Samantha wrote: Prairietype wrote: Lot of people compare U.S. passenger rail with that of other countries, most frequently Japan, and countries in Europe.The subject of privatization comes up frequently. Most of these other countries don't have privately owned railroads, or, if there is some semi-private arrangement there is still extraordinary government subsidy.So why should the United States try something that doesn't really exist elsewhere? The question could be turned on its head. Why not?The U.S. has a long history of favoring regulated free markets as opposed to state controlled markets because they are more efficient. However, in the transport arena, U.S. government action has masked the true cost of transportation, e.g. the full cost of driving is not reflected at the pump.Privatization of rail passenger service, in some markets, could work if the true cost of the alternative modes of transport where passed on directly to the user. Alas, as long as commercial transportation remains a sandbox for politicians to play in, the probability of privatization of passenger rail is unlikely. This means that we will continue to waste resources on modes that are inefficient in a given market, i.e. automobiles for commuting in large urban areas, airplanes for short haul flights, and long distance trains. And wasted resources means there is less money available for other priorities.
Prairietype wrote: Lot of people compare U.S. passenger rail with that of other countries, most frequently Japan, and countries in Europe.The subject of privatization comes up frequently. Most of these other countries don't have privately owned railroads, or, if there is some semi-private arrangement there is still extraordinary government subsidy.So why should the United States try something that doesn't really exist elsewhere?
Lot of people compare U.S. passenger rail with that of other countries, most frequently Japan, and countries in Europe.
The subject of privatization comes up frequently. Most of these other countries don't have privately owned railroads, or, if there is some semi-private arrangement there is still extraordinary government subsidy.
So why should the United States try something that doesn't really exist elsewhere?
The question could be turned on its head. Why not?
The U.S. has a long history of favoring regulated free markets as opposed to state controlled markets because they are more efficient. However, in the transport arena, U.S. government action has masked the true cost of transportation, e.g. the full cost of driving is not reflected at the pump.
Privatization of rail passenger service, in some markets, could work if the true cost of the alternative modes of transport where passed on directly to the user. Alas, as long as commercial transportation remains a sandbox for politicians to play in, the probability of privatization of passenger rail is unlikely. This means that we will continue to waste resources on modes that are inefficient in a given market, i.e. automobiles for commuting in large urban areas, airplanes for short haul flights, and long distance trains. And wasted resources means there is less money available for other priorities.
Well, then, in that case I'm all for it. Let private companies form to operate passenger rail service with the same public money levels that have been doled out to the airlines and the highways (and the contractors). Leave in this arrangement a fair market access regulation such as is already in place requiring freight railroads to permit track rights and access until the private railroads can build their own dedicated right of way.
Private passenger railroad companies might do very well (it could be 20 billion or more a year) and get the same preferential treatment of subsidy that the airlines and NASA gets.
Have fun with your trains
Antonio
Following privatization of the V Line, which was owned by Victoria, the system was rationalized. Lightly patronized country trains were replaced with buses. However, the remaining system was improved. New equipment, mostly RDCs was placed in service, and the schedules were improved.
Fares were increased but not enough to drive many patrons away. Anytime the price of goods or services increases, especially without a corresponding increase in wages and salaries, people believe that they are less affordable. As you probably know from my previous posts, I think the users should pay for the services that they use to the extent practicable.
Last year, whilst I was in Melbourne, I took the train to Balarrat. There seemed to be more trains and the trip was quicker than I had remembered it.
When the tram and commuter rail systems in Melbourne were privatized, the new operators implemented a variety of improved business practices. For example, fare collectors on the trams were dropped, thereby saving millions of dollars. In addition, the private operators bought new trams and commuter train equipment. As I said in a previous post, the state still subsidizes the private operators. Trams and trains cannot make it on their own under current market mechanisms. But the system is much better than the state and municipal run systems.
Melbourne has a potpourri of bus operators. I don't recall the number, but it is a bunch of them. Again, the new operators put a lot of new equipment in service.
