US rail system demands investment

With the Obama administration's investing in America's infrastructure by spending $17 billion on repairing roads, bridges and other public works, the U.S. rail-roads are feeling left out in the cold.

America's major freight railroads along with their advocates are arguing that money spent on internal infrastructure needs to be put into the rail system, in order to take freight off congested highways and keep the economy moving.

They are also accusing Congress of ignoring requests for investment in the rail service over the years, accusing politicians of ignoring warnings that action needs to be taken.

U.S. freight railroads are lobbying for greater, long-term government investment and have proposed tax incentives to expand capacity and favor public-private partnerships for infrastructure projects.

On top of this, it has been suggested by the U.S. Department of Transportation that rail freight tonnage will rise 88 percent by 2035, requiring mass funding for rail maintenance and trains.

In 2007, the Association of American Railroads released a report stating that the industry would require investments of $148 billion for infrastructure expansion over the next 25 years to keep pace with the forecast demand. About $96 billion of those funds could come from private railroads.

Unlike America's roads that receive public funding, private U.S. railroads must foot the bill for rail investment, spending that experts are calling insufficient.

Jason Seidl of brokerage Dahlman Rose was quoted by Reuters as saying, "After all of the money that has been spent on bank bailouts and the stimulus package, I doubt there will be enough political will to support significant investment in railroads."

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