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With a new administration in D.C., it's time to think outside of the box because passenger rail's survival just may depend on it

Saturday, June 25, 2011

Have We Lost Our Way?

I ask that question because lots of people in the rail community have seemingly lost their minds over the recent news regarding the Mica-Shuster plan to transfer Northeast Corridor ownership from Amtrak to the USDOT as well as intercity rail competition. 


First of all, contrary to all of the mainstream media reports, the proposed legislation is not to privatize Amtrak, just to strip the carrier from owning the NEC. I have provided good reasons why Mica-Shuster is long overdue here and over at the Transport Politic


Second, the NEC is one of only a few short-distance routes that is not state-subsidized. Eventually, the transit agencies will have to pay their fair share for using parts of the 457-mile route. 


Third, what happens in the Northeast will have no ripple effect on commuter routes operated by Amtrak, so I find this report to be pretty laughable.


Don't Get It Twisted
As good as the NEC divestment plan sounds, it should have applied to all railroads because owning all that infrastructure is a financial drag. In exchange for a nonprofit track maintenance organization jointly owned by the USDOT and a private firm, all railroads would pay an annual access fee as a way of keeping infrastructure in a state of good repair


For hauling freight, it may be based on mileage per Gil Carmichael's Interstate II vision (e.g., a freight train that moves goods 3,000 miles is assessed a 75 cents/mile tax). 


Meanwhile on the passenger front, the passenger entity would be charged for extra roundtrips. For long-distance routes, the threshold will be six trains a day so any additional roundtrips would be assessed a sensible fee for the extra trains. On the corridor side, the states and the high speed authorities will set a specific number of roundtrips once a service is initiated on non-Express HSR routes. For example, the MWHSRA wants to provide 16 trains between Chicago and Cleveland. If the trains prove to be extremely popular, the operator will add more frequencies. Perhaps, a 1% surcharge in addition to the operator's annual access fee could be the answer.


Reforming Rail Will Be Hard, Not Easy and Will Take Steps, Not a Leap
My take is that nobody ever said that reforming passenger rail would be easy. Everyone should have known that there would be difficulties ahead. PRIIA Sections 214 and 502 are supposed to supersede the Association of American Railroads' stance of only wanting Amtrak on their rails (after all, other companies have been eligible to operate intercity routes since 1997). 


The midterms were about the worst thing to happen to railfans because the new-found confidence that was on display in '09 and last year has quickly reverted to survival mode. While we can't do anything about the election results, the focus on the big picture was something that was controllable. When all of the talk about the stimulus funds was taking place, I was one of only a few people who warned the community to not take their eyes off of the ball ("Enjoy the distribution of HSR stimulus grants but make sure that competition guidelines are enforced for long-distance routes"). Not only did few people pay attention to PRIIA guidelines, but they seemed surprised that it was brought back up in March. Given the applications from other passenger entities and the distribution of the ARRA grants, there was a huge disconnect.


In essence, Republicans and free marketers like Mica need to recognize that no major project is even possible without government planning. Also, the feds must fund the development of vast projects like the Interstate Highway System and reforming  America's crumbling infrastructure. 


On the other side of the aisle, Democrats and True Believers have to realize that government has to eventually give way to the private sector in certain areas. Operating trains is definitely one of those areas. The days of Amtrak having sole control of passenger matters in the U.S. are winding down. It may also benefit the Boardman Administration to give up some of their routes, especially certain state-supported routes and overnight routes to its potential rivals. There are builders (they're really the 21st century successors to Pullman) ready to produce new equipment so Amtrak won't burden itself with rehashes of the same designs because the carrier's competitors will switch it up with various manufacturers. 

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