NARP June 2003 Hotlines

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"Amtrak Privatization: The Route to Failure" is a report released June 4 by the Economic Policy Institute (EPI), written by Elliott D. Sclar, Professor of Urban Planning and Public Affairs at Columbia University. EPI is "a nonprofit, nonpartisan think tank that seeks to broaden the public debate about strategies to achieve a prosperous and fair economy."

The report says that debate over what to do about passenger rail has "gotten off track," and should focus on modernization, not privatization. It says that the Bush Administration's approach to Amtrak is based on a search for "the correct answer to the wrong question. Let's instead get an approximate answer to the right question: How is America going to have an overall transportation system that is safe, convenient, time-competitive, minimizes environmental damage and oil dependence, helps make the nation more competitive, and-in light of national security needs-redundant?"

For a release about the new report, go to the EPI web site. For NARP's release on the report, click here. The report's executive summary and introduction and a note about the author are also at the EPI web site. The report is available for $8.95 from EPI at 1660 L St., NW, Suite 1200, Washington, DC 20036, or by calling them at (202) 775-8810.

Passenger rail financing was the topic of a Senate hearing on June 5, chaired by Kay Bailey Hutchison (R.-Tex.). She chairs the Subcommittee on Surface Transportation and Merchant Marine (Committee on Commerce, Science, and Transportation).

Hutchison discussed aspects of a bill she plans to introduce in the near future. It would include reauthorization of Amtrak through fiscal 2008 (with $2 billion in support authorized annually); authorize $50 billion in 30-year bonds ($10 billion for the Northeast Corridor and $40 billion for "freight railroad lines on the national system"); establish a "National Rail Transportation Finance Corporation" to administer the bond program; divert the current 4.3-cent rail fuel tax to a Railway Account of the Highway Trust Fund to back bonds issued by the Corporation; and create an 80% on-time performance mandate for all Amtrak routes. Failure of a route to achieve that would result in its being put out to bid for operations by other parties.

Hutchison said she was disappointed that Amtrak's request for $1.8 billion does not have more capital for Amtrak's nationwide service, but was focused on the Northeast Corridor (NEC, where most of Amtrak's infrastructure assets are located). However, Hutchison's bill would appear to address that by providing rail infrastructure funding for both NEC and non-NEC sectors, outside of the traditional appropriations process. At the full committee's April 29 hearing, she appeared very attentive when Amtrak President David Gunn -- responding to her questions -- explained that the practical way to improve on-time performance of long-distance trains was by addressing freight railroad "bottle-necks," rather than by trying to build passenger-only lines.

The top priority of the rail industry, represented at the hearing by the Association of American Railroads, is repeal of the 4.3-cent tax. That repeal has already been approved by the full House and by the Senate Finance Committee.

Another witness, James Query of Lehman Brothers, said that the 2001 terror attacks demonstrated "the importance of maintaining a national system -- just corridors are not adequate." He said that intercity passenger rail should benefit from tax-exempt funding (free of cap restrictions), as airports and ports do. He said that the federal government's previous experience with school-related tax-credit bonds has been encouraging and said, "I believe the market -- and investors' interest in such bonds -- will continue to grow."

Amtrak has begun selling eight Standard Bedrooms in the transition dorm car on the Texas Eagle, for trips starting June 8, daily through September 2. The prices and services are the same as in other cars. The rooms are sold as numbers 17 through 24 (numbers that don't occur in regular Superliner sleeping cars). The Superliner II dorm cars that Amtrak bought ten years ago included some with restroom and shower facilities for revenue passengers -- and a door separating the passenger and crew areas -- but never sold the revenue rooms for their original, intended purpose. NARP has told Amtrak for ten years that it was missing out on revenue, as a result.

If the Texas Eagle test is successful, the concept could be spread to other trains. The test began on the Eagle after one of its sleepers on some trips (three trips a week when there is also a Los Angeles sleeper) was transferred to the California Zephyr for the summer. That means there is a net reduction of about ten sleeping car rooms per week for the Eagle, but presumably a net increase in sleeping car rooms, systemwide. One coach was removed from the Eagle a week ago, apparently in error, and quickly restored.

The Amtrak board is drifting towards a vacancy situation, the impact of which on Amtrak is unclear.  Later in June, the five-year terms of two members -- Mayor John Robert Smith (R.-Meridian, Miss.) and former Massachusetts Gov. Michael Dukakis (D.) -- expire. They are, respectively, the board's chairman and vice-chairman. The board can choose a new chairman, but in September two more terms expire -- those of former Virginia Gov. Linwood Holton (R.) and Amy Rosen (a Democrat from New Jersey).

