A weekly digest of events, opinions, and forecasts from
United Rail Passenger Alliance, Inc.
America’s foremost passenger rail policy institute
1526 University Boulevard, West, PMB 203 • Jacksonville, Florida 32217-2006 USA
Telephone 904-636-7739, Electronic Mail info@unitedrail.org • http://www.unitedrail.org
Volume 6, Number 6
Founded over three decades ago in 1976, URPA is a nationally known policy institute that focuses on solutions and plans for passenger rail systems in North America. Headquartered in Jacksonville, Florida, URPA has professional associates in Minnesota, California, Arizona, New Mexico, the District of Columbia, Texas, and New York. For more detailed information, along with a variety of position papers and other documents, visit the URPA web site at http://www.unitedrail.org.
URPA is not a membership organization, and does not accept funding from any outside sources.
1) No! No! No! The answer is No! What’s the question? The question is, have Americans been told the truth about profitable passenger rail systems in the world, and the answer is No! It’s been the constant Big Lie that’s been told over and over again by Amtrak, it’s wholly owned lapdog organizations, authoritative people who should know better, supposedly prestigious magazines, and a host of innocents who haven’t bothered to do their own research.
The truth is, a number of passenger rail systems in highly developed Western countries all have profitable passenger rail systems which are efficiently run, provide excellent service for passengers, and hold the esteem of bankers and various financial people. In short, just the opposite of what Amtrak, and it’s Amen Corner echo, the National Association of Railroad Passengers, and various others, including members of government want you to believe, because constantly telling the Big Lie provides an excuse for the dismal performance of Amtrak.
It’s not nice to lie.
2) Here’s how it started: Railway Age Online, on Tuesday, February 24, 2009 published the following excerpt from International Railway Journal.
[Begin quote]
International News
Another good year for Netherlands Railways
Netherlands Railways (NS) says the introduction of an ambitious new timetable and the opening of new stations helped it to maintain its healthy financial performance last year, although net profit fell by 281 million euros ($357 million) to 56 million euros ($71 million). NS warned that its success in 2008 is unlikely to be repeated this year as the global financial crisis is expected to slow the growth in passenger numbers. NS says it is looking at ways of reducing costs and could sell off non-core areas of its business.
For more on this story, visit:
IRJ Breaking News
[End quote]
So, it seemed those wily Dutch were doing something allegedly no one else was doing, and the International Railway Journal was using normally verboten words in the United States like “profit” when referring to a national passenger rail system.
This required some digging, and the article and subject matter was tossed out to United Rail Passenger Alliance’s discussion and study group for comment. Here is what ensued.
[Begin quote]
CONTRIBUTOR ONE: The Europeans have culturally accepted rail as a primary form of transportation. It's profitable simply due to active use and streamlined operation.
In the US people would rather fly or drive, still.
CONTRIBUTOR TWO: ... Remember that movie "Field of Dreams"? It was okay. But, remember how the neighbors of guy that built the ballpark tried to put him out of business because he was going to go broke? They saw a nutcase who was going to go broke so they tried to do him in. It would be the same with passenger service. You will not get much aid and comfort for trying, but you will get lots of folks willing to help you fail!
CONTRIBUTOR THREE: And, lots of state subsidy I expect, just calling it something else, to wit: Britain's "profitable" private train operators who are on the government dole, paying a fraction of costs of their physical plant. Here, we would call that "corporate welfare."
CONTRIBUTOR FOUR: Here, we call that "Acela" and "NJ Transit".
CONTRIBUTOR SIX: Take a look at the Deutsche Bahn 2007 Annual Report [Germany] (on their website). At least at the EBIT [Earnings Before Interest and Tax] level, they say they made money on all of their passenger services (and freight as well). What any given service would look like after interest and taxes, they don't say.
Two caveats: 1) figures don't lie, but liars figure; 2) their positive EBITs in the passenger areas are at least partly based on results after subsidies from the Federal and State (Laender) governments. But, the holding company made money after interest and taxes. I don't think their ROI [Return on Investment] was startling, or even adequate, but that is not an unfamiliar story in railroading ...
CONTRIBUTOR SEVEN: Yes, but the true focus here - and what Contributor One is saying, too – is the system is robust enough to actually promote a profit. If there is enough activity – trains, rational frequencies, passengers, momentum – the system can throw off a profit. It's only those who want to believe that passenger rail MUST be a creature of government that don't want to believe this could happen. Remember, every "credible" source in the country always says there are NO passenger systems in the world which make money.
CONTRIBUTOR SIX: Yes, there is that allegation. BUT, it is actually untrue on two grounds.
1. The three Japanese railways (East, West and Central Japan) make money, period. It is true that there is a question whether the value at which they received their assets in the privatization was too low. Maybe, but you can read their Annual Reports on the web – they are listed on the NYSE (poor guys) – and the numbers are out in the open. One can argue that the SNCF [France] makes money on the TGV, at least Paris to Lyons, but the bookkeeping is not public.
2. There are a number of competed franchises in the UK, Netherlands, Sweden, and Germany that make money on passenger services, as do some of the concessions in Buenos Aires and Rio. In these cases, Government is asking for minimum subsidy, and they get pretty efficient service. I will be happy to debate the UK experience at length if anyone wants (see the highly informative website www.tgaassoc.com for this and other studies).
With this said, most passenger operators are unprofitable in the financial sense; their revenues from customers do not cover their costs. Governments make up the difference for social, economic, environmental, or political reasons, or a mix of all of them. Sometimes the governments do the right thing, sometimes they don't.
There is also a caveat about the Netherlands numbers – what is the railroad paying for access charges to use the infrastructure? The Dutch only wanted their operator to pay marginal cost access charges: in their case, this was only about 12 percent of the total cost of infrastructure. The Government paid the rest directly to the infrastructure manager. By comparison, the DB [Germany] operators are supposed to pay the entire cost of infrastructure from their access charges. See the most recent update of EU access charges on the website I mentioned above.
CONTRIBUTOR EIGHT: I think you're on thin ice here. If the infrastructure is subsidized, is the operation profitable? Within the parameters set, perhaps. In the real world, perhaps not. Are airlines profitable if they don't take provision of airport facilities, air traffic control, etc., into account? Truckers too, for that matter.
CONTRIBUTOR NINE: All of these are legitimate – and preferably quantifiable – facets of "profitability," however defined. What one needs to remember is that, in what passes for US policy debate about Amtrak, the mantra of "no passenger service makes money" is almost never a quantified or verified observation about the economics of rail passenger service, but an all-purpose propaganda excuse for Amtrak failures and a bogus premise for complete shutdown of further inquiry, lest any new examples of Amtrak's incompetence and duplicity emerge.
CONTRIBUTOR TEN: Gentlemen, as the inimitable Brother Dave Gardner ("The earth is a southern planet – have a moon pie and an RC") used to say, "it's all in how you look at it and study it."
And, unfortunately, there is no accepted common basis for looking at it and studying it, particularly with regard to our favorite carrier of last resort, who has made a masterwork of consistently pulling newer and more innovative figures and formulas out of an increasingly vast number of heretofore undiscovered ... openings.
The "bottom line" shell game has produced a crop of apples and oranges so extensive that it would cripple the Pacific Fruit Growers’ Express fleet.
That's the payment for politicizing a business. And it's all legal; just don't you try it.
This is why the best stuff has always come from people who dig through and distill the figures.
CONTRIBUTOR EIGHT: Don't get me wrong. The need for subsidy in some instances is no excuse for inefficiency, for failure to make the best use of assets. If your fare box recovery is 55% you should still be straining every sinew to make it 56% or better, because you owe that responsibility to the "owners," in this case the taxpayer. I attend public meetings and frequently ask the question "Is that the best you can do with my money?". I'm not always the most popular person in the room!
CONTRIBUTOR ELEVEN: The question as I see it is, "Can we draw a line, to the left of which is Infrastructure, and to the right of which is Operations; and draw that line so that Operations is profitable?"
The traditional view of Amtrak is that such a line cannot even be drawn.
The fact that an actual passenger railroad has drawn such a line, and made a profit, proves that such a line CAN be drawn.
CONTRIBUTOR SIX: Yes, a line can be drawn. The EU has demanded that a line be drawn and, with great reluctance, the EU railways have gone along. The famous American railroad belief that the EU model has failed has missed this point entirely. With infrastructure separated from all operators, then you can draw a line around infrastructure and tell whether the infrastructure is stable or not. You can also evaluate the performance of the operators as well and, if you want, you can privatize some operators while keeping others public.
The problem comes when they try to set up access charges. The Commission recommends the access charges be set at marginal cost (hard to define, but most people believe it is about 15% to 20% of total costs) with the government making up the remainder. But, the Commission also permits the infra manager to charge more than marginal cost if the government sets a financial target that includes more cost recovery above marginal costs. The result is that some governments set the marginal cost target and make up the rest directly to the infra manager, other governments set varying degrees of full financial cost recovery as a target.
When the target is above marginal cost, then the "markups" become critical, and they are fraught with difficulties that no one really has a perfect answer for. The most recent report on this issue (www.tgaassoc.com) covers the issue as well as it can be covered.
In fact, when Amtrak pays access fees to the freights, the line has been drawn (we don't know how the freights calculate their charges, and Amtrak and the freights refuse to reveal what the access charges are – a guess at about $3.00/train mile is about right). And Amtrak is happy to charge the freights full costs plus a considerable markup for the use of the Northeast Corridor while, in principle, they are charging the commuters marginal cost. Again, though, there is no information or backup about the charges.
With Amtrak, watch what they do, not what they say ...
CONTRIBUTOR NINE: Well stated. In the case of Amtrak, the drawing of the line has been done by that ever trustworthy draftsman, the Congress. For off-NEC situations, the Surface Transportation Board — contrary to popular belief — is not held absolutely to incremental costs when forcing Amtrak onto an uncooperative freight railroad.
Under 49 USC 24308(A)(2)(C), the STB is to determine “the extent to which, the compensation shall be greater than the incremental costs of utilizing the facilities and providing the services.” Apparently this standard governing off-NEC access was not altered by the recent legislation [Pub. L.110-432, Sec. 212, 122 Stat. 4848, 4925-27 (Oct. 16, 2008)], but it did set up a new regime of STB-adjudicated damages (not fines, as misstated in the press) for “substandard” freight performance of obligations, pursuant to new 49 U.S.C. 24308(f).
On the NEC, where Amtrak is the landlord vice tenant, the recent changes are very significant.
For freight carrier users of Amtrak’s NEC infrastructure, the pre-October 2008 standard of compensation to Amtrak was that the STB “shall assign to a freight carrier … the costs Amtrak incurs only for the benefit of the carrier, plus a proportionate share of all other costs of providing transportation … incurred for the common benefit of Amtrak and the carrier. The proportionate share shall be based on relative measures of volume of car operations, tonnage or other factors that reasonably reflect the relative use of rail property covered by this subsection.” [49 U.S.C. 24904(c)(2)] Note the absence of comparable statutory specificity for the payments to be made by commuter operators. No accident.
However, a potentially monumental change has been made — very inconspicuously – with respect to the NEC. See Pub. L. 110-432, Sec. 212(b)(2), 122 Stat. 4848, 4926. The limiting word “freight” has been deleted. Thus the statutory standard for STB cost allocation now applies to commuters as well.
There was also an existing directive [subsection (c)(1)] that NEC access agreements with freight and commuter carriers “shall provide for reimbursement of reasonable costs, but may not cross-subsidize intercity rail passenger, commuter rail passenger, and rail freight transportation.”
But, the pre-October 2008 statute contained no parallel coverage of commuter rail in its prohibition [subsection (c)(2)] in STB adjudications of access charges; only cross-subsidization between intercity passenger service and freight was prohibited there. No coverage of commuter service. No accident, again. That deficiency, too, has now been cured by Section 212(b)(2) of Public Law 110-432: “commuter rail passenger” service has now been made part of the cross-subsidization provision governing the STB’s adjudications.
These fundamental changes, based on the plain statutory language, would seem to require immediate – well, by government standards anyway – adjustment of the STB’s now superseded administrative standards for assigning costs in NEC access disputes.
There is no delayed effective date for these changes (as with the Amtrak board structure, for example), nor is there any statement that the advisory committee regime I am about to describe displaces any STB obligation to revamp its NEC cost standards right away.
Thus, any affected party could — and probably should — immediately file with the STB seeking the immediate opening of a new proceeding to replace the old standards.
However, there is to be a new NEC access formula developed by the new Northeast Corridor Infrastructure and Operations Commission (NCIOC), established under Sec. 212(a) of Pub. L. 110-432, new 49 USC 24905.
The Commission is to consist of members representing Amtrak, DOT/FRA, each state on the NEC (even the one that runs no commuter service whatever), plus DC, and the freight users of the NEC, but the freight representatives must be “selected by the Secretary.” Interestingly, only the freight representatives are also prohibited from voting. See new 49 USC 24905(a)(1)(D). Again, presumably no accident.
Among its other duties, the NCIOC is to develop by Oct. 16, 2010, “a standardized formula for determining costs, revenues, and compensation for Northeast Corridor commuter rail passenger transportation,” to be applied to the NEC as well as the Harrisburg Line. [new 24905(c)(1)]
The three elements mandated to be in the new formula are (1) the amended prohibition against cross-subsidization among all three types of services; (2) “each service is assigned the costs incurred only for the benefit of that service, and a proportionate share, based upon factors that reasonably reflect relative use, of costs incurred for the common benefit of more than 1 service”: and (3) “all financial contributions made by an operator of a service that benefit an infrastructure owner other than the operator are considered, including but not limited to, any capital infrastructure investments and in-kind services.” [new 49 USC 24905((c)(1)(A)(i)-(iii)]
This new, late 2010 formula is to be accompanied by a “proposed timetable for implementing” the formula by October 16, 2014.
Whatever the practicality of the mandated formula and any accompanying complexities, it’s only the beginning of a wild and tortuous ride. Remember NCIOC is an advisory committee. But, the newly amended statute requires that “Amtrak and public authorities providing commuter rail passenger transportation over the Northeast Corridor shall implement new agreements for usage of facilities or services based on the formula proposed [by NCIOC] in accordance with the timetable established therein.” Note again, no mention of the freights.
If Amtrak and the commuters fail to implement new access agreements based on the NCIOC formula and timetable, NCIOC “shall petition” the STB to “determine the appropriate compensation amounts for such services in accordance with section 24904(c),” i.e., the newly amended NEC formula statute discussed above. (This would seem to enhance the urgency of a new STB proceeding to replace the now obsolete cost-allocation standards posthaste, in case the NCIOC’s supposed consensus approach “fails.”)
I do not pretend to expertise regarding the Federal Advisory Committee Act (FACA), but making the recommendations of an “advisory” committee legally binding without any further intervening action by the Congress or the President seems dicey. Moreover, making the amended cost-allocation statute the default standard if the NCIOC process falters necessarily implies that whatever NCIOC does is expected to be somewhat at odds with or at least different from that statute, so it virtually has to constitute the improper delegation of authority to NCIOC to supersede a federal statute.
A second legal time bomb: as far as I know, there are existing access agreements covering all the current NEC tenants, presumably with specified prices and durations. I think to the Constitution, these are known as “contracts.” Impairing same by the feds is a big no-no.
But, this new statute (if the new NCIOC cost-allocation standards actually are implemented) arguably would overturn those agreements by 2014, regardless of their remaining terms, because new NCIOC agreements have not only to be signed by then, but “implemented.” (Note also that this same issue of overturning existing agreements prior to their expiration may well apply to new STB-developed allocation standards reflecting the now already fully effective changes to the statute.)
And, then there’s the across the board stiffing of the freights — no vote inside NCIOC, and no assured coverage by the new NCIOC formula. Nothing resembling due process. Deliberately perverse incentives to assure that no consensus NCIOC formula is ever implemented? A clever strategy by the freights to plant some constitutional land mines with which to overturn the statute? In the absence of additional information, I will adhere to the hallowed proverb of Rep. Al Swift (former D-WA): “Never assume conspiracy when mere incompetence will suffice.”
As Contributor Six correctly points out, actions and words (even statutory words) are often at considerable variance, and the standards (present or future) I have described apply in practice only when an access dispute finds its way to the STB.
In any other situation, what Amtrak, the commuters, and the freights do in actual negotiations and the setting of unlitigated access pricing and related cost-sharing charges is quite another matter. Whatever the state of play there, it is a virtual certainty that Amtrak’s demonstrably unreliable accounting and lack of transparency is an additional unhelpful factor. Now, at least on the NEC, a further degree of turmoil is virtually assured by the recent statutory changes, even the positive and the non-opaque ones.
CONTRIBUTOR TEN: Contributor Six and Contributor Nine, well put; both of you.
