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Congress must help U.S.to get back on the train Sunday, June 11, 2000 POST-INTELLIGENCER EDITORIAL BOARD Congress should approve the High-Speed Rail Investment Act, which gives Amtrak authority to sell $10 billion worth of bonds to finance passenger rail development in the Northwest and elsewhere. Why on earth should they do that? Actually, the overwhelming majority of this money would go out East, where the one (1) of 40 Amtrak route that is NOT losing money is located. Without this source of revenue, the prospects are bleak for realizing Amtrak's potential and for it to become self-sufficient.This is of course an admission that it continues to lose money in all but one of its routes, after 30 years of government subsidies Congress has ordered Amtrak to be fully self-sufficient by 2003. That isnUt quite true. Actually, itUs not even remotely true. The deal was, in exchange for a lot of money up front, they were supposed to be almost self sufficient for operating funds, the exception being that Congress would continue to pay some legacy costs of operations (inherited pension obligations) and continue to fund capital costs they had traditionally funded. Amtrak subsequently spent a whole lot of "capital" money that might have gone to fund at least a part of this on train over hauls, something that according to generally accepted rules of accounting, should have come out of operations money So it ill behooves Congress to stand in the way of fulfillment of its own mandate. This would imply that anyone that doesnUt give someone else $10 billion is "standing in the way" of their self-sufficiency. Does this make sense to anyone?Giving Amtrak the requested bonding authority is a reasonable way to achieve Amtrak's sound business goals.Giving Amtrak the requested bonding authority is ludicrous! This is an organization that has lost money for thirty years despite massive subsidies. When bonds are sold, there is a revenue stream to pay off the interest and ultimately the principal. No one would buy these bonds, even at "junk bond" discounts, unless they were backed by the full faith and credit of the US. And such there is no revenue stream to retire them, the US certainly would have to both back them, and ultimately cover both principal and interest. After making one deal, reneging on that, they are now trying to get another $10 billion in bonds that they will have to default on if they arenUt bailed out yet again. Amtrak is on the right track. Not hardlyRidership has risen each of the last three years for a total of 10 percent, Gee, about the rate of population growth! and on-time performance is 81 percent. Which is pretty pathetic, and if you look at their criteria for what constitutes "on-time" itUs even worse. Members of this state's Congressional delegation have a responsibility to do their part to make Amtrak succeed. Amtrak is experiencing its fastest growth in Washington State, where ridership on the Cascades is up 170 percent since 1992. From a trivial portion of the traffic to a still trivial portion of the traffic This state and Oregon, plus various ports and local communities and Burlington Northern railroad, have invested $590 million to upgrade train service in the region. Or more realistically they have wasted $590 million on choo-choos that might have been used to address some of the congestion problems. The result is two new Talgo trains offering highly popular, faster and more frequent service between Seattle and Eugene. Congress must help Amtrak build on this success. If this is success, what would failure look like?Much remains to be done to make high-speed rail what it ought to be in this country. Improved safety at rail crossings and higher speed rail corridors are a must. Locally, renovation of Seattle's decrepit King Street Station is imperative, as is extending high-speed rail service to Vancouver, B.C., and adding more trains. I thought Sounder was being limited by the tracks already being saturated with trains. WasnUt that why we had to let freight trains do 60mph through downtown Puyallup, Auburn, and Kent?In addition, Amtrak wants to expand delivery of mail and agricultural products such as apples using the Empire Builder.We need passenger trains to deliver main and apples? CouldnUt a freight train do it? And the Empire builder is one of the worst money losing routes that Amtrak has. Amtrak is showing it can be successful. Not hardly. It has shown a 30 year record of failure.But it can't go the distance if an intransigent Congress lays down on the tracks in front of the train.Mixed metaphors aside, Congress has supported this white elephant way too much for way too long. $10 billion more would simply be tossing yet more good money after bad.
the craigster
-- (craigcar@crosswinds.net), June 10, 2000
For those who need further proof of the intellectual bankruptcy of the PI editorial staff, Here is a table (God willing the formatting doesn't fall apart) from the GAO report on how "well" Amtrak is doing. It lists all their routes, including the one (1) that didn't lose money. Now to put this in context, this is the result after:
Congress covered legacy pension costs
Congress covered capital investment
Amtrak diverted capital investment money to cover additional operating expenses for major overhauls of equipment that, by generally accepted methods of accounting, should have been considered operating expenses and would have made these figures look even worse.
The bottom line is that, despite tens of billions of dollars in operating subsidies, both federal and state, Amtrak continues to lose money. Time to pull the plug on this silliness.
the craigsterAbstracts of GAO Reports and Testimony, FY98 RCED-98-151, May 14, 1998 (49 pages). Intercity Passenger Rail: Financial Performance of Amtrak's Routes.
