U.S. looks to private investment for high-speed rail

By John Crawley

WASHINGTON (Reuters) - The United States expects significant private investment in high-speed rail in coming years with firms from Europe and Asia -- where bullet and other trains are prominent -- to factor heavily in its development.

Transportation Secretary Ray LaHood, speaking to policy experts and reporters, said rail would be a strong opportunity for outside participation with the Obama administration taking early steps financially and politically to advance new train corridors to compete with short-haul air and highway travel.

"Companies involved in (overseas) high speed rail are in the U.S. right now," LaHood said, noting that several states are vying for a piece of an $8 billion downpayment in federal rail funding from February's economic stimulus package.

"I think you'll see private investment in high speed rail -- from Europe and Asia, not just the U.S.," he said.

LaHood also said broadband expansion would be a good bet for private interests but was less optimistic about attracting near-term investment from outside government in U.S. road projects due to recession.

"That may wait a little longer," LaHood said.

Some U.S. and overseas corporations have recently looked into renting roads and levying tolls to finance repairs.

States with high-speed train plans in the works include Nevada and California. Experts define high speed above 120 miles per hour and very high speed -- like bullet trains -- in excess of 200 mph.

Experts say building U.S. high-speed rail corridors will require tens of billions of dollars in federal and private financing over many years.

IBM , which provides technology for rail systems, has said some $300 billion will be spent around the world over the next five years on high-speed rail.

Amtrak, a government-subsidized for-profit company, is the only long-haul passenger railroad in the United States. And its signature line, the Acela, runs in the Northeast and only a fraction of the time at maximum speed due mainly to infrastructure limitations.

LaHood was not specific about which overseas entities might invest or seek contracts in rail projects.

The Japanese government is eyeing the U.S. market for its bullet trains and related technology. Officials from Tokyo met LaHood this spring to pitch their industries.

Analysts say Japan's long experience with high-speed technology puts it in a strong position to compete overseas.

Hitachi and Kawasaki Heavy Industries are leading train manufacturers.