GAO says high-speed rail cost could reach $70 billion

Tuesday, July 17th 2001, 12:00 am
By: News On 6

WASHINGTON (AP) _ Helping Amtrak raise $12 billion to start building high-speed train lines would cost the U.S. treasury as much as $19 billion over three decades, according to a report released Monday.

And that would be only the beginning, the General Accounting Office reported. Completing new high-speed corridors around the country, in addition to the existing one between Boston and Washington, could cost $50 billion to $70 billion.

GAO, the investigative arm of Congress, issued those estimates in a report requested by two leading critics of Amtrak, Republican Sens. John McCain of Arizona and Phil Gramm of Texas.

McCain and Gramm oppose legislation that would give Amtrak billions for high-speed corridors while it is still struggling to wean itself from federal operating subsidies by 2003, as ordered by Congress.

``Amtrak should be a solution to our nation's transportation congestion problems, not a money pit,'' McCain said.

Amtrak referred questions to the legislation's chief sponsor in the Senate, Democrat Joseph Biden of Delaware. Biden said Monday evening, ``It appears the Senate's most well-known opponents of Amtrak are using alarmist rhetoric to misrepresent a GAO report for their own political purposes.''

``The nation's governors, mayors and legislators are looking to this legislation to help them solve pressing transportation problems around the country,'' Biden added.

The Washington Post reported, meanwhile, that Amtrak President George Warrington has ordered a 15 percent cut in the railroad's management ranks and may cut service in an effort to rein in costs. Cuts in union employment of 10 percent to 15 percent also are being considered, the newspaper said in its Tuesday editions, citing unidentified sources.

Cheered on by Amtrak, 56 senators and 136 representatives have signed on to legislation that would allow the national passenger railway to raise the $12 billion over the next decade by issuing high-speed rail bonds.

Amtrak would spend the money over 10 years, but the government would provide tax credits to bondholders for 30 years, relieving Amtrak of the burden of paying interest.

The GAO said the tax credit would cost the treasury between $16.6 billion and $19.1 billion over the 30 years. That amount is comparable to the government spending $7.7 billion to $10 billion today, the GAO said.

The Senate Finance Committee had planned a Wednesday hearing on the bill but postponed it.

Michael Siegel, a spokesman for the committee, said Monday that staff members are still working on the bill, and he said a hearing may be held at a later date.

McCain, in a statement, said it is unfortunate the committee ``will not give (the bill) the public airing it needs.''

The money would pay for initial work to upgrade 11 designated high-speed rail corridors throughout the country to carry passenger trains at speeds exceeding 90 mph. Affected states would kick in 20 percent of the cost.

The only high-speed route in operation, the Northeast Corridor between Boston and Washington, would get up to $3 billion to upgrade tracks so that Amtrak's new Acela Express _ America's first ``bullet'' train _ can spend more time traveling at or near its 150 mph top speed.

Amtrak officials say they do not know how the remaining $9 billion would be divided. But $1 billion would be reserved for rail corridors not designated for high-speed trains, including the Alaska Railroad. Rep. Don Young, R-Alaska, is the chairman of the House Transportation Committee.

Wendell Cox, a member of the Amtrak Reform Council, has said the name of the legislation _ the High-Speed Rail Investment Act _ is misleading. The money may boost train speeds only modestly, he said.

The GAO says Amtrak estimates that fully developed high-speed corridors would cost $50 billion to $70 billion over 20 years.