Table 1 Financial Performance of Amtrak's Routes, Fiscal Year 1997 Profit or Operating (loss) per Name Route ratio\a passenger -------------------------- ----------------------------- -------------- -------------- Metroliners New York, NY-Washington, D.C. 0.94 $5 San Joaquins Oakland, CA-Bakersfield, CA 1.23 ($11) Carolinian New York, NY-Charlotte, NC 1.45 ($27) Piedmont Raleigh, NC-Charlotte, NC 1.48 ($42) Capitols Colfax, CA-San Jose, CA 1.52 ($15) Auto Train Lorton, VA-Sanford, FL 1.56 ($118) Northeast Direct Boston or Springfield, MA- 1.65 ($29) Washington, D.C., or Newport News, VA Pacific Northwest Corridor Eugene, OR-Seattle, WA, or 1.76 ($26) Vancouver, Canada Illini Chicago, IL-Carbondale, IL 1.82 ($47) Kansas City-St. Louis Kansas City, MO-St. Louis, MO 1.91 ($45) Southwest Chief Chicago, IL-Los Angeles, CA 1.92 ($180) San Diegans San Diego, CA-Los Angeles or 1.96 ($23) Santa Barbara or San Luis Obispo, CA Vermonter Washington, D.C.-St. Albans, 2.00 ($58) VTLake Shore Limited Chicago, IL-Boston, MA, or 2.01 ($90) New York, NY Empire New York, NY-Albany or 2.03 ($38) Niagara Falls, NY Adirondack New York, NY-Montreal, Canada 2.10 ($57) Philadelphia-Harrisburg Philadelphia, PA- Harrisburg, 2.15 ($22) PA Three Rivers New York, NY-Chicago, IL 2.18 ($138) Silver Meteor New York, NY-Miami, FL 2.18 ($120) Empire Builder Chicago, IL-Seattle, WA, or 2.20 ($136) Portland, OR Illinois Zephyr Chicago, IL-Quincy, IL 2.21 ($61) International Chicago, IL-Toronto, Canada 2.23 ($47) California Zephyr Chicago, IL-Emeryville (San 2.24 ($149) Francisco), CA Capitol Limited Chicago, IL-Washington, D.C. 2.27 ($133) New York-Harrisburg New York, NY-Harrisburg, PA 2.30 ($37) Pere Marquette Chicago, IL-Grand Rapids, MI 2.43 ($51) Coast Starlight Los Angeles, CA-Seattle, WA 2.43 ($92) Silver Star New York, NY-Miami, FL 2.47 ($143) Silver Palm\b New York, NY-Miami, FL 2.48 ($163) Crescent New York, NY-New Orleans, LA 2.56 ($163) Clockers New York, NY- Philadelphia, PA 2.59 ($11) Pennsylvanian New York, NY-Pittsburgh, PA 2.70 ($53) Chicago-St. Louis Chicago, IL-St. Louis, MO 2.73 ($64) Empire-Ethan Allen New York, NY-Rutland, VT 2.75 ($79) Express\cCity of New Orleans Chicago, IL-New Orleans, LA 2.78 ($130) Hiawathas Chicago, IL- Milwaukee, WI 2.92 ($50) Texas Eagle Chicago, IL-San Antonio, TX, 2.99 ($201) or Los Angeles, CA Sunset Limited Los Angeles, CA- Orlando, FL 3.16 ($284) Cardinal Chicago, IL- Washington, D.C. 3.29 ($136) Chicago- Pontiac Chicago, IL-Detroit or 3.66 ($66) Pontiac, MI ====================================================================== =================== Total route system 1.86\d ($47) ---------------------------------------------------------------------- ------------------- Note: These financial performance data do not represent the cash impact on Amtrak's bottom line of operating each particular route because (1) they show each route's fully allocated costs in operating intercity passenger trains, including depreciation and overhead costs; (2) they do not account for the impact travel on one route has on the ridership and revenues of other routes; and (3) certain costs are shared among routes and would shift to other routes if a route were closed. These issues are discussed later in this report. The three routes that Amtrak closed during fiscal year 1997 are excluded. \a A route's operating ratio is its expenses divided by its revenues. An operating ratio less than 1.0 means that the route was profitable, while an operating ratio greater than 1.0 means that the route lost money. A ratio greater than 2.0 means that the route's expenses were at least 2 times greater than its revenues during the fiscal year.
-- (craigcar@crosswinds.net), June 13, 2000.
Boy, that didn't format very well. The long and the short of it is that they lost money on 39 of 40 routes. One route (the Metroliner) actually made $5 a head transporting people from NY City to Washington DC. The other 39 routes lost varying amounts.
For those coming to/through the Puget Sound region, the Coast Starlight lost $92 a head, the Pacific NW corridor (from Eugene) lost $26 a head, and the Empire builder lost $136 a head. Overall, they lost $47 on every passenger they carried.
If the PI considers this a "success," you have to wonder how long they can expect to stay in business themselves.
And sadly, this is not an outlier. This is typical of Amtrak's business performance since it was created in 1971. There is an unbroken record of 29 years of failure.
Where does the PI get off calling this success?
-- (craigcar@crossiwnds.net), June 13, 2000.
