Are Private Operations on the Northeast Corridor the Means to an End, or Just an End?

» Without a commitment of more federal funds for improvement, an initiative to transfer rights to private entities to operate trains along the Northeast Corridor would not accomplish much.

In order to take advantage of the roadways effectively, bus drivers — not to mention car drivers — do not need to take possession of said roads. Indeed, they need only to be in possession of a vehicle that can navigate along the streets and be able to pay for fuel, part of whose cost returns to cover many of the expenses required to build and maintain the roads. Many different vehicles, owned by many different people or organizations, can share the roads, usually without problems. Sometimes, there are accidents, which can be mostly avoided through proper design of the roadways, and there is sometimes congestion, which can be relieved through road fees. Fundamentally, the system works: There are vehicle owners, usually private individuals, and there are infrastructure owners, usually the public sector, and they get along fine.

All of this, I know, is obvious. But when it comes to rail transportation, this formula has been avoided, especially in the U.S. The owner of railroad tracks usually is also the operator of trains along them. When other operators want to move their own trains in, conflicts typically erupt. The frequent disagreements about acceptable service levels between national rail operator Amtrak and freight railroads on tracks that the latter owns (and which it isn’t very happy to share) are indicative of this problem. But these disagreements are not irreconcilable. Indeed, an infrastructure owner that is able to arbitrate between competing operators could be more effective in producing efficient service for everyone than might be an owner-operator, which discriminates against other operators.

In this context, yesterday’s revealing of House Transportation and Infrastructure Committee Chairman John Mica’s (R-FL) plan for the Northeast Corridor raises a number of interesting questions. Convinced of the value of private sector competition and promoting a pull-out of the federal government from every public service imaginable, Mr. Mica has submitted a proposal that attempts to re-imagine the Northeast Corridor, Amtrak’s flagship route and the nation’s most-traveled intercity rail line, as a place where, fundamentally, the rules of the road — but not the railroad — could apply.

The bill (draft text) would force Amtrak to abandon its control of (much of) the Northeast Corridor between Washington and Boston, handing it over to the Department of Transportation, which in turn would lease it to an “Executive Committee.” Amtrak would have to give up all of its assets and it would loose federal funding. The Committee, in charge of infrastructure and setting pricing policies, would then engage a public-private partnership (PPP) with a private group, which would commit to upgrading the line and then operating trains to offer two-hour trips between New York and Washington and 2h30 between New York and Boston — within ten years, twenty years more quickly than Amtrak has said it would be able to make roughly the same improvements.

Mr. Mica also claims that this could be done at a cheaper price than Amtrak’s $117 billion proposal.

Outside of the Northeast, states would have to offer their rail corridors to competitive bidding; current subsidies to Amtrak would simply be redistributed to the winners of those operations bids.

Despite the wide-ranging proposed effects of the bill as summarized, the manner in which any of this would be implemented remains incredibly unclear. How would intercity rail operators interact with the freight and commuter railroads that also use the tracks, in the Northeast and elsewhere? If a PPP were implemented, how much would the government agree to commit to pay for improvements?

Unfortunately, the bill would not provide a realistic way to promote true operational competition. Nor does it would it offer a promise of actual federal support to fund an upgrade of the corridor, which seems unlikely to be sponsored by private entities alone. Most problematic would be the transfer of authority over the line’s management to the currently non-existant Executive Committee, whose ability to make decisions about rail properties has yet to be tested, let alone proven.

Fortunately, the proposal is unlikely to make it through the Senate, where Democrats and other Republican supporters of Amtrak are likely to prevent the bill from passing even if it makes it through the House. The American intercity rail system and the governance bodies that oversee it at the federal and state levels are too underdeveloped to be able to guarantee that this semi-privatization wouldn’t be a disaster.

But Mr. Mica’s bill does articulate a number of policy changes that could play an important role in shoring up passenger service in the Northeast. The status quo, in which Amtrak operates relatively infrequent and slow passenger trains within the nation’s most important megaregion, certainly is not ideal. If managed appropriately, the separation of track ownership and line operations could allow for a situation in which multiple operators offer competing services along the same routes, just as Megabus and Bolt Bus compete for the most customers on I-95.

In mainland Europe, E.U. regulations have mandated that national rail companies like France’s SNCF or Germany’s DB allow other operators (in many cases, SNCF and DB affiliates) to run trains between similar destinations. Though I am not convinced that this will produce universally positive results, it will at least likely result in lower fares for customers on the most heavily trafficked rail corridors. And focusing on the most-used lines is clearly Mr. Mica’s goal; according to the bill, the second-highest stated priority for potential investors are “activities that benefit the greatest number of passengers” (just after safety). Amtrak’s current policies do not exactly fit that bill since they are designed to push lower-income individuals (like myself) onto slower and less comfortable intercity buses.

Yet the Mica proposal would not produce true competition in rail operations. It would encourage competition in rail operations contracts. Rather than invest in the infrastructure and then open up the rights to use tracks, the PPP structure as proposed would be a build-operate-maintain system in which one private group would invest in improvements and then have control over operations, which it would perform itself. Mr. Mica has repeatedly referred to Amtrak as a “Soviet-Style” system because it has a monopoly over its services, but it is hard to see how a PPP extended over a long contract would be any different, except that it would charge even higher prices to make up for the initial cost of capital improvements and — even worse — it would be literally banned from cross-subsidizing other services with the profits, according to the proposed bill. Is this in the public interest?

The biggest question of all, though, is whether Mr. Mica is in complete denial about the extent of either the private sector’s ingenuity or their collective willingness to invest in public infrastructure. While it may sound nice, asserting that corporations can rebuild the Northeast Corridor in 10 years at a far lower cost to the taxpayers than Amtrak has proposed could is a stretch. And even a $50 billion upgrade would be larger than any single private investment in infrastructure ever in the U.S. What evidence does Mr. Mica have that a plan like this could move forward?

Image above: Inside New Haven’s station along the Northeast Corridor, from Flickr user Andrew Ciscel (cc)

107 Comments | Leave a Reply »
  • Danny

    There is a reason why the whole government-infrastructure/private-operator idea works well with roads and poorly with rail: capacity. With rail, total capacity is determined by the lowest common denominator with respect to operating speeds. A slow train doesn’t just slow the train behind it down, it actually reduces the usable length of the track at any point in time.

    • Straw man argument – how does the European paradigm work poorly? It’s not implemented anywhere in the US. In fact it seems that European rails have much higher capacity than the US ones.
      Secondly, in what way does the private owner-operator solve that problem in a way that a public infrastructure owner could not?

      • danny

        >>>how does the European paradigm work poorly?

        By sacrificing freight for passenger travel

        >>>In fact it seems that European rails have much higher capacity than the US ones.

        In well managed corridors that is true, but in those well managed corridors, it is typically a single operator.

        >>>Secondly, in what way does the private owner-operator solve that problem in a way that a public infrastructure owner could not?

        By running all trains at the same speed. Managing competing train operators so they run at the same speed is completely impractical for a variety of reasons, ranging from dealing with competitive behavior (why would a fast train company ever want to operate as slow as their competitor?) to simple inconsistencies in acceleration profiles between rolling stocks.

        • The European paradigm isn’t sacrificing freight for passenger travel; SNCF and DB’s inability to work together does. If you want to see a country that has very high passenger rail density and very low freight rail density, look to Japan, which has private owner-operators on the main lines.

          • Danny

            Europe most definitely has sacrificed freight for passenger rail. Their freight rail mode share was almost exactly like ours up until the 1970′s when passenger rail began to take precedence. It isn’t just SNCF and DB…the Italian, Spanish and British freight systems have floundered as well.

            Ours dropped too, but has been recovering ever since the Staggers Act…Europe’s mode share has never recovered.

            • What you say is also true of Japan.

              The French and German networks are the most important for transcontinental freight. The DB-SNCF animosity is also the worst, but the other national operators won’t work together either. It’s much easier in the US, where there are unified standards for rail freight and industry-wide unions.

