mood before the end of the 1960s, he knew that required a new culture, a new mindset and ultimately a new administration to become reality. this kind of example are things we should be mindful of today. don't misunderstand me, i have complete confidence in the united states the permit of transportation, and secretary a laho lahood, we have not had a chance to work together but we have the pleasure of being with karen ray at one of the outreach sessions. they're fully capable of developing the system throughout the nation. in order for america's moonshot to become a reality, members of congress must work in concert with the same bold vision. we must consider this revolutionary initiative in its proper context and recognize the clear view of this administration combined with mounting public and private sector for groups such as the

high-speed rail and texas compensation, the florida high speed rail authority among many others, working closely with bill miller and other organizations, represent a once in a century opportunity to make a real and positive impact on the country's transportation and economic development lansky. let's be certain we have our eyes on the same prize, passenger trains traveling and 195 miles an hour or more, on a new dedicated track system. if we have that support infrastructure, improve safety, reduce pollution and improve economic benefits to the community. as we look to build this new system is important to remember we're breaking new ground in the station. it would be wise to provide flexibility, provide market studies around engineering and environmental studies, all the projects i am involved with at the local level, it has primarily been traffic and pull road, we are the only county run toll road system, 500 miles of

system. we always build the project ahead of schedule and under budget but the key to be ahead of schedule and under budget was having the right to have a budget and doing studies before hand so that we knew what we responding in the end. the market and environmental studies are important we are to attract private investment as well. all of the discussions haven't discussed private investment and public/private partnerships, there are places in the world where high-speed rail is covering its operational costs, making profit for investment. there are places in america where high-speed rail can make central private investment and attract these investors, we must show that we can cover cost. to encourage private investment we should offer tax exempt additional taxes and private activity bonds and other financial mechanisms that might be available from the federal level. as we look to different projects, we don't try to put in one formula for the entire country. innovative project of the resistance are important, different needs in the northeast

corner of california, illinois, texas, in texas we have a linear airport model. senator hutchison has been working with us. in every part of the country, all of those are owned and operated by cities or counties. if you give local governments the opportunity to connect airports and transportation, metro transportation systems, we will, for the first time, brief life into a truly viable interconnected mobility system. we are very grateful for the support of the administration's vision for high-speed rail and are encouraged by the size of the financial commitment and transportation bill, we are not working under the assumption that the federal government or state government is prepared to cover the cost of these projects for our country. i thank the governor for giving comments to sustain assistance that we build. we believe cities and counties have a role to play in that and coming together to make that

work. we have a local government corporation and the capacity to bring the coalition together to help deliver this project in our state and provide service for 440 mile texas debone court or that senator hutchison mentioned, you bring texans together along the gulf coast corridor to new orleans and east coast and south central corridor into oklahoma city, little rock and memphis and ultimately into the midwest. this project, impressive in itself, will require a unique part of of federal, state and local officials and the private sector and we would very much look forward to working with this committee with amtrak to make that happen. thank you for having us here. looking forward to questions. >> miss fleming, we welcome you and ask you to make your remarks. >> mr. chairman, ranking no. 19, thune, ranking member hutchison,

thank you for the opportunity to discuss passenger rail, and the reinvestment act. the $8 billion provided by the act for high speed and other intercity passenger rail project have focused more attention on and generated a great deal of anticipation about the possibility of developing high-speed rail systems in the united states. my testimony have 2 parts, i will discuss the fact is that we have identified that affect the economic viability of high-speed rail projects and how f r a's strategic plan incorporates these factors. the potential benefits of high-speed rail projects are many, these projects are costly, take years to develop and build and require substantial up-front public investment as well as potentially long-term operating subsidies. the term and in which, if any, high-speed rail projects may eventually be economically viable will rest on the factors such as ridership potential, costs and public benefits.