Yeah, the NY to DC metroliners are the only routes that have ever made money. This was true in 1988 (summer job in Amtrak arrival and departure information) and probably prior to that date.Interestingly enough, it wasn't my impression that Amtrak was particularly poorly run. It was more of a square_peg/round_hold problem.
I too wondered what the P-I editorial staff was thinking. I can only presume wishful groupthink came up with that editorial.
-- Brad (knotwell@my-deja.com), June 13, 2000.
"Interestingly enough, it wasn't my impression that Amtrak was particularly poorly run. It was more of a square_peg/round_hold problem. "
Yeah, I'd interpret it as a denial of the reality that technology had advanced. Riding a train is not so much fun (although it is fun, my wife and I have ridden the dinner train in Renton a couple of times in the last year) that it is worth putting up with the increased expense and TIME compared to flying for any long trip, and it can't compete with the auto or even (gulp) transit for most local trips.
Technology does get bypassed sometimes. There are lots of people who sail sailboats for enjoyment, but few people try to make a living with sail anymore. The US Clipper ship fleet, which was at its time the culmination of cost-effective sailing technology for commerce was obsoleted quite quickly by steam powered ships and steam powered locomotives.
Survival of the fittest applies to commercial technology too. How many of you out there are reading this on a PC running DOS? How many on a 128K Mac running system 1.01? the craigster
-- (craigcar@crosswinds.net), June 15, 2000.
Rail Contractors Raided by Agents The Associated Press Thursday, June 8, 2000; 6:22 a.m. EDTOLD SAYBROOK, Conn. Federal agents have raided the offices of two contractors responsible for part of Amtrak's $1.7 billion high-speed rail project connecting Washington and Boston.
Balfour Beatty Construction Inc. and Massachusetts Electric Construction Co. have been criticized for cost overruns for the project to electrify track between New Haven and Boston. The price tag has ballooned from $321 million in 1995 to more than $500 million.
Law enforcement officials and sources close to the investigation told the New Haven Register and the Hartford Courant that agents were investigating the alleged misappropriation of hundreds of thousands of dollars.
The U.S. Office of Inspector General, the agency in charge of investigating Amtrak, would not comment on the investigation. Balfour Beatty officials also refused to talk about Wednesday's raid.
Electrically powered Acela Regional trains, capable of speeds of up to 120 mph, began operating in January between Boston and Washington. In July, Amtrak expects to launch Acela Express trains, which are projected to run at speeds up to 150 mph.
Amtrak's board of directors hired Balfour Beatty, a multinational company with U.S. headquarters in Atlanta, and Massachusetts Electric of Boston to install 157 miles of overhead electrical wires from New Haven to Boston.
The contract was awarded after the original construction firm hired to do the job ran into financial trouble.
Morrison Knudsen Corp. of Boise, Idaho, completed the initial design work in the mid-1990s. Balfour Beatty has said it needed to redo much of that work at increased cost to Amtrak.
) Copyright 2000 The Associated Press
-- (craigcar@crosswinds.net), June 16, 2000.
And ACELA, acknowledged by Amtrak advocates as vital to meeting the congressionally imposed deadline to sink or swim, continues to face delays and cost over-runs, in this case wheelsets, in the previous case, rail electrification woes. My bet? It's going to sink!Tuesday June 20, 6:01 pm Eastern Time High-speed Amtrak train faces further delays WASHINGTON, June 20 (Reuters) - Amtrak's high-speed Washington-to- Boston rail service will not carry passengers until at least mid- August due to further problems with the trains' wheel sets, a spokesman for the national rail service said Tuesday. In the latest setback for the sleek new Acela train, once due to have begun service late last year, engineers found cracked or missing bolts in the wheel sets during tests over the weekend. Amtrak spokesman Bill Schulz said it had been decided to halt further testing until the cause of the problem was determined. ``This has cost us a couple of weeks on the testing schedule and pushes it into August,'' Schulz said. The introduction of the train began slipping last September when unacceptable levels of wheel wear were detected. Acela aims to slash New York-to-Boston travel times from five hours to three hours, and will shorten Washington-to-New York travel times by fifteen minutes to just under three hours. The train, which can travel at speeds up to 150 miles per hour, is a key component of Amtrak's plan to wean itself from federal dollars for operations, if not capital costs. A congressional report released Monday found Amtrak will need nearly twice its $2.6 billion allocation over the next five years for infrastructure improvements. The Acela train units are being built by a consortium of two companies, Montreal-based Bombardier Inc. (Toronto:BBDa.TO - news) and Alstom SA , headquartered in Paris. Schulz said the wheel sets were being sent back to a facility in Barre, Vt., for analysis Tuesday and Wednesday. The cracked bolts were reported by the Washington Post in its Tuesday edition. Amtrak Vice President Richard Sarles told the newspaper that if the bolts that hold the wheel sets in place are found to be the problem, setbacks could be minimal. But if the problem is found to be with the wheel sets themselves, Acela could face more substantial delays, Sarles said.
the craigster
-- (craigcar@crosswinds.net), June 20, 2000.