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I just read on this week's NARP action alert (http://www.narprail.org) that out of the $1.2 billion Amtrak is asking for, only $200 million is designated for long distance trains. So why is Amtrak threatening to shut them down if it doesn't get the entire $1.2 billion if it only needs $0.2 billion part to keep them running?!?
And guess what? The Bush budget of $521 million would more than cover the needs of the long distance trains!
Either I'm reading this wrong, NARP's figures are incorrect, or Amtrak is holding the long distance trains hostage to get money for the NEC and other corridors.
If this is true, then I am more convinced than ever of two things: 1. That the NEC is the real financial drain, not the long distance trains. 2. That the National Railroad Passenger Corp. needs to get out of the regional corridor business, leave those to the states, and get on with the business of operating the NATIONAL system.
------------------ Trust God, love your neighbor, and never mistake opinion for truth. -Mr. Toy
"Amtrak will request a federal grant of $1.2 billion to maintain the current system, including $840 million for capital investment, $160 million for excess railroad retirement taxes and $200 million to support unprofitable long distance train service. If Congress and the Administration choose to provide less money, Amtrak will not be able to operate the current system as it is."
A big question is how much of the $840 million for capitol investment will go to the NEC and how much to long distance service. ------------------ Trust God, love your neighbor, and never mistake opinion for truth. -Mr. Toy
[This message has been edited by Mr. Toy (edited 02-12-2002).]
PullmanCo Member # 1138
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Vast majority, with some going to Portland-Seattle and LA-San Diego runs.
Minimalist minority.
See the vote laydown above...
quote:Originally posted by Mr. Toy: A big question is how much of the $840 million for capitol investment will go to the NEC and how much to long distance service.
------------------ The City of Saint Louis (UP, 1967) is still my standard for passenger operations
rresor Member # 128
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The issue is cash flow. Amtrak needs to conserve cash, and the long-distance trains are unfortunate in that their costs are almost 100% variable. If they stop running, Amtrak saves upwards of $100 million in payments to freight railroads for track use, plus the wages of on-board crews and station staff, plus maintenance on the equipment. West Coast services already receive lots of state money, so they'll stay, and cutting trains on the NEC won't save much since the fixed costs will continue.
Of course, Amtrak has been deferring both maintenance and capital expenditures on the NEC and everywhere else, but the only big, quick, savings left in the budget is the discontinuance of the long-haul trains.
It's also a convenient political tactic designed to rile up the maximum number of Congresspeople.
jimmymac Member # 1182
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If the long distance trains are stopped, what is the basis for Amtrak to exist as a "National" Passenger Railroad Corp? Tax payers in in the rest of the country would say to hell with it. It would become the operator or co-operator of three disconnected regional transit routes. Also, how much severence pay would all those laid off union employees receive?
Mr. Toy Member # 311
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IMHO, I think Congress should call Amtrak's bluff by giving Amtrak Bush's proposed $521 million for 2003 with the requirement that all of it be spent on long distance trains. None of it could be spent on the NEC.
That will probably put the cap on Amtrak's bogus claims that the NEC is "profitable." If it was truly profitable, it shouldn't need any money from Congress, should it?
------------------ Trust God, love your neighbor, and never mistake opinion for truth. -Mr. Toy
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To Mr. Toy: If the NEC isn't profitable it is not because of the fares. I have been comparing fares for equivalent service on the West Coast, Southeast and the NEC. The NEC appears to have the highest fares. As an example: The lowest round trip fare between Philadelphia and Washington DC on the Acela Regional with an unreserved coach ticket is $86. Metroliner Business Class is $190 and Acela Express Business Class is $212. San Diego to LA on the Surfliner is $76 Business Class and Charlotte, NC to Raleigh, NC on the Carolinian, Business Class is $56. I haven't checked the Chicago routes yet.
jimmymac Member # 1182
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To Mr. Toy: I checked the Illini from Champaign-Urbana to Chicago, approximately equivalent distance from Phila. to DC. Rail fare is $39 with business class an additonal $28. So the NEC is the most expensive route.
Mr. Toy Member # 311
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I'm not saying the NEC's fares are too low. I'm saying the NEC's fares aren't covering expenses as Amtrak claims. If they were, they wouldn't need a a pile of money to keep them going, and they wouldn't have a $5 billion infrastructure maintenence backlog.
I fully agree that Amtrak needs subsidies, but Amtrak needs to be honest about where the money goes.
For what its worth, the California corridors cover less than 50% of their expenses from ticket revenue.
------------------ Trust God, love your neighbor, and never mistake opinion for truth. -Mr. Toy
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I ride the Surfliner and the NEC from time to time, and have noticed that fare discrepancy too. Riding the NEC is definitely expensive. The high-speed tracks, overhead and signal systems probably cost alot to maintain... (It is great to experience Amtrak at its speediest, though).
jimmymac Member # 1182
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I also noticed that NC, IL and CA provided additional subsidies for Amtrak trains running through those states. PA also pays for the Keystone service. Nothing evident however from NJ, MD, or NY for NEC support. The cost of the NEC may be more than Amtrak cares to admit. I also heard that losses from the corridor operations are spread over the entire national system making the long distance trains appear to lose more money. Can anyone confirm this?
