Volume 3 Number 30
- Bevies of mostly uninformed people, some with a specific agenda, seem to want the world to believe the privatization of British Rail was not only a mistake, but an utter failure. URPA Vice President of Law and Policy Andrew Selden begs to differ. Mr. Selden’s comments are below.
The Big Picture Facts About the Privatization of British Rail
By Andrew C. Selden
There has been a great deal of discussion recently about the merits of England’s great experiment in privatization of its railways by the last Conservative government. That scheme involved splitting ownership of the infrastructure away from the government into a private sector, publicly-traded, business corporation called Railtrack, and franchising out to more than two dozen private businesses certain regional passenger operating rights over Railtrack’s infrastructure. Britain’s limited (by U.S. standards) freight services were assumed by a new railway company called the English, Welsh & Scottish (EWS), which, oddly, was controlled by the U.S.’s Wisconsin Central Railroad, and even adopted WC’s maroon and gold paint scheme.
Controversy was this scheme’s middle name.
Traditionalists bemoaned the breakup of British Rail, a nationwide government monopoly, and the loss of a seamlessly integrated national network, with such amenities as through ticketing, a single timetable and information service, and predictable operation. (Lamented in the United Kingdom as the worst national railway system in western Europe, which it probably was, BR’s schedules and performance made America’s passenger railroad monopoly look like the Keystone Kops in the train business.) Unions hated the loss of cushy government railroad jobs-for-life. Railtrack behaved badly (by socialist criteria) by skimming its profits off the track rents paid by the operating companies and re-investing them elsewhere, where it could earn for its shareholders market rates of return on the capital, rather than plowing everything back into track maintenance and improvements. The government overseer of the railways was as clueless as any American politician confronting an Amtrak policy debate, and exacerbated the many issues facing rail service.
On the other hand, as something one rarely reads in left-wing media, traffic soared, doubling in less than a decade. One of the many operating companies, Virgin Rail, invested more than a billion dollars of its own private capital into a re-equipping of its mainline and regional branch line services with state of the art (and off-the-shelf) European trainsets. The UK’s trains became, and remain, swamped with traffic. Naturally, critics pounced on the congestion as an issue.
But the overall results of privatization remain very hard to assess with a simple and unequivocal conclusion: “success” or “failure.” There has been a little of both. Among the failures: Railtrack, which had to be, in effect, re-nationalized, and the public subsidy for which has soared. And, in hindsight, the operating franchises were cut up into too many, too small, pieces. Fewer, larger, franchises seem to make more operating and economic sense, but that is being taken care of by the private sector capital markets, as investors buy and sell shares, and franchises are consolidated by their owners (rather than some public sector Commissar).
All the attention on the UK’s privatization foibles has distracted America from another radical experiment in railway privatization, in Japan, of which we were forcefully reminded recently by a story in The Wall Street Journal. The article noted that one of the several independent, private corporations that operates passenger trains in Japan, Hankyu Holdings, offered the equivalent of $3.5 billion (yes, billion) to acquire its competitor (there is that odd word, for a passenger rail context: “competitor”), Hanshin Electric Railway Company. The offer was prompted by a hedge fund (a speculative private investment fund) buying up a large stake in the Hanshin company. Longer distance intercity passenger traffic is booming in Japan, too, by the way, since the breakup of the old government controlled JNR company into private franchises.
What an odd concept: rational private sector investors, Japanese hedge funds and Sir Richard Branson (owner and CEO of Virgin) alike investing billions of dollars in rail passenger businesses. It pretty much puts to bed the notion that railway privatization is an inherently bad idea.
Instead, the experience in the UK and Japan alike (as well as in several other countries around the world) suggests that while there are lessons to be learned from the different ways that privatization has been carried out, that the idea of privatization has considerable merit, both from a passenger traffic and growth perspective, and in terms of public welfare and the overall wealth of the nation.
- It’s the middle of the dog days of summer, and America is traveling with a vengeance this year. How is Amtrak doing with ontime performance? Here are the statistics, as of July 22, 2006:
FY 06 to date, Initial terminal ontime performance: 90.8%
FY 06 to date, Acela/Metroliner ontime performance: 84.1%
FY 06 to date, Other Northeast Corridor ontime performance: 79.8%
FY 06 to date, Short Distance Trains ontime performance: 68%
FY 06 to date, Long Distance Trains ontime performance: 28.9%
FY 06 to date, End Point Arrivals, All Trains, ontime performance: 68%
Cancelled or Terminated Trains:
FY 06 to date, Acela/Metroliner: 109
FY 06 to date, Other Northeast Corridor: 253
FY 06 to date, Short Distance Trains: 843
FY 06 to date, Long Distance Trains: 391
FY 06 to date, All Cancelled or Terminated Trains: 1,596
- Last week in TWA, URPA Vice President William Lindley of Scottsdale, Arizona gave us a brief lesson on the late Dr. Adrian Herzog’s matrix theory as applied to passenger train networks. This week, Mr. Lindley favors us with a brief scenario as to how this matrix can be effective.
