Discussing Privatization of the Northeast Corridor, but for What Aims?

» House Republicans suggest putting Amtrak’s primary line up for bids, but faith in the private sector is not enough to promote this change.

House Representative John Mica, a conservative Republican from central Florida and the Chairman of the Committee on Transportation and Infrastructure, has been berating Amtrak for years, so his announcement last week that he would promote the privatization of the Northeast Corridor comes as no surprise.

With Democrats still in control of the Senate and a Republican Party history of bringing up the issue and then promptly giving up in the 1980s and 90s — even when the GOP has controlled the Presidency or both houses of the Congress — any such plan is unlikely to move forward. Yet the question of the privatization of intercity railway operations in the United States will play a role in future debates, especially if the federal government continues to invest in new and improved rail networks. This may be the opening salvo in a years-long argument.

Before stepping into that, though, we need an honest discussion about the goals of the railway system and that of the transportation network in general. Is it there to generate profit for a small number of private corporations, or to ensure alternative mobility options to the largest possible percentage of the population? Should its operations be ultimately determined by surface-level profitability, or by public and political consensus?

Mr. Mica’s recent denunciations of the national railroad have come across as downright dogmatic: So convinced of the failures of Amtrak, he has been referring to it as a “Soviet-style” railroad. The committee released a chart showing little growth in Amtrak ridership along the corridor over the past thirty years to back up this notion.* Thus the committee chair’s privatization argument, founded in the broader modern conservative logic that claims — whatever the evidence suggests — that anything that the public sector does, the private sector can do better. For Mr. Mica, who is an adamant supporter of high-speed rail between Boston and Washington, this means that Amtrak’s current ownership of the Northeast Corridor is a stumbling block in the way of progress.

Instead of Amtrak’s 30-year, $117 billion proposal to build a new true high-speed link along the East Coast, Mr. Mica would produce the same benefitsin half the time and at significantly less cost,” thanks to private sector participation, which would be involved in building, designing, and operating the new system. His committee has yet to release any information showing how this could work.**

Avoiding the complicated issue of construction and focusing on operations alone, the committee compared Amtrak’s performance with that of Virgin Trains, which has since 1997 held the contract to operate the United Kingdom’s West Coast Main Line, connecting London with Birmingham, Manchester, and other cities. Mr. Mica made the claim that Virgin had been operationally profitable and been able to pay the government usage fees, compared to Amtrak, which he noted was subsidized. The U.K., which began the privatization of its railroads in the early 1990s, is the model the Florida congressman seems to be interested in imitating: The general idea, like in Great Britain, is to pull the Northeast Corridor itself out of the hands of Amtrak and hand it over to a new track-owning entity under the auspices of the Department of Transportation (the fate of the track section not owned by Amtrak in New York and Connecticut is unclear). Then private operators, potentially including Amtrak, would be able to bid out for operations rights.

This was an odd comparison to make, not only because Amtrak is operationally profitable in the Northeast Corridor, but also because Virgin’s history of operating trains in the U.K. has not been scot-free. Though ridership has increased more than expected, on-time performance of Virgin trains have never reached levels above 90%. Instead of paying £1 billion to the government as originally planned in the contract, the company actually received what were effectively £590 million in operating subsidies between 2002 and 2006, according to the National Audit Office (much of which was due to the government’s own poor contract writing).

And then there’s the fact that the U.K. government paid for most of the costs of the £9 billion upgrade to the West Coast Main Line that was completed in 2008. Can we compare Amtrak effectively to this history? The U.S. government certainly did not commit to a $15 billion upgrade of the Northeast Corridor over the past 15 years — in fact, the Northeast Corridor Master Plan, the last serious effort to improve the system, lasted between 1977 and 1998 and distributed only $6 billion to the line.

This is not to say that Virgin is a particularly bad example. Its peer companies have a history of dropping their contracts in order to avoid paying the government for the use of the railroad tracks. During the recession, several private companies simply determined that they could not handle the agreements they had signed just a few years before, putting several lines into public hands (which now are making a profit). But these failures do not “prove” anything: There is no evidence that a public sector entity would have done the same job more effectively. A well-functioning government service provider would have passed any profits or shareholder dividends back to the user or the government, arguably the better outcome — but how can we be sure that it would be well-functioning?

The irony for Mr. Mica is that Amtrak, especially in the Northeast, has been acting much like a private, profit-motivated company would. The company has prioritized profitability in its operations over expanded ridership: The growth of intercity buses between the region’s largest cities has been met with little decrease in rail prices, and that’s because Amtrak knows it can fill its trains even at higher fares. The continued operational profitability of the corridor in the face of this competition is indicative of this fact.

Why, then, bring up the issue? Because the value of the nation’s rail system is established by the policymakers determining how to distribute grants or to whom to award service contracts, whether they be to public or private entities. Alon Levy wrote pointedly last week that the major handicap to improved performance in the Northeast is not Amtrak but rather the Federal Railroad Administration, which determines the regulations that govern the operations of the railways. Public or private, these rules would have to be followed.

If Mr. Mica’s ambition is to improve rail services, a reasonable path must evaluate the risks and benefits associated with different models of transport operations. This might mean transferring control of the infrastructure to an independent entity, or altering regulations, or even promoting some competitive bidding for the rights to operate in certain rail corridors.

But a goal of moving yet another service out of public hands and into private ones mostly for the sake of denouncing government as a concept is one that cannot be accepted. The surface-level comparison Mr. Mica made between Amtrak and Virgin Trains is indicative of the lack of serious thought that has been devoted to this conversation thus far. We need to evaluate and determine the national vision for our transportation system, and then move on from there.

* There was no mention of the fact that Amtrak’s capacity problems are mostly structural, stemming from track conflicts with commuter railroads and an inability to buy new railcars until recently. Update, 31 May: Ross Capon of the National Association of Railroad Passengers notes that the decline in ridership cited by the committee was not accurate; the initial figures included New York to Philadelphia Clockers (turned over to New Jersey Transit in 2005) and trains between Philadelphia and Harrisburg, neither of which were included in the 2010 numbers. Comparing the same train service, Amtrak ridership on the Corridor increased from 7.7 million in 1981 to 10.4 million in 2010.

** Amtrak has recently announced that it will pursue partnerships with private investors on future improvements for the Corridor.

Image above: Amtrak Acela train, from Flickr user Angelo Leung (cc)

170 Comments | Leave a Reply »
  • I’ll give you a simple answer: HELL NO. Its just another Health Care-like privatization snow job.

    We don’t need privatization of critical public infrastructure. If we crawl down that rat’s nest, we’ll have private companies only selecting the most profitable routes to pay shareholders, not routes that transport the most people to reduce driving and short flights.

    Since Amtrak is already proving that it can run at a profit in the NEC, its far more valuable to the country to hold Amtrak accountable for transporting more patrons per dollar invested.

    • So would you call Japan’s current system of largely private passenger rail (both intercity and intracity) a “rat’s nest”? Not saying that Mica’s proposal will be anything like what they have in Japan, but as of 2002, it is undoubtedly a privatized system.

      • I’m eventually going to write about different privatization experiences… that of Japan, or the privatization-in-all-but-name of SNCF and DB, does lead to focusing on just the core markets. In fact over-focusing on marginal markets for political reasons is one of the two problems with infrastructure that privatization could solve, the other being labor costs and overstaffing.

        • Very much looking forward to this post! (Hopefully it will actually materialize, unlike 95% of the posts that I promise to do in the future.) I often think the same thing when I hear transit advocates say that unprofitable routes will be dropped, which to me just sounds like a good incentive for small towns to upzone areas for TOD so that they will keep their rail links.

          • Okay, done. You should really read the last link in the post – it’s a compendium of best practices for privatization, and I only read the parts of it about Japan.

          • Drewski

            Stephen, you can feel free to discuss the trillions of yen which have been poured into shinkansen lines over the past 40-odd years…money which the private sector is not paying back. What new lines are under construction with NO public money or public support? Not many. If you want to reach for one of the LGV projects Sarkozy has pushed as PPP, you can feel free to mention the various hidden or indirect costs.

            • Danny

              When a business is bought (which is what privatization is), you aren’t “refunding” all the money the previous owner sank into their business…you are only paying for the value of the business.

              The amount they sank into the business that didn’t contribute to the value of the business is irrelevant.

              It works that way for any property transfer. When you buy a house, you don’t have to pay extra for puke-green and neon-orange painted walls regardless of the fact that the previous owner spent thousands of dollars to paint them. In fact that investment, much like the investments that many government agencies make, actually reduces the value of the home.

            • Kind of. It’s true that the Japanese government wiped JNR’s debt after privatization, but it’s wrong to say that this is the cost of building the Shinkansen system. JNR started losing money in 1964, and covered its losses by borrowing rather than subsidy. It’s the interest on this debt that crushed it by the 1980s. By assuming the debt, the Japanese government retroactively subsidized JNR’s losses in its last two decades.

              (More on this later, in a post on my own blog, maybe.)

    • Jake

      Let’s see them privatize the interstate highways and state roads first, and then we’ll talk about Amtrak.

      • George

        Some roads in the DC metro area are public/private. A private, for profit entity manages one of the major roads that commuters take out by Dulles Airport (Dulles Greenway). The private company is planning year over year increases in the toll rates. Citizens complain to lawmakers but there’s nothing government can do because the for profit company now runs the road. You can’t fault them for wanting to make a profit, that’s what they signed up for. People who ride the roads (and rails) need to understand that once private companies build something they will charge what is actually needed to cover the maintenance AND provide a profit. When government builds something, maintenance costs are an afterthought (unfortunately). I guess this just allows government to raise their hands and say -It’s out of my control, I can’t help you- when infrastructure becomes privately owned and operated.

        • Drewski

          There’s an even better example of this, and it’s the 407 tollway just north of Toronto. In that case, not only did the province sell the project–not leased, but sold–but the province also surrendered the right-of-way itself. Tolls are among the highest in North America, and they keep going up. Failure to pay a toll on this private road can prevent you from renewing car registration. This has turned the government of Ontario into a(n unwilling) collection agent for a private road consortium, and the province has no recourse.

  • While I support privatization in theory, in practice anything Mica comes up with will probably be fatally flawed.

    However, I do very much take issue with you characterizing the debate about privatization as a choice between profit for private companies and mobility for all. You might not like Mica or the idea of privatization, but you cannot ignore the fact that its proponents don’t believe they have to make this choice, and that there is indeed some evidence that this is the case (see: Japan, turn-of-the-century USA).

    • Danny

      Exactly. It is a completely false binary choice.

      Those trainsets AND routes AND electrification technology AND switching technology AND construction technology would never have existed if it weren’t for profit-seeking private enterprise. If it weren’t for profit-seeking private enterprise, there wouldn’t have ever been any public transportation infrastructure to take over and there wouldn’t be any transportation solutions to build.

      • Adirondacker12800

        would never have existed if it weren’t for profit-seeking private enterprise.

        Would never would have existed, in the case of NY-DC anyway, without WPA loans and grants. The steam train would leave Washington DC’s Union Station and go to Harrison NJ where they changed engines for the short trip on electricity to NY. Or the steam train would stop in Harrison where passengers changed trains and the steam train continued on to the ferry terminal in Jersey City.

        • danny

          OMG…are you really going to nitpick about the existence of a tunnel?

        • Adirondacker12800

          The tunnel was there in 1910. They didn’t get around to actually doing more with it than shuttling people from Harrison NJ until the government came up with the money to do it.

      • ThomasD

        Danny and Stephen,

        The only two points I’ll concede as best for privatization are:

        * Autotrain from Virginia to Florida (its a freight business)
        * Compete for long distance routes like Empire Builder (Minneapolis-Seattle), City of New Orleans and California Zephyr

        Both are good candidates for privatization because speeds over 90 mph are not required. Hence, they do not require major public investment for grade separation, high platforms, fancy stations, catenary and track & switch upgrades.

        • But the long distance routes would be bidding for public lowest subsidy, since none of them will have a gross operating ratio over 100%.

          You risk getting into the mess that is the British rail privatization if its done by bits and pieces, and if you do it as a group, its just bidding to be Amtrak ~ a private company subsidized by government to provide services mandated by government.

          • jim

            The Autotrain does cover its avoidable costs. it also has no connections with the rest of the network, so it’s a detachable piece. If someone really wanted to experiment with privatization, it would be the logical candidate.

            The Palmetto also covers its avoidable costs, but that’s because the stations it calls at are also called at by the Silver Meteor and would have to be O&M’d even if the Palmetto were canceled. If the Palmetto were privatized and its operator had to pay a proportionate share of the costs of shared infrastructure, it would lose money.

            None of the other long distance trains even cover avoidable costs.

            • Can we universally assume that unavoidable costs have a sugar daddy guaranteeing that they will be paid? Or that there will not be user charges just because an analysis identifies the cost as unavoidable?

              Indeed, it can be a slippery dividing line when infrastructure is needed to support A, B and C, that all three of A, B, and C might claim that its not an avoidable cost because its needed for the other two anyway, so each of A, B and C could insist on taking a free ride on the unavoidable cost of supporting one or both of the other two. Per Piero Sraffa, joint product problems can be tricky.

