1. A strong case can be made that often there is not a lot of intellectual honesty when it comes to discussing passenger rail in the United States.Different groups have staked out different positions, and they are sticking to those positions, no matter what happens to prove those positions are incorrect. Often, the positions make no sense either ideologically or realistically, but are good for membership drives, which accomplishes very little other than to fatten organization coffers.

   Such examples are “there are no passenger rail systems in the world which make money,” and “all Amtrak needs is more money and everything will be fine.” Both statements, of course, are completely wrong.The real head-scratcher is how the concept/ideology/operation of passenger rail passed from being the province of the very conservative world of the railroad industry to the socialist and liberal world of no one other than a government has the ability to operate passenger rail. Therefore, this unsavory theory goes, passenger rail should be treated exactly as roads and highways are treated, and funded accordingly, without an honest attempt for passenger rail to be as self-sustaining as possible, with government contributions only after other resources are exhausted, not the other way around.

2. Respected passenger railroad historian David Carleton has provided this very brief outline of recent passenger rail history [Note: a TWA guest columnist is working on a longer and more intricately detailed history of Amtrak, which we hope to bring to you sometime soon.]
   

   By David Carleton

   In 1956 the Republican Eisenhower administration approved the Interstate Highway program. It was going to have serious implications for the passenger train, but Congress and the administration did nothing to alleviate it.

   In 1967 the Democratic Johnson administration directed the Postal Service to remove all remaining Railway Post Office cars from passenger trains. Since this was the one remaining piece of passenger train business which was consistently profitable, the implications for passenger train service were dire. Still, the administration and the Congress did nothing to relieve it.

   Then, in 1970 the Congress passed – and Republican President Nixon signed – the bill creating the National Railroad Passenger Corporation (NRPC), commonly known as Amtrak. In light of the previous inaction this would appear to be a dramatic turnabout. What events facilitated it? Here are three:

   1. At the end of 1969 the venerable Pullman Company ceased operations and in 1970 was liquidated. Evidence of the impending demise of the Pullman Company became apparent in official Washington when it was necessary to assemble a funeral train to transport the remains of Senator Robert F. Kennedy. The large fleets of stand-by Pullman cars which had once been called upon to assemble campaign trains for candidates such as Roosevelt, Truman, and Eisenhower were no longer available and the railroads had to scramble to assemble a suitable train.
   2. In 1970 the Western Pacific Railroad succeeded in winning a train-off case to stop running its segment of the California Zephyr, effectively killing the train. This was America’s train, the train of the movies, the quintessential post-war streamliner. Its discontinuance had symbolic meaning larger than the train itself.
   3. The bankruptcy of the Penn Central Railroad threatened the stability of the entire railroad industry. The Penn Central was the largest passenger carrier, and that became an issue – not because of all the passenger train mileage that was being imperiled, but rather because of the size of the passenger train losses which showed up in the railroad’s reports to the Interstate Commerce Commission. If these reports were accurate, then these losses accounted for about ten percent of the railroad’s loss, but they were the most obvious item. Then, too, the Northeast Corridor Improvement Project (NECIP) was just then beginning to bear some results with new Metroliner trains moving swiftly over recently resurfaced Penn Central tracks.

   It is important to understand what happened to crystallize the thinking of both Congress and the Nixon administration when the decision was made to form the NRPC, because their reaction to those events continue to shape the national passenger train enterprise till this day.

   First of all – The NRPC was to stand in the place of the Pullman Company and manage a fleet of cars that could be deployed as needed.

   Second – The ICC and the railroads would be relieved of the complications of train-off litigation. That’s not to say that no more trains would be cut, in fact on Day One of Amtrak, half of all remaining private passenger rail service (Except for the services which opted not to join Amtrak, including the Southern Railroad and the Denver and Rio Grande Western.) was eliminated by the creation of Amtrak under rules governing what were – and were not – viable routes. But, the railroads and the ICC were no longer part of the process, from then on if the public was dissatisfied with changes to their service they would have to take their complaints elsewhere.

   And, third – The NRPC (Amtrak) was to save the NECIP and the Metroliners from the bankruptcy of Penn Central. It is interesting to note Amtrak service has typically been meager throughout most of its system, even on the former Penn Central, with the exception of the Northeast Corridor.

   In carrying out the above, the NRPC was formed and contracts were made with the various railroads. The contracts called for these railroads to operate certain designated trains “for” the NRPC, and also allowed the railroads to eliminate most of the rest. All the personnel, stations, etc. were to be provided by the railroads per the contract. The better railroads even continued to print timetables for “their” trains and distribute these to “their” stations. After a year even this began to fade away. What happened?

