This Week at Amtrak 2006-10-26
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Volume 3 Number 43 –
- The new Amtrak Fall 2006/Winter 2007 timetables are out. Here is what one wag had to say:
Have you seen the new system timetable? This company plainly is beyond irony: the cover photo shows what appears to be a Philadelphia – Harrisburg local in the Amish farm country of Pennsylvania, no doubt to celebrate completion of the INVESTMENT (NOT “subsidy”) of $140,000,000 of your money to turn this 104-mile model corridor into the wave of the future.
This is hilarious for at least a couple of reasons: the train depicted is being pulled, under the [catenary] wire, by a Genesis diesel [locomotive], and the train consists of three 30-year old Amfleet cars, all coaches, from the look of them. Granted that this may have been a photo-special, not a revenue train, but it is still perfectly illustrative of everything that is wrong with Amtrak’s business strategy. At least it is sized correctly, more or less, for the actual volume of traffic in this market. But no three-car train will ever be economic at Amtrak’s fare and cost levels, even at an unprecedented load factor.
Another note of interest in the new timetable is the lack of the renowned Pacific Parlor Car for sleeping car passengers on the Coast Starlight between Los Angeles and Seattle, Washington. This signature service, which has been operated using magnificently refurbished Santa Fe Hi Level lounge cars that are more than 50 years old, has been a staple on the Starlight for over a decade. One of the reasons for losing the service is the lack of lounge car attendants in the Los Angeles Crew Base which staffs the cars. Many LSA jobs (the classification for the lounge car attendants, who handle passenger money) have become vacant recently by employees either leaving the company or moving to other jobs.
- Whither the Sunset Limited, yet/still/again? Still no Sunset Limited operating east of New Orleans in Louisiana, Mississippi, Alabama, and Florida. The new timetable (see above) has this note, as provided by a This Week at Amtrak reader:
Page 98 of the new Amtrak timetable dated October 30, 2006 contains the following footnote:
“The Sunset Limited normally operates three days weekly between Orlando and Los Angeles. Due to severe infrastructure damage from Hurricane Katrina, Train 1 and 2 will originate and terminate in New Orleans, LA until a date to be announced. No alternate transportation is available between New Orleans and Orlando.”
I guess in official Amtrak legalize that means that Amtrak still plans to restore the train sometime in the 21st century.
Okay, it’s time to get creative about this situation. Perhaps, until Union Pacific Railroad can get serious about dispatching Amtrak trains, and until Union Pacific can expand the fabled former Southern Pacific Sunset Limited Route between Los Angeles and New Orleans via Arizona, New Mexico, and Texas, then the Sunset Limited may not be the best choice to use for restored service between New Orleans and Florida. However, other choices abound, with just a little creative thinking.
Choice One: Institute a daily daytime train between New Orleans and Jacksonville. Limited hubbing choices would be available at either terminus, with the Sunset, City of New Orleans, Crescent, Silver Meteor and Silver Star. If the Palmetto was extended back to Jacksonville where it belongs (and, has a much better chance of financial success than terminating in Savannah, Georgia just for the advantage of train and engine crew turns), that would provide another hubbing opportunity for a Sunset Limited replacement east of New Orleans.
Choice Two: Extend the City of New Orleans, making it a Chicago-Memphis-New Orleans-Mobile-Jacksonville-Orlando (or Tampa or Miami) train. This has been studied several times by URPA over the past 20 years, and this very viable option, operating the train on its present schedule between Chicago and New Orleans, would provide daylight service between New Orleans and much of the Gulf Coast, while still maintaining a rail lifeline for Florida’s panhandle between Pensacola, Tallahassee, and Jacksonville.
In the years before the Sunset Limited was extended east of New Orleans in 1993, an internal Amtrak study obtained by URPA showed that Amtrak estimated there were over 75,000 calls a year to its reservation centers looking for passenger train service between New Orleans and Florida.
While the Sunset Limited, at an undesirable and horribly expensive three frequencies a week service helped fill that gap, until full daily service is instituted, the entire route of the Sunset will take financial hits simply because of lack of daily service while maintaining all of the station and other infrastructure costs of daily trains. The same situation holds true for the Cardinal route between Washington and Chicago. This route of spectacular scenery, a natural magnet for leisure travelers, will always perform poorly for revenues and expenses simply because of a lack of daily service.