high speed rail is more likely to attract riders in densely and highly populated corridors especially where there is congestion on existing transportation modes. characteristics of the proposed service are also important. high-speed rail attracts writers where it compares favorably to transportation alternatives in terms of door-to-door trips times, frequency of service, reliability, safety and price. costs largely hinge on the availability of rail right of way, they use patterns and terrain. once projects are deemed economically viable, project sponsors face the challenging task of securing the significant upfront investment for construction costs and sustaining public and political support and stakeholder consensus. we found that in other countries with high speed rail system is the central government generally funded the majority of a front costs of high-speed rail lines. the $8 billion in recovery funds for high-speed rail represent a significant increase in federal

funds available to develop new or enhanced in a city passenger rail service. this amount, however, represents only a small fraction of the estimated cost for starting or enhancing service on 11 federal reauthorize high-speed rail corridors. furthermore, the challenge of sustaining public sector support and stakeholder consensus is compounded by long project lead times, the diverse interests of numerous stakeholders and the absence of an establish a framework of coordination and decisionmaking. my second point, strategic plan attempts to address the absence of an institutional framework for investment in high-speed rail. in a recent report we discussed the need for clear identification of expected outcomes, insuring the reliability of ridership and other forecasts to determine the viability of high-speed rail, and including high-speed rail with re-examination of other federal surface transportation programs to clarify federal

goals and rolls, link funding to performance and reduce stovepipes. f r a's strategic plan is more a vision than a plan. it does not define goals for investing in high-speed rail, how these investments will achieve them, how the federal government will determine which corridors issue -- we should invest in. f r a views the strategic plan in a first step in involving federal development, emphasizing that stakeholders' must help push out its approach to developing a high-speed rail under its control. and and plans to spend recovery funds in ways that show success to help keep long-term political support for these projects at the local level. in conclusion, the inclusion of $8 billion in recovery funds is only a first step in developing potentially viable high-speed rail projects. but host of seemingly intractable issues like high costs, uncertain ridership and the need for broad political support that have hampered development of these projects is

still with us and we need to be resolved to effectively spend recovery funds. surmounting these challenges will require federal, state and other stakeholders leadership to champion the development of economically viable high-speed rail corridors and political will to carry them out. we will also require clear, specific policies and delineations of expected outcomes and realistic analysis of writers it costs and other factors to determine the viability of projects and their transportation impact. mr. chairman, this concludes my statement. i will be pleased to answer any questions you or members of the subcommittee may have. >> thank you very much. miss fleming. now, mr. skancke, we welcome you and invite you to give your testimony. >> thank you, mr. chairman. the tough part about being the caboose is you cover a lot of track that the previous train has covered.

keeping in line with all the other -- >> get a little closer please. >> is that better? >> yes. >> good afternoon, chairman lautenberg, ranking member thune, and members of the committee. thank you for giving me the opportunity to testify today. in 2005 are appointed to the national surface transportation policy in revenue steady commission by senate majority leader harry reid. in january 2008 after 2 years of meetings, hearings and research, our commission recommended to congress a vision for transportation policy and funding in america. a new vision which includes a framework that will reformat hopefully revolutionize the way we do transportation policy and funding for the next 50 years. one of the recommendations was substantive reform of our passenger rail system. over the next half century the united states is projected to ed 1 fifty million new residents, 50% increase over its current population. this increase will cause travel to grow at even greater rate than the population will.

we will need to provide new choices which require a cultural shift for the traveling public. we presented our report to congress in january of 2008, we recommended that the entire country should be connected by a passenger rail by the year 2015. recommendations also define that the passenger rail corridor should connect population centers within 500 miles of each other. 11 months later the gao concluded the existing inner-city passenger rail system is in poor financial condition and the current structure does not effectively target federal funds to where they provide the greatest public benefits such as transportation. court or reeds, generally less than 500 miles in length have higher ridership, perform better financially and appear to offer greater potential for public benefit. we also recommend congress that our nation in vest at least $8 billion per year over the next 50 years in passenger rail

systems. president obama and senator reid and this congress realize that investment in passenger rail is needed now, not over the next 50 years. eight billion dollars was put into the stimulus bill to create jobs and kickstart the program to begin a valiant new vision for america's transportation. this president and senator reid and this congress have a vision for transportation in our nation much like that of president eisenhower which is connecting america. the united states is behind the curve in passenger rail service, as we know. the far east, near east, europe and the middle east are investing billions in passenger and freight rail systems for many years. our lack of vision and investment is deteriorating our global competitiveness and way of life. the nation's new vision should not just focus on existing passenger rail lines but expand beyond the current corridors. in my opinion the vision to improve a western connection much like the recommendation of our commission, connecting 22 western states in phases as a

