On my August 2004 commentary

by Noel T. Braymer, RailPAC President

NOTE: The following was received from Elizabeth O’Donoghue, Director-Communication Public and Government Affairs (West) Amtrak. My comments follow hers, and refer to my August commentary.

To: Editor, Western Rail Passenger Review

One thing – you wrote in the Western Rail Passenger Review that “…if Amtrak receives this money the Northeast Corridor will get the far largest share.” I’m not sure what you were referring to, but if it’s one of the following issues, I want to be sure that you understand, since I would disagree:

  • if the funding you refer to is for the Corridor Demonstration Pilot Program – we would envision that the funds would go to the states, not Amtrak; and it would be based on the ‘near term implementation plans’ outlined in the states’ plans — all the Tier I’s listed in the report. The NEC is a different animal and we focused the $1.990 Billion program only on the other corridors.
  • if the funding is for the National Network Demonstration program – that funds would also go to the states, or freights, to invest in the vulnerable segments. That doesn’t apply at all to the NEC.
  • if the funding is for equipment – the Strategic Plan calls for new Auto trains, as you mention (that’s not NEC equipment); and also overhauls of the Superliners and other equipment. We are also working with the states on a partnership procurement’ process whereby we contemplate issuing RFP’s for single level and bi-level corridor equipment (non electrified) that would be deployed on corridors throughout the country, with direct state involvement.

We’re just putting this together now and things will get clearer in the next few months.

My reply: RailPAC fully supports Amtrak’s efforts towards additional funding for the states for regional rail services, which can also improve Amtrak, freight and commuter services. I believe you are replying to my August President’s column. In it I said “Most of the money Amtrak gets goes to the Northeast Corridor which it is a minority user.” The NEC is the heaviest traveled commuter corridor in the country. The majority of the train run there are commuter trains.

Amtrak brings in about 2 billion dollars in revenues a year. It loses about 1.3 billion dollars a year which is the subsidy for this year. Amtrak is asking for 1.8 billion which I assume would give an additional 500 million dollars toward some of the projects you mention. Three hundred million dollars is the fully allocated cost for the National system. The subsidy requirements for the NEC ran 468 million dollars for operations. This leaves roughly 500 million dollars in Federal funds of the current 1.3 billion in Federal support. This money is used for management’s discretionary use and investment. Ninety percent of this money in Amtrak’s FY04 budget has gone into the NEC. Since 1975 Amtrak has received 27 billion dollars, 75% of that money has gone to the NEC. Of this 27 billion dollars, 90% has gone to the NEC and all other corridors. This leaves 10% for the Long Distance Trains .

The Long Distance Trains are Amtrak’s crown jewels. They bring in over 50% of Amtrak’s passenger revenues. The COAST STARLIGHT by itself brings in more passenger revenues than all the PACIFIC SURFLINERS combined. They could bring in more revenue for Amtrak, if they only had the capacity. There have been no additional Long Distance equipment bought since the 1980’s. Only since Mr. Gunn became Amtrak’s President has an effort been made to repair damaged Long Distance equipment that had long been left out of service. Additional equipment and better equipment utilization would expand ridership and increase revenues.

There is no program, let alone capital funds, committed to expand the Long Distance train fleet so ridership can expand, insure at least daily service on all trains, and create a national network of connecting trains to allow greatly expanded ridership and revenue at modest incremental costs. Such a program would greatly improve Amtrak’s bottom line and reduce its exposure to annual congressional budget battles. Too often the focus is on “saving money” at the expense of revenues. Currently brake inspections and routine maintenance are centralized at Beech Grove instead of done locally. This would make sense if the scheduling of all trains brought them close to Beech Grove on a regular basis. But this not being the case, equipment is being deadheaded thousands of miles to Beech Grove and kept out of service for days for work that use to be done at the train’s end points. This has made an existing equipment shortage worse during the peak summer season. This translates into lost revenues on Amtrak’s prime source of revenue.

Since Amtrak’s creation its Long Distance system has been greatly reduced in a effort to “save money”. The assumption was that route miles was the basis of costs, and Long Distance trains with plenty of route miles generated most of the costs. The result of each major cut of Long Distance train service was a massive loss of revenues and increase, not a decrease in Amtrak’s subsidy needs.