The real problems, as both have stated, is that (1) Congress loves to mix apples and oranges to its own political ends, (2) there is no traceability and/or common methodology to the calculation of incremental costs by the various parties in individual agreements (i.e., what is incremental to one is not to another) including Amtrak, and (3) the remnants of the arcane railroad accounting systems are still also muddying up the waters.
It will be interesting to see if the EU can force consistency on their systems.
It's the 21st century version of the application of the old Interstate Commerce Commission formula: Santa Fe consistently reported an above the rail profit for its passenger services because they viewed them as solely incremental and only charged what they believed they actually added in real costs, while Southern Pacific took all the allowables ever given them and would, for example, charge half the total cost of the Sunset Route infrastructure to the Sunset Limited passenger train when it was tri-weekly in order to show a whopping loss.
The railroads did not magically and immediately roll in dough on May 1, 1971 when Amtrak came into being. And, that's why.
Just remember, in the early 1950s, SP President Russell succeeded in convincing the ICC that SP should be able to drop all interstate routes less than 300 miles because "short hauls don't and can't make money, but, long hauls do." Within 10 years, he and successor Biaggini were back before the ICC axing long distance trains because "long hauls lose money and only short haul corridors less than 300 miles can make money."
That, folks, is the epitome of creative accounting.
I am drawn back to what URPA showed 25-30 years ago, that Amtrak has taken full advantage of the old approach (remember what [former Amtrak Board of Directors member ]Joe McDonald discovered on the Montrealer [passenger train route between Washington, D.C. and Montreal, Quebec]) it inherited from PennCentral (mostly) to say what it wants to say when it wants to say it. This, of course, still extends to gouging states when it wants to (which is generally constantly).
And, the most obvious result is that when national system (read "long distance") routes come off, the deficit goes up.
When McDonald reported to the Amtrak board that they were obtaining a black hole when they got the NEC from PennCentral, he knew exactly what was going to happen, and he was completely right.
For you who are too young to remember, Joe was a Vice President of Continental Can, with an extensive background in corporate operations and accounting who was appointed to the Board as a consumer rep all the way back in the 1970s. He discovered, among other things, that PC, and then Amtrak, were charging the Montrealer crew costs on one division in Connecticut that would account for a total of 26 enginemen and trainmen (not onboard services) on board a single Montrealer trainset at any given time, and after extensive investigation, determined that such "accounting" was occurring all over the NEC in order to prop up [former Pennsylvania Railroad President] Stuart Saunders' old myth that led to President Lyndon Johnson subsidizing Pennsylvania's first Metroliner program. Unfortunately, he succumbed to cancer before he got all the way to the bottom of it.
As we have said for decades, they've been cooking the books since the beginning.
As long as all of the involved parties are going to play this game, don't expect any real progress, either here or (equivalently) overseas.
[End quote]
2) That may have been just a tiny bit on the – shall we say – “dry and technical” side of things, but, the point is, anyone willing to do some honest research can discover throughout the world passenger systems do make money. Some of the systems are playing with similar rules to what Amtrak plays, some systems have a slightly easier time of it, and some have a more difficult time.
The bottom line is, there is nothing that keeps Amtrak from being fiscally responsible and fiscally self-sufficient except that Amtrak chooses not to take that path. We have demonstrated in TWA before that when Amtrak reaches enough critical mass of a combination of rational frequencies, services desired by passengers, and long enough trains, it can be a government-owned, self-sufficient enterprise, without the annual worry of begging federal and state governments for money for everything from operations to new equipment.
It’s true “profitability” is done elsewhere, and it’s true it can be done here. Until now, we have just chosen not to do it, and, in the process of enabling Amtrak’s constantly bad fiscal behavior, have continued to rationalize the constant lies told to us by far too many organizations, people, publications, and members of government.
3) Okay, you say, how do I change this?
Well, first, do your own research. Everything stated above is available on the Internet. Visit the sites above, visit the sites of the passenger railroads from around the world, visit the World Bank’s web site, visit sites where Amtrak statutes can be found, and confirm for yourself what the law says. Question everything and everyone. Don’t take anything at face value unless it’s backed up by facts.
Second, take your research and forget everything you have learned about passenger rail in the United States. The sad reality is, the U.S. is horribly behind the rest of the world in every facet of passenger rail, even to the point there is not a single home-grown major passenger car builder in the country, and we were the home of Pullman-Standard, which, along with Budd, were the two most prominent passenger car designers and builders in the world. Now, both are gone.
As you take your newfound research and study it with an open mind (Not tainted by what you know about Amtrak and it’s ongoing follies.), start applying it to a new generation of Americans who are willing to try different modes of transportation. This does NOT mean different types of automobiles, it means different types of transportation, such as air, surface, and water.
Ask yourself, if someone is willing to leave home and travel, what are their requirements? How important is time spent traveling, availability of schedules, and amenities while traveling? Is speed always the overriding factor? Where do comfort and convenience fit in? If you have ten different people, are there ten different preferences for mode of travel? Since people come in all shapes and sizes, should everyone be required to fit into a 19" wide seat, elbow to elbow and be allegedly happy about it?
Once you have reached your conclusions, start looking around and seeing why some modes of transportation are more popular than others. Is popularity based solely on convenience and cost, or do other factors come into play? Are the two most popular forms of transportation – air and private vehicle – the most popular by choice, or by consensus that these two forms will be the only two forms supported by private enterprise and government?
Then, start wondering how change can come about. We discovered in a previous issue of TWA earlier this year passenger rail is just a tiny fraction of less than one percent of the travel market, and Amtrak is statistically irrelevant. However, at times, it’s the number two recipient of federal dollars for annual infusions of free federal monies in the form of subsidies.
So, we know Amtrak has constant, bi-partisan political support. But, why does it have support? Is it because it’s just another government program which can’t be killed with an atom bomb?
What would happen if individual constituents across the country – especially outside of the Northeast Corridor – did their research and, in turn, attempted to educate their Senators and Congressmen? What would happen if Congress – Amtrak’s most important banker – suddenly said this country should have a viable surface transportation policy beyond building highways, and rational passenger rail is the answer? What would happen if every Congressman who has no Amtrak service or only midnight and wee hours of the morning Amtrak service demanded better schedules and connections for their districts, just like the East and West Coasts have?
The end result would be a viable, robust passenger rail system that is not only sustainable, but desirable.
That’s not going to happen as long as the grossly misinformed (often for their own benefit or political agenda) keep everyone believing nowhere in the world is passenger rail service profitable.
When you say passenger rail service is profitable, it means two things: It’s sustainable, and it’s popular.
When it comes to politicians, like congressmen and senators, “popular” is a critically important phrase, and it often translates into support.
Amtrak isn’t popular. Amtrak continues to be America’s Best Kept Secret.
4) To fix the problem of Amtrak being America’s Best Kept Secret, several things have to happen. First, Amtrak has got to stop being a railroad principally focused on the NEC, and become what it is supposed to be, a national carrier.
Second, it has to embrace the national, long distance system, where financial success is found, and political support can be successfully mined.
Third, it has to have a viable business plan that doesn’t focus entirely on the development of ruinously expensive short corridors, but instead focuses on growth throughout the country.
And, fourth, Amtrak has to have in place a new equipment plan that demonstrates a commitment to long distance trains and all levels of passengers, from short distance coach passengers to high-dollar sleeping car passengers, and everyone in between.
5) Go, do your own homework. Find out for yourself the truth about passenger rail and profitability in the developed world. Find out what everyone outside of the USA and Canada already know: Passenger rail is good, and passenger rail is viable and popular. Then, take your new knowledge and educate others. But, most importantly, stomp hard on those who want you to believe their convenient and/or ignorant lies. Demand the heretics tell the truth.
Because, a lie is a terrible thing, and in the real world, there is nothing bad about passenger rail that anyone should have to lie about.
Passenger rail is a good thing, and we should be telling people the good things about it, not the lies about it.
6) Everyone knows the two best national magazines in the United States about railroading are Progressive Railroading and Passenger Train Journal. Progressive Railroading produces excellent reporting for those in the railroad industry, and Passenger Train Journal provides a satisfying mix of history and perspective about passenger trains in North America and the world.
In the current issue of Passenger Train Journal (2009:1, Issues 238), available on news stands now, PTJ Assistant Editor and Art Director Kevin Holland wrote a piercing essay, “VIA’s New Canadian Schedule: Too Much of a Good Thing?” in which he studies the lengthening of the Canadian’s transcontinental schedule by almost 13 hours westbound, and adds an entire extra evening onboard for passengers traveling from launching terminal to end terminal.
Mr. Holland presents a sound analysis of whether or not the Canadian is actually providing transportation or just another tour train, and a number of associated issues. He writes with brevity and clarity.
This article is required reading for anyone studying the various facets and merits of passenger rail travel.
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Friday, February 27, 2009
Monday, February 23, 2009
VIA Rail Canada can work as a private company
There is talk from Canadian Prime Minister Stephen Harper of selling VIA Rail Canada; turning the Crown Corporation into a private business.
What a great idea.
Mr. Harper, Canada’s 22nd Prime Minister, and leader of the Conservative Party (today’s version of the former Progressive Conservative Party of the times of Brian Mulroney and Kim Campbell in the 1980s and 90s), thinks other Canadian federal responsibilities may work better in private hands, too, such as Canada’s postal service and the mint.
At the end of the 1980s, when Mr. Mulroney was Prime Minister, the idea of VIA becoming privatized was studied and discussed.
I know, because I was there. I led the team doing the privatization study. Privatizing VIA is a viable option, but it can’t be done overnight. The same can be said of Amtrak here in the United States, but it always brings howls of protest and derision from liberals and socialists who love the idea of government being the only provider of surface transportation. These are people who have no faith in the merits of capitalism and entrepreneurship, nor faith in individuals knowing what is best for themselves versus what Big Brother wants them to do for the betterment of Big Brother.
VIA Rail Canada at the end of the 1990s was a stronger company than it is today, with more trains, more route miles, and more potential.
VIA was created and operated as a “subsidiary” of Canadian National Railroad, then itself a Crown Corporation. Today, CN is North America’s largest railroad, and one of the best run. It is also no longer a Crown Corporation; in the 1990s it became a private company, and once the power of capitalism was unleashed at CN, it took off like a rocket.
Today, CN reaches from Vancouver on Canada’s West Coast to Halifax on the East Coast, to New Orleans on America’s Gulf Coast.
Once CN became private, VIA Rail Canada stood more on its own, and still operates primarily over CN tracks. Canadian Pacific Railroad was eager to divest itself of passenger trains when VIA was formed, and delightedly shed its passenger responsibilities so it could concentrate on the freight business.
When Prime Minister Mulroney’s government drastically cut VIA funding in 1989, it signaled the end of the original route of CP’s flagship train, the Canadian, between Montreal/Toronto and Vancouver via Calgary.
VIA, knowing the importance of the brand name of the Canadian, simply dropped the Super Continental name of the flagship western transcontinental train of CN, and slapped the Canadian name on that route, shifting the CP’s better equipment to the more northern route via Jasper, Alberta.
Also since the 1989 cuts, VIA’s former Rocky Mountaineer was privatized by Vancouver Grey Line bus operator Peter Armstrong, who has turned that franchise into an ongoing gold mine with seasonal operation out of Vancouver eastward, including summer trains and Christmas season runs.
Alas, on the East Coast, the Montreal to Halifax service, The Atlantic, which operated over CP via Maine, went away when CP transferred much of that line to a short line operator. Today’s remaining eastern service train is The Ocean, which operates jointly with The Chaleur, on a northern CN route via Moncton, New Brunswick.
Today, VIA has done much with little. The company, which has often been labeled one of the worst run companies in Canada, has managed to maintain high levels of passenger service, used innovative marketing, and has spruced up some services where ridership has grown.
In the early 1990s, all of the former CP Budd-built passenger cars underwent extensive refurbishing at the former Pointe St. Charles shops in Quebec. The 1950s equipment was completely updated and made to look and run like new. Now, nearly 20 years later, this equipment is still in daily use.
Ten years later, VIA purchased unloved European passenger cars, brought them to Canada, dubbed them Renaissance equipment, and re-equipped The Ocean with new sleeping cars to great acclaim.
But, back to the basic question: How can VIA Rail Canada be privatized?
Not quickly. Our 1990 study indicated VIA could be privatized, but would need a declining federal subsidy of 11 years to reach full profitability, and all of its long distance trains would need – for economy of scale – to be converted to bi-level passenger equipment, modeled on Amtrak’s Superliners.
VIA also needs to shed much of its expensive corporate overhead, and act more like a short line railroad. Even though VIA’s operation are far-flung over a vast continent, the number of trains it operates are few, the number of maintenance bases it operates are few, and its overall number of operating employees is low. It’s the corporate overhead that’s the killer.
CP, recognizing the folly of keeping its headquarters on Montreal where CN and VIA are also headquartered, moved its headquarters to Calgary, Alberta, shedding many employees and much overhead in the process. With a fresh start in a new headquarters town in Canada’s west, CP was able to rebuild its corporate structure in a far more efficient manner. VIA needs to do the same thing; our recommendation 18 years ago was to move VIA headquarters to Edmonton, Alberta.
VIA operates a number of what we called social services; trains to remote parts of Canada which can only be reached by rail, general aviation, or dog sleds. Canada long ago realized the best way to keep these small cities and towns and hamlets connected to the rest of the country was by rail. Those services much be maintained, but should be maintained at government expense, and by a direct subsidy for those lines from the federal government to a privatized VIA.
This essay could go on for another 2,000 words about how the privatization of VIA could take place and what the many benefits would be to the Canadian public. Since the 1990 study, Peter Armstrong has vividly demonstrated through his private version of the Rocky Mountaineer service how private passenger service has been financially successful in Canada, especially when government regulation has stayed out of the way.
There is no law which dictates railroad passenger service must be run by government to be successful, both socially and financially.
Today’s private freight railroads are much stronger financially and have more enlightened management than the freight railroads of the 1970s, which were desperate for mere survival.
It’s time to take a serious look at private passenger rail, especially for VIA Rail Canada. The only thing which could be lost are the shackles of government ownership and control.
What a great idea.
Mr. Harper, Canada’s 22nd Prime Minister, and leader of the Conservative Party (today’s version of the former Progressive Conservative Party of the times of Brian Mulroney and Kim Campbell in the 1980s and 90s), thinks other Canadian federal responsibilities may work better in private hands, too, such as Canada’s postal service and the mint.
At the end of the 1980s, when Mr. Mulroney was Prime Minister, the idea of VIA becoming privatized was studied and discussed.
I know, because I was there. I led the team doing the privatization study. Privatizing VIA is a viable option, but it can’t be done overnight. The same can be said of Amtrak here in the United States, but it always brings howls of protest and derision from liberals and socialists who love the idea of government being the only provider of surface transportation. These are people who have no faith in the merits of capitalism and entrepreneurship, nor faith in individuals knowing what is best for themselves versus what Big Brother wants them to do for the betterment of Big Brother.
VIA Rail Canada at the end of the 1990s was a stronger company than it is today, with more trains, more route miles, and more potential.
VIA was created and operated as a “subsidiary” of Canadian National Railroad, then itself a Crown Corporation. Today, CN is North America’s largest railroad, and one of the best run. It is also no longer a Crown Corporation; in the 1990s it became a private company, and once the power of capitalism was unleashed at CN, it took off like a rocket.
Today, CN reaches from Vancouver on Canada’s West Coast to Halifax on the East Coast, to New Orleans on America’s Gulf Coast.
Once CN became private, VIA Rail Canada stood more on its own, and still operates primarily over CN tracks. Canadian Pacific Railroad was eager to divest itself of passenger trains when VIA was formed, and delightedly shed its passenger responsibilities so it could concentrate on the freight business.
When Prime Minister Mulroney’s government drastically cut VIA funding in 1989, it signaled the end of the original route of CP’s flagship train, the Canadian, between Montreal/Toronto and Vancouver via Calgary.
VIA, knowing the importance of the brand name of the Canadian, simply dropped the Super Continental name of the flagship western transcontinental train of CN, and slapped the Canadian name on that route, shifting the CP’s better equipment to the more northern route via Jasper, Alberta.
Also since the 1989 cuts, VIA’s former Rocky Mountaineer was privatized by Vancouver Grey Line bus operator Peter Armstrong, who has turned that franchise into an ongoing gold mine with seasonal operation out of Vancouver eastward, including summer trains and Christmas season runs.
Alas, on the East Coast, the Montreal to Halifax service, The Atlantic, which operated over CP via Maine, went away when CP transferred much of that line to a short line operator. Today’s remaining eastern service train is The Ocean, which operates jointly with The Chaleur, on a northern CN route via Moncton, New Brunswick.
Today, VIA has done much with little. The company, which has often been labeled one of the worst run companies in Canada, has managed to maintain high levels of passenger service, used innovative marketing, and has spruced up some services where ridership has grown.