            • Woody

              Jim, Are you sure about the Palmetto? If it’s covering avoidable costs, I’m glad to hear it. But there has to be a better explanation. South of D.C., the Palmetto only shares half a dozen stations with the Silver Meteor.

              And of course those aren’t the only long distance trains that share several stations on overlapping routes. Cleveland-Elyria-Sandusky-Toledo-Waterloo-Elkhart-South Bend-Chicago are shared by the Lake Shore Limited (NYC/Boston-Albany-Buffalo-Cleveland-Chicago) as well as the Capitol Limited (D.C.-Pittsburgh-Cleveland-Chicago).

              My hope for the long distance trains is to see more trains added to overlap the existing routes, while the busiest stretches develop into Higher Speed corridors.

              Chicago-Cleveland takes 6 hours now, but that time can be cut to 4 hours or less with 110-mph trains. Then simply having the Capitol Ltd arrive in Cleveland an hour before midnight, instead of an hour after, would add to the number of passengers from Chicago to Cleveland. Meanwhile there’d be savings from using the equipment four hours less on each round trip, and from reducing crew time as well.

              But tweaking a schedule or two isn’t enough. We really need to grow Amtrak, increasing frequencies, serving more places during daylight, and starting to add new long distance routes. So extend the Pennsylvanian (NYC-Philly-Pittsburgh) to -Cleveland-Chicago. Split the Lake Shore Limited into two trains, instead of two sections with one going to Boston and one to NYC. Now we’ve got four long distance trains piggybacking on that 110-mph, four-hour-or-less stretch Cleveland-Chicago, and at least one of them can surely pass thru Ohio in daylight hours!

              Or take the Empire Corridor (NYC-Albany-Syracuse-Rochester-Buffalo). At present it has a few in-state trains running NYC-Albany and a few more running NYC-Albany-Buffalo. AND on the same tracks, the Adirondacker (NYC-Albany-Montreal) AND the Maple Leaf (NYC-Albany-Buffalo-Toronto) AND the Ethan Alan (NYC-Albany-Rutland, VT) and that Lake Shore Limited with sections Boston- and NYC- joining in Albany and on to Buffalo-Cleveland-Chicago.

              The first rounds of HSR funds to NY State were quite limited, largely because the NYDOT simply wasn’t ready with plans. But a few projects got funded that will start to shave minutes off all the trains running all or part of NYC-Albany-Buffalo. Cutting an hour or two out of NYC-Albany-Buffalo will not be cheap (new signaling, a new bridge over the Hudson at Albany, special tracks for 110-mph trains, etc.). But when done it will chop the costs and raise the passenger counts on more than half a dozen Amtrak trains.

              The long distance trains will start to make money when they are faster in those sections where they become part of frequent corridor service linking fair-sized cities. This will require many billions more of investment — and especially a couple of billions for more railcars — but it can happen.

              • Adirondacker12800

                The double track between Albany and Schenectady shaves more than a few minutes. The trip time will more or less stay the same but they will be able to cut padding out of the schedules.

              • jim

                I’m not sure the Palmetto covers avoidable costs because Amtrak no longer reports avoidable costs (or “FRA defined costs” which are essentially the same thing). But in FY09 it almost did (fell $100K short) and since then ridership and revenue have substantially risen.

                The remark about the stations was more to point out that avoidable costs are an accounting entity, not necessarily a bottom-line number. One often hears from NARP and URPA that the Auto Train is profitable. But it’s not. It covers avoidable costs.

                I think the real reason the Palmetto does better than most long distance trains is it’s a day train. It isn’t hauling around sleepers and a diner (so it always uses just one locomotive). And it isn’t carrying an on-board staff to service them. So its costs are much lower. In FY10, the Palmetto cost $32.4M/yr to cover a 829 mile route. The Silver Meteor cost $80.9M/yr to cover a 1389 mile route which included the 829 mile Palmetto route. That’s a lot more! Even proportionately.

        • Danny

          What makes you think private businesses can’t invest in those things? History has proven otherwise.

          • Nathanael

            Underpriced competition from roads.

            Yep, if we go back to all private tollways, private business will RUSH back into passeger rail. RUSH. But is that what we want? Private businesses create an inefficient and poorly organized network, and they need government assistance to get the right-of-way ANYWAY.

            Transportation right-of-ways are a public good and don’t work as a private good.

        • Woody

          To divide and conquer is the political reason for splitting up Amtrak’s routes. Let’s not go chopping off the long distance routes to wither and die on their own. It IS possible to imagine a growing Amtrak system where those routes become profitable, or the loss is minimal and we can forget about it. So let’s not go carving out the profitable Auto Train or the profitable NEC, either, to leave Amtrak with only losers and no winners.

          However, I’d like to see a real estate development piece of Amtrak set up to capitalize on TOD around its stations. Amtrak should enter into partnerships where it puts land into a venture, and then remains a silent partner. The private partner raises funds to invest and develops the TOD, and they split the profits down the line.

          In many cases, the private partner, or the new partnership rather, would need to buy up adjoining lots or blocks to maximize the development opportunity, which Amtrak has no funds to do and no business doing. For example, if/when Penn Station South is built under the block 30th to 31st Strs between 7th and 8th Aves, that will become a prime site for one or more skyscrapers — and maybe some nearby sites will be as well.

          Meanwhile, the United Rail Passengers Alliance blog, http://www.unitedrail.org, this week suggested that all sleepers, dining cars, and related services had once been provided by the Pullman Company rather than by the individual railroads and their showpiece passenger trains. Hmmn. It’s a sort of flakey outfit but maybe this isn’t such a flakey notion. How about an experiment where private investors order up hundreds of new sleepers and dining cars, lounges, and dome cars, to provide the First Class accommodations and all refreshment services on some long distance trains, and see how that would work out.

          Or am I falling into the same trap? Amtrak thinks the sleepers/dining car services on the l.d. trains are profitable for the company. Alas, for 20 years or more it has failed to get funding to add to, or even update, the fleet of sleepers and diners. (Until part of a tiny, 125-car total order last year, to come on stream starting in Oct 2012). But is it a good idea to leave Amtrak with the low-revenue coach class service while private investors get all the gravy from the First Class tickets?

          • Nathanael

            You’re falling into the same trap. Given that a train is running already, adding sleepers generally reduces Amtrak’s losses on the train or increases its profits. (Assuming the trip is long enough for customers to want sleepers.) You should remind yourself of the markup charged for them, it easily pays for the car and the attendants and even the food, particularly on the eastern routes.

    • ThomasD

      Stephen Smith,

      For all the folks who want to sell our key transportation infrastructure, USDOT (taxpayer) money just made your job easier with NEC getting $1.7B this year. If Mica and Birds of Feather want to “walk the walk”, line up private companies to put up the additional $12B required under the State of Good Repair proposal by Amtrak to 2X-3X patronage. Any takers?

      . I thought so. Money talks, ____ walks.

      • Danny

        I know you think you are being cute by asking a question that you think nobody will respond to, but what happens when someone responds to it? Does that make you less cute?

        • ThomasD

          Danny,

          If its such a good idea, why don’t private companies invest the up front capital costs? Yes it sounds rhetorical, but the fact is no private company wants to take the lead on major capital costs for 160-220 mph HSR lines.

          If Mica and BOF want to do the country a favor, they should push Repubs to fund 160-220 mph HSR properly, revise HSR-unfriendly regulation, and then hold Amtrak and California HSR accountable for hitting construction/patronage/trip time milestones. They should also look for more aops where private businesses want to pay for a portion of train stations, nearby TOD and naming rights.

          In that scenario, Mica would have a stronger case for Amtrak to drop low-traffic corridors that have no chance to support HSR patronage-levels and future profitability.

          • Danny

            FRA restrictions, property taxes, and a historical tendency of destructive regulation whenever enough constituents complain. That is why.

            The NE corridor at its current levels of profitability and state of repair is probably worth less than a billion. But given its current density and potential for growth, it could be worth north of $20B. If it were just for the business merits of the NE Corridor alone, it probably never would have fallen into the hands of the public in the first place, and it certainly would have had a few bids by now.

            The idea that private investors are not willing to invest is bullshit. They have certainly done so in other countries. The idea that private investors aren’t willing to wait for a profit is also bullshit. A market cap of $200B and $50B in long term debt at Berkshire Hatheway shows that there are plenty of debt AND equity investors that believe some investments are worthy of the long haul.

            Just from a political perspective alone, I wouldn’t touch any Amtrak corridor with a ten foot stick…because even though I would be promising better service and frequency at lower prices, I would also be eliminating a few hundred government jobs. And if there is anything politicians hate more than the devil himself, it is losing government jobs (i.e. votes). It is a pity they couldn’t care as much about private sector jobs.

            • ThomasD

              Danny,

              If your argument is private investors won’t touch 200-220 mph HSR in America because of Federal Government jobs, then why don’t these private interests take the lead in California HSR. It will not be run by the Amtrak and it will avoid 90-95% of slow train ROW issues.

              Provided private interests keep the same well-concieved routes and frequencies in California (+ Las Vegas extension) I would bet that Boxer, Feinstein, Gov. Brown and CA mayors would love private investors to put up $25B towards California to match CHSRA’s $10B bond and $10B from the USDOT. They might even make arrangements for those private investors to purchase the public’s share provided service levels are maintained.

              And we’re talking investment a state of the art, best world practices system unlike Amtrak Acela sharing tracks with freight and commuter trains (except in stations). From an operating efficiency perspective, what I’ve read about CAHSRA is that it will transport many more passengers per Kilowatt Hour of Energy, per dollar of construction cost, and lower cost per passenger mile than Acela.

              I would like to be wrong on this. But in conclusion, if massive private investment won’t to lead in California HSR, where will it lead in America?

              • Danny

                Why would private investors invest any money in an agency that is practically unparalleled in its reputation for wasting money, in a state that is practically unparalleled in its reputation for wasting money?

                We have had private investors offer to build and run CA’s high speed rail system, but it is a complete nonstarter if CHSRA demands to run it. About as pointless as giving thousands of dollars to a bum in hopes that he would spend it on a college education.

  • Jason Lu

    I’d also like to point out not only Japan Rail, but also Taipei’s MRT, and Deutsche Bahn as examples of privatized rail service that do a good job. In my case, I’m all for privatizing if it is being given to the hands of a company that has experience with operating HSR (like JR or Deutsche Bahn).

    Amtrak has had its chance, and it’s simply too slow in development in my opinion. It’s time for someone else to take over.

    • Andrew

      The problem isn’t Amtrak – it’s Congress and the FRA, who make Amtrak run their long-distance trains in hopes that they’ll be profitable – to no avail. Meanwhile, Amtrak is blocked out of building corridors which have better fiscal performance due to the 750-mile rule.

      • Lets be honest here. Amtrak has never been given a proper chance. It was designed and funded to fail.

        Change for the sake of change is not good.

        • Don

          Designed to fail and living up to that potential ever since! Now, it’s culture is so entrenched that it may not be fixable.

          • Woody

            It will be easier to change Amtrak’s culture than to change that of Congress.

            The failure of Amtrak is now part of the Repub’s general program of seeking failure for Obama, as the Senate Repub Leader Mitchell explained. They don’t care about Amtrak’s riders, or the environment, or oil imports from the Middle East, or the unemployed, or anything, except seeing Obama fail.

    • Kyle

      When discussing this, everyone has to keep in mind that DB is not privatized, all the shares are owned by the government, and 3 of 6 of the Japanese companies are completely private. Also to keep in mind is that all of the infrastructure was built by the government and is now maintained and improved by “private sector” companies.

      The private sector can work in many areas, but they need the government to fund the infrastructure to begin with.

      Plus, Japanese Rail was slowly privatized over time, with the government slowly selling share increments to make sure the transition went smoothly.

    • Drewski

      DB long-distance trains (ICE, IC, EC) were intended as for-profit trains. (The same is true in Sweden.) In their current operating structure, they have always operated at a profit.

      DB regional and local services are on contract. Each state pays for services. Some services are contracted out to other (private) operators. At least one S-bahn line (VRR S 28, Neuss-Düsseldorf-Mettman) is privatized.

      But…Jason, what you left out was a glaringly obvious question. Who paid for the tracks? Who paid for the infrastructure? It was German taxpayers who paid. It was the German Federal government which built the Neubaustrecken. It was Federal and city/state money that paid for the Nord-Süd Tunnel in Berlin…and the new Berlin Hauptbahnhof, and the reconstruction of the Stadtbahn (both the S-Bahn and the long-distance tracks). Hannover-Wurzburg and Köln-Frankfurt? Public money.

      If you want to trumpet innate superiority of the for-profit model, then let’s be honest about it. Show me a model where you’re honest and clear about who does what. Show me where a private train operator and a public infrastructure owner agree on realistic reimbursement for track access, maintenance, and capital improvements. Show me a model where your employees earn salaries and benefits comparable to the profitable public-sector operation you propose to replace.

