Obama pushes for high-speed rail

By John Crawley and Lisa Lambert

WASHINGTON (Reuters) - The United States will seek to develop high-speed rail nationally, President Barack Obama said on Thursday in emphasizing a broader commitment to U.S. infrastructure investment and a transportation alternative ignored or dismissed by previous administrations but long embraced by Asia and Europe.

"My high-speed rail proposal will lead to innovations that change the way we travel in America," Obama said in announcing the first steps of an ambitious initiative that will tap $8 billion in newly available economic stimulus money through 2012.

Those funds will go to states for upgrading existing passenger rail lines and laying the groundwork for high-speed projects, 10 of which are in various stages of planning in California, the Gulf Coast and other regions.

Amtrak, the national passenger railroad financially supported by the government, also hopes to tap into the stimulus money to improve its heavily traveled line between Boston-New York and Washington.

Amtrak has experienced a boon in ridership in recent years and new political footing after nearly a decade of confrontation with the Bush administration, which once sought to dismantle its operations.

Obama's vision clashes with entrenched views of many in government and powerful transport industries about the business prospects of long-haul passenger rail. The private sector abandoned money losing operations decades ago after the government expanded the U.S. highway system and facilitated the rise of air travel.

Still, he said reviving rail should not be a "pie-in-the-sky" proposition. "It's happening right now. It's been happening for decades. The problem is it's been happening elsewhere," Obama said in citing France, Spain and Japan.

"China, where service began just two years ago, may have more miles of high-speed rail service than any other country just five years from now," Obama said.

"There's no reason why we can't do this," he added, noting such a system would be cheaper and cleaner than building new highways or adding to an "overburdened" aviation system.

FOCUS ON STATES, OBSTACLES

The administration's effort focuses on federal and state dollars but private investment could play a key role in accelerating projects, government and rail proponents say.

Obama envisions a network of short and longer-haul corridors of up to 600 miles plied by trains traveling up to 150 miles per hour. Acela service operated by Amtrak only reaches 150 mph over a short stretch in New England.

Freight railroads, which own much of the rail infrastructure outside the Northeast, would also play a key role in facilitating high-speed. The biggest freight lines include CSX Corp, Union Pacific Corp, Burlington Northern Santa Fe Corp, and Norfolk Southern Corp.

Other companies that could factor in new U.S. rail investment include steelmakers and construction firms as well as locomotive manufacturer and equipment supplier GE Transportation, a unit of General Electric Co; Canadian locomotive and train car manufacturer, Bombardier, and brake systems maker, Wabtec.

The first grants to states for high-speed projects and upgrades to existing service could be awarded this summer. High-speed development, according to government and outside experts, will cost substantially more over many years. Obama proposed an additional $5 billion for rail in his budget.