Illinois locals line up for rail bonanza

Jim Coston is betting that the billions of federal dollars aimed at a high-speed rail system could reassert Chicago's place as the nation's rail center — and jump-start his attempt to resurrect a business that flourished here a century ago: building passenger rail cars Crain’s Chicago Business reports.  

Coston, a Chicago lawyer
and railroad veteran, is just one of the entrepreneurs and business owners
lining up to share in what could be a huge boon to the region, in terms of jobs
and transit improvements, once President Barack Obama unleashes $8 billion in
high-speed rail funds.

"This is the real
deal," says Joe Schwieterman, director of the Chaddick Institute for
Metropolitan Development at DePaul University. "The Midwest has become the
odds-on favorite to bring home big dollars."

The competition could be
fierce. Already there are about 300 applications from around the country with a
collective price tag of more than $100 billion chasing the feds’ $8 billion. But
insiders say Illinois could snare as much as $2 billion, leading to thousands
of jobs in manufacturing, construction and railroads.

Much of the high-speed
rail money likely will be spent on laying track, says Joseph DiJohn, director
of the metropolitan transportation support initiative at the University of
Illinois at Chicago. "The first step toward high-speed rail is to separate
passenger traffic from freight."

The Chicago-St. Louis
corridor, for instance — at the top of the Midwest’s high-speed rail plans —
would require a second line of track from Joliet to St. Louis that would be
laid by railroad employees. Such an extensive project would require hiring,
says Mike Payette, vice-president for governmental affairs at Union-Pacific,
which owns the line.

The plan also would
require investment in new cars. The Chicago-St. Louis route alone would double
the number of trains to eight daily from four. That’s where Coston comes in. With
the stimulus, he figures, the state of Illinois will finally have the money to
order the dozen Amtrak trains that have been on its wish list since last fall.
"We see the stimulus as a way to restart the rail-car industry in this
state," says the head of Chicago-based Corridor Capital, an investment
company that bought options on 50 former Amtrak cars that he says could be
rebuilt within the two-year time frame required for stimulus projects.

If he won even part of
the order, Coston says, he could immediately put 25 people to work, doubling
employment at Gateway Railcars in Madison, near St. Louis, a contract partner.
Since Pullman Co. ceased production in 1981, Gateway is the state’s sole maker
of passenger rail cars.

New train orders also
could help National Railway Equipment Co., a locomotive manufacturer based in
Downstate Mount Vernon, return to full employment of about 1,100. Its workforce
has dropped 20% since last year because of the downturn. "It would fill
the void," Vice-president James Wurtz says.

Stimulus funding also
would mean additional hiring at Kustom Seating Unlimited Inc., a Bellwood
company that makes seats for Amtrak, Metra, the CTA and rail operators across
the country. Employment already is up about 20 percent to 120 workers because
of a surge in mass-transit spending, says Gene Germaine, director of business
development, and stimulus funding is fueling additional demand. The company
expects to boost its payroll by another 20 percent next year.

Illinois hasn’t put a
number on the jobs that stimulus money would create if its projects were
funded, though the Midwest’s high-speed rail plan could generate up to 15,000
construction jobs and 57,000 permanent ones, Michigan Gov. Jennifer Granholm
has estimated. Chicago is at the heart of that plan, which includes high-speed
lines to St. Louis, Madison, Wis., and Detroit.

The biggest stimulus
winner likely will be the six-year-old Chicago Region Environmental and
Transportation Efficiency program. It includes 78 rail projects to speed up
freight traffic, separating passenger and cargo trains from each other and from
vehicles. Until now, it only had about $200 million in funding, mostly from
five freight railroads and the federal government, to pay for an estimated $1.5
billion in improvements, leaving the major construction projects waiting for
backing.

Already the state has set
aside $322 million in its capital budget to fund projects under the program. If
the big-ticket items, such as highway overpasses and railway
"flyovers," get stimulus funding, it will trigger a flurry of work
for construction companies, says Tom Livingston, a vice-president at CSX Corp. And
while it would take years to complete all the rail work, more jobs could be in
the offing once the trains start rolling.

"Eventually, after all
the infrastructure work is done, that means operating jobs at the back
end," says Bob Guy, legislative director in Illinois for the United
Transportation Union, which represents railroad workers. "If everything
comes through, it should be a boost in railroad employment across the
board."