      As I understand it, there are private operators who might match these criteria. In Sweden. But anybody who knows anything about Swedish rail operations knows that all of the current and recent infrastructure projects have been publicly funded. There is no private money at risk for tunnel construction in Malmö, or Stockholm, or Göteborg. There is no private money paying for electrification, nor for reconstruction of the Göteborg-Trollhättan line.

      I might have more faith in your private-sector fetish were it not for the number of reasons to question it. John Kasich is eager to lease the Ohio Turnpike, but it’s to avoid levying taxes. It’s a one-off deal which will restrict the state for 75 years, and there is no compelling argument like inefficient operation. (The Ohio Turnpike is consistently rated one of the best-maintained routes in the US.) When Pennsylvania sought a waiver to levy tolls on I-80, it got less-than-rousing support from Congress. Why was this Congress so unwilling to push the FHWA or USDOT? Maybe because all the talk about privatization is really code for evading responsibility to the taxpayer by any means possible. All this noise about privatizing Amtrak is more irresponsible talk by people with an eye to personal enrichment from public assets. Thanks, but no thanks.

    • Nathanael

      Deutshe Bahn is not really privatized.

      Anyway, the problem with the FRA is the RULES. The Built-like-a-tank rules, the arbitrarily low speed limits, the obsolete work rules. These would apply to any private company, not just Amtrak. And these don’t apply to any other country in the world, not even Canada, which as many of our stupid rules, but not all of ‘em.

      • Adirondacker12800

        arbitrarily low speed limits

        When you are going 80 MPH you can’t stop a train by the time you get to the red signal. Or looking at it another when you are close enough to see the signal it’s too late to stop. Wanna run your trains faster than 79 MPH you need cab signals.

        • Max Wyss

          Wanna run your trains faster than 79 MPH you need cab signals.

          This is also an arbitrary FRA rule. In other countries, the limit for no cab signalling varies between 140 km/h and 160 km/h (approximatively betwen 85 MPH and 100 MPH). Because of the longer braking distances (sometimes exceeding the standard block distance), there may be a surveillance system taking into account the speed and the distance to the point of danger.

          And, of course, protection systems, detecting warning and stop aspects are built in.

          But such devices can not be called “cab signalling”.

  • David Keddie

    The best method of ensuring “alternative mobility options to the largest possible percentage of the population” is through private operators. The entire rail network as it currently exists was built to “generate profit for a small number of private corporations.” Countries such as France, Germany, Japan and Britain have moved in the direction of privatization precisely because of their extensive experience with the failure of state-owned enterprises to meet your standard of “A well-functioning government service provider.”

    The privatized intercity bus operators such as Megabus that you mention prove that a private profit-seeking corporation can provide better service at far lower cost than a government-sponsored entity. The private buses have wifi, while far more expensive trains, both amtrak and commuter, lack such a basic amenity. To give another example, pertaining to New Jersey Transit, from my own backyard; our small branch line to Princeton called the Dinky costs ~$10/passenger to go five miles, making it noncompetitive with taxi service. The reason for the costs are union wage levels and labor rules, which for some reason are easier to avoid by proposing replacing the entire line with a bus given the political impossibility of rational staffing levels.

    I find your confidence in state-owned enterprises in the rail sector quite surprising Yonah, especially in light of the move by the countries with the best passenger rail networks in the direction of private operation and competition.

    • Jake

      The private buses mentioned have the advantage of not paying the full cost of their infrastructure.

      • orulz

        A private rail operator might presumably also have the same advantage of not having to pay the full cost of construction or upgrades on the route the trains ply.

        There is a broad spectrum of what railway privatization can mean. The below is an incomplete (and to the best of my limited knowledge, accurate) list:

        1. The tracks and rolling stock remain public, and just operations are contracted out in a competitive bid (Many US commuter rail systems follow this model)
        2. The tracks remain public but trains are owned and maintained by private companies which compete to purchase track rights and operate trains (The UK model)
        3. Everything down to the tracks and right-of-way are privately owned but their construction and improvement is encouraged by the government through tax breaks and grants (Japan model)
        4. The entire operation is completely private and the private operator is completely left on their own (US Freight Rail model)

        • Andrew

          1 & 2 seem to be what many European rail operations are like. Of course public funding went towards upgrading the lines and giving better service.

          • Adirondacker12800

            or
            4. The entire operation is intimately entwined in the regulatory structures and freely pursues government grants to maximize profits.

        • EngineerScotty

          #4 excludes the massive subsidies in the form of land grants received by legacy railroads, as well as much Federal policy protecting railroads from local government interference.

          Of course, in fairness to the US freight railroads, their primary competition (the trucking industry) is even more subsidized.

          • danny

            There isn’t really much protection from local government interference. Local governments do everything they can (and they succeed) to suck railroads for every penny they can. The railroads don’t have much of a choice, unlike other types of businesses, because moving rights of way is several orders of magnitude more costly.

            • Woody

              One protection against local government TAXES would be for Amtrak or the states to own more tracks. Socialistic, I know.

              Amusingly, the new Repub Gov of New Mexico has been busy aborting the previous Democratic Gov’s plan for that state to buy tracks from the Colorado border down to Albuquerque. That is the present route of the Southwest Chief, the long distance train Chicago-L.A. It’s also the future route of a possible Front Range train Cheyenne-Denver-Colorado City-Pueblo-Alburquerque-El Paso.

              Democratic Governor Richardson wanted to buy the tracks for such future use, and because the freight owner has been moving its traffic to a different route to the south, and reducing its maintenance costs as low as possible, causing slow-downs.

              One argument the new Rep Gov made against the State of NM buying the route was that three NM counties would lose about $750,000 a year each in property taxes if the state took over the ROW. Apparently no one discussed how much taxes the freight line will pay after it abandons the ROW — and Amtrak has to move the Chief to another route.

              Wonder if the Repub Gov could possibly be that stupid, or is she merely evil in making such a ridiculous argument?

              • Adirondacker12800

                One protection against local government TAXES would be for Amtrak or the states to own more tracks. Socialistic, I know.

                People who call it socialistic …. what do they say when you ask them how much property tax the Interstates pay. Or the state highway? or the county road? or the municipally paved and maintained cul-de-sac they live on?

              • It could be called “TollRail” or something like that ~ presuming that access and/or user fees are charged ~ and then it would magically be non-socialist.

        • Max Wyss

          1 is rarely found in Europe, unless it is for closed networks, where technical requirements limit the usable rolling stock, and there is a big legacy fleet (one example would be the Berlin S-Bahn).

          2 is pretty much the standard in Europe. When a new operator is chosen, they usually have the option to lease or acquire the legacy rolling stock. This is so because, for regional lines, the delivery time for new rolling stock is longer than the time between grant of a contract and begin of operation; so, the new operator orders, but until the new rolling stock is delivered, they lease the legacy stock, or even subcontract to the former operator.

          Option 4 is also found with tourist operation, without much further connection to the remaining network. In this category you may also find (semi) publicly accessible operation by big infrastructure companies (my example may be a bit obscure, but the Swiss Meiringen Innertkirchen Bahn is such an example, which belongs completely to the regional power generation company, which does provide passenger services, for one for their own staff, but also gets paid for public service).

          To 3: One of the features of the Japanese private railroads is that they do own quite a bit of real estate at and around the stations; the profits from this business help balancing the rail operation.

          • Actually the Berlin S-Bahn rolling stock is owned by the formerly public, now private operator. This is the precise reason of the whole meltdown in/since 2008 – The public is stuck with that operator, because they own the rolling stock.

            • Max Wyss

              So, what are the options for the City of Berlin and the according Land?

              Take over the operator? That would be close to a nationalization. But the damage has already been done with the reduction of maintenance, and catching up will be rather expensive. But that may be the only sustainable way to go…

              This also shows a “feature” of the privatization: Rolling stock can not be exchanged just so. From this point of view, the British system which separates rolling stock from operator has an advantage (but then, the big failure was to create artificial competition, but that’s another story).

              • Re-nationalization is difficult because a) DB Regio might not sell the S-Bahn company, b) Berlin can’t afford it (25$K debt per person).

                One option might be to try to acquire rolling stock (expensive and will take forever), and lease that to operators – the current rolling stock is mostly ~15 years old, but DB has a policy of never selling it’s rolling stock.

                I guess one option would be to continue as is, and hope it all works out. After the meltdown, the S-Bahn operator probably didn’t have much profit itself, so maybe they’re just interested in getting back to how it was before the mess.

                There’s an election later this year, we’ll see what’ll happen after.

              • Adirondacker12800

                Why should Berlin have to pay for it? The wall came down years and years ago. People in Berlin have been paying taxes to the national government since.

              • Operating Regional Rail is a State competency in Germany, and Berlin is a State.

              • Max Wyss

                Well, DB Regio would have nothing to say in such a re-nationalization procedure.

                As far as I can see, the rolling stock would do fine if properly maintained. So, Berlin could essentially take over that branch of DB Regio (thanks to the the “privatization”, it is a legal unit on its own.

                Acquiring rolling stock for the network would be pretty expensive, and still take several years. And at the moment, it seems that the manufacturers are running at capacity; so, how could Berlin make one of the manufacturers justify building a new plant with a connection to the network (would be useful for maintenance as well).

                But, yeah, there are not that many options. I don’t know exactly when the contract runs out, but when it comes up for renewal, it must at least have serious fines for service cancellations and reductions. If the operator does not get their act together, they may eventually have to sell themselves to Berlin.

                On the other hand, the IPO of DB has been postponed, and, there will be elections soon…

              • Drewski

                As I understood it, the problem with the Berlin S-Bahn was that there were safety concerns with new rolling stock, and that the concerns emerged after it was received and in service. Much of the old rolling stock had already been rotated out, which is why it wasn’t available for use. All of the new trains had to be pulled from service–it was like Sunday service for a weekday rush hour, and the service restrictions lasted the better part of a year. The accounts I’ve read have put the responsibility with the manufacturer far more than with S-Bahn Berlin GmbH, and the disruption was caused by searching for *potential* flaws on every wheel and bogie.

                Also, the Federal government has spent tens of billions of marks/euros on reconstruction of the network. There’s still major work underway: reconstruction of the Ostkreuz and the Dresdner Bahn. Beyond that, the past is pretty much considered done, and Berlin can get in line like any other city.

              • That’s how the operator is trying to spin it. The trains were delivered between 1996 and 2004, by the newly formed S-Bahn operator. They were sort of on the cheap side though – and in 2009 the rail ministry ordered that the axes had to be replaced more often.
                Now there were two problems
                - Due to the rationalization of maintenance facilities, a huge backlog developed. When the rail ministry found out, they started grounding large parts of the fleet
                - Due to the rationalization of the fleet, there were not enough replacement cars.

          • Drewski

            Specific example of Japanese rail company is Tokyu. They run trains…which are focused on their massive real estate developments…where they have retail complexes at main stations…where they happen to own an anchor department store. Dunno if they still do, but Tokyu also used to manufacture railcars–Cleveland’s Red Line railcars were built by them. There is nothing close to this kind of integration in the US; it’d probably be illegal here.

            • david vartanoff

              WTC in NYC was built to replace the smaller office buildings over the PATH (originally H&M) station. The Port Authority explicitly agreed to take over/improve/continue to operate the rail system if allowed to build the office towers.

            • Tokyu still manufactures trains.

              There’s no law in the US requiring separation of rolling stock vendors and train operators. Such laws are not the default; they must be passed first (and were with planes). However, public operators tend to have less legal leeway to engage in other things than running trains, namely property development. Both the JRs and the Hong Kong MTR could engage in much more development after privatization, boosting profits.

            • Nathanael

              There were US laws forcing railroads to divest themselves of their electricity generation utilities (or vice versa), and these were documented to have massively negative effects on the railroads, and not to be terribly good for the power companies either.

              Yeah, I expect the Japanese “quasi-governmental private business” system would be illegal here now.

    • Max Wyss

      The reason why France, Germany and other EU countries “privatized” was because of EU regulations, which require to provide non-discriminatory access to the rail infrastructure. EU regulations also more or less forbid cross-subsidizing, which means that profitable intercity services no longer can subsidize not so profitable regional services.

      The privatization in France and Germany and other European countries is that the state railways got broken up into “private” companies, but the only shareholder is the state (you may call it “government”). Of course, this all happened after the state took over the debts of the state railways.

      There is nothing stating that “private” can do it better; the reason why for example the DB Intercity services company is profitable is because intercity services are profitable; not because they are “private”.

      In fact, bringing up the DB example, the attempts to “make fit for IPO” of DB essentially failed. They say that the mentioned elsewhere disaster with the Berlin S-Bahn system was a consequence of the reduced maintenance, in order to make the company “look better”.

      What is always brought up as “good example” for privatization is the UK. Interestingly, the just recently published efficiency report more or less states that one of the main reasons why the system is not efficient (meaning wasting money) is because there are too many parties involved. If that does not translate into “chopping up British Rail was a mistake”, I don’t know what else it says.

