Backers of a $500bn (£324bn) high speed rail network across the US have admitted that their funding streams for the programme have dried up after engineers questioned its attractiveness to private investors.
President Obama unveiled his vision for high speed rail in January along with £5.2bn of funding to states across the US to start working up designs and even begin some construction work.
But Federal Railroad Administration deputy administrator Karen Rae last week was forced to admit that there was no further funding currently available.
“We recognise that for this programme to be successful we do need a reliable, long-term source of funding,” she told the ARTBA conference in Washington.
“But where that money will come from is something that Congress is going to have to focus on in the next one or two years.”
Rae said that private money might come from paying a builder/operator for line availability.
Line availability models would emulate where operator is paid for keeping the road open.
“Using an availability model is something we can think about,” she said.
Halcrow vice president Bob Brownstein warned that investors would be very wary of fare revenue promises.
“Passenger risk is a major challenge, particularly in the USA where we don’t have a tradition of travelling by public transport,” he said.
Rae said a route from San Francisco and Sacramento to Los Angeles and San Diego in California was an example of where demand was apparent.
This is the US’s most advanced high speed line, with £2.9bn of funding available via Obama’s package and state funds.
This is funding land purchases, construction of track, signalling systems and stations, and completing environmental reviews and engineering documents.
Up to £6.4bn in state funds are available to be spent on the route, if matched by federal funding. But the overall cost of the project is estimated at “£28bn, leaving a £15bn funding gap.
The project is already facing major delays after local communities in the San Francisco Bay area lodged a legal challenge to the route. Environmental groups are also expected to oppose the construction of the line through marshland in area.
Development work is currently underway on 13 high-speed rail corridors across the US.
The US government wants to connect 80% of the country to a high speed rail line within 25 years, but concerns have been raised that the majority of this will not be true high speed. Much of the routes will be existing rail lines upgraded to allow trains to travel faster.
But they will still have to share the track with freight, which in the US takes precedence over passenger rail by law.
Strategic consultant Castalia Advisors partner Brian Chase, who advises banks on private finance investments, said that could seriously undermine the plans.
“We have a system that gives preference to freight,” he said. “I’ll bet money that in five years there is not a single line built that does 150mph (241kmph).
“The money was too far spread around and, fundamentally, fuel for cars is so low to make travelling by rail economically viable.”