A postscript to the above:
Call the rail part of the equation a "loss leader." A danger I could foresee is the developers losing interest in the rail at some point, if it is too much of a loser and after they have cashed in on the real-estate development. Is this the point at which the rail gets fobbed off onto the public?
Not the worst outcome ... only sayin' (as people are always sayin').
Yes, we can cheer any private-enterprise passenger railroading, a throwback to days of yore. Other cities -- Normal, Illinois, comes to mind -- have been happily surprised at how development (both commercial and residential) have followed expanded passenger rail service. If developers such as the people behind AAF should actually begin thinking of and banking the two in tandem, fans of passenger rail could be in for some happy days ahead.
Whether AAF is a real estate deal or a rail transportation deal or a combination thereof is immaterial. As long as the investors are bearing the cost, I don't care how they generate the cash necessary to cover the cost and generate a return for the investors.
For years JCPenny, Sears, etc., earned more money financing the purchase of their merchandise than they did selling it. Great! If the promoters of AAF, as well as the Texas Central Railway, can leverage the rail line off of real estate or vice versa, I say go for it.
WizlishAs has been noted, the All Aboard Florida effort is largely a real-estate play. On that wider basis, perhaps, investors would see a long-term possibility... but the meaningful return would be on the land appreciation, not ROI from the train operations, which are likely going to remain an enabling technology rather than an actual profit center net of all costs.
This is a really good point.
AAF is able to draw the "control volume" around enough stuff to show a good ROI - train operations + real estate development. What this means is that there is a direct net benefit for a single entity greater than the cost.
In a world where the train operator can't expand their scope beyond the train itself, many benefits are being felt by others outside of the train operation organization. Example: NJT does't get a dime from the extra business they bring to Atlantic City, nor do they get paid by the Casinos for the parking decks the Casinos don't have to build, nor the extra lane the Expressway authority would have to build- but those benefits still occur. NJT just can't capture them on it's books.
In a practical sense, we might be able to live in a world where we support intercity passenger rail projects that can show a good cost/benefit ratio and then be able to cover non-capital costs from fares. The capital for building out the route could come from tax dollars, but there would be little tax expense after that. I think this approach would sit well with most citizens. Generally, we understand public inventment in infrasturcture as being beneficial, but don't like operating subsidies.
To some extent, this is what's alrealy going on - at a pretty slow pace - and probably not very efficiently.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
Sam1If passenger rail had even a remote possibility of covering its costs, the question of a good route would not be debtable. Investors would rush to invest in a good route, i.e. one that would enable them to earn a return on their investment.
Or not. Most investors are aware of opportunity cost. They are not going to 'rush' to invest in something with a lower return than other, safer alternatives... say, tax-free munis. Perhaps the 'greater fool' theory might apply, or there would be enough of a community of investors concerned about providing passenger rail and backing their opinions up with their capital... but until the (unsubsidized) rate of return is considerably higher than practical with just about any present scheme relying just on a 'good route', I would be very surprised to see much interest (except perhaps among those of the pump-n-dump persuasion...)
As has been noted, the All Aboard Florida effort is largely a real-estate play. On that wider basis, perhaps, investors would see a long-term possibility... but the meaningful return would be on the land appreciation, not ROI from the train operations, which are likely going to remain an enabling technology rather than an actual profit center net of all costs.
Passenger rail will be a stand-alone commercial enterprise in only a very few exceptional cases. Having said that, I wonder just how many private companies are volunteering to buy the land, build and operate new toll roads in Texas, or anywhere in North America. There are many places where there is apparent pressure for new expressways. Could it be that they also are seen as unlikely to provide any financial return?
Note, I am excluding public/private partnerships, since public money is still a significant component, and it is some level of government that is the proponent.
So what does a good route look like? Is it one that makes money or at least breaks even? How many passengers would it need to carry to be classified as a good route?
