Ah, the agony and tragedy which has befallen California, the golden state.

High speed rail blues have set in with the heavy thud of reality.

New cost projections and business plan have been unveiled, much to wailing and gnashing of teeth over the new projected costs.

When California voters, being California voters who often believe money grows on trees, approved a high speed rail project in a statewide referendum in 2008, just before the full impact of the Great Recession was being felt, the price tag was $33 billion.

Hey! Many people said, the feds are going to pay for a big chunk of this, and we all know that’s not real money out of our pockets, so let’s have a new, shiny, high speed rail system!

Oops! The new estimate – and, it’s still only an estimate, just like the initial projections of Boston’s infamous Big Dig were – is now $98 billion, triple the initial estimate.

That’s all before the first shovel of dirt has been turned, and none of the lawsuits against the project trying to stop it or reroute it away from various NIMBYs are settled.

So, the California public seems to be wisely turning against this turkey and are having second thoughts. Just about every newspaper in California except the Los Angeles Times and the San Francisco Chronicle are editorializing against proceeding, wisely so.

Ken Orski, in his usual good work, has a full essay on the subject in his always informative Innovation NewsBriefs, Volume 22, Number 31, dated November 13, 2011. You can access all of Mr. Orski’s work at http://www.innobriefs.com to read more. Keep in mind, once you start reading his work, you will want to follow every word.

Here in warm, sunny Florida, our beleaguered Governor Rick Scott looks like a genius for killing Florida’s proposed high speed starter system between Orlando and Tampa to the southwest. Everything the governor predicted could come true with Florida high speed rail has already come true in California.

One other California high speed rail project not many are talking about in this process is the DesertXpress, a private company hoping to use public money loans to build a high speed rail system from Victorville, California, in the middle of the desert, to Las Vegas, Nevada.

The business plan calls for convincing Southern California drivers to drive east to Victorville, going through the worst of the heavy traffic between Southern California and Las Vegas, park their cars in Victorville, and then board a high speed train to whisk them to Las Vegas. Of the five hour drive between Southern California and Las Vegas on heavily traveled I-15, the worst of the traffic is between the Los Angeles area and Victorville, From Victorville into Las Vegas, it’s all open road at high speed.

No one has explained why the founders of the DesertXpress seem to believe drivers will abandon their automobiles after the worst part of the trip and then spend money to travel on a high speed train the easiest part of the trip.

The DesertXpress plan calls for an eventual connection to the rest of California’s proposed high speed system after it is built. Now that the California system is in jeopardy, you have to really wonder why anyone would continue to promote the DesertXpress. It easily could become another desert white elephant; a curiosity for future historians to wonder why it ever got as far as it did before it fell over and died from the weight of illogical choices.

If the main California system goes away and the DesertXpress system slows as a result, that makes life easier for other conventional rail projects now being planned for Southern California to Las Vegas.

Andrew Selden had this thought about the $6 billion California wants to start spending on high speed rail: “Imagine what you could do with $6 billion for the conventional passenger rail system in California; it could become the strongest in the country.”

Indeed, it could.

Two decades ago, there was a great debate in Southern California over the beginning of Metrolink. Tens of millions of dollars were spent acquiring private railroad right of way in and around Los Angeles and environs. Plans were drawn and implemented to upgrade the infrastructure into some of the finest in the world for passenger rail. It’s a beautiful system, and a sight to behold because public dollars were wisely spent on a not-too-ambitious system which built upon existing infrastructure and merely made things better and smoother running.

Metrolink continues to be a great success today, and created a template for other cities and regions to follow.

Reports have come that Ross Rowland has put his Greenbrier Express project on hold. The plan calls for service from major northeastern cities to the swank Greenbrier Resort in West Virginia. The Greenbrier Express was expected to have a regular schedule, but not a daily schedule.

The cited cause for the suspension of the project, according to a story in The Mercury newspaper of Pottstown, Pennsylvania, where the car refurbishment work was being done for the Greenbrier Express, is over-regulation by the federal government. Mr. Rowland said the Federal Railroad Administration has too high of standards for crash-worthiness if the cars were in an accident.

According to the story, the project isn’t dead, but is being reevaluated.

Many of you are familiar with Mr. Rowland as a former member of the Amtrak Board of Directors, and as the creator of the American Freedom Train. He was also involved in a project to attempt to bring steam locomotives back to mainline railroading.

Is all of this doom and gloom for private passenger service? Nah, it’s just a natural shaking out of projects, some of which never should have been started in the first place.

There are still enough other projects around the country in the works which will keep things going.

As long as we’re talking about surprising turns of events in the past few days, we have to include the change of direction Chairman John Mica of the House Transportation and Infrastructure Committee has taken about change of ownership of Amtrak’s Northeast Corridor.

Chairman Mica had correctly said everyone would be better off if the NEC was not under Amtrak ownership, but ownership of another agency of the federal government and then the operations put out to bid.

The usual firestorm erupted from the New Jersey cabal of politicians and their cohorts who all believe Amtrak must be the owner and operator of the NEC so all of the local transit agencies who use the NEC daily (and, more than Amtrak) can continue to have sweetheart deals regarding the cost of infrastructure and maintenance and suck the economic life out of Amtrak in the process.

Mr. Mica said there was little support in Congress outside of his committee to do the deal, so he changed course, and is now supporting Amtrak ownership of the NEC and hopes to steer even more money to the NEC to upgrade it to what he calls true high speed rail.

Depending on who the next and/or continuing occupant of the White House is may ultimately decide this for good.