Improving Passenger Train Travel in the Southeast
By William Lindley
Recently reported ridership gains in North Carolina are encouraging, but what’s the path forward beyond these modest gains?
The State of North Carolina currently owns one trainset and is refurbishing another and helps fund the cost of the Piedmont service. The one active set makes a single daily round trip between Raleigh and Charlotte, three hours each way. The equipment does not carry passengers for 18 hours out of every 24. Such low equipment utilization is unheard of at airlines, bus companies, and freight railroads.
Other trains serving the area include the Palmetto (now New York - Savannah, Georgia) and the Crescent (New York - Atlanta - New Orleans).
How should North Carolina productively expand its service? Here is one scenario.
Start by running two round-trips with the existing trainset. For example, leave Raleigh at 6:30 A.M., arrive Charlotte 9:40 A.M.; depart Charlotte 10:45 A.M., arrive Raleigh 1:55 P.M.; depart Raleigh 3:05 P.M., arrive Charlotte 6:15 P.M.; depart Charlotte 7:30 P.M., arrive Raleigh 10:40 P.M.. That leaves eight hours idle time daily for maintenance.
Next, change the Carolinian route (which is also partially funded by North Carolina’s state DOT program); it now operates New York - Washington - Richmond - Raleigh - Charlotte. Instead, replace the New York - Washington segment (about 3 hours in length) with Charlotte - Atlanta (about 6 hours), where today the Crescent is the sole daily train. The Carolinian would leave Washington in the morning and arrive Atlanta in the late evening, with the Crescent departing Washington in the evening and arriving Atlanta in the morning. With the choice of morning or afternoon trains, more than twice as many travelers would choose the train (Beyond the fact there are then two frequencies; increased travel choices have a profound impact on the availability of travelers willing to try a particular mode when there is more than one daily choice.).
The Palmetto should similarly be realigned to operate between Washington and Jacksonville, Florida - spending three hours every day covering a route where there are only two other daily trains, instead of dozens on the Northeast Corridor.
Once the second trainset is available, use the two sets as follows. Have Set A leave Washington five minutes after the Carolinian, diverging at Alexandria to travel west via Charlottesville and Danville, Virginia, and rejoining the Carolinian’s route at Greensboro, North Carolina. The western route is somewhat faster, so Set A would terminate its southbound run at Charlotte about 90 minutes before the Carolinian (via Rocky Mount, Raleigh and Durham) arrives to carry passengers from Virginia all the way to Atlanta. Set A then reverses and covers the 5:30 P.M. northbound departure, calling at Durham, Raleigh, Rocky Mount, and arriving in Richmond a little after midnight. Set B meanwhile (having run the Set A schedule on the previous day) departed Richmond at 3 A.M., called at Raleigh at 7 A.M., and arrived Charlotte before 10:30 A.M. for a 1:15 P.M. departure back north to Greensboro, North Carolina (2:41 P.M.), Charlottesville, Virginia (6:03 P.M.), and terminating at Washington, DC at 9:15 P.M.
These two trainsets, then, will be operating a combined 31 hours every day, instead of the six the current trainset provides. Including the Palmetto and Crescent, every day there will be:
4 trains between Charlotte and Greensboro;
2 trains between Richmond, Virginia and Charlotte via Raleigh; and
2 trains between Washington and Atlanta via Charlottesville, Virginia.There will be a train directly from Richmond, Virginia to Atlanta, Georgia. It will be possible to go from Charlottesville, Virginia to Greensboro, North Carolina, wait a few hours for the train to Raleigh, and board a train for Florida in just a few hours.This scenario modestly increases train frequency and length, but there is an immense jump in the number of combinations of places between which you can reasonably travel. The result will be:
- Far better utilization of equipment and stations,
- Increased attractiveness to travelers both in destinations and schedules, and
- Longer average trip distances, creating greater revenue passenger miles, and higher average ticket prices.
Comparing this to the simple alternative of two trainsets each making a single 3-hour round-trip within state lines - 12 hours daily revenue service versus this scenario’s 31 - reveals the mammoth impact that building the matrix of a proper network can have, especially if it were to be repeated across the country.
While the current trainset is owned by the State of North Carolina, and the new set will be as well, the benefits of this type of an expanded route matrix, including crossing state lines, even though funding primarily comes from just one state, briefly demonstrates how the originating/funding state program (and, passengers, too, the main reason for any of these programs) can prosper by thinking beyond geographic state boundaries.
