the signaling system was still working.”

China has been engaged in an expansion of its high-speed rail network at a pace that has awed much of the world, going from no high-speed trains in 2006 to having the world’s largest high-speed train network with over 6,000 miles of track. The trains have until this point been a clear success, carrying over 796,000 passengers every day (up from 237,000 per day when the lines opened in 2007). Even after three years of frenzied building, China’s Rail Ministry announced in 2010 a five-year plan to invest between $540 and $607 billion into the rail sector.

But the accident does not come as a surprise to some analysts, who questioned China’s ability to build this massive network without compromising its integrity.

“I think since 2008 China has experienced what we call a ‘great leap forward’ of railway construction,” Ren Xianfang, a senior analyst at IHS Global in Beijing, told the New York Times. “We’ve long had suspicions that this speed of construction is unsustainable.”

There is no doubt that what China has been trying to do is unprecedented. There has been a suspicion, however, that Chinese officials were more concerned with maintaining the nation’s economic growth than they were with safety, and that other countries had good reason to avoid attempting what China is trying to pull off.  If it turns out that the accident is due to a failure in the signaling system, it may be evidence that China’s infrastructural goals overshot the managing software’s capabilities.

“The Chinese are running at least two times the level of anyone else in the world,” Michael Komesaroff of Urandaline Investments in Australia told the Times. “That means signaling and systems management become more critical.”

Beyond the human tragedy of Saturday’s events, China may have sunk its attempt to become the world’s leading exporter of high-speed technology as potential foreign investors reassess the quality of what Chinese firms have to offer.

Domestically, the response to the deadly accident could have ramifications that reverberate beyond the transportation sector. China’s government has been quick to silence whatever opposition sprung up during the lines’ development, although many average Chinese were complaining that the high-speed trains were displacing more affordable, conventional-speed passenger trains. So far, the Chinese public has been unwilling to accept government attempts to gloss over the incident, turning the accident into a symbol of resistance to government planning that fails to take into account public input. The Times translated one social media user’s pleas to the China’s leaders:

“Wait for your people ... wait for your conscience! We don’t want derailed trains, or collapsing bridges, or roads that slide into pits. We don’t want our homes to become death traps. Move more slowly. Let every life have freedom and dignity.”


The Obama Administration today announced a deal with 12 major automakers to increase average fuel economy to 54.5 miles per gallon for cars and light-duty trucks by model year 2025, almost double the current fuel efficiency standard.

“This agreement on fuel standards represents the most important step we’ve ever taken as a nation to reduce our dependence on foreign oil,” said President Barack Obama. “By 2025, the average fuel economy of vehicles will nearly double.”

The President, Transportation Secretary Ray LaHood, Environmental Protection Agency Administrator Lisa Jackson gathered at the White House to announce the change. The three trumpeted the $1.7 trillion in total fuel savings for the U.S. economy that will result from the higher standards, and the $8,000 in average savings at the pump for every vehicle by 2025. It also means a cut of 6 billion metric tons of greenhouse gas emissions over the life of the program.

While the increase comes only two years after the Obama Administration raised fuel efficiency standards for Model Years 2012-2016 to 35 mpg, the White House seems to have secured the blessing of the auto industry. Automakers, perhaps, are paying attention to commodities forecasters, who are predicting steadily rising fuel prices as worldwide energy demand soars while global oil supplies plateau. By working with federal regulators to raise standards, American car manufacturers could avoid the loss in market share precipitated by the oil shock of the early 2000s.

“Our innovative American automakers are responding with plans for some of the most fuel efficient vehicles in our history” said Administrator Jackson.

While the higher efficiency standards will be good news for consumers looking for relief from soaring gas prices, it will serve as another nail in the coffin of the Highway Trust Fund which relies on revenue from the gas tax. As per-vehicle-consumption declines, Congress will be hard pressed to find replacement funds—particularly in light of an unwillingness to raise the gas tax, unchanged since 1991.


The Leadership Conference on Civil and Human Rights released a report this week demonstrating that lack of access to high-quality transportation choices is a civil rights issue, leaving lower-income Americans with less access to employment and other necessities without having to spend at least a third of their income on owning and maintaining a car.

Read more on the NARP Blog. 


Washington State’s Department of Transportation announced today that it had reached an agreement with Amtrak and track owner BNSF Railway that will allow work to begin on upgrading service on the popular Amtrak Cascades service between Seattle and Portland, Oregon.

“The immediate benefit of this agreement is jobs – from engineers to site supervisors, to construction workers,” said Transportation Secretary Paula Hammond. “The longer-term benefit is that improvements in the rail corridor will reduce travel times and improve the on-time performance of passenger rail, which provides a viable transportation alternative along the West Coast.”

Today’s agreement establishes a clear contractual relationship between WSDOT and BNSF, outlining mutually agreed upon performance measures and includes project delivery schedules and a budget, among other things. The contract will allow BNSF to begin spending $400 million in federal High-Speed and Intercity Passenger Rail Program funds, creating 1,000 jobs through 2017. The money will be used to add tracks that will eliminate a rail yard bottleneck, easing congestion for both passenger and freight trains. WSDOT projects that the line’s on-time-performance will increase to 88 percent (from the current 62 percent).

“We’re pleased with this progress and our long standing relationship with WSDOT,” said BNSF Chairman and CEO Matt Rose. “This is an important step towards improving the trackage infrastructure to help meet current and future demands for both passenger and freight rail service.”

Washington State has received $781 million in HSIPR funds in total. WSDOT has been using the funds to upgrade the Amtrak Cascades corridor, which has soared in popularity, carrying the highest second-quarter totals since the service started in 1994.


Travelers Advisory:

Beginning Wednesday, August 3, 2011, Amtrak’s Battle Creek station will relocate to a trailer across McCamly St. The trailer will be located about 100 yards northwest of the current station.

The temporary location will serve passengers over a nine month period while the Battle Creek station is renovated and upgraded. While there will be a ticket agent on duty, ticketing capabilities won’t be transferred until early September (at the earliest). Passengers will need to rely on the conductor ticket delivery process.

Limited short-term parking will be available at the temporary station for pick-up and drop-off only.