      What privatization (or allowing private operators on the network) may lead to is a bit of a wakeup for the state railways. But it will always end up as “raisin picking”. We will see how well Westbahn will do in Austria, or NTV in Italy.

    • Adirondacker12800

      Megabus that you mention prove that a private profit-seeking corporation can provide better service at far lower cost than a government-sponsored entity.

      “better” is very very subjective. The bus is slower, less reliable, cramped and while wi-fi was a big deal in 2002 it’s far less of an attraction today. ( 3g and 4g work just fine on the bus or the train ) If better=cheaper, yes it’s “better”

      • Of course, part of “cheaper” is “someone else pays”, which is a principle strategy for the pursuit of profit in the modern economy.

        • Adirondacker12800

          Well yes, having your customers stand around on street corners is much cheaper than paying the Port Authority for a use of a bus bay. Telling them their bus was ‘canceled’ when you don’t have enough passengers to make it worth paying a driver is much cheaper. Not giving the drivers any benefits is much cheaper…..

          • More fundamentally, someone else paying for a large portion of your right of way usage costs is cheaper than having to pay for it yourself, but it does not eliminate the usage costs, its only shifts them around.

  • Tom West

    A few points
    1) When anyone ever suggests privitising public transport (including railroads), my first question is “what problem
    are you trying to solve? No-one has ever given me a decent answer to that one…
    2) Amtrak’s ‘unchanged’ ridership: show me their average load factor through the years. If that’s high (85%+) and unchanged, it supports your notion that Amtrak is capacity constrained. Also, ridership actualy gone up 10 million, thanks to states being more supportive than the feds.

    • Amtrak’s monthly reports have subsidy figures per seat-mile and per passenger-mile. This allows calculating load factors. We obtain, for a selection of routes:

      Acela: 63%
      Regional: 42%
      Surfliner: 31%
      Capitols: 28%
      Empire: 33%
      Keystone: 39%
      Auto Train: 67%
      Empire Builder: 51%

      The Acela has capacity issues; the Regional generally does not.

      • What load factor would you expect a train on the NEC packed out for a strategic portion of its route to show, and what multiplier would you assume between average load factor and load factor of the most loaded service?

        • Adirondacker12800

          Not unheard of for select Regionals to have more than 100% of passengers board the train. The conductors and the assistant conductors have the speech down pat “Your ticket entitles you to passage, not a seat” and people stand between Baltimore and Philadelphia. There are days of the year when even though everybody gets a seat, or should in theory, they run in excess of 100%. . .. don’t book a train if the number is 3XXX, it’s an “extra” and will be something other than regular Amtrak rolling stock.

        • Abroad, the maximum average seat utilization on high-speed rail is about 70%, so this should be taken as the point at which so many trains are sold out that it’s time to raise fares or provide more capacity.

          The NEC may have a larger maximum to average load factor ratio because its biggest city is in the center rather than at the end. Amtrak doesn’t break down NEC load factors based on south vs. north of New York. It won’t surprise me if the Regional has a higher load factor south of New York. But if it doesn’t it won’t surprise me either, because more trains run south of New York…

          • Danny

            I haven’t done the trip from NY to Boston or NY to DC, but in some of my other trips far more than 50% of the people leave before getting 100 miles from NY. I wouldn’t be surprised if NY-Boston was below 60% on average.

            • We’d need a load profile to see, but that’s the kind of thing I was wondering about ~ an 80% load factor for a full middle half of a service and 50% load factor for the balance is a 65% average for what is, indeed, a full train at its dominant destination/origin. If 65% is a full train, getting much above 40% average load factor would be tricky.

              The capacity constraint, though, would not likely be rolling stock, it would be whatever prevents overlay services on the middle half of the route.

          • Andre L.

            Thalys trains ofen run with load factors above 75%. They are the most profitable railway train-operation company, despite having some competition of slower-but-cheaper operations in Amsterdam-Brussels and Köln-Brussels routes.

            • Hmmm… is that the average, or the maximum? I’m asking because the TGV runs at about 70% average load factor and the LGV Sud-Est is already considered to be at capacity.

              • Max Wyss

                It would be interesting to see the load factor of Thalys (not of individual trains, but of the operation).

                FWIW, for non-tourist flights within Europe, a load factor of around 75% is considered to be good by the major airlines.

              • Andre L.

                Any train service will have to run some not entirely full trains to keep the trains where they are needed.

                What makes Thalys operate at a higher load factor is that they cater for a different market and have a different pricing strategy. There are many tourists using Thalys for non-frequent trips between France, Belgium and Netherlands. They usually flock to mid-train trains where there are cheaper, way cheaper fares.

                So Thalys can manage to have higher load factors throughout the day. Together with Eurostar, they take yield management further than any other rail company: fares on a Paris-Amsterdam 2nd class trip can cost as little as € 35 (14-day or more advance, mid-day departures, limited availability, non-refundable/non-exchangeable) or as much as € 112 for the same seat on a Monday morning train, tickets bought 10 min before departure.

                SNCF doesn’t push their model that way, hence their trains run with more empty seats. Ineed, this is the essence of yield management: carry as much people as possible at the highest possible fares.

                Because airlines know how Thalys operate, they don’t dare reinstating many Bruxelles-Paris cheap flights, for instance.

      • Chris

        Those capacity numbers are appalling!

        If Amtrak could have load factors similar to those of airlines, its revenues would be way higher.

        http://chartingtheeconomy.com/?p=1529

        I’m not understanding why a private investor would put his own money into regularly-scheduled intercity passenger trains in any form without some kind of government back-up- “privatization”, UK-style, already exists in the US for commuter railroads, with the government just paying private operators to run the trains, but I’m not aware of any large-scale “true” privatization anywhere, with no government subsidies involved.

        Sidenote: my own proposal for Amtrak’s long distance trains is to let private freight carriers run them again, in exchange for tax credits for operating losses. That would encourage the private RRs to be super-efficient, if they could keep the difference between the tax credit and the actual loss.

        • Long hauls cannot get daytime corridor train load factors ~ you have to haul a single consist across the country, running through some stations at an excellent time of day and other stations at 3:30am, sometimes serving a city of 2m and sometimes serving a town of 2,000. Remember that the average trip is six hours, so on a 48hr plus route, some seats may have been filled eight times and some seats may have had one passenger and have gone over 40hrs empty.

          Its when you get an intercity route with sufficient population in the catchment of its stations for two hour to three hour trips, can get good load for the strongest demand routes at full price, keep the trains running back and forth and use demand management to keep them reasonably full that you get to the load factors of the European HSR trains. The middle of the night problem does not occur because the corridor shuts down for regular corridor maintenance.

          Of course, with the long haul train, you are also spending far less energy keeping each seat moving than with a plane, so hauling the seats that are “only used 10% of the time” can far more easily be a revenue generating proposition for a train than for a plane, but having the right staffing for when the seats are booked out without being overstaffed is tricky for any 12hr+ route.

        • Airlines achieve load factors that intercity railroads never get. I do not know of any high-speed train (or low-speed intercity train) with a load factor much more than 70%, and I know of many that make a profit at less than 50%. I don’t want to speculate on why, but I’ll note that the most airline-like Amtrak route, the Auto Train, also has the highest load factor.

          • Part of it could just be natural differences due to difference average fixed cost and average variable cost. Airways need higher load factors because they pay more per mile to carry around an empty seat, so the profit maximizing load factors are likely to be different.

          • Danny

            It has to do with the high marginal cost per stop. It costs so much more for an airliner to stop along its way than it does for a train to stop along its way.

            If airlines could pick up passengers and drop them off with the same cost structure as trains they would likely do the following:

            1) abandon the logistically complicated hub-and-spoke process because the load factor improvement wouldn’t be worth the cost
            2) run more flights

            In other words, high load factors are a revenue maximizing strategy for airlines that isn’t worth the cost for railroads.

            • Adirondacker12800

              You are assuming that airlines have rational decisions backing up their scheduling. The closest big airport to me is Albany. Try and book a flight from Albany to DC. There’s lots and lots of them at three times the cost of a train ticket or twice the cost of a coast to coast flight. There’s cheaper ones that have you flying to Atlanta or Chicago first. Some really odd ones where you fly to St. Louis first… or something like that. Some of the itineraries take longer than driving would.

              • Danny

                Those are entirely rational decisions. Just because you don’t like it doesn’t mean it is irrational.

              • Woody

                Danny is right. It isn’t irrational from the airlines’ point of view to offer these flight schedules. (Usually they have an inventory of unsold seats that the computer knows will be worthless when the cabin door is closed. )

                But I take you point that it would seem irrational for you to take one of these roundabout or high-priced flights! Faster and more frequent trains in the Empire Corridor and the NEC can capture a lot of the Albany-D.C. market, and/or force prices down from the competition.

        • jim

          If Amtrak could have load factors similar to those of airlines, its revenues would be way higher.

          Actually, its revenues would be lower. It would be running shorter consists, so that some segment would be completely sold out. The fares from the partly filled car (or cars) that would be cut out of the consist would therefore not be collected.

          True, its costs would also be lower. It would be hauling around fewer cars, so would burn less fuel. It might also make do with fewer on board staff. But it is likely that the lost revenue would be greater than the saved cost.

          Airline behaviour is not comparable.

          • It does depend in part on how the higher load factor is achieved. If it is by filling in additional services in the higher demand part of the corridor to balance the load on the longer, there could be a spillover frequency benefit and, indeed, rather than looking at dropping revenue and dropping costs, the comparison is rising revenue to the increased cost of the fill-in services.

            • Nathanael

              In other words, the new Lynchburg service, relieving capacity constraints on the Crescent. That’s how you run a railroad.

              • jim

                It’s worth pointing out that the load factor on the Lynchburg train is quite low. I rode it home from New York recently. After Washington, they closed the last car, asking the two remaining people in it to move forward, since the new crew coming on at Washington was smaller than the crew that got off at Washington and fewer cars were easier to manage.

                Despite its low load factor, though, it’s profitable. Which suggest that load factors are not necessarily a good performance measure.

        • Andre L.

          Chris, the time in which freight railways operated long-distance rail cars were times before Interstate Highway System and, specially, widespread air service.

          Trains connecting Chicago to the West Coast shouldn’t exist in 2011, period. Better saying: they could exist, but only as exotic “holiday on rails” premium services operated at profit, or shut down.

          The Rockies are among the harder possible terrain to build an even “higher speed” railway. Sure, in Europe you have the Alps, but then you can cross them with a bunch of tunnels surrounded by plain terrain on both sides. In Western US, you have, by whatever route you choose, at 350-550 miles of very rugged, hilly terrain that current rail alignments deal with by S-shaped contours, few high-altitude tunnels, and lots of valley-aligned sectors. It makes superb photos along the Colorado River Canyon, but it is a nightmare for higher speed operation.

          However, for political reasons Amtrak can’t just cut off services in WY, NM, AZ, MT, ID, NV… they would lose political support. Yona thinks this is good and reflects “public accountability”, but it has its drawbacks.

          Apart of those routes, there is the 700-mile rule. If it were dropped, Amtrak could focus more on less costly day service (no Dome cars, no dinning car – maybe catering service on sea? -, no sleeper cars) and make more profit on selective routes, particularly in the Midwest, where terrain is almost flat, land is relatively cheap and construction is easier.

          • Woody

            Long distance routes don’t have to be the enemy of shorter corridor service. If Congress would pony up for another 1,000 rail cars ON TOP OF the proposed replacement order, Amtrak could soon grow itself out of this mess, largely by overlaying shorter routes on the existing long distance routes.

            Consider the Coast Starlight, L.A.-Seattle. Upgrading the full Cascades route Eugene-Portland-Seattle to allow speeds up to 110 mph will also chop a couple of hours from the run time of the Coach Starlight on that section, reducing costs, adding passengers. That long stretch between Eugene and Sacramento may never reach 110-mph capability, not in this century. But long distance trains travel thru the dark and the passengers sleep, even in the coach seats.

            Look at the pitiful Cardinal, Chicago-Indianapolis-Cincinnati-D.C.-NYC. It runs only three days a week, shoveling money from the back of the caboose. But upgrading Chicago-Indianapolis-Cincinnati to 110-mph top speed, under the Midwest Regional proposal, cuts 4 hours out of the run time Chicago-Cincinnati.

            That faster time will attract many new passengers to the Cardinal, while cutting 8 hours out of the roundtrip will save a shift from the labor costs. The remnant regular-speed section Cincinnati-Charleston, WVa-Charlottesville-D.C can easily go daily, once Amtrak has a dozen new railcars to put on that route. Piggybacking on High(er) Speed Rail Chicago-Cincinnati and getting new coaches, locomotives, etc., out of a major order will solve the Cardinal problem. No worries.

            Even those dreaded transcontinental trains can be salvaged. The California Zephyr now chugs along at about Amtrak average speed Chicago-Omaha-Denver, before it hits the mountains. The present route misses every population center in the state of Iowa. The Midwest Regional plan is to speed up the trains out of Chicago, and put the Zephyr on a direct route to serve Quad Cities-Iowa City-Des Moines-Omaha, while putting additional frequencies Chicago-Omaha-(maybe as far as Lincoln).