   The NRPC acquired an upper management which proceeded to form it into a strong bureaucracy. They replaced the designation NRPC, which stood for something, with Amtrak, a word they made up. And, then they went to work building and reinforcing the Amtrak we know today – perfectly equipped to stand against the travails of 1969/70!

3. Next, we visit a most interesting and thought-provoking white paper by J. William Vigrass. Through the years This Week at Amtrak has been published, we have been honored to publish the writing and speeches of former FRA Administrator Gil Carmichael, who, along with Andrew Selden, are the two greatest passenger rail visionaries in the United States today. Long-time railroad and transportation specialist William Vigrass has shared his thoughts of a vision similar to that of Mr. Carmichael and his Interstate II concept for the future of American railroading.

   Mr. Vigrass completed 56 years on the transportation industry, including service with Rutgers – The State University of New Jersey, Edward J. Bloustein School of Planning and Public Policy; Hill International, Inc.; Port Authority Transit Corporation, Lindenwold, New Jersey; Battelle Memorial Institute, the Union Pacific Railroad Company, and the Erie Railroad Company. Mr. Vigrass is the past chairman of the Committee on Rail Transit A1E04 of the Transportation Research Board.Mr. Vigrass has an extensive background in both passenger and freight railroad operations and planning. The following paper was first presented in 2007 at the height of freight congestion in our country. While today many of the problems cited have abated simply because of a slackened economy, as the national and world economy start to improve, these problems will once again be all too prevalent.

   A proposed National System of Interstate and Defense RAILROADS, as an infrastructure project for the next fifty years

   By J. William Vigrass, Member, Blue Ribbon Panel of Experts
   Project Manager (retired) Hill International, Inc., Marlton, NJ 08053.

   To the National Surface Transportation Policy and Revenue Study Commission, USDOT Bldg., L’Enfant Plaza, 400 7th St. N.W. Conference Room 4200, Washington, DC, 20590, Tuesday, 10:00am February 6th, 2007.

   Background: The scope of the Commission’s mandate is to provide policy direction for infrastructure for the next fifty years. This paper will expand upon the thoughts set forth in my December 7th, 2006 paper and will be confined to the railroad mode because all other modes have numerous advocates for government investment in highways, waterways and airways, all of which are owned by the public sector. All are used by private sector operators which have not invested any of their own capital in the infrastructure provided by government. They pay fuel and other taxes as operating expenses, and said taxes cover but a portion of the government’s investment and maintenance costs. Only the railroad infrastructure is privately owned, maintained and financed. Even though railroad property is devoted entirely to the public interest, the owning companies nonetheless pay real estate taxes on their properties. In urban areas these taxes can be substantial. Railroad freight rates must cover all operating, maintenance and ownership costs, something that competing modes have never had to do.

   When railroad companies invest in improvements to their physical plant with internally generated funds, they must be assured of an internal rate of return equal to or better than the cost of borrowing money in the private market. In contrast, when the Corps of Engineers makes improvements to the inland waterways system, the barge operators do not put up any investment dollars. When the FHWA and state DOT’s improve highways, the trucking industry does not have to directly contribute to the investment. This unbalanced situation has led to under-investment in railroad plant with consequent congestion is many locations. Railroads presently have great difficulty adding new train services and have made it clear they are unable or unwilling to add timetable slots for additional passenger train services unless the public sector makes capacity available.

   At the same time, an expanding economy has put pressure on freight railroads to add more service and some new services such as long distance run-through trains. The nation’s highways are congested in many places, and the expanding economy has added to the pressure for widening existing Interstates and building new Interstates where they do not now exist. Tests done under the auspices of the American Association of State Highway and Transportation Officials (AASHTO) have proven highway damage is geometrically related to heavy loads. There is good reason to divert heavy loads off highways onto railroads since the latter are engineered to handle heavy loads. With several good reasons to add more railroad service, why has not more been done? The answer is, very simply, the railroads cannot afford to make the necessary investments. Their margin of profit is held down by truck competition for the most part. Common carrier truck rates are held down by the ubiquitous owner-driver who often works for bare wages, fuel, a contribution to maintenance and little or nothing for depreciation.

   The trucking industry is using an Interstate and Defense Highway System designed and built since 1956, and incorporating improvements in design from time to time. It is largely an up-to-date highway system. The enormous capital invested in the Interstate and federal aid highway systems has been generated by motor fuel and other motor vehicle related taxes borne by the entire motoring public. Past studies have found trucking does not cover about 30% of costs related to truck operation. This allows the trucking industry to offer rates less than their true economic costs. Every time taxes on trucks or trucking have been increased, the industry has lobbied intensely and successfully for increased length and weight limits which in turn allowed freight rates to remain lower than they otherwise would have been. This has attracted more freight to highways, which in turn caused more wear and tear and congestion.

