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Track trouble for planned California high-speed rail

(Reuters circulated the following story by Jim Christie on June 10.)

SAN FRANCISCO — As California prepares to vote on a $9.95 billion bond measure to finance a statewide bullet-train network, the Union Pacific Corp (UNP.N: Quote, Profile, Research) railroad is warning advocates of the planned rail system that it will not share its right-of-way corridors.

The No. 1 U.S. railroad, in a recent letter, told the California High Speed Rail Authority its tracks do not belong in the corridors. The notice came as a surprise amid a relatively smooth approach to the November election for the authority's long-awaited bond measure.

The decade-old authority's measure has been postponed over the past few election cycles because California officials instead rallied behind multibillion dollar bond measures to raise cash for the state to plug its budget shortfall and finance new infrastructure such as roads, water and flood-control projects and public buildings.

The November debt measure would help finance a rail system for passenger trains capable of speeds of more than 200 miles per hour linking distant cities such as San Diego and Sacramento.

The nearly $10 billion in general obligation debt from the measure would fund the system's first phase, a line connecting San Francisco to Anaheim. Federal funds, public-private partnerships and possibly investments by local governments would expand the system, expected to cost about $30 billion over a 10-year construction period.

The system's passenger tracks would likely have to share, to some extent, Union Pacific's existing right-of-way corridors, and that is unacceptable, said Scott Moore, a vice president of public affairs for the railroad.

"Regardless of where it is we're not interested," Moore said on Monday, noting Union Pacific has plans of its own for its right-of-ways, with international trade through California's seaports on the upswing as Asian economies expand.

Union Pacific sees a future in which it hauls more and more freight, potentially requiring new tracks for additional trains towing various types of cars, including those that carry double-stacked shipping containers.

The railroad would need to expand within its existing corridors, such as its Sunset Route line linking Los Angeles and El Paso, Texas, and it would require room for growth in urban centers, such as in and around the ports of Los Angeles and Long Beach, California.

"The capacity needed for the future is something we're very concerned about," Moore said.

Union Pacific's needs will not necessarily derail the California High Speed Rail Authority if voters approve its general obligation debt to get it moving because right-of-way needs are yet to be determined, said authority Executive Director Mehdi Morshed.

He said the authority is considering routes adjacent to Union Pacific corridors and would only buy land and rights-of-way if they make financial sense: "We are going to select a corridor that is suitable for what we need and that is available at the right price.

"If UP doesn't want to sell, then we'll buy from others that are adjacent to them," Morshed added.

Wednesday, June 11, 2008

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