If passenger rail had even a remote possibility of covering its costs, the question of a good route would not be debtable. Investors would rush to invest in a good route, i.e. one that would enable them to earn a return on their investment.
Hopefully the All Abord Florida and Texas Central Railway projects will be good routes for their investors. If they turn a profit for their investors, they will be. If they don't the investors, as opposed to the taxpayers, will have to eat the consequences. Which is the way it should be for a commercial enterprise!
gardendance schlimm And you give no mention to medium-length routes added with multiple trains daily and increasing patronage. Are you saying intercity only refers to long distance? What bout increasing numbers of trains between CHI-DET; CHI-STL and LAX-SDO? Don't they count? http://www.amtrak.com/ccurl/889/344/Amtrak-States-Agreement-Preserve-All-Corridor-Routes-ATK-13-124.pdf It required states to share costs with Amtrak under a consistent formula for all routes of less than 750 miles, excluding the Northeast Corridor Apparently they don't count, or at least they don't count the same as routes longer than 750 miles.
schlimm And you give no mention to medium-length routes added with multiple trains daily and increasing patronage. Are you saying intercity only refers to long distance? What bout increasing numbers of trains between CHI-DET; CHI-STL and LAX-SDO? Don't they count?
http://www.amtrak.com/ccurl/889/344/Amtrak-States-Agreement-Preserve-All-Corridor-Routes-ATK-13-124.pdf
It required states to share costs with Amtrak under a consistent formula for all routes of less than 750 miles, excluding the Northeast Corridor
Apparently they don't count, or at least they don't count the same as routes longer than 750 miles.
It's a matter of resources, Gardendance -- money. How can Amtrak just add routes, even good ones, when Washington keeps trying to cut its operating subsidy for the existing routes, and cash for new equipment is also hard to find?
schlimmAnd you give no mention to medium-length routes added with multiple trains daily and increasing patronage. Are you saying intercity only refers to long distance? What bout increasing numbers of trains between CHI-DET; CHI-STL and LAX-SDO? Don't they count?
Patrick Boylan
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ROBERT WILLISONThe national ltd provided a direct connection from the NEC to the mid west ( st Louis, Cincinnati and kc) thus as avoiding Chicago)
The consequence was having a slow, often late and sometimes cancelled operation on deteriorating Penn Central track, especially in Indiana and Illinois. That led to declining ridership. When the Carter admin. put into efect a minimum cost/farebox recovery ratio, the National Limited failed to meet the standard because of low ridership and thus it was dropped. Blame its loss on the public's choice and the Penn Central, not Amtrak.
C&NW, CA&E, MILW, CGW and IC fan
ROBERT WILLISON Many long distance trains have been dicontinued by amtrak.
Many long distance trains have been dicontinued by amtrak.
Yes, but the original ROUTES have remained remarkably intact from May 1, 1971, even when perhaps they shouldn't have.
The Desert Wind and Pioneer were add-ons. (In my opinion, their routes should have been preserved originally as part of the efficient Union Pacific "City of Everywhere" scheme -- but they weren't.)
The "North Coast Hiawatha" (bastard name) was an add-on after May 1, and was properly derided as "The Senators' Special," after Sens. Mike Mansfield (D-Mont.) and Quentin Burdick (D-N.D.).
Extension of "The Sunset Limited" to Florida was another add-on.
Etcetera. Yes, the trains have been tweaked on the old New York Central and Pennsylvania, but the original Amtrak routes have been preserved.
In short, we Amtrakers have fared very well, given that it's been at least 60 years since jets and 50 since the Interstate. I'm grateful for what we've got, and hope to God we can keep it.
I am simply saying some significant trains were discontinued, putting big holes in the national route. The national ltd provided a direct connection from the NEC to the mid west ( st Louis, Cincinnati and kc) thus as avoiding Chicago) the Floridian provided direct service from the mid west and the west to the south and Florida.
Most were discontinued to cut costs. Amtrak can not provide a nation wide schedule without serving the heart land of the nation.