system, not as pieces, should be a priority. the first phase of the western connection is being considered, the desert express' high-speed rail passenger corridor connecting california to las vegas. this project will ultimately connect victor ville to palmdale, calif. from los angeles to san francisco. this project will connect 3 major western metro mama ted -- metropolitan regions. each project meeting the criteria set up by our commission. this takes leadership and courage to get it done. it can be done and should be done. having grown up in south dakota, it would have been nice to take a 60 minute train lied for my thanksgiving holiday but instead i was stuck at home in a. it because we had to travel by car. these systems will be costly to design but we can do this.

this is the united states of america. mr. chairman, i have something for this policy to commander -- consider. we must agree upon a bold new vision and make a cultural shift in the way we do transportation, a vision the american public can invest in and believe in and includes passenger rail that connect america like the eisenhower interstate highway system. we must do today what our parents and grandparents did for us. invest in a new vision. reform the current program and revolutionize the way we do transportation policy and funding. we must reduce the time it takes to deliver a rail project in this country. 20 years in new starts is too long. we must delivered in 3 to 5 years. this is process delivery. agencies cannot sit on projects. we need to create -- we did not need to create an oversight

office, we just need to get the project out. we need to open the need for process to get this done, it can be done by reviewing duplicative services. the system must be performance based and out hundred and. performance measures for rail systems include reliable, on-time performance, congestion, safety and environmental benefits, improved choices, mobility options and reduce energy use. systems need to be in their own rights of way, have a minimum share tracked in metropolitan areas and on-time delivery. needs to be reliable or the public won't use it. in closing, albert einstein once said, quote, without changing our patterns of thought, we will not be able to solve the problems we created with our current patterns of thought. let's change our patterns of thought so that we can solve the problems we created with our current patterns of thought. you should be commended for having this hearing today to talk about high-speed passenger

rail. your leadership demonstrates the change is in washington d.c. and in this committee. passenger rail is the future for moving americans and now is the time to make that investment. we need to restore hope and promise in the transportation system, our fellow citizens are counting on us to get it done. >> thank you very much for your excellent testimony. we are going to start, i think we will do is allow 6 minutes -- six minutes for each person. i would ask gov. rendell a question. president obama has made high-speed rail a priority. he started with $8 billion in recovery, the president has proposed $1 billion for each of the next five years for high

speed rail. what sources of funding might congress consider for these future high-speed rail investments, but before i ask you to answer, i would say you have got to be a little cautious with the climate change money. we are working arduously to say that there are many problems, some of the more severe than others, among them is our infrastructure focused today on rail, but also on climate change to make it possible for generations that follow to be able to breathe the air and conduct a healthy life with climate change, and one of the best things for climate change is a high-speed rail. so what sources of funding by congress consider for the future

high-speed rail systems? you said it earlier. $13 billion is not a lot of money. when you think of the neglect that has taken place, what we have invested in rail is pitiful by comparison. to the needs, not only of more efficient operations, importation of oil, the security needs for the country to be able to function in times of emergency. should the development of high-speed service receive a dedicated federal funding like our interstate highway system or aviation system, that is the first part of the question. >> there is a sports writer in philadelphia who writes a column

once a month in title defy working of the world, and he delineates all the change he would make in professional sports. if i were king of the world we would stop messing around. every one of the g-7 nations has undertaken massive infrastructure repair programs, japan and germany, countries of fraction of our size, have spent over a trillion dollars in that five to tenure infrastructure repair. that is what we should be doing. we should finance through a capital budget and change the way we score such financing mechanisms. it is the only way we're going to get this done. we are kidding ourselves, we are doing something to pat ourselves on the back and say i heard secretary lahood save $15 billion is terrific, better than we ever had, $13 billion better than nothing. sure it is, but it doesn't get us anywhere down the road. we can do infrastructure on the

cheap. we have to invest what we need to invest and we have to find a way to do it and we have to find the political courage to find a way to pay for it. i think a capital budget is long overdue. >> i can tell you that if we -- >> no company ever -- >> -- cash basis -- >> you would not finance your capital needs out of operating costs, we financed building a bridge or train system the same way we purchase paper clips and the federal government. it is time to change. it is time to change and we had better do it soon because infrastructure is a lot like that commercial, you can pay me now and he holds up the can of oil filler, $8.75, or you can pay me later and he points to the dilapidated car and, if 4 thousands of the $25, it is not getting cheaper. >> we are on the same page.