Gil Carmichael, former FRA Administrator during the Bush I years, and former Chairman of the Amtrak Reform Council, as well as the Founding Chairman of the Board of Directors of the Intermodal Transportation Institute at the University of Denver has started a new series of reports, entitled the Gil Carmichael Report, Investing in Interstate 2.0. The reports are free, informative, and a must read for anyone serious about the future of railroads in the United States. Contact the report distributor at geoff@jdmandassociates.com for your very own copy.

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J. Craig Thorpe, noted Amtrak and railroad illustrator is available for all railroads, railroad-related companies, and organizations for his dramatic illustrations on a custom basis. Mr. Thorpe’s impressive gallery of work and contacts for engagement may be viewed on his web site, which is listed below.

There are about a dozen projects in the pipeline for private passenger rail in the United States, and the first one is out of the planning stages and into actual operation.

Iowa Pacific Holdings’ Saratoga and North Creek Railway had its inaugural last Saturday, July 23^rd, and is officially open for business. This is a new railroad for general passenger transportation and a resort component in upper New York state. The route is a former branch line of the Delaware and Hudson Railroad, and the Saratoga and North Creek Railway frequencies make connections with Amtrak’s Ethan Allen Express Service.

In brief, here is how Ed Ellis, president of Iowa Pacific Holdings described the new service:

This is a fully-compliant passenger railroad. We make a good connection with the [Amtrak] Ethan Allen in both directions, and we lease the two station tracks from Canadian Pacific. Amtrak stops on the controlled siding.

Present equipment is full-length Budd dome cars and bi-level coaches built by Toyku Car for the Long Island Rail Road. Full dining service is available in dome class.

It’s not quite a year round operation. We operate Thursday through Monday (no trains on Tuesday or Wednesday), two round trips a day, one oriented to residents, one oriented to connections. This schedule runs through October 30th. There is a ski train late December through March, and there are special event trains in the gaps. North Creek is a summer and winter market, but there is a shoulder season that is pretty quiet.

The ski train will be an early morning departure from Saratoga to provide a full day of skiing at Gore Mountain which is adjacent to North Creek.

You can learn more about the new, private-for-profit operation at www.sncrr.com or visit the web site of the parent company, Iowa Pacific Holdings at www.iowapacific.com.

Iowa Pacific Holdings is privately owned, with 10 owners, is profitable, and has reinvested all earnings, plus tax credits, plus RRIF loan proceeds into infrastructure over the years. Iowa Pacific has extensive holdings in short line freight operations, car repair, and infrastructure maintenance, as well as passenger tourist and excursion operations in the United States and Great Britain.

As for expansion, Mr. Ellis said:

We will run additional trains for ridership demand, or if one or more units of government will pay for additional trains. As you may know, New York State DOT is paying for a second track on the CP at Ballston Spa (about two miles, connects two long sidings yielding maybe five miles of double track) and between Albany and Schenectady. It’s no secret they would like to have two more pairs of trains between Albany and Saratoga. We would be willing to consider operating trains such as those under contract, and would be willing to add whatever qualifications and insurance that would be necessary to do so. That could also yield a year-round operation to North Creek.

I should point out that unlike many contract commuter operators, we are “soup to nuts,” and maintain track and equipment, take reservations, provide onboard services and do our own marketing. So we are not like, for example, Herzog running the RailRunner. We are more like Amtrak running the Heartland Flyer, except there is no subsidy, we take the risk, and we expect to make a profit.

The Saratoga and North Creek serves nine cities and towns, with full stations in North Creek and Saratoga, and seven flag stops in between. Each trip takes about two hours and 15 minutes for a trip just under 60 miles. Fares are from $19 for coach seating, one way.

For historians fond of Theodore Roosevelt, it was the North Creek railroad station where he boarded a special train after learning President William McKinley has died at the hands of an assassin, and vacationing Vice President Theodore Roosevelt became President Roosevelt.

Keep your eyes open for more to come from other successful railroaders outside of the government realm.

We need to have a discussion about intellectual honesty and funding for Amtrak and various proposed high speed rail projects. Most rational people know the federal government is broke and is struggling to meet its obligations. Some want higher taxes to accomplish the goal of meeting past and current obligations; other, more rational beings, simply want lower levels of spending and a redefining of government as a smaller entity.

Just about everything – as it should be – is on the table for discussion in Washington. Leaders of every description are seeking ways to improve various things, and, as often happens, this leads to seismic shifts in how government programs survive, either in whole or part.

The cries of unabashed full funding for Amtrak and high speed rail in the current Washington environment are not only not helpful, but cheapen the cause for improved passenger rail transportation.

The proper cry is for full productivity by Amtrak and increased self-reliance, and, for high speed rail, the biggest bang for the smallest buck. This is a time to be making friends by demonstrating worth, not alienating large populations which may be necessary for future gain.

Amtrak’s various Amen Corner support organizations need to be working to help Amtrak achieve recognizable goals, not demanding others do without funding to prop up an organization which always seems to lurch from one budget year to the next without a defined plan for permanent success. In this time of financial crisis, it’s hard to shed any tears for those who don’t help themselves, first, and ask the help of others after their own resources are exhausted.

The goal of more trains to more places is achievable by clever people with a clear purpose and a clearly defined path. Anything less just creates problems for the future.

Most readers know of the devastating high speed train wreck over a week ago in China. This is the first major wreck for the new Chinese system, and it took the lives of nearly 40 people. There is lots of finger pointing going on at the moment, and good information is slow coming out of a country which has been tight-lipped for centuries. What we do know is the major accident slows down considerably any other countries which may have been listening to the siren song of the Chinese, hoping to export their high speed rail technology outside of their own country. In their haste for a world showcase, apparently they forgot one critical component – safety comes first.

The ever thinking William Lindley of Scottsdale, Arizona passed along these thoughts after the final landing of NASA’s Space Shuttle recently.