            • Tom West

              Disagree. The amount of freight (excluding coal) hauled on the UK’s railways has ben icreasing steadily for the last two decades.

              (I exclude coal, because coal hauled by rail is exactly equal to coal consumed by power stations. The latter has fallen a *lot* in the past 30 years. Or to put it another way: the amoputn of coal shipped by rail in the UK has nothign to do with how the ralways ar3 run).

              • Danny

                The rail freight share has been increasing steadily pretty much everywhere except Cuba…but that doesn’t nullify the fact that freight rail capacity has been sacrificed in favor of passenger rail.

              • Ocean Railroader

                A lot of these freight rail lines where much bigger in the 1900′s when they had both freight and a lot of passanger trains on them in that there was a lot of double track lines that are now one track lines today and there where even a lot of four track lines that are now double track lines today.

                The Pennsyvinia Railroad had a four track wide main line from Phili to Pittisburg and the New York Central had a four track line form New York City to Nigrafalls.

                A lot of these four track mains the four track wide bridges and embankments are still there with the double track runnind down the same right of way what really needs to happen is that they start reopening some of these extra sets of tracks to take the rising freight and passanger load.

        • Infrastructure owners sell slots on their infrastructure, they regulate what speed the trains run on. They have, just like owner-operators, the ability to decide that everything should run at the same speed.

          Except that now you can have multiple operators, rather than one. That means you get more trains on one line. It’s not true that most well-managed lines only have one operator.

          Also, track upgrades (double-tracking, electrification, signalling) improve capacity, but freight operator/owners can not afford those.

          Are you some sort of private railroad shill?

          • Danny

            They have the ability to regulate their tracks, but they either don’t do it well or they don’t try.

            Having multiple operators isn’t a guarantee of more trains on one line. That is your assumption, but you would be hard pressed to find actual empirical evidence to support it. The highest capacity rail systems (both passenger and freight) in the world are all run by the owners of the infrastructure. The level of organization and coordination required to do so require a strong centralized control.

            The idea that track upgrades are the key to capacity improvement is a bit like saying that anybody could drive as fast as Michael Schumacher if they could just have the same car as him.

            The idea that freight railroads can’t afford track improvements is laughable. Their reinvestment as a percentage of revenues is among the highest of any industry in the world. They can afford it, but they choose to invest where the investment is needed. That means that low benefit upgrades like signaling systems often take lower precedence than things like long term track upgrades.

            The idea behind shared rail infrastructure is based upon a flawed premise. Competition does wonderful things when competition is permitted to flourish, but competition on the same rail lines reduces everyone to the lowest common denominator, which eliminates the benefits of competition. Roads don’t have that disadvantage, which is why the comparison isn’t appropriate.

            And no, I don’t care at all about private vs public. I would prefer Deutsche Bahn running a completely integrated rail system over 10 competing private companies fighting over the same shitty rails. There are plenty of reasons why private operators generally have advantages in operations, but this is not one of those cases.

            • City Tunnel Munich: 30tph, 2 tracks – operated by DB Regio Bayern, owned by DB Netz.

              Berlin Stadtbahn: 300 mainline, 600 S-Bahn trains a day, 4 tracks – operated by S-Bahn Berlin Gmbh, DB Regio, DB Fernverkehr, owned by DB Netz (there would be 2 more independent if the track fees where less)

              Eurotunnel: 150K trains a year (~400 a day), Operated by Eurotunnel, DB Schenker, Eurostar, SNCF, after 2012 by DB Fernverkehr as well, possibly more operators. Owned by Eurotunnel.

              When I say freight owners can’t ‘afford’ to electrify, I mean that their business model doesn’t allow it – because they have higher margins on crappy tracks.

              The Chunnel is actually an interesting example. Their slots are at given speed (I think 120km/h) – so trains going at different speeds (i.e. 160km/h) have to use more slots to run. Nevertheless the overall capacity is much higher than your standard American 50 year old single Diesel track + sidings.

              • Danny

                I get the feeling like you think that when I talk about capacity, that I’m talking regardless of how many tracks there are in a corridor.

                I’m not. 1000 trains per day in a 4 track corridor is no higher capacity than 500 trains per day in a two track corridor…in fact the company that runs 500 trains per day in a two track corridor is running tigher tolerances and would be able to run far higher than 1000 trains per day if they had a 4 track corridor.

                Your examples are not what you think they are. City Tunnel as well as the Berlin S-Bahn are owned and operated by the same company. Your assertion that they are different is only true if you consider a subsidiary to be a different operating entity…which may or may not be true in other contexts, but in the context of competitive operations it is most definitely not true.

                Your eurotunnel example proves my point quite well. The standard speed for operation is always the lowest common denominator. If all trains were required to run at 160km/h, slot pricing would actually be lower because as long as trains are traveling within a very narrow speed tolerance, higher speeds will equal higher capacity. Since only some trains travel at higher speeds, they are the ones penalized.

              • Max Wyss

                The reason why the “standard” slot in the channel tunnel is set for 125 km/h is because that’s the speed the majority of the trains are running (that’s the speed of the shuttles). There are some trains which run at 80 km/h (mabe 100 at best). That’s the (few) regular freight trains. They have to use two standard slots. And then there are the high speed trains, running at 160 km/h, and which have to use two slots as well.

                That said, it is not necessary that the slowest trains have the least number of slots to be used, and pay therefore least. The standard slot speed is tailored to fit the majority of the trains (or if there are “political” reasons, the speed of those trains.

                The München Stadttunnel example may be a bit unique because it is used by a homogenous fleet, and consistent running patterns.

                A definite example of not preferring passenger operation is the current emergency operation pattern after the fire in the Simplon tunnel. In order to get a maximum capacity of the tunnel (meaning a 10 km long single track section), even the international trains are cut between Brig and Domodossola, and a dedicated replacement shuttle runs at an hourly interval. That allows to get up to 6 freight trains through the tunnel per hour.

                As the passenger train is not thaaat much faster than the freight trains, they may even switch slots without much disturbance, and there are always freight trains waiting for a slot.

              • Your claim is that owner-operator = good, vs owner-multiple-operators = bad. And in order to support it you make dubious claims that the European model supposedly failed. And results in supposedly low capacity – because different trains run at different speeds.

                I am merely saying that the speed issue can be regulated by the infrastructure owner – as in the case of the Eurotunnel; and that allowing multiple operators on a track (or a set of four, which have thus more capacity, duh) does not decrease capacity, but actually allows to increase it. And this is not necessarily in the sense of multiple competing operators (I never made that claim, and the European rail-market isn’t that liberalized yet, anyway), but also operators serving different markets (freight, regional, intercity, commuter).

                Imagine the Eurotunnel was in the States somewhere, and owned/run by CSX or whatever. This means only their couple of freight trains could cross the tunnel. It would also mean that there would be barely any passenger service, because that’s not what they do. And if they allowed Amtrak to run some passenger trains, then that would already be the multiple-operator paradigm again.

                If multiple Operators all serve the same corridor, with a couple of trains a day, it simply doesn’t make sense to all run them on different ROWs, on their own tracks – it makes much more sense to consolidate them into one ROW, possibly with more tracks. Then the usage of that corridor would be much higher, meaning the track can be kept in a much better shape (or even electrified!), because the track costs are shared across many more trains.

                How many trains does the busiest operator-owner track run in the States, anyway? How many trains run on the ‘average’ track in the US, compared to Europe?

              • Andre L.

                Your argument about the Channel Tunnel ignores a simple fact: freight trains there run on a schedule (as they do in most of Europe). Some key tunnels and passes (Brenner, Löetschberg, Fréjus, Orensud) act as effective bottlenecks of the system.

                In the US, freight railroads don’t come even close to operate under a tight defined scheduled regime. This allow them to operated cheaply and be more competitive, at expense of any possibility of large scale use of their tracks for passenger traffic.

