Hotline #707 -- May 20, 2011

Amtrak announced yesterday that it is developing a business plan that will look to private sources of investment to bolster public funding for capital improvements and equipment purchases for high-speed rail on the Northeast Corridor.

“Amtrak will aggressively pursue private investment, in combination with funding from the federal government and from other public sources, to achieve our goal of initiating true high-speed rail from Washington to Boston,” said Al Engel, Amtrak Vice President, High-Speed Rail, in a prepared statement.

Amtrak revealed that it issued a request for proposals in April, and has already received interest from a number of private investment firms.

Amtrak will look for a business plan capable of identifying and developing public and private funding sources.  A successful proposal will consider central financing issues such as risk, credit, debt, and the phasing of investment, as well as provide an outline for how to meet a project delivery timeline and achieve financial goals.  Amtrak is recognizing that public investment will continue to play the central role, and is requiring consultants to provide information about how this business plan would inform the company’s fiscal year 2013 budget request.

In the last few years, Amtrak has been maneuvering—within the fiscal constraints imposed by its limited capital budget—to develop 200 mph-and-higher train service on the Northeast Corridor. 

“Even with limited funding, Amtrak is continuing to make bold moves forward toward realizing its vision for 220-mph next-generation high-speed rail in the Northeast Corridor,” said Engel.

Steps have included the unveiling of an ambitious, $115 billion vision plan, which includes “a stair-step approach” for a structured path to achieve 220 mph service first between Philadelphia and New York, then New York to Washington, followed by New York to Hartford, and finally Hartford to Boston.  Amtrak has also ordered additional equipment for the Acela Express—a move that will increase seating capacity by 40%.  And earlier this year, the company announced the Gateway Project, which includes a new Portal Bridge over the Hackensack River and new rail tunnels under the Hudson River, easing congestion at the U.S.’s busiest passenger rail bottleneck.

Private sector involvement almost certainly depends upon a steady source of public funding that would give investors the confidence that their efforts would be backed in coming years.  In the near-term, that requires the reinstatement of funding for high-speed rail in the FY 2012 budget (the program was zeroed out in the 2011 budget passed in April), an inclusion that is far from certain in the current fiscal climate.

Proposals are due to Amtrak by June 10.


The Senate Appropriations Subcommittee on Transportation held a hearing on passenger rail on May 17, expressing optimism about the potential for continued growth of the network while recognizing that the funding picture for transportation is gloomy.  Senators also voiced concerns over rail security in the wake of new intel secured from Osama bin Laden’s compound.

Chairman Patty Murray (D-WA) and Ranking Member Susan Collins (R-ME) began by asking the witness panel—Federal Railroad Administrator Joseph Szabo and Amtrak President & CEO Joseph Boardman—what additional steps were being taken to ensure the safety of trains in light of recent information that Al Qaeda had targeted train and transit services on the 10th anniversary of the September 11th attacks. 

Boardman responded that Amtrak’s security forces patrol parts of the network identified as vulnerable in the wake of the 9/11 attacks, and spoke highly of Amtrak’s bomb-detection K-9 units.  Boardman also urged development of real-time, rail gauge-verification technology that could detect if tracks had been tampered with, though he echoed Szabo’s statement that bringing these technologies to fruition would require Congress to provide a steady research & development budget for the FRA.

Tight Funding Picture for 2012

Chairman Murray recognized the Obama Administration’s bold vision for high- and higher-speed intercity passenger rail, but expressed her belief that given the scarcity of federal resources, it is important to develop a benefits model that shows the return on the public’s investment in trains.  Murray asked about the FRA’s national rail plan, which would quantify benefits, the initial and long-term capital and operating costs, and provide insight where money should be directed in the near- and longer-term.

Szabo replied that the plan was a few months away, and took the opportunity to promote the Administration’s plan to remove Amtrak from direct Congressional funding and place it under the budget of his agency’s budget.

“Historically, federal investment in intercity passenger rail was a bilateral arrangement — FRA grants to Amtrak,” said Szabo.  “Going forward, many different arrangements would be available to develop and operate intercity passenger rail.  There will also be an important role for private capital investment as well.  The transition has begun with the funding provided in the Recovery Act and in FY 2010.”

Collins applauded what Amtrak has done in her state with the Downeaster, and congratulated the company on reducing its debt burden.  But as The Wall Street Journal reported, she also said, “‘I don’t understand how you can be serving more passengers than ever before’ while losing more money…”

Boardman cited the long-distance routes and the fact that increased state payments for shorter routes anticipated in the 2008 reauthorization law have not materialized.  But he also was quick to point out that Amtrak is covering more than 85% of its total operating costs from revenues. 

[Through the first six months of the year, compared with the same months a year earlier, Amtrak figures indicate an improved financial performance for all three service categories – Northeast Corridor, other short corridors, long-distance.  However, this trend is not projected to hold through the last half of the year, partly because of increased fuel costs and partly because—in the case of the long-distance trains—capacity is limited and this is a time of year when the trains were already full or nearly so a year ago.  Of course,  it is not surprising that conservative budget projections for future months and years are less impressive than actual results from FY 2010.]