In the early 1990s, all of the former CP Budd-built passenger cars underwent extensive refurbishing at the former Pointe St. Charles shops in Quebec. The 1950s equipment was completely updated and made to look and run like new. Now, nearly 20 years later, this equipment is still in daily use.
Ten years later, VIA purchased unloved European passenger cars, brought them to Canada, dubbed them Renaissance equipment, and re-equipped The Ocean with new sleeping cars to great acclaim.
But, back to the basic question: How can VIA Rail Canada be privatized?
Not quickly. Our 1990 study indicated VIA could be privatized, but would need a declining federal subsidy of 11 years to reach full profitability, and all of its long distance trains would need – for economy of scale – to be converted to bi-level passenger equipment, modeled on Amtrak’s Superliners.
VIA also needs to shed much of its expensive corporate overhead, and act more like a short line railroad. Even though VIA’s operation are far-flung over a vast continent, the number of trains it operates are few, the number of maintenance bases it operates are few, and its overall number of operating employees is low. It’s the corporate overhead that’s the killer.
CP, recognizing the folly of keeping its headquarters on Montreal where CN and VIA are also headquartered, moved its headquarters to Calgary, Alberta, shedding many employees and much overhead in the process. With a fresh start in a new headquarters town in Canada’s west, CP was able to rebuild its corporate structure in a far more efficient manner. VIA needs to do the same thing; our recommendation 18 years ago was to move VIA headquarters to Edmonton, Alberta.
VIA operates a number of what we called social services; trains to remote parts of Canada which can only be reached by rail, general aviation, or dog sleds. Canada long ago realized the best way to keep these small cities and towns and hamlets connected to the rest of the country was by rail. Those services much be maintained, but should be maintained at government expense, and by a direct subsidy for those lines from the federal government to a privatized VIA.
This essay could go on for another 2,000 words about how the privatization of VIA could take place and what the many benefits would be to the Canadian public. Since the 1990 study, Peter Armstrong has vividly demonstrated through his private version of the Rocky Mountaineer service how private passenger service has been financially successful in Canada, especially when government regulation has stayed out of the way.
There is no law which dictates railroad passenger service must be run by government to be successful, both socially and financially.
Today’s private freight railroads are much stronger financially and have more enlightened management than the freight railroads of the 1970s, which were desperate for mere survival.
It’s time to take a serious look at private passenger rail, especially for VIA Rail Canada. The only thing which could be lost are the shackles of government ownership and control.
Sunday, February 22, 2009
This Week at Amtrak; February 6, 2009
A weekly digest of events, opinions, and forecasts from
United Rail Passenger Alliance, Inc.
America’s foremost passenger rail policy institute
1526 University Boulevard, West, PMB 203 • Jacksonville, Florida 32217-2006 USA
Telephone 904-636-7739, Electronic Mail info@unitedrail.org • http://www.unitedrail.org
Volume 6, Number 5
Founded over three decades ago in 1976, URPA is a nationally known policy institute that focuses on solutions and plans for passenger rail systems in North America. Headquartered in Jacksonville, Florida, URPA has professional associates in Minnesota, California, Arizona, New Mexico, the District of Columbia, Texas, and New York. For more detailed information, along with a variety of position papers and other documents, visit the URPA web site at http://www.unitedrail.org.
URPA is not a membership organization, and does not accept funding from any outside sources.
1) Amtrak has a new hero, and his name is Daryl Pesce. Mr. Pesce is the General Superintendent in Chicago, for Amtrak’s Central Division. This guy should get a medal.
Mr. Pesce’s domain is one of Amtrak’s most difficult; Chicago is the main passenger rail hub of the Midwest, and trains converge into and out of Chicago from and to every direction to every part of the country. Eastern long hauls come in from New York and New England, as well as Philadelphia and Washington. Three of Amtrak’s premier transcontinental trains have terminals in Chicago, and it is directly served from New Orleans by the City of New Orleans. Chicago also has its share of corridor and short haul trains which include Michigan’s Pere Marquette, the Detroit service, as well as the Illinois services and others, such as the Hiawathas.
Together, this makes for interesting passenger railroading, because in addition to all of this, Amtrak has to work around Chicago’s vast commuter network.
As Amtrak’s General Superintendent in Chicago, Mr. Pesce is Lord of the Manor. However, along with the glory comes the responsibility over an Amtrak division that every year seems genuinely surprised when winter arrives immediately after the fall. For years, Chicago has been one of Amtrak’s biggest headaches when it comes to equipment maintenance and just about every other facet of operations. It’s almost been as if Amtrak’s employees in Chicago have been doing the equivalent of the inmates running the asylum. Employee comfort and convenience has in almost every instance beat out passenger service or a desire to operate a passenger railroad in an efficient manner.
For years, reports have dribbled into URPA and TWA about the naughtiness of Chicago maintenance employees, especially in winter. This has been on top of numerous firings for things like full-time Amtrak union employees also collecting a paycheck from a second employer while they were supposed to be working for Amtrak.
In short, accountability has been so far out of the window in Chicago, that accountability hasn’t been recognized by anyone recently as a current concept.
Daryl Pesce seems determined to change that. He’s asking questions, and, when the right answers don’t come, is demanding more. He’s not content with “business as usual,” and wants things to improve. Not only is he demanding more of his top managers, but he’s rightly demanding more of the frontline employees, too. When a conductor or engineer on a far-flung train hours away from Chicago (but still in the division) makes a passenger-unfriendly decision, Mr. Pesce demands to know why that conductor or engineer was allowed to do that, and what’s being done to fix it in the future.
This is so refreshing, it’s hard to describe the euphoria it generates among those who believe adult supervision should always be prevalent in every part of passenger railroading.
Mr. Pesce is having to answer to the State of Michigan for December’s problems with the Pere Marquette, and Michigan’s Department of Transportation is being rowdy about the whole situation, and demanding performance for the money its spending. Other cities and towns along the way are jumping on Michigan’s bandwagon, and demanding accountability from Mr. Pesce’s division. This is all good; Mr. Pesce seems to be just the man to correct those situations and put new orders in place so problems won’t happen a second time.
In the past, there have been so many good managers, such as current Amtrak Vice President Richard Phelps, that have had to work in less than ideal circumstances because of an ingrained Amtrak culture of non-accountability. Here’s hoping Mr. Pesce, along with the higher-ups like Mr. Phelps, will continue to whack away at that unacceptable culture and create an Amtrak everyone can be proud to work for and to ride as a passenger.
2) Here’s what we have learned about Amtrak’s massive failure to have a serviceable locomotive fleet in the national system.
Several incorrect things have happened, along with some experimentation by an outside consultant who allegedly claims Amtrak can save big bucks by not performing routine maintenance on locomotives, but, instead, just replace crucial locomotive components at timed intervals.
One of the reasons so many trains were recently cancelled in and out of Chicago due to a lack of locomotives also falls on Washington, because eight locomotives were pulled out of the regular service pool to haul President-Elect Obama’s now-famous special train from Philadelphia to Washington on the Saturday prior to the inauguration.
The Secret Service has – correctly – very strict rules about presidential trains which have been in place for decades. The rules make a lot of sense, especially in today’s terrorist environment.
Under normal circumstances, Mr. Obama’s train would have been pulled by electric locomotives, since it operated exclusively on the Northeast Corridor. However, the Secret Service said no to that; diesel locomotives had to be used instead. This meant the presidential train was not at the mercy of overhead catenary, but, rather was always operating under its own power. That makes perfect sense. Also, the train – short as it was – had two locomotives instead of one, in case of engine failure. Another logical move.
What many people don’t know is a presidential train is always preceded by an advance train, which essentially makes sure the rails are clear, and if anyone has placed anything on the tracks, the advance train will deal with it, not the presidential train. Again, a train with two locomotives, bringing the total to four.
Behind the presidential train was a third train, offering protection from the rear. Again, two locomotives, for a total of six.
Two other locomotives were held in reserve, in case anything went wrong with the other six locomotives, brining the total to eight.
By the time Amtrak pulled these units out of regular service, spiffed them up mechanically and both inside and out for presidential service, and later returned them to service, they were gone from the pool roster for a long number of days.
Considering Amtrak was already short of locomotives before this special event, losing eight locos put a huge hole in Amtrak’s operating plan. As a result, regular train service on several routes in and out of Chicago was cancelled on various days for lack of motive power, sometimes for several days in a row.
If you were Amtrak, what decision would you have made? It’s impossible to turn down a presidential request, especially such a high profile request. Secret Service demands are high – thank goodness – and perfection is demanded. Lacking perfection, backup plans must be in place and everything must go off without a hitch. There is no room for error; too much is at stake on every level.
Amtrak did the right thing handling the presidential train, but, in reality, there should have been more than enough locomotives to handle a relatively small request of eight locomotives out of the entire fleet of 199 which serves intercity trains outside of the NEC (but does not include West Coast trains).
Intercity has a requirement of 150 locomotives on a typical day, out of 187 active units. (Keep in mind these locomotives include all of the East Coast units; New Orleans, New England, and anywhere else outside of the NEC and West Coast that needs power, so not all 187 active units have a home base of Chicago.)
It’s not unusual for 15% or more of those units to be out of service for maintenance; that’s 28 locomotives on average. Oops! Suddenly you’re almost out of locomotives. Take another eight units out of service for presidential service, and you’re in real trouble. (You think 15% of the locomotives down for maintenance is high? Think, again. On the NEC, it’s not unusual to have 24% of the locomotives out of service. The NEC has 96 units on its active roster, with a daily requirement of 65; sometimes 23 can be out of service.)
But, the question remains, why is Amtrak always short of locomotives, when it has enough motors on the books to handle all of its needs?
Because, Amtrak has been practicing – as a corporate policy – far too much deferred maintenance to save money, and also, when something breaks, Amtrak just sends a broken locomotive to sit idle in the weeds instead of repairing it.
There are also some silly policies about rotating spare parts stock that make little sense to the rational mind, and these policies often have Amtrak selling/getting rid of spare parts instead of using them to repair out of service locomotives.
3) Let’s get down home about this. If something like this became an issue in a political campaign, any good candidate would be having a field day with Amtrak’s locomotive problems.
Here’s how it would be portrayed for maximum impact: Amtrak, a semi-government corporation, which exists on annual subsidies of taxpayer monies on both the federal and state levels of well into billions of dollars, takes monies specifically to be used for equipment maintenance which allows Amtrak to fulfill its mandate of operating passenger trains for the benefit of the traveling public, yet does not spend that money on basic necessities like locomotive maintenance.
Instead of spending the money on required maintenance on equipment which costs more than $1 million per locomotive, Amtrak just parks this expensive equipment on a weeded side track instead of keeping it in revenue service. Because that locomotive is not in revenue service, and therefore, generating fares from passengers who may wish to travel on a train, Amtrak exacerbates the problem by keeping a valuable, revenue-generating asset idle, therefore, needing more government subsidy to make up for the lost income not generated by a working locomotive.
A good political candidate would be demanding reform, demanding relevant law enforcement agencies be looking into misuse of public funds, and demanding to know why all members of management directly associated with these decisions are still employed by Amtrak.
Legal minds will tell you – in theory – this is the kind of thing management is supposed to be accountable for to a normal board of directors, who are then accountable to stockholders on every level.
However, since this is Amtrak, the board rarely bestirs itself to take an active role in this level of management. In terms of outside remedies beyond the board, there may be the possibility of a citizen “qui tam” suit. This is a suit in which any citizen/plaintiff has standing to sue because the federal government is involved.
From a law enforcement standpoint, it would depend on how much gumption a federal prosecutor has and the time/inclination to start looking into such a rat’s nest of complex financial dealings and questionable bookkeeping practices which Amtrak has used for years.
Which means unless something extraordinary happens, Amtrak will probably get away with these hijinks, and continue to be unaccountable to anyone. Here’s wishing Daryl Pesce well in his pursuit of accountability in Chicago; perhaps he can persuade the powers that be that if he is going to be successful in rehabilitating Chicago into a normally-functioning division of Amtrak, he’s got to have available working locomotives to pull his trains.
4) Amtrak has a new Chairman of the Board, and, to no one’s surprise, he’s from Illinois. For some very odd reason, the Republican Chairman of the Board, Donna McLean, felt it appropriate to step aside from her duly appointed position, and install Thomas Carper, former Mayor of Macomb, Illinois as Amtrak’s new chairman. The former vice chairman, Hunter Biden, son of Vice President Joe Biden, left his position so Ms. McLean could become vice chairman.
Got that? Ms. McLean, who was chairman is now vice chairman, and Mr. Carper who was a board member is now chairman of the board, and Mr. Biden, who was vice chairman is now a board member. Nancy Naples remains on the board.
In April, Joe Boardman, the Interim President and CEO of Amtrak will become a full voting member of Amtrak board, as directed by the Amtrak authorizing legislation signed by former President Bush last October. There are still four board vacancies to be filled, as the board will be expanded from seven to nine members. The entire tenure of the Bush Administration never saw a fully-populated Amtrak board of directors.
Here’s the official press release from Amtrak, dated January 30, 2009.
[Begin quote]
AMTRAK BOARD NAMES THOMAS CARPER OF ILLINOIS AS CHAIRMAN
Former Chairman Donna McLean becomes Vice Chairman
WASHINGTON – At its regularly scheduled meeting yesterday, Amtrak’s Board of Directors unanimously agreed to name Thomas Carper of Illinois as Chairman of the Board. Carper, who has served in various Illinois state and local government positions, including Mayor of the City of Macomb, has been a director on the Amtrak board since March 2008. At the same meeting former Chairman Donna McLean was named Vice Chairman, replacing Hunter Biden, who remains as a board member.
Carper said, “Everything we have done as a board, we’ve done as a unified body, and this change in our hierarchy is no exception. That this was a unanimous and non-contentious decision is testimony to that fact. I look forward to tackling the exciting challenges and opportunities that lie ahead. Amtrak is ready to play a growing role in strengthening our transportation system and our economy.”
The five-member board consists of four voting members, two Democrats, Carper and Biden, and two Republicans, McLean and Nancy Naples. Amtrak President and CEO Joseph Boardman is a non-voting member of the board.
Former Chairman McLean, who was named Vice Chairman, said, “With the change in administration, its best for the company to have Tom as Chairman. I am pleased to be able to work with Tom and the rest of the board as we face the exciting and challenging years ahead.”
As part of the Passenger Rail Investment and Improvement Act of 2008, the Board of Directors of the National Railroad Passenger Corporation (Amtrak) is expected in 2009 to expand to nine members from its current allotment of seven positions, five of which are currently occupied. The President nominates and the U.S. Senate confirms Amtrak Board members.
About Amtrak
Amtrak has posted six consecutive years of growth in ridership and revenue, carrying more than 28.7 million passengers in the last fiscal year. Amtrak provides intercity passenger rail service to more than 500 destinations in 46 states on a 21,000-mile route system. For schedules, fares and information, passengers may call 800-USA-RAIL or visit Amtrak.com.
[End quote]
Here in the real world, it’s amusing the Amtrak board felt this step necessary. There is no evidence Ms. McLean would not have been able to continue functioning as Amtrak’s chairman, but, since she’s a Republican, turned over the reins to a Democrat.
This illustrates the folly of Amtrak being such a child of government; if it were strong enough to stand on its own without billions in federal subsidies every budget year, it wouldn’t matter if a Republican or Democrat was chairman of the board. All that would matter would be if the corporation was being run in a proper way.
Maybe, one day, that will be the case. In the interim, we’ve got a new chairman of the board with Illinois credentials.
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United Rail Passenger Alliance, Inc.
1526 University Boulevard, West, PMB 203
Jacksonville, Florida 32217-2006 USA
Telephone 904-636-7739
brucerichardson@unitedrail.org
http://www.unitedrail.org
United Rail Passenger Alliance, Inc.
America’s foremost passenger rail policy institute
1526 University Boulevard, West, PMB 203 • Jacksonville, Florida 32217-2006 USA
Telephone 904-636-7739, Electronic Mail info@unitedrail.org • http://www.unitedrail.org
Volume 6, Number 5
Founded over three decades ago in 1976, URPA is a nationally known policy institute that focuses on solutions and plans for passenger rail systems in North America. Headquartered in Jacksonville, Florida, URPA has professional associates in Minnesota, California, Arizona, New Mexico, the District of Columbia, Texas, and New York. For more detailed information, along with a variety of position papers and other documents, visit the URPA web site at http://www.unitedrail.org.
URPA is not a membership organization, and does not accept funding from any outside sources.
1) Amtrak has a new hero, and his name is Daryl Pesce. Mr. Pesce is the General Superintendent in Chicago, for Amtrak’s Central Division. This guy should get a medal.
