FRA Guidelines On Federal Funds For HSR

by Rafael

Earlier today, the Federal Railroad Administration (FRA) published a press release to notify the general public of guidelines for applicants seeking a slice of the $8 billion allocated in the American Recovery and Reinvestment Act (ARRA) a.k.a. the stimulus bill passed in the spring.

The same guidelines will be used to evaluate applications for the $1.5 billion reserved for HSR in the Passenger Rail Investment and Improvement Act (PRIIA) that was signed into law last October. The principal difference is that PRIIA funds are limited to 80% of total project cost. The proposed 2010 budget also includes a provision for an additional $1 billion in federal funding to be made available in each of the next 5 years and will presumably be allocated according to the same or similar guidelines as PRIIA.

USDOT Secretary Ray LaHood expects the first HSR grants to be awarded by mid-September. To allow for timely processing, the guidance calls for pre-applications to be filed no later than July 10 (preferably sooner). These are essentially expressions of interest with rough outlines that FRA will use to establish the volume of applications it will need to process and, to aid applicants in drafting their formal documentation. Final applications for Tracks 1, 3 and 4 (Projects, Planning and FY 2009 appropriations, respectively) due no later than August 24. Those for Track 3 (Service Development Programs, e.g. the California HSR network) are due October 2. These dates may be pushed back by at least 30 days if FRA decides to make changes to its guidelines in response to formal comments received no later than July 10.

Each application will be evaluated using 7 criteria in three categories. From 1 to 5 points will be awarded for each to reflect how well it conforms to the objectives of the federal government and Congress. The results are summed up, with different weights used for the various Tracks.

The first category addresses the return on public investment. This includes a rigorous analysis of financial costs and benefits of service operations. Further, it includes quantification of indirect benefits such as population mobility and safety, economic recovery benefits, energy efficiency, CO2 reduction etc.

The second category covers criteria related to project success, specifically project management and the sustainability of claimed benefits.

The third category examines the timeliness of estimated project completion and the risk of delays, which typically entail cost overruns as well.

These evaluation criteria will apparently be used to arrive at shortlists of candidates in each of the Tracks described above. The final selection among those will be based on what the guidelines refer to as "balance and diversity". This refers to the geographic extent of the projects, the level of technical innovation required etc. USDOT will explicitly favor those shortlisted projects that have already attracted non-federal investment. Tracks 3 and 4 explicitly require 50% matching funds.

Even so, these selection criteria remain quite fuzzy, so political clout on Capitol Hill and with the Obama administration will almost certainly play a significant role. Keep in mind that only projects in the eleven official high speed rail corridors are eligible at all. However, the Secretary of Transportation has limited powers to modify their definition. Brand-new corridors could only be created by and act of Congress, which would also have to amend the PRIIA and/or ARRA to make them eligible.

The Associated Press interprets the guidelines as favoring California and the Midwest over other regions. My own take is that Florida's HSR effort is still stalled and lacks funding commitments, though it is otherwise well placed thanks to the advanced state of its environmental impact review. In addition, Rep. Oberstar (D-MN) and Mice (R-FL) intended the NEC to be the primary beneficiary of HSR funds in PRIIA, to cut the Amtrak Acela Express' line haul times for New York to Washington, DC from roughly three to under two hours.