News

February 02, 2009

Media contact: John Egan
Elizabeth Christian & Associates Public Relations
512-472-9599
jegan@echristianpr.com

AUSTIN, Texas—With more miles of freight rail tracks than any other state, Texas stands to benefit enormously from the proposed federal Freight Rail Infrastructure Capacity Expansion Act of 2009, Bruce Todd, executive director of the Texas Rail Relocation and Improvement Association, said Feb. 4.

The Freight Rail Infrastructure Capacity Expansion Act would provide a 25 percent federal tax incentive to railroads and other companies that invest in new track, terminals or other projects designed to increase the capacity of the nation’s freight rail network. That network includes the more than 10,000 miles of freight rail track running through Texas.

U.S. Rep. Kendrick Meek of Florida introduced the Freight Rail Infrastructure Capacity Expansion Act in January. Co-sponsors of the bill (H.R. 272) are U.S. Rep. Kevin Brady of Texas, U.S. Rep. Eric Cantor of Virginia, U.S. Rep. Ron Paul of Texas and U.S. Rep. Lynn Westmoreland of Georgia.

Brady said last year in a news release: “Freight rail has proven to be a very environmentally friendly way to transport goods across America … . If we are serious about addressing future transportation issues, we need to invest more in the rail infrastructure of our nation.”

The U.S. Department of Transportation predicts that demand for freight rail service will nearly double in the next 25 years. A 2007 study by Cambridge Systematics Inc. concludes that $148 billion will be needed over the next 25 years to meet projected demands for rail capacity.

“The 25 percent tax incentive that would be created through the Freight Rail Infrastructure Capacity Expansion Act could be coupled with money from the Texas Rail Relocation and Improvement Fund to significantly bolster the state’s freight rail system,” Todd said.

“Unfortunately, Texas state legislators have not allocated any money for the Rail Relocation and Improvement Fund since voters authorized the fund in 2005. We urge Texas lawmakers to do their part to invest in freight rail and in the future economic growth of our state by putting money into the fund.”

Todd said rail is just as important as roads in addressing the transportation challenges facing Texas.

“Given the economies of scale in railroad operations and concerns over highway congestion, rail freight is seen as part of the solution to increased logistics costs,” according to a RAND Corp. study.

By capitalizing the Texas Rail Relocation and Improvement Fund and passing the Freight Rail Infrastructure Capacity Expansion Act of 2009, Texas could dramatically shrink the gap between track supply and freight demand, Todd said.

“Railroad carriers’ decision to shed what was initially thought to be excess capacity has hampered their ability to carry additional traffic,” according to a report from the Bush School of Government and Public Service at Texas A&M University. “The high cost of capital has effectively made replacing abandoned infrastructure difficult. As a result, railroad carriers have financed only the most essential projects.”

Any state funding for rail relocation and improvement projects in Texas would be balanced with private investments from railroads, Todd said.

James Young, chairman, president and CEO of Union Pacific Corp. and chairman of the Association of American Railroads, recently told a congressional subcommittee: “The freight railroads are willing to put up money consistent with the benefits we would receive, while the local, state and federal governments put up the resources commensurate with the public benefits. These types of projects allow both sides—private and public—to develop and implement projects that would not otherwise move forward.”

About the Texas Rail Relocation and Improvement Association
The Texas Rail Relocation and Improvement Association is a statewide coalition of municipal, county and state elected officials, as well as groups and concerned Texans, who are interested in improving transportation throughout the state. Rail Relo NOW! is an initiative of the association aimed at obtaining state funding for relocation and improvement of freight rail lines around Texas. For more information, visit www.railrelo.org.