Mr. Pesce’s domain is one of Amtrak’s most difficult; Chicago is the main passenger rail hub of the Midwest, and trains converge into and out of Chicago from and to every direction to every part of the country. Eastern long hauls come in from New York and New England, as well as Philadelphia and Washington. Three of Amtrak’s premier transcontinental trains have terminals in Chicago, and it is directly served from New Orleans by the City of New Orleans. Chicago also has its share of corridor and short haul trains which include Michigan’s Pere Marquette, the Detroit service, as well as the Illinois services and others, such as the Hiawathas.
Together, this makes for interesting passenger railroading, because in addition to all of this, Amtrak has to work around Chicago’s vast commuter network.
As Amtrak’s General Superintendent in Chicago, Mr. Pesce is Lord of the Manor. However, along with the glory comes the responsibility over an Amtrak division that every year seems genuinely surprised when winter arrives immediately after the fall. For years, Chicago has been one of Amtrak’s biggest headaches when it comes to equipment maintenance and just about every other facet of operations. It’s almost been as if Amtrak’s employees in Chicago have been doing the equivalent of the inmates running the asylum. Employee comfort and convenience has in almost every instance beat out passenger service or a desire to operate a passenger railroad in an efficient manner.
For years, reports have dribbled into URPA and TWA about the naughtiness of Chicago maintenance employees, especially in winter. This has been on top of numerous firings for things like full-time Amtrak union employees also collecting a paycheck from a second employer while they were supposed to be working for Amtrak.
In short, accountability has been so far out of the window in Chicago, that accountability hasn’t been recognized by anyone recently as a current concept.
Daryl Pesce seems determined to change that. He’s asking questions, and, when the right answers don’t come, is demanding more. He’s not content with “business as usual,” and wants things to improve. Not only is he demanding more of his top managers, but he’s rightly demanding more of the frontline employees, too. When a conductor or engineer on a far-flung train hours away from Chicago (but still in the division) makes a passenger-unfriendly decision, Mr. Pesce demands to know why that conductor or engineer was allowed to do that, and what’s being done to fix it in the future.
This is so refreshing, it’s hard to describe the euphoria it generates among those who believe adult supervision should always be prevalent in every part of passenger railroading.
Mr. Pesce is having to answer to the State of Michigan for December’s problems with the Pere Marquette, and Michigan’s Department of Transportation is being rowdy about the whole situation, and demanding performance for the money its spending. Other cities and towns along the way are jumping on Michigan’s bandwagon, and demanding accountability from Mr. Pesce’s division. This is all good; Mr. Pesce seems to be just the man to correct those situations and put new orders in place so problems won’t happen a second time.
In the past, there have been so many good managers, such as current Amtrak Vice President Richard Phelps, that have had to work in less than ideal circumstances because of an ingrained Amtrak culture of non-accountability. Here’s hoping Mr. Pesce, along with the higher-ups like Mr. Phelps, will continue to whack away at that unacceptable culture and create an Amtrak everyone can be proud to work for and to ride as a passenger.
2) Here’s what we have learned about Amtrak’s massive failure to have a serviceable locomotive fleet in the national system.
Several incorrect things have happened, along with some experimentation by an outside consultant who allegedly claims Amtrak can save big bucks by not performing routine maintenance on locomotives, but, instead, just replace crucial locomotive components at timed intervals.
One of the reasons so many trains were recently cancelled in and out of Chicago due to a lack of locomotives also falls on Washington, because eight locomotives were pulled out of the regular service pool to haul President-Elect Obama’s now-famous special train from Philadelphia to Washington on the Saturday prior to the inauguration.
The Secret Service has – correctly – very strict rules about presidential trains which have been in place for decades. The rules make a lot of sense, especially in today’s terrorist environment.
Under normal circumstances, Mr. Obama’s train would have been pulled by electric locomotives, since it operated exclusively on the Northeast Corridor. However, the Secret Service said no to that; diesel locomotives had to be used instead. This meant the presidential train was not at the mercy of overhead catenary, but, rather was always operating under its own power. That makes perfect sense. Also, the train – short as it was – had two locomotives instead of one, in case of engine failure. Another logical move.
What many people don’t know is a presidential train is always preceded by an advance train, which essentially makes sure the rails are clear, and if anyone has placed anything on the tracks, the advance train will deal with it, not the presidential train. Again, a train with two locomotives, bringing the total to four.
Behind the presidential train was a third train, offering protection from the rear. Again, two locomotives, for a total of six.
Two other locomotives were held in reserve, in case anything went wrong with the other six locomotives, brining the total to eight.
By the time Amtrak pulled these units out of regular service, spiffed them up mechanically and both inside and out for presidential service, and later returned them to service, they were gone from the pool roster for a long number of days.
Considering Amtrak was already short of locomotives before this special event, losing eight locos put a huge hole in Amtrak’s operating plan. As a result, regular train service on several routes in and out of Chicago was cancelled on various days for lack of motive power, sometimes for several days in a row.
If you were Amtrak, what decision would you have made? It’s impossible to turn down a presidential request, especially such a high profile request. Secret Service demands are high – thank goodness – and perfection is demanded. Lacking perfection, backup plans must be in place and everything must go off without a hitch. There is no room for error; too much is at stake on every level.
Amtrak did the right thing handling the presidential train, but, in reality, there should have been more than enough locomotives to handle a relatively small request of eight locomotives out of the entire fleet of 199 which serves intercity trains outside of the NEC (but does not include West Coast trains).
Intercity has a requirement of 150 locomotives on a typical day, out of 187 active units. (Keep in mind these locomotives include all of the East Coast units; New Orleans, New England, and anywhere else outside of the NEC and West Coast that needs power, so not all 187 active units have a home base of Chicago.)
It’s not unusual for 15% or more of those units to be out of service for maintenance; that’s 28 locomotives on average. Oops! Suddenly you’re almost out of locomotives. Take another eight units out of service for presidential service, and you’re in real trouble. (You think 15% of the locomotives down for maintenance is high? Think, again. On the NEC, it’s not unusual to have 24% of the locomotives out of service. The NEC has 96 units on its active roster, with a daily requirement of 65; sometimes 23 can be out of service.)
But, the question remains, why is Amtrak always short of locomotives, when it has enough motors on the books to handle all of its needs?
Because, Amtrak has been practicing – as a corporate policy – far too much deferred maintenance to save money, and also, when something breaks, Amtrak just sends a broken locomotive to sit idle in the weeds instead of repairing it.
There are also some silly policies about rotating spare parts stock that make little sense to the rational mind, and these policies often have Amtrak selling/getting rid of spare parts instead of using them to repair out of service locomotives.
3) Let’s get down home about this. If something like this became an issue in a political campaign, any good candidate would be having a field day with Amtrak’s locomotive problems.
Here’s how it would be portrayed for maximum impact: Amtrak, a semi-government corporation, which exists on annual subsidies of taxpayer monies on both the federal and state levels of well into billions of dollars, takes monies specifically to be used for equipment maintenance which allows Amtrak to fulfill its mandate of operating passenger trains for the benefit of the traveling public, yet does not spend that money on basic necessities like locomotive maintenance.
Instead of spending the money on required maintenance on equipment which costs more than $1 million per locomotive, Amtrak just parks this expensive equipment on a weeded side track instead of keeping it in revenue service. Because that locomotive is not in revenue service, and therefore, generating fares from passengers who may wish to travel on a train, Amtrak exacerbates the problem by keeping a valuable, revenue-generating asset idle, therefore, needing more government subsidy to make up for the lost income not generated by a working locomotive.
A good political candidate would be demanding reform, demanding relevant law enforcement agencies be looking into misuse of public funds, and demanding to know why all members of management directly associated with these decisions are still employed by Amtrak.
Legal minds will tell you – in theory – this is the kind of thing management is supposed to be accountable for to a normal board of directors, who are then accountable to stockholders on every level.
However, since this is Amtrak, the board rarely bestirs itself to take an active role in this level of management. In terms of outside remedies beyond the board, there may be the possibility of a citizen “qui tam” suit. This is a suit in which any citizen/plaintiff has standing to sue because the federal government is involved.
From a law enforcement standpoint, it would depend on how much gumption a federal prosecutor has and the time/inclination to start looking into such a rat’s nest of complex financial dealings and questionable bookkeeping practices which Amtrak has used for years.
Which means unless something extraordinary happens, Amtrak will probably get away with these hijinks, and continue to be unaccountable to anyone. Here’s wishing Daryl Pesce well in his pursuit of accountability in Chicago; perhaps he can persuade the powers that be that if he is going to be successful in rehabilitating Chicago into a normally-functioning division of Amtrak, he’s got to have available working locomotives to pull his trains.
4) Amtrak has a new Chairman of the Board, and, to no one’s surprise, he’s from Illinois. For some very odd reason, the Republican Chairman of the Board, Donna McLean, felt it appropriate to step aside from her duly appointed position, and install Thomas Carper, former Mayor of Macomb, Illinois as Amtrak’s new chairman. The former vice chairman, Hunter Biden, son of Vice President Joe Biden, left his position so Ms. McLean could become vice chairman.
Got that? Ms. McLean, who was chairman is now vice chairman, and Mr. Carper who was a board member is now chairman of the board, and Mr. Biden, who was vice chairman is now a board member. Nancy Naples remains on the board.
In April, Joe Boardman, the Interim President and CEO of Amtrak will become a full voting member of Amtrak board, as directed by the Amtrak authorizing legislation signed by former President Bush last October. There are still four board vacancies to be filled, as the board will be expanded from seven to nine members. The entire tenure of the Bush Administration never saw a fully-populated Amtrak board of directors.
Here’s the official press release from Amtrak, dated January 30, 2009.
[Begin quote]
AMTRAK BOARD NAMES THOMAS CARPER OF ILLINOIS AS CHAIRMAN
Former Chairman Donna McLean becomes Vice Chairman
WASHINGTON – At its regularly scheduled meeting yesterday, Amtrak’s Board of Directors unanimously agreed to name Thomas Carper of Illinois as Chairman of the Board. Carper, who has served in various Illinois state and local government positions, including Mayor of the City of Macomb, has been a director on the Amtrak board since March 2008. At the same meeting former Chairman Donna McLean was named Vice Chairman, replacing Hunter Biden, who remains as a board member.
Carper said, “Everything we have done as a board, we’ve done as a unified body, and this change in our hierarchy is no exception. That this was a unanimous and non-contentious decision is testimony to that fact. I look forward to tackling the exciting challenges and opportunities that lie ahead. Amtrak is ready to play a growing role in strengthening our transportation system and our economy.”
The five-member board consists of four voting members, two Democrats, Carper and Biden, and two Republicans, McLean and Nancy Naples. Amtrak President and CEO Joseph Boardman is a non-voting member of the board.
Former Chairman McLean, who was named Vice Chairman, said, “With the change in administration, its best for the company to have Tom as Chairman. I am pleased to be able to work with Tom and the rest of the board as we face the exciting and challenging years ahead.”
As part of the Passenger Rail Investment and Improvement Act of 2008, the Board of Directors of the National Railroad Passenger Corporation (Amtrak) is expected in 2009 to expand to nine members from its current allotment of seven positions, five of which are currently occupied. The President nominates and the U.S. Senate confirms Amtrak Board members.
About Amtrak
Amtrak has posted six consecutive years of growth in ridership and revenue, carrying more than 28.7 million passengers in the last fiscal year. Amtrak provides intercity passenger rail service to more than 500 destinations in 46 states on a 21,000-mile route system. For schedules, fares and information, passengers may call 800-USA-RAIL or visit Amtrak.com.
[End quote]
Here in the real world, it’s amusing the Amtrak board felt this step necessary. There is no evidence Ms. McLean would not have been able to continue functioning as Amtrak’s chairman, but, since she’s a Republican, turned over the reins to a Democrat.
This illustrates the folly of Amtrak being such a child of government; if it were strong enough to stand on its own without billions in federal subsidies every budget year, it wouldn’t matter if a Republican or Democrat was chairman of the board. All that would matter would be if the corporation was being run in a proper way.
Maybe, one day, that will be the case. In the interim, we’ve got a new chairman of the board with Illinois credentials.
If you are reading someone else’s copy of This Week at Amtrak, you can receive your own free copy each week by sending your e-mail address to
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You MUST include your name, preferred e-mail address, and city and state where you live. If you have filters or firewalls placed on your Internet connection, set your e-mail to receive incoming mail from twa@unitedrail.org; we are unable to go through any individual approvals processes for individuals. This mailing list is kept strictly confidential and is not shared or used for any purposes other than the distribution of This Week at Amtrak or related URPA materials.
All other correspondence, including requests to unsubscribe, should be addressed to
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URPA leadership members are available for speaking engagements.
J. Bruce Richardson
President
United Rail Passenger Alliance, Inc.
1526 University Boulevard, West, PMB 203
Jacksonville, Florida 32217-2006 USA
Telephone 904-636-7739
brucerichardson@unitedrail.org
http://www.unitedrail.org
This Week at Amtrak; January 29, 2009
A weekly digest of events, opinions, and forecasts from
United Rail Passenger Alliance, Inc.
America’s foremost passenger rail policy institute
1526 University Boulevard, West, PMB 203 • Jacksonville, Florida 32217-2006 USA
Telephone 904-636-7739, Electronic Mail info@unitedrail.org • http://www.unitedrail.org
Volume 6, Number 4
Founded over three decades ago in 1976, URPA is a nationally known policy institute that focuses on solutions and plans for passenger rail systems in North America. Headquartered in Jacksonville, Florida, URPA has professional associates in Minnesota, California, Arizona, New Mexico, the District of Columbia, Texas, and New York. For more detailed information, along with a variety of position papers and other documents, visit the URPA web site at http://www.unitedrail.org.
URPA is not a membership organization, and does not accept funding from any outside sources.
1) Inquiring minds have wanted to know for a long time why Amtrak never wants to report its metrics by standard measures used by all other types of common carriers, not to mention federal government reporting agencies such as the Bureau of Transportation Statistics.
The reason is, Amtrak has a dirty little secret it doesn’t want anyone to know or figure out: Statistically, Amtrak is completely irrelevant as a part of our domestic transportation network.
New figures have been released by BTS this month. The latest figures available from BTS are for 2006, but that doesn’t matter, because Amtrak’s figures are so very low, even if they were doubled Amtrak would still be statistically irrelevant.
BTS 2006 Statistics, Market Share by Mode
Air – 11.07%
Passenger cars – 49.82%
Other 2 axle vehicles (Such as SUVs, pickup trucks, etc;) – 35.38%
Busses – 2.78%
Motorcycles – 0.30%
Rail transit – 0.31%
Rail commuter – 0.19%
Amtrak – 0.10%
Other transit – 0.04%
Just in case you think you read that Amtrak figure incorrectly, it’s one tenth of one percent market share. Yes, far less than a single percentage point.
If you are doling out free federal monies in Washington, how high would that be on your priority list? Amtrak has certain members of Congress who will ALWAYS offer amendments to bills and other devices to defund Amtrak. When you look at Amtrak’s true numbers, you have to wonder why not more members of Congress don’t do the same thing? Just looking at raw numbers, Amtrak is not only a loser, but it’s a colossal loser, and screams government waste and boondoggle to rational people.
If you are a political commentator of any stripe and are accustomed to either flying everywhere or driving to any destination (especially if you live outside of the Northeast), you can see why Amtrak receives little or no support for a future as part of our domestic transportation network.
When someone cries “Close it! Sell it! Dismantle it!” they are doing so from a practical economic standpoint. Amtrak is, in the eyes of anyone doing cold, hard, analysis, unimportant. If Amtrak went away – even (gasp!) in the Northeast – there would be little, if any, impact on any roadway crowding. Even as heavy as traffic is on Northeast interstate highways, Amtrak’s daily passengers could still easily be absorbed onto busses, vans, and in automobiles.
Now, you see why Amtrak only wants to talk about warm bodies/passenger counts. Amtrak says it carries about 26 million passengers a year, for an average of 70,000 passengers a day on its over 300 trains (most of which are Northeast Corridor trains) a day (including the two tri-weekly trains, the Sunset Limited and the Cardinal).
What this tells us is a completely new approach is needed to “sell” passenger rail in North America. VIA Rail Canada isn’t much different from Amtrak in terms of percentage of population it serves; the only real difference is VIA has some social service routes which are critical to the inhabitants of remote parts of various provinces where no real roads exist. VIA and general aviation are still the only two forms of any type of transportation through or over some very desolate countryside.
Here’s the good news. It doesn’t take much to sell travelers on the potential of passenger train travel, especially Generation Y (people in their 20s) travelers. To many, train travel is a new and novel experience to be embraced and enjoyed.
If ever Amtrak gets away from insisting it must be the best kept secret in America, it will explode with riders.
