Since Amtrak has so many issues getting money from Congress, why don't they go the route of private investors? If they haven't already.
I don't know if private investors could be interested, but I'll bet they could make some decent money selling advertising space on some of their slab-sided locomotives and rolling stock.
I rather doubt that Amtrak cash flow would allow repaying private investor debt. The Postal Service and the Military can't borrow money if Congress under-funds them.
Just another wonderful feature of being a political football.
Chuck
They attempted to borrow money to cover Congressional appropriation shortfalls in the 1990's as the Accela trainsets started to get built. It pushed Amtrak into a cash flow crises which Congress was forced to rescue it from.
Inevitably someone is going to argue with me on this or correct me (fine with me) but I will be the first to lay it out here. Commercial Lending is unlike borrowing for yourself. Commerical Lenders, especially if your a higher risk attach a lot more strings to the loan in the area of financial performance and expected returns from the loan investment. If you start missing on the metrics the interest rates rise or can be renegotiated. Unless your a very large and established firm with excellent credit your not going to get just a straight fixed interest rate and fixed term on a commericial loan. I highly doubt Amtrak given it's ongoing and uncertain situation can obtain a normal commercial loan and hence it avoids commercial borrowing unless it needs to as a last resort.
Collateral or Equipment Trust loans are another story but still Amtrak has to take into account what happens if the equipment is siezed due to non-payment and the lender has to take into account how easy it is to resell the collateral to another party in case of default or non-payment.
Governments borrow money for infrastructure directly (in the private market) all the time -- municipal and state bonds.
C&NW, CA&E, MILW, CGW and IC fan
I doubt it, I doubt they have the authohrity to do so. And if they did, I am sure the money would be appropriated by Congress for less important matters in their practice of politics.
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schlimm Governments borrow money for infrastructure directly (in the private market) all the time -- municipal and state bonds.
dakotafred schlimm Governments borrow money for infrastructure directly (in the private market) all the time -- municipal and state bonds. Correct, but in my experience covering city government repayment was usually tied to a specific mechanism such as a (city) sales tax -- something more reliable than the farebox. Amtrak, of course, lacks resort to the taxpayers (after Congress!).
Yes, but we are talking about an asset (equipment) that could be collateralized. Amtrak could use an equipment trust the same as some commuter rail cars have been in past, such as on the old C&NW. Why don't they?
Warren Buffett who owns the BNSF could Buy Amtrak Up?? Could Buffett Buy Amtrak if he wanted too?? or give 10 Billion Dollars of free Money for New Superliner car order and more Viewliners cars too. Could he do that??
conrailman Warren Buffett who owns the BNSF could Buy Amtrak Up?? Could Buffett Buy Amtrak if he wanted too?? or give 10 Billion Dollars of free Money for New Superliner car order and more Viewliners cars too. Could he do that??
Of course he could, but he will not. He (Berkshire Hathaway actually) buys business to make money.
ATK looses hundreds of millions of dollars every year despite its virtually free ride on the freight railroads, and has billions of dollars of deferred maintenance on the NEC. In addition the Hudson river tunnels, a gift to the nation from the great PRR when it was great, are inadequate for NJ commuter traffic that wants to use them, but more seriously are approaching the end of their physical lives. Best guess for new tubes is $20 Billion or so.
ATK is not a business, it is a welfare program. Rational business people do not buy welfare programs.
Mac
PNWRMNM Rational business people do not buy welfare programs.
Heh, not so sure about that. Look at Donald Trump and the infamous "Trump Shuttle" airline experience. Most rational businessmen at the time knew the airline business then was a loser but Trump and his ego......thought he could do better and turn a profit. I still wonder at how much money that ego trip cost him.
In regards to Mr Buffet. I would argue he purchased the second best U.S. railroad, the smarter choice would have been Union Pacific given it's track record of financial stability. Except that I believe U.P. was too large for Mr. Buffet's wallet for control and takeover and so he went for #2.
PNWRMNM conrailman Warren Buffett who owns the BNSF could Buy Amtrak Up?? Could Buffett Buy Amtrak if he wanted too?? or give 10 Billion Dollars of free Money for New Superliner car order and more Viewliners cars too. Could he do that?? Of course he could, but he will not. He (Berkshire Hathaway actually) buys business to make money. ATK looses hundreds of millions of dollars every year despite its virtually free ride on the freight railroads, and has billions of dollars of deferred maintenance on the NEC. In addition the Hudson river tunnels, a gift to the nation from the great PRR when it was great, are inadequate for NJ commuter traffic that wants to use them, but more seriously are approaching the end of their physical lives. Best guess for new tubes is $20 Billion or so. ATK is not a business, it is a welfare program. Rational business people do not buy welfare programs. Mac
I don't think any rational person, whether a businessperson or financier or economist, seriously believes passenger rail services can be profitable. Calling it welfare is as ridiculous as calling a profitable freight rail a robber baron.
Even Bill Gates could give free Money too Amtrak. Alot of People Billionairs could help Amtrak if they wanted too.
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