              • Danny

                >>>Imagine the Eurotunnel was in the States somewhere…

                I understand and agree with what you are saying, but it only works in corridors that are currently underutilized. Most freight corridors in the US that are also acceptable as passenger corridors are already used within the range where accepting more passenger trains means a decrease in freight capacity. The freight corridors that are underutilized also tend to be corridors where passenger service wouldn’t even come close to warranting investment.

                A perfect example is the corridor right by my home. It is a double-tracked mainline (although far from being the most important mainline on the CSX system). It would be a good choice for a passenger corridor (it was built as a passenger corridor and used for the 20th Century Limited). But in order to use it as a passenger corridor would require phenomenal amounts of investment.

                Electrification could increase capacity, but not enough to account for long term growth. It would have to be triple tracked at the very least. The thing is, this would only be for a corridor between Cleveland and Buffalo. If you want a route that has exceptional ridership potential, you have even fewer potential routes to choose from.

                And while it is hardly the most used corridor on the CSX system, at peak hours they are running between 15 and 20 tph.

                From what I can tell, there are only two passenger rail corridors in the US where freight utilization is low enough that increased passenger service wouldn’t hurt freight capacity, and that is between Buffalo/Toronto and NYC and between Montreal and NYC.

              • Danny: isn’t New York-Buffalo part of the CSX mainline? Or is simply not that important compared to lines within the Midwest or between New York and Florida?

              • Adirondacker12800

                The yards in Selkirk are very very busy, Those cars are going someplace or coming from someplace…

              • danny

                >>>Danny: isn’t New York-Buffalo part of the CSX mainline? Or is simply not that important compared to lines within the Midwest or between New York and Florida?

                It is a mainline, but it isn’t one of their more important mainlines, and it was well overbuilt in the days of the NY Central. I don’t have any objective data to back it up, but from my observations, they look like they have about half the utilization rate per track as the tracks that run by my home.

                In terms of freight usage, the only north-south mainlines that compare with east-west mainlines are in the Midwest (Mississippi river proximity or Texas/Chicago corridors).

  • Tom West

    With regard to selling off the NEC, I shall ask the question I always ask when it comes to privatising (or nationalising) things: What problem does this solve?

    Or to put it another way, what would a private operator be able to do under this framework that Amtrak cannot do now?

    • Peter

      It assumes that Amtrak will not be able to find private funding to upgrade the NEC. But a private operator would in fact be able to find this same private funding somehow…

    • David Keddie

      The problem that would hopefully be solved is to improve the efficiency and service quality of passenger rail. A private operator motivated by profit derived from passengers should provide superior service at a lower price than a government operator motivated by political concerns and government subsidies. For example, Bolt Bus and Megabus provide radically less expensive and more frequent intercity travel on the northeast corridor, alongside service advantages like wifi, all because they are in competition and driven by profit derived from passenger fares.

      Moreover if we look to the past, the quality of intercity passenger rail was much greater in the era of private ownership and operation. The difficult question for passenger rail is whether it can survive without government subsidy. The rail companies abandoned passenger service precisely because it was no longer profitable in the face of competition from cars, buses and planes. However, the northeast corridor has operational profitability, even with amtrak’s excessive wage and employment levels, and is close to covering its capital expenses. Presumably a private operator free from union rules and wages, rewarded not for political lobbying but for serving customers by adding simple services like wifi, would be able to turn a profit on the whole line.

      • Tom West

        “A private operator motivated by profit derived from passengers should provide superior service at a lower price than a government”

        Acela is operationally pfotiable, not “close” to it. Given this, Amtrak should (and do) operate the NEC on a commercial basis, maximising profit from the available resources.
        What would a private operator do differently?

        Further, profits from the NEC reduce the subsidy it eceives to operate other routes. If a private company owned the NEC, Amtrak would require MORE subsidy. Finally, all U.S. railroads (freight and passenger) are unionised – Amtrak is nothing special there.

      • Tom West

        Also: you are implying Amtrak’s empoyees are over-paid. However, if you cut wages, simple economic theory says you will get worse workers.

        • danny

          This is only true if rent-seeking is minimized. With nearly any public service union situation, this is simply not true.

          • I’m not clear on the argument why rent seeking by upper management is preferable to rent seeking by workers, in that it will automatically lead to preferable outcomes for the economy as a whole.

            • Danny

              You must have misread me. I never made that argument.

            • You argued that privatizing railroad would fight against rent seeking by workers. Wouldn’t that be due to rent seeking upper executives not wanting to share the rents they extract with workers?

              • Adirondacker12800

                Bruce. saying that is class warfare. Increasing profits and executive compensation while wages for hoi polloi remain stagnant isn’t. But that’s okay because isn’t it obvious that rich people get everything they deserve? After all if they didn’t deserve it they wouldn’t be rich…..

              • Its just simple mainstream economic theory ~ if we assume that individuals are motivated by self-interest, then everyone’s a rent seeker. Looking and seeing who is getting the rents at the present time is a simple empirical question of looking at income flows.

                Of course, a more sophisticated economic theory would recognize that people are not shimmering globules of desire but are social animals, and so its not as simple as that ~ but the social context of senior executives certainly promotes and encourages rent seeking behavior on their part, so we can be confident that rent seeking applies to senior executives of commercial corporations.

              • Danny

                >>>You argued that privatizing railroad would fight against rent seeking by workers. Wouldn’t that be due to rent seeking upper executives not wanting to share the rents they extract with workers?

                No. What I argued was that by paying lower wages does not guarantee worse workers. If you have significant rent-seeking among your workers, it is completely possible to pay less and not get worse quality.

                Regardless, in a non-profit public service situation, fighting rent-seeking workers does not automatically mean that the rents get collected by management instead. In fact, isn’t the public supposed to benefit?

              • Regardless, in a non-profit public service situation, …

                in which you argued that rent-seeking public sector unions are all but inevitable. The next step of that argument is then that privatization allows for an institutional environment in which the power of labor unions can be broken.

                Of course, now we are not in a non-profit public service situation anymore, and in terms of rent seeking are out of the frying pan and into the fire of commercial corporate rent-seeking, which over the past thirty years has tended to extra larger rents, with smaller positive economic spillover benefits.

              • Danny

                >>>in which you argued that rent-seeking public sector unions are all but inevitable. The next step of that argument is then that privatization allows for an institutional environment in which the power of labor unions can be broken.

                This is true, but I didn’t make that argument. In fact, if public service operators could break their unions (which I am sure they can do), the public would benefit far more than by privatization. Privatization is merely a compromise…”here, have a little profit, in exchange for making my political decisions easier”.

                >>>Of course, now we are not in a non-profit public service situation anymore, and in terms of rent seeking are out of the frying pan and into the fire of commercial corporate rent-seeking, which over the past thirty years has tended to extra larger rents, with smaller positive economic spillover benefits.

                I don’t buy this on the whole, and I think you suffer from a severe availability heuristic in this regard. The examples we have of this happening are a) only in the largest of the large corporations, which is a tiny percentage of all economic entities, and b) only possible in uncompetitive or politically favorable situations.

                Competition for rail operating contracts will definitely constrain rent seeking behavior over the long run, as long as contract duration is short enough.

      • Adirondacker12800

        For example, Bolt Bus and Megabus provide radically less expensive and more frequent intercity travel on the northeast corridor,

        The Chinatown bus operators are heavily subsided. Not directly but they are. Instead of paying the Port Authority for space in the bus terminal they use city street corners. There’s all sorts of hidden subsidies lurking in using the toll roads between the destinations they serve.
        It’s not more frequent than Amtrak service. It’s much slower and much less reliable than Amtrak service. And carries far fewer passengers. ( Roughly one bus equals one half to three quarters of one railroad car ) Wikipedia claims that average ridership on Acela is 8818 per day. At 60 passengers per bus you’d need 146 buses a day to serve the same amount of passengers. Or roughly a bus every ten minutes 24 hours a day. Throw in the Regionals and they’d have to to be dispatching a bus every 5 minutes.
        They are busy skimming a small percentage of passengers that are willing to trade service for price.

