Rail Series: Who will own it? Who will pay for it?

December 18, 2012 - By admin

Amtrak - wikipediaThis is Part 6 of a series on Medium-Speed rail alternatives to California’s High-Speed Rail project. Click to read Part 1Part 2Part 3Part 4, and Part 5.

Dec. 18, 2012

By Stan Brin

In any discussion of rail expansion, two gorillas always appear: How do we pay for it? How do we keep the government out of it?

I’m not a politician. I can only accept that the people of California, especially in the areas that would be served by faster rail service, have spoken. They want it and appear ready to pay for it. They were simply sold a technically impossible can of worms at a ridiculous price.

Here comes the hard part: Private enterprise isn’t interested, at least not in financing it.

In fact, railroad companies, often willing to go to heroic lengths to improve their freight traffic, feel about passenger service the way most people feel about disease-bearing insects. It’s death.

Overregulation and price manipulation by the now-defunct Interstate Commerce Commission nearly wiped them out.

While the federal regulators that kept fares low and unprofitable lines open have been abolished, I don’t see anyone stepping in to invest his own money. So if the taxpayers want trains, they will have to pay for them out of the public purse, the way Louis XIV financed the Canal du Midi.

Who is to own it?

As planned, the High-Speed Rail project is to be an independent, state-owned system operating entirely on its own.

My alternative, on the other hand, would be mostly a modernization of existing routes — the Tehachapi segment being the exception — and a part of the national railroad system. The track owners are likely to be the companies that own the existing right of way, Union Pacific and BNSF, or a combination of the two — or a consortium along the lines of the Alameda Corridor agency.

Perhaps a new company will operate the trains that will run on the new tracks, but perhaps no one but Amtrak (sigh) will want to operate it.

There is no question that Amtrak loses money on every line it runs. There is no question that Amtrak could probably break even on its East Coast “sorta high speed” Acela Express line if politics didn’t intercede to keep fares about five bucks per ticket below cost.

There is also no question that its long distance routes across the prairies and deserts can never break even because the ridership isn’t there. Political pressure keeps those lines rolling.

A divested Amtrak would face the same issues.

I believe that that Amtrak can be divested, but Congress would likely force the private operator or operators to maintain unprofitable lines, and the private operators, in turn, would expect federal subsidies to do so, bringing us back to square one.

In fact, it’s hard to find a precedent for this problem. The British divested their state-owned trains in the 1990s, and created a bloody mess which they still haven’t been able to clean up. Even Richard Branson couldn’t make a go of it. His Virgin Rail Group system and was about to lose his franchise until it was extended until November 14. After that, it’s uncertain what will happen.

The Federal Government successfully divested its cobbled-together Conrail system in the 1980s, but its assets were undervalued and the taxpayers were taken to the cleaners. The two private railroads that snapped up Conrail made a fortune.

France

Perhaps the whole thing should just be turned over to the French. Against all logic, their TGV trains make a profit of a billion dollars a year, even if they can’t regularly run above 200 mph. The French also obtain 75 percent of their electricity from nuclear facilities, but have never had a major accident.

Go figure.

In 2010, the managers of the French high-speed rail system made some suggestions to the California HSR authorities that they said would make the line profitable, but they were rudely ignored.

Perhaps someone thought such behavior was a form of payback — Americans being rude to the French, for a change.

Whatever the case, the French went home in a huff, and we’re stuck with a boondoggle. And certainly no one is going to pay any attention to all my talk about double-tracking.

Medium-Speed Rail?

It’s too easy, and too cheap.

Forget about it.

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Comments(10)
  1. Rex the Wonder Dog! says:

    Who will own it? Who will pay for it?
    ==
    Dont know, or care, who will own it, but I know who will pay, taxpayers, mostly the poor and middle class.

  2. Numan Parada says:

    “There is also no question that its long distance routes across the prairies and deserts can never break even because the ridership isn’t there. Political pressure keeps those lines rolling.”