   It is recommended the Congress not approve any more increases in the size or gross weight of motor trucks in interstate commerce.

   Trucking uses up to date highways.

   Railroads use Nineteenth Century Alignments. In contrast, nearly all the US railroad network was designed and built in the 19th Century. Grading was done by manpower, horses and scrapers. Heavy excavation was done by manual drilling (sledgehammers on the drill someone was holding) and black powder. Such engineering achievements as the Horseshoe Curve, Tehachapi Loop, the Central Pacific (UP) over Donner Pass were all great achievements of that era, but they are circuitous compared to competing Interstate highways. No matter how fast railroad freight trains may run, they must go further than a truck in most cases. Curvature imposes permanent speed restrictions. Histories of those early projects often include drawings of proposed realignments that could not be carried out by the privately owned railroads. Major tunnels had been proposed, but not built. Many sharp curves remain although realignments had been planned.

   Meanwhile in Europe, at this time, many kilometers of new high speed railways have been – and are being – built. Several Base Tunnels are being built for railway use under the Alps and other mountainous barriers. These are:

   • Lötschberg base tunnel – portals at Frutigen (Canton of Bern) and Raron (Canton of Valais) in Switzerland. 34.6 km (21.6 miles) in length. Scheduled to open this year (portions will be single track).
   • Gotthard base tunnel – portals at Erstfeld (Canton of Uri) and Biasca (Canton of Ticino) 57 km (35.6 miles) in length. Scheduled to open 2015-2017. They are running into geological problems. (This project has been covered on cable television’s The Discovery Channel.)
   • Combination bridge/tunnels connecting Sweden to Denmark provide an all rail connection between Scandinavia and Europe.
   • In project planning (length not yet established) – Mt. Cenis (France-Italy and Brenner (Innsbruck), Austria and maybe Bolzano/Bozen, Italy
   • Proposed tunnel connecting Spain and Morocco under the Straits of Gibraltar has been planned and is going into the engineering phase. This will connect the railway system of North Africa with that of Europe.
   • The Channel Tunnel (50 km, 31 miles long) is well known in the US. Less known in the US is the Japanese Seikan tunnel between the main island of Honshu and the north island of Hokkaido. It is longer and deeper than the Channel Tunnel, and passes through far more difficult geology. It has the following statistics:

     Seikan Tunnel
     Location: Honshu and Hokkaido, Japan
     Completion Date: 1988
     Cost: $7 billion
     Length: 174,240 feet (33 miles)
     Setting: Underwater
     Materials: Steel, concrete
     Engineer(s): Japan Railway Construction CorporationThe US has no railroad tunnels that compare.

   In all such cases, the railroads are owned by the public sector and such projects have national and/or European Union support. (Switzerland is not in the EU.) While European railroads offer much more frequent passenger train service than is found in the US, they carry a tiny percentage of freight ton-miles and are far less efficient than American freight railroads. Yet, with the superiority of American freight railroading, the companies cannot justify or afford the huge investment that would be needed to provide a 21st Century alignment. They need help!

   The present US railroad system is the most efficient hauler of overland freight in the world in terms of ton-mile costs. It is also the result of drastic downsizing that followed deregulation. The present system is carrying double or triple the number of ton miles that had been carried on a much larger network prior to deregulation. About one third the track miles are carrying two to three times the traffic. While efficient, this leaves little room for growth. It is also difficult for freight railroads to maintain their track when there is only one track on a given alignment. Trains must be delayed or rerouted over circuitous routes to allow track to be taken out of service for maintenance or replacement. This is not desirable, but it is necessary.

   One may conclude that the present railroad system consists largely of 19th Century engineering, has greatly reduced track miles and route miles than existed in the 1950′s, yet is carrying twice the traffic. Expanding capacity to be able to handle increased freight traffic as well as increased passenger train traffic appear to be highly desirable national objectives. Excess capacity is desirable to handle an expanding economy as well as peak loads. Private companies cannot invest in excess capacity (unless they have large profit margins, which the railroads do not.) Redundancy is highly desirable to handle dislocations caused by natural disasters such as Hurricane Katrina or terrorist attacks that have not yet been experienced.

   It is a point of historic fact the Prussian State Railways in what is now Germany were built in the 19th Century such that the network consisted of a series of triangles. Two routes were provided between strategic points so that the military would always have an alternative route in case of invasion. The US railroad system was not designed with such strategic objectives in mind. The mainland US was never threatened, but now this is a distinct possibility. The loss of a key bridge or tunnel here or there could cause great havoc to the US economy, as there are now fewer alternative routes than there were in the 1950′s. Some of the alternatives might be restored, or new ones created.

