1. Here is the text of a speech delivered to the Florida Coalition of Rail Passengers here in Jacksonville, Florida on Saturday, November 7, 2009 by this writer.
   

   It’s been an interesting week for the railroad business; changes we couldn’t imagine a decade ago have suddenly become true. America again has a “railroad robber baron” – but, this time, it’s a benevolent man who may be the smartest businessman in the world.

   Warren Buffett said he would cheerfully pay $34 billion for the Burlington Northern Santa Fe Railroad, and BNSF said they would cheerfully accept his offer.

   While many people agree this is not going to launch a series of mergers – there isn’t much left to merge other than creating a transcontinental railroad – this is a game changer. BNSF under private ownership no longer has to act by the dictates of Wall Street.

   Think of the BNSF deal as a giant-sized version of what happened to our own Florida East Coast Railroad: going private allowed it to think radically outside of the box.

   The FEC – after over a decade of waiting – has partnered with the Florida Department of Transportation and Amtrak to restore passenger service on its coast route between Jacksonville and Miami. Now, start thinking about BNSF and passenger service – they have already publicly indicated if the right business opportunity comes along, they will talk about it.

   Reading the FEC/FDOT proposal – which is part of the national grab for high speed rail stimulus money – gives any reader respect for the Florida DOT.

   Amtrak has its usual equipment demands, because both the Silver Meteor and Silver Star will again be split here in Jacksonville, and half of the consists will go to Miami via Orlando, and half go on the FEC.

   The best part is the request for additional local regional trains running between Jacksonville and Miami to provide a higher level of frequencies. The most obvious part left out is extending the Palmetto south of Savannah and running it down the FEC or perhaps over to Tampa.

   The only part of Florida’s rail plan found wanting is mention of doing something to bolster Tampa’s conventional train service. In the Tampa Bay area we have Florida’s second largest metropolitan area, and its level of train service is less than that of Sebring and Palatka.

   If you really want to look at the unfairness of it all, take a look at Florida’s panhandle. The people living there pay all of the same taxes we pay, but their train – the Sunset Limited – went away because Amtrak doesn’t want to bother restoring the train after a hurricane that happened over four years ago temporarily tore up some track.

   As I join you today on behalf of United Rail Passenger Alliance, my late friend and predecessor, Austin Coates, was no stranger to this group or many of you personally. We’ve never forgotten Austin’s most famous line regarding Amtrak – “it’s just business as usual.”

   More than half a decade after Austin’s passing, we need to help Amtrak stop its continuing “business as usual.”

   Let’s look at how Amtrak has treated us here in Florida over the past 25 years or so.

   Going back to the pre-Amtrak days, Florida had so many passenger trains you couldn’t walk very far without tripping over one. Florida was a state built by the passenger train.

   We had the Seaboard’s Silver Meteor, Silver Star, Palmland, Sunland, and Gulf Wind. Not only did we have service to Miami, but we also had service down the middle of the state and from Tampa down the west coast to Venice.

   The Atlantic Coast Line provided us with service on the East Coast Champion, West Coast Champion, Gulf Coast Special, seasonal Florida Special, and the Everglades. The ACL on the west coast would take you to Fort Myers.

   From Chicago and the Midwest, you could catch the City of Miami, South Wind, Seminole, or Dixie Flyer.

   Until just a couple of years prior to Amtrak, the Florida East Coast even operated its daily two car train between Miami and Jacksonville.

   Then came Amtrak Day in 1971.

   Amtrak Day wasn’t as bad for Florida as elsewhere, for we still had the Silver Meteor, Silver Star, Champion, and South Wind. We lost the Gulf Wind, and that huge – and currently unfilled gap – between Jacksonville and New Orleans opened up. We lost service south of Tampa on the west coast. But you could still get to Florida from Chicago with single train service, and you had three choices from New York to Florida, and both coasts and the middle of Florida through Ocala were still served.

   We all know what has happened since then.

   The once busy crew and maintenance base in Tampa is gone, with just a single daily train remaining. Naturally, this occurred only after the City of Tampa decided to spend a king’s ransom on the breathtaking restoration of Tampa Union Station.

   Miami, once the golden goose of passenger railroading, now has two trains a day.

   The South Wind, then the Floridian, with direct Chicago service, is gone.

   The Cross Florida service between Tampa and Miami came and went.

   The extended Palmetto from Savannah to Jacksonville, and eventually to Tampa, and then turned into the Silver Palm to Miami – is gone.

   We now have Auto Train, but unless you’re taking along your car and only have a destination of Northern Virginia or beyond, it’s not the most useful service in Amtrak’s stable.

   Then, there is the sad saga of the Sunset Limited. We all worked hard in Florida to bring the Sunset to us in 1993. The State of Florida ponied up over $7 million to help upgrade the CSX line in the panhandle.

   We knew prior to the Sunset’s extension, there was an average of 75,000 calls per year into the Amtrak res centers seeking a train between New Orleans and Florida.

   Now, the Sunset is almost history. I say “almost” because it never officially went away, just in reality went away. As [FCRP member] George Bollinger often asks, “what if it had been the Seaboard and L&N that had suddenly decided to stop running the Gulf Wind, just because it was inconvenient?”

   For a while, unknowing people tried to blame our friends – yes, make no mistake about it, at CSX they are our friends – for not allowing Amtrak to resume service on the Sunset. But, we know CSX gave Amtrak written notice the line was available for the Sunset on April 1, 2006.