each of these countries is committed to significant government support for its high speed rail system. is it realistic to expect a high-speed passenger rail service to be successful without government contributing toward capital or operating expense? >> we found there is a real commitment in france, spain, and japan, and the majority of upfront construction cost was born by the federal government, central government and these countries, without the expectation that they would recoup these investments.

most of these countries build a trunks sign to show success and build upon that. the commitment, followed with a significant amount of money, what that allowed is for them to begin initial construction relatively quickly, than if they didn't have the large investment by the central government. patent >> i would like to ask a question and hope we can get a quick response. my understanding is manufacturers, passenger cars, that recovery act, what could we do for countries to enter into the high-speed rail manufacturing market? >> mr. chairman, i was

encouraged yesterday, ge, locomotive provided testimony, where they are ready to build next-generation with these 0 high speed. 1 24, they had their ceo at the hearing in pittsburgh. they are catching on to the fact that there is a commitment in this country. that is the most important point. >> investing $7 million -- >> let me turn to my ranking member. we have a proposal called build america. bonding capital improvements, i

agree entirely the way we budget around here defies any sort of, rational basis, making these decisions, clearly not the way to go in the private sector. i appreciate your observations about that. if brett favre is paying for the vikings, more people want to get to minneapolis, driving through a blizzard. the main thought i'd take away, the reliable projections for ridership and cost. the overly optimistic proponents overestimate ridership and underestimates costs. the federal government make investment decisions based on faulty forecasts.

we are going to fund projects that will be successful. i will direct this first to mr. sable. how are we going to evaluate such projections for proposed projects, are you going to rely on the project sponsor n? >> one of the key projects we will be ranking the applications on, the proposed management plan and management of risk which includes covering the operating costs, those responsibilities belong to the applicant, not the federal government. those forecasts are accurate, of the things we plan to do is build a template where

essentially, the data to us, i ran the data for our own calculations, as we compare the projects, we are getting apples to apples comparison. to ensure the integrity of the data, we have accurate forecasts. we understand the fact that the project we choose will be successful. we can not squander this opportunity. the project we select. we won't be a next generation. we understand responsibility we have, we are prepared to take

the challenge. >> one of the ways we ensure we are getting accurate estimates. we bear the risk as well. we share the $144 million cost of the expansion. >> that is a good suggestion, and one that we need to take them out and evaluate these progress. let me ask ms. fleming and follow up that question, do you think the department should make sure these forecasts, when it relies on this information, that you want to make them as accurate as possible, and my question more directly is should there be some outside, neutral party that evaluates these forecasts too in addition to having them?

>> ridership and other forecasts are key factors in determining whether a project or system is going to be economically viable. unfortunately, statistics, results have shown ridership is underestimated. we feel there are several ways to try to provide more reliable statistics. first would be falling governor rendell, obligating state and local governments to share some of the risk of underestimated cost where they are seeking federal assistance. another way would be to obtain estimates and forecasts from independent sources, where there isn't a specific project being considered. lastly, making the forecast subject to peer review, making it publicly available. making the data publicly available. those things would better insure the information would be more

reliable. >> szabo, after we spend $13 billion appropriated for high-speed rail over the next several years, do you expect the united states to have at least one corridor of substantial length served by a japanese or european style high-speed rail road? >> is important that, first off, we wait and see what is applied for. obviously i can't start commenting on what we are going to do until applications come forward, and are graded and approved. clearly again, we understand the need to ensure that we have very tangible, very substantial successes. clearly, our vision is to follow the model of what the europeans have advanced.