   One may conclude the basic US railroad network is a product of 19th Century engineering with no thought to redundancy which may be needed to cope with natural or terrorist activity, or even routine maintenance or reconstruction. It is also circuitous compared to the Interstate Highway System, and thereby not as competitive as it might be. This all indicates it probably is an impediment to economic growth of the US rather than a lubricant for economic growth.

   What, then, should be done?

   It is proposed to create a National System of Interstate and Defense Railroads which would be multi-tracked, grade separated and suitable for competitive speeds. This would mean 75 mph for freight trains and 110 or 125 mph for passenger trains. A combination of tax credits and direct grants would be needed, since some strategic investments desired for passenger train use might not be needed or wanted by freight railroads. Those improvements would be provided by grants, and such grants would consist of federal and non-federal shares. Multi-track means at least double tracked, and where combined passenger/freight traffic requires, three or even four tracks.

   Heavy Haul Routes Needed. This is not to ignore the need for separate heavy haul routes that would be (and are) designed for 25 – 40 mph. It is recognized such routes being capable of handling 15,000 to 25,000 ton coal or other heavy trains are needed. Energy needed increases with the square of the speed, such that it requires four times the energy to move a train at 80 mph as at 40 mph. The railroad companies have been relatively successful in generating internal capital for such investments in heavy haul routes. It is desired to keep such traffic off high speed freight/passenger routes to avoid delays to fast trains. It may be desirable to have separate heavy haul tracks alongside fast freight/passenger tracks where both share the same corridor as exist on portions of the Union Pacific Railroad and Burlington Northern Santa Fe Railway. For purposes of this paper, it will be assumed the railroad companies can continue to fund improvements for heavy haul traffic from their own resources. Exceptional needs might be handled on a case by case application for government aid.

   A Program to Create a National System of Interstate and Defense RAILROADS.

   A number of steps would be needed to approach, identify and quantify needs. This is not something which can be done by a few papers such as this, in which small numbers of man hours have been committed. A major research and planning effort will be needed. This might be done under the auspices of the Transportation Research Board with funding from USDOT.

   Assumptions: Some key assumptions must be made upon which planning would be based. Among them would be the following:

   • Population of the US would continue to increase as forecast by the Bureau of the Census. Legal immigration would continue at the same rate.
   • The US economy would continue to expand at the same overall rate. Shifts within the economy would be recognized to the extent data become available.
   • Petroleum would continue to become scarcer with consequent increases in price. Unusual or anticipated changes in the supply/price would be included to the extent data permit.
   • Efforts to control degradation of the environment will increase.
   • Population distribution will continue to flow to metropolitan areas.
   • Others, as may be developed during initial research.

   A Proposed Research Program to Develop a National System of Interstate and Defense Railroads.

   Some factors which have come to mind and/or have been suggested by some of my many email friends and correspondents follow. They are in a more or less sequential (chronological) order.

   • Identify corridors, and quantify traffic to the extent data permits as to what growth would be expected over the 50 year period under study for the Commission.
   • Identify where rights of way for double or multiple track remain. Determine when – and if – restoration would be desirable.
   • Identify abandoned rights of way that exist (more or less intact). Determine which ones could be rebuilt for modern use. Rank them in order of probable need. Establish a list of rights of way to be purchased and preserved for future rail use. This use might be freight railroad, intercity and/or commuter passenger railroad or rail transit in urban-suburban areas. Funding for purchase and preservation of such rights of way should be the first item to be implemented under the proposed program. Existing rights of way must be preserved especially in urban areas before they are disposed of to developers or other non-rail use.
   • Identify where railroads are essential for defense. It is established that railroads are the most efficient way to move an armored division. There are other areas where railroads have been used effectively.
   • Identify new areas where railroads might be useful or critical in combating domestic terrorism.
   • Identify areas/places where railroads should be protected from terrorism access. Devise means for such protection.
   • Identify corridors suitable for electrification in chronological sequence. Given that petroleum will become more expensive and scarcer, it follows that electrification of major corridors will be in the national interest and will contribute to the railroad system’s efficiency. This may well be a major contribution to reducing our nation’s dependency on petroleum and allow petroleum’s use where there is no alternative, such as for aviation. A major shift of freight and passengers from highway to railroad should be an objective to reduce domestic use of petroleum based fuels. No technological development would be needed. Electric locomotives would be similar to diesel-electric locomotives “under the floor” with similar traction motors. “Above the floor” devices such as transformers, rectifiers and inverters are all within the state of the art. Transmission and distribution systems have been developed in Europe and Japan and could be adapted to American conditions.
   • Identify where increased electrical generating capacity would be needed. Whether electrification would be nuclear or coal powered would be decided by research in that area and local policy. It may vary from one place to another in the US. Where convenient to waterpower or coal, those sources would be used. Nuclear power might be used widely provided that certain objections to it can be overcome.
   • Determine where by-pass freight routes are desired around urban areas. These are desired for carriage of hazardous materials and as ways around urban railroad congestion. In recent months, carriage of hazardous material through Washington, DC has stirred up opposition by local residents and their political representatives. There are few options other than very circuitous routes that would bring the shipments through other communities which would object.Input from local planning agencies will be desired, but oversight by a steering committee appears to be desirable and necessary because many planners have not had academic training or experience in evaluating what railroad rights of way might be used for. They might want a hiking trail on what might be a strategic interstate freight corridor.
   • A nationwide survey is needed to determine where such by-passes are desired. The survey would include identification of existing abandoned or underused alignments that could be incorporated.
   • Costs and benefits from such by-passes should be identified and quantified. They could be strategic redundant routes.
   • Create a “Greater Amtrak” route structure and overlay it on a proposed fast freight network. Determine where multiple track would be needed, multiple meaning three or more tracks. It used to exist, and roadbeds remain in most places, primarily New York – Cleveland on the ex-New York Central and New York – Philadelphia – Pittsburgh on the ex-Pennsylvania Railroad. Short segments did exist in other places such as on the Pittsburgh & Lake Erie between Pittsburgh and Youngstown where the heavy industry that was served has disappeared. Some multi-track routes may not be needed to be replaced, but new multi-track may be needed where none existed, such as has occurred for the Powder River Coal Field in Wyoming. Other new needs will occur for multiple track.

