Wednesday, September 03, 2003

Congress Still Loves Trains

WASHINGTON - It's not buggy whip time yet, but America's railroad supply industry has sure seen better days. Thomas D. Simpson, executive director of the Railway Supply Institute's Washington office, reports that only 17,700 freight railcars were ordered last year, down from 70,000 to 80,000 in the late 1990s. Meanwhile, locomotive sales have dropped to just 400 per year from 1,200. "It's been a tough slog," he sighs.

But happily for rail suppliers, Congress still loves trains. Several proposals for revamping the nation's rail infrastructure are now chugging around the House and Senate. And RSI, whose members range from industrial giants like General Electric and ITT Industries to smaller rail equipment manufacturers such as Greenbrier and Wabtec, is trying to make sure one of those proposals becomes law.

"There's some hard work in front of us," says Simpson, "but we can get something, and getting something is key."

Atop the RSI's legislative wish list is to have Congress establish a "Rail Finance and Development Corporation," modeled on government-sponsored enterprises such as Fannie Mae and Freddie Mac. With a chief executive and a presidentially appointed board of directors, the entity would be authorized to issue $50 billion in federal tax credit bonds to states and private/public partnerships to finance rail projects. (Holders of these bonds get a tax credit, which provides an indirect federal subsidy for rail.)

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