http://www.businessweek.com/news/2011-12-08/bombardier-urges-upgrades-as-tracks-slow-amtrak-acela.html

Bloomberg News

Bombardier Urges Upgrades as Tracks Slow Amtrak Acela

December 08, 2011

(Corrects Acela’s top speed in third paragraph of story published Dec. 7.)

Dec. 7 (Bloomberg) -- U.S. rail travelers would benefit more from upgraded tracks allowing trains to go faster than from immediate spending on high-speed equipment, according to Bombardier Inc., the maker of Amtrak’s Acela.

New high-speed trains are “not really what the U.S. needs right now,” Bombardier Chief Executive Officer Pierre Beaudoin said yesterday in an interview. “I know that sounds odd from a manufacturer. Before you go and buy all this new equipment, let’s work on the infrastructure.”

An antiquated rail network keeps the Acela from reaching its top speed, Beaudoin said at Bloomberg headquarters in New York. Upgrades such as more underpasses and new signaling equipment to reduce spacing between trains are among the elements that would allow Amtrak to offer faster service, he said. The Acela’s maximum speed is 150 miles (241 kilometers) per hour, according to Amtrak.

Congress refused to fund President Barack Obama’s high- speed and intercity rail program in this fiscal year. John Mica, the Florida Republican who leads the House transportation committee, has said the U.S. should focus on financing 220-mph trains between Washington and Boston, not projects nationwide.

“I did New York to Boston on the Acela and I think our average speed must have been 30 miles, maybe 40 miles an hour,” said Beaudoin, 49. “The train is capable of doing a lot better.”

Acela trains, Amtrak’s fastest, are manufactured by the transportation unit at Montreal-based Bombardier. That division accounted for 51 percent of the company’s $17.7 billion in sales in the last fiscal year, with the rest coming from the aerospace business.

Signaling Equipment

Bombardier also makes signaling equipment, “so I would probably get something out of that,” Beaudoin said of a possible U.S. policy shift to favor infrastructure upgrades.

Passengers and taxpayers alike would benefit, he said, because the ability to run faster trains on the existing rail network would be a better investment than a single corridor for a 250-mph train that would cost $20 billion to $30 billion.

“The average speed is what you should focus on,” Beaudoin said. “The realities of population in the U.S. are that there’s not that many corridors to justify this kind of stuff. So let’s focus on the infrastructure.”

The Acela carried 3.4 million passengers in Amtrak’s 2011 fiscal year, 5 percent more than a year earlier, according to company figures. That was more than 10 percent of Amtrak’s ridership.

$117 Billion

Amtrak has a 30-year, $117 billion plan to bring 220-mph service to the northeast corridor. The company and states in the region have received $954 million from the high-speed rail program to date to improve existing infrastructure. Amtrak’s $1.42 billion in funding from Congress for this fiscal year was short of a requested $2.22 billion that included plans to buy 40 more Acela cars.

More Acela orders are under consideration, Beaudoin said.

“Amtrak is looking at that now because they have enough volume on the corridor that they need more Acelas in the northeast,” Beaudoin said. “Whether they’ll make a decision in the short term I don’t know, but they need it. It’s very popular and they have some capacity issues.”

Amtrak hasn’t placed such an order with Bombardier, Christina Leeds, a railroad spokeswoman, said in an e-mail.

--Editors: Ed Dufner, Stephen West

To contact the reporters on this story: Frederic Tomesco in New York at tomesco@bloomberg.net; Lisa Caruso in Washington at lcaruso7@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net


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