NORFOLK, Va. Tax incentives to expand freight rail capacity would make sense for America, generating $1 billion in economic benefits and 20,000 green jobs, Norfolk Southern Corporation CEO Wick Moorman said today on Capitol Hill, the carrier said in a press release.
America needs more transportation capacity and needs it now, Moorman said on behalf of the Association of American Railroads during testimony to a U.S. House subcommittee. Noting that todays transportation network is not designed to handle the doubling in freight demand projected by 2035, Moorman said, Railroads are the most affordable and environmentally responsible way to meet this demand, and that is why tax incentives for rail capacity would be good public policy.
Railroads have spent record amounts reinvesting in their own networks even during the economic downturn, Moorman said a record $10.2 billion in capital improvements last year alone. Since 1980, railroads have spent more than 40 percent of their revenues some $440 billion to maintain, improve, and expand their networks.
Yet as much as railroads are investing, it isnt enough to meet projected demand, he said. A recent study found a $52 billion gap between the $148 billion needed for expanding freight rail capacity and the $96 billion railroads can expect to generate. Tax incentives provide a sensible way to help bridge this gap, Moorman said.
In addition to creating economic stimulus and jobs, public benefits would include reductions in fuel consumption, greenhouse gas emissions, and highway congestion, as railroads are more fuel efficient than trucks, and a single train can haul as much freight as 280 or more trucks, Moorman said.
Numerous states are partnering with us, Moorman said. Thanks to the leadership of Pennsylvania Gov. Ed Rendell, Virginia Gov. Tim Kaine, and others, we are already investing to expand our system to meet the looming demands of moving our nations commerce. Congress should bolster these efforts by enacting tax credit legislation to encourage additional freight rail investment, he said.
America today has the best freight rail network in the world. Still, it is clear that rail capacity must increase as the economy and population expand in the years ahead. Tax incentives provide one way to ensure that happens, Moorman said.
(This item was distributed by the NS July 23, 2009.)
Last week, CSX Transportation and Norfolk Southern Corp. touted the economic benefits of government funding support for freight rail through tax incentives and public-private partnerships, Progressive railroading reported.
Tax incentives for freight-rail capacity expansion would generate $1 billion in economic benefits and 20,000 "green" jobs, NS Chairman, President and Chief Executive Officer Wick Moorman told lawmakers on Capitol Hill July 23.
"Railroads are the most affordable and environmentally responsible way to meet [freight] demand, and that is why tax incentives for rail capacity would be good public policy," he said, according to a prepared statement.
Since 1980, railroads have spent more than 40 percent of their revenue -- or about $440 billion -- to maintain, improve and expand their networks, said Moorman.
"Yet as much as railroads are investing, it isn't enough to meet projected demand," he said. "It's clear that rail capacity must increase as the economy and population expand in the years ahead."
NS already has established partnerships with several states, including Pennsylvania and Virginia, to help fund capacity expansion projects.
"Congress should bolster these efforts by enacting tax credit legislation to encourage additional freight-rail investment," Moorman said.
CSXT couldn't agree more. Last week, the Class I promoted the need for more federal funding and more public-private partnerships at the 2009 National Conference of State Legislatures' legislative summit in Philadelphia.
CSXT sponsored a booth touting the National Gateway initiative, a public-private partnership that aims to create a more efficient double-stack intermodal route linking Mid-Atlantic ports with Midwestern markets.
The Class I has committed to funding half of the more than $700 million needed to complete the National Gateway. Project supporters are seeking funding from states and the federal government to complete clearance projects and intermodal terminals.
(The preceding article appeared on the Web site www.progressiverailroading.com on July 27, 2009.)