            Lessee, faster trains, shorter trip times, a choice of train times including daylight stops in Iowa, overlapping city pairs like Quad Cities-Des Moines and Iowa City-Omaha, and yes, this section WILL make a surplus. Extend one of the added frequencies from Omaha-Lincoln to Denver, and half the length of the Zephyr will be doing fine.

            The scenic section Denver-Salt Lake City already sells out for months in the summer and early fall; add more equipment, yeah, more high-fare sleepers and dome cars, and revenues will soar here too. The Zephyr passes thru desert Utah and Nevada during the night, but any loss here will be offset by the surplus on the remainder of the route. Reno-Sacramento-Bay Area already sees full trains. No worries about the Zephyr.

            (Of course, the Repubs in Iowa are trying to sabotage these improvements that would benefit the Zephyr, by blocking Phase 2 of the plan, adding a train Chicago-Quad Cities on to Iowa City. But Illinois and the feds are going ahead with time-saving upgrades Chicago-Quad Cities whether or not Iowa City gets on board now.)

            A smaller but similar fix could help the Southwest Chief, Chicago-Kansas City-Albuquerque-Grand Canyon-L.A. Not many big cities along that route. But the train leaves Chicago at 3 p.m. and arrives in Kansas City at 10:11 and Topeka at 12:29. (Why it takes more than two hours to go those last 66 miles …) But if upgrades could reduce the trip time by half an hour to get the train into Kansas City before 10 pm, ridership would improve, and again if the Chief could arrive in Topeka around 11 p.m., or at least before midnight. And then add a morning departure from Chicago to Kansas City-Topeka.

            Happy thing is that a large part of the route being upgraded to serve the coming Quad Cities service is also the current route for the Zephyr and the Chief thru Illinois. The improvements are being concentrated close to Chicago, where the C.R.E.A.T.E. program is untangling the huge mess of railroads and streets and highways. If those upgrades reduce the trip time by even 15 minutes, that alone could get the Chief’s Kansas City arrival on the right side of 10 o’clock, or get the Zephyr into Omaha a bit before the current scheduled 10:55 pm, and get it to Lincoln minutes BEFORE midnight.

            (Understand that I believe train passengers consider the convenience of departure and arrival times — Can Daddy pick me up at the station? Will the taxies still be running? Do you mind waiting up for me? Is it safe at that late hour? — as much they care about a trip taking plus/minus an hour or more.)

            The worst long distance train could be the simplest to fix. Not cheap, but simple. The Sunset Limited runs L.A.-Palm Springs-Yuma-(sort of near Phoenix)-Tucson-El Paso-San Antonio-Houston-Lafayette-New Orleans, but only three times a week. The UP wants a ransom of over half a Billion, iirc it’s $750 million, to allow Amtrak to make that route daily. If Amtrak could scrape up enuf cars to run that many more trains.

            But it is not hard to see a High Speed line running L.A.-Phoenix, and either HSR or H(er)SR on to Tucson. At the other end, New Orleans-Houston-San Antonio could become a corridor, probably starting as 110-mph H(er)SR, but that would be good enuf to cut Houston-San Antonio to about 2 hours, Houston-New Orleans to about 4 hours. Redoing the high volume stretches at either end would leave the Sunset with a low volume stretch Tucson-El Paso-San Antonio, and it would probably continue to lose money. Those losses would be easily offset by the surpluses piling up at either end.

            The Empire Builder already has a fairly good farebox return. But when Chicago-Twin Cities gets upgraded, frequencies added, hours chopped off the running time, the Empire Builder will benefit greatly. Maybe one frequency can be extended Twin Cities-St Cloud-Fargo. At the other end, upgrade Seattle-Spokane-Glacier National Park to corridor service, and that will greatly benefit the long distance train again. Only the middle section — Twin Cities-Glacier Park — would probably show a small loss.

            Do you need more examples? The Lake Shore Limited runs Chicago-Cleveland-Buffalo-Albany-NYC/Boston. New York State was asleep when the first rounds of grants came out of the Stimulus, but they are coming up with real plans to make NYC-Albany at least 110-mph H(er)SR, maybe 125 mph when electrified. Albany-Buffalo is the next priority. The coming changes in this Empire Corridor will cut 2 hours or more out of the Lake Shore timetable.

            btw The Maple Leaf, NYC-Toronto, will benefit in the same exact way, while the Adirondack, NYC-Montreal, and the Ethan Allen, NYC-Vermont, will benefit from improvements underway NYC-Albany-Schenectedy. The stretch NYC-Buffalo will need several additional frequencies, and some of the needed equipment may come out of faster trips allowing the coaches and locomotives to be turned around for another run.

            At the other end, Chicago-Cleveland will be an HSR corridor when (or if?) certain politicians quit being hateful and stupid, and it will generate an operating surplus. That will leave only the section Buffalo-Cleveland unimproved, but with times cut at either end, reducing labor costs while attracting more riders, the Lake Shore Limited will make a surplus too.

            I even want to add more long distance trains.
            * The Lynchburg train, D.C.-Charlottesville-Lynchburgh, surprised the world and the State of Virginia, its sponsor, by attracting huge ridership and making a nice surplus. How about extending a train Lynchburg-Danville-Greensboro-Charlotte, stopping at those small cities during the daylight, while the Crescent makes stops in the night. This mini-Crescent could turn at Charlotte, given the political hostility in Deep Dixie. But ideally it should go Charlotte-Greenville-Atlanta-Birmingham. (The Atlanta-Birmingham city pair got a surprisingly high score in this report, http://www.america2050.org/high-speed-rail.html,
            but it is easily overlooked.)
            * Now the Lake Shore Limited combines a section from Boston with the train from NYC at Albany before heading west. At some point Boston-Chicago should be its own train, with daylight stops in Cleveland, which Amtrak doesn’t offer now.
            * The Pennsylvanian, NYC-Philly-Harrisburg-Pittsburgh, should be extended Pittsburgh-Cleveland-Chicago. Splitting the Lake Shore Limited into two separate trains, with the Capitol Limited, and adding the Pennsylvanian could give four trains a day Cleveland-Chicago, a solid start on corridor service.
            * The Carolinian, NYC-Raleigh-Charlotte, is subsidized by North Carolina. But upgrades underway Raleigh-Charlotte will take 13 minutes out of that stretch, bringing it under 3 hours, and making the Charlotte arrival 8 p.m, or earlier. This stretch also has two frequencies of the Piedmont trains. But it should easily support a second frequency D.C.-Richmond-Raleigh-Charlotte.
            * When Gov Scott stops being hateful and stupid in Florida, I guess after the next time the faces the voters, that second frequency of the Carolinian could go Charlotte-Columbia-Charleston-Savannah-Jacksonville-Florida East Coast route-Miami. The right schedule could give daylight service to the small Carolina and Georgia cities now visited by the Silver Meteor during the dark of night. With the Silver Meteor and Silver Star, three long distance trains a day Savannah-Jacksonville and West Palm Beach-Ft Lauderdale-Miami gives at least a start to corridor service.
            * Restore some train between Chicago and Florida. One obvious route would be Chicago-Indianapolis-Louisville-Nashville-Chattanooga-Atlanta-Macon-Florida. Another could go Nashville-Huntsville-Birmingham-Montgomery-Mobile-Pensacola-Tallahassee-Jacksonville-beyond. Chicago-Florida is obviously one city pair after another, with many overlapping.
            * Restore the Sunset Limited New Orleans-Gulfport-Mobile-Pensacola-Tallahassee-Jacksonville-Orlando.
            * (List in formation.)

            Of course, the 1,000 additional railcars I suggested above could easily turn out to be not enuf. But the long distance trains will not be a big problem.

      • Nathanael

        Regional load factors have to be sorted out by time of day; I’d expect them to be peaky, with overloads at peaks and low loads for the midnight trains.

  • D. P. Lubic

    Not mentioned in this particular discussion is the past and current influence of highway and air subsidies. Based on information from Highway Statistics (USDOT site, principle reference would be Section IV, Report FH-10, “Highway Finance), the American highway system as a whole (federal, state, and local) has a cost-recovery ratio of only 51% based on cash flow, and the actual recovery ratio if you include things like deferred maintenance is likely to be worse yet. The cash-flow accounting alone amounted to a 50 cents per gallon subsidy in 2008,and that didn’t include shortfalls in things like deferred maintenance, nor externalities like a share of our military actions in the Middle East.

    How can a private enterprise compete against that?

    This has been a problem for a long time, as noted in this railroad-sponsored public relations film from the 1950s:

    http://www.youtube.com/watch?v=e08v0KqImes

    This viewpoint is echoed in a recent edition of “Destination Freedom,” the newsletter of the National Corridors Initiative (scroll down, last two items).

    http://www.nationalcorridors.org/df3/df05312011.shtml

    Fix that subsidy problem, and you might just find you’ve fixed everything else.

    It might be as simple as getting rid of federal involvement in the highway system. A new road might not look so attractive if you do not have an 80% federal match to pay for it.

  • I find it kind of weird how much trust many seem to place into private enterprise to somehow work in the interest of the public, when their whole point is exactly the opposite – to generate profit. Some have the believe that ‘the market’ will naturally deliver what’s in the public interest by giving the people ‘what they want’.

    That said, there seem to be some privatization schemes that work ok. I don’t know about Japan/Taiwan, but some European (SNCF, DB) schemes seem to work if the operator is private and infrastructure is owned by the public. Some of the contracts that private operators bid themselves into (mostly for regional rail) are pretty airtight, keeping a lot of the control with the public – for example fare structure, and adding penalties if quality of service dips. Regional rail is still subsidized – privatizing operations is not a magic trick to make rail lines profitable, it just makes some cheaper to operate.

    For longer distance HSR, the market seems more liberalized – and then we see some of the problems of service concentrating into few profitable corridors, forcing the public to create subsidized regional services as a backup for formerly existing high speed services.

    At the same time there are a lot of cluster-fucks with all the privatizations (let’s not even mention the UK…)
    - for example the complete S-Bahn meltdown in Berlin in 2008 was due to a privatized operator knowing there was no competition, and cutting down maintenance so much that the whole system effectively shut down in 2008 – it’s still not operating normally, three years later. That company will keep the operating contract for several more years, simply because there’s no alternative (due to special tech), and because the operating contract wasn’t too good.

    Another weird thing for example is that DB holding owns the network (DB Netz) and the actual rail operating companies. Since the profit of the track fees goes back into DB holding, which can then give it back to its rail operations, it’s able to create unfair competition by making track fees so high that private companies can’t pay, whereas DB just sends the track fees back to it’s operations.

    In the end of the day, effective privatization of parts of rail services in the interest of the public is really difficult, but possible. It can be decade long process to liberalize the correct features of such a market and nurture it, while keeping control of some aspects (infrastructre) with the public. This tends to go a long with big investments in the infrastructure.

    With the American belief that any privatization is the magic bullet to solve any problems – that are really due to bad regulation and lack of investment – The US might be going down the wrong track, again.

  • Vincent

    First of all you need to define privatization:

    Is privatization selling infrastructure and right to operate trains, enabling de facto private monopolies to be created, or is it franchising, where ultimate control still belongs to the government, but operations are given to the private sector for a fee/subsidy?

    DB and SNCF are not private. They may behave like private companies, but are ultimately publicly owned. Also infrastructure investments are paid for by government usually.

    Yonas raised good points here. Ultimately “privatization” of public services does not provide the benefits one may expect. it is more a political philosophy where one believes that the private sector always operates more efficiently/at less cost, which is not always the case, especially from a social point of view!

  • jim

    It should be pointed out that Amtrak is a private company. The US Government is not even the majority shareholder, I believe. Amtrak owns portions of the Northeast Corridor. The US Government does not. How Mica intends to sell to private investors property that he does not own has not been explained.

    It is possible that he intends to exercise eminent domain over the right of way. In that case, it would make sense to also exercise eminent domain over the Metro-North owned portions, the ConnDOT owned portions and the MBTA owned portions. But I cannot see such a proposal passing the Senate.

    On the other hand, I cannot see a private entity (different from Amtrak) bidding to buy just the portions of the right of way that Amtrak currently owns and having to negotiate with Metro-North and MBTA to run HSR trains across right of way they control.

    So I cannot believe that Mica is serious about this proposal. He’s like a cuttlefish, squirting ink to mask what he’s actually doing. Perhaps his actual reauthorization markup will contain no funds for HSR: he’ll justify it by reasoning that the NEC is the only place for HSR but no-one will let him unleash private enterprise on HSR for the NEC.

    • A transpo authorization has to get through the Republican controlled House committee and the Democratic controlled Senate committee.

      Threatening Amtrak gives him cards to play against the NEC Senators. MD DE NJ NY CT RI and MA makes up to 14 Senators.

