This Week At Amtrak 2005-02-28
Vol. 2, No. 6 - February 28, 2005
- That great liberal icon and foreign affairs visionary of the 20th Century, Franklin D. Roosevelt famously said, trying to soothe a frightened nation, “we have nothing to fear but fear itself.” That lesson apparently has been forgotten by Amtrak cultists and their ilk and other normally rational people when it comes to discussion of the Northeast Corridor.
One of the best proposals being discussed about the future of Amtrak is the splitting of the infrastructure of the NEC away from Amtrak and creating a separate federal entity to own and maintain the NEC while Amtrak will continue to operate just trains.
For some odd reason this perfectly reasonable proposal is causing great gnashing of teeth and questioning of wisdom as to whether or not anyone other than Amtrak is capable of maintaining this allegedly sacred stretch of roadbed between Washington and Boston.
It’s time to take a reality check. Here is what the likely changes are that will occur if and when a second creature of the federal government is created to take over the NEC infrastructure:
- The NEC maintenance of way motive power and rolling stock will have a new name on it, other than Amtrak.
- NEC MOW workers will have another name on their hard hats, other than Amtrak.
- NEC “No Trespassing” signs will have another name on them, other than Amtrak.
- Passengers riding on Amtrak and regional commuter trains will see no difference. They will still be riding on the same trains operated by the same companies and public agencies. The names on the station buildings will remain the same, and all train operating employees will remain the same.
- Washington budget architects will now be able to truthfully plan for the desperately needed upgrading plans of the NEC, instead of playing shell games through the current Amtrak budget.
- Just as the private railroads in 1971 shed their passenger departments and related employees and equipment to Amtrak when the company was created, so, too will Amtrak shed the thousands of NEC infrastructure and related employees and expenses to the new federal entity. In other words, the same people who are running and maintaining the NEC today, will also be doing so under the new entity.
- Amtrak will see an immediate improvement in its general costs of doing business because of the loss of NEC-related employees and infrastructure support. Just saving on the costs of issuing payroll checks, related payroll taxes, and the supplies and general support needed to run this operation will mean an instant decline in Amtrak general overhead expenses.
- The remaining Amtrak will be able to fully concentrate its management and resources on developing a healthy and robust national system, free of the constant black hole of NEC costs and related worries. Amtrak will go back to its original mission of being an operating company that owns locomotives and rolling stock, based on the highly successful model of the Pullman Company. Amtrak’s free federal money needs will go back to reasonable levels, and the company’s finances will become more transparent as it quits trying to hide true NEC expenses.
What’s not to like?
- Apparently, Amtrak’s hired help management has never heard of the Sarbannes-Oxley Act, the relatively new federal legislation that regulates truth in financial statements from publicly traded companies. Even though Amtrak, being a company owned be the federal government is exempt, most companies are at least complying with the spirit of the Act. Not Amtrak.
When Amtrak released the latest copy of its FY 2005 business plan, it indicated that NEC Acela operations made a net contribution of $87,276,000 to the company’s bottom line. Similarly, the remaining Metroliner operations contributed $6,583,000. Yet, the NEC Regional/Federal services showed a loss of $68,672,000, and the Clockers a loss of $3,877,000.
The Acelas carried 2,873,340 passengers, the Metroliners 284,445, the Regional/Federals 6,456,232 passengers, and the Clockers 1,987,030 passengers.
Here’s the problem: Every one of these four services uses the identical tracks, infrastructure, dispatching, stations, all or parts of routes, and every other common service needed to market and operate trains. So, with this being the case, how can two of these services, carrying a little over 3,000,000 passengers make money, while the other two services, carrying nearly 8,500,000 passengers lose money?
Just for fun, here’s another puzzler. Amtrak’s Silver Service from the Northeast to Florida, operating two trains and for part of the route operating the Palmetto and Carolinian, lost $98,527,000 for the same period. The Silver Service uses Amtrak’s Sunnyside yard in New York, and Hialeah yard in Miami. The service is part of the national system, using all resources of the company.
Now, the Auto Train, which runs along part of the Silver Service, Palmetto, and Carolinian route between suburban Washington and suburban Orlando, has a dedicated Superliner equipment and motive power pool, dedicated stations, dedicated maintenance facilities, dedicated commissary, and about everything else dedicated, except the common reservations system and general company overhead. Yet, the Auto Train, which will carry 212,935 passengers and their vehicles versus the Silver Service’s 827,501 passengers, will show only a loss of $12,881,000.
Could someone please explain that, too? This seems to be a disturbing demonstration that Amtrak fashions its books to fit the outcome it desires to support favorite services while other services financially languish. If Amtrak is doing this so transparently, what is it doing that no one else can readily see? Perhaps the great 18th Century British statesman, Benjamin Disraeli was right when he said, “there are lies, damned lies, and statistics.”
- Once one of the world’s great newspaper, none other than The New York Times, has said, in an article published on February 20th, that Amtrak “… faces a new challenge: the ambivalence of its own board of directors.”
The article went on to say that while the board missed a February 15th deadline to submit a budget request to Congress, that two days later the chairman, David M. Laney, sent a letter to Congress saying that the board plans to make a grant request, but that “the status quo at Amtrak is neither viable nor acceptable.”
That’s ambivalent? Here are some excerpts from Mr. Laney’s letter to Congress:
"… In past years, Amtrak’s annual report has included a grant request for the upcoming fiscal year; because Amtrak is engaged in a strategic planning process which could affect its needs for FY 06, any such submission at this point would be premature. A grant request will follow as soon as a planning process permits.
"… Amtrak cannot reasonably expect to attract levels of funding from any combination of federal, state, local or private sources at levels adequate and predictable enough to sustain passenger rail service in this country. The Amtrak Reform Board [board of directors] agrees that the President’s proposed operating budget of ‘zero’ is the right message. Status quo at Amtrak is neither viable nor acceptable. To effect needed reforms at Amtrak, however, ‘zero’ is not the right number at this juncture.
"…[P]assenger rail presents the promise of an alternative mode of transportation as well as increasingly valuable added capacity for national transportation networks, particularly in our most congested regions. But the promise of passenger rail can only begin to be realized if it is more effectively structured, more efficiently operated and adequately funded over a longer term than year-to-year.
"Recently, the Amtrak Reform Board began a process of analysis and planning that should result in the Board’s adoption and implementation of a number of far-reaching changes, both structural and operational, and the further recommendation of legislative initiatives that, if enacted, would provide the foundation needed for the development of U.S. passenger rail service …."
Memo to The New York Times: Your definition of ambivalence and the real world’s definition of ambivalence apparently are two very different definitions.