The station at Ardmore, Okla., will be rededicated on June 14, 10:30 am, upon completion of its renovation. The date coincides with the 4th anniversary of the Heartland Flyer. Speakers will include Gov. Brad Henry.

Amtrak has announced the appointment of three new members of the Amtrak Mayors' Advisory Council. They are R. Michael Kasperzak (Mountain View, Cal.), Beverly O'Neill (Long Beach, Cal.), and Charles W. Scholz (Quincy, Ill.). The 19-member council meets twice a year during the U.S. Conference of Mayors' annual and winter meetings. The next meeting is June 9 at Denver.

There are (as of June 12) 142 signatures on a bipartisan letter circulating in the House, in support of the $1.812 billion that Amtrak has requested for 2004. The goal remains 218. The initial signers were Railroads Subcommittee Chairman Jack Quinn (R.-N.Y.) and Ranking Member Corinne Brown (D.-Fla.); James Oberstar (Minn.), ranking member of the full Committee on Transportation and Infrastructure; and Rep. Michael Castle (R.-Del.). Be sure to ask our Representative to sign this letter -- his or her office will tell you if that has already happened (in which case, say "thank you"). Democrats should contact Frank Mulvey or Mike Herron (225-3274); Republicans, Steve Stallmer (225-3306).

S.104, the National Defense Rail Act that would greatly increase authorized funding for Amtrak and for corridor development, got its 33rd Senate co-sponsor -- Rockefeller (D.-W.Va.). The bill's primary sponsor, Commerce Ranking Democrat Ernest Hollings (S.C.), pointed out at an April 29 hearing that "we had a bipartisan bill last year, approved by this committee by an overwhelming margin, but couldn't get it to a vote on the floor." He said to Chairman John McCain (R.-Ariz.), "I have enough votes to get my bill out of Committee. Let's do it ... Let's get something done."

Amtrak and Michigan DOT are currently in negotiations about running the Pere Marquette and International through the rest of the current state fiscal year. The current deadline for such an agreement is June 30, and the current fiscal year ends September 30.

The focus in Michigan now shifts to next year's funding, for fiscal 2004, which starts October 1. There currently is draft appropriations legislation that would provide $7.1 million for running both trains, with no caps (such as the ones that caused so much trouble this year). Work on that legislation may wrap up in the next couple weeks, so now is a good time for Michigan residents to contact their legislators in support of the full funding ($7.1 million) for the Pere Marquette and International. See Michigan legislative web sites for contact information for Representatives and for Senators.

The U.S. Conference of Mayors met in Denver earlier in the week. Among the resolutions they passed, three had to do with passenger rail. One resolution called for reauthorization of Amtrak "with a fair and consistent source of capital and operating support" and for Congress to "provide at least $1.8 billion for Amtrak in FY 04 to sustain our national intercity passenger rail system over the next year." A second resolution expressed support for the Reconnecting America effort to integrate rail and airport facilities. A third called on Congress to "establish a dedicated federal rail infrastructure program to address needed improvements to our nation's railroad infrastructure."

In what a Washington Post editorial called an "act of bravery," Amtrak Police Officer Rodney Chambers chased a man who appeared to pull a pin from a hand grenade near Washington Union Station. Then, relying on his military training, Chambers wrestled with the man and held down a safety catch on the grenade for 15 minutes, until a Capitol Police bomb squad could arrive. The grenade turned out not to be real, though Chambers could not have known that. Police were first alerted to the man after he flashed the grenade in a store in Union Station during a robbery attempt, and then dropped it on the ground in the station's west portico.

A recent opinion column by George Will concludes that because "a nationwide poll shows 71 percent public support for subsidizing Amtrak at current or increased levels," Amtrak, "long-distance trains, legislative logrolling and all, should be counted as a cost of democracy. It is here to stay, like true love, only more so."

We certainly agree with the conclusion, though we disagree with Will on the utility of long-distance trains. Still, Will recognizes that "it is fanciful to think Congress will subsidize the Northeast Corridor without legislative logrolling to guarantee continuing subsidies of long-distance trains (routes of at least 500 miles) beyond the corridor, where five-sixths of Americans live." The column appeared in several papers over several days, including the June 8 Washington Post.

