Today, the U.S. DOT announced a $563 million loan to Amtrak for the acquisition of 70 new electric locomotives to run on the Northeast Corridor (NEC).
The DOT is offering Amtrak the loan through the Railroad Rehabilitation and Improvement Financing (RRIF) Program, which provides rail projects with direct loans and loan guarantees. Started in 1998, the program offers projects very low interest rates and long re-payment periods (up to 35 years). Today's loan to Amtrak - the program's largest loan to date - demonstrates RRIF's potential to encourage critical improvements to public infrastructure at virtually no cost to the government. So far, the program has been largely under-utilized.
Amtrak's new locomotives will offer substantial benefits to riders. The new engines will serve riders on the NEC and Keystone Corridor, which together serve more than one million Amtrak passengers every month. The new locomotives will replace existing engines that have been in service for 20-30 years. With an average of 3.5 million miles traveled, current locomotives require extensive maintenance and are highly susceptible to failure. In April 2011, engine failures on the Northeast Regional service were responsible for over 2,700 minutes of delay - disrupting travel for Amtrak passengers as well as tens of thousands of commuter riders who share the NEC with Amtrak. These new locomotives will offer significant improvements in service reliability and increased energy efficiency.
The announcement has earned strong praise from Amtrak and its Democratic supporters. In a press release, US Senator Frank Lautenberg (D-NJ) praised the loan's role in creating jobs and helping achieve a state of good repair along the NEC. He remarked, "It is critical that Amtrak can provide reliable service and upgraded equipment to keep our region and economy moving. This federal assistance will improve service on the Northeast corridor, while also putting hundreds of Americans to work." US Senator Tom Carper (D-DE) called the grant "a win-win situation and great news for Delaware and the rest of the Northeast Corridor."
In a statement released after the announcement, Amtrak CEO Joe Boardman said, "We appreciate the strong support of the Obama administration in advancing passenger rail in America."
According to the U.S. DOT, the new locomotives will also create jobs in other parts of the country. Siemens USA has been contracted to complete construction and the company plans to create 250 new manufacturing jobs at locations in Ohio, California and Georgia. The locomotives are expected to begin service in 2013.
Press Release from the US DOT announcing the loan.
Amtrak Statement on the Loan Announcement.
Joint Press Release from US Senators Frank Lautenberg (D-NJ) and Robert Menendez (D-NJ).
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