Testimony of P. Michael Reininger, CEO, Brightline Holdings, LLC before the Subcommittee on Railroads, Pipelines, and Hazardous Materials of the U.S. House of Representatives Committee on Transportation and Infrastructure.
Thank you, Mr. Chairman, Ranking Member, and members of the Subcommittee. As the CEO of Brightline, I am honored to be here again, having last testified before you four years ago. Brightline was under construction, and some of the same discussion topics were on the table. Since our 2018 launch in Florida, we operate the only private high-speed system in the US, showcasing the potential of American high-speed passenger rail.
We carried more than a million passengers in our first full year and learned a lot that is worth sharing from the investment of over $4 billion over the last 10 years.
From the perspective of our experience, we see multiple opportunities to again, break free from the inertia that has historically restrained high-speed rail in the US.
Along with the current discussion around the potential of high-speed rail, we also hear the voices lamenting the lack of the advanced train systems that exist in many competing global economies. We see immediate ways to forge meaningful progress toward realizing the potential we are discussing and encourage this committee to enlist the private sector to multiply the effects of public-sector investments.
We have developed an approach which applies American ingenuity to the successful models observed from around the world.
We carefully select travel markets that are “too short to fly and too far to drive” and where introducing passenger rail presents a clear consumer value proposition. Changing current habits requires offering a better option.
We use existing road alignments and infrastructure corridors to leverage previous investments, reduce environmental impacts, lower costs, speed execution and build a basis for profitability.
Given the high costs of infrastructure, this is one area where public and private cooperation can yield dramatic results.
We continue to build our system every day, and in 2022 we will complete the extension into the Orlando International Airport making our total route 235 miles- linking 4 of the largest cities in America’s third largest state. 400 million annual trips occur between these cities, 95% of them by car.
We upgraded a freight railway first built in the 1890s and are now building along an express highway to leverage 130 years of previous investment to support our 21st century service. Brightline is on track to carry 9 million annual riders.
Brightline West will connect Las Vegas to Los Angeles where today 50 million annual trips and over 100 daily flights occur. Traveling on trains capable of speeds of 200 mph- using the I-15 corridor, but cutting the drive-time in half- Brightline West’s better option expects to serve 11 million annual riders.
We Integrate with other systems to fashion a multi-modal network that is diverse and convenient. MiamiCentral connects all local transit systems with ridesharing, bike sharing and even e-scooters to connect our customers to their ultimate destinations.
This level of integration requires inter-agency investment and innovation, but also offers real leverage in advancing the appeal of train travel in America.
Cooperation is key to advancing the administration’s priorities related to jobs, climate, and equity so the many benefits that accrue from the introduction of high-speed rail- to customers, communities and economies -are unlocked.
Revitalizing Miami’s Overtown neighborhood, equitable access to transportation and new employment opportunities are just a few of the benefits in addition to the $6.4 billion in total economic impact Brightline has already produced in Florida.
As this subcommittee looks to exact results- especially through increased public investment, we urge you not to consolidate around a single approach, and not to underestimate the power private investment can bring toward crafting a national network.
Consider allowing private entities to become eligible parties for FRA grant programs by partnering with currently eligible applicants as a simple way to stretch direct government investment.
High-speed rail projects require large upfront investments and need cost-efficient, long-term financing.
Private Activity Bonds helped us attract private lenders and freed up capital to be redirected into building our hard assets. Consider increasing the volume cap on PABs from the current $15 billion – which has already been exhausted – to $30 billion to create a larger available pool to help finance projects. An improvement, but PABs alone is not the full solution.
RRIF was designed as a low-interest loan, in lieu of grants, to incent projects that need an economic boost. We vigorously pursued RRIF, but ultimately found it ineffective for projects such as ours.
RRIF has only provided $6.2 billion of a $35 billion authorization in project funding over the last two decades – none of which has gone to high-speed rail. Why? These projects; viewed as start-up ventures, get ladened with high, upfront credit-risk premiums, adding inertia that defeats the momentum otherwise gathered from a low-interest loan.
If credit risk premiums were an eligible use of USDOT discretionary grant programs, much smaller grants, used in conjunction with a loan, would ultimately return principal and interest to the government, engage equity investment into the collateral and lower the overall level of public investment needed to exact results.
We commend the efforts of this Subcommittee for the chance to present our suggestions. Our collective efforts can advance us toward an American high-speed rail system that will compete alongside the best in the world- and as an active participant, we remain fully committed to overcoming inertia and building systems that we can all ride within the next fours.