Some otherwise well-respected authors are continuing the tedious and false drumbeat about Amtrak having to perpetually be a step-child of government, and how it can never come close to making money or even breaking even. Since this canard is constantly put before the public, more and more people blithely believe this drivel without bothering to check for themselves what the realities are about passenger rail in North America. Yes, as long as passenger rail commands one tenth of one percent of the traveling public’s market share, it will always have to be an unwanted child of government. It if ever gets just to one percent of market share, it will be a success both financially and socially, as long as the correct business plan is followed.
2) As rational individuals, we know body counts are worthless; revenue passenger miles are the defining figure of measurement.
Here are the same results for 2006, expressed in revenue passenger miles instead of percentages (in millions).
Air – 590,633
Passenger cars – 2,658,621
Other 2 axle vehicles (Such as SUVs, pickup trucks, etc;) – 1,887,997
Busses – 148,485
Motorcycles – 15,750
Rail transit – 16,587
Rail commuter – 10,361
Amtrak – 5,410
Other transit – 2,221
Amtrak still comes out on the bottom, no matter how you express the data.
If the presumption was made that every Amtrak passenger was unique every year (every passenger used Amtrak only one way for one trip a year), then Amtrak would be serving about 8.5% of the population of the United States. However, since the vast majority of Amtrak’s riders use the train as a round-trip service, and over half of Amtrak’s riders use NEC trains on a frequent basis, it’s safe to say Amtrak actually serves well under 3% of the population of the United States – again, making the service statistically irrelevant.
2) Let’s look at some other figures and trends, all courtesy of the Bureau of Transportation Statistics.
Here’s a breakdown of U.S. passenger miles by mode over an extended period of time (figures in millions).
Air Passenger Miles
1960 – 33,399
1965 – 57,626
1970 – 117,542
1975 – 147,400
1980 – 219,068
1985 – 290,136
1990 – 358,873
1995 – 414,688
2000 – 531,329
2005 – 583,689
2006 – 590,633
Highway Passenger Miles (Combined passenger car, motorcycle, two-axle passenger vehicles)
1960 – 1,272,078
1965 – 1,555,237
1970 – 2,042,002
1975 – 2,404,954
1980 – 2,653,510
1985 – 3,012,953
1990 – 3,561,209
1995 – 3,868,070
2000 – 4,390,076
2005 – 4,887,945
2006 – 4,933,689
Transit Passenger Miles (Combined bus, light rail, heavy rail, trolley bus, commuter rail)
1960 – NA
1965 – NA
1970 – NA
1975 – NA
1980 – 39,854
1985 – 39,581
1990 – 41,143
1995 – 39,808
2000 – 47,666
2005 – 49,680
2006 – 52,154
Passenger rail/Intercity, Amtrak Passenger Miles
1960 – 17,064
1965 – 13,260
1970 – 6,179
1975 – 3,931
1980 – 4,503
1985 – 4,825
1990 – 6,057
1995 – 5,545
2000 – 5,498
2005 – 5,381
2006 – 5,410
Additional figures compiled by URPA from Amtrak data
2007 – 5,653
2008 – 6,159
Figures for prior to 1990 are only reported in five year increments. What’s interesting about the passenger rail figures is the huge drop – over 50% – from 1965 to 1970, a period still prior to Amtrak when most railroads were still running private passenger trains under government regulation.
The drop from 1970 to 1975 includes the introduction of Amtrak with its skeletal national system and the removal of most remaining passenger trains in the country. Since the directed mission from the United States Department of Transportation in the creation of Amtrak was to determine what formerly private railroad routes could be considered sustainable after the creation of Amtrak, it’s obvious just the very creation of Amtrak instituted a false capacity constraint on passenger rail.
The total figure of revenue passenger miles for 2008 – Amtrak’s best year ever – is still below that of 1970, the year before Amtrak started service and private railroads were still operating passenger trains under government mandate.
What does this tell us? From the very beginning, by government directive, Amtrak has placed a false restraint on passenger demand in the United States. Even as bad as the last years of private passenger trains were by some railroads hoping to scare away passengers and only operate the barest of services, the public still wanted to ride trains. Not everyone wants to fly, and not everyone wants to travel by private automobile, no matter how wonderful the Eisenhower Interstate Highway System may be.
What would have happened if Amtrak would not have falsely constrained demand? What would happen if Amtrak was not America’s best kept secret? What would happen if Amtrak’s senior management was actually interested in making the company a success rather than living off of the sour fruits of payments from state treasuries to run intrastate services at high prices while offering low value and bad service?
3) How did Amtrak falsely constrain demand? Let us count the ways, using higher math, of course, because simple arithmetic can’t handle the numbers.
Amtrak has consistently replaced its original fleet inherited from the private railroads with fewer and fewer cars. Here are the numbers.
Passenger Railroad Cars (Does not include locomotives)
1970 – 1,569
1980 – 2,128
1990 – 1,863
1994 – 1,852
1995 – 1,722
1996 – 1,730
1997 – 1,728
1998 – 1,962
1999 – 1,992
2000 – 1,894
2001 – 2,084
2002 – 2,896
2003 – 1,623
2004 – 1,211
2005 – 1,186
2006 – 1,191
2009 – 1,505 plus 140 state owned, but operated by Amtrak, for a total of 1,645
2009 – 1,345 active cars Amtrak lists as available for fleet status or undergoing routine maintenance
Passenger Railroad Car Purchases by Year as reported by BTS (Does not include locomotives)
1975 – 109
1980 – 109
1990 – 58
1994 – 64
1995 – 76
1996 – 92
1997 – 10
2000 – 26
(No figures available after 2000)
Today, Amtrak has 1,551 fewer cars than it did in 2002, mostly due to older equipment being sold for scrap by previous Amtrak stewards, and Amtrak allowing too many cars to go onto the wreck line for minor maintenance issues which Amtrak chooses not to pay for to restore the cars to service.
Again, Amtrak has intentionally created false passenger constraints by simply not providing enough equipment to haul passengers based on demand. While Amtrak’s Amen Corner choruses will incorrectly claim this is the fault of the federal government due to alleged under funding, the reality is Amtrak never requests funding for large equipment orders, nor does it explore viable options through bootstrapping equipment leasing schemes. Instead, Amtrak is content to annually ask for free federal monies to supplement its operations instead of searching for viable ways to support itself, perhaps, say, with the fabulous idea of hauling more passengers instead of seeking subsidies.
4) Most Amtrak supporters suffer from the unbecoming disease of modal envy, that scurrilous malady which forces people to think that just because some other mode of transportation has to have free federal monies to keep it solvent, so does passenger rail.
Here are the numbers – again, from BTS – published in Federal Subsidies to Passenger Transportation in December 2004
[Begin quote]
Executive Summary
Recent work in the private sector and current policy debates have refocused attention on Federal subsidies to passenger transportation modes. To provide the Department of Transportation with an independent analysis of this issue, BTS developed data on federal transportation revenues, expenditures, and net subsidies, by mode. Subsidy, for the purpose of this analysis, represents a simple accounting calculation of the net flow of funds to or from the federal government for individual transportation modes. The excess of expenditures over revenues is the net subsidy. To show the amount of subsidy relative to the level of use of transportation infrastructure, we normalized the data by dividing the absolute net subsidy values by passenger-miles.
Highways
Users of the highway passenger transportation system paid significantly greater amounts of money to the federal government than their allocated costs in 1994-2000. This was a result of the increase in the deficit reduction motor fuel tax rates between October 1993 and September 1997, and the increase in Highway Trust Fund fuel tax rates starting in October 1997.
School and transit buses received positive net federal subsidies over the 1990-2002 period, but autos, motorcycles, pickups and vans, and intercity buses paid more than their allocated cost to the federal government.
On average, highway users paid $1.91 per thousand passenger-miles to the federal government over their highway allocated cost during 1990-2002.
Passenger Rail
The net federal subsidy to passenger railroads was the third largest, except for the years 1998-2000, when it was second. The Taxpayer Relief Act of 1997 provided Amtrak with a tax credit in the amount of $2.18 billion in current dollars that caused the net federal subsidy to increase dramatically in 1998 and 1999.
Passenger rail received the largest subsidy per thousand passenger-miles, averaging $186.35 per thousand passenger-miles during 1990-2002.
Transit
Between 1990 and 2002, transit received the largest amount of net federal subsidy, increasing from $5.09 billion to $7.31 billion, an increase of 3% per year. Next to passenger rail, transit received the next highest net federal subsidy per thousand passenger-miles for the period, averaging $118.26 in year 2000 chained dollars.
Air
After transit, air transportation received the second largest net federal subsidy, except for the period from 1998 to 2000, when rail was second. Subsidies declined in 1998-2000 as a result of the increase in federal receipts from aviation users associated with the Taxpayer Relief Act of 1997, which increased existing aviation excise tax rates and introduced new taxes as of October 1, 1997.
Net federal subsidy per thousand passenger-miles for air increased between 1990 and 1996 and then declined from 1997 to 2000, before rising again in 2001 and 2002. The decline during 1997-2000 was caused by the increase in federal receipts from aviation users as a result of the increase in the existing excise tax rates and the introduction of new taxes in 1997, which preceded increases in expenditures.
[End quote]
So, for you in the back of the room sleeping, let’s have a quick review. Out of the 10 modes of transportation measured by the federal government, Amtrak is ranked ninth (9th) in market share, only above “Other Transit,” which includes such modes as “demand response, ferryboat, and other transit not specified.”
Being ninth in line – passenger automobiles, other passenger vehicles such as SUVs, and air being the top three modes – Amtrak in some recent years has received the second largest net federal subsidy, and often received the third largest net federal subsidy. To repeat part of the quote above: “Passenger rail received the largest subsidy per thousand passenger-miles, averaging $186.35 per thousand passenger-miles during 1990-2002.”
Please, stop the modal envy. Amtrak is cleaning up when it comes to free federal monies. Every other mode should be jealous of Amtrak, not the other way around.
5) Where are we in the Winter of 2009? Amtrak is statistically irrelevant. But, even if it gains just one percent of the national transportation market share, it can be self-sustaining without annual federal funds. This doesn’t mean it has to go private (as appealing as that is to many people), but it does mean it doesn’t have to live and die by the will of reluctant lawmakers who constantly use Amtrak as a political pawn.
Prior to the introduction of the Boeing 707 jet aircraft and the building of the Eisenhower Interstate Highway System, passenger rail had the vast majority of market share in North America for moving passengers. Those days will never be repeated, mostly because there are too many good alternatives to passenger rail. But, passenger rail has tremendous growth potential to regain enough business to make it relevant.
Put all of the annoying tree-hugging arguments aside. Make a modern case for the business of passenger rail. Take visionary schemes like Gil Carmichael’s Interstate II and make them a reality, tugging passenger rail along for the ride.
Most people don’t ride a train for four main reasons: either they don’t know train service is available, today’s embarrassingly skeletal offerings are too inconvenient, no Amtrak service is available to them, or they have joined the thousands of legions of “never again” passengers Amtrak has mistreated in one way or another over the past nearly four decades.
The next time you hear a politician or political commentator griping about Amtrak, just be grateful they even know enough about passenger rail to complain about it. Statistically, Amtrak should never even be a topic of conversation, it’s so insignificant.
As soon as Amtrak management embraces a true growth strategy which includes good passenger service, then Amtrak will become more and more relevant. As long as Amtrak chooses to remain a ghost of America’s past transportation glory, it will be unimportant to almost everyone except Amtrak’s Amen Corner choruses, who are often Amtrak’s worst enemies in disguise because of the enabling they provide for poor management and bad business decisions.
6) We promised last week more in this issue about Amtrak’s winter naughtiness and the appalling lack of functioning locomotives outside of the Northeast Corridor. We promise – really – to address this topic in the next issue of TWA. We’re still gathering information, and had hoped to have more by this point in time.
If you are reading someone else’s copy of This Week at Amtrak, you can receive your own free copy each week by sending your e-mail address to
freetwa@unitedrail.org
You MUST include your name, preferred e-mail address, and city and state where you live. If you have filters or firewalls placed on your Internet connection, set your e-mail to receive incoming mail from twa@unitedrail.org; we are unable to go through any individual approvals processes for individuals. This mailing list is kept strictly confidential and is not shared or used for any purposes other than the distribution of This Week at Amtrak or related URPA materials.
All other correspondence, including requests to unsubscribe, should be addressed to
brucerichardson@unitedrail.org
URPA leadership members are available for speaking engagements.
J. Bruce Richardson
President
United Rail Passenger Alliance, Inc.
1526 University Boulevard, West, PMB 203
Jacksonville, Florida 32217-2006 USA
Telephone 904-636-7739
brucerichardson@unitedrail.org
http://www.unitedrail.org
United Rail Passenger Alliance, Inc.
America’s foremost passenger rail policy institute
1526 University Boulevard, West, PMB 203 • Jacksonville, Florida 32217-2006 USA
Telephone 904-636-7739, Electronic Mail info@unitedrail.org • http://www.unitedrail.org
Volume 6, Number 4
Founded over three decades ago in 1976, URPA is a nationally known policy institute that focuses on solutions and plans for passenger rail systems in North America. Headquartered in Jacksonville, Florida, URPA has professional associates in Minnesota, California, Arizona, New Mexico, the District of Columbia, Texas, and New York. For more detailed information, along with a variety of position papers and other documents, visit the URPA web site at http://www.unitedrail.org.
URPA is not a membership organization, and does not accept funding from any outside sources.
1) Inquiring minds have wanted to know for a long time why Amtrak never wants to report its metrics by standard measures used by all other types of common carriers, not to mention federal government reporting agencies such as the Bureau of Transportation Statistics.
The reason is, Amtrak has a dirty little secret it doesn’t want anyone to know or figure out: Statistically, Amtrak is completely irrelevant as a part of our domestic transportation network.
New figures have been released by BTS this month. The latest figures available from BTS are for 2006, but that doesn’t matter, because Amtrak’s figures are so very low, even if they were doubled Amtrak would still be statistically irrelevant.
BTS 2006 Statistics, Market Share by Mode
Air – 11.07%
Passenger cars – 49.82%
Other 2 axle vehicles (Such as SUVs, pickup trucks, etc;) – 35.38%
Busses – 2.78%
Motorcycles – 0.30%
Rail transit – 0.31%
Rail commuter – 0.19%
Amtrak – 0.10%
Other transit – 0.04%
Just in case you think you read that Amtrak figure incorrectly, it’s one tenth of one percent market share. Yes, far less than a single percentage point.
If you are doling out free federal monies in Washington, how high would that be on your priority list? Amtrak has certain members of Congress who will ALWAYS offer amendments to bills and other devices to defund Amtrak. When you look at Amtrak’s true numbers, you have to wonder why not more members of Congress don’t do the same thing? Just looking at raw numbers, Amtrak is not only a loser, but it’s a colossal loser, and screams government waste and boondoggle to rational people.
If you are a political commentator of any stripe and are accustomed to either flying everywhere or driving to any destination (especially if you live outside of the Northeast), you can see why Amtrak receives little or no support for a future as part of our domestic transportation network.
When someone cries “Close it! Sell it! Dismantle it!” they are doing so from a practical economic standpoint. Amtrak is, in the eyes of anyone doing cold, hard, analysis, unimportant. If Amtrak went away – even (gasp!) in the Northeast – there would be little, if any, impact on any roadway crowding. Even as heavy as traffic is on Northeast interstate highways, Amtrak’s daily passengers could still easily be absorbed onto busses, vans, and in automobiles.
Now, you see why Amtrak only wants to talk about warm bodies/passenger counts. Amtrak says it carries about 26 million passengers a year, for an average of 70,000 passengers a day on its over 300 trains (most of which are Northeast Corridor trains) a day (including the two tri-weekly trains, the Sunset Limited and the Cardinal).
What this tells us is a completely new approach is needed to “sell” passenger rail in North America. VIA Rail Canada isn’t much different from Amtrak in terms of percentage of population it serves; the only real difference is VIA has some social service routes which are critical to the inhabitants of remote parts of various provinces where no real roads exist. VIA and general aviation are still the only two forms of any type of transportation through or over some very desolate countryside.
Here’s the good news. It doesn’t take much to sell travelers on the potential of passenger train travel, especially Generation Y (people in their 20s) travelers. To many, train travel is a new and novel experience to be embraced and enjoyed.
If ever Amtrak gets away from insisting it must be the best kept secret in America, it will explode with riders.
Some otherwise well-respected authors are continuing the tedious and false drumbeat about Amtrak having to perpetually be a step-child of government, and how it can never come close to making money or even breaking even. Since this canard is constantly put before the public, more and more people blithely believe this drivel without bothering to check for themselves what the realities are about passenger rail in North America. Yes, as long as passenger rail commands one tenth of one percent of the traveling public’s market share, it will always have to be an unwanted child of government. It if ever gets just to one percent of market share, it will be a success both financially and socially, as long as the correct business plan is followed.