   The sum of all the above efforts will be a very large research effort. It might be separated by task into contracts, or it might be awarded to an agency that could manage and coordinate the entire effort, subcontracting out tasks. The latter appears desirable because of the huge depth and breadth of scope and need to coordinate tasks.

   • Financing of such a National System of Railroads will be a major and continuous undertaking. In the recent past, TRB and USDOT/FHWA have sponsored meetings/seminars/symposia on the subject of innovative financing of transportation projects. There is no need for duplication. Rather, research toward financing the National System of Interstate and Defense Railroads should build upon work already done. This new research effort will be separate from but in parallel with research to define and quantify the proposed system.Win/Win: A key point to be kept in mind is that financing must be acceptable to all parties to any agreement to improve the national railroad system. With win/win in mind, it is suggested that improvements funded by the public sector be owned by a public entity and leased to the railroads so that the improvements should not be subject real estate taxes.Some assumptions here may be in order, but they should be confirmed before work begins.
   • Whatever is proposed must be acceptable to the freight railroads which own nearly all the national railroad system. It must be a win/win combination that benefits the owning railroads, as well as public sector needs.
   • Tax credits as proposed by the Association of American Railroads may well be a primary source of capital funds from the private sector. It is suggested a basic percentage be established for all railroad infrastructure, primarily heavy haul routes, and a somewhat higher percentage be allowed for multi-tracked lines handling passenger trains operated by public entities or on behalf of public entities.
   • For very large projects (which would be common) having very long pay off periods, precedent of the Alameda Corridor might be followed. A public entity would be owner, and would issue long term bonds to fund the project. Using railroad(s) would pay a fee (a toll) per car, per ton, per ton-mile or whatever logically fits the project for the use of it. If such fees would not cover interest and amortization, public financing of the balance might be used, covered by a port authority or whatever the owning agency might be assuming it has cash flow from other sources.
   • Multi-purpose corridors might be established, especially in urban areas, in which a corridor might include separate freight and passenger railroad tracks along with fiber optic cable, electric power lines (especially if the railroad is or is to be electrified), water or other pipe lines, and perhaps truck-only roads. Fees from all users would be applied to bond issues. If forecast revenues were found insufficient, direct grants from relevant public agencies might be sought. The nature of each project would guide choices of funding. It is likely funding will be project specific, although similar projects might well employ similar funding methods. Innovative, new, financing methods should be an objective of research.
   • Legislation at the federal and state levels will be needed to implement the proposed National System of Interstate and Defense Railroads. It would be the objective of a final research task to draft such proposed legislation for review by representative staff of relevant legislative bodies.

   The above program is ambitious and will require much investment over a period of years. It need not be done all at once. Much of it is already in place, and needs only improvement. Restoration of double track where rights of way exist could be an early development. Some bottlenecks are already apparent, and are the topic of another panel discussion. Elimination of such bottlenecks would be a natural inclusion in the proposed National System. Identification of defense needs is the subject of still another panel that will be fit into the National System.

   Task 0: A preliminary first task will be to estimate the funds and time needed to undertake the research outlined above. A source of such funds must then be identified and found. Some money or services in kind might come from the railroad industry itself, as a key beneficiary and would also give them seats on any steering committee. Much must come from the public sector, most likely USDOT through its FRA, FHWA or other appropriate agency. An independent research organization would manage the effort, and this would logically be the Transportation Research Board which already has much experience in some of the proposed tasks. Tasks would be advertised and awarded to research foundations or consultants in the usual manner. This effort might take up to three years and might cost on the order of $3 to $5 million. Output would be a conceptual engineering type of result defining a National System of Interstate and Defense Railroads and putting tasks in prioritized order for implementation.

