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Banking on High-Speed Rail

New Trade Group Hopes to Capitalize on Stimulus Funds

If you fund it, they will come.

It’s a maxim that has proved to be true time and time again in Washington, and sure enough, just months after the Obama administration announced billions of federal dollars for a U.S. high-speed rail system, a new trade association has emerged to help firms get their foot in the door of a potentially lucrative new market.

“We saw this as the perfect opportunity to go ahead and turn this into an official association and start to bring together some of the experts,— Andy Kunz, president of the newly minted U.S. High-Speed Rail Association, said in an interview last month.

A mainstay of travel in parts of Europe and Asia, high-speed rail has long been seen in the United States as the starry-eyed goal of an idealistic but dedicated group of advocates.

The only thing that comes remotely close to the 200-mph bullet trains of Japan is Amtrak’s Acela Express, which only rarely hits its top speed of 150 mph.

But that changed in February when President Barack Obama signed the $787 bil­lion economic stimulus, which at the president’s personal request included an unprecedented $8 billion down payment for high-speed rail. With a stroke of the pen, a U.S. high-speed rail industry was born.

Enter Kunz, an architect by training, an urban planner and a longtime advocate for high-speed rail who saw the opportunity to provide “help from outside the government to help organize the industry.—

The group, which officially opened for business in July, envisions a 17,000-mile network of high-speed rail lines, built in phases and scheduled for completion by 2030.

The association is preparing for its first conference, scheduled for Oct. 22-23 in Washington, D.C., where invited speakers include Vice President Joseph Biden, House Transportation and Infrastructure Chairman James Oberstar (D-Minn.) and Virgin CEO Richard Branson.

Among the sectors targeted for membership are finance, real estate development, large engineering and construction firms, and companies with rail expertise. Kunz said he receives six or seven applications a day from companies around the world, including France, Spain, Germany, Italy and South Korea. “It’s quite amazing the foreign interest in this,— he said.

A primary focus for the association is securing additional federal dollars for high-speed rail. Kunz said the stimulus funds and additional billions pledged by the administration are a good start, but “to really do a proper national system we need to be adding more zeros to these numbers.— China, for instance, is reportedly eyeing a $300 billion high-speed rail network.

Equally important is finding a dedicated funding source for high-speed rail. “If we’re really going to dive into this as a whole new form of transportation, it has to be a long-term project and it has to have continuous funding for at least 10 or 20 years solid,— Kunz said.

The $500 billion transportation reauthorization bill is one revenue option, but rail advocates also have their eyes on the defense budget. Redirecting a “small amount— from that to high-speed rail would cut gasoline use, boosting national security, Kunz said.

However, a challenge will be dispelling the notion that high-speed rail can’t exist without large government subsidies. Kunz predicts that federal startup money will be supplemented with private sector dollars. “If the tracks are built by the government, trains can actually be run by for-profit companies,— he said.

An additional challenge will be steering clear of the policy disputes that led to the unraveling of an earlier group, the High Speed Rail Association. Joseph Vranich, a former head of the association, said it splintered after the Clinton administration redefined high-speed rail to include slower trains. “High-speed rail became kind of a perversion and started to lose steam,— he said.

Vranich predicts the new political winds will bode well for the successor to his group. “It’s probably the right time for a new trade association because the people running Washington want to spend money on it,— he said.

However, he questioned some of the proposed routes through rural states, which he said would never compete with air travel. “It makes no economic sense,— he said.

Another unresolved issue is how Kunz’s association will interact with organizations such as the Midwest High Speed Rail Association, which since 1993 has been building support among Midwest governors for a regional high-speed rail network, or the California High-Speed Rail Authority, a state agency promoting fast train routes in the state.

Richard Harnish, the Midwest group’s executive director, said he recently had a collegial meeting with the new association’s officials, but it was too early to tell if the group will be seen as an ally or competitor. “I don’t know how that’s going to work yet,— Harnish said of possible collaboration.

Kunz, however, tried to downplay any idea that his new trade association was a threat to regional groups, saying they all share the same goals. “We want it to be a national focus, but at the same time it’s actually going to be built region by region,— he said.

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