Collins asked if the weakest routes should be terminated.  Boardman said that would just mean the “next weakest” routes would become the new weakest and “we’ll have be having this same discussion” about those routes.  “I think you run them all, or you don’t run any of them.  There is also a business decision in this, in that discontinuing the service would result in $1 billion in (labor agreement?) costs.”

Boardman instead framed the funding of the trains as a policy question: whether America will provide transportation choices for rural communities, for seniors, and for disabled travelers.  He said 42% of Amtrak’s disabled travelers use the long-distance trains.

Boardman also made the case for a steady source of funding, arguing that a properly maintained rail network would lower costs in the long run.

“As you can appreciate, continued capital funding will allow us to reduce or eliminate problems that translate in turn into higher levels of operating expense,” said Boardman. “Over the long term, an effective investment in capital can translate into a permanent reduction in expenses, and I hope the subcommittee members will consider this carefully as they discuss our proposed funding levels in coming months.”


Washington Post Attacks California Project:  The Washington Post, ran an editorial yesterday under the headline, “Runaway train: More evidence that California is going off the high-speed rails.” 

The editorial begins, “There’s a scandal brewing in California…We refer to the $43 billion high-speed rail project in that state…California’s High-Speed Rail Authority is bound and determined to start building the railroad before its long-term funding is clear…” Probably many projects now taken for granted would not exist if construction had been postponed until “long-term funding” was assured.

The full editorial is here.  The Post takes letters at letters(at)washpost.com" _mce_href="mailto:letters(at)washpost.com">letters(at)washpost.com and says they “should be fewer than 200 words.” More guidance on letters to the editor can be found here.


A bipartisan group of Senators introduced legislation last week that would extend the Department of Transportation’s Transportation Investment Generating Economic Recovery (TIGER) program though 2018, though the group did not specify how much they would like to see authorized for the program.

Senators Patty Murray (D-WA), Susan Collins (R-ME), and Dick Durbin (D-IL) are sponsoring the proposal to extend the TIGER program, which is designed to fund large projects that will have a significant impact on the economic development of the nation, a metropolitan area, or a region.  It targets projects that are important but haven’t been funded for whatever reason: because the project is intermodal, and fails to fall under the jurisdiction of a traditional agency; because the project spans a number of states, falling outside of any one state’s transportation budget; or because the project is too expensive for local transportation officials to fund.  A significant portion of the funds have gone to improve rail rights-of-way, benefiting both freight and passenger trains.

The volume of submissions is proof that the program is addressing infrastructure that has been underdeveloped, with TIGER I applications adding up to almost $60 billion worth of projects (40 times the available $1.5 billion), and TIGER II generating $19 billion worth of applications competing for a pool of $600 million.

“I have been thrilled by the successful transportation projects that have been funded in the two years since I established the TIGER grant program.  These projects are putting people to work, boosting regional economies, and improving our country’s infrastructure,” said Senator Murray, who chairs the Appropriations Subcommittee on Transportation, Housing and Urban Development and Related Agencies. “I am proud to introduce this legislation today to authorize more of these critical infrastructure investments that will help communities and businesses succeed in the 21st century economy.”


Amtrak will be changing out how it deals with employee accidents and safety violations to better prevent future reoccurrences.

The passenger railroad is transitioning to a “behavioral-based safety system rather than a rule-based safety system,” Amtrak President & CEO Joseph Boardman told Progressive Railroading this month.

The initiative, labeled the Safe-2-Safer injury prevention program, will try to improve the identification of unsafe behavior by changing how employees are disciplined for safety violations.  The company will instead focus on isolating and modifying unsafe behavior.

“At Amtrak, you won’t be disciplined for an injury for violating a rule,” Boardman said. “That’s not to say that discipline will go away, but we want employees to look at how they do things.”

The program was rolled out in the Northeast and Mid-Atlantic last year, and is currently being incrementally implemented throughout the entire company.


Travelers Advisory

• Work on Illinois’ high-speed corridor resumed today, affecting Amtrak’s Lincoln Service and Texas Eagle trains. Work to upgrade 96-miles of railroad tracks resulted in the substitution of chartered motorcoaches for some Lincoln Service trains, as well as the detour of the Texas Eagle, between Chicago and St. Louis. Crews will install a quarter-million railroad ties.  This, along with other upgrades, will allow Amtrak trains to reach speeds of up to 110 mph.  The current top speed is 79 mph. Detours and motorcoaches will operate from May 20 to May 24, and June 1 to 9.  The current phase of the upgrade is expected to be completed by the end of the summer construction season, and trains will reach the 110 mph benchmark by next year.
• The Amtrak Thruway bus stop for Red Bluff, CA has been relocated to the TRAX Bus & Ride transit center, located at Rio and Walnut Streets. The move, requested by Caltrans, will make it easy for Thruway passengers to connect with Tehama County transportation services