2) As rational individuals, we know body counts are worthless; revenue passenger miles are the defining figure of measurement.
Here are the same results for 2006, expressed in revenue passenger miles instead of percentages (in millions).
Air – 590,633
Passenger cars – 2,658,621
Other 2 axle vehicles (Such as SUVs, pickup trucks, etc;) – 1,887,997
Busses – 148,485
Motorcycles – 15,750
Rail transit – 16,587
Rail commuter – 10,361
Amtrak – 5,410
Other transit – 2,221
Amtrak still comes out on the bottom, no matter how you express the data.
If the presumption was made that every Amtrak passenger was unique every year (every passenger used Amtrak only one way for one trip a year), then Amtrak would be serving about 8.5% of the population of the United States. However, since the vast majority of Amtrak’s riders use the train as a round-trip service, and over half of Amtrak’s riders use NEC trains on a frequent basis, it’s safe to say Amtrak actually serves well under 3% of the population of the United States – again, making the service statistically irrelevant.
2) Let’s look at some other figures and trends, all courtesy of the Bureau of Transportation Statistics.
Here’s a breakdown of U.S. passenger miles by mode over an extended period of time (figures in millions).
Air Passenger Miles
1960 – 33,399
1965 – 57,626
1970 – 117,542
1975 – 147,400
1980 – 219,068
1985 – 290,136
1990 – 358,873
1995 – 414,688
2000 – 531,329
2005 – 583,689
2006 – 590,633
Highway Passenger Miles (Combined passenger car, motorcycle, two-axle passenger vehicles)
1960 – 1,272,078
1965 – 1,555,237
1970 – 2,042,002
1975 – 2,404,954
1980 – 2,653,510
1985 – 3,012,953
1990 – 3,561,209
1995 – 3,868,070
2000 – 4,390,076
2005 – 4,887,945
2006 – 4,933,689
Transit Passenger Miles (Combined bus, light rail, heavy rail, trolley bus, commuter rail)
1960 – NA
1965 – NA
1970 – NA
1975 – NA
1980 – 39,854
1985 – 39,581
1990 – 41,143
1995 – 39,808
2000 – 47,666
2005 – 49,680
2006 – 52,154
Passenger rail/Intercity, Amtrak Passenger Miles
1960 – 17,064
1965 – 13,260
1970 – 6,179
1975 – 3,931
1980 – 4,503
1985 – 4,825
1990 – 6,057
1995 – 5,545
2000 – 5,498
2005 – 5,381
2006 – 5,410
Additional figures compiled by URPA from Amtrak data
2007 – 5,653
2008 – 6,159
Figures for prior to 1990 are only reported in five year increments. What’s interesting about the passenger rail figures is the huge drop – over 50% – from 1965 to 1970, a period still prior to Amtrak when most railroads were still running private passenger trains under government regulation.
The drop from 1970 to 1975 includes the introduction of Amtrak with its skeletal national system and the removal of most remaining passenger trains in the country. Since the directed mission from the United States Department of Transportation in the creation of Amtrak was to determine what formerly private railroad routes could be considered sustainable after the creation of Amtrak, it’s obvious just the very creation of Amtrak instituted a false capacity constraint on passenger rail.
The total figure of revenue passenger miles for 2008 – Amtrak’s best year ever – is still below that of 1970, the year before Amtrak started service and private railroads were still operating passenger trains under government mandate.
What does this tell us? From the very beginning, by government directive, Amtrak has placed a false restraint on passenger demand in the United States. Even as bad as the last years of private passenger trains were by some railroads hoping to scare away passengers and only operate the barest of services, the public still wanted to ride trains. Not everyone wants to fly, and not everyone wants to travel by private automobile, no matter how wonderful the Eisenhower Interstate Highway System may be.
What would have happened if Amtrak would not have falsely constrained demand? What would happen if Amtrak was not America’s best kept secret? What would happen if Amtrak’s senior management was actually interested in making the company a success rather than living off of the sour fruits of payments from state treasuries to run intrastate services at high prices while offering low value and bad service?
3) How did Amtrak falsely constrain demand? Let us count the ways, using higher math, of course, because simple arithmetic can’t handle the numbers.
Amtrak has consistently replaced its original fleet inherited from the private railroads with fewer and fewer cars. Here are the numbers.
Passenger Railroad Cars (Does not include locomotives)
1970 – 1,569
1980 – 2,128
1990 – 1,863
1994 – 1,852
1995 – 1,722
1996 – 1,730
1997 – 1,728
1998 – 1,962
1999 – 1,992
2000 – 1,894
2001 – 2,084
2002 – 2,896
2003 – 1,623
2004 – 1,211
2005 – 1,186
2006 – 1,191
2009 – 1,505 plus 140 state owned, but operated by Amtrak, for a total of 1,645
2009 – 1,345 active cars Amtrak lists as available for fleet status or undergoing routine maintenance
Passenger Railroad Car Purchases by Year as reported by BTS (Does not include locomotives)
1975 – 109
1980 – 109
1990 – 58
1994 – 64
1995 – 76
1996 – 92
1997 – 10
2000 – 26
(No figures available after 2000)
Today, Amtrak has 1,551 fewer cars than it did in 2002, mostly due to older equipment being sold for scrap by previous Amtrak stewards, and Amtrak allowing too many cars to go onto the wreck line for minor maintenance issues which Amtrak chooses not to pay for to restore the cars to service.
Again, Amtrak has intentionally created false passenger constraints by simply not providing enough equipment to haul passengers based on demand. While Amtrak’s Amen Corner choruses will incorrectly claim this is the fault of the federal government due to alleged under funding, the reality is Amtrak never requests funding for large equipment orders, nor does it explore viable options through bootstrapping equipment leasing schemes. Instead, Amtrak is content to annually ask for free federal monies to supplement its operations instead of searching for viable ways to support itself, perhaps, say, with the fabulous idea of hauling more passengers instead of seeking subsidies.
4) Most Amtrak supporters suffer from the unbecoming disease of modal envy, that scurrilous malady which forces people to think that just because some other mode of transportation has to have free federal monies to keep it solvent, so does passenger rail.
Here are the numbers – again, from BTS – published in Federal Subsidies to Passenger Transportation in December 2004
[Begin quote]
Executive Summary
Recent work in the private sector and current policy debates have refocused attention on Federal subsidies to passenger transportation modes. To provide the Department of Transportation with an independent analysis of this issue, BTS developed data on federal transportation revenues, expenditures, and net subsidies, by mode. Subsidy, for the purpose of this analysis, represents a simple accounting calculation of the net flow of funds to or from the federal government for individual transportation modes. The excess of expenditures over revenues is the net subsidy. To show the amount of subsidy relative to the level of use of transportation infrastructure, we normalized the data by dividing the absolute net subsidy values by passenger-miles.
Highways
Users of the highway passenger transportation system paid significantly greater amounts of money to the federal government than their allocated costs in 1994-2000. This was a result of the increase in the deficit reduction motor fuel tax rates between October 1993 and September 1997, and the increase in Highway Trust Fund fuel tax rates starting in October 1997.
School and transit buses received positive net federal subsidies over the 1990-2002 period, but autos, motorcycles, pickups and vans, and intercity buses paid more than their allocated cost to the federal government.
On average, highway users paid $1.91 per thousand passenger-miles to the federal government over their highway allocated cost during 1990-2002.
Passenger Rail
The net federal subsidy to passenger railroads was the third largest, except for the years 1998-2000, when it was second. The Taxpayer Relief Act of 1997 provided Amtrak with a tax credit in the amount of $2.18 billion in current dollars that caused the net federal subsidy to increase dramatically in 1998 and 1999.
Passenger rail received the largest subsidy per thousand passenger-miles, averaging $186.35 per thousand passenger-miles during 1990-2002.
Transit
Between 1990 and 2002, transit received the largest amount of net federal subsidy, increasing from $5.09 billion to $7.31 billion, an increase of 3% per year. Next to passenger rail, transit received the next highest net federal subsidy per thousand passenger-miles for the period, averaging $118.26 in year 2000 chained dollars.
Air
After transit, air transportation received the second largest net federal subsidy, except for the period from 1998 to 2000, when rail was second. Subsidies declined in 1998-2000 as a result of the increase in federal receipts from aviation users associated with the Taxpayer Relief Act of 1997, which increased existing aviation excise tax rates and introduced new taxes as of October 1, 1997.
Net federal subsidy per thousand passenger-miles for air increased between 1990 and 1996 and then declined from 1997 to 2000, before rising again in 2001 and 2002. The decline during 1997-2000 was caused by the increase in federal receipts from aviation users as a result of the increase in the existing excise tax rates and the introduction of new taxes in 1997, which preceded increases in expenditures.
[End quote]
So, for you in the back of the room sleeping, let’s have a quick review. Out of the 10 modes of transportation measured by the federal government, Amtrak is ranked ninth (9th) in market share, only above “Other Transit,” which includes such modes as “demand response, ferryboat, and other transit not specified.”
Being ninth in line – passenger automobiles, other passenger vehicles such as SUVs, and air being the top three modes – Amtrak in some recent years has received the second largest net federal subsidy, and often received the third largest net federal subsidy. To repeat part of the quote above: “Passenger rail received the largest subsidy per thousand passenger-miles, averaging $186.35 per thousand passenger-miles during 1990-2002.”
Please, stop the modal envy. Amtrak is cleaning up when it comes to free federal monies. Every other mode should be jealous of Amtrak, not the other way around.
5) Where are we in the Winter of 2009? Amtrak is statistically irrelevant. But, even if it gains just one percent of the national transportation market share, it can be self-sustaining without annual federal funds. This doesn’t mean it has to go private (as appealing as that is to many people), but it does mean it doesn’t have to live and die by the will of reluctant lawmakers who constantly use Amtrak as a political pawn.
Prior to the introduction of the Boeing 707 jet aircraft and the building of the Eisenhower Interstate Highway System, passenger rail had the vast majority of market share in North America for moving passengers. Those days will never be repeated, mostly because there are too many good alternatives to passenger rail. But, passenger rail has tremendous growth potential to regain enough business to make it relevant.
Put all of the annoying tree-hugging arguments aside. Make a modern case for the business of passenger rail. Take visionary schemes like Gil Carmichael’s Interstate II and make them a reality, tugging passenger rail along for the ride.
Most people don’t ride a train for four main reasons: either they don’t know train service is available, today’s embarrassingly skeletal offerings are too inconvenient, no Amtrak service is available to them, or they have joined the thousands of legions of “never again” passengers Amtrak has mistreated in one way or another over the past nearly four decades.
The next time you hear a politician or political commentator griping about Amtrak, just be grateful they even know enough about passenger rail to complain about it. Statistically, Amtrak should never even be a topic of conversation, it’s so insignificant.
As soon as Amtrak management embraces a true growth strategy which includes good passenger service, then Amtrak will become more and more relevant. As long as Amtrak chooses to remain a ghost of America’s past transportation glory, it will be unimportant to almost everyone except Amtrak’s Amen Corner choruses, who are often Amtrak’s worst enemies in disguise because of the enabling they provide for poor management and bad business decisions.
6) We promised last week more in this issue about Amtrak’s winter naughtiness and the appalling lack of functioning locomotives outside of the Northeast Corridor. We promise – really – to address this topic in the next issue of TWA. We’re still gathering information, and had hoped to have more by this point in time.
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This Week at Amtrak; January 23, 2009
A weekly digest of events, opinions, and forecasts from
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Volume 6, Number 3
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1) “What we’ve got here is failure to communicate.” is the famous line uttered by the late, great character actor Strother Martin to the even greater late Paul Newman in 1967's Cool Hand Luke movie. While Mr. Martin’s character, when addressing Mr. Newman’s character, was specifically talking about some perceived naughtiness by Mr. Newman’s character, we can use this famous line when referring to Amtrak, too.
When the House of Representatives version of the new Obama administration’s nearly $1 trillion stimulus plan was announced January 15th, Amtrak and passenger rail fans were agog at how little was included in the plan for the benefit of Amtrak. After all, Amtrak had recently requested over $7 billion in projects it felt were “shovel ready,” and, certainly, the thinking of so many went, no organization could be more worthy than Amtrak for free federal largess to help the economy get back on a solid footing.
Whoops! Amtrak was only allotted $1.1 billion in the House version, with the Senate still unheard from. But, you can bet the Senate version won’t be markedly different from the House version; maybe – at best – an extra billion, but nowhere near what the alleged cognoscenti thought would be coming the way of Amtrak and passenger rail. So, what happened (besides reality striking)?
First, let’s visit the most recent column, Volume 20, No. 2, released by Ken Orski and Innovation NewsBriefs, an always informative source for transportation infrastructure topics. (www.innobriefs.com)
[Begin quote]
January 18, 2009
The Stimulus Bill Leaves Most of the Transportation Community Dissatisfied
It looks like the economic stimulus proposal unveiled by the House Appropriations Committee on January 15 has left few in the transportation community satisfied. That’s a conclusion we have drawn from informal conversations at the just concluded annual meeting of the Transportation Research Board and from reviewing the National Journal’s Transportation Blog. (The stimulus program has been a focus of discussion on that blog during the past week. The blog can be found at www.transportation.nationaljournal.com). Voicing disappointment were members of the House transportation committee and a wide array of interest groups ranging from the highway users and the construction industry to transit and airport officials, labor unions and environmentalists. According to a January 15 Wall Street Journal story, some members of the House transportation committee protested at a congressional Democratic caucus session last Thursday against what they deemed a grossly inadequate level of funding for transportation projects. In a radio interview on "Marketplace" the same day, Highway and Transit Subcommittee Chairman Peter DeFazio (D-OR) made no attempt to hide his displeasure. He pointed out that the transportation sector has received a scant 7% of the proposed stimulus package despite the high potential of transportation funding to create jobs and revitalize the economy.
The House transportation leaders’ dissatisfaction was echoed by a wide variety of transportation stakeholders who voiced disappointment with what they felt was inadequate consideration of their particular needs. "Transportation infrastructure investment should be a core component of an economic stimulus plan," stated a Transportation Construction Coalition release, expressing the views of its leaders, the American Road & Transportation Builders Association (ARTBA) and the Associated General Contractors of America (AGC). Writing in the National Journal’s Transportation Blog, Terry O’Sullivan, President of the Laborers’ International Union (LIUNA) criticized the proposed level of infrastructure investment as falling "far short of needs and ... of the opportunity to invest in a way that can revive our economy and leave behind tangible assets and a positive legacy for generations to come." James C. May, President of the Air Transport Association thought the House missed a real opportunity to create new jobs by failing to invest more in the aviation sector.
Environmental spokesmen such as Deron Lovaas, Transportation Policy Director of the Natural Resources Defense Council and Geoff Anderson, Co-Chair of the liberal Transportation for America Campaign, were blunt in criticizing the House proposal, calling its allocation to mass transit and passenger rail as inadequate and disproportionately low compared to the highway allocation. Other environmental activists decried the House bill in even stronger terms, calling it "disastrous," a "capitulation" and completely lacking any emphasis on "fix-it-first," "green" transportation projects.
The House Appropriations Committee’s $825 billion draft bill (with $550 billion in spending initiatives and $275 billion in tax cuts) would dedicate $30 billion to highways, $9 billion to public transportation, $3 billion to airport runway projects and $1.1 billion to Amtrak and intercity passenger rail. An additional $7.75 billion would be spent on flood control, navigation and public lands infrastructure. The House proposal would require a certain percentage of each state allocation to be distributed to metropolitan planning organizations (MPOs), based on population. In selecting projects, the draft bill specifies that priority should be given to projects that are in an approved Transportation Improvement Program and can be contracted within 120 days. Grant recipients must certify that the projects contribute to job creation and are an appropriate use of taxpayer dollars. (The draft bill can be found at http://appropriations.house.gov/pdf/recoveryreport01-15-09.pdf)
Short-term vs Long-term Benefits
What kind of projects deserve to be funded has been likewise a subject of debate. Opinion is roughly divided between those who view the short term economic impact and job creation as the primary (or sole) goals of the stimulus program, and those who view the stimulus as an opportunity to invest in the country’s infrastructure and achieve long-term benefits. "Unless we spend those dollars on the right things (which requires a plan) and efficiently (which requires non-political iron handed oversight) we will ... fail to create the infrastructure needed to support an economy vigorous enough to repay the dollars we are spending," wrote Robert Crandall, retired Chairman of American Airlines in the National Journal’s Transportation Blog. Steve Heminger, Executive Director of the San Francisco Bay Area’s Metropolitan Transportation Commission concurred, evoking the potential of the economic recovery program to launch major infrastructure projects such as those built during the New Deal, whose benefits, he pointed out, Bay Area residents enjoy to this very day.