      • EngineerScotty

        Can we have a moratorium on the platitudes about “private enterprise good, gubmint bad”? Please? Pretty please? It’s tired dogma that doesn’t have much place in a serious debate; there are plenty of examples of private enterprise running transportation infrastructure poorly. There are legitimate empirical differences between private and public that are worth discussing in detail, but you didn’t provide any–you parroted the same old rhetoric that we’ve all heard a zillion times before. (And likewise, leftist rhetoric about how big business is inherently evil also tends to annoy me–it is far better to deal with actual examples and actors than with dueling abstractions).

        As far as Acela goes; it is a profitable service: a big reason that Rep. Mica would like to see it privatized, I suspect, is that some entity wants to capture that value stream for itself, rather than having it fund Amtrak’s unprofitable operations elsewhere. You notice that there’s no call to privatize the Empire Builder, after all…

        • Adirondacker12800

          And no call to privatize I-90 through South Dakota or I-94 through North Dakota. I-90 does quite well as a quasi-private road east of Chicago….

          • In a perverse way, it makes sense. The NEC and the short-distance corridor services can make money (the NEC already does). So can urban toll roads. But the Empire Builder and I-90 through South Dakota can’t, ever; you might as well close them, in which case the Senate delegation from the area would have some nasty things to say about this plan.

            • Which is the point of leverage to ask whether it is possible to achieve the target service levels without shutting down all the long haul passenger service, as Mica’s proposal would likely do?

              If the answer is, “yes, with appropriate regulatory reform and some targeted investment in curve easing and improved superelevation”, then a bill of “achieve these objectives with these investments and the FRA charged with updating regulations to accomodate this international best practice, or else in 10 years the NEC will be taken out of your hands” might have a shot.

              • If the Repubs were really interested in reducing useless gummit regulations, then Mica would be holding some feet to the fire and fighting the FRA regs that do NOT meet international standards.

                But they really are not interested in any such thing. They want to undermine and sabotage Amtrak (while ultimately letting the Democrats “save” it) to preserve their Exhibit A in their argument that the gummit can’t do anything right.

                Mica has unleashed a powerful fakestorm about privatization. Not gonna happen. What will happen is that Amtrak’s order for new-and-improved equipment to replace its obsolescing fleet is effectively postponed until after Nov. 2012 or even later.

              • If the Repubs were really interested in reducing useless gummit regulations, …

                I wouldn’t argue they really are, its only a checklist talking point to them. The question is how to divert the push that Mica is making into something useful, in particular when it hits the Senate.

              • ThomasD

                We all know Mica’s plan is a political stalling tactic for the 2012 election.

                There is no “Its Broke” justification to privatize the NEC, so Mica and unnamed forces backing him attack the strongest part of Amtrak to prevent the spread (funding) of more Amtrak successes. Mica and his backers are scared of 110 mph Amtrak service taking off in DC-Charlotte, Milwaukee-Chicago-St. Louis, Chicago-Kalamazoo-Detroit and Portland-Seattle-Vancouver corridors.

                And if you really want to see brown in the shorts, talk to Mica about 220 mph California HSR running on ~90% dedicated high-speed only tracks.

        • saxman

          We can’t forget that one reason the NEC is operationally profitable is because of the huge amounts of capital to provide the infrastructure and capacity of the line. Plus its pretty easy to make connections at many of the stops along the way to other modes of transport. Connections are key! Perhaps if similar investments were made, other routes could at least close the gap much farther or maybe even break even from an operational stand point. Again connections are key! I’m not saying build HSR in North Dakota, but there is a reason the Empire Builder and other rural routes continue to sell out.

          • I’m not saying build HSR in North Dakota, but there is a reason the Empire Builder and other rural routes continue to sell out.

            Yes, because of lack of effective alternatives and because of (largely justifiable) subsidized operation of coach services.

            There are a number of “regional corridors” which would generate a surplus as 110mph or 125mph corridors ~ the same regulatory reforms which would allow 2:00 NYC/DC and 2:30 NYC/Boston would allow those regional corridors to be raised to operating surplus with smaller capital grants. One could imagine having the Acela only subsidizing long haul services running to or into the NEC, the Chicago Hub subsidizing long haul services running to or through Chicago, and the California corridors complementary to Express HSR in California subsidizing long haul services running to or through California.

      • FG

        I don’t buy the union rules and wages as killing passenger rail since AFIK freight isn’t all that different. I think too much competition did it in – yes, riders disappeared, but there were too many routes and competing services to be effective (similar, in some respects to the early London Underground having competitors stations close to each other or the Grand Concourse subways trying to kill off each other). Had rail all gone from the same stations rather than many (in some cities) and been more like airports, things might have worked out better. And of course, friendlier government policies in the inter/post war periods.

        I don’t see how some parts of this bill would/will work – how could states open their “corridors” to open/competitive bidding when the corridors are mostly owned by private companies – or does this mean Amtrak’s slots? Aren’t the slots owned by Amtrak by contract – would those even allow someone else to use them?

        • Labor costs are less important on freight trains, because the much higher fuel consumption (25 gallons per mile for a 10,000-ton train) makes labor a smaller proportion of operating costs.

          • Freight trains also have fewer crew as well. Commuter rail might equal them with only an engineer and conductor (so far as I’ve seen on Metrolink), but Amtrak has more than that on its trains, and sleeper trains can have nearly 20 employees on board at any given point in time.

            • Adirondacker12800

              those dastardly labor regulations that say staff has to have time to go the restroom, eat etc. and sleep a certain number of hours each day. Just awful. I’m sure they could get by with much less staff if they didn’t give the staff any time off on a three day trip.

              • Those labor regulations don’t actually affect the staffing in that manner. Know how much time a sleeper car train attendant, of whom there are several per train, gets off each day to sleep? Four hours. Hours of service regulations require the changing out of conductors and engineers, they don’t require carrying extra ones aboard (which would be self-defeating anyhow, since HOS applies to them).

                There is no need for several conductors whose sole purpose is to check everyone’s tickets. That is an example of a bloated and unnecessarily large workforce. My point remains, however, that not only are relative labor costs higher for trains, but so are the absolute: a necessity on sleepers and a consequence of Amtrak’s management on others.

    • Don

      The problem it might solve is “how to find enough money to fund and operate the NEC in the future”, so it is worth a look.

      Amtrak wants $117B to upgrade & replace the NEC. What incentive does Amtrak have to try to make that number smaller. Virtually none. Trying to bake in some profit motive might prove useful.

      Suppose you did transfer ownership of the NEC to the DOT, as proposed, and then bid out the upgrade work based on speed and capacity, not scope of work. That is, “how much to build a RR capable of supporting X trains an hour with running time Y?” instead of “X miles of class 8 track with constant tension catenary…etc.”

      The problem I see with Amtrak and other HSR and HrSR and commuter rail and most transit project proposals is they tend to be gold plated. For most transit/commuter rail projects, we get nice, covered, concrete platforms with paved and landscaped parking lots with retention ponds, decorative lighting, etc. when all we really needed to get started was timber and asphalt platforms, a gravel lot, some sodium vapor street lights and a couple of bus shelters with a concrete bench or two.

      I’m not saying the proposals on the table will work or not. The devil is in the details. I’m just saying a little bit of vested interest in cost control would be a good thing!

  • TomA

    That is the best question. Amtrak’s problem in the Northeast is that it needs lots of money to upgrade its lines. Even if a private contractor could do the same thing for half the price (I doubt they could), thats still $60 billion to do the upgrade. Who is or even COULD shell out that kind of money other than government.

    • AFAIU (which in this case might read as, ‘if I recall correctly Alon once said …), the SNCF expression of interest in Express HSR corridors was on the basis of 80% government capital funding, 20% private.

      So on that basis ~ from an actual potential bidder, no less ~ for $60b to be found that’d be $12b private, $48b public.

