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Midwest governors OK pact for high-speed rail push

CHICAGO, July 27 (Reuters) - The prospect of billions of dollars in federal money to spur high-speed rail has united eight U.S. Midwest governors who announced on Monday an agreement to work together to obtain that funding.

The governors, as well as Chicago Mayor Richard Daley, agreed to create a Midwest rail steering group to coordinate applications for funding under the American Recovery and Reinvestment Act, which allocates $8 billion nationwide for high-speed rail.

“We want to make sure the Midwest is in front of the rest of the nation,” said U.S. Senator Dick Durbin, an Illinois Democrat who joined Daley and the governors of Illinois, Iowa, Michigan, Ohio and Wisconsin at a high-speed rail summit.

Governors from those states, as well as Indiana, Minnesota and Missouri, signed the agreement.

Wisconsin Governor Jim Doyle said federal high-speed rail funding could rise to as much as $19 billion in the coming years with ongoing appropriations and that the Midwest states want a substantial portion of that money despite the fact that other U.S. regions were also vying for it.

“I don’t think you will find any part of the country that will have as well coordinated, thought out, solid application as we’re going to put out from the Midwest states,” he said.

The U.S. Department of Transportation has already received pre-applications for the funds totaling $102 billion with $13 billion of that amount requested in the Midwest. Funding grants are expected to be finalized this fall.

The Midwest coalition has identified priority rail corridors linking Chicago to St. Louis, Milwaukee and Madison, Wisconsin, and to the Detroit area. Those corridors as well as additional ones reaching into other states carry a price tag in the tens of billions of dollars over 10 to 20 years, according to Doyle. The high cost will require local funding at a time when most Midwest states are facing budget problems due to the recession.

Illinois Governor Pat Quinn said his state took a first step toward local funding by including high-speed rail in $31 billion, six-year capital spending legislation he signed into law this month. The measure raises fees, taxes and allows video gaming terminals to generate money to help pay off bonds.

Iowa Governor Chet Culver said his state was partnering with a private freight carrier for a passenger rail link between Chicago and Iowa City estimated to cost $130 million.

“There’s a lot of opportunities here to partner with the freight rail carriers to just upgrade the tracks to take them from 59 miles per hour to 79,” he said.

Michigan Governor Jennifer Granholm, whose state has lost thousands of manufacturing jobs due to the ailing automotive industry, said high-speed rail could mean 57,000 permanent jobs and 15,000 construction jobs for the region. (Reporting by Karen Pierog; Additional reporting by Lisa Lambert in Washington; Editing by James Dalgleish)