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This Week at Amtrak; 2012-04-26

April 26th, 2012

Volume 9, Number 4

From the Editors…

This Week at Amtrak returns to Washington for the two day Passenger Trains on Freight Railroads conference held by Railway Age Magazine.

Editors: D & D Carleton              Proofreading: Black Bear Wordsmiths (blackbearws@yahoo.com)

 The fading perception of how the future will move

By Daniel Carleton

What a difference a year makes

“I missed the first half of Stan Feinsod’s speech. I’m sure he said that all future passenger service should be run by Amtrak.” – Al Engel, then-Vice-President – High-Speed Rail, Amtrak

Irony has been defined as “incongruity between what is expected to be and what actually is, or a situation or result showing such incongruity.” It has also been implied that irony has been the ethos of the last half-century or more. Perhaps it is because of this ethos that we not only accept irony when we find it, but will expend resources in order to maintain the irony, in the belief that all expectations are valid.

The previous year’s conference had a buzz so loud one might recommend hearing protection. Nothing brings in a crowd like money, and where federal dollars are a possibility, there definitely will be policy wonks. It was the first such conference following the President’s admonition to build something called “High-Speed Rail.” The twelve months that followed were a political rollercoaster for the socialized passenger rail faithful, with adverse election results and cancelled projects in Ohio, Wisconsin and Florida. At this year’s meeting, the buzz was replaced with a vacuum. HSR was mentioned, repeatedly even, but it did not carry the same punch as it did last year. Even though many of the faces were the same there was definitely a change in the air.

This would be the eighteenth conference of this nature and it has become something of a tradition, where the editor of Railway Age opens the conference by asking how many in attendance have been to all of them. Every year that number grows smaller. This year the overall attendance was smaller than last, most likely due to the Railway Interchange gathering in Minneapolis the previous month.

Picking up where he had left off just days earlier, Association of American Railroads President and CEO Ed Hamberger gave the keynote address, hitting upon many of the same points. He did add some interesting anecdotes: Time magazine called the AAR, first time in 12 years, to verify a rumor it had heard that the railroads actually owned their own track. In a survey of business leaders, only 40% knew the railroads owned their own track; 50% thought railroads were public-private partnerships. On the plus side, the railroads handle one-third of all exports to their port of departure.

But this was a conference on passenger trains, and he did succinctly outline the railroad’s stance on expansion; there will be “no harm done” to the existing flow of freight traffic on today’s railroads. If one desires to operate passenger trains where none exist right now, there are four things which need to be considered: Capacity, Liability, Safety and Compensation. On the subject of compensation, and as was copiously illustrated at last year’s conference, a new service does not fall under the Railpax agreement of 1970; the price per mile for access will be higher and closer in line with actual cost to the railroads for such access. That being said, the railroads do have a goal of “getting to yes” when it comes to more passenger trains. This is quite a paradigm shift from even just a few years ago, when the answer was a qualified “no.” Apparently, the states have learned their lesson and now bring appropriate quantities of cash along with a realistic attitude when approaching the railroads with their passenger train perceptions.

Hamberger made it clear that the lawsuit AAR filed as a result of federal regulation, allowing Amtrak authority to promulgate the rules with respect to the conduct of the railroads and timeliness of passenger trains, was directed not at Amtrak, but at the Federal Railway Administration. A decision on this is expected this Spring. He also repeated the official stance of the railroads that the accepted operator of intercity passenger trains is Amtrak. He neither explained nor elaborated on this.

Many will take solace in the notion that the AAR has given its seeming endorsement to Amtrak as the sole operator of non-commuter trains in the country. As the conference wore on, however, it was clear that not all shared this opinion.

The conviction of the old guard

Eugene Skoropowski, then a director with HNTB, wears the mantle of elder statesman for state-sponsored passenger rail. Therefore, it was something as a surprise, for him as well as for those in attendance, when Railway Age approached him to write an article and make a presentation on the idea of a private-sector role in intercity rail. The article, as well as his presentation, made the argument that full operation by the freight railroads is not in the cards:

Today’s freight railroads might be expected to participate constructively in cooperative development of a rejuvenated, higher performance passenger rail system, but their business model no longer allows them to be sources of capital investment or operating support for passenger services. To accomplish this would require the freight railroads to pour billions of dollars into their infrastructure for double-tracking, sidings, signaling, etc., and that’s not going to happen. – Eugene Skoropowski, How private enterprise can strengthen Amtrak, Railway Age Magazine, October 2011

He went on to extol existing partnerships between the railroads and passenger operators in New England, California and North Carolina. What could private enterprise bring to the table of passenger rail? No one knows the railroad business better than the railroads. But there lingers the persistent belief that public money is necessary, and the availability of such money is cyclical.

