Amtrak Congress Finance Northeast Corridor

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)

Amtrak High-Speed Rail Northeast Corridor

Amtrak Unveils Ambitious Northeast Corridor Plan, But It Would Take 30 Years to be Realized

» Unfunded, $117.5 billion proposal would speed trains from Boston to Washington in just 3h23. Amtrak wants a full new corridor along the entire line, including a new inland route through Connecticut.

After months of sitting on the sidelines as states and regional agencies promoted major new high-speed rail investments, Amtrak has finally announced what it hopes to achieve over the next thirty years: A brand-new, 426-mile, two-track corridor running from Boston to Washington, bringing true high-speed rail to the Northeast Corridor for the first time.

The report, released today at a press conference in Philadelphia, suggests investing $4.7 billion annually over the next 25 years on the creation of a route that would allow trains to speed between New York and Washington in 96 minutes and between New York and Boston in just 84 minutes. The line would run along a corridor that could stretch in new tunnels under the city centers of Baltimore, Philadelphia, and New York, and along new rail rights-of-way through Connecticut. New stations would be built in every city the project would serve. This Next-Generation High-Speed Rail, as Amtrak is calling it, would produce overall average speeds of about 140 mph by 2040 (top speeds of 220 mph), compared to 75 mph today. It would undoubtedly significantly expand the mobility of residents of the Northeastern United States.

Amtrak claims that once in operation the line could produce an annual profit of almost $1 billion a year (in 2010 dollars), increasing overall intercity rail ridership along the corridor from about 12 million today to 38 million by 2050. Total construction costs would be $117.5 billion in year-of-expenditure dollars, or $42 billion in 2010 dollars, about the same as the California High-Speed Rail project.

But it is worth being skeptical of the political chances for the project’s implementation. The timing of the plan’s release could not be much worse. With anti-rail and austerity-focused Republicans likely to retake control of the U.S. House of Representatives in this fall’s elections and little serious talk of increasing funds for fast train projects in the immediate term at the national level, a vast increase in capital financing for Amtrak is hard to imagine.

Amtrak has rarely publicly advocated for such a major investment. Last year, the publicly owned agency’s vision for the Northeast Corridor suggested $10 billion in upgrades producing a 5h30 total trip time between Boston and Washington. Today’s announcement is of a completely different magnitude, but it falls in line with the agency’s recent push to operate true high-speed lines in places like Florida.

The proposal is even larger than that suggested by a University of Pennsylvania planning group earlier this year, which I dismissed as mostly unrealistic, thanks to its grandiose proposal for a new tunnel under the Long Island Sound and a new corridor through Center City Philadelphia. Yet Amtrak’s management clearly thinks there is a possibility of major investment here, which is why this new program would not only build that new tunnel under Philadelphia, but also connect New York’s Penn and Grand Central Stations and involve the construction of an entirely new greenfield route through much of the region.

The fact that the Congress has thus far only committed $10.5 billion total to high-speed rail projects across the country does not seem to have fazed anyone in Amtrak management, though it may have resulted in the decision to propose spreading out spending over a 25-year period, rather than, for instance, building it all in ten years. Under the plan, the sections from Baltimore to Wilmington and from Philadelphia to New Rochelle would be completed by 2030, with the rest done by 2040.

Amtrak will need a massive and long-term commitment from the federal government to make this project possible. It will have to find a way to build a coalition between Republicans and Democrats on the matter, since each party will inevitably be in power at some point over the next thirty years. It will have to make a strong case for why investing in the system fulfills national objectives. In the report, it is clear that the agency hopes to portray the Northeast’s strong contribution to the overall U.S. GDP as one of the primary reasons to invest in infrastructure there.

There are therefore long odds for this scheme, but that does not mean it is without merit. In order to implement truly high-speed rail in the Northeast, there is basically no choice but to commit to the construction of an entirely new corridor, since the existing tracks are already mostly at capacity surrounding the major metropolitan areas. Upgrading them could cost as much or more as building from the ground up.

And Amtrak understands the value of building the new line in terms of interconnections with the existing network. Under the service plan suggested in the report (shown below), trains from the southern part of the new corridor could run through along the existing Coastal Corridor in Connecticut and Rhode Island; similarly, trains coming from Harrisburg along the existing Keystone Corridor could interline with the new route at Trenton.

Amtrak will have to assemble major political force behind this project to see it through. This will not be a simple project, either from a funding or construction standpoint. But for the nation’s densest and most economically productive region, it may be the best way forward.

Images above: Amtrak’s proposed routing for its new high-speed rail service, from Amtrak

High-Speed Rail Northeast Corridor

What Would It Take to Fully Invest in the Northeast Corridor?

» Penn Design group proposes almost $100 billion investment between Washington and Boston. Amtrak confirms it’s evaluating constructing another Hudson River tunnel.

