Hotline #160 - October 13, 2000

With Congress apparently headed towards approving a tax package next week that could include the rail bond bill (High Speed Rail Investment Act), the message is simple -- Ask Democratic Senators and Representatives to tell the White House to include the rail bond bill in the tax package; ask Republican legislators to make the same request to Speaker Hastert and Senate Majority Leader Lott. Time is short, so please use electronic means (see the NARP web site). Congress has adjourned until Tuesday, October 17.

The vehicle bill for rail bonds -- S.3152, the Senate version of the Community Renewal and New Markets Act -- now has 29 co-sponsors. Of those, eight are not already among the 57 sponsors of S.1900, the High Speed Rail Investment Act. Thus, a total of 65 Senators are sponsoring the rail bond bill in one or both forms. The House version of the High Speed Rail Investment Act, H.R.3700, now has 168 co-sponsors, six more than a week ago. See our web site for a full list.

H.R.4475, the fiscal 2001 transportation appropriations bill with (only) $521 million for Amtrak capital, is on the President's desk awaiting signature.

Two new high-speed rail corridors got federal designation October 11. Transportation Secretary Rodney Slater named a two-prong Northern New England Corridor (Boston-Portland-Auburn and Boston-Montreal) and a "Y"-shaped South Central Corridor (San Antonio-Austin-Dallas/Fort Worth with branches to Oklahoma City-Tulsa and to Texarkana-Little Rock).

Slater also named extensions to existing corridors -- Chicago Hub (Chicago-Toledo-Cleveland, Cleveland-Columbus-Cincinnati, and Indianapolis-Louisville), Gulf Coast/Southeast (Birmingham-Atlanta and Macon-Jesup), and Keystone (Harrisburg-Pittsburgh). Finally, he clarified that the 1992 designation of the California corridor was not meant to specify a particular route, but rather to link particular metropolitan areas, making the Coast Route clearly eligible. See also the DOT release or click here for more information.

This brings to ten the total corridors that have been designated. TEA-21 allows for one more. Section 1103(c) of TEA-21 makes designated routes eligible for a portion of $5.25 million in dedicated annual federal funding for grade crossing improvements "where railroad speeds of 90 mile or more per hour are occurring or can reasonably be expected to occur in the future."

The Section 1103(c) corridors also are eligible for 90% of the funding in the High Speed Rail Investment Act, should that be enacted. The Clinton Administration's position has been ambiguous. Secretary Slater told reporters on October 11, "We are working with Congressional leaders on funding the corridors ... I met with [Treasury] Secretary Summers [who has had problems with the bond bill]. I think we're going to get it." Slater appeared to catch the irony of naming new corridors while "negotiations" on the bond bill continued within the Administration, the only plausible method for serious funding of corridor improvements (vs. TEA-21's token grade crossing dollars).

In this regard, an October 12 Washington Post article said, "Congressional and Amtrak staffers are waiting for word from the White House, which so far has been silent. They agree that if the White House strongly supports the [High Speed Rail Investment Act], it will pass. If the White House remains silent, it will have a tough time passing. Failure could be embarrassing, since the administration has made high-speed rail one of its mantras, and Vice President Gore adopted it early as one of his fields of technology."

Amtrak ridership in fiscal 2000 exceeded 22.5 million. An Amtrak release of October 12 gave a lot of credit for that to the Satisfaction Guarantee program introduced in July. Ticket revenue was up 10%, to $1.103 billion. Over half the ridership (12.9 million) and revenue ($596 million) is attributable to the Northeast Corridor business unit. Cost figures, which have been of concern to the Department of Transportation Office of Inspector General and to the General Accounting Office, have not been released yet.

Two Union Pacific derailments have caused one trip of the Sunset Limited to be annulled altogether this week. Train 2 (departing October 10) was annulled from Los Angeles to San Antonio due to freight-train derailments near Tucson and Sanderson. The latter location involved damage to a bridge and was expected to reopen today at the earliest.

On October 3, the Surface Transportation Board (STB) issued a 348-page notice of proposed rulemaking about railroad mergers. Comments are due November 17. The STB proposed to shift the burden towards railroads proposing mergers. It also requires descriptions of how affected lines will continue to fulfill existing performance agreements with Amtrak and commuter carriers.

Citing the STB's anti-merger bias, and the way Wall Street has pummeled BNSF stock despite the railroad's strong performance, BNSF Chairman Robert Krebs this week told the Washington Post that his company would scale back capital investment in favor of stock buybacks. BNSF will halt a plan to double-track parts of the Minneapolis-Seattle line that Amtrak uses; will not finish double-tracking the Amarillo transcontinental main line; will not build a needed $50 million locomotive facility in Texas; and has no plans for new locomotives beyond 50 under contract. Krebs speculated that government and Wall Street antagonism towards his well run railroad would lead to diversion of freight from rail to road.