Written Statement Expresses NARP’s Stance on Rail Capacity

Release #06-10—June 30, 2006

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Washington, D.C.—In a statement submitted today to the Senate Committee on Commerce, Science, and Transportation’s Subcommittee on Surface Transportation and Merchant Marine, the National Association of Railroad Passengers reiterated its provisional support for the 25% investment tax credits sought by the freight railroads.

The June 21 hearing on “Economics, Service, and Capacity in the Freight Railroad Industry” was held by the Subcommittee on Surface Transportation and Merchant Marine of the Senate Committee on Commerce, Science and Transportation, chaired by Trent Lott (R-MS).

The written statement, by NARP Executive Director Ross B. Capon, also recognized the important role that public-private partnerships can play in enhancing capacity and efficiency of the nation’s railroad network.

However, Capon cautioned that the combinations of partnerships and tax credits will fall short of filling the huge gap between the billion dollar investments needed to ensure that freight railroads are able to maintain existing market shares in a growing economy, an investment that the railroads are likely to make or finance on their own.

According to estimates released in a January 2003 report by the American Association of State Highway and Transportation Officials, the predicted investment shortcomings will be between $33-53 billion by the year 2020, a fact cited in the prepared testimony of Association of American Railroads President and CEO Edward R. Hamberger.

Capon cautioned, “Some of the legitimate, capacity-enhancing investments that will depend on public support may be not lend themselves so obviously to specific ‘publics’ for the ‘public-private partnership’ to work.  Indeed, there may not be enough ‘CREATEs,’ that is, projects with benefits that draw in public partners, to yield public funding anywhere near $33-53 billion.”  [CREATE is a major project to improve railroads and highway/railroad crossings in the Chicago area.]

Developing federal program that identifies and addresses other projects potentially involves objection from freight railroads afraid of both losing competitive edge and re-regulation.

In his statement Capon also said, “The National Association of Railroad Passengers has both a specific and a general interest in a healthy, reliable railroad network where average speeds are increasing, not decreasing…Our specific interest, of course, is to see that railroads do a good job of running Amtrak and commuter trains.  Amtrak’s current and recent experience is not good.”

Potential exists for a greatly-expanded role for passenger rail.  It is widely recognized as maximizing energy and economic efficiency, minimizing environmental damage, and increasing the safety of our overall transportation system.  Capon cited recently issued energy efficiency measures from the Oak Ridge National Laboratory’s annual “Transportation Energy Data Book” that prove rail’s benefits to the environment and energy conservation.

The full text of NARP’s statement is here on our website.  Prepared statements of witnesses at the hearing are at the subcommittee’s website.