Washington Post Column and Chat Today

Washington Post Business Columnist Steven Pearlstein in today’s column discussed obstacles to adequate infrastructure and observed that “it is only a matter of time before bottlenecks reemerge, either at the ports themselves or on the railroads and highways that connect them to the rest of the country.” I sent him a message documenting that the railroad bottlenecks are with us today. My message said, in part:

“Back on January 16, 2002, the American Association of State Highway and Transportation Officials unveiled two major reports, Freight Rail Bottom Line and Intercity Passenger Rail Transportation.  Of particular relevance here, the first of those documented a $53 billion shortfall between the estimated investment needs of the rail freight industry over the next 20 years and the industry’s ability to raise capital in the private sector. And those investment needs are just what would be necessary to maintain rail’s existing market share. [The passenger report concluded that about $17 billion needs to be invested in intercity passenger rail corridors over the next six years, and $43 billion over the next two decades.]”

He responded by asking why the railroads can’t use private capital to do all the investing necessary. That, by the way, is the same question a Hill staffer asked me two weeks ago in referring to the freight railroads’ current quest for a 25% investment credit to encourage railroad infrastructure investment. My response included this:  “In a nutshell, two different objectives: management’s goal is a profitable railroad at reasonable risk, while public policy needs much larger rail capacity.

My full answer is at the bottom of the transcript of his on-line discussion this morning (also includes a link to his column).