As experts grapple with the future of transportation in America, one thing has become generally accepted: rail will play a large role. Once considered obsolete due to the rise of trucking, those old rights-of-way with their ribbons of steel are gaining new respect. The environmental and commercial benefits are many, as a growing body of studies attests.

What makes sense for the nation also makes sense for Vermont. The Western Corridor, running from Bennington to St. Albans is a prime example. It is an intermodal corridor, made up, between Bennington and Burlington, by the Vermont Railway line and U.S. Route 7. This pairing is essential. Since there is no Interstate Highway on the west side of the state, communities along the corridor must work with what they have: the highway and the rail line.

Photo Courtesy of the Institute for Sustainable Communities.

In addition to the obvious freight traffic, the potential for intercity passenger service (read connecting Vermont to New York City) is large. The ability to reach Burlington/Essex in five hours with stops in Bennington, Manchester, Rutland and Middlebury is eminently marketable. What’s needed is a way to improve the infrastructure to serve both freight and passengers.

Much progress has been made toward this end. With the help of our Congressional delegation—particularly Senator Jeffords—the 2005 Federal Transportation Authorization bill included provisions to set up a corridor pilot project here in Vermont. Dubbed the Gateway Rural Improvement Pilot Program (GRIP), the project was further supported by a $30 million earmark to jumpstart key projects in the corridor.

So, improving rail is the goal, and societal and environmental benefits support it. But the question remains: is it viable? Can we make it happen in a timely manner and on a reasonable budget? How will it be financed?

We know it will be expensive. The price tag for all corridor improvements, including tracks, bridges and switching facilities, will likely top $150 million. However, over the length of a 150 mile corridor this would average $1 million per mile; new highway construction costs ten times that. And while highways need significant rebuilding every 30 to 40 years, the tracks and bridges we’re replacing on the Western Corridor have served us for as much as 100 years. Rail is a good long term investment.

So how do we approach the problem? The Gateway Rural Improvement Pilot Association, Inc. (GRIP, Inc.) is a non-profit company formed by public and private partners along the corridor to implement the federal pilot project authorized in 2005. A large part of our work has centered on defining strategies to finance the rail improvement. Interesting dynamics have emerged.

First, while building highways is largely done with tax dollars, rail provides a tremendous opportunity for public-private partnerships. A good example is the use of user fees. In the case of the Middlebury Spur (connecting OMYA’s Middlebury quarry to the main rail line) the shipper and railroad have agreed to pay a voluntary surcharge on each ton of rock shipped on the new spur. This will produce $22 million over and above the regular freight charges. The user fees will provide a source of repayment for favorable federal loans and can be counted as non-federal match for federal funds put into the project. (Federal guidelines require a 20 percent match) Usually, this non-federal match is appropriated out of state funds.

The Middlebury Spur will produce more match than it will require for itself. In normal circumstance, this surplus would be lost. However, since the spur is part of the broader pilot project defined in the federal statute, the excess match can be used for other projects in the corridor. All told, this alone could leverage more then $100 million in rail improvements.

While each project may be built as a stand-alone project, the corridor strategy is the viable approach.With VTrans unable to maintain a rail division within the agency, the public-private partnerships available through GRIP, Inc. may well turn out to be the key to Vermont’s rail future.

Frank Heald is the President of the Gateway Rural Improvement Pilot Association, Inc.