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Michael Ward says no to the President
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<p>[quote user="Paul_D_North_Jr"]</p> <p> <blockquote> <div><img src="/TRCCS/Themes/trc/images/icon-quote.gif" /> <strong>Bucyrus:</strong></div> <div> [snipped] <span style="font-family:verdana,geneva;"><span style="font-size:small;"><span style="font-size:small;">3)</span> <span style="font-size:small;">They run a private freight railroad, and don’t want to reduce its profitability by sharing their infrastructure with a government-run passenger operation. </span></span></span></div> </blockquote> There's an unstated presumption here - that the government-run passenger operation will in fact reduce the profitability of the host private freight railroad. Certainly that's been the vast majority of the US experience for the last 80 years or so - but it's not an immutable law of physics. It need not be so in at least 3 variations that I can think of: </p> <p>A) Passenger operation pays fees to the host railroad that include all the broadly-defined variable costs (including a reasonable Return On the Investment) incurred by the host from the passenger train, <span style="text-decoration: underline;">plus</span> an amount equal to or gr'eater than the lost profits from the displaced freight traffic - if any, because that scenario doesn't occur unless the line is at or near capacity;</p> <p>B) And if not, then the passenger trains should still be covering all of their broadly-defined costs, plus some further contribution to the bottom line - so where's the harm ?, because the railroad is now better off anyway; </p> <p>C) And/ or, the passenger railroad makes capital improvements to or for the host private freight railroad that are of such usefulness and value - <span style="text-decoration: underline;">to the <em>freight </em>railroa</span>d - as to be at least a partial offset to the potential lost profits, with additional fees to make up the balance.</p> <p>- Paul North.</p> <div style="clear:both;"></div> <p>[/quote]</p> <p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-size: small;"><span style="font-family: verdana,geneva;"><span style="font-size: small;">I agree that it is not an immutable law of physics that HSR will reduce the profitability of the private host railroad.<span style="mso-spacerun: yes;"> </span>My only point was that some heads of private railroads might expect that to be a result of hosting HSR, and if they do, that would be a reason for them to oppose hosting HSR.<span style="mso-spacerun: yes;"> </span></span></span></span></p> <p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-size: small;"><span style="font-family: verdana,geneva;"><span style="font-size: small;"> <o:p></o:p></span></span></span></p> <p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: verdana,geneva;"><span style="font-size: small;">I also agree that if all of the cost imposed on the host railroad by HSR were reimbursed by the government, there would be no reason for the private railroads to object to HSR.<span style="mso-spacerun: yes;"> </span>But with the scale and cost complexities of infrastructure reworking needed to shoehorn HSR onto the private railroad corridors, I can understand the private railroads worrying about the cost sharing agreement with the government, and the strings that might be attached to it. <span style="mso-spacerun: yes;"> </span>It goes back to not letting the camel get his nose under the tent. </span></span></p> <p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-size: small;"><span style="font-family: verdana,geneva;"><span style="font-size: small;"> <o:p></o:p></span></span></span></p> <p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: verdana,geneva;"><span style="font-size: small;">I refer back to this article, which describes HSR opposition by NS, UP, and CSX.</span></span></p> <p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-size: small;"><span style="font-family: verdana,geneva;"><span style="font-size: small;"> <o:p></o:p></span></span></span></p> <p class="MsoNormal" style="margin: 0in 0in 0pt;"><a href="http://online.wsj.com/article/SB10001424052748703305004575504180006530598.html?ru=yahoo&mod=yahoo_hs"><span style="font-family: verdana,geneva;"><span style="font-size: small;">http://online.wsj.com/article/SB10001424052748703305004575504180006530598.html?ru=yahoo&mod=yahoo_hs</span></span></a></p> <p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-size: small;"><span style="font-family: verdana,geneva;"><span style="font-size: small;"> <o:p></o:p></span></span></span></p> <p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-size: small;"><span style="font-family: verdana,geneva;"><span style="font-size: small;">The government has already demonstrated the reckless abandon they can muster when it comes to throwing bailout and stimulus money around without any accounting of where it went or what it accomplished.<span style="mso-spacerun: yes;"> </span>It is clear that the government likes to throw cash around and call for the recipients to dance to the tune. <span style="mso-spacerun: yes;"> </span>And if the recipients can’t exactly say how much cash got thrown, they lose say in how much dancing is enough.<span style="mso-spacerun: yes;"> </span></span></span></span></p> <p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-size: small;"><span style="font-family: verdana,geneva;"><span style="font-size: small;"> <o:p></o:p></span></span></span></p> <p><span style="font-size: 12pt; mso-fareast-font-family: 'Times New Roman'; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA;"><span style="font-family: verdana,geneva;"><span style="font-size: small;">Even John Gray of the AAR refers to taking money from the government for hosting HSR as “selling your soul.”<span style="mso-spacerun: yes;"> </span></span></span></span></p>
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