The final Shuttle flight raises the question: What does Amtrak have in common with the Space Shuttle?

Both cost far too much, did far too little, and led their industry to atrophy. Our space program and our intercity passenger train network today lie shriveled and sunken, in need of a new and vibrant life.

The Space Shuttle was envisioned as an inexpensive way of transporting men and machines, with quick turn-around times on the ground and weekly launches. Yet, somewhere between concept and execution, the program became burdened with supporting so many different objectives, becoming so heavy and complex, that in reality each launch cost over a billion dollars – a hundred times the original budget – and across the 30 years the program averaged 11.5 weeks per launch – ten times longer than desired. According to the Boston Globe, the Shuttle program ran up a total budget $196 billion. Other than the Hubble Telescope and a few other major successes, the Shuttle program resulted in relatively little new science, at the cost of the loss of all crew on mission numbers 51 and 107.

Contrast this with the two highly successful and scientifically valuable Mars Rovers whose total budget to date is somewhere around one billion dollars. Yet, NASA, which has an effective monopoly on space exploration, has barely been able to build and operate programs like the Rovers, with the Shuttle devouring so much time, manpower, and money.

The net result across three decades was that few scientists and engineers were inspired to pursue space careers, and few new businesses were formed. How far ahead we would be if there were a hundred Burt Rutans competing to build spacecraft to the stars! Instead, our space program lies mired in bureaucratic muck.

Amtrak, too, came out of this eggs-in-one-basket approach. Like the centrally-planned NASA, there was one way to do things and Congress held all the purse-strings. Like NASA, almost everyone at Amtrak believed in their mission and their product, but the organization’s structure permitted little dissent or imagination.

Both Amtrak and the Shuttle were monstrous, ponderous programs that discouraged competition and co-operation.

I shed no tears for the Space Shuttle which drained the adventure and vitality from the Space Age I envisioned as a child watching the Moon Landing, and I shall shed no tears at whatever befalls Amtrak. – William Lindley

Trains of Discovery: Railroads and the Legacy of Our National Parks by Alfred Runte has been issued in its updated, fifth edition.

It’s a book chocked full of colorful railroad photos, posters, and illustrations, focusing on how our nation’s national park system was promoted and grown by the passenger railroads of the 19^th and 20^th centuries. The book has been updated to include parks east of the Mississippi River.

Al Runte is a hardcore conservationist and his work reflects that. He’s obviously in love with passenger trains, and his work reflects that, too. His books are a combination of excellent history about passenger trains and his passion for conservation. Whether you read the book for trains, or read the book so you can enjoy hugging the next tree you see, either way, you will spend an enjoyable time with the writing of Al Runte. The book also contains full color photos of many of his extensive railroad collectibles and many illustrations by J. Craig Thorpe.

The book is published by Roberts Rinehart is available in both hard and soft covers. It was released this month.

Gil Carmichael, former FRA Administrator during the Bush I years, and former Chairman of the Amtrak Reform Council, as well as the Founding Chairman of the Board of Directors of the Intermodal Transportation Institute at the University of Denver has started a new series of reports, entitled the Gil Carmichael Report, Investing in Interstate 2.0. The reports are free, informative, and a must read for anyone serious about the future of railroads in the United States. Contact the report distributor at geoff@jdmandassociates.com for your very own copy.

According to Fred Frailey in TRAINS magazine,

Union Pacific has told Amtrak that changing the Sunset Limited‘s frequency from tri-weekly to daily will cost the government-supported company about $750 million in capital improvements.

That’s almost as much as Phoenix spent building an entirely new 20-mile “light rail” system — including two large bridges and a complete modern maintenance facility and fifty computer-controlled trolley cars. We eagerly await U.P.’s wish-list. One wonders, once you spend some millions to restore a missing connection at San Antonio to eliminate back-up moves, add a couple formerly removed station tracks at places like Tucson, add a bridge here and some signals there … how do you come up with three-quarters of a billion dollars to run one train once a day?

Meanwhile, Berkshire’s BNSF issued a two-part $750 million bond, $250 million for a 10-year period at 3.616% and a 30-year $500 million part at 5.074%, both paying a premium over Treasury bonds.

In his annual letter to shareholders, Berkshire chief Warren Buffett wrote: “Overall, we expect this regulated sector to deliver significantly increased earnings over time, albeit at the cost of our investing many tens — yes, tens — of billions of dollars of incremental equity capital…” So the same dollar figure that U.P. wants for one passenger train, it seems, is the same as BNSF’s first installment in sprucing up its entire system. Does one of those numbers seem a bit off?

Next, to Ohio, where Republican gubernatorial candidate John Kasich has “vowed to kill the 3C plan if elected.” This train, which would connect Cincinnati, Dayton, Columbus and Cleveland, is in line for a $25 million for a preliminary study. Kasich and his advisors apparently are fretting over the $400 million starting price tag, and continuing state outlays. One does wonder, where is one penny of income from Ohio’s libraries? From Ohio’s fire departments? From Ohio’s superhighways? Oh, you say they result in increased education, decreased property losses, and increased economic and social activity, right? So why do we not frame trains in the same way? What is the cost of a trip not taken…

Yet we rail advocates find ourselves in a nasty predicament. Every time good work gets done, as in Ohio, toward a new train… or in Boise… or anywhere across the country where cities and states who want better transportation, and the social and economic benefits that stem from trains… Every time new Amtrak service is proposed, the price is so high and the service to be so slim that nothing ever happens. A year ago we looked at Amtrak’s Ohio report, one of three wrong-think reports issued around that time. We saw how “Amtrak really doesn’t want to be in the passenger railroad business” and, although there were some hopeful signs in subsequent months, we seem still stuck in the same doldrums as for the past 40 years.

