Thursday, February 3, 2011

What can we expect from Washington?

We continue to speculate whether the new Congress is intent on a "claw-back;" that is, rescinding the awards made by the DOT, but not yet spent.  It's a high priority intention of John Mica, the Chair for the House Committee on Transportation.  That presumably would include the dollars earmarked for the Central Valley high-speed rail construction start, scheduled for 2012.  

Even if the House approves, the Senate won't.  It remains to be seen what actual impact House decisions will have.  I expect lengthy back-room negotiations over this between Dems. and Repubs.  Also, I have not yet learned if those HSR ARRA funds that have been awarded to the CHSRA are only "obligated" but not spent, or not. 

Our position here is that we certainly hope that this "recapture" can happen. If it reduces the possible work for the Central Valley to what the CHSRA is allowed to spend without federal dollars (and no matching Prop.1A dollars), it does not seem likely that construction can even begin.

However, even if such a rescission is not possible, the likelihood of further federal funding appears to be zero. While we don't want HSR construction to start building useless viaducts and tracks in Central Valley farmland which would be severely harmful to that environment (environmental protection indeed!), at least the harm will be contained.

The other issue is Public-Private Partnerships (P3).  Schwarzenegger had talked about this for HSR but it was only talk.  It's high on the Republican's list of conditions for high-speed rail and other infrastructure development. If I understand this, it means that there would be private investment in the capital development of a project that can be launched by either the government or a private consortium.  However, if the private sector isn't interested in high-speed rail, the government wouldn't be launching it.   

This has been a constant issue in the California rail plan; private investment.  The rail authority keeps promising private funding sources, but for private funds to appear, the California project would have to deliver not only on revenue surpluses, but a government guarantee as well.  While P3 appears plausible for future energy infrastructure projects, such as renewables, it does not look likely for the permanently deficit-based rail transit world, particularly high-speed rail.  After all, the major private railroad operators were delighted to relinquish their money-losing passenger services to Amtrak. The overseas private investor 'track record' is less than stellar.  

The only likely investors are the high-speed rail industries from HSR-operating countries overseas looking for huge and profitable contracts here in the States.  That raises the game to multi-national politics, balance of trade issues and similar global economic challenges and raises the politics of HSR to a foreign policy level. My own belief is that California won't be able to do this without Congressional and Administration approval.

APTA: Key committee members reveal plans for surface transportation reauthorization bill

A few key Congressional committee members have begun to reveal their plans for the next surface transportation authorization bill, according to the American Public Transportation Association (APTA).

Last week, in a series of meetings with transportation industry group leaders including APTA President William Millar, U.S. Rep. John Mica (R-Fla.), chair of the House Transportation and Infrastructure Committee, announced his commitment to drafting a full six-year bill in 2011 and outlined four key principles for the legislation, APTA officials said in a prepared statement.

According to APTA, Mica's four principles would:

• stabilize the Highway Trust Fund, ensuring spending would not exceed actual Trust Fund receipts;

recapture unspent federal funds within the transportation program (although specific funds have not been identified, Mica has noted significant unobligated funds remain available throughout the federal transportation program that could supplement trust funding spending);

• leverage federal funds through public-private partnerships and other alternative financing mechanisms (Mica is interested in expanding current authorized programs that provide loan assistance and innovative financing, such as the Transportation Innovative Financing and Innovation Act and Building America Bonds. He also is open to new programs that encourage more private investment); and

• streamline programs and speed up project delivery to save costs.

Mica's goals for the legislation "are based on the premise that there will be no new resources available to increase trust fund revenues, and that the political climate is not favorable for a general increase in spending without budget offsets," APTA officials said.

In his own prepared statement, Mica said he plans to travel to more than a dozen U.S. locations this month, starting Feb. 14 in West Virginia, to hold hearings and listening sessions to gather ideas for the legislation. At least a dozen other sessions have been scheduled for Feb. 17-25, including a joint House-Senate hearing in Los Angeles with cooperation from Sen. Barbara Boxer (D-Calif.), who chairs the Senate Environment and Public Works Committee.

Boxer also has indicated that a surface transportation reauthorization bill is a top priority for her committee in the next few months, APTA said.

Meanwhile, APTA officials believe the Administration’s outlook on a bill will become clearer the week of Feb. 14, when the President Barack Obama submits his fiscal-year 2012 budget proposal to Congress.