The national passenger trains (Indian Pacific, Ghan, and The Overland) are operated by Great Southern Rail, which in 1997 was the successful bidder for the Passenger Rail business of Australian National. This made it the first government owned transcontinental passenger business to be privatized in Australia.
Great Southern Rail originally consisted of a consortium of Australian and International financiers, operators and service providers. These partners all contributed solid financial backing. In October 1999, Serco Asia Pacific bought out the other partners, placing the company in a strong position for future growth.
Great Southern Rail is in the tourism business over and above being a rail transport operator. It is customer focused and committed to growth of tourism in Australia.
Great Southern rail receives subsidies from the national government, but again it introduced sound business practices that reduced the amount of subsidy required while greatly improving the service. I have ridden all three national trains in Australia. They are first class. If there is a true market for long distance trains in America, the Great Southern rail model would be the way to go.
My business was electric utilities. Prior to 1995 the State Electricity Commission of Victoria had more than 25,000 employees. Following privatization, over a period of time, the number of employees in the privatized companies totaled just a hair over 7,000, if I remember correctly. The savings, of course, were passed onto the customers.
I could tick off numerous other examples of the advantages of privatization and competitive market places, but neither you nor I probably have the time or interest to cover them all.
Samantha,
Yes, but in that good country down-under, did not a number of lines shutdown and/or service was reduced in a number of areas? Also, did not fares increase sharply on all of medium and longer distance passenger train runs to the point that the people that want to use the service find it less affordable?
"I like my Pullman Standards & Budds in Stainless Steel flavors, thank you!"
BaltACD wrote:When Pigs, without electronic special effects, fly!
Keep looking up!
In 1994 the railways, trams, bus operations, electric and gas utilities, amongst others, in Victoria, Australia were owned by the state government. By 2004 all of them had been privatized. Because of the privatization movement in Victoria, I had an opportunity to move to Melbourne in 1999, which is the capital city of Victoria, where I lived for nearly five years. My company had bought one of the electric distribution companies in Victoria.
Equally impressive, at the federal level, numerous government owned or controlled entities were privatized. Telecommunications was opened to private investors; the national railway was opened to private operators (the government still owns the tracks); and nearly half of the country's national airline was sold to private investors.
Will passenger rail in the U.S. be privatized? The probability is low. But had you asked a Victorian before 1994, except for those working behind the scenes to make it happen, if their major transport modes and utilities would be privatized, they too would have suggested keeping a sharp lookout for flying pigs.
FWIW, I wonder if the airlines would have ever left the ground if they had had to pay for their own airports, the ground-based nav systems and the air traffic control network.
By and large the airlines have paid for the portion of the airports that they use. They have also paid for their portion of the air navigation infrastructure and air traffic control operations.
As I have pointed out in other posts, the airlines, as well as general aviation, which is the biggest user of the airways, as well as most airports, realize a marginal cost advantage because the country's airports were funded with tax free municipal bonds. This has lowered the cost of building the airports, which is passed on to the airlines in slightly lower landing fees, hanger fees, etc., depending on the stance taken by the local airport authority. The lower cost also benefits the airport vendors, fixed base operators, etc.
The airways were funded with federal dollars, most of which were and are recouped through fuel taxes, ticket taxes, and fees. Theoretically, the interest associated with those dollars was the rate for the U.S. Treasury Ten Year Note. But the actual interest rate would have varied significantly and at times would have looked more like the Treasury long bond rate. Historically, these rates have been somewhat lower than the interest rates in the private capital markets.
Early in their history the airlines depended on mail contracts to survive. Whilst I was in college, I took several transport economics courses. I remember one professor who made a compelling case that the government paid more for the mail contracts as a means of subsidizing the budding airlines, but the practice was stopped by the early 1960s.