    • The Federal government is the majority shareholder of Amtrak and owns all preferred stock. Dissolution of Amtrak or requiring it to hand the NEC to Federal control (or another institution) is simply a matter of passing the relevant law.

      • Nathanael

        Nope. The common stockholders still claim that their stock has value, and upon a dissolution they would undoubtedly exact demands. A bit hairier than you think; unless an outside fair-market-value evaluation of the value of all of Amtraks’ real property and chattel came up smaller than the existing debt plus back dividends on the preferred, the common stockholders would have a case.

    • ThomasD

      “Mica is … like a cuttlefish, squirting ink to mask what he’s actually doing. Perhaps his actual reauthorization markup will contain no funds for HSR: he’ll justify it by reasoning that the NEC is the only place for HSR”

      I think you’re on to something with Mica. The more I hear from him, they less America should trust his intentions for HSR.

      • jim

        Yes. But don’t think of it as being about Mica personally. He’s been put in a box by the House leadership. They packed his committee and changed the rules so that Appropriations (the genuinely nasty Rogers) needn’t spend what he authorizes. He’s constrained to follow the party line. His own policy preferences are irrelevant.

        His leadership didn’t trust his intentions for HSR!

        • ThomasD

          “His leadership didn’t trust his intentions for HSR!”

          That may be true, but whatever happened to sticking to your guns? If you can’t stand for critical infrastructure that you once supported as the head of an Infrastructure Committee, then you shouldn’t be leading that committee.

  • Just like the ICC strangled pre-Amtrak passenger rail companies, Amtrak is being told to do more while its hands are tied by route mandates and other nonsense regulations. While I’m not against privatization, privatization based on dogma and a distaste for government programs is a recipe for failure.

    • Don

      Amtrak’s hands have been tied so long, if you untied them, they would remain in the tied up position! The current version of Amtrak is not fixable.

      • david vartanoff

        Not inevitable. When Claytor ran the show it was better; and UP has become less obstructionist since Davidson retired. A serious budget, AND political support to confront the freight RRs on deliberate delays/track maintenance issues would go a long way.

      • Nathanael

        Amtrak is honestly quite well run within the limitations of its starvation funding and mandates.

        • $117 billion for around 500 km of new HSR track? Yeah, paradigm efficiency.

          • Woody

            Well run within its starvation budget and requirements, he said. Nathaniel wasn’t talking about their mega-project estimates, which is a special section of the question. But it seems like the current crop of small-scale projects underway are not out of line with American practice. Not trying to provoke you. ;-)

            Anyway, I’m also thinking that Amtrak is being very well run now under Joe Boardman. He got a lot of criticism at first for not having vision or whatever. But he started as a holdover Bush appointee, and was lucky to keep his job, after all. Obviously he has won the confidence of Ray LaHood and his team, so I hope he’s going to get to stay around. And he’s starting to show some of that vision stuff.

  • kemo

    Interesting that Representative Mica uses Virgin Rail as an example to compare Amtrak. It seems, however, that community-supported ownership of rail lines in England may be the wave of the future. See for example: http://www.acorp.uk.com/.

    • Max Wyss

      The community-supported ownership is not quite targeting what we are looking at here; they are an excellent way to support local lines, and their scope is local. Which is good, and there are very nice things which can be done by these groups.

      What we are looking at here is intercity connections, where Virgin can be considered as an example. However, the comparision made by Mr. Mica fails completely, as Virgin neither owns right of way and tracks (that is owned by Network Rail), nor rolling stock (that is owned by one of the three or so rolling stock leasing companies *). So, Virgin is essentially an operator which can be easily replaced.

      *) As far as I know, the operator can specify the rolling stock to be acquired, that’s why Virgin went (amazingly) with Pendolini (and even more amazingly, they seem to be happy with them).

  • David Oleesky

    The private rail franchise system in the UK is unwieldy due to the multiplicity of different companies involved in the system, so much so that vertical integration is now being considered in some well-defined geographical areas such as East Anglia. Rail privatisation has not reduced government subsidies – they have actually increased. In addition, the fares system is so complicated, and also very expensive for peak-time travel to/from London, that many people avoid using trains except when they have no alternative.

  • ThomasD

    Stephen Smith,

    For all the folks who want to sell our key transportation infrastructure, USDOT (taxpayer) money just made your job easier with NEC getting $1.7B this year. If Mica and Birds of Feather want to “walk the walk”, line up private companies to put up the additional $12B required under the State of Good Repair proposal by Amtrak to 2X-3X patronage. Any takers?

    Crickets …. crickets …. crickets. I thought so. Money talks, ____ walks.

  • Andrew

    Hopefully no one is proposing to privatize the tracks. This has been a huge disaster in Canada as (formerly government owned) freight railway CN charges high fees for VIA and GO passenger trains leading GO to nationalize some of CN’s track to improve service. Contracting out operations generally has a better track record but must be done with caution.

    • Danny

      CN’s tracks always were designed for freight, so why are you so surprised that CN would want to use their strained capacity for freight?

      And just because privatization led to poorer passenger train performance doesn’t mean it was a bad idea. CN transports way more now than they ever did in their low productivity government days. If it weren’t for the privatization, that traffic would be on trucks right now.

      Regardless, your situation is not comparable to the NE Corridor in the slightest. The NE Corridor always was a passenger rail corridor with occasional freight. It would be a complete nonstarter to convert the NE Corridor to primarily freight, especially with the abundance of competitive freight corridors along the eastern seaboard. Your concern is like worrying about people trying to convert skyscrapers into farmland.

      • Adirondacker12800

        Before there was Penn Central or Conrail there was lots of freight on the NEC. They’ve rearranged things over the years so that there is less and less freight.

      • david vartanoff

        Danny and all, “occasional freight” is inaccurate. The bypass over 30th St Station was built because the volume justified it.

        • Don

          You both are correct. The current NEC route was fairly heavy with freight under PC and up to 1980 under Conrail. It was (and could be again) a fast and efficient freight route. The current NS LV-RDG-PRR route from North Jersey to Harrisburg and Hagerstown is slow and circuitous compared to the all-PRR route to Harrisburg and Alexandria. The CSX LV-RDG-B&O route to the south is not much better.

          NS still has rights over the route from Alexandria to North Jersey, but trackage rights fees are too high and the lack of double stack clearances makes them impractical to exercise as a through route.

          • david vartanoff

            right, Amtrak sabotaged Conrail use of electrics by cheating them on KWH rates and steadily made freight operations increasingly difficult. Conrail in turn abandoned or degraded PRR freight bypasses.
            The fantasy was that Amtrak by controlling its own ROW could run more reliably. In recent years, the Capitol Corridor services on the post-Davidson UP have outperformed Amtrak’s NEC.

      • Keeping the infrastructure public while privatizing operations could’ve probably created more competition and thus more freight operations overall; CN is like a quasi monopoly.

        At the same time it would’ve made passenger rail operations easier – and cheaper. There are rumors that the AMT (Montreal commuter rail) pays like 7-8 million a year to get access to gare centrale Montreal — which CN is not using for freight. How does it make sense to pay that to a formerly public entity? Wouldn’t it have made more sense to get that infrastructure to VIA/AMT?

        Publicly owned infrastructure also would’ve made it easier to incrementally invest into the tracks – because then the public actually owns the improvements they pay for.

        • Nathanael

          The government sell-off of CN at bargain prices was a scam. Bit like the government sell-off of Conrail at bargain prices.

          Lemon socialism, both times.

  • Ocean Railroader

    The NEC is Amtrak’s Jewel and he and his oil freinds know it and by selling off the NEC off of Amtrak it would cripple Amtrak’s main source of money and passangers and without it would make it easer for them to cut up Amtrak to get rid of it. In that with the NEC a part of Amtrak if you kill Amtrak you destory the NEC but with the NEC gone they can kill Amtrak.

    I really think this whole thing smells like rotton fish

  • BillyBob

    Why not privatize the routes that are not making money? I don’t want some Florida politician enriching his corporate friends by giving them my Acela service to soak themselves with. Give them routes in Kansas.

  • david vartanoff

    Because the routes in Kansas, and Montana, and North Dakota…and others get Congressional support for Amtrak because they provide local service in rural/less urbanised areas as well as land cruises. Letting Mica give away the NEC is like selling off the rights to all of the blockbusters and then trying to continue funding B movies with NO cash flow.

    • Including revenue from Acela, the NEC operates a whopping fifty million in the black. Loss of it will have no real impact on Amtrak’s cash flow.

      • BillyBob

        Then the same can be said for the other routes that lose not so much money. Give those up to private bidders if Mica and his cronies want rail so bad.

        The whole idea is just like the author of the article describes. And in the end private money won’t put one any new track down or get one new train rolling.

        • If we want private money to lay new track, we wouldn’t be talking about privatization of an existing corridor, we would be talking about privatizing a service that does not yet exist, the Northeastern NextGen 220mph Express HSR.

          So, yeah, its not about getting private money to lay new track, or else it would have been framed differently.

          • Ugh… Sorry, I misunderstood the comment you made to the same effect on my blog. If the issue is privatizing future service, CAHSR-style, versus privatizing existing service, then I really can’t disagree that it’s a much better idea. (However, regulatory reform and infrastructure construction that’s capable of taking on intransigent commuter operators are still required.)

      • In terms of cash flow, the Acela and the Northeast Regionals combined are over half of Amtrak ticket revenue, $479m of $898m on 10Q4/11Q1, and the Acela over a quarter at $243m, and that is with rolling stock constraints on Acela ticket revenue.

        On total March 2011 FYTD expenses of $1,891m, NEC ticket revenues are over 25% of total expenses.

        Its a bit surprising to see that characterized as “no real impact on cash flow”.

        • Because it’s a net neutral, with NEC expenses all but entirely canceling out Regional and Acela revenues.

          • BillyBob

            In the black means in the black. Now if its still that way after capacity is increased then there’s an issue. Otherwise your minimizing it just says more about you than Acela or Amtrak.

          • That is assuming away scale economies. If there are any economies of scale, then the cost of the long hauls and the regional corridors operated on their own is greater than the share of cost they are allocated, and at the same time the cost of the NEC services on their own would be greater than they are allocated.

            Getting an appreciation for the scale of the operation is one reason for looking at cash flows, and not just the profit and loss.

      • If you look at the latest monthly report, you’ll see that the NEC is $70 million in the black YTD, which translates to $140 million in the black per year. YTD, the corridor trains are $100 million in the red and the long-distance trains are $300 million in the red.

        • Woody

          Perspective. The long distance trains are in the red by about $300 million a year. That’s been the range for at least a couple of years. Just NOT a big deal. Less than a dollar a year per U.S. citizen. Or something like one or two lazy afternoons in Afghanistan.

          Last month Amtrak head Joe Boardman was asked a good question, ‘Why is Amtrak forecasting increasing losses next year even while seeing passenger totals grow?’ He gave a poor answer, blaming that on the long distance trains.

          He could have answered, ‘Until we get another thousand or so all-NEW locomotives, coaches, diners, lounges, baggage cars, crew cars, dome cars, etc., we’ll be capacity constrained on every long distance train we have. After we get hundreds of additional rail cars, we expect to add revenue faster than we gain passengers, by having more frequencies and restoring or adding a few routes. And as upgrades are finished on a few segments funded under the Stimulus bill, some of the long distance trains will go faster and our revenue will grow.’

          Or he could have said, ‘Because of FRA regulations that require all our equipment to be built like tanks on tracks, our heavy trains burn more fuel than passenger trains elsewhere in the world. Unless or until those regulations are revised, we will have to live with high operating costs and results in the red.’

          • Nathanael

            Yep. Even something as simple as doubling the Lake Shore Limited frequency with a “service to Ohio and western New York” 12 hours off would more than double ridership…. but there are no cars for it.

          • jim

            The long distance trains are in the red for $600M a year, fairly consistently. Alon’s number was for the first six months of FY11. $600M is a substantial figure. It’s more than twice the Essential Air Service subsidy, for example. Congress is apparently willing to pay it, but that doesn’t mean it’s good.

            There’s no real reason to suppose that more long distance trains would attract more passengers. Certainly I’m aware of no ridership studies that purport to say so (and, no, URPA saying something doesn’t make it so). Most long distance routes are concatenations of corridors, most of which would not support corridor service on their own (there are some exceptions to this: ridership on the Capitol Ltd. is primarily between Chicago, Pittsburgh and Washington; all but 200 miles of the LSL route have been proposed as HSR corridors). Why run more trains along corridors without riders when, if more rolling stock were available, you could run more trains along corridors with riders?

            • Woody

              Sorry, I misread Alon’s figure. And when I’ve tried to look at Amtrak’s Annual Report, my brain glazes over. But O.K. Long distance trains cost $2 for every American citizen.

              Meanwhile Amtrak’s interest and amortization on its debt runs $300 million a year, and that DOES seem like a big number to me. Right now the federal government can borrow at about 1% interest. I’m sure Amtrak pays a much higher rate on its debt. So: Treasury borrow $2 or $3 Billion at 1%, pay off Amtrak’s debt, save a ton of money. But oh no, we have to pretend that Amtrak is an independent entity — until Congresscritter Mica starts calling it a frog and telling it how high to jump.

