Riders from new york to boston than all other airlines put together. 50 of people that travel this distance. And between washington d. C. And new york city, amtrak carries twice as many passengers as all Airlines Come bind. Today it carries 75 of inner city travel letters between new york and washington. Amtrak has done all this with the threat of funding cuts and privatization especially of the profitable northeast corridor hanging over its head. We know that in other parts of the world privatization of high speed Passenger Rail has tried and failed to solve the problems it was intended to solve. These plans were almost always preceded by funding cuts, system i can safety and reliability problems caused a great deal of upheaval in the transportation and forced countries to renational lies a system. With that being said, we think that amtraks longterm next general plan for the northeast corridor provides a temp plate for a Public Private partnership that is worth discussing. If the partnership does not reduce the Public Interest or the interest of the brotherhood of lock motive engineers and other skilled workers. Further they believe that amtrak should be the service prider for the northeast corridor and for the United States because they have provided progressive Quality Service despite many obstacles and continue to look for ways to increase train speed and reliability in Service Despite of these obstacles. Thank you chairman. Thank you and for all of you for your patience to exercise our constitutional responsibility and thats vote. We are back now. Well turn to questions. Let me just comment to mr. Tollman and welcome labor representing men and women that work for us. I appreciate your roll. Ive said repeatedly and i wonder if people have a hearing disability and cant comprehend what im saying. Ive always advocated the benefits, the wages, the retirement for amtrak employees in whatever structure we adopt making certain thats protected. Ive also been here and watched the number of personnel from amtrak go from 29,000 to 19,000 and i say that doesnt pretend a Bright Future for labor either if youre the head of a union or Labor Organization or a member. Ive been there fighting for labor when labor had to fight amtrak and the federal government for benefits and wages. In fact, that was a prolonged and difficult experience for the people who worked for amtrak, those Union Members who were denied benefits and wages. And i als used the example of freight rail which gives better salary and better wages and reaches agreements without that type of poem significance. As far as my record, i have always supported the right of americans to join a labor union. When we wrote the tsa legislation, i insisted that we have that right. I also take the position that no one should be forced to join or compeled to join a union. But i think thats an important right and i think that labor has done an incredible job over the years. There have been some problems here and there, but in raising the standards, the compensation and the working conditions for the people that get out there and roll up their sleeves and actually make things happen, rather than Like Congress just talk about it. So i want to make that clear. And as we move forward, i think that again, there are just unlimited possibilities. If we can have four time the number of passengers, i know we can increase the employment. We already actually tech nick cli, amtrak is a private corporation. It does have some governmental character sticks and certainly substantial government support. There have been debates about the level of support but further more ive supported Long Distance service, a national system. But we want that to be operated and managed on the very bist basis because the chief underwriters of the private sector cooperation we have with am track in 1971 t main underwriters are the taxpayers of the United States. So thats all ive asked for. I think our goal is to have high speed rail in the northeast sordor. I think thats your goal, mr. Tollman, correct . Yes. We want to do that rather than in 30 years. 30 gleers my calculation brings the chart well put in the record without objection shows us not getting to high speed operations until 2030 to 2040. At that junk chure i wont be around to see that given that my d. N. A. And longevity and as far as male members of my family are concerned. So my goal is to see it while im alive and not to have it happen after im pushing daisies out of some better set egg. But with those words and questions. Weve got well, let me go to he had land first. I brought a caller of conquering gothm. Has everybody read this . Will the staff please take this and im going to ought graph it for him. Lets see to joe, from john with love. [laughter]. If you think youre having problems, after you read this story of alexanders attempts to bring rail service into manhattan, the tunnels that he built, Union Station that he built. You think your politics have been tough, wait till you read this story. Its one of the most fascinating volumes i have ever read and it encapsulates all of the issues were going through. He was determineed to do this. They were going to build ten or 12 rail lines. Then people had to take a ferry from new jersey to new york. And his sister was an accomplished artist who had a studio in paris. During one of his visits he observed the french tunneling so he came back and said if the french could tunnel, we could too and adopted that plan. They actually failed. And youll read that story too in this in trying to build a tunnel previous to that. But he did succeed. Its an incredible story of vision and just the type of determination to get the job done. Will one of the staffers deliver that to mr. Boardman. Thank you. It does take that vision and it takes also the determination. And also to be quite blunt, it takes the cash. Now i was excited about president obama committing to high speed rail, however, i did express my disappointment in