One correspondent writes,

Amtrak’s complaints are so ingrained in politicians’ and voters’ minds that when some good public relations is needed, the cupboard is not only bare, but snarling back at those seeking relief.

Another writes that Amtrak,

has spent most of the last forty years not only saying, but proving, that passenger rail is a fiscal sinkhole. Needless to say the green eye-shade brigade in state capitals that must produce a balanced state budget every year takes on massive new obligations only with trepidation.

Add to this carriers like Union Pacific pulling massive numbers, some might think out of a hat, but perhaps out of reasonable expectations based on past dismal performance of a government-run passenger railroad, and here we sit, stalled again.

Perhaps the most excellent description of the conundrum is Steve Forbes’ recent commentary on high-speed rail. Forbes, logically unconvinced by what trains might be able to do, looks at projects like the Acela so-called high speed train which have failed to deliver on practically any of their promises, and at the cost of billions including a hidden billion-dollar loan from Canada… and rightly asks, Where is the benefit? Forbes doesn’t see any. And without benefit, what is the point of pouring billions more dollars into it? At some point, there have to be results.  Call it return on investment.

To succeed in business, to succeed in the real world, you have to become indispensable. Apple has done that. Google has done that. Some might say Amtrak seems to have concentrated on becoming irrelevant.

Perhaps the renaissance of passenger trains will have to occur from the bottom up. USA Today reports that Denver has broken ground for its commuter train to the International Airport that replaced Stapleton Field. This is to be the long-anticipated first of four commuter lines radiating from Union Station which will complement Denver’s light-rail system.  The article continues,

Denver joins a growing list of U.S. airports that are trying to promote public rail transportation. Others that will be connected directly via rail in the coming years include Dallas Love Field, Salt Lake City, Phoenix, Miami, Dallas/Fort Worth, Oakland, Washington Dulles and Los Angeles.

An AP newswire story tells how even Arizona is planning on a commuter and regional train system:

“It will not be possible to accommodate growth and avoid traffic congestion by improving roadways alone, so passenger rail should become a key component of the Sun Corridor transportation system,” the draft plan stated, referring to a planning area that stretches from Prescott on the north to Nogales on the south and includes both Phoenix and Tucson.

Phoenix is seeing results with its Metro trains, with monthly averages up to 44,000 daily riders, far above the projected 26,500, and continuing year-over-year increases.  With few exceptions, every city that has built a rail system in the past decades has met or exceeded expectations, and brought new development and a renewed sense of place and community pride. The cost has shown its benefit. Why should there be any different standard for intercity trains?

Finally, as promised, this on first-class accomodations.

AMTRAK SLEEPING CARS ARE THE BEST VALUE AMTRAK OWNS

Commentary by Andrew C. Selden and Randy Schlotthauer, URPA

Note: This item was on (Congressman) Eric Cantor’s list of budget cuts he wants people to vote on. Only 48% of respondents to the poll favored the idea, but on Thursday, July 22, Mr. Cantor and some of his followers appeared on the floor of the U.S. House to extol the desirability of this cut. An amendment to a pending bill was introduced to implement the idea, but was rejected 234-179. We asked Mr. Selden and Mr. Schlotthauer to comment on the reasons this idea was not a good one. – Russ Jackson

Eric Cantor: “Prohibit ‘First-Class’ Subsidies on Amtrak; Potential savings of $1.2 billion over ten years. While only 16 percent of Amtrak long-distance passengers opt for “sleeper class” travel, as opposed to coach class, federal taxpayers provide substantial extra subsidies for this first class travel. Passengers in long-distance first class travel are provided a sleeping room, many with a private toilet and shower, turn-down service, and complimentary entertainment and pre-paid food. Yet, Amtrak loses more than twice as much per passenger (an average of $396) for first class service as compared to coach class service. These losses are made up by taxpayers. This proposal would eliminate subsidies for first-class service and require Amtrak to provide any first class service at cost.”

Andrew C. Selden: The issue is the corrupt Amtrak RPS-based internal MIS/cost accounting system. Large subsidies to western sleepers are an artifact, if not an intentional distortion, caused by the system, not the business activity. We can show (and have often done so) that these sleepers are substantial net contributors of free cash flow to Amtrak, failing only to cover arbitrarily allocated shares of other system, not operating, costs, only some of which are even indirectly related to the operation of these services.

The Superliner sleeping car, measured by business economic factors like return on capital investment, load factor, revenue per dollar invested, etc., is the best thing Amtrak owns. These members of Congress should look closely at actual sleeping car fares out west, where many passengers are paying thousands of dollars for a single trip. There is NO POSSIBILITY that these fares are losing money on a direct cost basis. The catch is always to audit deeply what costs Amtrak is charging against the sleeping car revenues to determine that a loss exists in the first place. That is where the members of Congress were being conned.

The collateral issue is the subsidy that these sleepers provide to the dining cars. FIRST, diners are indispensable to all travelers on LD trains, where the AVERAGE trip runs 15-20 hours in duration (varying by route). These people therefore (including every coach passenger) are on board over two to four meal periods (and of course some for even more). Lose the diner, and you’ll lose ALL the passengers, not just the “fat cat” families and retirees in the sleepers. The sleeper fare transfer to the diner is what keeps the diner on at all—by including meals in the sleeper fare, Amtrak guarantees a predictable base of revenue to the diner. Take away the sleepers and that fare transfer, and with the loss of sleeping car passengers (most of whom wouldn’t be caught dead making a two or three day trip in coach) and their fare transfers to the diner, the diner would have to charge obscene prices that would drive out the remaining coach passengers, and without meals over two to three day trips, no one will ride and the trains would be empty.