   A sense of urgency is needed to create a National System that will reduce the nation’s dependence upon imported petroleum for its basic interstate transportation needs. The world’s petroleum supply is being used up at an ever increasing rate, and many of its sources are in insecure areas. President Bush’s state of the union message January 23, 2007 included an objective of greatly reducing the US’s consumption of petroleum for surface transportation purposes. The proposed electrified railroad system would contribute to this objective in a big way. Freight railroads are one of the larger users of diesel fuel, much of which must be consumed on main lines which are most conducive to electrification. It has been estimated that railroads consume about six percent of the nation’s consumption of petroleum. Railroads are the only interstate mode that is suitable for electrification using existing technology. We should save petroleum for uses in which there is no readily apparent alternative such as aviation.

   If we don’t get started promptly, we will regret it in the not too distant future. The future is approaching rapidly. It is recommended the research proposed above be authorized and funded at the earliest opportunity. It took fifty years to build the Interstate and Defense Highway System as defined in 1956 legislation and amended from time to time. The railroad system envisaged would take approximately the same length of time.An improved railroad system will benefit the economy.

   An electrified railroad system would reduce petroleum use and will also contribute to faster and more efficient operation.

   An unimproved railroad system will be a hindrance to economic growth.If the United States is to continue its role as the world’s leading economy, it must have a 21st Century System of Interstate and Defense Railroads.The time to begin is now!

4. One highway interchange to be rebuilt in New Jersey using stimulus funds appropriated earlier this year connects an Interstate Highway with a US Highway and a New Jersey state road. The cost of rebuilding this single interchange is $900 million. Amtrak’s average annual free federal monies appropriation is $1.3 billion, just $400 million more than the single interchange in New Jersey.

   This does not speak of the unattractive bugaboo of modal envy, but makes business sense for the spending of government resources for the highest and best use of funds and return on investment. While the highway interchange will serve perhaps less than two million citizens in New Jersey, that same $900 million, applied to Amtrak’s national system, would easily serve over 20 million Americans and international tourists, based on Amtrak’s unacceptably skeletal system.

   Which is the best return on investment?

   Where is the vision in federal, state, and local governments to start seriously including passenger rail in government planning?

   Where is the vision in Amtrak to start realigning corporate resources to reach out to the various government agencies to create awareness and programs which benefit everyone involved in domestic network transportation planning?

As a thought, both the Southern and Rio Grande stayed out of Amtrak in the beginning; even the staid Seaboard Coast Line wasn’t doing poorly running the Florida trains and many have said SCL thought long and hard before jumping into Amtrak.

If you take this thought process out a bit further, if some sort of change in federal government regulation would have allowed railroads to get rid of the short hops and money-gulpers quicker and restructured passenger service into less of a ghost of its domestic transportation system than it was and more into a passenger services provider, perhaps there never would have been a need for Amtrak.

One thing is clear; Amtrak was created by a Republican administration (Nixon) to fix a big business problem. There were many considerations, including the unions. And, the funniest part is that the original administration figures were based on the assumption that Amtrak could be launched and turned into a success for less than $150 million!

The thinking could be extended to the theory that in the last 60s/early 70s, not enough creative thinking was being done; simply creating another government welfare program (VERY popular in the 60s) would make the problem go away.

It’s always great fun to consider the vagaries of history.

A gentleman on our list asked several questions about VIA service in Canada. Eight years ago I led a project that took VIA apart and put it back together again on paper for the purpose of privatizing the company. Our final report presented to Prime Minister Mulroney’s federal government ran about 800 pages, complete with timetables, marketing plans, and a review of union contracts, among many other topics.

It was an interesting project, because our group of professional passenger rail consultants had the opportunity to say “what if?” on almost every topic relating to creating and operating a successful railroad.

For those of you wondering, our figures were created using standard North American accounting principles (we used railroad accounting where necessary, but converted our facts and figures to real-world accounting for the benefit of the government – it was an interesting conversion). Both our marketing and operating figures (as well as corporate overhead) were always conservative to a point where if we knew a coach seat headrest paper towel costs 15 cents to replace, we tripled that cost to err on the side of caution. We used VIA historical ridership figures for marketing calculations.

The only part of VIA for Amtrak to emulate is their customer service. They consistently rank very high with their customers, with high satisfaction scores constantly running above 95%.

The rest of VIA currently emulates Amtrak, and Canada uses the U.S. as a positive model for their arguments.