that the money was diverted among 150 projects. Most of the money went to california for a true high speed rail. The rest is inner city enhanced Passenger Service and a number of other improvements and grants. For the fra representative and administrator, what is the intent of the administration for high speed rail in the future, the next four years . Well, i think the president s vision is in his budget and it includes additional billions of dollars for high speed rail. And so it is spelled out in his budget which he continues to be quite committed to it and we hope that the congress will follow through on that. Well, mr. Boardman, you started out with i think less than a hundred million and some of the money that came into the northeast corridor came in sort of i guess at the same time we designated the corridor high speed, which i commend you on doing. But secondly, with the return of money from at least florida, wisconsin and ohio. And mr. Boardman, youre using that in some i dont mean this to be critical but its sort of a band aid approach because you dont have the money but youre trying to pick project that is would make a major impact in improvements in the speed of that corridor. Where are you on gate way as far as funding, planning, expect cushion, where do you see it now and how much to get that done . And gate way maybe you could describe that for the record . Gate way goes past new wark past pen station in new york. It proves two tunnels, some new tracks that go from basically lot enburg center to the new two tunnels and it includes space within pen station for new Jersey Transit trains that dont have the same ability as Long Island Railroad does to stop quickly and store their trains in the hudson yards. Where are you with that . Were in the planning stage. Some projects could move quicker than others. We included that in the sandy question in the 336 million. And we need to secure a space under the hudson yards. Its about an 800 foot section at about 190 million. Once that real estate the development occurs it would close off the ability to get those two new tunnels n. The second thing we need to do that would be done under gateway is to raise to a platform or a different location that sub41 station that was flooded during the tunnel and also add high density signal systems on the east river tunnels, not so much to add capacity to the station, but to give us the ability to move trains through those east river tunnels more quickly and we could have restored the same level of service quickly had bebeen able to do Something Like that. Those are additional planning amount of money to move us forward on that project. Two things, one we are trying to complete an environmental study in the corridor. That is scheduled to be done about 2015, is that correct . Thats right. Its the tier one for the corridor which will set the framework for the entire corridor and then you go into tier two and that process looks at individual projects. Some of the delays that occur in the environmental process come when the individual projects are considered and the advantage of bringing the resource agencies in early in the beginning of the planning process is that when we get to tier two, we can say that we think save significant time because the resource agencies will have bought into that. They wont come in the way they sometimes do at the end and say we dont like the way you did the analysis and you have to re do it or you have to look at two or three alternatives that were dismissed early on but they werent at the table when that analysis was done. So we are hoping to, as i said, complete the tier one by 2015. By the way, we do need additional funding. The first phase of that we had 9 million. That will be completed in february. But the next two phases will cost an additional 30 million and we need additional funding. Has that been requested in the budget . I believe so but ill get back to you on that. Anything we can do to speed that process up. Does that include the entire corridor, all 47 or just parts of it . Its the entire corridor. I was wondering again if any of this could be divided up and expedited and thats Something Else id like to look at and discuss with you all. I have more time to focus on the northeast corridor after the beginning of the year and id like to make that a priorityty moving it forward. But youll need the money if youre going to complete the plan. Thats right. Then when we get that we will have alternatives analysis . Yes. At that point and junk chure, we had secretary lahood here and he was talking about high speed rail and he said we will need the money and he will be opening these opportunities to private sector competition. Do you see any problem with that . No, as he said last week, and i think hes been quite consistent on this, we welcome private Sector Investment to be able to leverage the public naunds are available. We want to make sure that where that money comes in makes the most sense, is the most Cost Effective way to do it, that the contracts are put together in a way that protect Public Interest. I would concur with all of those, particularly our job is protecting the Public Interest. Also i think its important that we maintain the ownership of that infrastructure that were contributing to build along the way. I think youre never going to get the congress to give you 151 billion even over a period of 30 years. But if we could attract private capital and thats where our managing director of Morgan Stanley maybe could she had some light. Right now we take in about a billion dollars. We have 12 or 12 million passengers on that run. If that was 40 million passengers, of course there is cost in adding capacity and the infrastructure to support that. How much money do you think could be raised, any thumbnail idea of what that kind of activity would support, that revenue . We probable have about 4 become coming in from passenger revenue at that stage and could be am tiesed over a number of years. Maybe