If Congress wants to look for subsidies to first class riders, have them divide the Acela first class revenue by its proportionate share of the annual two-thirds of a billion dollars of subsidy “invested” each year into the NEC. Those numbers are real and staggering, even though Amtrak never reports them as such.

Randy Schlotthauer: Were it not for the frightening lack of concern by our government about the concerns of citizens, not to mention their misplacing of the Constitution (I have several copies of my own that I would be happy to donate to them), this entire debate over “first class” subsidies would be so tiresome that I would not be drawn to the laptop to respond to it. Those of us that have been involved with Amtrak since THE BEGINNING (that would be before many supporters and opponents were born) have seen this windmill tilted at every year. I remember when we were desperately phoning and writing politicians, interest groups, and anybody else that would listen over a $246M TOTAL SUBSIDY that promised that the pin would be pulled on October 1, (fill in the year). This was in the good old days when there were just two types of cars: Amfleet and everything else, which wasn’t much. Though few of us at the time would have granted it, Amtrak President Graham Claytor managed to “modernize” the fleet with new equipment which in retrospect probably saved the LD trains, which we were convinced he was conspiring with THEM to eliminate.

Though designed with the promise and physical capability to deliver a high quality LD experience, through active sabotage by some crew members and a benign neglect (read: stupidity) on the part of management. None of the LD trains ever made full use of the features designed into the cars, and did not repair equipment that was damaged or stolen by passengers, crew, and the denizens of 16th St, 8th Street, and other “maintenance facilities”. As a result, even the best attempts by individual route managers to ended up flowering and then all too soon downgraded due to budget cuts that often were the disguised jealousies of other route managers. Despite the efforts of the original RailPAC-URPA group to introduce market economic laws and theories to Amtrak and it’s 485 owners, every year it was a battle for survival, with Amtrak management’s RPS accounting system proving that they could be profitable if not for those nasty LD trains.

Never was enough capacity provided to even approach break even, which was all any serious advocate discussed. If every seat in every car on every train on every day were filled at the highest tariff fare, there would still be a loss. Even Herb Kelleher (Southwest Airlines) couldn’t do anything with one triweekly plane to its largest potential markets. He recognized that planes (and trains too!) make money only if they are moving and filled with people. In fact Herb was one of Amtrak’s greatest opponents, because he knew what a well run passenger railroad could do.

So today we are discussing the proposed elimination of the First Class Subsidy, in order to “save” the railroad. First of all, the last trip I took in a Deluxe Bedroom on #3 and #4 could not be called luxury by any stretch of the imagination. Indeed, Denny’s offers superior food, service, and even entertainment (if you are at the right one at the right time of night). When you kill the sleepers you kill the diner and lounge. When you kill those, you are the Southern Pacific in the 1960′s, although this time there are not enough people that buy the line that America NEEDS Amtrak. I can build you a great case for a quality passenger rail service, including multiple classes of service. I can even build you a case of how you make it break even in 10 years. RailPAC-URPA’s Dr. Adrian Herzog did the math a long time ago, and it still works. What I cannot do is build a case to justify an Amtrak First Class Subsidy for LD trains. There is corporate culture at Amtrak that would fight any attempts to a really make things work.

1. Sometimes, the information sneaks in through the backdoor, which is fine, as long as it comes in.

   Courtesy of the United States House of Representatives, Committee on Transportation and Infrastructure, we have learned of Amtrak’s plans for new equipment.

   The United States House of Representatives, in a rush to spend more public money, has presented H.R. 2847, THE “JOBS FOR MAIN STREET ACT, 2010” which it considers to be a jobs creation bill. There is all types of transportation monies in the bill, including scads of money for Amtrak.

   Before you jump to any conclusions, this is a bill which is in progress, not a completed bill approved by both the House and Senate and sent to the president for signing. This is only a bill in progress, working its way through the legislative system.

   But, what this bill does is give us a good glimpse into Amtrak’s wish list for new equipment.

   Here’s what the bill has to say, pertaining only to Amtrak.

   AMTRAK: $800 MILLION

   H.R. 2847, the Jobs for Main Street Act, 2010: Title I, Chapter 6 of H.R. 2847 provides $800 million to Amtrak for fleet modernization, including rehabilitation of existing equipment and acquisition of new equipment such as fuel-efficient locomotives. It also strengthens Amtrak’s Buy America requirement to encourage domestic manufacturing and rehabilitation of the equipment.

   Amtrak’s equipment is aging; it is a major factor in delays. Some of Amtrak’s vehicles are more than 50 years old. The average life of a passenger rail car, depending on its usage, is 25 to 30 years. The lifespan of a locomotive is 20 to 25 years. Currently, Amtrak has 92 Heritage cars in service (which are 53 to 61 years old), 17 Metroliners (which are 42 years old), 412 Amfleet I cars (which are 32 to 35 years old), 122 Amfleet II cars (which are 28 to 29 years old), 249 Superliner I cars (which are 28 to 30 years old); 184 Superliner II cars (which are 13 to 15 years old), 97 Horizon cars (which are 19 to 20 years old), 50 Viewliners (which are 13 to 14 years old), 29 Talgo cars (which are 10 years old), 120 Acela cars (which are nine to 10 years old), and 41 Surfliners (which are seven to nine years old).

   With respect to locomotives, Amtrak has 49 AEM-7 locomotives (which are 21 to 29 years old), 18 P32’s (which are 18 years old), 18 P32DM’s (which are 11 to 14 years old), 21 F59PHI’s (which are 11 years old), 15 HHP-8’s (which are eight to 10 years old), and 207 P42’s (which are eight to 13 years old).