      • I don’t remember saying that. I forget what SNCF’s terms for public/private funding percentage were, or if it explicitly proposed any. However, in its proposals for HSR in the US, it said that,

        Estimates of revenue, annual operating and maintenance costs are such that as ridership matures and service is fully established, revenue will exceed O&M costs and will also cover a portion of the capital costs to the extent that public funding will be required for only 62 % of the initial capital investment.

        The above quote is from the Texas proposal. In California the percentage given is 70%, and in the Midwest it’s 54%.

        • Then 80% may have been Florida … if the NEC had been a designated HSR corridor at the time of their report, we might have had a direct estimate from SNCF of the public capital grant required.

          The second leg of redirecting momentum from the Mica proposal into a more useful direction could well be a public/private partnership for a new Express HSR alignment in the Northeast.

    • Chris

      There are many large private corporations for whom $100 billion of capital investments over a decade or two is not unreasonable (e.g. every large energy company). Especially since cash flow from existing operations – which would improve as you could raise prices or increase volume due to your incremental improvements as time passes – would help fund some of the later capital expenses.

      Long story short the big check needed is not really the obstacle to 100% private capital; it’s the fact that the continued massive subsidization of less efficient modes limits the available rate of return, so cheap public capital is needed to juice the returns for the private investors.

      • Adirondacker12800

        If they are going to be using public capital why do we need private investors? Use the ROI for lower fares, more frequent service, subsidies to the slow feeder lines…

        • Chris

          I think the better question to ask is why sole control of the most efficient intercity travel mode in the most attractive intercity travel region in the country can’t generate an adequate rate of return to attract private investment. I think the overall goal of transport advocates should be to fix the intercity transportation market so that this is not the case.

          • Adirondacker12800

            I think the better question to ask is why sole control of the most popular intercity travel mode in the most attractive intercity travel region in the country can’t generate an adequate rate of return to attract private investment. Why aren’t the tolls on the New Jersey Turnpike higher? Or the Maryland Turnpike. I think the overall goal of transport advocates should be to fix the intercity transportation market so that this is not the case.

            • Chris

              I agree, that’s precisely my point. The way to respond to Mica’s platform is not to demand more federal funding for rail, it’s to push back against federal funding for highways and civil aviation. The problem for HSR in the Northeast is not a lack of federal funding, it’s that there’s vastly too much federal funding poured into the regional transportation system already.

  • Sivart

    To pretend that this latest proposal is nothing more than yet another attempt by the Republican party to shut down Amtrak is rather naive. The fact that the NEC is now actually profitable throws a wrench in their age old argument so they are proposing to take it away from Amtrak leaving it saddled with the unprofitable long-distance lines, making it “obvious” that Amtrak “must” be broken up. This is neither the first, second or third time the GOP has proposed the dismemberment of Amtrak and assuming their proposal flounders in the Senate it will no doubt not be the last.

    • Tom West

      So answering my “what problem does this solve” question with your comment: it solves the problem (for the Republicans) that state-owned rail isn’t always unprofitable….

    • Sivart, yes, yes and more so.

      Amtrak’s biggest problem is the crippling lack of new equipment.

      It can’t come up with locomotives and coaches to make up a train for any new state-supported corridor.

      It can’t add coaches to its own heritage short-distance trains, mostly in the Empire Corridor, NYC-Albany-Buffalo and the Wolverines, Chicago-Detroit.

      It can’t run a daily Cardinal, NYC-D.C.-Charlottesville, VA-Charleston, WV-Cincinnati-Indianapolis-Chicago, much less a daily Sunset Limited, New Orleans-Houston-San Antonio-Tucson-almost Phoenix-L.A. It simply does not have equipment for the needed trains. So these three-times-a-week trains lag far behind the returns on the other, daily l.d. trains. The Cardinal and the Sunset thereby provide the cultist critics with the “big-money-losing, high-subdidy-needing” examples to make their case that Amtrak is a loser. The haters certainly don’t want those two l.d. trains to get improved.

      It can’t add another l.d. train Chicago-East Coast that would visit Toledo (bus to Detroit)-Cleveland-Buffalo during daylight hours, or link thru Chicago-Toledo/Detroit-Cleveland to the Pennsylvanian’s Pittsburgh-Harrisburg-Philly cities.

      It can’t extend more Regional trains down to Norfolk or Roanoke or Raleigh or Charlotte, or up from NYC to Albany or Syracuse or Hartford-Springfield-Worchester-Boston North Station-Portland.

      Meanwhile, the current fleet is reaching the end of its normal life cycle, with increasing problems occurring while in service and increasing maintenance costs.

      Amtrak has proposed a very large order of new-and-improved equipment. The railcars would still be FDA-heavy, but at least would offer larger windows, better toilet facilities, electric outlets at every seat, Wi-Fi capability, nicer seats — lots of stuff customers would like. Amtrak asked Congress to authorize a purchase of over 1,000 new coaches, sleepers, diners, lounges, baggage cars, crew dorms, whathaveyou, oh, locomotives it likes to describe as ‘faster-accelerating.’ That request is pending.

      But instead of dealing with the real business needs of Amtrak, Congress will instead provide a circus’ worth of diversions about “privatizing” and “spinning off” and doing this or that or the nothing. Mostly the nothing. Nothing will be done about Amtrak’s need for new equipment or any of its other real world problems.

      Mica’s delay of the Amtrak equipment order is at its ugly heart just another action that will put the beliefs and theories of an economic cult ahead of the need for real world investment, and to sabotage passenger rail for more years to come.

      My only consolation is to think that Mica’s baloney about “privatization” will also delay a possible action by the crazies to pull the plug on Amtrak altogether. Slim consolation.

      • AlanF

        Amtrak has ordered 130 Viewliner 2s for the eastern long distance trains and baggage cars for the entire LD fleet and also 70 ACS-64 electric locomotives to address their most immediate critical equipment needs. Amtrak has applied for a federal RRIF loan to pay for the order. The HSIPR grant awards will pay for 120 bi-level cars for CA and the mid-West routes. So there is some new equipment coming, but there is still a huge backlog of replacement rolling stock that will need funding.

        As for this plan for the NEC, I wonder if Mica or his staff have any understanding of the complexity of the traffic on the NEC? What happens to all the (state owned) commuter train services that run on and off of the NEC? There are far more daily commuter passengers on some part of the NEC than Amtrak riders. Amtrak works with the commuter agencies for scheduling, track and maintenance planning, and so on.

        And, yes, what happens to all the Amtrak trains that use part of the NEC but run to numerous destinations on freight owned tracks? Which are going to increase in number and destinations in the coming years, if the Repubs don’t kill passenger rail. Privatizing NEC operations at this point may be like trying to unmake an omelet. Save the private HSR operations for new HSR corridors built from scratch, because those can be set up as cleanly separated operations.

        Leave the NEC as it is. And, yes, put several billion a year of sustained federal funding towards getting the NEC to a state of good repair.

        • AlanF, “Save the private HSR operations for new HSR corridors built from scratch, because those can be set up as cleanly separated operations.”

          You mean like CAHSR? It’s likely to have a private, or at least a foreign-government-owned operator. But Mica is not supporting CAHSR. He and his colleagues in the Party of No are spending their energies undermining all of Amtrak’s plans for HSR in the NEC and H(er)SR in the Midwest.

          And doing what they can to delay, delay, delay every improvement to Amtrak. It’s an ideologically driven policy of sabotage, and the taxpayers will pay for the dishonesty of it.

        • About the order for 130 newish Viewliner II cars. Yeah, 55 baggage cars, 25 sleepers, 25 diners, 25 combo crew dorms/baggage cars. All to replace aging heritage equipment on the East Coast l.d. lines.

          They will help things a lot: Newish cars with more efficient a/c and heating units, better lighting, more outlets for our electronic toys, better ADA compliance, even bike racks. Best of all they won’t be moving at drag-ass speed on the NEC, holding up the really fast trains behind them. Amtrak promises to “improve on-time performance”. (An optimist might dare to hope for a few minutes saved on the l.d. trains’ trip times.)