The same thing occur we with privately operated passenger. As trains were discontinued, connections were lost. As connections and passenger convenience were reduced, ridership declines.
ROBERT WILLISONMany long distance trains have been dicontinued by amtrak.
You gave a long list of long distance trains. Some were added because of political pressure. And some were discontinued because of poor patronage. But you lump them altogether. Do you honestly expect Amtrak to simply run trains, regardless of patronage?
And you give no mention to medium-length routes added with multiple trains daily and increasing patronage. Are you saying intercity only refers to long distance? What bout increasing numbers of trains between CHI-DET; CHI-STL and LAX-SDO? Don't they count?
ROBERT WILLISON but the national route map of long distance trains trending down.
That's a mighty slow trend!
Who could forget the tubo's,american and french
Hilltoper (Harley Stagges Special), Turbotrain, Amtrak Cape Cod service, Amtrak Atlantic City service, NY-Boston via Springfield, first cut back to New Haven - Boston via Springfield.
Many long distance trains have been dicontinued by amtrak. The Broadway ltd, the Floridian, the montrealer,desert wind, the north coast ltd, the champion, the seasonal Florida special ( all sleeper nyc- mia) ,the national ltd, the owl, along with its executive sleeper ( nyc-was set out sleeper) to name a few. The Texas chief,morphed into the Texas eagle. The lake shore came and went and came back, ultimately surviving its long time competitor the Broadway ltd. The three rivers was extended to Chicago and then cut back.
The sunset ltd extension to jax, Orlando and Mia, was added and subtracted. The old Portland rose route from Denver to Portland came back and then discontinued.
The original NYC to Florida trains had one or two trains into st Pete, these were cut back to Tampa and now the star runs NYC -lakeland-tpa- back to lakeland again before going onto Miami.
My point is a deeper dive into Amtrak will reveal long distance trains being added, but the national route map of long distance trains trending down.
Medium and short hauls had thier ups and down. State subsidiesed trains like the Chicago to dululth , and the old tampa to Miami silver palm came and went. The Hoosier is going to another operator, the Pennsylvanian is always on the ropes. I am sure I have missed a few others trains.
This is how Amtrak defines itself in Amtrak National Facts. Lots of opportunity for hair splitting lawyers to have a field day! Not to mention pulling in substantial fees whilst splitting the hairs!
Amtrak is a capital corporation but it isn't! And it is a public agency but it isn't! Wow, no reason to be confused! It appears to be as clear as mud!
The significant reduction in intercity passenger service comes if you compare service in April 1971 with that in May 1971.
ROBERT WILLISONIn reality long distance service has been reduced significantly since Amtrak conception
Significantly? Compare Day One of Amtrak with today and I believe you will find the route structure is similar. Several routes were added in the first year and some have come and gone.
Amtrak is a quasi government corporation formed in 1970 by congress to take the burden of providing intercity passenger service off the railroads backs. The railroads had to pay a fee to join Amtrak,most opted to some did not. The fees Amtrak collected then went back to the railroads in order buy locomotive's and rolling stock. Thier was never a mandate of how much service Amtrak had to provide. In reality long distance service has been reduced significantly since Amtrak conception,while short hauls and state services have grown. Amtrak has never operated either transit services or commuter operations with the exception of those they were contracted to run.
What do you think CP, CN, UP, NS, BNSF, & CSX would actually do if the SC rules in favor of the AAR? Bow to political pressure? Arms length contracts with Amtrak? Say bye to Amtrak? Amtrak pulls in its reins to focus on operating on its own tracks, and upgrade those services? (I think the NEC really could function well on its own without rail connections beyond it. Might that be the best answer for the times?)
I wonder if the Supreme Court will rule that Amtrak is a nationwide transit system and must therefore be supported as such.
"The Economist" comments on the case of The Department of Transportation v. The Association of American Railroads.
http://www.economist.com/blogs/democracyinamerica/2014/12/congress-and-amtrak
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