“Business as usual is a recipe for failure.”
— Secretary of Transportation Norman Mineta in referring to Amtrak, July 2003.
by Noel T. Braymer, RailPAC President — Norman Mineta is an old trusted friend, a former Congressman from California, the only Democrat in the Bush Cabinet; he is no right wing ideologue. His Department of Transportation has identified a major problem for Amtrak, which is the high cost of owning the NorthEast Corridor. This is nothing new. The cost of the NEC was a major factor in the bankruptcy of the PennCentral in the late 60’s. By the mid 70’s the NEC was dumped on Amtrak so that CONRAIL would have a chance to succeed. The administration is proposing among other things to split Amtrak into two organizations, an infrastructure company (the NEC) and a train operating company. The DOT would lease the NEC infrastructure to a compact of States responsible for NEC train dispatching and infrastructure. To accomplish this the Administration is considering raising the current $900million proposed annual subsidy to up to $1.4billion in the future to carry this out. Amtrak’s response is to demand almost 1.8 billion and threaten again to shut down if they don’t get what they want. Almost all of this subsidy would go to the NEC, Amtrak admits only 300 million is used on the national system.
What is the impact of the NEC on Amtrak’s budget? Amtrak is saddled with major debt payments (remember they mortgaged Penn Station and most of their other Assets) in their effort to start the ACELA trains. This debt is a major part of Amtrak’s fiscal woes. Much of the money Amtrak want to spend out of their proposed 1.8 billion dollars is on the NEC to run ACELA at higher speeds. So how is the ACELA doing? ACELA is far from being Amtrak’s “glidepath to profitability.” Amtrak is forced to heavily discount tickets to maintain ridership. Remember, at the fall schedule change Amtrak cut back ACELA service and added running time to improve on time performance. The results seem unchanged: 65.8% on time for January. Unfair comparison you say, since this January was very cold? Well, compare this to the METROLINER at 74.7% or the Regional trains at 76.1%, which also ran back east in the same weather. The DOWNEASTER was on time at 95.1 %, which also had to deal with cold weather.
One example demonstrates how expensive the NEC is to operate and what little value Amtrak gets for it. Just outside of Amtrak’s Sunnyside Yards on Long Island is Harold Interlocking. This railroad intersection controls traffic between Long Island, Penn Station and the Bronx. Amtrak owns and maintains this major junction built in 1908. During rush hours trains come through Harold at a rate of 42 an hour. Most of these are Commuter, not Amtrak trains. Metro-North, operator of New York City’s Commuter trains wants to increase this to 66 trains an hour. They want to start construction to rebuild Harold to do this. The problem: Amtrak. Amtrak is too broke it says to participate and is afraid that as owner of the property they will be held liable if toxic substances are uncovered in construction. Well the solution is simple, sell Harold, and sell the whole NEC off. This is what a profitable business would do.
How do I know? Because I saw the Santa Fe Railway do the very thing I’m talking about. Back in the 1990’s Santa Fe “sold” most of their non-mainline railroad in Southern California to the State. Not only did the Santa Fe get cash, it got rid of the legal liability of owning railroads which they had become the minority user. What did the Sante Fe lose? Good question. They retain exclusive freight traffic rights on their old lines, their rent payments are less than their cost of ownership, plus they no longer pay property taxes on the railroad. They have a much better railroad to use now and they are carrying much more freight on most of these lines than when they owned them.
Amtrak has much to do to improve their operations. This winter their long distance trains are grossly short of low level equipment for service east of Chicago. You can blame the weather. But in many cases poor supervision allowed equipment in the yards to be left without Head End Power, which caused equipment and water lines to freeze because the cars were left unheated. The results were cars put out of service. An example of Amtrak’s attitude towards passengers was found on a late running LAKE SHORE LIMITED this winter. Not only did passengers have to endure a train running hours late, but also almost all of the toilets had to be put out of service. Yet Amtrak management didn’t feel it was worth the cost to send a service truck out to the train en route to get to at least some of the toilets working.
What could Amtrak do if they improved operations of their trains? Well if they just did as well as the railroads before Amtrak they could run New York to Chicago with 2 trainsets instead of 3. Between New York to Florida and Chicago to Texas they would need 3 trainsets per train instead of the current 4 observed a Mr. Byler. That’s a saving of 8 trainsets or about 80-90 cars. That’s a saving of not only millions of dollars, but would free up equipment for more trains and bring in millions more revenues! Amtrak keeps talking about putting THEIR railroad in a good state of repair. They mean the NEC, which except for a few miles in Michigan is the only railroad they own. If they rented the railroad they could demand like any renter that the owner maintain the railroad in a good state of repair. Then they should concentrate on good OPERATION of their Rail Passenger service, which is what the Rail Passenger cares about.