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High-speed rail development is a growing industry worldwide, and President Barack Obama recently committed $13 billion in seed money to the United States' foray into this hot market. If the federal government follows through with visionary plans for a cross-country high-speed rail system, U. S. companies that specialize in railway equipment, technology and vehicles could get a boost in business for years to come.
The Obama administration is considering 10 corridors, ranging from 100 to 600 miles long, for new high-speed rail lines and upgrades to the popular Amtrak line between Boston and Washington, D. C. Local companies and suppliers will benefit once the corridors are chosen, and several U. S. companies could become large-scale providers of equipment and engineering for government-funded rail projects.
Some officials estimate that building high-speed rail just between San Francisco and Los Angeles, one of the 10 corridors in contention, could itself cost $35 billion. Developing all 10 corridors would be a lengthy and expensive undertaking, but it could pump hundreds of billions of dollars into rail supply companies.
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Companies that stand out as front-runners for large rail contracts already are proving themselves on the world stage, many providing trains and rail products to China, Japan and European countries that are making large investments in high-speed rail. International experience and a focus on environmentally responsible products and cutting-edge technologies-both of interest to the Obama administration-could land companies long-term contracts worth millions.
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International Business Machines, Corp () already has publicly stated an interest in partnering with the Obama administration on high-speed rail, arguing sophisticated technology can keep high-speed trains running safely and efficiently. IBM recently has gained technology used in new high-speed rail systems in Taiwan, the Netherlands and China, and IBM officials are pushing this "smart technology" as a necessary foundation for the United States' system.
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Harsco Corporation's () track technologies division is one of the biggest suppliers of railway track maintenance services and equipment in the world. This company has a firm foothold in a niche market, offering engineering expertise and more than 140 types of equipment used in building and maintaining railway track. Harsco should be a strong contender for high-speed rail projects.
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Portec Rail Products (PRPX) is an international supplier of a wide range of track accessories, such as rail joints and anchors, as well as a friction management system for railways. This company performed well in 2008, primarily because of its friction management products that could be integrated into Obama's high-speed rail projects.
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General Electric Co. 's () transportation division is the world's largest make of locomotives, and it has supplied more than 3, 000 of its new Evolution Series hybrid engine locomotives all over the globe. Its lower-emissions technology should be appealing to the environmentally friendly Obama administration.
Wabtec Corp () provides a number of railway products, including electronic train-control systems and environmentally friendly locomotives. The company recently embarked on a joint venture with China to supply rail braking equipment to the growing Chinese rail system, establishing Wabtec as a player in the world rail transportation market.
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