   By law, when Amtrak cancels an entire train route, it is supposed to post a 180 day notice of cancellation. This minor technicality to Amtrak has never been honored, with the ongoing excuse of not only did the dog eat Amtrak’s homework, but Amtrak merely “suspended” the service due to conditions wrought by the hurricane.

   A number of union jobs on all levels were lost by the suspension of the Sunset. Yet, Amtrak’s unions have chosen to do nothing about this. No union filed a lawsuit, no union screamed at the top of its organized lungs about this flagrant abuse of the law.

   Congresswoman Corrine Brown put $1 million into last year’s Amtrak reauthorization to study the restoration of the Amtrak route. We know the result of that; a lot of paper with a lot of excuses and reasons why Amtrak doesn’t want to restart the service.

   The quickest, cheapest, cleanest way to restore service is to extend the City of New Orleans from New Orleans to Orlando.

   Because of bad equipment scheduling, the City trainsets sit for a full day in New Orleans before they return to Chicago. On any given day there are two trainsets in Louisiana, the one just departing New Orleans Union Passenger Terminal and the one about to arrive at NOUPT. By extending the route to Orlando, only one extra trainset would be required to bring the train to Florida.

   Amtrak will instantly whine about stations; the only real station problem is at Mobile, where the Eisenhower-era relic of the L&N Railroad’s poor choice of architect station building was mercifully torn down after Katrina. The only problem for Mobile is finding a new spot for a platform and placement of a temporary Amshack.

   Remember, the only manned stations between New Orleans and Jacksonville were Mobile, Pensacola, and Tallahassee. Everything else was just a platform and city-run shelter.

   Many of my readers of This Week at Amtrak know I talk about the Sunset and the City of New Orleans a lot, and there’s a reason for that. From 1996 to 2000, I was a paid consultant to the Gulf Coast Business Group, working with both of those trains, plus the Crescent. My late business partner and I specialized in marketing for these trains, creating onboard services programs, the highly successful 24 hour dining car test runs on the Sunset, and handled special events, such as station openings and helped with the inaugural of the Gulf Coast Limited. Even today, those are still my trains.

   From 1999 to 2000, we ran the Sunset Limited and City of New Orleans Promotional Office for Amtrak from our offices here in Jacksonville. We worked a number of projects that brought new riders to the Sunset and City through radio and television station promotions, worked with local media, and even hosted a dining car gathering in Memphis for local and regional media food critics.

   Like any large company, we found white hats and black hats inside of Amtrak. Some very good people left because of the constant problems caused by the black hats, and others left merely because Amtrak was not the most pleasant place to work if you weren’t part of the good old boy network.

   But, there is a shrinking core group of dedicated people who are there because they like running passenger trains.

   What can we do to help those at Amtrak who want the company to succeed?

   First, everyone must realize there is more than one answer to Amtrak’s problems. Those who constantly plead “we all have to work together” generally mean we all have to agree with them, and forget about any other solutions.

   Second, we have to realize the reality of passenger rail around the world. Amtrak constantly wants us to believe no passenger rail system in the world makes money. This is only an excuse to enable Amtrak’s dysfunctional behavior.

   I invite you to do your own research; scan credible publications like the International Railway Journal and read the stories about passenger rail systems in The Netherlands, Germany, and Japan which make money.

   Doubters say this isn’t true, these companies are still propped up by their governments. Wrong. Some of these systems may operate over government owned right of way – just as trains do on the Northeast Corridor – but they still pay a train mile fee. Some of the systems share the rails with freight trains – just like Amtrak – and they receive a benefit – just like Amtrak – from the shared cost of infrastructure.

   For years, URPA has been crunching numbers and seeing almost every long distance train in the Amtrak system makes money “above the rail.” This is the same system used by other countries – based on operating costs, not full infrastructure maintenance costs – and revenue passenger miles.

   One thing URPA has talked about for decades is Amtrak’s erroneous use of warm body counts in the form of ridership instead of the real world metrics of load factor and revenue passenger miles. Amtrak wants us to be wowed by warm body counts, which are meaningless. What matters is how far you carry a passenger, and what revenue you derive from a passenger, not how many passengers.

   Which passenger would you rather have: one passenger traveling the 608 mile average length of trip on the Silver Meteor at 15.7 cents a revenue passenger mile … or four passengers on Oklahoma’s Heartland Flyer, traveling an average length of trip of 175 miles at 12 cents a revenue passenger mile? That one passenger on the Meteor not only makes Amtrak more money than the four passengers on the Heartland Flyer, but that one passenger will also spend more money onboard in the diner and lounge, had less cost to the national reservations system, less to reach through marketing, and tracks all the way through Amtrak’s accounting system with less costs because Amtrak is handling one passenger instead of four.

   When the late Graham Claytor – without a doubt Amtrak’s best president – retired from Amtrak in 1993, the company was generating internally enough money to cover 72% of its 1989 $1.7 billion operating budget, up from 48% in 1981. Today, that number has slipped dramatically, down to about 60%.

   Since Mr. Claytor retired, we have seen a virtual parade of permanent and semi-permanent interim chief executive for Amtrak, from Tom Downs to George Warrington to David Gunn to David Hughes to Alex Kummant to today’s Joe Boardman.

   Every new Amtrak president seems to have made the company worse in so many ways. We’ve seen the Heritage fleet – which is highly valued and treasured by VIA Rail Canada today – sold off. The original Pennsylvania Railroad Metroliners were scrapped. The Turboliners were rehabbed with someone else’s money, and then suddenly hidden and stored, and are now for sale.