At a few of the major airports in the U.S., e.g. Kennedy, DFW, LAX, the airlines have the biggest presence. But they are not the only players. At these three airports, as well as the country's other hub airports, other commercial carriers, e.g. Federal Express, UPS, DHL, etc. have a significant presence, as does general (business) aviation. They too pay landing fees to cover the cost of building and operating the airports.
Outside of DFW and Houston Intercontinental, the airlines account for less than 50 per cent of the operations at the other Texas airports, as an example. And at many of the smaller fields, they may account for less than 30 per cent of operations. For example, airline flights in 2006 at Dallas' Love Field accounted for approximately 27 per cent of its movements.
Airline operations make up about 30 per cent of the FAA's air traffic control workload. The rest is attributable to general aviation, e.g. FedEx, UPS, business operations, etc.; military operations in civilian airspace, and miscellaneous flights.
The Airline Transport Association has argued before Congress that its members pay more than their fair share of the cost of the airways and air traffic control system. As expected, general (business) aviation groups have pushed back on this assertion, but there is some validity to it.
JT22CW wrote: Amtrak is not the same as British Rail. The freight operators were not subsumed into Amtrak. Also, the big privatization experiment in Britain was not repeated in other countries (DB is not truly privatized by any means, nor is JR).Frankly, the biggest problem the freight railroads have right now is the FRA. Staggers Act? The railroads are more regulated than ever, perhaps more than at any point in history. Certainly, the different track classes, buff strength requirements and signaling requirements are more draconian, and they bias operations towards slow drag freight and away from fast freight and fast passenger operations. What's even worse, with the rising cost of motor fuel and jet fuel (it's not going down, folks), rail continues to be de-emphasized, even more than ever at this point. (What's wrong with that picture, folks?)
Amtrak is not the same as British Rail. The freight operators were not subsumed into Amtrak. Also, the big privatization experiment in Britain was not repeated in other countries (DB is not truly privatized by any means, nor is JR).
Frankly, the biggest problem the freight railroads have right now is the FRA. Staggers Act? The railroads are more regulated than ever, perhaps more than at any point in history. Certainly, the different track classes, buff strength requirements and signaling requirements are more draconian, and they bias operations towards slow drag freight and away from fast freight and fast passenger operations. What's even worse, with the rising cost of motor fuel and jet fuel (it's not going down, folks), rail continues to be de-emphasized, even more than ever at this point. (What's wrong with that picture, folks?)
Most of the regs you describe have their roots 30-100 years ago. Are you referring to those or something more recent?
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
al-in-chgo wrote: From prior post: "well management contracts run by private operators on behalf of the Dft, WAG and the Scots Govt"OK, my English friend, can you offer a couple of American translations? I understand the abbreviation for "Scots Government" or "Scottish Government," but what pray is a "Dft" or a "WAG?" (Actually the second term in this country has some currency as an acronymn meaning "Wild Guess.") "Dft," other than an abbreviation for "draft," must mean something else in British English, I suppose.
From prior post: "well management contracts run by private operators on behalf of the Dft, WAG and the Scots Govt"
OK, my English friend, can you offer a couple of American translations?
I understand the abbreviation for "Scots Government" or "Scottish Government," but what pray is a "Dft" or a "WAG?" (Actually the second term in this country has some currency as an acronymn meaning "Wild Guess.") "Dft," other than an abbreviation for "draft," must mean something else in British English, I suppose.
Dft (or Daft as it's known) is the Department of Transport based in London. It decides rail policy for England and (partly) Wales as well as having an overview in Scotland. It does not however fund the railway in Scotland which is in the hands of the scots government. WAG is the Welsh Assembly Government based in Cardiff. They have less "powers" over railway policy in terms of funding and presently do not control the passenger franchise which covers Wales; but that is to change. However they can specify additional services and spend cash on where they think money should be spent.
Sort of a Quasi federal system which is slowy being introduced in the UK.
