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IBM seeks share of $8 billion in U.S. high-speed rail funding

(Bloomberg News circulated the following story by Angela Greiling Keane on March 25, 2009.)

WASHINGTON, D.C. — International Business Machines Corp. is seeking a share of $8 billion the U.S. will spend on high-speed rail, part of an effort by the largest computer- service provider to tap into economic stimulus funds.

The company already furnishes the reservation system for Amtrak, the U.S. long-distance passenger carrier. Armonk, New York-based IBM also has contracts in three other countries for high-speed-rail systems software.

IBM and competitors are trying to take advantage of experience in industries as disparate as transportation, medical records and utilities to get a piece of the $787 billion stimulus measure enacted last month. The recovery plan will generate revenue of more than $100 billion for technology companies, research firm IDC said this month.

A team at IBM was formed “to look at all the major industries and decide where it makes the most sense for us to play,” said Raul Arce, vice president of IBM’s travel and transportation business. “They’re looking at the stimulus across multiple industries.”

IBM Chairman Sam Palmisano was one of 13 executives who met with President Barack Obama in January to talk about development of the stimulus package.

The company is also seeking to tap the $20 billion in the stimulus plan to digitize the U.S. health-care system.

IBM won’t be alone in working for the rail stimulus money, said Robert Goodwin, a Gartner Inc. managing vice president based in Emeryville, California.

Usual Suspects

“The list of usual suspects with some financial muscle and expertise are certainly able to say let’s look at these projects and go after them,” he said.

Companies such as Accenture Ltd., the world’s second- largest technology consulting firm; Cap Gemini, Europe’s largest computer-services company; and Thales SA, Europe’s largest defense-electronics maker, are among those that may compete with IBM for high-speed rail contracts, Goodwin said.

The $48 billion in total transportation spending in the economic stimulus package gave U.S. high-speed rail development a boost as supporters seek service comparable to that in Europe and Japan.

“We certainly feel we can provide those best practices and experience from the other countries,” said Ken Donnelly, strategy and product management executive for IBM’s Aerospace and Defense Strategy division.

IBM wants to capitalize on that expertise to gain consulting contracts initially and later technology contracts from the high-speed rail stimulus funds, Donnelly said.

Federal Guidelines

The rail money will be doled out through states after the Federal Railroad Administration decides on guidelines.

Obama “personally” inserted the high-speed rail funding into the stimulus measure, Transportation Secretary Ray LaHood said yesterday in remarks at a ports-industry conference.

“He wants the U.S. rail system to be like it is in Europe and Asia,” LaHood said.

Laura Kliewer, director of the Midwest Interstate Passenger Rail Commission, contrasted the funding with a $30 million high- speed rail program last year at the Federal Railroad Administration.

“To have this infusion of funding is like going from the Motel 6 to the Trump Towers,” said Kliewer, whose 10-state group is based in Lombard, Illinois.

Wednesday, March 25, 2009

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