            • Woody

              I may have omitted steps in my thinking and jumped to my bold conclusion, because I basically agree with your point. The customers Amtrak has now are going to be its best customers. Much of the needed infrastructure is in place on the current routes. The overhead per train, including advertising and marketing, but stations and other costs as well, goes down as more frequencies are added. So the shorter, corridor routes are the low hanging fruit. (But that doesn’t mean I’m not thinking of tall ladders for future harvesting.)

              We need to support a *bold* vision for Amtrak. The haters are constantly spewing a story of failure, advocating cutbacks and retrenchment. If we don’t have a contrasting view of growth and success, we will lose the argument. Obama has tried to use HSR to wrap a mantle of success over the future of all passenger rail, but he — and Biden, LaHood, the team — have not been telling a good story about Amtrak.

              Here’s my story of growth:

              Amtrak needs hundreds, probably 1,000 new railcars, that’s the starting point. New and in addition to the 1,500 or so replacements needed for obsolete cars. Including new locomotives that Amtrak and the DoT like to describe as quick-accelerating locomotives.

              Add another sleeping car to every long distance train. Look at results and probably add still another sleeping car to every long distance train. And maybe another on some routes. And yet another on a few selected routes.

              Add coaches as needed, probably at least one to every train Amtrak has to start, from the California Zephyr to the Heartland Flyer. But mostly on the shorter distance trains, and mostly east of the Mississippi, west of the Sierra Nevada range. Then add another coach to every train. And another to many trains.

              The next-generation coaches, with bigger windows, outlets at every seat and the potential for Wi-Fi, and other attractive features, will draw more riders all by themselves.

              Put new dome cars on almost every long distance train. They are absolutely worth their weight in marketing. They symbolize the idea that rail travel is special, almost exotic, and most of all fun.

              Link Pontiac-Detroit-Dearborn (or is that Lansing/Kalamazoo-Battle Creek-Ann Arbor?) with eastbound trains at Toledo, even if it means launching an entirely new train from Michigan to the East Coast.

              Make the Cardinal daily. Put the first new dome cars here, because the Cardinal passes thru the New River Gorge Wild River unit of the National Park Service. Gorgeous river scenery, but little known. Putting the first new dome cars on this route will generate huge amounts of earned publicity and help to fill those high-revenue sleepers.

              Make the Sunset Limited daily New Orleans-Houston-San Antonio. And make it daily L.A.-(sort of close to Phoenix)-Tucson (if we can negotiate down the UP’s ransom demand). Restoring the route from L.A. into downtown Phoenix would make this a great route. Not cheap, but it needs to be done. Phoenix is too big to be off the network. Phoenix-L.A. is too ripe a corridor to be given a bypass instead of a direct route.

              Add frequencies on the shorter distance trains, e.g. the Wolverines, Chicago-Detroit; the Pennsylvanian, NYC-Philly-Harrisburg-Pittsburgh; the River Runners, St Louis-Kansas City; the Vermonter, NEC-Hartford-Springfield-Vermont.

              Look at tweaking the shorter routes, maybe get the River Runners going beyond St Louis to Chicago in a one-seat ride from Missouri. Maybe extend the River Runners 66 miles or so Kansas City-Hutchison-Topeka, or Kansas City-St Joseph, or even Kansas City-St Joe-Omaha. Maybe extend a Keystone beyond Harrisburg to Altoona (a study for PA found this made sense).

              Look at adding new shorter distance trains that overlap parts of existing long distance trains, like maybe NYC-New Haven-Hartford-Springfield-Worcester-Boston North Station-Portland; NEC-Richmond-Norfolk; Chicago-Kansas City. Or within existing short corridors, like Flint-Lansing-Battle Creek-Ann Arbor-Detroit, and Kalamazoo-Battle Creek-Ann Arbor-Detroit.

              Look at extending short trains, like NEC-Charlottesville-Lynchburg to Danville-Goldsboro-Charlotte. And as soon as Gov Scott is out of the way in Florida, do the Florida East Coast route Miami-Ft Lauderdale-West Palm Beach-Canaveral-Daytona-Jacksonville.

              Add more feeder lines to the NEC. The study HCR in America 2050 liked Salisbury, MD-Dover, Del-NEC; NEC-Atlantic City; NYC-Allentown-Reading; NYC-Scranton; NEC-Barnstable, Cape Cod. Maybe Boston-Nashua-Manchester-Concord, NH.

              Meanwhile watch as portions of the long distance routes become shorter, H(er)SR corridors, leaving only some sections losing money. Many long distance routes will grow into mostly overlapping, high frequency corridors and not lose money at all.

              Then I’d start looking at which long distance routes could benefit from a second frequency end to end.

              I haven’t seen any studies either of how that works out, not sure it’s ever been tried in this country. Tho it is clear that an additional frequency or two can markedly increase the passenger total for short distance trains. St Louis-Chicago Lincoln service went from two trains a day to four, or if you count the Texas Eagle in that corridor, it went from three trains to five, a 65% increase in frequency and a 100% increase in passenger count. Raleigh-Goldsboro-Charlotte went from two frequencies to three, a 50% increase, and riders increased 91% by one report. Even the celebrated Lynchburg line is a second frequency on part of the Crescent’s route — not to mention the Cardinal also running, a third frequency three days a week, between D.C. and Charlottesville.

              But on the long distance trains, I think passengers will appear ‘out of the dark’ when a train stops in their city during daylight hours, passengers who will never, not ever, get out of bed to hang around the train station after midnight. I also think passengers will choose rail if they can ride to one city and return, preferably the same day, or at least the next. When either the departure or the arrival is at an awkward, inconvenient time, they will not ride the train. More frequencies bring reasonable departures and arrivals to more city pairs.

              This hypothesis will not be difficult to test on one or two routes.

              Maybe start with a mini-Empire Builder, Chicago-Twin Cities-St Cloud-Fargo-Grand Forks. The current Empire Builder passes thru Fargo and Grand Forks after midnight and before dawn, but iirc, they each board about 25,000 passengers nonetheless. I’d like to see how many passengers would get aboard after 7 a.m. and before 8 p.m. Oh, wait. Not sure that mini-route would be overnight! Might have to try that second frequency the entire route of another train. The Southwest Chief would be a tough test. I understand that Denver-Salt Lake City is too congested to easily allow a second frequency, but the Zephyr would be a good test.

              Last in priority, add a few long distance routes. Chicago-Florida cries out for a link. Or isn’t that Indianapolis-Louisville-Nashville-Chattanooga-Atlanta-Florida?

              Restore the Sunset Limited east of New Orleans. I happen to agree with URPA that some riders are gained from a better connected network. Not enuf to solve the problem. But it’s absurd that passengers from L.A. or Texas have to travel to Chicago or to D.C. to get to Florida. Maybe a Chicago-Atlanta-Florida train would take care of that. But doesn’t New Orleans-Gulfport-Mobile-Pensacola look like a short corridor that would not lose money? It shouldn’t be a big loser to later extend one train to Tallahassee and Jacksonville.

              Kansas was, under a previous not crazy Gov, very interested in extending the Heartland Flyer, Ft Worth-Oklahoma City, onwards to Wichita-Kansas City, then perhaps to St Louis or Chicago. It’s worth a look, I’d say, after we build up the existing system and the shorter routes.

              How about L.A.-Las Vegas. Then some want to push on to Salt Lake City. It will probably happen when the Mormons want it to happen, but not before.

              A Front Range line would not necessarily start out as a long distance train. Cheyenne-Ft Collins-Denver (if they can figure how to get north-south trains into Union Station now that they sold its soul to real estate developers)-Colorado City-Pueblo. Extending that to Albuquerque and El Paso had support from Gov Richardson, but now a Repub train-hater is in the office, so forget it until she’s gone.

              Restoring the Pioneer, Denver-Salt Lake City-Pocatello-Boise-Portland, has its advocates. The population of Boise has grown from 125,000 in 1990 to 200,000 now (metro area 600,000+). Keep up that growth and by the time Amtrak has enuf cars to make up a consist for the Pioneer, it could have enuf passengers to fill it.

              The biggest problem with adding routes is not if they’d attract enuf passengers to fall in the midrange of performance of Amtrak’s existing routes. I think they would. The problem is the huge ransoms the freights ask for upgrading the routes to add even four more trains a week on a route already carrying three trains a week.

              But if the economy keeps wallowing in quasi-depression, or prosperity for the rich, misery for the unemployed, the poor, and the underwater home-owners, maybe one day we’ll need to put thousands to work on rail projects all across the country, and restoring the Pioneer will start to look cheap! That might take a view of guillotines being erected on the Mall to get Congress to that conclusion, but it could happen.

              Alas, until Amtrak gets new cars coming on line, two or three hundred a year (including the replacements for the most obsolete in the fleet), not much can happen, good times or bad.

              • jim

                There’s a false equivalence here.

                All Amtrak’s corridor trains, without exception, cover their avoidable costs. That means that an additional frequency on a route leads to lower losses on that route. Until the route’s market is saturated, adding frequencies lowers losses, perhaps even leads to operating surpluses. The Piedmont is likely to go into the black with another couple of frequencies.

                But the long distance trains, except for the Auto Train (which is sui generis) and possibly the Palmetto, all fail to cover their avoidable costs. A second frequency incurs most of the avoidable costs of the first (all but station O&M) and will have fewer riders than the first frequency — the first frequency schedule is presumably optimized to catch the largest ridership possible, hitting the largest markets at the best time and the smaller ones at less convenient times; a second frequency will hit small markets at more convenient times and large markets at less — so will lead to the route losing even more money.

                Even adding cars to a long distance consist incurs more avoidable costs: more fuel, more OBS, more maintenance. Unless the trains are consistently selling out across a major portion of their route, the increased revenue isn’t going to be worth it.

                The Zephyr sells out between Reno and Sacramento and between Denver and Glenwood Springs. That’s an argument for working with California and Nevada so that more of the Capitol Corridor trains extend to Reno and working with Colorado to create a Denver-Glenwood Springs-Grand Junction corridor. It’s not an argument for more cars on the Zephyr. Hauling more cars between Chicago and Emeryville so that Denverites can go skiing is crazy.

              • the first frequency schedule is presumably optimized to catch the largest ridership possible, hitting the largest markets at the best time and the smaller ones at less convenient times; a second frequency will hit small markets at more convenient times and large markets at less — so will lead to the route losing even more money.

                The Cardinal is, of course, betwixt and between ~ its a reasonable NYC/DC to western VA regional corridor, and except for being bog slow north of Indianapolis a reasonable Cincinnati / Indianapolis / Chicago corridor, and a medium-long haul service connecting the massive urban areas of Charleston and Huntington WV to both Chicago and the Eastern seaboard.

                Even if the operating cost of running a car that is closed except for corridor-length sections of the route were covered by the extra revenue, there is still the opportunity cost of running that car deadhead for the majority of the route, when if dedicated to the corridors, they could each make multiple revenue turns in the same period of time.

                For the Cardinal, its corridor sections acting as corridors and fare integration would allow on alternate days the Chicago side to run one service through WV to connect to the eastern services at Charlottesville and the DC side to run one service through WV to connect to the Chicago corridor at Cincinnati.

              • jim

                Bruce,

                The PIP on the Cardinal said that its schedule was optimized for Chicago connections. Shift it around and the ridership from those connections is lost and added convenience in eg Cincinnati doesn’t make up for it. Or at least that’s what Amtrak’s ridership model spits out.

              • Are long-distance to long-distance connections really more important than decent Chicago-Cincinnati corridor service?

              • jim

                No, but they’re more important than the current Chicago-Cincinnati service, which Bruce above described as “bog slow.”

              • jim

                The problem is that long distance trains really don’t provide adequate corridor service. Everyone was surprised at the ridership on the Lynchburg NEC Regional extension. The surprise came from the fact that it’s scheduled to leave Lynchburg only an hour and a half after the Crescent. People weren’t riding the Crescent, so it was thought that they wouldn’t ride the corridor train. That thought was clearly wrong.

                The northbound Crescent originates in New Orleans. By the time it gets to Lynchburg it’s traveled nearly a thousand miles and can easily be running two hours late. Stuck behind a unit stone train between Meriden and Birmingham, say. The northbound corridor train leaves Lynchburg on time. People reluctant to rely on the vagaries of the Crescent can and do rely on the extended NEC Regional.

                The same thing applies to Chicago-Cincinnati. The westbound Cardinal has been traveling more than 800 miles by the time it gets to Cincinnati. Even if it were scheduled to get there at a better time than one in the morning, there’s no guarantee it’ll actually arrive on or near schedule. Who will rely on it?

                If they want a decent Chicago-Cincinnati corridor train, Illinois, Indiana and Ohio have to work to get one set up. The Cardinal isn’t it.

              • Woody

                Drop the long distance trains, you’ll have to start all over making deals with the freights. Good luck with that.