The freight operators are Open Access and are not franchised; however they are subbed by the passenger system over here (its the reverse to the US we regulate passenger trains in front of the "goods") in terms of track access charges (one operator recives a grant) and both the operator and shipper can apply for grants in terms of new wagons, sidings and the like as it is recognised that commercially freight doesn't make cash but there are other quantifiable benefits in not having the goods off the road onto the railway.
Does this mean that the FRA's safety requirements are TOO strict???
Quick note:
The railway infrastructure in the UK is government owned (Network Rail)
The passenger operators are franchised - well management contracts run by private operators on behalf of the Dft, WAG and the Scots Govt. The franchise terms are very very tightly defined in terms of fare setting, timetabling and even calling patterns.
The rolling stock for these operators is increasingly being specified and ordered by the government.
Which leads one to ask; why not cut out the middle man directly (the franchisee)....?
tomikawaTT wrote: Correct me if I'm wrong, but aren't the named routes subsidized by the various States? I agree that they would probably survive - IF the States and municipalities were willing to pick up the whole tab.
Correct me if I'm wrong, but aren't the named routes subsidized by the various States? I agree that they would probably survive - IF the States and municipalities were willing to pick up the whole tab.
Pretty well, yes.
If private enterprise were to pick up a long distance train, I'd think something between the Northeast and Florida would be most likely. Autotrain, perhaps?
Rocky Mountain Railtours has been quite successful here in western Canada. There are a lot of similarities between Vancouver-Calgary and Salt Lake City-Denver.
nanaimo73 wrote: erikem wrote: I'd say that the corridor service in California would stay around - much of the line the corridor trains run on is already owned by various commuter rail agencies - such as the entire LOSSAN corridor.California would only loose their long distance trains. I'd guess Washington State and Oregon would keep the Cascades as well. There would be a movement in all 3 States to keep the Coast Starlight as well, but that would be difficult.Surely Illinois and Michigan would also keep a few trains, and perhaps Wisconsin might want the Hiawathas.
erikem wrote: I'd say that the corridor service in California would stay around - much of the line the corridor trains run on is already owned by various commuter rail agencies - such as the entire LOSSAN corridor.
I'd say that the corridor service in California would stay around - much of the line the corridor trains run on is already owned by various commuter rail agencies - such as the entire LOSSAN corridor.
California would only loose their long distance trains. I'd guess Washington State and Oregon would keep the Cascades as well.
There would be a movement in all 3 States to keep the Coast Starlight as well, but that would be difficult.
Surely Illinois and Michigan would also keep a few trains, and perhaps Wisconsin might want the Hiawathas.
Correct me if I'm wrong, but aren't the named routes subsidized by the various States? I agree that they would probably survive - IF the States and municipalities were willing to pick up the whole tab. If not....
Chuck
erikem wrote: tomikawaTT wrote: If Amtrak was put up as a, "Sell or scrap," proposition, everything south and west of the Northeast Corridor would go POOF and vanish.The freight railroads got rid of passenger trains once, and consider Amcrap a nuisance. Also note that there doesn't seem to be any mad rush of venture capital to the numerous suggested superspeed routes/options discussed on these forums. So, what private operator would want the losses and hassle? I'd say that the corridor service in California would stay around - much of the line the corridor trains run on is already owned by various commuter rail agencies - such as the entire LOSSAN corridor.One problem with carrying passengers is that they usually don't want to pay for the full cost of service for any mode. For example, how much venture capital is going into the airline industry?
tomikawaTT wrote: If Amtrak was put up as a, "Sell or scrap," proposition, everything south and west of the Northeast Corridor would go POOF and vanish.The freight railroads got rid of passenger trains once, and consider Amcrap a nuisance. Also note that there doesn't seem to be any mad rush of venture capital to the numerous suggested superspeed routes/options discussed on these forums. So, what private operator would want the losses and hassle?
If Amtrak was put up as a, "Sell or scrap," proposition, everything south and west of the Northeast Corridor would go POOF and vanish.