you could tell us what that might forecast for investment. And i know you said there have to be conditions, government guarantee in backup which could be done. With that kind of revenue, what kind of investment would it support . Thank you, mr. Chairman. Its hard to put a precise number on this of course. But i would say were in an environment where there is more and more capital to be invested in Infrastructure Projects globally than there are opportunities to invest that. And i say that because there are a lot of project that is are not profitable and are very difficult to make the math work from a business standpoint. The northeast corridor, i believe is definitely an exception to that. Its profitable currently and i think with additional investment could be a lot more profitable. If we had 4 billion in revenue versus one million, there is nothing gog to be a nice net return. Would that support 20, 30 or 40 billion in investment . It would be private Equity Capital. I think with that steady type of cash flow, i think what people would get comfortable with when you look at the cash flow available for debt service, lets assume all the cost you get to something in excess of 2 billion, you could argue that there is at least basically its hard to give an exact number but its multiples of that that would get you comfortable for debt service. These numbers, there is no other project like this because its so huge relative to what people have been investing in in the past. There is interest and capital seeking projects of this nature, one of course of this magnitude might have a great deal of interest. But my main thing is to get our alternatives and get this environmental study done and then look at the possibility and take proposals from the private sector to build this out. And whoever the operator is or working with amtrak has to also honor the labor agreements. I think im looking at it, trying to look at it from a positive standpoint of what we could do. There are so many benefits, the air traffic con jex. Even with next Generation AirTraffic Control which wont be developed in the quickest, im trying to speed that up. Maybe 15 years. You can only fly so many planes so closely together. They can only land so many planes. Ive watched them land and see were max micing even with the stewart addition of the fourth airport, you will still run out of air space. But taking this traffic to the corridor and the connections that we have. A question was raced by ms. Brown about impeding some of the service along the way. Actually if its properly done and there is separation, we can enhance local Passenger ServiceCommuter Service and we can also increase freight traffic by again separation within the corridor with the right plan. So i look forward to working with you mr. Boardman, with the deputy administrator and others. And thank you for participating today. Were going to leave the record open till the 31st of december. How is that for a date, without objection. And well have additional questions well submit to you. May i yield to ms. Norton. Thats a fine date. Well either be over the cliff or not by that time. I appreciate this hearing. I want to say i have an a supporter of private projects in my own subcommittee on Economic Development where its better known and better understood and extensively used. I have and therefore, im very interested in its conceivable application to a railroad. If we did more Public Private partnerships in construction and real estate in my other committee, we would have saved billions of dollars. Now i want to see if thats the same if were talking about railroads. I noticed that your examples where you were recently advised on transactions tend to be examples like parking systems, concessionings, parking concessionings, airports and the like, have you ever advised on any project as large or as extensive as the northeast corridor . Id say there are a lot of projects ive worked on that are similar understand terms of airports there is lots of complexity unique to airports. But this is a unique project ive seen in the u. S. Or around the globe especially as it relates to cost. Its not just me speaking, it would be anyone in the financial communityty thats used to seeing transactions where an equity check of a billion dollars is considered large and this is something that could support significantly more than that if structured appropriately. If the capital is available for such a project like the northeast corridor. Now my recent experience, id like you to describe what you think is the reason for our recent experience where the department of transportation put out requests for proposals, did get a few, but none for the northeast corridor. Why do you think that the d. O. The got none for the northeast corridor since thats only really profitable one . One id like at the example of the florida high speed rail project which had been considered at one point in time and there was a list of groups that had formed that expressed interest in that and they were really truly some of the best operators around the world for high speed rail, some of the best Construction Companies and some very wellknown equity sources as well. So i think there is a lot hoff interest in general. But what the private sector has seen multiple times before are project that is are still very much in the conceptual stage and are concerned about spending significant dollars today until there is more clarity on the projects because they cost a lot of money to have consultants and others to analyze it. And thats why i mentioned political will in my testimony, not that on both sides of the house there is clearly support for projects like this, but there is a lot of details that need to be dealt with in terms of what the actual economics may be. Then once those are determined then i think there will be a lot of interest from the private sector. Im looking at page six of your testimony, you say that contribution equity contribution from priva