Bonds News

UPDATE 2-US looks to private investment for high-speed rail

* Participation seen from those with overseas experience

* Broadband another possible area for private investment

* Economic recession to dampen private investment in roads (Adds Alstom interview, LaHood quotes, highway funding)

WASHINGTON, July 15 (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 IBM.N , 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 6501.T and Kawasaki Heavy Industries 7012.T are leading train manufacturers.

Leading global players also include Canada's Bombardier BBDb.TO, Germany's Siemens SIEGn.DE and France's Alstom ALSO.PA.

Morgan Stanley upgraded Alstom on Wednesday partly on the potential for global government stimulus programs to drive new rail orders.

LaHood visited Alstom facilities in Europe this spring.

Alstom’s U.S. president, Pierre Gauthier, told Reuters in an interview the company concentrates on providing trains and signal systems but would not preclude other forms of investment in U.S. rail if a market develops.

“When you have this and good service, I think Europe has shown that people use this a lot,” Gauthier said.

Another industry player is SNCF, which owns and operates France’s TGV high-speed rail network and is a driving force behind Europe’s high-speed rail. It has formed a network of European partnerships, including Eurostar and several others.

Other companies that could be a factor in rail investment include steelmakers and construction firms as well as locomotive manufacturer and equipment supplier GE Transportation, a unit of General Electric Co GE.N and brake systems maker, Wabtec WAB.N.

Freight railroads, which own much of the rail infrastructure outside the Northeast, could also play a key role in facilitating high-speed. (Reporting by John Crawley and Lisa Lambert; Editing by Lisa Von Ahn, and Carol Bishopric)