One of the presumed roadblocks to an outside agency operating a state-sponsored passenger rail service is the necessity of indemnification. Amtrak currently is required to carry a $200 million policy for its services. Based upon his experience in California, Mr. Skoropowski stated it was not legal for a state agency to obtain insurance for a third party. At this point, Ray Lanman, Vice President, Corporate Development at Herzog Transit Services, spoke up and stated that “anyone can buy $200 million of insurance.” It is a cost of business and is priced into the cost of such business. Amtrak already does this.

Ironically, Skoropowski would join the Florida East Coast Railway five months later as its senior vice president of passenger rail development. The FEC would later announce its intentions to initiate passenger rail service between Central and South Florida; “a privately owned, operated and maintained intercity passenger rail service that will be a solution for millions of business travelers, families, and tourists.”http://www.allaboardflorida.com

Frank Wilner, well known author and Public Relations Director for the United Transportation Union, also spoke on the possibility of the railroads resuming passenger rail services starting, off with, “Islands of socialism don’t fit well in the ocean of capitalism.” He followed this with the standard canard which states that long-distance passenger trains exist for the sole purpose of political support for funding the all-important Northeast Corridor. Railroads running passenger trains would be a “second best solution,” but if they did run them, this would remove the threat of losing access to private property.

If there was any point to be taken away about the role of the private sector in operating passenger trains, it may be simply stated that there are hurdles to overcome but they are not insurmountable.

Al Engel, then Amtrak’s Vice President – High-Speed Rail, addressed the gathering, spinning the same old yarn from the well-worn songbook, “The Northeast Corridor generates a surplus which supports the long-distance trains.” He then added that the NEC is at or close to capacity with 2200 trains per day. After talking about other corridors in the country, he was asked about the then ongoing negotiations with individual states for Section 209 of the Passenger Rail Investment and Improvement Act. At that time there were still “a few stragglers” who had not yet signed on. When asked where the long-tardy methodology for Section 209 could be found, he directed all of us to the website for the American Association of State Highway and Transportation Officials. Why this would be published with AASHTO, and not the FRA or Amtrak websites, is anyone’s guess. In keeping with the irony, Al Engel would leave Amtrak before the end of the year “to pursue other opportunities.”

Federal Railway Administrator Joe Szabo and his deputy, Rob Lauby, gave an update of the High-Speed Rail program even though there are no active high-speed projects in the country. The FRA has basically taken the stance of “If you don’t like what you see, lower your expectations,” and as a result, 110 mph projects to Detroit and St. Louis are considered “HSR.” Be that as it may, 98% of the American Recovery and Reinvestment Act funds have been obligated and one-third of TIGER grant money is going toward freight rail.

There were various updates from different states. Illinois is studying 220 mph trains between O’Hare Airport and downtown Chicago. The representative from North Carolina could not be there in person, but did send a narrated Power Point program outlining the challenges of selecting a route into downtown Raleigh. Regarding the upgrade in service between Chicago and St. Louis, the procurement process for new trainsets is underway. There will be six new sets of equipment consisting of five cars/two locomotives each. As for who will own these, that is still up in the air. There was no mention of Amtrak in this presentation.

In Pennsylvania, a shortline operating in and around Pittsburgh proposed establishing a light-rail type service along one of its routes. Following the presentation, this writer asked why a railroad would be interested in starting something like this. The answer was because the line in question has excess capacity. Immediately someone in the back of the room yelled, “You didn’t answer the question! Why are they doing this?” The real answer is that the owner stands to gain $30 million for the sale of the line, while retaining the freight rights. Now that is a good reason.