                The UP wants $750 million to take the Sunset Limited from 3 days a week to 7 days. Drop the 3-day-a-week Sunset and see how much the UP will demand for L.A.-(almost near) Phoenix-Tucson and New Orleans-Houston-San Antonio.

                I’m willing to lose a couple of day’s worth of Afghanistan on the l.d. trains as placeholders for a couple more years, and start overlaying corridor trains on portions of their routes just as soon as Amtrak can get a couple hundred next-generation cars off the assembly line.

              • Amtrak has no plans to get next-generation cars anywhere except maybe the NEC. Its plans for future rolling stock consist of slightly nicer versions of the Superliners and Viewliners – certainly nothing that is considered next-generation in places that do mainline rail right.

              • aw

                Amtrak has already ordered the next generation of the Viewliners. When they order replacements for the Superliners and Amfleets, they’ll be next generation Superliners and Amfleets. They’ll look a lot like their ancestors, but they will indeed be next-generation.

              • Woody

                Alan, Point taken.

                I meant the next order of the new model cars, which will have larger windows and other nice features. And still will be as heavy as tanks.

                We won’t have a real “next generation” of coaches until we have a new generation at the FRA.

  • Allen

    A similar piece could’ve been written 40+ years ago when the NEC was bought out by gov’t. agencies instead of being sold off to private hands.

    Whatever the overall ideology it should be clear by now that things haven’t markedly improved since then in relation to railroad improvements in the country. The question shouldn’t be can the current arrangement theoretically work but what concrete changes can be made that will improve this capital starved corridor.

    BTW, I’m not sure why the operating profit is such a big deal. It’s a bit like the pizza delivery guy that brags about how much money he’s making delivering pizza while ignoring how much his car + car repairs are costing him.

  • Ocean Railroader

    This plot with the NEC sounds a lot like how the bus and oil companies bought up the streetcar companies in the 1950′s and 1940′s and started scraping them saying they where going to improve service when in real life they ripped up the streetcar systems and made serivice far worse. I really think this is part of this plan much the same way they two up the EV-1 Eletric Car and took it to the scrapers and ground it up into scrap metal even though it worked fine.

  • Woody

    Don’t we have a few test cases of privatizing passenger rail going on right about now? An ambitious group wants to run “fun trains” from near L.A. to Las Vegas. Of course, they’ll need permission from Union Pacific to run on UP’s track. How’s that working out, do ya think? And is Mica doing any heavy lifting to help this Las Vegas effort for privately-operated passenger rail?

    One advantage “Socialized” Amtrak has is a general right to run its long distance trains over the freights’ tracks. In practice it has the right to go hat in hand to beg permission to run a new or added train. But it does hold the rights on its existing routes, and that’s a hell of a lot more authority than any private operator of passenger trains would enjoy.

    Privatize Amtrak’s long distance trains and open all routes for new bidders. I can see it now. David Branson’s Virgin Rail America takes over the California Zephyr from Denver to the San Francisco Bay Area. He decides to double down and add new trains out of Denver along routes formerly known as the Pioneer, northwest to Portland and Seattle, and the Desert Wind, to Salt Lake City, Las Vegas, and L.A. Sure he can, when Virgin gets permission from the freights. They wanted over $350 million to allow a restart of the Pioneer, iirc.

    So then will Mica push thru a law REQUIRING the freights to carry passenger trains of private operators like Virgin, at a rate to be determined by a third-party regulator or arbitrator? Doesn’t seem like a very conservative thing to do. But without some limits of the charges, the freights will simply price Virgin or any other new operator off the rails. Seems like privatizing the l.d. trains is really a scheme to end them.

    Meanwhile in California, the voters approved a bond issue of about $10 billion, to help build a new HSR line. The feds have already approved $3 Billion as a start, and more is sure to come, if the government doesn’t default or something crazy. And the plan is that at some point private investors will come in. But this project has some real-world qualities to it. So the planning assumes that the private investors will be the equipment suppliers looking to demonstrate their wares in what they hope will be a growing market, and the company, probably a foreign one with experience, that wins the right to operate the new HSR system. They aren’t really expecting “private investors” like, you know, individuals or institutions that buy new stock issues or anything like that.

    So California has a new HSR line, to include private funding, and almost surely to be privately operated (I mean, Amtrak could win the right, but don’t expect it). Is Mica a big proponent of this form of privatization of HSR? I don’t think so. Probably because, if for no other reason, than because Obama is for it, and therefore all real Repubs must be against it.

    No. Mica is not doing a damn to support these privatization efforts on the West Coast. To me that confirms that his real interest in “privatizing” the NEC is to destroy Amtrak, bringing him into line lock-step with the crazies who dominate his party.

  • Liberals love to talk about how big the subsidies are for roads and airports compared to Amtrak. But when WE talk about how much the Amtrak subsidy is, the liberals say “pay no attention to that man behind the curtain”.

    Pretty hypocritical if you ask me.

    Why not listen to the average American to determine what America wants? The average American doesn’t have time to take Amtrak to go see the Grand Canyon with grandma. We really don’t have time to travel at all. So we can’t go around getting “cultured” like all the so called intellectuals out there making out of touch transportation decisions from ivory towers. We need planes and cars. So expand that and if you want choo choo go to a museum or another country that doesn’t have it as good.

    Responsible conservative families do NOT need subsidized transportation!!!

    The country has the right to know the truth about transportation costs. We pay our gas taxes and we want what we paid for. People in Priuses are the ones not paying for the roads they use. Raise THEIR gas taxes, not ours.

    I think it’s wrong to only tell one side of the story and let people believe there isn’t another side.

    • Tim E

      Kinda funny, just flew out of Anchorage, AK this morning where subsidized travel either via plane, ferry or road is the norm in a state that has been the biggest winner of Federal Income tax handouts for Years. Heck, they even named the airport after the guy who brought home the most bacon.

    • BillyBob

      “I think it’s wrong to only tell one side of the story and let people believe there isn’t another side.”

      Air and road subsidies are far higher than rail, a mountain compared to an ant hill. So you can complain about rail subsidies but your “side” has a weak argument.

    • ThomasD

      Paris,
      Your soundbite “Responsible conservative families do NOT need subsidized transportation”, is in fact, an entirely false or hypocritical statement.

      Gasoline taxes only contribute $19 billion/year, while Federal Highway expenses have been $40-42 Billion/year for many years. Ditto for the $14-16 billion/year airports receiving more from Federal Aviation than they collect in taxes & fees. See for the 2010 US Dept of Transportation numbers for yourself at http://www.dot.gov/budget/2010/bib2010.htm

      Fact is, American taxpayers has been subsidizing all major modes of transportation infrastructure since the 1800s because it is a public good that enables more business and leisure activity. More activity powers our economy and private jobs.

      I also dispute your mischaracterization, “The average American doesn’t have time to take Amtrak to go see the Grand Canyon with grandma.” The average American is 80% urbanized according to the 2010 US Census, see http://www.fhwa.dot.gov/planning/census_issues/metropolitan_planning/cps2k.cfm

      And increasingly more urban Americans DO want their tax dollars, which are the majority contribution into federal and state tax kitty, to fund 400-500 mile HIgh Speed Rail corridors between major cities. Thats not speculation by me.

      Aside from the Northeast region wanting improved HSR service, California voters passed a $9.9 billion bond measure towards building a $43 billion 220 mph HSR system. Illinois is feverishly developing plans for a 220 mph system connecting Milwaukee-Chicago-St. Louis and possibly Chicago-Indy, according to the Illinois governor this week, see http://www.midwesthsr.org/governor-quinn-announces-partnership-with-university-of-illinois-to-study-220-mph-rail-service

      The Southeast and Pacific Northwest can’t wait to finish upgrading their rail lines to 110 mph to both increase patronage, speeds and lower operating subsidies.

      One last point. HSR lines are a lot cheaper to maintain than Federal Highways.

      • Paris is a parody troll. Regulars on the Infrastructurist know to stay away. I sometimes can’t restrain myself and write sarcastic replies.

        • Spokker

          Yup. I maintained a parody troll for a little while too. And Paris Palin is definitely the style I posted in but in the context of transportation issues in Orange County, CA.

  • Amber

    The best thing about privatization is that private, for-profit companies can give political campaign contributions, whereas government employees can’t (Hatch Act). When a politician suggests privatizing or contracting out a service that was previously performed by the government and says things like “bad management”, “going over budget”, “the private sector can do it better” or “Soviet-style service”, he might not really care about these things at all. Private-sector money can change the way a politician sees things.

    • Danny

      That is complete bullshit.

      http://www.opensecrets.org/orgs/list.php

      Right there. #2.

      • Are federal employees allowed to donate to political campaigns, or just state and local employees?

      • Drewski

        No, Danny, it’s not BS. You’re posting a link about identified contributors. Koch Brothers? Richard Mellon Scaife? Personal loans to one’s own campaign (remember when Mr Huffington wanted to pay his way into office)?

        Let’s bring it back to a question of the motives of politicians who want to sell or lease public assets for financial gain. As this link http://www.azcorrections.gov/adc/reports/ADC_FY2010_PerCapitaRep.pdf shows, the state of Arizona’s own data on contract prisons show that they cost more per inmate. More, not less.

        Why should I pay road tolls to a private company, when the tolls I pay for the Ohio Turnpike result in a well-maintained road paid for by its users and NOT by the general revenue fund? Why should a taxpayer be compelled to guarantee a profit margin to a contractor? My model is more straightforward than yours, yet you want to cloud the discussion with information which isn’t directly germane to the subject.

        I’ll give you a good example of the unintended consequences of your ideological argument. TWA’s hub was in St Louis. St Louis’ Lambert International Airport embarked on a billion-dollar expansion, which included demolition of a couple thousand houses in the city of Bridgeton. There is no monetization of the value of the airspace used by TWA, or any other airline for that matter. There is no monetized value on the increased noise pollution. There were hundreds of millions of dollars from the FAA, as well as local funding, to pay for this project. But then a funny thing happened: TWA collapsed, and its assets were bought by American. St Louis didn’t need that capacity, not least because the TWA hub melted away. This pattern repeated itself in Cincinnati (Delta) and Pittsburgh (USAir). Cleveland was a United hub, but United all but pulled out of the market; Continental established a hub here, but Continental has merged with United. The only reason there’s not a likelihood of drastic service cuts is that Cleveland has far more local-origin traffic than St Louis, Cincinnati or Pittsburgh did, relative to their total numbers as hubs. The underlying issue is that every one of these airports burned through a good billion dollars of public money (including PFCs) to benefit a private carrier, and that the added volume is far beyond market demand.

        Compare this to a proposed HSR, in this case one running from Cleveland to Chicago. I’m going to assume express and limited service. Let’s call it 7-10 nonstops, as many as 20 limited-stops (Toledo and South Bend, plus intermediate cities like Sandusky), and hourly regional service (Cle-Tol). The rights of way for most of this concept already exist. Infrastructure upgrades–like electrification, grade separation and smoothing curves–would increase existing capacity with reduction in overall noise pollution (no horns or diesel locos). Instead of using eminent domain to take private property, there’s a market created for some of the most unwanted real estate in the country. Moreover, this concept benefits lineside towns with access comparable to a larger city.

        I haven’t described anything unrealistic. I have described something which is current practice in Germany, Sweden and Spain. I’ve described a government initiative which creates opportunities for the private sector, but does so without hiding costs or responsibilities. You’re busy trying to conjure up a nonexistent bogeyman. There’s an existing model to follow, yet you persist in seeking the Ayn Rand oracle to no practical end. Meanwhile, other countries are leaving the US in the dust, and any true conservative would be very concerned with the risk that the status quo poses to our long-term economic, political and fiscal sovereignty.

        • Danny

          Nice diatribe dude…but in the end it was just a fight against a bunch of straw men.

          1) Supporting privatization does not mean that you support privatization of everything. It is you that brought up private prisons, not me. In fact, you call me ideological, but not once have I mentioned that I want to privatize everything…but you attack privatization as a cure to anything, which is a far more ideological position than supporting privatization when it is appropriate.

          2) You make it sound like the only thing privatization does is add an extra cost (guaranteeing profits) to the use of the thing, whatever it is. This is a fundamentally false assumption, and it is disproven thousands of times over with real world examples of privatization. In many cases (not all of course, which is important because unlike your assumption, mine isn’t ideological) privatization benefits the public far more than the profits take away.

          One example that I am familiar with after living in the country for a few years was the privatization and demonopolization of Hondutel’s cellular division. Within two years, there were more cell phones in Honduras (at cheaper monthly rates) than there had ever been of any telephone at any point in the history of Honduras…all the while the still-publicly-owned landline division saw negative growth.

          Why? How? Because the publicly owned cellular division never had a cost structure that would allow the prices that the private market gave them. Once private companies were allowed to compete with the status quo, the status quo was demolished, and to the benefit of every single person that can now afford one.

          • ThomasD

            Yeah Danny,

            Just like your strawman that HSR should be privatized, but no private companies are stepping up to pay 70-80% of construction cost like the public does.

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