          The emphasis is on replacing the heritage equipment that dates back to the 1950s and 40s (!), That happens to be the baggage cars, sleepers, and diners. (The new dorms will move the crew out of the sleepers, which they have to use now for lack of dorms, thus adding more sleeping car tickets to the inventory.)

          The new sleeping cars will be sweet for revenues, because those passengers make up only about 15% of all l.d. riders, but provide 35% of the l.d. revenues. No new coaches, however, means this order will not help much to grow ridership.

          And it will do nothing to provide equipment for more frequencies, or any new l.d. trains, not even anything for state-supported corridor service.

          The 130 newish cars were ordered back in July 2010. The first deliveries are scheduled for October 2012. Allow a few months for testing and it will be 2013 before these cars enter actual service.

          Amtrak’s proposed fleet renewal plan does provide for additional coaches to allow more state-supported corridor service. But with Mica providing privatization diversions, we can’t expect to see that order placed this year.

          Maybe an order in 2012? Then about 3 years before the first of those new-and-improved cars come into service. So we might see them in 2015? With new state-supported corridor services beginning that year?

          No, I think not. Surely the Repubs will insist on delaying any replacements to, must less expansion of, the passenger train fleet until AFTER the election in November, 2016. They certainly wouldn’t want to see Obama, Biden, and LaHood at any ribbon-cutting photo op while in office. They hardly tolerate the thought of any progress at all, ever, for Obama’s flagship proposals for better passenger trains.

          • aw

            Won’t the Viewliner baggage cars be useful for Superliner trains?

            Amtrak will potentially get some equipment freed up from the state-supported corridors. There are the Illinois and California next gen orders which could free up a few Superliners from California and whatever equipment is currently on the Lincoln service. The Wisconsin Talgo order could free up equipment from the Hiawatha. The Oregon and Washington orders will go toward service expansion on Cascades.

          • AlanF

            The 55 Viewliner 2 baggage cars are to be used on the western LD trains and the eastern daytime corridor trains that run with the 1940s and 50s Heritage baggage cars. The 25 baggage-dorms, 25 diner cars along with the 25 new Viewliner 2 sleepers (to be added to the 50 current Viewliner 1 sleepers) will create a much more modern and maintainable eastern LD fleet. Enough new diner and sleeper cars to add another LD service train or two, although Amfleet II LD passenger cars will be the constraint for new single level LD trains, until or if the LD passenger cars can be ordered and delivered. Amtrak may have been considering ordering 150 to 200 Viewliner 2 LD passenger cars from CAF to be built starting after the current 130 Viewliner 2 cars production run winds down. Would be a cost effective way to complete the modernization and expansion of the eastern LD and longer range corridor equipment.

            After many years, we finally have some sort of plan for incrementally improving corridor train service in much of the US, and as a result, improvements to the LD train services because the more decent shape corridor routes there are, the better the support structure is for the LD trains. What Mica’s proposal does is basically to blow all of the current planning for corridor services on and connected to the NEC up. Which may well be the intent of the financial and industry backers behind the scenes.

            I really hope the Senate and the Obama administration stand up and stop Mica’s plan dead in the tracks. We do need to move towards increased private operation opportunities for passenger rail travel in the US, but it has to be a carefully thought out, incremental step approach carried out over a number of years as the intercity passenger rail system gets healthier. Ramming a bill without much, if any, public input through the House appears to be the current Republican modus operandi unfortunately. The 2012 election can’t get here soon enough.

            • Ocean Railroader

              They are planning to end the $0.41 cents a gallon Ethonal subisty July 1 which is costing the US and it’s tax payers six billion dollars a year if that ends that would free up six billion dollars the goverment doesn’t have to come up with a years so they could take a billion dollars from those savings or even 500 million from that ended program and buy enough railroad cars to up date half the Amtrak fleet which would really raise funds for Amtrak over all.

              • Andre L.

                That money come from general budget expenses, no reason to specifically think it is earmarked for transportation.

              • However, if half of the savings are allocated to some spending and half to “deficit reduction”, there’s no reason not to allocate them in that way.

          • Buckeyeman

            I sure hope that these new cars result in the trains they run on running at faster speeds, whether it’s on the NEC or elsewhere. I know that not every stretch of track Amtrak runs on is up to 10 mph running but once these cars are in service the trains they’ll be running on should be allowed to go that fast wherever possible. I would also like for a way to be found to see that Amtrak is able to buy all the cars in that option for more Viewliners.

            • AlanF

              The passenger cars are not the limit on maximum train speeds (with one exception) as Amtrak’s rolling stock is capable of 110 mph speeds. The limits are the tracks, aging bridges, and signal systems that Amtrak operates on outside of the NEC. Many of the train services are slower than their equivalent of 50 years ago because the freight companies, to save on maintenance and property taxes, tore up second tracks, lowered max speeds, abandoned lines, and so on. The tracks are what has to be fixed for faster speeds.

              The one notable exception for the current Heritage equipment is that Amtrak’s long distance trains and longer range corridor trains (those with baggage cars) with the 50-60 year diner and baggage cars are limited to 110 mph on the NEC between NYC and DC because that is the max permitted speed for the cars. The Viewliner 2 diners, baggage-dorms, and sleepers will allow the LD trains to operate at 125 mph on the NEC, the same speeds as the NE Regionals. The main purpose is not to speed up the LD trains by a few minutes on the NEC, but to simplify operations as a mix of 110, 125, and 135 (to 160 in a few years) mph Amtrak trains complicate scheduling and train movements.

              • Adirondacker12800

                The NEC is four tracked between Stamford and Wilmington. As far as I know the long distance trains run on the local tracks.

              • AlanF

                4 tracked to Stamford CT?? The NEC is 2 tracks from New Rochelle to Queens over the Hell Gate. Moot point anyway as the LD trains don’t run on the NEC between NYP and Boston. Then the NEC is predominantly 2 tracks from NYP to Newark NJ, but this is also a moot point for 110 vs 125 mph trains as the max speeds on that section are 90 or lower.

                To your main point, why would Amtrak run the LD trains on the outside local tracks in between Newark & Philly and have NJ Transit and SEPTA trains constantly get in the way? The LD trains make a limited number of stops between NYP and DC, fewer than the NE Regionals. No, the LD trains run mostly on the 2 center tracks, same as the Acelas and Regionals. Then from just north of Wilmington to DC, there is a mix of 2, 3, 4 track sections (which makes that entire segment one of the major capacity issues for the NEC which will take serious $ to fix). At 110 mph max speeds, the LD complicate the train movements of the Regionals and Acelas. Hence the 125 mph Viewliner 2 cars will solve that particular problem.

              • Adirondacker12800

                Moot point running at 110 in Westchester or Fairfeild county. The speed limit is 90.
                It’s 5 or 6 tracked from New Rochelle to Manhattan. The Metro North trains stay on the line to Woodlawn and Grand Central and the Amtrak trains go to Pelham Bay and onto Queens. It’s two tracked between Newark and New York but for those ten miles all trains are moving at the same speed. Again the speed limit is 90 with some sections of 60. They get up to 26 an hour through there. Widens out to three tracks someplace in Harrison and is four tracked all the way through to Wilmington. Slow trains on the local tracks

                http://www.youtube.com/watch?v=78dc2R2_QwA

                Though I think it’s three tracked through New Haven.

                http://www.youtube.com/watch?v=aZE1QKzGOss

                Foamers love to go down to the station and video the Acela passing this and the Regional passing that….

              • Max Wyss

                To AlanF: I am not very familiar with the operation, but would it be possible that the lower maximum speed of the LD trains with fewer stops could fit into a Regional slot with higher speed but more frequent stops?

              • The New Haven Line is four-tracked until just east of the junction with the Waterbury Branch, at the western end of New Haven County.