   We have seen the delivery – and subsequent running off the wheels – of the too small order of Viewliners, with a promise, but no firm order for any more. We’ve seen a more than decade old order of Superliners, but those numbers are thinning due to neglected maintenance. We’ve seen the much heralded arrival of the Acela trainsets, but their mechanical troubles, too, have become legendary.

   In short, Amtrak has no reserve equipment pool it can activate quickly to expand or create new services. Even though there are still nearly 200 cars sitting in the wreck line, most of that is needed just to restore existing consists to previous levels of productivity, or put a service back east of New Orleans.

   During all of this while we have seen meaningless ridership numbers rise, we’ve also seen abysmal systemwide load factors; during some years more than half of Amtrak’s highly perishable inventory goes unsold.

   We have seen train consists shrink and shrink.

   So, Amtrak is running fewer seats miles for occupancy, creating less of a chance for success. Its equipment is old and getting more worn out by the hour. We know some equipment is being rehabbed by this year’s stimulus money, but it’s only token amounts for the national system.

   Which brings us back to, what can you do to help change Amtrak?

   I urge everyone in this room to start a new campaign.

   The Cardinal is the only train in Amtrak’s entire system which is run by federal mandate. Senator Robert Byrd slipped into federal law that his train – the Cardinal running through his home state of West Virginia – has to be operated. Amtrak uses and abuses this train, but it’s helpless to cancel it the way it did the east end of the Sunset Limited.

   My conservative soul is tortured by this next suggestion, but it may be necessary until Amtrak can be made to run like a real business. FCRP needs to convince the Florida Congressional Delegation the Silver Meteor, Silver Star, and an extended Palmetto south from Savannah to Jacksonville and beyond, and some sort of restored service east of New Orleans, must be mandated to be operated by federal statute.

   Your sister organizations in other states need to do the same with their trains. Remember – if it happened to the Sunset Limited east of New Orleans – it can happen to any train. Most of you know the very most basic rule of railroad safety: when on railroad property, be prepared for a train to be coming towards you at any time, from any direction. You know the second most basic safety rule – the one which separates real railroaders from rail fans – never, never, never, step on top of the rail; always step over the rail.

   Florida – and every other state – is currently standing on top of the rail, unaware a train is bearing down from an unknown direction. Amtrak’s management is much more interested in seeking free federal monies than in operating trains.

   We’ve seen no new equipment orders to date – just promises of a single-level order for Viewliner cars – and the just released update of Amtrak’s ongoing five year plan calls for no new cars.

   If Amtrak is serious about keeping its system intact, it would be at least talking about a new car order, especially for Superliners. But, the silence is all we need to know.

   Paul Dyson, President of the Railroad Passenger Association of California and Nevada, has openly raised the question of whether or not Amtrak is actually planning to exit the long distance route business because of a lack of equipment order.

   A few weeks back, one of our URPA associates was attending a rail fair in the Northeast. He ran across an Amtrak Engineering Department intern who wanted the world to know how important he was – after all, he was an intern at Amtrak.

   The question of equipment orders came up, and this young man offered a glimpse into Amtrak’s corporate thinking. He said, “Amtrak isn’t interested in slow trains, it’s only interested in fast trains.”

   Just shortly after that, Tom Carper, Amtrak’s Chairman of the Board, gave a presentation to the Midwest High Speed Rail folks touting Amtrak as the logical and national operator of all of the nation’s high speed systems. When you read Mr. Carper’s presentation, you realize the young intern wasn’t just whistling “Dixie.”

   So, if you’re [FCRP member] Jerry Sullivan and you want to travel west to visit your grandchildren in Texas, it’s not likely to happen any time soon on a restored Sunset Limited. If you’re George Bollinger and you just want to ride trains, you better plan your trip early, because too often you can’t get there from here.

   Until Congress mandates Amtrak must operate its long distance trains, every one of those trains is in danger. The train may not go away today, but it’s consist will be constantly shrinking, the level of service will deteriorate worse and Amtrak will remain – as Union Pacific’s official spokesman labeled it – “novelty transportation.”

   Amtrak today accounts for only two tenths of one percent of America’s transportation output, hardly enough for anyone to take seriously. Even worse, Amtrak isn’t doing much to change that.

   The only people Amtrak listens to is Congress, when it mandates Amtrak do something. It’s time for Congress to mandate – without exception – Amtrak must run all of its long distance trains, and throw in some restorations like the Sunset back to Florida, the Pioneer, with a full second frequency operating all the way between Chicago and Denver, the North Coast Hiawatha, and take the Sunset and the Cardinal daily.

   Amtrak will kick and scream and whine everyone is being mean to it by making it run trains it doesn’t want to run. But, if someone doesn’t do something this drastic soon, long distance passenger rail in America will be only a memory like steam locomotives, dome cars, and Pullman berths.

   Thank you so much for allowing me to be with you today; it’s a pleasure to be here.

2. Warren Buffett’s privatization of the venerable Burlington Northern Santa Fe rocked the railroad world. Here is what William Lindley of Scottsdale, Arizona had to say.
   

   Warren Buffett’s offer for BNSF the first week in November might prove to be a pivotal event for intercity passenger rail, having come at a time when, as Don Phillips in his recent Trains magazine column recently highlighted, dissatisfaction over Amtrak’s seeming refusal to participate in a renaissance of train travel is at a peak.

   Undoubtedly, Buffett has a record of making sound business decisions; and BNSF, being among the best managed and progressive of large railroads, does fit a motif of acquiring something good and making it better.