Finally, a breath of fresh air

A highlight, if not the highlight, of this gathering was the luncheon speech given by Stan Feinsod, a long-time transit contracting specialist with experience in project development and management, planning and engineering, operations and even streetcar specialties. He is currently a Business Development Advisor at Ratp Dev USA, serves as Secretary Treasurer of the Association of Independent Passenger Railroad Operators (AIPRO), and Co-Chair of the APTA Commuter Rail and High Speed and Intercity Passenger Rail Subcommittee. The full text of his discourse was reprinted with his gracious permission back in November 2011, and may be seen here: http://www.unitedrail.org/2011/11/08/the-path-forward-creating-an-american-high-performance-integrated-intercity-passenger-rail-system/

What he outlines is simple:

  • A system based on the American economic model of competition.
  • A system based on the private sector, and cooperation with the pre-eminent American freight railroads who own the most important rights-of-way.
  • A system developed by a broad public-private partnership with the states and the federal government.
  • A system that strives for continuously-improved performance and the reduction of travel time; a system that has excellent connectivity to the urban transport systems it serves.

No, this is not rocket science. Still, there were those present who believed he was asking for the moon.

A sample of success

It is really hard to argue with a company whose workout model is “only buy dogs.” Yet that is exactly what Iowa Pacific is doing under the careful hand of Amtrak alum-turned-entrepreneur Ed Ellis. An amalgam of shortline railroads, Iowa Pacific recently concluded a windfall with the sale of its Arizona Eastern line to another company. Although freight pays the bills, its passenger tourist line business is not a drag on the core.

Ellis pointed to the over 300 tourist railroads in the United States, and all of them — at the very least — cover their costs. Last year, Iowa Pacific commenced a new passenger service in upstate New York, the Saratoga & North Creek Railroad. This is no backwoods operation isolated from the rest of the network. It runs out of the same municipally-owned station as Amtrak trains in Saratoga Springs, and operates over a short stretch of Canadian Pacific mainline before diverging onto the branch to North Creek. It complies fully with 49CFR238, the Federal Code governing passenger trains. By the time of the conference, the S&NC had 30,000 boardings in the first three months of service.

Iowa Pacific has its own national reservation center and maintenance facilities. The vision for its fleet of rolling stock is “return to zero age.” Cognizant of its responsibilities, the Iowa Pacific is very clear that the burden and reward for its services rests solely on its own shoulders. Last year. the S&NC covered all costs above-the-rail , this year it expects to cover all fully-allocated costs. The S&NC receives no subsidy.

The quest for reality

Longtime conference attendee and presenter Al Fazio projected pictures of the Concorde SST and Boeing 747 with the subheading “defining a purpose.” Both had their first flights in 1969 and both carried the dreams representing the future of transportation. Whereas only 20 SST’s were built (and all were since retired), over 1400 copies of 747 variants have been constructed and continue to be built. In short, Boeing was right; the future was not about speed but rather efficiency. And now, four decades later, it is time for passenger rail to face this stunning if simple reality: While sleek and sexy bullet trains make for great models and posters, it is the everyday high-performance passenger trains which will get the job done.

But who will operate these new trains? Outside of the New York metropolitan area, most commuter rail systems are contracted out to private operators or, as is seen in Chicago, the freight railroads. Amtrak is currently the default-operator of choice for all other services, and sells itself as the sole keeper of the American passenger railroad. Is there any real reason to maintain the status quo? This conference successfully challenged that notion, making it very clear that there are entrepreneurs waiting in the wings for the opportunity to flex their experience and acumen for the benefit of the operation and expansion of the nation’s passenger rail network.

Perhaps it was multiple generations of science-fiction television that raised the expectations of the modern populace. Many who are at or past “middle age” believed flying cars would be the travel mode of choice at least by the Twenty-first Century. That expectation is easily dismissed, however, because individually we make an accounting of our own coffers and recognize our financial limits. This is the personification of fiscal responsibility. Even so, many still expect passenger trains to be something out of a futuristic novel; and upon arriving at the station, are then disappointed by what they see. A steady diet of fast-train phantasms by well-meaning but grossly-mistaken politicos feeds this disappointment, and the incongruity between fantasy and reality effectively sours the public to passenger train travel. There are those who feed off this incongruity by selling fast trains that are at best superfluous — at worst, exorbitant. There are others, however, who endorse fiscal responsibility by offering efficient, well-thought-out-service that satisfies the need and covers its costs. We applaud them. Loudly.

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