Jeffrey Shane, former Deputy Secretary of Transportation, speculated that "a national ranking of the most productive transportation investments would look very different from the aggregation of a fifty-state wish list" but, he added, "let’s give our state authorities some credit for knowing what works." Bob Poole, Transportation Director at the Reason Foundation, observed that the process inherent in the stimulus bill "substitutes political priorities for economic priorities," and the use of existing allocation formulas spreads the money across the country rather than focusing funds on high-performing projects that offer maximum pay off. Polly Trottenberg, Executive Director of the Building America’s Future Coalition agreed, noting that "the political process may be producing a result which is at odds with what the public supports." She cited a Coalition-sponsored public opinion survey that stressed the importance of setting priorities and measuring outcomes.
As Steve Sandherr, AGC’s Chief Operating Officer pointed out, many of the details of the stimulus bill will inevitably change over the coming weeks. In fact, as one congressional source told us, the fight has only just begun. Over the next several weeks we shall see some of the most intense lobbying in recent history. The stakes are extremely high. State and municipal governments, the non-profit sector, businesses, and the construction industry are facing tremendous economic pressures and the stimulus bill offers for some of them a rare avenue of relief. The intensity of the lobbying is magnified by the promise of unprecedented sums of money dangled in front of the stakeholders. For example, the $39 billion stimulus allocation to surface transportation represents almost 80 percent of the entire FY 2008 appropriations for highways and transit ($49.9 billion)
Needed: A National Strategy for Infrastructure
Could the stimulus package influence the plans for a new surface transportation authorization later this year? One could argue that an injection of a substantial sum of stimulus money might lessen the need and the pressure for a prompt enactment of new surface transportation legislation. The longer it takes Congress to approve the stimulus bill, the easier it will be for lawmakers to put off consideration of a separate surface transportation bill. Faced with a crowded legislative agenda, congressional legislators might convince themselves that the immediate needs of the transportation program have been taken care of and can safely be postponed until 2010 or beyond. Of course, it can be argued that postponing the reauthorization by one year might not be such a bad thing after all. It would give Congress and the Obama Administration more breathing space to thoroughly reexamine the existing transportation policy and fundamentally restructure the federal program.
Contending that the economic recovery package is no substitute for a multi-year legislation will be House transportation leaders and an array of transportation interests. House Transportation and Infrastructure Committee Chairman James Oberstar (D-MN) has already announced that he plans to introduce and pass "the largest transportation investment package since the creation of the Interstate Highway System" (as much as $500 billion over six years). Transportation interest groups such as ARTBA, AASHTO, APTA and AGC will be solidly aligned behind the Chairman. Another strong advocate of a multi-year strategy of infrastructure investment is Pennsylvania Governor Ed Rendell. Speaking at a January 12 Brookings symposium on Infrastructure, Rendell observed that investment in infrastructure will have to continue long after the stimulus program has expired. He called for a long-term vision to finance major capital investments through a dedicated federal capital budget and a National Infrastructure Bank. (Unconfirmed reports at the end of the week had the National Infrastructure Bank proposal in real danger of being killed by opposition in the Senate Finance Committee).
The current debate surrounding the infrastructure priorities in the stimulus bill offers a preview of the debate later this year (or in 2010) about the structure and priorities of the new surface transportation legislation. But unlike the stimulus bill, the reauthorization will not have the benefit of easy, deficit-financed money. It will require either raising new funds through a politically risky gas tax increase or coming up with some new untried financing mechanisms. The authors of the transportation authorization will face a far more difficult challenge than simply allocating seemingly "free" money.
[End quote]
Let’s add to what Mr. Orski had to say. He’s given a good, broad picture of what it will take for infrastructure improvements.
We can safely conclude, without hesitation, part of the lack of funding for Amtrak projects has very much to do with two simple concepts: First, Amtrak remains America’s best kept secret, and second, Amtrak still only accounts for 1% (yes, one percent) of America’s transportation output, or, about the same as motorcycles.
So, Amtrak has a failure to communicate. When not that many people know – and, as a result, care – about you, why should a flood of funding come your way? Amtrak has burned so many bridges through the years by abandoning routes and stations (Often, stations just recently completed with local or state monies.), annoying Members of Congress in uncountable ways on just about every subject, and by ignoring glaring business opportunities on every level, it was/almost is not relevant in a national stimulus package discussion.
Now, everyone who understands the business of passenger rail and the desirability of passenger rail as a legitimate part of our domestic transportation network knows this is a golden opportunity for passenger rail to waddle up to Washington’s golden trough of money and gobble up some free federal monies. The question is, will Amtrak be able to get its snout close enough to the trough to slurp up a few dollars?
2) Even before the Obama administration was inaugurated last Tuesday, the criticism began to flow after the announcement of the stimulus plan spending allocations. It only took seconds for Internet bloggers to reach a high pitched whine about the lack of support for Amtrak, especially since “Amtrak Joe,” (that would be Vice President Joe Biden, dubbed Amtrak Joe by the news media) used to commute daily on Amtrak between his Wilmington, Delaware home and Washington when he was serving in the Senate. It seems more than one blogger made the incorrect assumption that since Amtrak Joe was now just a heartbeat away from the presidency, and his son is Vice Chairman of the Amtrak Board of Directors, Amtrak’s worries about federal funding were at an end.
Wrong, of course. All of these misguided, yet hopeful, Internet bloggers forgot to take into account how Washington works. No matter who Amtrak has as an abstract friend, it still has to prove it’s worthy of extra funding, especially when the federal budget is in a huge deficit mode.
What it’s going to take is honest hard work, backed up by real documentation – not Amtrak’s and it’s wholly owned lapdog organizations’ hyperbole – demonstrating money spent is money well spent.
Anything worth having is worth working for, and that includes free federal monies.
3) Paul Dyson, the take-no-prisoners president of the Rail Passenger Association of California has sent a letter to Amtrak Interim President and Chief Executive Office Joseph Boardman. Here’s is Mr. Dyson’s letter. We can only hope all other state association presidents are being this proactive and sending similar letters at the earliest possible moment.
[Begin quote]
16th January, 2009
Mr. Joseph H. Boardman
President and Chief Executive Officer
NATIONAL RAILROAD PASSENGER CORPORATION
60 Massachusetts Avenue, NE
Washington, DC 20002
Via Fax to 202 906 2850 (2 Pages)
AMTRAK ROLLING STOCK INVESTMENT PLANS
Dear Mr. Boardman:
As you take up your new duties as President of Amtrak, albeit so far on temporary assignment, we’d like to draw your attention to some distressing tendencies in Amtrak policy over recent years. We refer in particular to the geographic imbalance of Amtrak investment, and the capital starvation of service west of the Mississippi. It has been the case for some years now that 95%, more or less, of Amtrak’s capital budget has gone to the NEC, and at the same time most of the long distance trains in the west have had almost no new equipment since the 1970s. If this trend is continued, and the current 5-year rolling stock plan indicates that it will be, then trains such as the Coast Starlight and the Empire Builder will cease to operate for want of serviceable cars in a few short years. Our Board believes that this will be both politically and economically disastrous for the future of passenger rail in the USA.
We believe that you should quickly review this policy and redress this imbalance as soon as possible. Consider these points:
• Even though Amtrak owns the NEC, it is the minority user as far as trains and passengers are concerned. The commuter agencies that share the route need to contribute more to bringing the route up to date and into good order. We do not advocate starving the NEC, or any other market, of appropriate capital resources, but it would be just as foolish to continue to starve productive western routes.
• We see no regulatory reason why Amtrak should expect the State of California or other western states to provide the rolling stock and other capital improvements for trains on the existing National network. San Diego to San Luis Obispo for example is part of this network and is every bit as deserving of its share of Amtrak’s capital investment as any other route in the country. Since most journeys, even in the shorter state corridors, are longer than most journeys in the NEC, we believe that the western routes are more productive in revenue and passenger miles, and can generate a better return on investment.
• Both the California corridors and the long distance trains need new cars. We believe that these cars can be built using a common hull and many standard components. Indeed the coach car can be common to all these services. We believe that Amtrak should immediately be placing an order for this type of equipment. A long term order with steady state production of say 2,000 cars will give the manufacturer and supplier the opportunity to reduce costs substantially.
We have started to take this message to the California congressional delegation. We are pointing out that California taxpayers are paying twice for Amtrak service, through federal and State taxes, and that this is not acceptable. While most of our elected officials support Amtrak funding as a concept, very few understand the funding mechanisms and the direction in which the money flows. This is changing.
Mr. Boardman, we wish you every success in your new position. We’d be delighted if you could attend our Spring combined members meeting (date to be announced) in Los Angeles. We’d like to discuss these issues with you and give you the opportunity to meet a core group of passenger rail supporters.
Yours faithfully,
SIGNED
Paul J. Dyson
President, Rail Passenger Association of California
[End quote]
4) From Steven Aftergood and the Federation of American Scientists (Amtrak, are you paying attention? It’s time to mend your ways.):
[Begin quote/edited for relevancy]
Date: Thu, 22 Jan 2009
SECRECY NEWS
from the FAS Project on Government Secrecy
Volume 2009, Issue No. 7
January 22, 2009
Secrecy News Blog:
http://www.fas.org/blog/secrecy/
PRESIDENT OBAMA DECLARES "A NEW ERA OF OPENNESS"
In a breathtaking series of statements and executive actions, President Barack Obama yesterday announced "the beginning of a new era of openness in our country."
"For a long time now there's been too much secrecy in this city," he told reporters at a January 21 swearing-in ceremony.
"The old rules said that if there was a defensible argument for not disclosing something to the American people, then it should not be disclosed" (a paraphrase of the October 2001 policy statement of former Attorney General John Ashcroft). "That era is now over."
"Starting today, every agency and department should know that this administration stands on the side not of those who seek to withhold information, but those who seek to make it known," President Obama said.
Moreover, "I will also hold myself, as president, to a new standard of openness.... Information will not be withheld just because I say so. It will be withheld because a separate authority believes my request is well-grounded in the Constitution."
"Let me say it as simply as I can. Transparency and the rule of law will be the touchstones of this presidency."
Accordingly, the President issued several new policy statements. A new policy on Freedom of Information directed that "All agencies should adopt a presumption in favor of disclosure" and called for the Attorney General to develop new FOIA guidelines reflecting that principle. A broader statement on Transparency and Open Government directed agencies to "harness new technologies to put information about their operations and decisions online and readily available to the public," and ordered preparation of recommendations for an Open Government Directive. A new executive order rescinded an order issued by former President Bush that imposed increased restrictions on public access to presidential records.
The whole package gained immense force from the fact that it was presented on the President's first full day in office. (By comparison, the Clinton and Bush Administrations did not get around to addressing FOIA policy until October of their first year in office.) The actions closely tracked the recommendations of openness advocates, and they represented a personal commitment to openness and accountability that goes far beyond what any previous President has dared to offer.
Inevitably, several caveats are in order. A "presumption of disclosure" really only applies to records that are potentially subject to discretionary release, which is a finite subset of secret government information. Vast realms of information are sequestered behind classification barriers or statutory protections that remain unaffected by the new policy statements. "In the face of doubt, openness prevails," the President said. But throughout the government secrecy system, there is not a lot of doubt or soul-searching about the application of secrecy.
...
Secrecy News is written by Steven Aftergood and published by the Federation of American Scientists.
The Secrecy News Blog is at:
http://www.fas.org/blog/secrecy/
Steven Aftergood
Project on Government Secrecy
Federation of American Scientists
web: www.fas.org/sgp/index.html
email: saftergood@fas.org
voice: (202) 454-4691
[End quote]
Memo to Amtrak: At the earliest possible moment, many of us crave a better understanding of how you allocate expenses to all routes, especially the long distance routes. Also, please explain how the Northeast Corridor is considered profitable, even though not all of the expenses of ownership and operation are fully allocated, and many of the daily expenses of NEC operations are hidden in capital expenditure accounts, instead.
5) Amtrak has been unbelievably naughty this winter by constantly annulling trains in the Midwest and elsewhere (sometimes for days at a time) because of lack of working locomotives. These are not just issues related to cold weather, but issues related to outright neglect of the non-NEC locomotive fleet in order to not spend money on proper routine maintenance and repair of these valuable assets.
For the moment, the burning question is, why has William Crosbie, Amtrak vice president and chief operating officer, allowed this situation to deteriorate to such a degree as Amtrak is unable to fulfill its basic purpose of operating passenger trains on a routine basis? It’s impossible to blame this situation of a lack of funds; it’s a lack of management priorities. Mr. Boardman, what is being done about this deplorable situation?
More on this in the next issue of This Week at Amtrak.
6) An update on the last issue of TWA from Joe Vranich:
[Begin quote]
Hello Bruce,
A Google alert showed that you are attributing a definition of High Speed Rail to me being one of 180 MPH or more. Please note that I've never used that figure. I have used 150 MPH or more. At one time that speed could have been considered the "official" HSR definition under U.S. law when the IRS code was modified to permit tax-exempt bonds to be used to help finance HSR systems – provided trains reached (if I remember the language correctly) "sustained" speeds of 150 MPH or more.
BTW, the fastest HSR train in the world today is in China, between Beijing and Tianjin, at 217 MPH.
Hope you are well,
Joe Vranich
[End quote]
If you are reading someone else’s copy of This Week at Amtrak, you can receive your own free copy each week by sending your e-mail address to
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URPA leadership members are available for speaking engagements.
J. Bruce Richardson
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1526 University Boulevard, West, PMB 203
Jacksonville, Florida 32217-2006 USA
Telephone 904-636-7739
brucerichardson@unitedrail.org
http://www.unitedrail.org
United Rail Passenger Alliance, Inc.
America’s foremost passenger rail policy institute
1526 University Boulevard, West, PMB 203 • Jacksonville, Florida 32217-2006 USA
Telephone 904-636-7739, Electronic Mail info@unitedrail.org • http://www.unitedrail.org
Volume 6, Number 3
Founded over three decades ago in 1976, URPA is a nationally known policy institute that focuses on solutions and plans for passenger rail systems in North America. Headquartered in Jacksonville, Florida, URPA has professional associates in Minnesota, California, Arizona, New Mexico, the District of Columbia, Texas, and New York. For more detailed information, along with a variety of position papers and other documents, visit the URPA web site at http://www.unitedrail.org.
URPA is not a membership organization, and does not accept funding from any outside sources.
1) “What we’ve got here is failure to communicate.” is the famous line uttered by the late, great character actor Strother Martin to the even greater late Paul Newman in 1967's Cool Hand Luke movie. While Mr. Martin’s character, when addressing Mr. Newman’s character, was specifically talking about some perceived naughtiness by Mr. Newman’s character, we can use this famous line when referring to Amtrak, too.
When the House of Representatives version of the new Obama administration’s nearly $1 trillion stimulus plan was announced January 15th, Amtrak and passenger rail fans were agog at how little was included in the plan for the benefit of Amtrak. After all, Amtrak had recently requested over $7 billion in projects it felt were “shovel ready,” and, certainly, the thinking of so many went, no organization could be more worthy than Amtrak for free federal largess to help the economy get back on a solid footing.
Whoops! Amtrak was only allotted $1.1 billion in the House version, with the Senate still unheard from. But, you can bet the Senate version won’t be markedly different from the House version; maybe – at best – an extra billion, but nowhere near what the alleged cognoscenti thought would be coming the way of Amtrak and passenger rail. So, what happened (besides reality striking)?
First, let’s visit the most recent column, Volume 20, No. 2, released by Ken Orski and Innovation NewsBriefs, an always informative source for transportation infrastructure topics. (www.innobriefs.com)
[Begin quote]
January 18, 2009
The Stimulus Bill Leaves Most of the Transportation Community Dissatisfied
It looks like the economic stimulus proposal unveiled by the House Appropriations Committee on January 15 has left few in the transportation community satisfied. That’s a conclusion we have drawn from informal conversations at the just concluded annual meeting of the Transportation Research Board and from reviewing the National Journal’s Transportation Blog. (The stimulus program has been a focus of discussion on that blog during the past week. The blog can be found at www.transportation.nationaljournal.com). Voicing disappointment were members of the House transportation committee and a wide array of interest groups ranging from the highway users and the construction industry to transit and airport officials, labor unions and environmentalists. According to a January 15 Wall Street Journal story, some members of the House transportation committee protested at a congressional Democratic caucus session last Thursday against what they deemed a grossly inadequate level of funding for transportation projects. In a radio interview on "Marketplace" the same day, Highway and Transit Subcommittee Chairman Peter DeFazio (D-OR) made no attempt to hide his displeasure. He pointed out that the transportation sector has received a scant 7% of the proposed stimulus package despite the high potential of transportation funding to create jobs and revitalize the economy.