"Amtrak America - Your Travel Guide to Amtrak Routes and Services - 2003-2004" may be ordered, for free, from Amtrak's web site. The guide is similar in format -- and replaces -- the Travel Planner that was published in previous years. Other publications, including timetables, may be ordered from the same part of Amtrak's web site.

Amtrak's internet sales now account for nearly a quarter of its sales, according to Wired News. So far this fiscal year, that figure is 24%. Amtrak had $1.4 million in internet sales on June 9 -- the highest amount for any single day on Amtrak's web site.

The state comptroller of New York, Alan Hevesi, released three audit reports yesterday on that state's high-speed rail program. "The Empire Corridor is a vital part of our state's transportation system, and the link between New York City and Albany is one of the most heavily traveled Amtrak routes in the nation," he wrote, according to the Albany Business Journal. "I am concerned that today, five years and $51.5 million after the Turboliner modernization project was commenced, just two of the seven trains included in the project are in service." Problems have included management weaknesses, technical problems, and payment control shortcomings, according to the audits.

Much of the criticism was directed at the state DOT, and some to Amtrak. The audits point out that even when all seven train sets are ready, Amtrak will not have the funding to make track and grade-crossing improvements needed to allow higher speeds.

The Heartland Flyer's fourth anniversary and the restoration of the station at Ardmore, Okla., both will be celebrated tomorrow at 10:30 am, at the station. Also tomorrow, the Dunsmuir Railroad Days will have various events, including an unveiling of the restored Amtrak station.

The City of Chicago released a $1.5-billion plan to improve railroad infrastructure in the nation's busiest railroad hub, on June 16. The plan comes after two years' discussion among officials of the city, State of Illinois, federal government, Association of American Railroads, Amtrak, Metra, and freight railroads. The plan includes 25 highway-rail grade-separation projects, and six rail-rail separations. Those six include three on Metra's SouthWest line (to Orland Park), two on Metra's Heritage line (which also has Amtrak's St. Louis trains on it), and one at the crossing at Englewood of Metra's Rock Island line and Norfolk Southern's main line to the east (Amtrak's route to Hammond-Whiting and the east).

Another feature is the elimination of the St. Charles Air Line along the near South Side, which is used by Amtrak's City of New Orleans and Illini. A $20-million project, early in the process, provides a way for those trains to reach the Norfolk Southern line (at Grand Crossing), giving them a faster, more direct route to Union Station. However, the Cardinal is the Amtrak route with the worst freight-train interference in Chicago. For the Grand Crossing project also to benefit the Cardinal, renovation of another connection (not in the plan) would be required to enable the Cardinal to join the IC line near Harvey, eliminating the train's present, congested route through Auburn Park.

A feature article on Amtrak in the June 18 New York Times highlighted Amtrak's renewed interest in infrastructure renewal, and contrasted it with the situation of a year ago, when Amtrak faced a $200-million shutdown crisis. A concrete-tie-laying machine, now working in the Wilmington area after being idle "for the last few years," was highlighted.

The article pointed out what readers of this Hotline already know -- Amtrak's authorization and appropriations future remains murky. Among the featured quotes causing pessimism was one from House Transportation Appropriations Chairman Ernest Istook (R.-Okla.), at a hearing April 10 -- "There is a grave question whether Amtrak can continue to operate without dragging down the transportation system for the rest of the country."

BART's Colma-Millbrae extension, 8.7 miles, opens June 22. The new Millbrae station will be served both by BART and Caltrain, the first direct link between those two systems. There is also a short spur to the San Francisco Airport (international terminal), which Caltrain passengers will have to use to reach the airport.

Currently, Caltrain passengers can use a free shuttle bus to get from the existing Millbrae Caltrain station (which closes today) and all areas of the airport. But that bus will be discontinued, and Caltrain passengers then will have to use the BART spur, which costs $1.50 and serves only one airport terminal (international). Transit advocates earlier had argued, unsuccessfully, for an intermodal BART/Caltrain station closer to the airport that would be served by the airport's internal circulator system, connecting both BART and Caltrain to all parts of the airport.

Nevertheless, the direct BART link to the airport will be very useful to people headed to and from points north of the airport, including the city of San Francisco.

Weekend Caltrain service continues to be suspended during a major reconstruction project.

MetroLink, the St. Louis-area light-rail operator, opens a 3.5-mile extension from Belleville Area College (Ill.) to Shiloh-Scott, June 23.