- Those who know North American passenger rail history, know that in the late 1980s, the Canadian federal government of Prime Minister Brian Mulroney became tired of constantly being “submarined” by VIA Rail Canada’s management. Too many times VIA’s management cried “wolf” at the door of the Prime Minister’s government, saying one thing when another thing was true. As with some former Amtrak chief stewards, VIA’s management at the time felt that money from the Canadian government was plentiful and abundant, and it wasn’t necessary to “play nice” with VIA’s government patrons.The result? VIA’s annual free federal monies were drastically slashed, and VIA lost about half of its route system, including the original Canadian Pacific transcontinental routing of the historic Canadian train, the former CN Super Continental (which was renamed the Canadian), the Rocky Mountaineer was privatized (and is doing spectacularly and growing constantly under private ownership and operation), and a number of other trains that were daily became less than daily operations. In short, VIA was gutted down to a skeleton of its former self.
Are we seeing a Washington version of this scenario? For years, under Amtrak’s previous management of former boards of directors and presidents of the company that have tried every social engineering and transit concept they could think of instead of running a healthy passenger railroad, Amtrak always thumbed its corporate nose at Washington oversight and pretty well “submarined” anyone who tried to change Amtrak’s wicked ways.
A news release came from Capitol Hill this week, from the U.S. House of Representatives Committee on Transportation and Infrastructure:
To: National Desk/Transportation Reporter
October 26, 2006
Top Legal Expert Critical Of Amtrak Legal Department’s Relationships With Outside Law Firms; “Instead Of Being The Aggressive Protector Of Amtrak’s Interests, Many In The Law Department … View Themselves As The Advocates For Outside Counsel” – John W. Toothman, Esq.
Washington, D.C. – An expert forensic legal fee analyst hired by the federal government to investigate Amtrak’s extensive legal expenses with private law firms has found numerous questionable management practices and lax oversight over tens of millions of legal expenses billed to Amtrak each year.
“Amtrak’s Law Department is not fulfilling its role,” John W. Toothman, Esq., wrote in his 102-page report. “Instead of being the aggressive protector of Amtrak’s interests, many in the Law Department, including upper management, seem to view themselves as the advocates for outside counsel.”
Toothman was hired for his expertise in analyzing legal billings to assist in a federal investigation of Amtrak’s Legal Department by the National Railroad Passenger Corporation (Amtrak) Office of the Inspector General and the U.S. Department of Transportation’s Inspector General. The investigation was requested by U.S. Rep. John Mica (R-Fla.), a senior Member of the House Transportation and Infrastructure Committee, and U.S. Rep. Don Young (R-Alaska), the Chairman of the Transportation and Infrastructure Committee.
A copy of the redacted Toothman report can be accessed on the Transportation Committee’s website at: http://www.house.gov/transportation
On Wednesday, the Transportation Committee released the report by Amtrak Inspector General and DOT Inspector General which outlined numerous examples of mismanagement and lack of oversight for more than $100 million in taxpayer-financed legal fees paid by Amtrak during a three-year period (2002-2005). This report is also on the Transportation Committee’s website.
Summary Of Toothman’s Findings
Toothman was selected to assist the Amtrak and DOT Inspector General investigation as one of the top U.S. experts in the field. He is a former Department of Justice attorney, an experienced litigator, and a Harvard Law graduate who has published extensively on the subject of legal fees billing.
He is regularly retained by public entities and large private clients who feel the performance of their legal counsel is in question. He is regarded as an expert in managing outside counsel and litigation in general.
Some of the major findings in his report include:
Questionable Process For Selecting Outside Legal Firms
“Amtrak’s in-house lawyers appear to have been co-opted by their outside firms, they rarely select new outside firms, they are making no apparent effort to engage in a thorough law firm selection process, and the firms they use are among the largest and most expensive in the country.”
Questionable Billings and Expenses By Outside Legal Firms Are Rarely Challenged
Instead of challenging many of the fees and expenses billed by the outside legal firms, Toothman wrote: “Amtrak’s Law Department acts as though its job is to defend outside counsel, not manage them. The attitude exhibited by Amtrak’s Law Department when their handling of outside lawyers was questioned was to defend the lawyers and provide excuses for not reviewing them more aggressively.
“This is a bad sign, indicating that the Law Department has lost sight of its primary job: To protect the interests of Amtrak.”
Other Legal Firms Could Provide Less Expensive Service
“Amtrak’s Law Department has not investigated its firms properly and not considered alternative law firms that would be cheaper and provide equivalent, if not better, services,” Toothman wrote in his report. “There are thousands of firms with expertise handling most of the work done for Amtrak – most of Amtrak’s work is routine, both in subject matter and complexity.”
Toothman said using smaller firms outside “expensive metropolitan areas, would save Amtrak millions a year in legal fees.”
