U.S. High-Speed Train Projects Get a Push

It may be old hat in Europe and Asia to rocket through the landscape on a 200-plus-mile-an-hour train. But in America, all that promoters of high-speed passenger rail service have to show for three decades of effort are dusty feasibility studies stretching from Florida to California.
Yet by committing $13 billion in stimulus and budget funds to high-speed train travel to reduce traffic congestion and cut pollution, the Obama Administration is giving these projects a critical boost. A priority is a line that would whiz passengers 520 miles from Anaheim to San Francisco in less than three hours and upgrades of Amtrak service in New England and the Midwest to reach speeds of up to 150 mph. "This is the first time a U.S. Administration has put this high on the agenda and is putting serious money behind it," says G. Lindsay Simmons, a Washington attorney representing the French National Railway, which aspires to manage U.S. transit systems.
Dozens of potential investors, most of them foreign, are interested but wary. They remember all the previous setbacks that undid once-promising projects in places such as Texas and Florida. They're also keenly aware that U.S. government analysts concede that it's impossible to run these hugely expensive networks profitably. That means an eternity of subsidies—and the unending wrath of Republican budget hawks who have repeatedly attacked Amtrak's budget. "We believe deeply that high-speed rail will come to the U.S.," says Yannick Legay, high-speed project policy manager for Alstom, creator of France's fabled TGV, or train à grande vitesse. "But we're still at the beginning of the story."
Despite their caution, executives from Alstom have made three marketing trips to California in recent months to showcase the company's latest technology, which can hit 357 mph in tests. Bullet-train operator Central Japan Railway has formed a 10-person division to develop strategies to bid on U.S. contracts. Foreign manufacturers such as Bombardier, Kawasaki, and Siemens, which now assemble transit cars in the U.S., would gladly do the same with high-speed trains to land business.
California is the big test. Voters in November authorized the state to float $9.9 billion in bonds to start construction of the first $33 billion phase. Billions more are expected from Washington. "You can never have 100% certainty that a deal will happen, but this is as good as it gets," says David Crane, economic adviser to Governor Arnold Schwarzenegger.
If, however, projects like California's don't begin before the next shift in poltical power, federal funding could again be in jeopardy. Support also must be maintained for the long haul. U.S. Transportation Secretary Ray LaHood notes that the interstate highway system, launched in the 1950s, wasn't finished until the early '90s. "We are talking another three decades," he says, "before a national high-speed network becomes a reality."
With Andy Reinhardt in London, Kenji Hall in Tokyo, and bureau reports.
Engardio is an international senior writer for BusinessWeek, where this story originally appeared