   Over the next weeks we will look at some of the synergies (much as that word is overused, it does apply here) and economies of scale that could apply to an enlarged role for BNSF in the passenger train business. But right now a single move would signal a positive direction. Words and attitude cost little but mean much; as you may know, trademarks, unlike copyrights and patents, are most defensible when they are in continuous business use. BNSF could gain much publicity, and build on its widespread and long standing – even if subconscious – recognition, by reviving its classic red, yellow, and silver “Warbonnet” scheme.

   A new interpretation of their classic corporate symbol would show a revived interest in being a participating citizen in every railroad town and city. Not to mention the free advertising garnered from rolling under practically every child’s Christmas tree. Renewing interest in today’s youth will perpetuate the recent industry rediscovery that trains are good for more than just hauling coal – they are the future of transportation, as well as the history.

   Yes, we undoubtedly will consider details in our upcoming columns here, but for now, Mr. Buffett, we simply convey – Welcome to the world of railroading.

3. Professor James McCommons of Northern Michigan University has a new book out this month, and it’s required reading for anyone interested in the business of passenger railroading.

   For full disclosure, this writer was interviewed for the book here in Jacksonville by Mr. McCommons. The interview was full of serious, well thought out questions and observations; it’s very clear the product of all of his interviews and research has led Mr. McCommons to creating a book far any beyond anything else on the market today regarding passenger rail as it stands in America.

   “Waiting on the Train: The Embattled Future of Passenger Rail Service – A Year Spent Riding Across America” is much more succinct than its title, and presents a wide variety of honest opinions and thoughts about passenger rail. More than just the usual viewpoints are presented with conclusions both obvious and left for the reader to determine.

   The book is actually too short; Mr. McCommons reports his publisher, Chelsea Green (www.chelseagreen.com) had him remove about 40,000 words of his original text to fit into a predetermined format. What a shame; when you read the book, you are wanting more, and another brief 40,000 words would be welcomed by any reader.

   There is a lengthy review of the book in the current issue of Passenger Train Journal magazine by Karl Zimmermann for those wishing more detail, but, please, if your buy just one railroad book this year, buy “Waiting on the Train;” it’s time and money well spent. We can only hope Mr. McCommons will one day do a follow-up book.

4. Speaking of the latest issue of Passenger Train Journal (2009:4, Issue 241) which just hit the newsstands in the past week or so, there is an ever-so-timely article on Amtrak’s Pioneer, the subject of much discussion for an expensive route restoration, as well as the usual mix of good articles and photos. Editor Mike Schafer’s On The Point column – as always – not only hits the mark about the Pioneer, but covers some other good points, too. Other rail magazines may publish more frequently, but Passenger Train Journal remains the magazine of record for the business of passenger trains.
5. And, this e-mail to TWA arrived shortly after the last issue was published regarding VIA Rail Canada.
   

   I am a big fan of VIA and have been doing a yearly trip from Toronto to Vancouver on that lovely train, the Canadian for quite a few years. About a year ago, I wrote a comment to Crain’s Chicago Business online about Amtrak and their lack of interest in taking care of their equipment. When we board the Canadian in Toronto, she is shining, the windows are spotless,  (glass, not micro scratched plastic), flowers are fresh and the crew seems happy to see us!

   A couple of weeks ago, we went from Portland, Maine to New York City, and while waiting in Boston to transfer trains, several Acela’s came and went: they were already grimy and neglected looking. One of my stories about VIA involved what I consider to be a remarkable piece of quality railroading when the Canadian from the west was delayed by a blizzard and a freight accident making it too late east to turn. VIA put together a very spiffy “shuttle” consist which left on schedule from Toronto with a complementary lunch, complementary wine too!, and in several hours we rendezvoused with the now turned train and proceeded west, right on schedule. I asked a supervisor how this feat was accomplished, to which he replied, “it is all a matter of attitude.” Says it all about the difference between VIA and Amtrak.

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1. Interesting words from Matt Rose, Chairman, President, and CEO of Burlington Northern Santa Fe Railway. His thoughts and comments mesh well with former FRA Administrator Gil Carmichael’s Interstate II vision.
   

   Written Testimony of Matthew K. Rose
   Chairman, President and Chief Executive Officer
   BNSF Railway Company
   Before the House Committee on Appropriations
   Subcommittee on Transportation, Housing and Urban Development

   For a Hearing on “The Future of High Speed Rail, Intercity Passenger Rail, and Amtrak”

   Wednesday, April 1, 2009

   Good afternoon Chairman Olver, Ranking Member Latham and members of the Subcommittee. I am Matt Rose, the CEO of the BNSF Railway, and I appreciate the opportunity to testify before the Subcommittee today on the issue of high speed rail. As a freight railroad CEO, a member of the National Surface Transportation Policy and Revenue Study Commission, and an early supporter of the One Rail coalition, I’ve had a lot of opportunity to think about what our country’s vision for passenger rail ought to be.

   I, too, have traveled to Europe and Asia and appreciate the perspective of those in the United States who ask why Americans can’t have what they have – 200 mph corridor service connecting dense population centers which, themselves, have efficient regional transit distribution. However, as I discovered in my work on the Commission, while many passenger rail advocates and policy makers at all levels of government are intercity passenger rail advocates, they are somewhat skeptical of this vision. Their appetite is for a more incremental approach of improving existing intercity passenger rail service. Perhaps conditioned by years of scant Amtrak budgets and Congress’s disinterest in a formal federal intercity passenger rail program, many also are concerned that some large metropolitan areas might not be included in a “bullet train” network, either due to unavailability of right of way or other market-based demand reasons. In the Commission deliberations, we had a very robust discussion about these issues.

