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Europeans and Other Foreign Companies Line Up for US High-Speed Rail “Gold Rush”     Print Email

(October 7) Notwithstanding a “buy America” requirement, European railroad engineering firms are lining up eagerly and in force to enter what they see as a modern day “gold rush” to get a stake in the U.S. high speed rail market, fueled by President Obama’s $8 billion in stimulus funds.  So far, 13 routes in a wide geographic area, including California and Florida, have been proposed.  See recent European Affairs article raising the curtain on this push.

Europeans are hoping to get an edge because of the highly developed rail systems in Europe and because they have experience and capabilities to seize the opportunity.  Competition will be keen, however, from Asian and Canadian companies.  Thirty eight  companies have officially registered interest in the proposed Tampa-Orlando-Miami route.  One industry estimate is that starting in 2011 the US market for high speed rail could number 145 trains and more than 1,000 cars.

Germany’s Siemens will showcase its Velaro ICE trains in Florida this week in advance of the bidding process in the state.  The Velaro trains can travel up to 250 miles per hour, but the gleaming train cars are sitting on trucks in Florida because the special tracks they require have not yet been built.

Bombadier, headquartered Canada, will be a tough competitor.  Bombadier already has experience in what passes for the nascent  US high speed market--the Acela Express lines along the northeast corridor, Washington-New York-Boston. The Acela can reach speeds of 150 miles per hour, but generally averages less than half of that.

Both Siemens and Bombadier have large plants in the US, which will comply with the “Buy America” provisions.  Bombadier has recently expanded its plant in Plattsburgh, NY and Siemens has purchased land adjacent to its large Sacramento facility in order to expand and meet the high speed opportunity.  (Siemens employee 70,000 people in the US already.)

Of course, high speed rail is hardly a done deal in the US.  The Obama Administration’s $8 billion is seed money only, and multiples of that figure will be required to implement the high speed routes, which require expensive new lines through populated areas.   Cost estimates for all thirteen proposed routes combined range from hundreds of billions to $1 trillion.  Another possible stumbling block is political opposition from some Republicans who, in full election mode, have seized on the rail plan as another example of government overreach.

By Jennifer Pietras