   Over the next five years and given adequate resources, Amtrak plans to purchase 396 new single-level vehicles for corridor service, which will replace about 95 percent of the Amfleet I vehicles; purchase 275 new single-level vehicles for long-haul service in an effort to remove all of the Heritage single-level cars and about 95 percent of the Amfleet II vehicles from service; purchase 160 new bi-level vehicles to replace 65 percent of the Superliner I cars; and purchase 100 new electric locomotives to replace the entire electric locomotive fleet. Amtrak also plans to acquire 54 new diesel locomotives, replacing 20 percent of its diesel fleet; and purchase five additional Acela trainsets and 41 new switch engines to replace the entire switcher fleet. Amtrak estimates that the effort requires capital funding of approximately $4.57 billion.

   Recovery Act Implementation: The Recovery Act provided Amtrak with $1.3 billion for capital improvements. Of the $1.3 billion, Amtrak has awarded $623 million in contracts for 350 projects. This amount represents 48 percent of the total apportionment. Other major initiatives are planned, including infrastructure improvements (such as major bridges); and improvements to rights-of-way, facilities and other structures, information management systems, and communications and signal systems. Amtrak is also making capital improvements to stations and other facilities to meet requirements under the Americans with Disabilities Act; various safety and security improvements, including purchasing police equipment; and replacing concrete ties.

   Okay, while your True Believer buddy to the left of you is jumping up and down for joy at the information above, you, being a regular reader of This Week at Amtrak, and, therefore, exercise more bold caution when it comes to announcements from Amtrak or about Amtrak, take a more critical view of what you have just read.

   You realize everything above only talks about REPLACING aging equipment; none of the hyperbole above actually talks about fleet EXPANSION.

   In other words, Amtrak, if it gets the big bucks, only plans to replace its fleet, not expand its fleet. Using Amtrak’s usual bureaucratic thinking nonsense about always wanting perfect government-think scenarios because they are neat and tidy and don’t require any real thought, probably considers all of that older-hopefully-replaced equipment as upcoming surplus, to be sent to the scrap yard.

   Amtrak still hasn’t learned its lesson from its chilly cousin to the north, VIA Rail Canada, which has the majority of its fleet’s equipment older than what Amtrak is using, and they cheerfully slap a new coat of paint on it, take out some of the dents, upgrade the electronics, and keep it going down the road with great dispatch, mostly because when Budd built the stuff in the 1950s, they built is the same way other companies built Sherman tanks: virtually indestructible.

   But, no, that won’t do for Amtrak. Amtrak wants all-new, instead of new augmenting older for a blended fleet with different purposes. Heaven forbid Amtrak maintenance would have to be as clever as VIA Rail Canada maintenance.

   So, yes, it’s nice to know Amtrak does have some plan tucked away somewhere for the future. Unfortunately, that plan doesn’t call for any expansion, or any improvements. It only calls for replacements.

   Amtrak hasn’t figured out that wars are not won by just replacing dead soldiers; wars are won by determined surges making use of a combination of existing and new soldiers.

2. Did you notice the ad in the November 2009 issue of Railway Age Magazine?

   It has the unglamorous title of “Request For Proposals: 10-PCJPB-T-025 For a Rail System Operator.” Did that make you start tingling all over? No? Well, here’s why it should.

   The ad was placed by Caltrain, which operates the former Southern Pacific Railroad commuter service in and out of San Francisco and down the San Francisco Peninsula. Caltrain operates 98 trains per day, San Francisco-San Jose-Gilroy, with a total of 33 stations (including endpoint terminals). Included in the system is the famed Silicon Valley. The system has 77 miles of track with a top speed of 79 M.P.H. Caltrain carries on average, 39,000 passengers a day on weekdays.

   This is not an inconsequential system; there are 29 locomotives and 110 passenger cars.

   Let’s look at Amtrak in California; Amtrak’s biggest state cash cow. Amtrak takes in State of California (Caltrans) revenues for operating costs for the Capitols, San Joaquins, Pacific Surfliners, and, now Southern California’s Metrolink, in addition to its current operations deal for Caltrain.

   Amtrak has been operating Caltrain on behalf of the Peninsula Corridor Joint Powers Board (a longish and legally proper way of saying the old Southern Pacific San Francisco Peninsula commuter service) since 1992. Now, the contract is up, and Caltrain has advertised for a request for proposals.

   Amtrak just lost the Virginia Railway Express on the Right Coast; what would happen if it lost Caltrain on the Left Coast?

   With the addition of Southern California’s Metrolink, probably not much on the surface; the Amtrak bureaucracy in the West would just keep on marching.

   Those with a sharp eye may notice Gilroy, California is on the Union Pacific main line which is traversed by Amtrak’s Coast Starlight. Gilroy slips right in the middle of the San Jose and Salinas station stops.

   So, let’s speculate, just a bit, as an intellectual exercise.

   Suppose Amtrak doesn’t keep the Caltrain contract; suppose some other service provider, such as Veolia Transportation, Herzog, or even the French company which is taking over VRE on the far side of the country successfully bid for and win the Caltrain contract.

   And, then, suppose the Caltrain operator performs successfully, and pleases not only the folks at Caltrain, but also – more importantly – the folks at Caltrans, who are monthly writing big, big checks to Amtrak for operating the Pacific Surfliners, Capitols, and San Joaquins (Metrolink writes its own checks).

   What if some renegade bureaucrat in Caltrans says, “well, Caltrain is doing so well, how can we expand that service?

   “What would happen if, say, we took one or two of those Caltrain consists, and pushed them further south than Gilroy, perhaps all the way to Los Angeles?

   “What would happen if Union Pacific Railroad liked the Caltrain operator better than Amtrak?

   “What would happen, if say, well, gee, we just start turning over all of the Caltrans contracts to the Caltrain operator, instead of retaining Amtrak contract after contract?”