   The Commission clearly called for the kind of investment needed to support passenger trains operating at the highest speeds in sealed, passenger-only, separated right of way. It called upon Congress to see the future, as Europe and Asia have, and begin the process of developing a corridor system of truly high speed rail. Make no mistake about it – this is a trillion-dollar funding proposition. Such a system may be beyond our current means; but one certainly can envision the development of five to ten truly high speed passenger regional rail corridors that make economic and operational sense. California – where you would expect some of these corridors should be – has taken the difficult yet necessary steps toward a vision of 200-plus mph passenger trains, despite a challenging budgetary environment.

   Importantly, the Commission report also specifically recognizes the contribution that less-than-highest speed passenger trains in corridors of fewer than 500 miles can make to the Nation’s transportation system. Existing Amtrak service outside the Northeast Corridor generally achieves 79 mph on freight rail tracks. Public investments made to enhance reliability of this service can yield tremendous on-time performance reliability benefits, which is often all that is needed to successfully satisfy demand for passenger service in certain markets. There are many examples of this, but most recently, BNSF completed several double track construction projects on behalf of the State of California, which are intended to further improve already good on-time performance levels for 79 mph service.

   Speaking as a freight railroad CEO, it is possible to increase speeds from 79 mph to 90 mph on tracks that both freight and passenger trains use. Upgrades would include the implementation of Positive Train Control (PTC), which I’ll touch on again shortly. Track would need to be upgraded from Class IV to Class V track, which would lead to a step level increase in track maintenance and track component replacement. For example, a larger number of ties per mile would have to be replaced each year. Rail joints would have to be eliminated. Extensive and regular undercutting would have to be undertaken to eliminate sub-grade defects. Rail would have to be re-surfaced much more often. All of this, in turn, would lead to more frequent outages for needed work, which will make joint freight/passenger operations more challenging and expensive.

   At sustained speeds in excess of 90 mph, passenger train operations will need to be segregated from freight operations on separate track. The level of maintenance work required, the very different impacts passenger and freight rolling stock have on the surface of the rail and managing the flow of train traffic with such differences in speeds would make the joint use of track uneconomic and impracticable. Furthermore, it is my belief that at these speeds all interface between passenger trains and road crossings will need to be eliminated by grade separations or crossing closures. While it may be possible in some instances to co-locate higher speed passenger tracks with freight tracks in a freight railroad’s existing right of way, that won’t always be the case, and other right of way should be obtained. Where it is possible for the public to purchase freight railroad right of way, we must ensure sufficient capacity remains to operate safely and protect the ability to serve freight rail shippers, present and future, on a corridor.

   In sum, the Commission’s model for intercity passenger rail in this country is to develop the highest speed rail where feasible and economically viable, coupled with more reliability for 79-90 mph passenger service in other key corridors where it will continue to make sense from a density, utilization and cost perspective. We believe that this vision could finally generate the public support and political will necessary for a successful passenger rail system in this country.

   During the Commission’s deliberations, Wisconsin DOT Secretary and Chairman of States for Passenger Rail Frank Busalacchi and the late, great Paul Weyrich and I spent a lot of time debating the provisions of the report that dealt with the passenger and freight rail interface. It was a worthy exercise because from it came a clear understanding of the importance of how freight and passenger rail are interdependent in today’s policy, political and economic environment. This is the origin of the OneRail coalition, which consists of passenger, freight and environmental interests and advocates for the benefits of both freight and passenger operations.

   There were some basic principles around this interface upon which the Commission agreed. These are basic rules of fairness, which make public-private cooperation possible and fruitful. In my own experience, they have helped BNSF and many communities on the BNSF network – including Seattle, Chicago, Albuquerque, St. Paul/Minneapolis, and Los Angeles – realize a partnership that achieves outstanding commuter rail service without degrading present or future freight service. These communities recognize their stake in both passenger and freight rail service.

   The first key principle is that access by passenger providers to freight rail networks, where reasonable, must be negotiated at an arm’s length with freight railroads. This includes joint use tracks and rights of way, as well as opportunities for shared corridors with separate track structure for freight and passenger service. The second is that the impact on present and future corridor capacity must be mitigated to ensure that rail freight capacity is not reduced, but enhanced. This recognizes that speed differences between passenger and freight trains and certain well-defined passenger service requirements must be taken into account. There must be a fair assignment of costs based on the ongoing cost of passenger services, including the cost of upgrading and maintaining track, signals and structures to support joint freight and passenger operations and the cost of maintaining and improving the safety and reliability of highway/railroad intersections in joint use corridors. Finally, all host railroads must be adequately and comprehensively protected through indemnification and insurance for all risks associated with passenger rail service on their lines and in their rights of way.

   I’d now like to turn your attention to an issue that has become very important in the discussion about the passenger-freight interface: positive train control (PTC). Congress has placed a non-risk based, multi-billion-dollar mandate to install PTC on what effectively could be 90% of the freight rail network. This is driven by the requirement to implement this technology where passenger rail or shipments of certain hazardous materials utilize the network.

   BNSF began developing this train control technology in 1984, which led us to the development of what we now call Electronic Train Management System (ETMS). However, it was never intended to be implemented on the scale envisioned by the mandate included in the rail safety bill enacted last year by Congress. The unprecedented cost – which we estimate could be in excess of $1 billion when fully implemented on BNSF in 2015 – is driven by factors mostly outside of our control, such as the presence of passenger trains and our statutory common carriage obligation to haul toxic chemicals. The cost will have to be fairly allocated between BNSF, its shippers and the public.