PATH's Exchange Place station in Jersey City, N.J., reopens June 29. It has been closed since the September 2001 terror attacks. This will reestablish a link between the PATH system and NJT's Hudson-Bergen light rail system. PATH service from Exchange Place to Lower Manhattan will resume in November, after an extensive refurbishing of that route's Hudson tubes and completion of a temporary station at the World Trade Center site.

The Citizens for a Sensible Transportation Solutions, of Tucson, Ariz., are hosting a display of a full-scale mock-up of a Minneapolis light-rail car, through June 24 (except Sunday). The display is in the Main Library Plaza on Church St. The groups wants to see light rail come to Tucson as well, which will be the subject of a referendum in November.

Union Pacific has donated the former Missouri Pacific station in Poplar Bluff, Mo., to the Committee to Save and Restore the Historic Train Depot. The only current use of the building is a waiting room for Texas Eagle passengers. The room is cared for by two members of the depot committee. The next projects for the committee are repairing the roof and exterior steps.

The American Passenger Rail Coalition, which represents manufacturers and suppliers, presented its annual Rail Leadership Awards on June 17. Sen. Arlen Specter (R.-Pa.) and Rep. James Oberstar (D.-Minn.) were honored at Washington Union Station.

New Jersey Transit was expected to award a contract for a $5-million environmental impact study today, for a new Hudson tunnel, according to the New York Daily News. The tunnel, expected to cost $5 billion, would expand track capacity between Penn Station in Manhattan and New Jersey.

Amtrak has expanded the capabilities of its "Julie" automated voice response system. Julie now can process credit card transactions. Previously, the system had to send a customer to a live agent at that point in a reservations process. Julie, which was designed by SpeechWorks, has gradually been given more tasks since first introduced in April 2001. Amtrak estimates that Julie has saved the company $13 million so far.

There was major movement by House and Senate authorizing committees on Amtrak and on general rail infrastructure investment this week.

The House Transportation and Infrastructure Committee approved on June 25 a three-year Amtrak reauthorization, H.R.2572, which allows up to $2 billion a year for Amtrak for fiscal years 2004, 2005, and 2006. It requires Amtrak to provide an annual business plan for Congress and the DOT with "separate accounting" (including ridership, revenue, and expense targets) for the Northeast Corridor, "commuter" service, long-distance service, state-supported service, and other commercial activities (such as mail and "contract operations"). That all is to be updated every two months. Amtrak is also barred from incurring operating losses on any contract commuter or express contract.

The Senate Commerce Committee also approved a $2-billiion-per-year Amtrak reauthorization, on June 26, for six years. It came as a Hutchison (R.-Tex.) amendment to the Surface Transportation Safety Reauthorization Act of 2003, which the Committee also approved. This bill (no number) contains components of TEA-21 renewal over which the Committee has jurisdiction (such as hazardous materials shipments and highway safety), and will be introduced later as an amendment to the larger TEA-21 renewal legislation.

Chairman John McCain argued for leaving Amtrak out and dealing with it in a separate bill, later, because "everybody knows that Amtrak has to be reformed." But Hutchison presented her amendment as a placeholder in the "must-pass" surface transportation legislation and said that details on Amtrak can be revisited later. An unhappy McCain said its inclusion would cause the bill to bog down on the Senate floor.

The appropriations process -- which will be difficult -- determines how much Amtrak will actually get. But is it is helpful to get both authorizing committees on the record in a positive way. The House appropriations subcommittee chaired by Ernest Istook (R.-Okla.), an outspoken critic of Amtrak, is expected to consider its 2004 DOT funding bill (including Amtrak) on July 10, with possible full committee action the following week.

Also June 25, the House Transportation and Infrastructure Committee approved a ten-year high-speed rail bill, "Railroad Infrastructure Development and Expansion Act for the 21st Century" (RIDE-21, H.R.2571), that lets states issue $12 billion in bonds that are federally tax-exempt, and $12 billion in bonds with federal tax credits, and expands the size of the Railroad Rehabilitation and Infrastructure Financing loan and loan guarantee program to $35 billion. It also reauthorizes the Swift Rail Development Act at $100 million a year (up from about $30 million appropriated this year) and converts that program from technology development to corridor development.

RIDE-21 requires elimination of highway grade crossings where they would interfere with high-speed operation. It also requires overall corridor designs with sustained speeds of 125 mph, although -- once DOT approves a design -- the project can be phased so that 125 mph is years away. RIDE-21 does reduce to 110 mph the threshold for a long- established but as yet unused tax-exempt bond provision for high-speed rail projects. Most states (with the notable exception of California) have been planning 110-mph service with enhanced grade crossings.