- One Chicago wag, reading last week’s TWA item about a drug courier carrying a bag with 10 pounds of cocaine on the Southwest Chief had this comment to make: “You are usually very thorough in your summations provided, but one item left me with a question, i.e., your No. 7 topic of who is traveling next to you. The passenger with the ten pounds of cocaine in a bag, did Amtrak weigh it to determine if an excess weight charge applies? … every penny counts.”
- Finally, this week, a veteran daily rider of Amtrak’s Empire Service in and out of New York City had this tale to relate:
“… I second a motion to do some serious weeding out of Amtrak’s so-called customer service department. For as long as I’ve been riding Amtrak I have contended that, of all the things Amtrak does badly, customer service is the thing it does absolutely far and away the worst. If you deal with Amtrak customer service reps a few times, you’ll begin to wonder if [ineptness] is a mandatory qualification for employment in the department.
“Extenuating circumstances put the badness of Amtrak’s customer service on particularly prominent display. For starts, ‘Julie’ is utterly useless as a source of information when things go wrong. And, the actual human help center operators are often worse than useless, giving out bad information that can actually reduce your chances of getting where you want to go.
“One evening, just after the annual 2:00 P.M. pre-Thanksgiving-Thursday Harlem River Tunnel Fire & Station Blackout had concluded its normal run of events at Penn Station, I tried calling in for advice on what to do, knowing this was probably going to be an interesting day getting home. I shouldn’t have. During the first call, I was wandering the platforms in Penn Station, looking around for signs of life. The Amtrak customer service representative told me my train was currently boarding on the platform right where I was standing. When I told her a tunnel fire had cancelled all Amtrak service through Penn Station from 2:00 P.M. up until at least that moment, and I was standing right there and I could see with my own eyes no Amtrak trains were anywhere to be seen, she insisted I was wrong, and all service through Penn Station was, and had been, running on a normal schedule. Apparently they teach their reps their computer system is a more reliable indicator of what was happening than are the eyes and ears of the passengers who are on location.
“I should have stopped calling at that point, but I was still just a novice Amtrak passenger back then, and so I didn’t know any better. So, I called again, an hour or two later, and the customer service rep I talked to had actually been apprized of the situation … somewhat. She told me to hop over to Grand Central Terminal and take Metro North to Croton Harmon, where Amtrak trains were being routed down from Albany to meet us and take us the rest of the way up. So, I did that. The problem was, no trains were being sent down from Albany at all. And in the meanwhile, not long after I left Penn Station for Grand Central, Empire Service resumed out of Penn Station. So I arrived at Croton Harmon on a Metro train just in time to see the first of what would be several packed northbound Empire Service trains out of Penn Station blow right past me. That was how I learned that, when things go wrong, you call up your fellow train gang members or try to find your conductor (I know then all by name) and ask for advice on what to do. Never call 1-800-USA-RAIL!
“It’s a shame, because it doesn’t have to be this way. I can understand maintaining and repairing equipment and infrastructure is very expensive, takes time, and creates logistics problems. But, a few phone calls is all it would take to get a consistent and reasonably accurate message to your passengers about what’s going on and what the plan is to deal with it when something goes wrong. Bad customer service and a lack of planning and communication is perhaps the single most damaging thing to customer satisfaction at Amtrak, but it would be the easiest and cheapest thing to fix.
“Just for a barometer of what I’ve been seeing over the past five years in terms of the state of repair of equipment, the situation is generally getting worse on the Empire Service, and has taken a sharp dive over the past year or so. The locomotives are about the same (they continue to break down at about the same rate as before), so no complaints there. We’re starting to see more frequent equipment shortages that leave 300+ passengers vying for space on consists of two Amfleet passenger cars and one (non-functional) cafe car. But, the real change is in the little things. Restroom doors jam shut, locking passengers inside, and have to be pried open, or pop open suddenly, leaving a passenger in an embarrassing position. The doors between the carriages and to the outside are very frequently broken. Electrical systems and HVAC systems on the carriages fail and remain broken for weeks at a time. It’s gotten so bad the passengers and conductors frequently joke about selling an Amtrak passenger’s travel kit that includes such items as a flashlight for when the lights and electricity go completely out, a tool box containing screwdrivers, a hammer, a crowbar, pliers, and the like so you can get into and out of the restrooms and move between cars, a portable, gas-fired space heater during the winter months to stay warm, and a few MRE’s for those times we remain stranded behind an abandoned freight train for several hours with no cafe car.
“But we take it all in stride. The mishaps do break up the monotony of the daily grind. The conductors are what really make the difference. Most of them are such great, fun people who work heroically against all odds to try to make the best of every situation. And when all else is lost, they never fail to at least give us all some really good laughs. After all, you have to have quite the sense of humor to keep walking in their shoes.
“And there is a side benefit in it for me: one of these days, I may have to travel on business to India or Bangladesh, and so riding Amtrak should acclimate me to crowded, overheated, late transit systems where little works correctly and chaos is the norm. That way it won’t be such a shock when I get there.”