   This mandate represents a tremendous financial burden not just on the freight railroads, but also on Amtrak and the commuter lines. If you have not yet heard about this issue from these constituencies, you soon will. They are partners in the cost of implementing this technology across jointly used lines. While the rail safety bill did authorize a relatively small technology grant program ($50 million per year for Fiscal Years 2009-13), no funding has yet been appropriated. I urge you to fully fund this program.

   However, you should also ensure that other funding sources are available to the public passenger and private freight railroads to help defray the tremendous financial impact the mandate will have. For example, the intercity passenger and high speed rail programs at the Federal Railroad Administration received significant funding in the American Recovery and Reinvestment Act. The intercity passenger program has previously been tapped for safety technology investments like centralized traffic control and cab signal systems and makes sense as a funding source going forward, given the PTC mandate’s intense focus on passenger train operations.

   In addition, the Department of Homeland Security’s rail security grant program was created by Congress with specific statutory language making train control, tracking and communications systems eligible for funding. The Transportation Security Administration’s long time focus on reducing security risks surrounding shipments of Toxic Inhalation Hazards fits squarely with the mandate’s inclusion of rail lines carrying these highly hazardous materials.

   Finally, the freight railroads continue to support a rail infrastructure tax credit bill, sponsored by Congressman Kendrick Meek (D-FL) and Congressman Eric Cantor (R-VA) in the House. This bill provides a 25% tax credit and expensing for rail infrastructure expansion activities, of which PTC implementation is eligible. I believe this is a significant way that Congress can soften the impact this mandate will have on the railroads, in what is one of the most economically challenging times we’ve seen in decades.

   In closing, my recommendations to you are two-fold:

   1. Observe the principles for passenger/freight joint use of rail right of way that the Commission recognized, and be realistic about the kind of passenger service that can be achieved, given the limitations of joint use. Generally, those limitations are based on nothing less than the laws of physics and the consequences that flow from them.
   2. Develop a realistic vision for passenger service that works for all stakeholders – including freight railroads and the nation’s shippers – and fully fund it.

   It took $4 a gallon gas to show us that passenger train options are important to providing a fuel efficient alternative to the highway for millions of Americans. In addition, though, a comprehensive passenger rail program may shift a portion of the congested short-medium haul air traffic to rail, expand employment in the passenger rail industry and engender vibrant economic development around these networks. The choice to fund passenger rail over the next 20 years can have as significant an impact on this country as funding Air Traffic Control and runways have had in the last 20 years.

   I appreciate the opportunity to present these views and I would be happy to answer any questions you have about passenger rail or freight rail policy.

2. An inconvenient fact: When writing about high speed rail coming to the United States, many writers refer to high speed rail in Europe where “everyone rides the train, and high speed rail is very successful.” Well, compared to Amtrak’s share of the domestic transportation market in the United States, which stands at less than one percent, yes, high speed rail in Europe does have a much larger market share. However, look at the real numbers. High speed rail in Europe does not have an overwhelming market share.

   According to the Rio Grande Foundation, high speed rail works well for tourists traveling in Europe without the expense of renting an automobile, but it hasn’t done much to change European travel habits.

   In 1980, intercity rail accounted for 8.2 percent of passenger travel in the 15 countries which made up the European Union as of 2000. But, by 2000, intercity rail declined to 6.3% of market share. Automobile driving gained almost exactly the same market share that rail lost in this time period, growing from 76.4% to 78.3%. Low cost European airlines have made the greatest challenge to high speed rail, thanks to Europe’s “open skies” policies, domestic air travel increased from 2.5% of travel in 1980 to 5.8% in 2000. Both intercity busses and urban transit both lost shares.

3. Thoughts from Ken Orski, Innovation NewsBriefs, Volume 20, Number 5.
   

   April 1, 2009

   The Promise of High-Speed Rail

   Is it wise to spend $13 billion of the taxpayers’ dollars in the next five years ($8 billion in the recovery package and $5 billion in the next five annual appropriations) as a down payment on a high-speed rail network? Or are there better ways to spend this money on transportation? That was the subject of a recent weekly debate on the National Journal’s Transportation Blog. The Blog’s contributors include some 80 invited “Beltway Insiders,” including members of Congress, governors, state and local transportation officials, senior executives of trade associations, environmentalists and respected transportation professionals. The debate revealed a spectrum of opinion among the contributors, with proponents of high-speed rail outnumbering the doubters by a wide margin.

   SUPPORT FROM THE POLITICAL LEADERS

   To launch the conversation, National Journal’s Lisa Caruso, who hosts the blog, asked Secretary of Transportation Ray LaHood what he thinks of President Obama’s decision to make high-speed passenger rail service a centerpiece of his transportation agenda.

   “Do I believe in President Obama’s high-speed rail initiative? The short answer is ‘Yes, I do. Profoundly,’ the Secretary answered. It is a “transformational initiative,” the Secretary went on, and the $13 billion in federal money is “a down payment that will jump-start what will be a world-class passenger rail system.” The Federal Railroad Administration is finalizing a plan and related guidance for intercity passenger rail grants from the initial $8 billion in the economic recovery package, the Secretary announced.

