High-speed trains get new U.S. funds

NEW YORK (CNNMoney.com) -- The Department of Transportation awarded $2.4 billion Thursday for high-speed rail projects, though a lot more money is needed to make the project a reality.

The lion's share of the grants went to California and Florida, according to the department. California is receiving more than $900 million, including $715 million to build a rail through the Central Valley, the nation's agricultural powerhouse. Florida will receive $800 million to build a high-speed rail from Tampa to Orlando.

Chicago is also being established as a major connector for the high-speed rail project. Iowa received $230 million to build a rail connecting Chicago to Iowa City and the Quad Cities along the Illinois-Iowa border. Michigan received $161 million to connect Chicago with Detroit.

In all, 23 states will receive part of the $2.4 billion .The money will go toward constructing the track and the stations, as well as new passenger equipment and the studies for developing high-speed service.

Demand for the federal funding is high. The Federal Railroad Administration, a division of the department, said it received 132 applications from 32 states totaling $8.8 billion.

However, the grants are a drop in the bucket compared to the estimated total cost. For example, Amtrak has estimated that a high-speed revamp of the Northeast Corridor, the most highly developed rail stretch, would cost $117 billion.

The Obama administration considers high-speed rail to be a necessary component in improving the nation's infrastructure to stimulate economic growth.

The Recovery Act passed last year has provided a down payment of $8 billion for high-speed rail funding, and the Department of Transportation provided more than $2.1 billion as part of its fiscal year 2009 budget.

In comparison, China's Ministry of Railways is investing $300 billion in its nationwide high-speed rail project, according to a World Bank report from July.