The freight railroads got rid of passenger trains once, and consider Amcrap a nuisance. Also note that there doesn't seem to be any mad rush of venture capital to the numerous suggested superspeed routes/options discussed on these forums. So, what private operator would want the losses and hassle?
One problem with carrying passengers is that they usually don't want to pay for the full cost of service for any mode. For example, how much venture capital is going into the airline industry?
How much venture capital is going NOW to the commercial airline companies? Very little, I'd wager. Airline after airline has unused aircraft; and given the contraction of service, the older ones that are also less fuel efficient get retired first.
Passengers don't want to pay the full cost of rail travel, but I'll wager they do when they have to. My partner and I paid $120 to go from Newark to Philly last fall (and there was one time-of-day slot that cost even more). Even though Milwaukee is a little farther away from Chicago than Newark is from Philly, we would have paid half as much to travel Chgo - Milw.
If the NEC considered to be Boston - Penn Station - D.C. loses money as a whole, something is terribly wrong. Perhaps in that case the NEC should indeed be privatized, even if the buyer is from another country. Belgians are good at running things and their Euro is so mighty compared to our dollar that they might buy something they couldn't otherwise afford.
tomikawaTT wrote:If Amtrak was put up as a, "Sell or scrap," proposition, everything south and west of the Northeast Corridor would go POOF and vanish.The freight railroads got rid of passenger trains once, and consider Amcrap a nuisance. Also note that there doesn't seem to be any mad rush of venture capital to the numerous suggested superspeed routes/options discussed on these forums. So, what private operator would want the losses and hassle?
tomikawaTT wrote: If Amtrak was put up as a, "Sell or scrap," proposition, everything south and west of the Northeast Corridor would go POOF and vanish.The freight railroads got rid of passenger trains once, and consider Amcrap a nuisance. Also note that there doesn't seem to be any mad rush of venture capital to the numerous suggested superspeed routes/options discussed on these forums. So, what private operator would want the losses and hassle?The UK and Japan had, and have, railroad cultures. In the US, Henry Ford (and his competitors) did a very good job of killing that, and there's not much chance of a resurrection, NARP or no NARP. (Note that the AAA has a LOT more members than NARP.)Chuck
The UK and Japan had, and have, railroad cultures. In the US, Henry Ford (and his competitors) did a very good job of killing that, and there's not much chance of a resurrection, NARP or no NARP. (Note that the AAA has a LOT more members than NARP.)
I agree that Amtrak would go kaput except for the NEC.
One big advantage to privatizing the NEC is that, since it has been shown to be profitable, a private company would have access to LOTS of capital in the form of equity (stock) and debt (bonds); and given the big demand on the NEC a firm tht calls its own shots might be able to satisfy more passengers by going double-deck, increasing HST runs, etc.
Amtrak acts very much like private industry in its "everything the traffic will allow" type of pricing on the NEC. Airplanes and private cars are becoming increasingly problematic and I don't see them "stealing" any traffic off the NEC -- far from it.
What Amtrak isn't doing -- probably what it hasn't the funds to do -- is buy such great amounts of capital equipment by itself. Not unless there were a Fannie Mae for rail infrastructure, spreading the debt around. Nobody seems to be interested.
IF you don't count the capital cost of electrifying Hew Haven to Boston (a big IF I agree), Amtrak probably makes money out of the NEC, and probably the NEC alone. It is a pity they can't find more ways to satisfy more NEC passengers and make even more money. It really does seem to me to be a need unfulfilled.
I don't anticipate a bunch of colorful passenger operating companies like in England or the European countries.
After all, Amtrak is Congress's "billion dollar baby," even though a billion doesn't go nearly as far as it used to! - a.s.
Never too old to have a happy childhood!
Slim to none.
Al - in - Stockton
Along with Amtrak's new 14.9 billion, private companies are encouraged to take control in the northeast and even on less successful routes. How possible is it that the US passenger network will end up like Britan's with operators such as Virgin, Southeast Trains, Cross Country etc.?
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