   Belief in the promise and potential of high-speed rail was also expressed by two congressional lawmakers who will be at the center of the legislative debate about the future of the nation’s transportation program. “President Obama is on the right track, if I may use the term,” wrote Rep. James Oberstar (D-MN), Chairman of the House Transportation and Infrastructure Committee. High-speed rail can provide “an efficient, convenient, comfortable alternative to driving or flying short or medium distances,” he observed. Referring to the European and Japanese experience with high-speed rail (HSR), Oberstar noted “that success did not occur overnight.” It took many years for the high-speed networks to mature and European countries continue to invest substantial amounts each year. There is no reason why we cannot do the same here in the United States, Oberstar contended. Rep. John Mica (R-FL), Ranking Member of the House T&I Committee echoed Mr. Oberstar’s sentiments, noting that he has been a long-time supporter of high-speed rail. A solicitation in the Amtrak reauthorization law, he wrote, produced over 110 expressions of interest, “an encouraging sign that there is tremendous interest in bringing high-speed rail to the United States.” It won’t be right for every region of the country, and it will require a significant investment, Mica wrote, but it has to be part of our national transportation strategy. Gov. Tim Kaine of Virginia, was of the same opinion. Many communities have lost commercial air service over the last two decades, he observed, and high-speed rail can be an effective and affordable alternative for shorter commute routes. It already is in the Washington DC-to-New York corridor, he noted, and we need to create additional high-speed passenger rail corridors to support other major urban centers.

   STATES’ SHOULD BE AN IMPORTANT PARTNER

   Several contributors drew attention to the need to involve the states and to use the leverage of federal money to obtain funding commitments from state, local and private sources. Steve Heminger, Executive Director of (Bay Area) Metropolitan Transportation Commission cited the California HSR Authority’s plan as the kind of business model that needs to be replicated around the country if we are to be successful in building high-speed rail networks. The $35 billion Los Angeles-to-San Francisco project, he wrote, hopes to secure at least $15 billion in federal funds, $3 billion from local agencies and about $7 billion from the private sector in addition to a $10 billion state bond measure. In other words, the federal investment would leverage another 130 percent of funding from other, non-federal sources. “When it comes to high-speed rail, the federal response should focus on helping those states and regions that are willing to help themselves,” Heminger concluded. Frank Busalacchi, Secretary of Wisconsin DOT was of the same opinion. California, the Cascades corridor, the Midwest corridor and North Carolina are some of the states already offering corridor services at their own expense, he noted. “Allocating the $8 billion to the state corridors will help expand passenger rail services where services are most needed,” he wrote. “High-speed projects that require new rights-of-way would require a longer time frame.”

   Mortimer Downey, Senior Advisor at Parsons Brinckerhoff and head of the Obama transition team at U.S. DOT observed that what the Administration proposal has done is to bring the rail options to the intercity transportation table. But, he said, “the real proof of the merits of rail investment will come when hard decisions have to be made concerning specific corridor investment. It is those corridor decisions that will prove or disprove the merit of the high-speed rail case. And it will be up to the proponents of specific projects to show how effective high-speed rail is in bringing about desired results in terms of energy conservation, decrease in greenhouse-gas emissions, congestion reduction and other potential benefits.

   NOTES OF CAUTION

   Several contributors cautioned about raising unreasonably high expectations as to what the $13 billion in federal money can accomplish. There needs to be a reality check on what is practical, since there is no way an entirely new rail line can be built in the near future given the complex and lengthy environmental review and approval process, Rich Sarles, Executive Director, NJ Transit wrote. A similar opinion was expressed by Bob Poole, Director of Transportation Studies at the Reason Foundation. “The $8 billion in the stimulus bill has created expectations for Japanese-style bullet trains on 11 long-planned corridors, but those hopes are likely to go unrealized,” he wrote. “True high speed rail (HSR) that goes 150-200 mph requires entirely separate rights of way with no grade crossings, shallow grades, very broad curves, and no 60 mph freight traffic. That’s what Japan, France, Spain, Germany, and Italy are doing, and the taxpayer cost is many billions per line…What the new federal funding will mostly be used for is upgrades to the existing shared passenger/freight tracks, aiming to get Amtrak trains up to speeds of 90 to 100 mph rather than today’s 60 or 70 mph.”

   Ken Orski, Editor/Publisher of Innovation NewsBriefs, also thought that much of the $13 billion in federal money is likely to end up supporting incremental improvements in existing rail infrastructure rather than building true high-speed lines in new alignments. But incremental improvements, he suggested, could involve not just upgrading existing signalization and roadbed but also adding extra track capacity in existing rail corridors, a move that would reduce interference between passenger and freight trains and benefit both freight and passenger rail service. In the same vein, Ed Hamberger, President of the Association of American Railroads, noted that passenger and freight improvements are not mutually exclusive goals. “America has the best freight railroad system in the world,” he wrote, and ” there is no reason why we can’t have the best passenger system as well.”

   Jack Schenendorf, former vice chairman of the congressionally-chartered National Surface Transportation Policy and Revenue Commission, urged to consider the high-speed rail initiative in the wider context of a national surface transportation strategy. “I applaud the fact that the President is making a down payment on high-speed rail but I am dismayed by the fact that he continues a pattern of underinvestment in the rest of our national surface transportation network,” he wrote. We need to do much more than just increase investment in high-speed passenger rail, he continued. We also need to increase investment substantially in other modes of transportation. We need to adequately maintain our existing roads and bridges, upgrade our freight rail network, expand our transit systems and significantly increase highway capacity. “I respectfully urge the President to revise his budget to do for all the modes of transportation that he did for high-speed rail” Schenendorf concluded. Bill Graves, President of American Trucking Association also cautioned that we must not lose sight of the nation’s need to expand and repair the national highway system. Expanding passenger rail will not end traffic congestion, he wrote.