Lack Of Oversight and Enforcement Of Legal Bills
Toothman said after examining a sample of bills from six law firms billing Amtrak the largest amounts, “I noted pervasive, obvious violations of the Billing Guidelines and general billing standards. There was almost no indication that anyone from the Law Department is reviewing the content of the bills, let alone enforcing the guidelines.”
For additional information, access the Transportation & Infrastructure Committee website at: http://www.house.gov/transportation
It is fascinating to note the period in question, 2002 to 2005, the exact same period of time the mercifully departed former Amtrak President and CEO David Gunn held the top job at Amtrak. This is the same David Gunn, who, when he was invited to hastily leave by the Amtrak Board of Directors, so many in Congress rallied around to try and save his job.
In an earlier press release this week from the same Congressional committee, some of the other areas of Amtrak which have been under investigation showed these troubling results:
To: National Desk/Transportation Reporter
October 25, 2006* Media Advisory *
… Summary Of Prior Investigations By The Amtrak Inspector General
- Massive Financial Losses In Amtrak’s Food & Beverage Operations [This was the impetus for Diner Lite]The Amtrak Inspector General audited the performance under the contact and found that:
- Food and beverage operations were losing $83 million per year;
- Amtrak was losing $2 for every $1 it received.
In addition, the GAO found that:
- Amtrak management exercised very little oversight of the Gate Gourmet contract;
- Amtrak did not enforce the contractual requirement that annual reports be filed.
- Lack Of Quality Control Management & Financial Oversight at Amtrak’s Mechanical DepartmentThe Amtrak IG’s Mechanical Report found that:
- Amtrak’s Mechanical Department (AMD) did not maintain adequate information to allow the company to properly keep track of its maintenance costs;
- AMD did not prioritize its maintenance expenditures based on ensuring the greatest reliability of its fleet;
- AMD had virtually no quality control management system;
- Cost data was so inaccurate, misleading, and inefficient that it lead to waste, fraud and abuse in the course of Amtrak procuring goods and services.
- Theft By Amtrak PersonnelMore than 200 employees have been removed because of financial irregularities and theft against Amtrak. In the period from January 1, 2005 to September 2005, the Amtrak IG’s office referred 22 cases for civil or criminal prosecution.
What does all of this demonstrate? A company that has been out of control, and off the leash. For those who have been impatient with the current Board of Directors and new president, imagine being from the private sector and walking into this mess and having to clean it up while at the same time keep the trains running. Also imagine that several major executives in the company who have been responsible for much of this, are still employed by Amtrak; why, is any rational person’s guess.
David Laney, Amtrak’s Chairman of the Board has said there is much that needs to be addressed in the corporate cleaning up of Amtrak, and that much has been accomplished. Many accomplishments, such as weeding out those who have stolen from the company, have been invisible to the public and Amtrak’s passengers.
Most likely many other things, beyond Amtrak’s Law Department, are going to be found that need to be fixed immediately. Fixing Amtrak is not going to be an overnight process, but it must be an ongoing process with great transparency and oversight to bring Amtrak into the good graces of corporate decorum.
- Massive Financial Losses In Amtrak’s Food & Beverage Operations [This was the impetus for Diner Lite]The Amtrak Inspector General audited the performance under the contact and found that:
- The other big Amtrak headline of the week is the strange behavior of Canadian National, owner of the former Illinois Central Railroad, which hosts several Amtrak daily trains, and will be host to new Illinois state service allegedly beginning operations on Monday, October 30th.So the story goes, Amtrak and CN came to a contractual agreement to host the new Illinois-funded daily trains in and out of Chicago. Inaugural runs were held to great fanfare, with CN dispatching the trains over its tracks.
Now, the week before service is scheduled to begin, CN is suddenly saying it may not allow Amtrak to operate the new daily trains over its tracks. Huh? What? Inaugural trains were run, there have been literally dozens of stories in the news media about these new trains, reservations have been taken, tickets have been sold, train crews have been hired, and cars and locomotives have been spiffed up for Monday’s start of service.
What’s going on, here? Nobody seems to know. CN, North America’s largest railroad, is usually pretty good at keeping its corporate word and honoring contracts. Amtrak, for all of its sins, is not about to advertising and inaugurate new train service without a valid contract. What has happened?