VIA cuts its annual federal government subsidy each year by improving their efficiency and passenger counts. However, the last time I looked, they were still only recovering  about 40% or less of their operating costs at the farebox.

They have slashed their route system to the bone, where all but one of their long distance trains is tri-weekly. The Ocean, running between Montreal and Halifax is six times per week. VIA started its life with a huge corporate staff. They have trimmed some during the years, but many think they are probably still overstaffed.

Their version of the NEC between Sarnia and/or Windsor and Toronto and Ottawa and Montreal has daily service, but much less dense than our NEC.

VIA has always hauled express service and mail, but only because many of their routes are “social services” where there are no roads. The only form of transportation is either the train or a small airplane. Because of the nature of tri-weekly service, there is not much advantage to mail and express service of much consequence.

VIA has learned correctly that while it is a vital part of Canada’s domestic transportation network, they make huge money from sleeping car service. They also split their coach business into two classes. The long-distance advanced coach service (called VIA 1 on corridor trains) is similar to Amtrak’s regular coach service in terms of spaciousness and amenities. (VIA 1 on corridor trains is similar to first class airline service.) The riff raff in the lower class coach service on long-distance trains have an experience similar to riding in a short-distance Amtrak coach for a couple of days. It isn’t very pretty.

Their dining and lounge car services are exceptional. The diner has a much more upscale atmosphere than an Amtrak diner. The food is excellent.

VIA has no new equipment. They reworked the old Canadian Pacific coaches and sleepers at Pointe St. Charles about seven years ago, and it was on the same level as when the heritage sleepers were reworked at Beech Grove. VIA spent a bit more money and updated the equipment a little better, but they had the benefit of Amtrak’s previous experience to draw upon.

Their corridor equipment is about 20 years old and holds up well. Other than GO transit equipment in Toronto and some other isolated areas of Canada, there is no bi-level equipment that in Canada that VIA owns or operates (other than 35 year old dome cars).

VIA union contracts are not as progressive as Amtrak’s contracts.

VIA is a crown corporation, which means, like Amtrak, it is a creature of the federal government. Unless something has changed in the last few years, VIA has never even had the benefit of statutory authority from Parliament; it was created by an act of the cabinet, not the Parliament. Canada’s form of government is a copy of the English system. Therefore, the Prime Minister and cabinet have considerable powers that automatically flow to them that Congress does not afford our President in our system.

VIA is envious of Amtrak. The Canadians think we have a better system and wish they had our frequencies and routes. VIA management through the years made many of the same mistakes and Amtrak management, and paid as heavy of a price in 1989 when over half of their system was slashed by the government.

Our plan said it would take 11 years to privatize VIA (and not all of it; just the long-hauls) and would require a number of things to happen, including the purchase of bi-level equipment. It can be done, but there must be a long-term commitment to doing it and a workable plan everyone agrees to in advance.

Bruce Richardson

The major hurdle of Amtrak’s future in regards to Congressional funding and reauthorization has been crossed.

To ensure a prosperous future for Amtrak, two important processes must take place. First, the new Amtrak Reform Board of Directors, consisting of seven members appointed by the White House in consultation with the Senate, must take place. By Congressional mandate, this board must be constituted by July 1, 1998 for Amtrak to be considered for their federal appropriation in FY 1999. Second, the new Reform Board must select a successor to Thomas Downs.

Because the Clinton administration reacts strongly to public opinion, it must see a public clamor for appropriate new board members. While most members of the current board are eligible for nomination to the Reform Board, it is desirable that a completely new slate of directors be nominated.

By law, as spelled out in the Amtrak Reauthorization Act, each nominee must possess the technical, financial, and other expertise necessary to qualify for a corporate board seat. Excluded (with the exception of the Secretary of Transportation) are employees of the federal government, Amtrak employees, freight railroad managers, railway labor officers, and pure political appointees. The test for the nominee is that each must possess the technical, financial, and other expertise necessary to make decisions regarding a multi-billion dollar corporation.

Other criteria equally important, includes:

• Be both financially and politically savvy; they must understand how the process works and not have a lengthy learning curve. The final rescue of Amtrak cannot last longer than five years; in corporate terms, this is a very short period of time.
• Understand passenger railroads and how the passenger system works in relationship to other modes of transportation and how the system works in relationship to the needs of host freight railroads. One of Amtrak’sgreatest faults is its lack of institutional memory. So many Amtrak senior, middle, and low-level managers have come and gone without leaving a written legacy that Amtrak constantly blunders into the same mine fields again and again because no one left behind a sign saying “stay away”.
• Be willing to make bold and/or difficult decisions without fear of great political backlash. While, as above, they must be politically savvy, they must also be ready to make the right decisions and defend the decisions while they go through an incubation period on their way to a profitable blossoming.
• Be secure in the knowledge that Amtrak’s salvation is in growth, not shrinking. A full network of routes with multiple frequencies is the best long-term plan. The new board members must know this too, and position the company for growth.