Because of its bond provisions, RIDE-21 is likely to be referred to the House Ways and Means Committee, which typically would have 45 days to act to change the bills, if it chooses to.

The sponsors of both House bills are the chairmen and ranking Democrats of both the committee and subcommittee (Young, R.-Alaska; Quinn, R.-N.Y.; Oberstar, D.-Minn.; Brown, D.-Fla.).

The Senate Commerce Committee -- in Hutchison's amendment -- also included a placeholder for rail infrastructure investment, in the form of a "Rail Infrastructure Finance Corporation ... to support rail transportation capital projects through the issuance of rail capital infrastructure bonds." The Railway Supply Institute is a prime supporter of this concept, but NARP also has supported this in its several statements to committees this spring. Negotiations among Senators will continue on the details of this.

The Hutchison amendment, which was also worked on by others (such as Hollings, D.-S.C. and Carper, D.-Del.), is noteworthy also because it correctly establishes rail as a mode worthy of consideration in the context of "surface transportation" legislation.

The need for federal investment in rail infrastructure (passenger and freight) was discussed at a June 26 hearing of the House Transportation and Infrastructure's Railroads Subcommittee, chaired by Jack Quinn (R.-N.Y.). Surface Transportation Board Chairman Roger Nober said, "Freight railroads are unable to make the level of capital investment in their networks that those systems presently need."

Tim Gillespie, speaking for the Railway Supply Institute, advocated creation of a private, federally chartered Rail Finance and Development Corporation (similar to what the Senate Commerce Committee approved the same day) that could issue up to $50 billion in tax-credit bonds for capital investment in rail-related infrastructure not generally eligible for transportation trust fund expenditures under TEA-21. However, speaking for the Bush Administration, Federal Railroad Administrator Allan Rutter opposed such bonds.

House appropriators this week got a letter signed by 219 Representatives asking for full funding ($1.812 billion) for Amtrak in fiscal 2004. Click here to see a list of signers.

High-speed rail funding was vetoed by Florida Gov. Jeb Bush (R.) on June 23. The legislature had provided $7.2 million in the next state budget for high-speed rail. An amendment to the Florida Constitution says that construction on the system must begin by this November. Bush has always opposed high-speed rail and has tried -- unsuccessfully, so far -- to get the legislature to send the matter back to voters, who approved the amendment in 2000.

Bush left in the budget $4.9 million for intermodal terminals in Tampa and Orlando that could be used for high-speed rail. Bush believes that allows him to still comply with the amendment.

A trestle fire in the southern Chicago suburb of Riverdale, Ill., on June 22 caused major disruption all week to Amtrak, Metra, and Canadian National services. The trestle, at 137th St., is on the six-track, partially electrified, former Illinois Central main line. At the time of the fire, a contractor was making repairs to the bridge.

Amtrak and CN have been able to detour their diesel-electric trains around the site (with 60-90 minutes' delay for Amtrak), but Metra's electric service south of Kensington was annulled. Metra runs on a segregated, parallel line, and many of its electric trains are marooned on the south end of the line, beyond the burned trestle. Metra hoped to have the bridge repaired and service restored by July 2, and added service to its Rock Island route to the west. But Amtrak said it could take several weeks for the City of New Orleans and Illini to be restored to their normal route.

While June 30 is the deadline for funding progress for Michigan-supported trains (Pere Marquette and International), we understand that there is, for the moment, adequate funding ($7.1 million) for the trains in the appropriations bill for fiscal 2004, which starts October 1. As we reported June 13, negotiations between Amtrak and the state to continue running the trains in the interim continue.

The Capitol Corridor management in California is planning a test run of a passenger train between Sacramento and Reno, as a way to gauge operating conditions and running times. The goal is twice-daily service to Reno by 2007, and, possibly, some form of seasonal ski train.

Connex, one of Britain's biggest, private rail operators, will lose its South Eastern franchise at the end of this year, two years before it was supposed to. According to BBC, the Strategic Rail Authority blames Connex's poor financial management. The Authority gave Connex $96 million in public funds in December 2002 to keep trains running, with the condition that Connex's finances also improve, but Connex recently asked for another $330 million. Connex is part of a consortium that is set to take over operation of Boston's commuter trains from Amtrak next week.