Whispers abound, everything from Amtrak jumping the contractual gun, to CN getting a better offer for use of its infrastructure by another party to carry freight. Nobody knows for sure, but we have been assured negotiations between Amtrak and CN are continuing, plus Amtrak has threatened to go to court to force CN to honor the contract for the new train service. The Chicago Tribune reported October 25th that a low-level CN executive, without authorization to sign a new contract with Amtrak, signed the contract anyway, and when the finished deal reached CN headquarters in Montreal, higher level executives claimed the contract was void because the original CN signature on the contract was unauthorized to consummate the deal with Amtrak.
For whoever has created this mess, this will probably go down in passenger railroad history as one of the most hair raising beginnings of new passenger service in modern railroad history.
- One final note for this week. Our Canadian cousins, operating VIA Rail Canada’s greatly reduced system, is celebrating an anniversary of Canadian passenger railroading. Here is a current press release from VIA Rail Canada:
Montreal, October 26, 2006 – Tomorrow marks a major milestone in the history of passenger rail in Canada – the 150th anniversary of what is now known as VIA Rail’s “Quebec City-Windsor Corridor”. On October 27, 1856, at 7:00 AM, the first passenger train left Toronto and travelled to Montreal in 14 hours. That same day, the first train left Montreal at 7:30 AM and travelled to Toronto in the same amount of time. This was the first stretch of track linking the two largest cities in Canada.
The Grand Trunk Railway Company of Canada was formed in 1852 as a consolidation of several railways, some under construction, others only projected. It became one large system stretching from Levis, Quebec (already connected to Montreal) all the way to Sarnia, Ontario (later extending to Windsor). Just three years after the amalgamation of the railway, the line from Montreal to Toronto was complete and open for service. The Kingston Advertiser, on October 28, 1856, wrote that “the Grand Trunk Railroad will henceforth be the great commercial artery of Canada”. Grand Trunk Railroad was eventually fully merged into Canadian National, which later spun off passenger rail with the creation of VIA Rail Canada in 1978.
Today, the 1150-km Quebec City-Windsor Corridor in central Canada is a spine travelling through the most densely populated and heavily industrialized area of the country. This region contains over half of Canada’s population – 16 million – and some of its largest cities.
VIA’s busiest route
The corridor is VIA’s busiest route, running more than 400 of Canada’s intercity passenger trains on tracks throughout the corridor every week, using CN’s former Grand Trunk Railway network. Traffic in the corridor represents close to 90% of VIA’s volume or more than 3.5 million trips, which means that VIA derives the majority of its revenues from this route.
Earlier this year, VIA was the first passenger rail operator in North America to provide wireless access to Internet on board trains travelling in the corridor. This allows passengers, many of whom are business people and students who commute frequently, to make more productive use of their busy time.
“Passenger rail in the corridor is still going strong after 150 years. The long-lasting popularity of this service illustrates the on-going need for passenger rail in Canada. Last year alone, VIA carried a record 4 million passengers,” said Paul Côté, President and Chief Executive Officer. “It is clear that more and more people are turning to passenger rail as a safe and environment-friendly travel alternative, something we at VIA are very proud of.”
How it started
In 1852 the Canadian government officially announced its plan to build a railway between Montreal and Toronto. The following year it purchased existing railway companies in Quebec and Ontario, and the Grand Trunk Railway Company began the construction of the proposed railway.
A major commercial link
On July 22, 1854, the first stone was laid in building the Victoria Bridge, by far the biggest construction project of the entire Grand Trunk network. It took 5 years to build the bridge, named in honour of Queen Victoria. When completed, it was the longest bridge in the world, and remains a major contributor to Montreal’s role as a continental hub in the North American rail system. The bridge was inaugurated by the Prince of Wales on August 25, 1860. This was the first visit of a royal prince to a British colony in Canada.
Some important milestones
1851 – On August 30 an act was passed to build a railway the length of the province of Quebec
1852 – Plan made public and birth of the Grand Trunk Railway Company of Canada
1854 – Construction began on the Victoria Bridge, the largest project of the Grand Trunk network
1854 – Work began on the main line, from Montreal to Toronto
1856 – In September, last gaps were closed and rushed to finish the project on time
1856 – On October 27, first passenger trains travel between Montreal and Toronto
1920 – Grand Trunk Railway fully merged into Canadian National Railways
1978 – VIA Rail set up as independent Crown Corporation to operate passenger rail in Canada, taking over from CN.
About VIA
As Canada’s national passenger rail service, VIA Rail Canada’s mandate is to provide efficient, environmentally responsible and cost effective passenger transport services, both in Canada’s business corridor and in remote and rural regions of the country. Serving more than 450 communities with a network of inter-city, transcontinental and regional trains, demand for rail services continues to grow as more Canadians turn to train travel as a safe and convenient travel choice.