                (P.S. Remember, I have the track maps on my blog, at least unless/until Rich E. Green asks me to take them down.)

              • AlanF

                @Adirondacker12800, for the record, the Metro-North line from New Rochelle to Grand Central Terminal is NOT part of the NEC. The NEC is the 2 track line that branches off at New Rochelle, south to Hell Gate, Queens, and into NYP. As I wrote, moot point for LD trains because Amtrak does not run LD trains on the NEC between NYP and Boston. Maybe someday if the Montrealer is restored, but the New Haven line is slow anyway.

                The 4th track north of the Waterbury branch to New Haven is in the plan to rebuild and electrify, but don’t know when that might happen. If Mica succeeds in his quest to totally bollix up decades of NEC planning, might not happen for decades.

              • Maybe, maybe not. Since the three-track segment of the New Haven Line is reasonably straight, it makes sense for an HSR operator to four-track it and run trains on it, which is going to be cheaper than constructing an equivalent length of new track. Assuming, of course, that it’s possible to gain access to Metro-North’s turf… (But that’s actually doable – the commuter trains in that area make all stops and could be confined to the outer tracks. Metro-North would only have to give up its penchant for taking tracks out of service during weekends.)

              • Adirondacker12800

                my turn to be pedantic. New Haven is east of the Waterbury branch. And it’s already electrified all the way to Boston.

  • BillyBob

    Mica is just angry at the Northeast because his state was too inept and divided to use its $2B in rail funds. Give him and his cronies any rail line in the midwest to prove they can make it profitable. The NEC has good service and is profitable, there is no reason to give it away.

  • jim

    Am I misreading the draft bill?

    Once an operator has been selected for the NEC, Amtrak can’t run trains along it, right? So the five long distance trains that traverse the NEC will all have to terminate in Washington. The Carolinian, too, and the Virginia services. The Pennsylvanian and Keystone services would all have to terminate in Philadelphia and the Vermonter in New Haven.

    At first that sounded ridiculous. But if Amtrak can run trains along the NEC, then it can do so in competition with the selected operator. And it can do so at high speed. It can (with the cooperation of New York) electrify Albany-New York and buy some Velaros to run Albany-Washington (oh, and by the way, we’re willing to take passengers between New York and Washington at lower fares than the Boston-Washington operator). Which is unlikely to be satisfactory to the selected operator.

    While the title of the bill is Competition for Intercity Passenger Rail in America, it doesn’t mean that sort of competition.

    But preventing the couple of dozen trains that currently run along portions of the NEC from entering it seems to me unacceptable. It would end the Palmetto, for example, since it would no longer be over 750 miles. It would drastically reduce ridership on the Crescent and the Silver Service trains. For Virginians to be forced to transfer at Washington or Pennsylvanians at Philadelphia would be a major hassle (did Schuster run this by anyone in Pennsylvania?).

    It is really difficult to disentangle Amtrak’s NEC operations from the rest of its East Coast operations. And the meataxe approach which the T&I staff have taken isn’t going to work.

  • Max Wyss

    To the European situation: So far, Open Access has been for international routes. That’s why we have Eurostar (monopoly through the channel tunnel), Thalys (kind of monopoly between Paris and Bruxelles and beyond, plus several night train operations (where City Night Line is now fully merged into DB Nachtzug).

    It is only recent that private operators for domestic intercity routes are allowed under Open Access rules. In the past, there were some pseudo-competition operations, such as a “premium service” between Hamburg and Köln, operated as its own business unit by DB. It lasted for a few years, and left so much impression that I even can not remember its name anymore… If I remember correctly, they ran about 3 or 4 trains per day and direction, at (to be expected “good” times), and they were faster than the IC/ICE services.

    There was also one Open Access intercity service in the UK, recently ended because not sufficiently profitable.

    We may, however, soon have some impression if private competition can actually have an effect, in two places in Europe:

    a) in Austria, WESTbahn will start operating hourly services between Wien and Salzburg. This is kind of an equivalent to the NEC (in point of reputation) for the Austrian Railways. We will see how it evolves; They were ableo to get people with railway operation experience at the helm, such as the former chief of the Swiss Federal Railways.

    b) in Italy, NTV will start operating regular high speed services between various cities. There is big money behind it, and they are serious, apparently, otherwise, they would not have ordered a nice fleet of high-speed trains from Alstom. It is not clear when they will begin services, as the approving organs allegedly change the rules more frequent than the weather, and also the trains are delivered delayed.

    In any case, these two operations can be considered “competition” because they offer a regular and frequent service.

    About dealing with different operators on the NEC: don’t we already have such a situation? Don’t the various locals operators (NJTransit, MARC, MBTA etc. use NEC tracks? I don’t know whether there is an Open Access legislation, and whether the time slots are assigned in a non-discriminatory way? That said, what should the separation from operator and infrastructure manager really bring in? Isn’t it kind of handled this way already?

    About those bus operators: Is “having WiFi on board” their argument? That’s probably the only one they can bring up against service quality of Amtrak… Ah, yeah, price… well, if you want to go the slow route (at least between Philadelphia and New York, you can try SEPTA/NJTransit… it is not thaaaat bad, and if you don’t loiter along too long in Trenton, you even have kind of decent connections.

    Just a question: are there limitations preventing Amtrak from entering PPPs?

    FWIW, just today, Railway Gazette mentioned the signing of the PPP for the Tours – Bordeaux High-speed Line; private contribution here is about 50% of the cost of the line. The rest is “government”. The concession signed is for 50 years, which means that from the private side, a very long engagement is necessary… something which is far beyond the “typical” USAn corporate scope…

  • Stino

    Re: David Keddie

    Passenger rail has received subsidy ever since air and auto travel became prevalent. PreAmtrak railroads were required to provide passenger service. It was generally a net loss subsidized by freight operations. A railroad would require a special waiver from the government to discontinue passenger service.

    In simplistic terms, Amtrak was an opt out. Give us your rolling stock and track use, and you’re out of passenger service.

  • Isaac B

    Big projects typically fail to deliver 100% of what was origibally envisioned, in the time promised and cost expected. What happens when the NEC gets turned over to private operators who fail to upgrade it? Does the government recapture it, or are waivers granted to the hedge fund or investment bank that “purchased” it, so it can keep milking the revenues?

    What track record do John Mica of Florida and Bill (son of Bud) Shuster (car dealer) of Pennsylvania have in realizing rail passenger transportation projects in their own backyards, under the terms they propose?

    • Don

      Don’t know about Mica but Daddy Shuster did a lot. How about keeping Hollidaysburg Car Shops open as a condition of the NS/CSX merger? How about the creation of the Pennsylvanian? How about “Interstate” 99? (Altoona needs an interstate highway?)

      Mica seems truly interested in gov’t investment in the NEC and not so interested in it anywhere else. I have come to believe he is a “true believer” in the NEC. I didn’t always think that, though.

      I think Bill Shuster might be thinking more about how any of this can drive business to the rail related industries in his district – there are many.

    • One positive of privatized passenger rail could be a massive reworking of the FRA regulations that now add so much weight to the railcars that they are “like tanks on rails” and that encumber high-speed running thru curves. Note: Alon can explain in detail about cant deficiency and stuff but I can’t :-)

      Making passenger trains heavy makes them slow and makes them gobble power, raising costs. As long as the victim of these outdated rules is the publicly owned Amtrak, nobody seems to care, least of all the likes of Mica and Shuster.

      But when a private operator attempting to make a profit (please bow your heads and clasp your hands upon hearing that word) starts to complain about costly rules from the FRA … Oh, Babee! Then it will be that agency’s turn to learn how Congress can and will micromanage passenger rail operations whenever and however it damn well feels like it.

      So private owners will get the costly rules swept aside, allowing more efficient and faster running. But public operators like Amtrak and state agencies will face these burdensome regulations until the powerful private interests get them changed for all.

      Maybe someone smarter than me should make back-of-the-envelop calculation of the cost structure of selected long distance routes without the burdensome regulations. Perhaps some privately operated l.d. trains actually could become profitable with the dead hand of the FRA off the controls.