DC2001 Member # 542
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There are so many things about Amtrak that don't add up. Must be some form of "new math".
Perhaps someone can explain it all to me. A billion dollars is the supposed minumum to find the profitable Northeast Corridor for the next year; $200 million (one-fifth the NE total) to support the "money losing" long-distance trains. So, assuming Amtrak recieves only the $521 million proposed by the Bush administration, it will be forced to discontinue all overnight trains, saving that $200 million.
Problem is, actually discontinuing those trains will not save $200 million, or anything close to it. Let's see, the employees on those trains have (from what I've read - somewhere) up to five years of labor protection, so they still have to be paid not to work. Then there are the passenger cars, most of which were sold and leased back to generate cash in past fiscal years. Amtrak remains obligated (depending on legal specifics) to those payments, on cars that will now generate $0 in revenue (I once heard $900/day for a Superliner II Sleeper). They cannot be used in the Northeast at all, with limited utility in California or Chicago, and there are limited other markets to sell or re-lease the cars. Oh, also don't forget the leases on 207 P-42 diesels, basically all surplus (sufficient P-40's, F-59's, and P-32's to cover regional trains).
Amtrak's mail & express division - including the ExpressTrac Reefers - essentially goes out of business. More lost revenue, and this swill start to dwindle long before October 1. The Post Office and other shippers will start to shift business to other carriers, and in a (possibly likely) last-minute reprieve for LD trains this business may be permanantly lost. I wonder if there is a penalty for getting out of a mail contract early?
Finally, while fixed costs would decline somewhat if you are running fewer trains (ignoring the fact that the largest "fixed" cost is the NE corridor), the bulk of those overhead expenses will remain, only now the cost will be allocated over fewer trains. That $5 per passenger profit often quoted for the Metroliner will become a per-passenger loss of much more than that amount.
Bottom line, cutting LD service will not save Amtrak $200 million. It may not save a single penny, depending on whose financial numbers you believe, but it absolutely will not be but a fraction of that $200,000,000. The corridor costs a lot more, but is provided as a "public service" even if there were no Amtrak trains whatsoever. So, somebody has to pay for that corridor, if not Amtrak then another federal and/or multi-state agency. It will cost about the same regardless.
That $1.2 billion request, defined as $840 for the corridor, $160 railroad retirement, and $200 LD service, doesn't even tell the whole story. Amtrak will pay about $330 million in debt repayment next year, and (supposedly) some $53 million in losses on regional trains (outside the Northeast).
Mr. Toy Member # 311
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DC, your assessment is absolutely correct, and is further reason to believe that Amtrak's threat is a sham. If Amtrak actually does carry out its threat it will be the end of Amtrak, NEC and all. Taxpayers from Maine to Hawaii will balk at giving any money to Amtrak for the NEC since it won't do them any good. Then the Northeast states will have to take up the burden of financing the NEC.
I think George Warrington and Michael Dukakis are smart enough to figure that out. They are just hoping Congress will be dumb enough to go along with the charade.
------------------ Trust God, love your neighbor, and never mistake opinion for truth. -Mr. Toy
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Getting some good debate here on the Railforum. Let me repeat something George Warrington said when he dreamed up the MBNA or MNBA, I don't remember which, it doesn't matter none of it came to fruition except the Janesville Joke. He said" We can't cut our way to prosperity." That's exactly right, each and every discontinued train decreases the nuber of people on a host of other trains, regional & long distance. One set of figures showed about fifty percent or more of the passengers into Chicago transferred to another train. The option I favor is to put some people into the upper echelons of Amtrak that are dedicated to preserving & yes expanding our national rail system. Reggie
reggierail Member # 26
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Oh Yeah, did I forget to mention that the NEC runs 40 or 50 trains a day at an occupancy of around 40%. There are only 3 trains a week from LA to Houston, New Orleans & Florida, often sold out as are most of the other LD trains in the country. Ain't something F&%#$n wrong with that picture?
Count the votes in the Congress. The resources follow the votes.
NEC voting block trumps ANY single other route.
It's not a matter of load factors. It's not a matter of cost factors. It is a matter of lobbying.
Can I make it any simpler???
John
------------------ The City of Saint Louis (UP, 1967) is still my standard for passenger operations
Mr. Toy Member # 311
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Pullman, as you point out there are more votes per route in the northeast, but the total number of votes outside the northeast vastly outweigh the votes within the northeast. If the long distance trains disappear the relative handful of votes in the northeast won't be enough to keep it funded with federal dollars coming from everywhere else. Without the national system behind it, the northeast corridor is just another regional train and Amtrak will have no more reason to exist. That's why the threat to shut down the long-distance trains is so irrational. It is suicide for Amtrak.
------------------ Trust God, love your neighbor, and never mistake opinion for truth. -Mr. Toy
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