The House transportation leaders’ dissatisfaction was echoed by a wide variety of transportation stakeholders who voiced disappointment with what they felt was inadequate consideration of their particular needs. "Transportation infrastructure investment should be a core component of an economic stimulus plan," stated a Transportation Construction Coalition release, expressing the views of its leaders, the American Road & Transportation Builders Association (ARTBA) and the Associated General Contractors of America (AGC). Writing in the National Journal’s Transportation Blog, Terry O’Sullivan, President of the Laborers’ International Union (LIUNA) criticized the proposed level of infrastructure investment as falling "far short of needs and ... of the opportunity to invest in a way that can revive our economy and leave behind tangible assets and a positive legacy for generations to come." James C. May, President of the Air Transport Association thought the House missed a real opportunity to create new jobs by failing to invest more in the aviation sector.
Environmental spokesmen such as Deron Lovaas, Transportation Policy Director of the Natural Resources Defense Council and Geoff Anderson, Co-Chair of the liberal Transportation for America Campaign, were blunt in criticizing the House proposal, calling its allocation to mass transit and passenger rail as inadequate and disproportionately low compared to the highway allocation. Other environmental activists decried the House bill in even stronger terms, calling it "disastrous," a "capitulation" and completely lacking any emphasis on "fix-it-first," "green" transportation projects.
The House Appropriations Committee’s $825 billion draft bill (with $550 billion in spending initiatives and $275 billion in tax cuts) would dedicate $30 billion to highways, $9 billion to public transportation, $3 billion to airport runway projects and $1.1 billion to Amtrak and intercity passenger rail. An additional $7.75 billion would be spent on flood control, navigation and public lands infrastructure. The House proposal would require a certain percentage of each state allocation to be distributed to metropolitan planning organizations (MPOs), based on population. In selecting projects, the draft bill specifies that priority should be given to projects that are in an approved Transportation Improvement Program and can be contracted within 120 days. Grant recipients must certify that the projects contribute to job creation and are an appropriate use of taxpayer dollars. (The draft bill can be found at http://appropriations.house.gov/pdf/recoveryreport01-15-09.pdf)
Short-term vs Long-term Benefits
What kind of projects deserve to be funded has been likewise a subject of debate. Opinion is roughly divided between those who view the short term economic impact and job creation as the primary (or sole) goals of the stimulus program, and those who view the stimulus as an opportunity to invest in the country’s infrastructure and achieve long-term benefits. "Unless we spend those dollars on the right things (which requires a plan) and efficiently (which requires non-political iron handed oversight) we will ... fail to create the infrastructure needed to support an economy vigorous enough to repay the dollars we are spending," wrote Robert Crandall, retired Chairman of American Airlines in the National Journal’s Transportation Blog. Steve Heminger, Executive Director of the San Francisco Bay Area’s Metropolitan Transportation Commission concurred, evoking the potential of the economic recovery program to launch major infrastructure projects such as those built during the New Deal, whose benefits, he pointed out, Bay Area residents enjoy to this very day.
Jeffrey Shane, former Deputy Secretary of Transportation, speculated that "a national ranking of the most productive transportation investments would look very different from the aggregation of a fifty-state wish list" but, he added, "let’s give our state authorities some credit for knowing what works." Bob Poole, Transportation Director at the Reason Foundation, observed that the process inherent in the stimulus bill "substitutes political priorities for economic priorities," and the use of existing allocation formulas spreads the money across the country rather than focusing funds on high-performing projects that offer maximum pay off. Polly Trottenberg, Executive Director of the Building America’s Future Coalition agreed, noting that "the political process may be producing a result which is at odds with what the public supports." She cited a Coalition-sponsored public opinion survey that stressed the importance of setting priorities and measuring outcomes.
As Steve Sandherr, AGC’s Chief Operating Officer pointed out, many of the details of the stimulus bill will inevitably change over the coming weeks. In fact, as one congressional source told us, the fight has only just begun. Over the next several weeks we shall see some of the most intense lobbying in recent history. The stakes are extremely high. State and municipal governments, the non-profit sector, businesses, and the construction industry are facing tremendous economic pressures and the stimulus bill offers for some of them a rare avenue of relief. The intensity of the lobbying is magnified by the promise of unprecedented sums of money dangled in front of the stakeholders. For example, the $39 billion stimulus allocation to surface transportation represents almost 80 percent of the entire FY 2008 appropriations for highways and transit ($49.9 billion)
Needed: A National Strategy for Infrastructure
Could the stimulus package influence the plans for a new surface transportation authorization later this year? One could argue that an injection of a substantial sum of stimulus money might lessen the need and the pressure for a prompt enactment of new surface transportation legislation. The longer it takes Congress to approve the stimulus bill, the easier it will be for lawmakers to put off consideration of a separate surface transportation bill. Faced with a crowded legislative agenda, congressional legislators might convince themselves that the immediate needs of the transportation program have been taken care of and can safely be postponed until 2010 or beyond. Of course, it can be argued that postponing the reauthorization by one year might not be such a bad thing after all. It would give Congress and the Obama Administration more breathing space to thoroughly reexamine the existing transportation policy and fundamentally restructure the federal program.
Contending that the economic recovery package is no substitute for a multi-year legislation will be House transportation leaders and an array of transportation interests. House Transportation and Infrastructure Committee Chairman James Oberstar (D-MN) has already announced that he plans to introduce and pass "the largest transportation investment package since the creation of the Interstate Highway System" (as much as $500 billion over six years). Transportation interest groups such as ARTBA, AASHTO, APTA and AGC will be solidly aligned behind the Chairman. Another strong advocate of a multi-year strategy of infrastructure investment is Pennsylvania Governor Ed Rendell. Speaking at a January 12 Brookings symposium on Infrastructure, Rendell observed that investment in infrastructure will have to continue long after the stimulus program has expired. He called for a long-term vision to finance major capital investments through a dedicated federal capital budget and a National Infrastructure Bank. (Unconfirmed reports at the end of the week had the National Infrastructure Bank proposal in real danger of being killed by opposition in the Senate Finance Committee).
The current debate surrounding the infrastructure priorities in the stimulus bill offers a preview of the debate later this year (or in 2010) about the structure and priorities of the new surface transportation legislation. But unlike the stimulus bill, the reauthorization will not have the benefit of easy, deficit-financed money. It will require either raising new funds through a politically risky gas tax increase or coming up with some new untried financing mechanisms. The authors of the transportation authorization will face a far more difficult challenge than simply allocating seemingly "free" money.
[End quote]
Let’s add to what Mr. Orski had to say. He’s given a good, broad picture of what it will take for infrastructure improvements.
We can safely conclude, without hesitation, part of the lack of funding for Amtrak projects has very much to do with two simple concepts: First, Amtrak remains America’s best kept secret, and second, Amtrak still only accounts for 1% (yes, one percent) of America’s transportation output, or, about the same as motorcycles.
So, Amtrak has a failure to communicate. When not that many people know – and, as a result, care – about you, why should a flood of funding come your way? Amtrak has burned so many bridges through the years by abandoning routes and stations (Often, stations just recently completed with local or state monies.), annoying Members of Congress in uncountable ways on just about every subject, and by ignoring glaring business opportunities on every level, it was/almost is not relevant in a national stimulus package discussion.
Now, everyone who understands the business of passenger rail and the desirability of passenger rail as a legitimate part of our domestic transportation network knows this is a golden opportunity for passenger rail to waddle up to Washington’s golden trough of money and gobble up some free federal monies. The question is, will Amtrak be able to get its snout close enough to the trough to slurp up a few dollars?
2) Even before the Obama administration was inaugurated last Tuesday, the criticism began to flow after the announcement of the stimulus plan spending allocations. It only took seconds for Internet bloggers to reach a high pitched whine about the lack of support for Amtrak, especially since “Amtrak Joe,” (that would be Vice President Joe Biden, dubbed Amtrak Joe by the news media) used to commute daily on Amtrak between his Wilmington, Delaware home and Washington when he was serving in the Senate. It seems more than one blogger made the incorrect assumption that since Amtrak Joe was now just a heartbeat away from the presidency, and his son is Vice Chairman of the Amtrak Board of Directors, Amtrak’s worries about federal funding were at an end.
Wrong, of course. All of these misguided, yet hopeful, Internet bloggers forgot to take into account how Washington works. No matter who Amtrak has as an abstract friend, it still has to prove it’s worthy of extra funding, especially when the federal budget is in a huge deficit mode.
What it’s going to take is honest hard work, backed up by real documentation – not Amtrak’s and it’s wholly owned lapdog organizations’ hyperbole – demonstrating money spent is money well spent.
Anything worth having is worth working for, and that includes free federal monies.
3) Paul Dyson, the take-no-prisoners president of the Rail Passenger Association of California has sent a letter to Amtrak Interim President and Chief Executive Office Joseph Boardman. Here’s is Mr. Dyson’s letter. We can only hope all other state association presidents are being this proactive and sending similar letters at the earliest possible moment.
[Begin quote]
16th January, 2009
Mr. Joseph H. Boardman
President and Chief Executive Officer
NATIONAL RAILROAD PASSENGER CORPORATION
60 Massachusetts Avenue, NE
Washington, DC 20002
Via Fax to 202 906 2850 (2 Pages)
AMTRAK ROLLING STOCK INVESTMENT PLANS
Dear Mr. Boardman:
As you take up your new duties as President of Amtrak, albeit so far on temporary assignment, we’d like to draw your attention to some distressing tendencies in Amtrak policy over recent years. We refer in particular to the geographic imbalance of Amtrak investment, and the capital starvation of service west of the Mississippi. It has been the case for some years now that 95%, more or less, of Amtrak’s capital budget has gone to the NEC, and at the same time most of the long distance trains in the west have had almost no new equipment since the 1970s. If this trend is continued, and the current 5-year rolling stock plan indicates that it will be, then trains such as the Coast Starlight and the Empire Builder will cease to operate for want of serviceable cars in a few short years. Our Board believes that this will be both politically and economically disastrous for the future of passenger rail in the USA.
We believe that you should quickly review this policy and redress this imbalance as soon as possible. Consider these points:
• Even though Amtrak owns the NEC, it is the minority user as far as trains and passengers are concerned. The commuter agencies that share the route need to contribute more to bringing the route up to date and into good order. We do not advocate starving the NEC, or any other market, of appropriate capital resources, but it would be just as foolish to continue to starve productive western routes.
• We see no regulatory reason why Amtrak should expect the State of California or other western states to provide the rolling stock and other capital improvements for trains on the existing National network. San Diego to San Luis Obispo for example is part of this network and is every bit as deserving of its share of Amtrak’s capital investment as any other route in the country. Since most journeys, even in the shorter state corridors, are longer than most journeys in the NEC, we believe that the western routes are more productive in revenue and passenger miles, and can generate a better return on investment.
• Both the California corridors and the long distance trains need new cars. We believe that these cars can be built using a common hull and many standard components. Indeed the coach car can be common to all these services. We believe that Amtrak should immediately be placing an order for this type of equipment. A long term order with steady state production of say 2,000 cars will give the manufacturer and supplier the opportunity to reduce costs substantially.
We have started to take this message to the California congressional delegation. We are pointing out that California taxpayers are paying twice for Amtrak service, through federal and State taxes, and that this is not acceptable. While most of our elected officials support Amtrak funding as a concept, very few understand the funding mechanisms and the direction in which the money flows. This is changing.
Mr. Boardman, we wish you every success in your new position. We’d be delighted if you could attend our Spring combined members meeting (date to be announced) in Los Angeles. We’d like to discuss these issues with you and give you the opportunity to meet a core group of passenger rail supporters.
Yours faithfully,
SIGNED
Paul J. Dyson
President, Rail Passenger Association of California
[End quote]
4) From Steven Aftergood and the Federation of American Scientists (Amtrak, are you paying attention? It’s time to mend your ways.):
[Begin quote/edited for relevancy]
Date: Thu, 22 Jan 2009
SECRECY NEWS
from the FAS Project on Government Secrecy
Volume 2009, Issue No. 7
January 22, 2009
Secrecy News Blog:
http://www.fas.org/blog/secrecy/
PRESIDENT OBAMA DECLARES "A NEW ERA OF OPENNESS"
In a breathtaking series of statements and executive actions, President Barack Obama yesterday announced "the beginning of a new era of openness in our country."
"For a long time now there's been too much secrecy in this city," he told reporters at a January 21 swearing-in ceremony.
"The old rules said that if there was a defensible argument for not disclosing something to the American people, then it should not be disclosed" (a paraphrase of the October 2001 policy statement of former Attorney General John Ashcroft). "That era is now over."
"Starting today, every agency and department should know that this administration stands on the side not of those who seek to withhold information, but those who seek to make it known," President Obama said.
Moreover, "I will also hold myself, as president, to a new standard of openness.... Information will not be withheld just because I say so. It will be withheld because a separate authority believes my request is well-grounded in the Constitution."
"Let me say it as simply as I can. Transparency and the rule of law will be the touchstones of this presidency."
Accordingly, the President issued several new policy statements. A new policy on Freedom of Information directed that "All agencies should adopt a presumption in favor of disclosure" and called for the Attorney General to develop new FOIA guidelines reflecting that principle. A broader statement on Transparency and Open Government directed agencies to "harness new technologies to put information about their operations and decisions online and readily available to the public," and ordered preparation of recommendations for an Open Government Directive. A new executive order rescinded an order issued by former President Bush that imposed increased restrictions on public access to presidential records.
The whole package gained immense force from the fact that it was presented on the President's first full day in office. (By comparison, the Clinton and Bush Administrations did not get around to addressing FOIA policy until October of their first year in office.) The actions closely tracked the recommendations of openness advocates, and they represented a personal commitment to openness and accountability that goes far beyond what any previous President has dared to offer.
Inevitably, several caveats are in order. A "presumption of disclosure" really only applies to records that are potentially subject to discretionary release, which is a finite subset of secret government information. Vast realms of information are sequestered behind classification barriers or statutory protections that remain unaffected by the new policy statements. "In the face of doubt, openness prevails," the President said. But throughout the government secrecy system, there is not a lot of doubt or soul-searching about the application of secrecy.
...
Secrecy News is written by Steven Aftergood and published by the Federation of American Scientists.
The Secrecy News Blog is at:
http://www.fas.org/blog/secrecy/
Steven Aftergood
Project on Government Secrecy
Federation of American Scientists
web: www.fas.org/sgp/index.html
email: saftergood@fas.org
voice: (202) 454-4691
[End quote]
Memo to Amtrak: At the earliest possible moment, many of us crave a better understanding of how you allocate expenses to all routes, especially the long distance routes. Also, please explain how the Northeast Corridor is considered profitable, even though not all of the expenses of ownership and operation are fully allocated, and many of the daily expenses of NEC operations are hidden in capital expenditure accounts, instead.
5) Amtrak has been unbelievably naughty this winter by constantly annulling trains in the Midwest and elsewhere (sometimes for days at a time) because of lack of working locomotives. These are not just issues related to cold weather, but issues related to outright neglect of the non-NEC locomotive fleet in order to not spend money on proper routine maintenance and repair of these valuable assets.
For the moment, the burning question is, why has William Crosbie, Amtrak vice president and chief operating officer, allowed this situation to deteriorate to such a degree as Amtrak is unable to fulfill its basic purpose of operating passenger trains on a routine basis? It’s impossible to blame this situation of a lack of funds; it’s a lack of management priorities. Mr. Boardman, what is being done about this deplorable situation?
More on this in the next issue of This Week at Amtrak.
6) An update on the last issue of TWA from Joe Vranich:
[Begin quote]
Hello Bruce,
A Google alert showed that you are attributing a definition of High Speed Rail to me being one of 180 MPH or more. Please note that I've never used that figure. I have used 150 MPH or more. At one time that speed could have been considered the "official" HSR definition under U.S. law when the IRS code was modified to permit tax-exempt bonds to be used to help finance HSR systems – provided trains reached (if I remember the language correctly) "sustained" speeds of 150 MPH or more.
BTW, the fastest HSR train in the world today is in China, between Beijing and Tianjin, at 217 MPH.
Hope you are well,
Joe Vranich
[End quote]
If you are reading someone else’s copy of This Week at Amtrak, you can receive your own free copy each week by sending your e-mail address to
freetwa@unitedrail.org
You MUST include your name, preferred e-mail address, and city and state where you live. If you have filters or firewalls placed on your Internet connection, set your e-mail to receive incoming mail from twa@unitedrail.org; we are unable to go through any individual approvals processes for individuals. This mailing list is kept strictly confidential and is not shared or used for any purposes other than the distribution of This Week at Amtrak or related URPA materials.
All other correspondence, including requests to unsubscribe, should be addressed to
brucerichardson@unitedrail.org
URPA leadership members are available for speaking engagements.
J. Bruce Richardson
President
United Rail Passenger Alliance, Inc.
1526 University Boulevard, West, PMB 203
Jacksonville, Florida 32217-2006 USA
Telephone 904-636-7739
brucerichardson@unitedrail.org
http://www.unitedrail.org
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