      • Size matters when it comes to Congress doing an industry’s bidding ~ a private rail operator in the NEC alone may not be big enough to win either a bureaucratic trenches fight or a Halls of Congress fight with the Class I freight operators who have captured the FRA.

        • Amtrak is pretty big. It has a Vice President and a Secretary of Transportation who are loyal to it. It could have allies in the form of the LIRR and other commuter railroads. Why hasn’t it been able to modify the FRA rules?

          More to the point, suppose a private operator manages to wrangle profits out of an FRA-compliant line. What incentive does said operator have to lobby for changes and make it easier for other private operators to make a profit, potentially in competition?

        • If Goldman Sachs gets involved in privatizing passenger rail, it will get the regulatory changes it wants. Remember what Sen Durbin said, “The banks own this place.”

          And if privatization is piecemeal, one sweet deal on a given route will only increase the appetite of the investment bankers to do more deals, carving up the rest of Amrak’s carcass.

          Besides the Repubs are willing to do just about any damage to help a private owner. Remember when they wanted to shut down the Weather Bureau? (Heck, that’s probably on the table again in the current round of concessions the Dems are making in the name of budget cutting.) That’s because private company AccuWeather sees public Weather Bureau with its free services as competition to AccuWeather’s forecasts-for-sale business.

  • Donald

    Missing in all of the email comment string is the observation that Mr. Mica simply loaths governemnt; that is his only motivation for pushing PPP; his pushing PPP has nothing whatsoever to do with the feasibiiity of PPP; it is rather a means to an end and that end is privitization to the extreme.

  • Walter

    The bill still doesn’t solve the problem of the NEC north of New York. New York, Connecticut, and Massachusetts all own large parts of the corridor, and I don’t see New York or Connecticut sacrificing the rides of 125,000 people on the New Haven Line because some private company wants to run more trains to Boston. Amtrak already faces these problems, and they have a good working relationship with these states. These states certainly won’t give up their control of the tracks because some southerner from a southern-dominated party wants them to; they already pay more into the federal kitty than they get back and don’t want to lose any more federal monies (in this case, Amtrak money).

    By not even addressing the state owned portions of the NEC the plan is doomed anyway. Say only NY-WAS is privatized; will any private operation want to provide this service without the ability to serve 15 million people northeast of New York?

    • On the answer to the last question, yes, surely ~ it won’t be worth as much, and so the public share of capital funding would have to be higher, but since it would definitely generate an operating surplus, there would be multiple bids at various levels of capital funding levels for the franchise to be the operator DC/NYC.

      As far as the bids to be the private operator on minimum service levels as specified by Mica and no public capital grant, there’d be no bid for the whole NEC, so the question for NYC/DC alone is moot.

  • Private companies seeking profit always work the best. They’re infallible.

    Thats why they always provide the best customer service. Like Comcast. And AT&T. Everybody loves calling them.

    Private companies always innovate and reinvent themselves for the future. Just look at Kodak. Or Motorola. Or blackberry. They have a level of forsight the government could never attempt to copy with an agency like NASA.

    Private companies always judge the market correctly, and provide the right services at the right price. Like Circuit City. And Linen-n-things.

    Private companies adore competition. That’s why Comcast bought NBC. And Google is buying everyone. And AT&T wants to merge with T-mobile. They’re doing what’s best for the consumer.

    Private companies always follow the law and profit within the guidelines set by society. That’s why UPS never double parks, and why trucking companies never lie about worker hours.

    Everything should be run by private companies, they’re always perfect.

  • The Mica-Shuster plan: good idea, horrible execution. The NEC should be transferred over to a PPP nonprofit organization that is jointly owned by the USDOT and a private company. The current debate has devolved into the usual absolutist positions of supporting the status quo vs killing off Amtrak when serious passenger rail reform is needed. There must be an appropriate public-private balance. Most people in the rail community fail to even factor in the private sector while politicians like Mica and Shuster fail to recognize that the public sector has to fund the development of infrastructure and development of all transportation systems.

    Most critics of the NEC divestment plan seem to forget that maintaining infrastructure along the route is very costly to Amtrak. The fact of the matter is that the Ford Administration made a huge mistake when it transferred the bulk of the 457-mile line from Penn Central/Conrail to Amtrak when it should have handed ownership of the route over to the USDOT from the outset! Had that happened, George Warrington wouldn’t have stared bankruptcy in the face. Amtrak was initially not supposed to own any tracks anyway, so in a weird way, separating NEC ownership from operations is a major correction that is long overdue. Frankly, a PPP NEC track owner would be able to restore infrastructure to a state of good repair at a far less cost than the $117 bil Boardman wants to spend on an brand new NEC.

    When to comes to a private operator running trains on the NEC, I’m expecting the following compromise: Private operators will be allowed to run any other routes in the country not considered as a part of the Amtrak system (i.e. Empire Service and Wolverines), but the NEC will be off-limits as the USDOT takes over ownership.

    • Frankly, a PPP NEC track owner would be able to restore infrastructure to a state of good repair at a far less cost than the $117 bil Boardman wants to spend on an brand new NEC.

      First, $117b in YoE is $65b in constant dollars is we assume a 3% inflation rate.

      Second, doesn’t Amtrak claim they can bring the NEC up to a state of good repair for less than $117b? That is, the Amtrak NextGen proposal is on top of the Amtrak NEC Master Plan, assuming that even with the Master Plan, the NEC will hit capacity constraints by 2020.

      • First, $117b in YoE is $65b in constant dollars is we assume a 3% inflation rate.

        The plan itself states that it is $117 billion in 2010 dollars, not YoE. “The projected construction costs (in 2010 dollars) for completion of the total system would be approximately $117 billion.” Page 20.

        • Actually, the NEC plan itself gives $52.33b in 2010 dollars, on page ES-7.

          Alon claims that much of the NEC Master plan is not necessary to hit Mica’s modest speed targets with FRA regulatory reform, but the NEC Master Plan was drawn up presuming existing FRA regulations.

          • Actually, the NEC plan itself gives $52.33b in 2010 dollars, on page ES-7.

            Yes, the NEC Master Plan says that. The NEC Next Gen HSR plan, however, does not, and states $117 billion in 2010 dollars. I have no idea why you brought up the Master Plan.

      • ThomasD

        A year ago, Amtrak published an NEC State of Good Repair estimate of ~$14 billion. Reaching top speed off 160 mph in more places with existing Acela trainsets, that would improve Acela express for DC-NYC to 2 hours 15 minutes and Boston-NYC to 3 hours 8 minutes. SOGR would increase Acela Express frequency with 5 more daily trains.

        Given that document, why hasn’t Amtrak published a ‘tweener option for $50-55B whose funding could be sliced up by USDOT, state DOTs, Amtrak and private interests? At that number range, 200 mph is possible in more places for 2 hour DC-NYC and 2 hour 45 minutes Boston-NYC with longer trainsets. Provided prices stay at or slightly under airfare, shaving 45 minutes off each corridor segment the service would be a huge hit with consumers.

        Politically, $50-55B would be easier for the rest of the nation to swallow, since the USDOT Secretary estimates $500 billion for an Interstate HSR Network. That would also be a smaller target for Mica & company to shoot at.

        • Because Amtrak isn’t actually interested in improving or modernizing service. That’s why it published an extraordinarily expensive and gold-plated HSR plan. Even the SOGR report is suspect: it came out only a few years after the Amtrak board fired David Gunn for insisting on SOGR first and profits later, and its timing was perfect for some rent-seeking on the heels of the stimulus. Amtrak frankly has no interest in controlling costs or making its plans less of a sticker shock.

    • Sorry, that’s capacity constraints by 2030.

      • Adirondacker12800

        The NEC hit capacity constraints soon after Midtown Direct service opened back in the 90s. Which is why they were chatting about where they were going to put the new tunnels back in the 80s.

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