   The answer is, Amtrak would suffer a horrible blow, and be crippled tremendously in the west. Amtrak would actually have real world competition. Amtrak would have to sing for its supper every night. Amtrak would really have to perform.

   All of this, of course, comes under the heading “what if?”. But, it’s an intriguing “what if?”.

   Amtrak for too long has taken most of its world for granted. It has even had the hubris of presuming it will be the preferred operator of the coming various high speed rail systems, even though it has not done well operating what it has today.

   An article in today’s Daily Finance (www.dailyfinance.com) says Japan Central Railway has started putting together a proposal to be the sole builder and operator of America’s high speed rail system; everything from building track and infrastructure to building and operating trainsets. These are the same folks who operate the profitable bullet train franchise in Japan today.

   The French and Germans want in on the USA action, too.

   Amtrak may think it has the home field advantage, but it’s tough to see how, when there are much more successful worldwide competitors out there knocking on America’s door.

   Veolia Transportation, which operates some sort of commuter rail or transit system in over 500 cities around the world (equivalent to Amtrak’s number of station stops in the national system) wants in on US high speed rail, too. They have the talent, and they have the financial clout to make it happen.

   Will Amtrak understand in time what is swirling around it and potentially causing a lot of mayhem? Will Amtrak understand it has a long, long way to go to get its corporate house in order so it can fend off these much more successful international competitors? It’s going to take a lot more clout than Amtrak has today on Capitol Hill to keep things together. Amtrak needs to understand the world is not an exclusive Amworld.

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1. It’s that time, again. Amtrak has put out the Fall 2009/Winter 2010 national timetable, and these things just keep getting better with every edition. Amtrak’s timetables are one of the few bright spots in the company; each one becomes more user friendly than the previous edition, and the design – which was stagnant for years – shows some zip and imagination.

   Notable are the number of paid advertisements by outside agencies and vendors. These people are obviously interested in the business which can be created by Amtrak’s passengers, and they are reaching them in the most expeditious manner, plus helping reduce the cost of producing the timetables.

   Whoever is creating the timetables needs to keep doing whatever they are doing. It’s working, and working nicely.

2. It’s begun. Yesterday’s San Francisco Business Times reports the California High-Speed Rail Authority is submitting a business plan to state lawmakers increasing the price tag of the California bullet train between Los Angeles and San Francisco by $9 billion, from $33.6 billion last year to $42.6 billion now.

   Ridership estimates have also fallen, from 51 million riders a year down to 41 million; the Authority says the lower ridership estimate is based on projected higher fares, from $68 to $104, now almost $105 instead.

   The cost increases for construction are due to inflation, more right-of-way purchases, and additional track work required.

   The Authority expects the intrastate project will be funded by $9 billion for 2008′s Proposition 1A approved by California voters, local funding of $4 to $5 billion, private funding of $10 to $12 billion, and you and me as federal taxpayers will kick in $17 to $19 billion over the life of the construction project, which isn’t planned to be completed until 2020, 11 years from now.

3. This will give you an end-of-the year giggle. There is a mini-crisis brewing in Tallahassee, Florida’s capital. Senator Paula Dockery, who lost the battle to defeat SunRail this go round earlier this month is never saying “die.” Her new approach: Ask for all of the e-mails swapped between various government officials, departments heads, etc., relating to SunRail. Senator Dockery has particularly been gunning for the Secretary of the Department of Transportation.

   Here’s the fun part: Florida has very strong sunshine laws governing all public communications, including intra-governmental e-mails. It seems while the legislation was being formed, Florida’s Department of Transportation was in constant contact with CSX, the main beneficiary of the law; CSX is selling its right-of-way and infrastructure to the State of Florida to make SunRail in Central Florida possible.

   Horrors! says Senator Dockery. Florida DOT, as it was crafting legislation, was in contact with CSX, the beneficiary of the legislation. Something crooked must be going on!

   Most likely, it never occurred to Senator Dockery, in all of her vitriol and seeking revenge against CSX and Florida DOT, perhaps, since both parties are going to have to agree to this deal, if the parties communicate while the deal is going on, there will not be a prolonged period at the end for negotiations? Perhaps, if agreements are made incrementally, then upon final drafting of the deal, only signatures will be required instead of more and more negotiations?

   That’s what a reasonable person would think.

   The folks at Florida DOT didn’t help themselves, though, by creating what is now known as “Wafflegate.” It seems the DOT people MAY have wanted to avoid public records disclosure searches by labeling all of their e-mail pertaining to SunRail with the names of breakfast foods.

   Yes, you read that correctly. E-mails traded between DOT officials had subject headers of “pancakes,” and “French toast.” When the initial public records search was made using key words such as “SunRail,” “CSX,” and “commuter rail” the search engines somehow completely ignored “pancakes” and “French toast.”

   So, a tempest in a teapot has come to be. Somebody, drinking the breakfast tea, should have used better judgement in labeling e-mails. A very good commuter rail project is now mired in election year political backbiting and witch hunts because somebody was just being foolish.

4. Does everyone understand the concept of an unfunded mandate? This is what Congress and the federal government frequently do; laws are created everyone must follow, but no money is provided often for the billions of dollars it will cost for private industry or individuals to follow the new law’s mandate.

   Positive Train Control, as mandated for 30 of our nation’s railroads in the Amtrak reauthorization signed last year by President George W. Bush is an unfunded mandate, which the railroad industry estimates will cost $10 billion to comply, says ProgressiveRailraoding.com. The railroads (including Amtrak) will be required to install the monitor-and-control system. Industry benefits on the $10 billion investment are expected to be about $600 million, far, far short of the cost of installation.