   Greg Cohen, President of the American Highway Users Alliance, injected a note of skepticism. It is important that the Administration, rail advocates and critics answer some critical questions about the ultimate high-speed rail plan before investing hundreds of billions of taxpayer dollars, he wrote. “Where is the money coming from to fund the ultimate HSR plan?” he asked. Are there no good alternatives to HSR? He suggested that “intercity motor coach” transportation may offer a meaningful alternative and ought to be considered more closely.

   Is the $13 billion high-speed rail program a game changing event that, in the words of Peter Gertler, Director of High-Speed Rail at HNTB Corporation, “will lay the foundation for the most significant national investment in public infrastructure since President Eisenhower’s vision to build a national interstate highway system”? Or will the money be frittered away on studies and modest improvements in existing rail service – improvements that may achieve marginal reductions in travel time but do not move us any closer to achieving a true national high-speed rail vision? Will the Administration resist the political temptation to spread the $13 billion among the six high-speed rail initiatives that are in various stages of planning in California, Texas, the Midwest, Florida, Nevada and North Carolina? Or should the Administration take the long view and focus its efforts and resources on one or two corridors that most clearly justify high-speed service (the Northeast Corridor comes to mind), knowing that such a strategy, like the interstate highway system, may take decades to realize over a number of presidential administrations. We should soon find out which road the Administration has chosen to follow.

   For a full text of the discussion go to http://transportation.nationaljournal.com

   For a full view of all of Mr. Orski’s work, visit www.innobriefs.com

4. Amtrak, finally, after three and a half decades seems to be getting serious about the Sunset Limited. Word is coming the Sunset will become a daily train between Los Angeles and New Orleans. Still no word, however, about much needed service east of New Orleans. Amtrak still has not made a decision about this service; a congressionally mandated study is underway concerning restoring the Sunset Limited or a replacement service for it. We expect to hear about a completed study sometime soon. In the mean time, Amtrak is still sticking to its story that no one is interested in riding this train east of New Orleans even though a full 46% of the Sunset’s revenue used to originate east of New Orleans. Or, to put it another way, Amtrak still claims the dog ate its homework, as usual.
5. There is some good news. Amtrak has restored sleeping car service on the Lake Shore Limited between Boston and Albany, New York. This puts a missing sleeping car service back which has been gone for several years. Miraculously, Amtrak says it can make money from this on-again sleeping car. Wow; Amtrak has figured that out. Does that mean Amtrak also acknowledges what the rest of us have known for decades, that most sleeping car service on Amtrak everywhere else in the country makes money, too?
6. Just a quick note about Amtrak’s $1.3 billion in stimulus money. Amtrak has a plethora of documents on www.amtrak.com detailing how this money is being spent all over the country (That translates to how the money left over from not being spent on the Northeast Corridor is being divided up by the rest of the country.). Lots of good projects included in here, mostly for ADA compliance, and lots of new signage around the country which will help solidify Amtrak’s image. A lot of projects which have desperately needed to be done, such as the restoration and painting of the canopies over the train platforms at Tampa Union Station are included here. Most of this stuff would have never come out of Amtrak’s normal operating or free federal monies capital budgets, so it’s good to have the stimulus money to get these things done.

   However, probably the most important expenditure of the money is for the restoration and rehabilitation of out-of-service passenger cars.

   On Amtrak’s web site, we are told there are 1,519 passenger cars owned by Amtrak, plus 469 locomotives, 80 Auto Train vehicle carriers and 101 baggage cars. Amtrak operated state-owned equipment includes 136 railroad passenger cars and 20 locomotives.

   So, if Amtrak says it owns 1,519 passenger cars, less the 1,346 cars it says it has on its active daily roster, then there are 173 pieces of equipment sitting around in the weeds somewhere on a wreck line. In the stimulus package, Amtrak says it will return 21 long distance cars from wreck status to operating status, and a mixture of 60 Amfleet low-level cars (a very few long distance cars, but the vast majority are NEC cars) back to service. This totals 81 cars, which still leaves 92 cars sitting in the weeds. Yes, some of those cars are most likely beyond repair, but not all 92 of them.

   When will we see these other cars returned to service? How much of a priority will this be for Amtrak?

   Of the current 1,346 active cars on the daily roster, there is a daily requirement of 1,072 cars for use (Yes, trainlines and consists have been cut that much.). In late February, there were 1,120 cars ready for service, which is a good improvement for Amtrak. That leaves 274 cars (a high percentage) either as spares, or in the shops being worked on.

   So, let us say Amtrak is improving its shop performance, and will have a lower amount of cars in the back shop at any one time, and more cars available for service, plus the new Viewliner series sleepers, diners, and baggage cars it is ordering.

   What could be done with all of this equipment, right now?

   Well, the Sunset could easily go daily between Los Angeles and New Orleans, as could the Cardinal between New York and Chicago.

   Either the Pioneer, Desert Wind, or North Coast Limited between Chicago and the West Coast could be restored (Only one, not all three.).

   Some type of short daily train between New Orleans and Florida could be added to replace the east end of the Sunset Limited, and this train could include a full consist of cars, including sleepers. Other consists could be beefed back up.

   All it takes is for Amtrak management to have the will to do this.

   Remember, with the current inventory of cars (prior to lots of wrecks, thus the requirement for some of this equipment to be rebuilt), all of the existing Amtrak network was operated, plus the Desert Wind, Pioneer, and Sunset Limited east of New Orleans, and most trains had longer consists.

   It’s not about the money. It’s about Amtrak management wanting to be clever enough and work hard enough to make this happen, and the Amtrak Board of Directors to be asking questions as to why this isn’t happening.