    The author lost his credibility at that sentence. Those long distance trains provide necessary transportation to areas that have no air and bus service. Amtrak has not been able to increase capacity on existing trains or create new services on account of next-to-no investment towards these trains. Yet ridership is increasing, with trains like the LA-Seattle Coast Starlight sell out regularly. Riders are very much voting with their feet in using these trains, so the ridership is clearly there, despite your assertions.

  3. us citizen says:

    They are the ones that voted it in……I sure in the hell didnt

  4. jimmydeeoc says:

    Numan Parada:

    You lost credibility with your response. Do you have any idea how few AMTRAK lines there even are in the West? And these “areas with no air and bus service”? That’s a load of BS. Nearly all have bus service. Kingman, Barstow

    Your homework assignment is to take out your map and go to AMTRAK’s website. See how many towns are “reliant” upon AMTRAK service.

    The only ridership on long distance routes is people with plenty of TIME….old people, kids, maybe a few college students.

    It’s an excursion….even an enjoyable one. But it’s surely not serious transportation.

  5. gblatham says:

    jimmydeeoc:

    Why are you judging the credibility of others when you’re simply regurgitating what you’ve heard from questionable, biased sources? While we’re at it, why are you assigning homework when you’re the one in need of remedial education?!

    Have you actually seen a Russell’s Guide recently? The latest copy I have in my possession looks more like a thick magazine than a book!

    I’ll give you two examples of cities which I have visited within the past year that are “‘reliant’ upon Amtrak service”: Temple, Texas (population 66,000; no bus service; nearest commercial airfield 25 miles away [major airport 65 miles]) and Deming, New Mexico (14,000; no bus service; nearest commercial airport approximately 110 miles away).

    Ridership on Amtrak’s National Network trains is quite diverse – and most definitely includes “serious passengers.” Long distance routes are made up of interconnecting/overlapping corridors which not only serve end-point cities, but many individual intermediate markets as well.

    Numan Parada’s comments were right on-spot. The only real problem with Amtrak’s current system is that there are far too few trains operating along far too few lines!

    Garl B. Latham

  6. Rex the Wonder Dog! says:

    Numan Parada’s comments were right on-spot. The only real problem with Amtrak’s current system is that there are far too few trains operating along far too few lines!

    Garl B. Latham
    ===
    Yes, too few trains on too few lines, due directly to too few passangers (no market) costing the poor and middle class too MUCH of their too few dollars.

  7. Stan Brin says:

    Actually, Amtrak passes right through many town without stopping. For example, Fairfield Iowa, which has an extensive used-railroad sales lot, is not an Amtrak stop. They used to stop there, but these days, locals have to drive about 15 miles to Ottumwa, Tom Arnold’s hometown to board a train.

    A lot of people in the farm belt depend on trains, but nowhere near enough to pay for them. Without a federal subsidy, all long distance train traffic would cease

    (Boy, some people get really mad over a secondary point!)

  8. gblatham says:

    Stan,

    Without federal subsidies, all passenger operations via all modes – including private motor vehicles on roadways – would cease! To single out “long distance train traffic” seems, at best, duplicitous.

    Actually, I tend to believe we have much in common regarding our approach to this game. If you find an opportunity to do so, I’d encourage you (and anyone else who may be interested) to read some of my essays. The following would be a great place to begin:

    “High Speed Rail is not the starting point”:

    http://myprogressiverailroading.com/myprogressiverailroading_blogs/b/gblatham/archive/2010/06/30/high-speed-rail-is-not-the-starting-point.aspx

    “The myth of ‘Higher Speed Rail’”:

    http://myprogressiverailroading.com/myprogressiverailroading_blogs/b/gblatham/archive/2010/07/09/the-myth-of-quot-higher-speed-rail-quot.aspx

    Best,
    Garl

  9. gblatham says:

    Rex:

    Your comment indicates a profound lack of knowledge regarding contemporary domestic intercity passenger train service.

    All else being equal, one might presume a champion of “the poor and middle class” would be in favour of rail-based transportation – and would educate himself concerning its intricacies and benefits.

    Garl

  10. Marten Purdy says:

    Rail Series:
    My idol “Trainrider” surfing germany’s fastest train, the ICE with a top speed of 330km/h (205mp/h)

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