If you thought California’s more than forty billion dollar plan to connect San Francisco and Los Angeles with high-speed rail was an unreasonably large investment, you’ll be doubled-over by what a University of Pennsylvania student group has proposed for the Northeast Corridor: a $98.1 billion spending spree that would transform America’s most productive region by speeding commutes between Boston and Washington to just 3h15.

The plan advocates the construction of new rail tunnels through downtown Philadelphia and Baltimore, a bypass around Wilmington, and, get this, a twenty-mile tunnel under the Long Island Sound from Ronkonkoma to New Haven. Trains would average 155 mph on the trip. These investments, the students suggest, would be enough to triple ridership on the intercity rail network by 2040. I wouldn’t doubt it.

The problem, of course, is that while the plan is well-documented, beautifully illustrated, and, I’m sure, technically feasible, it stands absolutely no chance of being realized, bar some unforeseen willingness on the part of the U.S. government to drop tens of billions on one program and a multi-state agreement binding the Northeast region’s taxpayers to the construction of the world’s single biggest infrastructure project. I would love to see such ease of transportation between these cities, but in the next twenty years, the most we’re likely to get is Amtrak’s current ten billion dollar plan to speed trains from 6h30 between the extremities of the corridor to 5h30. This in spite of the fact that the Northeast Corridor, with the nation’s highest densities and highest potential train ridership, is theoretically perfect for high-speed rail.

But there are two fundamental obstacles to a significantly improved Northeast Corridor: financial limitations and differences in political interest.

Though the Northeast is an incredibly rich region, it has no capacity to raise sufficient funds to pay for an investment on the scale of what the Penn Studio has suggested. Not only are all the states in a fiscally difficult situation today, but they are underfunding their existing roads, transit, and intercity rail systems. Because the Northeast has some of the nation’s oldest infrastructure, it also has the most pressing maintenance needs. If the region were to suddenly benefit from a massive increase in tax revenues, that money should probably first be spent on making sure the subways and highways are working as they should, no small task.

Just as important, the U.S. government, despite its decision to allocate $10.5 billion thus far to the high-speed rail development program, is handicapped by the fact that it must spread the money across the country. If the Northeast deserves a federal contribution of $50 billion for its high-speed program, the rest of the country will demand another $200 billion for their own needs. Where, exactly, will that money come from? The two-year period in which the U.S. government appeared to be guided by a Keynesian impulse to stimulate the economy through infrastructure creation has come to a definite, and probably premature, end.

Of course, the lack of adequate funds is determined by politics; if they wanted, state leaders could approved tax hikes to pay for far more than just maintenance. They could, for instance, band together to promote a regional gas tax increase. Yet the situation in the Northeast is paralyzed by poor decision-making and an unwillingness to look across state lines for compromise.

For example, the $8.7 billion Access to the Region’s Core tunnel, which will connect New Jersey and Manhattan by 2017, will not include connections into the existing Penn Station complex; this makes it possible for only trains terminating in Manhattan to use the tunnel and fundamentally blocks off Amtrak use of the facility. As a result, the national rail operator is now studying the construction of yet another tunnel under the Hudson River, a consequence of the fact that New Jersey simply didn’t care enough to find a way to share. (Note that Amtrak’s study is far from final; while the tunnel may be needed, there is no funding for the project.)

The Northeast has internalized its decision-making at the state level, refusing to come to clear agreements about where the region’s priorities should be focused. This is partly due to the fact that many of the state capitals are not along the Northeast Corridor itself — Albany, Hartford, Harrisburg, and Annapolis — but also due to the fact that high-speed rail sections through some states may be actually more beneficial to residents of other states. For instance, though the link between New York and Philadelphia runs primarily through New Jersey, its users are primarily not from that state; this makes it outside New Jersey’s political interest to invest in true high-speed rail there.

Thus, one wonders whether the kind of mammoth investments necessary to outfit the Northeast Corridor for true high-speed rail should be prioritized. California and Florida are developing cheaper and far less complicated plans to run fast trains between their biggest cities, and it’s actually possible to imagine that their schemes will come to fruition. They benefit from the fact that each project remains within state borders and California’s voters made a very large $10 billion commitment to actually funding their line, a feat to which no Northeast state has come close.

Similarly, in the Midwest, there’s a relative consensus in thinking that Chicago is the region’s core and that primary rail links should head in and out of there. This has made agreement about where investments should go simpler and explains that region’s relatively advanced plans for intercity rail.

People in the Northeast complain that the federal government’s high-speed rail funding allocations have gone to other regions, but the Obama Administration may have its priorities right. Instead of choosing to throw its funds into the mind-numbingly complex project that is the Northeast Corridor — where even minor improvements cost billions of dollars — it has picked intercity rail programs that will significantly improve service at a lower cost in the short-term. If Northeastern states want to see similar allocations in the coming years, they must get their act together by developing regional funding sources and establishing more lines of agreement.

Image above: Philadelphia alternative alignment proposed by Penn Design Studio, from Penn Design