   As a result of this, some railroads are looking at their track networks and trying to figure out how much of the networks have to have PTC by the mandated start date. Some railroads, such as CSX, are looking at lightly used main lines, like the Sunset route east of New Orleans into Florida, and making decisions not to upgrade that track, electing instead to move freight trains over a nearly parallel route further to the north, and dropping back into Florida for the gateway at Jacksonville to all of Florida’s peninsula.

   Other Class I railroads are correctly doing the same. With a mandated investment in the billions, and return on investment in the low millions, railroads have to take a rational approach to PTC. No track is being torn up, but routes are being downgraded until the long term business climate looks more favorable.

   This puts Amtrak in a bit of a difficult position. Any route expansions or restorations have to take into account for the first time whether or not PTC infrastructure is in place. If not, the cost of the expansion includes the addition of Positive Train Control on the new track.

   Some TWA readers have wondered what all of this is going to do to Amtrak as it shakily stands today.

   Most likely, the host freight railroads are going to look to Amtrak as much as possible to bear the cost of PTC on their lines, especially on routes which are lightly used for freight movements, but constantly used by Amtrak. Parts of the Southwest Chief route on the Burlington Northern Santa Fe Railway qualify under this condition.

   The freight railroads will look at Amtrak like one of their investment bankers; Amtrak has less controversial access to cash from the federal and state governments than the private railroads. Don’t be surprised sometime in 2010 or soon after for Amtrak to make a large grant request to Congress, perhaps in the hundreds of millions of dollars, solely for the purpose of PTC upgrades along established routes.

   This only makes sense; it was Congress, in its rush to prove its chops after the many fatalities of the Metrolink crash in Southern California earlier in 2008, which said any line carrying passenger trains and certain hazardous freight loads must be PTC equipped if used in regular, scheduled service.

   If Congress believes its own publicity and believes it acted correctly with the Amtrak reauthorization in 2008 which included PTC mandates, then it should have little, if any, problems coming up with the big bucks it’s going to take to fund Positive Train Control.

   Since Congress mandates host railroads MUST handle Amtrak trains, and Congress mandates host railroads MUST offer the safety of PTC, the Congress MUST pay for all of this. It’s one thing to make railroads host passenger trains, it’s entirely another to penalize them with additional expense to create a multi-billion dollar mandate nearly 40 years after Amtrak was created.

5. Here is the latest from Ken Orski at Innovation NewsBriefs. This is Volume 20, Number 24; for further information, consult www.innobriefs.com.
   

   December 12, 2009

   Using the Jobs Stimulus to Reform the Transportation Program

   Writing recently in the National Journal’s Transportation blog, we observed the new Obama-proposed job stimulus might dim the prospects for an early enactment of a long-term surface transportation authorization. “The jobs stimulus,” we wrote, “or rather its infrastructure component, could be the death warrant for any foreseeable reform of the federal surface transportation program.” (“What Have We Learned from the Recovery Act”, December 9, 2009, http://transportation.nationaljournal.com)

   The crowded senate calendar, we reasoned, means congressional action on the second stimulus proposal — or at least its $50-70 billion component dealing with new infrastructure spending — must wait until next year and may not reach the President’s desk until late Spring 2010. With the newly authorized infrastructure funds added to the still unspent $16 billion left over from the Recovery Act (ARRA), federal stimulus spending for transportation projects could stretch well beyond 2010.

   Assuming the job stimulus becomes law, we asked, does any one think Congress would still have any appetite to enact a $500 billion multi-year authorization in 2010, on the eve of a congressional midterm election? Most likely, we concluded, a multi-year authorization would be delayed until 2011and some pessimists think that with a new Congress and an increased emphasis on deficit reduction, an even further slippage could occur. “Is the tradeoff worth it? You decide” we wrote.

   Well, the response is in and it largely supports our point of view. It came in the form of responses from fellow bloggers and in a December 9 Newsweek column by David A. Graham, entitled “Putting the Cart Before the Horse: Could a transportation-based jobs stimulus stymie infrastructure reform?” Wrote Graham: “The stimulus bill would spend tens of billions of dollars in infrastructure but do little to remake a flawed financing and planning system. That’s a missed opportunity, according to some observers, who are concerned a stimulus, while better than nothing, would fall short of its potential by ignoring the issues the surface transport bill aims to address.” The column goes on in a later paragraph to say: “The worry is that by pumping large sums into infrastructure this spring, Congress might kill any appetite for a meaningful overhaul of surface transportation funding any time soon.” It quotes my fellow National Journal Transportation blogger James Corless, director of the liberal Transportation for America coalition as “very concerned.” “We worry greatly,” the column quotes Corless, “that putting tens of billions of dollars into these existing stovepipes is not going to have the intended outcome,” i.e. a true reform of the surface transportation program.

   Meanwhile, the objectives of the proposed second stimulus are becoming more elastic as we speak. At a December 10 Brookings Institution forum on Infrastructure, U.S. DOT Secretary Ray LaHood said he sees no reason why some of the infrastructure funds in the stimulus program should not be allowed to be diverted to fund the operating expenses of transit systems which have been hard hit by the economic recession. It’s difficult to see how such a move would help to promote job growth, but then the entire rationale and objectives of the second infrastructure stimulus have been poorly articulated and, not surprisingly, are coming under increased scrutiny.

   Hopefully, by the time Congress is ready to act — most likely, only after the President’s State of the Union address in January — the hemorrhaging of jobs will stop and Congress will be able to shift its focus, as several of my fellow bloggers suggested, from “ready-to-go” maintenance projects (which seem more effective at preserving existing jobs than at creating new jobs) to a longer lasting goal of investing in infrastructure projects that improve national connectivity, increase metropolitan accessibility and enhance economic growth. Such action would make it less urgent to enact a multi-year transportation bill, whose prospects of passage in 2010, we still believe, are anything but certain.

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