The White House clipping service reads hundreds of newspapers from all over the country, and notes threads of interest. Letters to the editor and editorial page op-ed pieces on the subject outlined above will catch their eye.

While telephone calls and e-mail to Congress were effective during the legislative process, this part of the process requires opinions and facts expressed in writing in public places, including newspapers, editorial comments as given on local broadcast newscasts, and, of course, the internet.

So, for the end of the year, it’s time to continue the process of taking Amtrak to the next level and help influence who the new Reform Board of Directors will be. Everyone can agree it is imperative these appointees not be the usual political favors, but rather, truly qualified individuals who will steer the company in the right direction and make the best choice for who will be Amtrak’s next president.

Bruce Richardson

As to the question of privatization of long hauls, ask someone who has gone through this complete exercise. Thank you, I’m glad you asked. In 1990 a group of us took VIA Rail Canada apart and put it back together again on paper. This was not an amateur or academic exercise, but a real-world study to determine the future of rail transportation in Canada. The result? Over a eleven year period, the VIA long-hauls (national system) could be privatized and turn a modest profit. But, this only occurred if their version of the NEC between Toronto and Montreal stayed in government hands. Other details include radical changes in the way the company was operated by senior management, and even more radical changes in marketing practices. It also required new bi-level equipment and the operation of MORE daily trains, not tri-weekly or less trains. The project did not go forward because of the necessary huge capital investment needed and a change in federal government from conservative to the present liberal government.

The same can be done with Amtrak, but it will take far beyond 2002 to do it. And, before it can be privatized, the Amtrak corporate culture must undergo radical surgery to harmonize the company and eliminate many hurtful and wasteful things which now occur on a daily basis.

Also, Amtrak ownership will have to be structured similar to that of the old Pullman Company. Own equipment and motive power, have reservations and marketing, but leave everything else to others, including the NEC. The NEC should remain a government agency because it operates more like a highway than anything else.

Dr. Adrian Herzog of URPA has created a thoughtful White Paper on the future of passenger rail in our country, and he envisions tax credits and a number of other issues, including perhaps cheerful participation by the managements of present freight railroads. Dr. Herzog put much effort into this work, and it is an admirable document, in fact, the only long-term plan now on the horizon.

If others with to think differently than Dr. Herzog, they should put the same time and effort into possible solutions. This could only have a positive effect, with new ideas being openly debated.

As someone who in the regular course of business has conversed with more than one freight railroad president on the subject of passenger rail, it is my opinion – and please read the word opinion again – that the senior management of the major freight railroads today do not wish to become any further involved with passenger rail beyond a commuter capacity. When a workable national play is drawn where the freight railroads can participate on a basis they can justify to their stockholders, then they will come to the table. Before that, they will stick to what they know best now, which is hauling boxcars.

From a non-emotional, business standpoint, the present senior management of Amtrak has a series of problems which must be addressed immediately. These problems were created by their past actions since 1993. Who will answer these remains to be seen.

The next president of Amtrak must be a risk-taker, who is willing to put in place sound principals and be a student of history. Amtrak’s history is spotty at best, and to know where the company has failed before will help in not making the same mistakes again.

When Graham Claytor became president of Amtrak, he did so as the capstone to his career. He had “been there, done that” in about every capacity in the railroad industry, and therefore, was able to go to Amtrak and use his personal credibility to bolster the entire company.

Someone of his stature, age, and wisdom needs to do this again. It us unlikely someone from the freight industry will view moving to Amtrak as a career enhancement on the way to higher position. Too many risks that are too great and too many chances of failure are present. The best candidate will be someone who knows innovation and is far-sighted, but also does nothave a personal agenda for the extended future.

The next president of Amtrak should be someone who is willing to put a lifetime of talent and wisdom into stabilizing Amtrak, and then start it to grow again. Amtrak’s problems will never be solved by cost cutting, but only by orderly growth through revenues from passenger miles, state or regional tax support, and other ways, such as a rational plan to increase express business in such a way everyone can accept it.

Congess appointed a Blue Ribbon panel earlier this year which came up with several good ideas about the future of Amtrak and passenger rail in general. What has happened to this document? Was it only a “feel good” exercise that will never again see the light of day?

Let’s don’t destroy Amtrak now. Let’s work with our politicians to make instrumental change and have a long-term view of solving passenger rail problems. Let’s stabilize and take what we have and build from there. Let the regional needs be met by their own constituencies, and let’s together face the national challenges.

Thanks for taking the time to read this.

Bruce Richardson
Jacksonville, Florida