Consensus on Amtrak

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Posted by zugmann on Monday, June 11, 2018 11:32 AM

PJS1
It is an indirect subsidy for cars sold in the U.S.

Still a gov't handout (just like their tax incentives for their battery factory).  Just a more palatable name for the masses.

 

But let's be realistic - they are not the shining beacon of free market capitalism that some pretend they are.   Not that there's anythign wrong with that.

 

And lots of places have gas pumps now (conveneince stores, grocery stores, warehouse clubs).  I don't get the big deal about electric charging stations - just the gas pump of hte 21st century for some.

The opinions expressed here represent my own and not those of my employer or any other railroad, company, or person.

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Posted by PJS1 on Monday, June 11, 2018 12:23 PM

charlie hebdo
There have numerous articles in the progressive media citing name of authors and the foundations (Think Tanks) receiving funding from the carbon industries. One need only Google it. 

By your own admission you have cherry picked articles from the "progressive media".  Is there another side to the story or just one? 

What does the fact that the oil industry contributes to some think tanks have to do with their perspect on Amtrak?  

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Posted by PJS1 on Monday, June 11, 2018 12:32 PM

zugmann
 But let's be realistic - they are not the shining beacon of free market capitalism that some pretend they are. 

My point has been lost in the weeds.  The fact that Tesla or any organization gets tax incentives has nothing to do with the fact that it is a competitive enterprise and, therefore, it is pushed to find ways to better serve its customers, i.e. the symbiotic relationship with Love Travel stops.

Amtrak is a government bureaucracy.  It has no direct rail competition; it has no real driver to do things better, faster, cheaper.  And it shows. 

Amtrak has plodded along for 47 years without a lot of innovation.  Why not?  If it screws up, it can dump its mistakes on the tax payer.  If Tesla screws up, it goes out of business. 

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Posted by BaltACD on Monday, June 11, 2018 12:37 PM

zugmann
 
PJS1
It is an indirect subsidy for cars sold in the U.S. 

Still a gov't handout (just like their tax incentives for their battery factory).  Just a more palatable name for the masses. 

But let's be realistic - they are not the shining beacon of free market capitalism that some pretend they are.   Not that there's anythign wrong with that. 

And lots of places have gas pumps now (conveneince stores, grocery stores, warehouse clubs).  I don't get the big deal about electric charging stations - just the gas pump of hte 21st century for some.

Beyond all that - 'charging stations' are not the future of EV's.  For EVs' to be 'utility transportation' in the USA there will need to be interchangabe, easily replaced battery packs that will give the vehicle 200-300 mile range with a fully charged pack.  Drivers have become accustomed to a 10-15 minute stop to refuel their vehicles - they won't stand still for a 3-4 hour recharge time on trips.  

Charging stations may allow 'top off' charging for arround town errands but they are not the answer for a traveling vehicle.

Easily replaceable, interchangable battery packs have yet to be developed - infact (to my knowledge) standards have yet to be devised.

         

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Posted by charlie hebdo on Monday, June 11, 2018 2:49 PM

PJS1

 

 
charlie hebdo
There have numerous articles in the progressive media citing name of authors and the foundations (Think Tanks) receiving funding from the carbon industries. One need only Google it. 

 

By your own admission you have cherry picked articles from the "progressive media".  Is there another side to the story or just one? 

What does the fact that the oil industry contributes to some think tanks have to do with their perspect on Amtrak?  

 

1. The statement I made about progressive media was at the beginning of my post, not applying to all the post or links. You attempted to misapply.  I suppose you think the NYT or Guardian are progressive media?

2. What I said is simply facts.  The other side would be contrafactual.

3. The purpose of the post was to show that CandO for Progress's post was not to be so easily dismissed as you would like.

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Posted by MidlandMike on Monday, June 11, 2018 7:47 PM

PJS1

 

 
blue streak 1

How do we reconcile the almost same number of passenger miles on the NEC and the rest of the syste?

 

In 2017 the passenger miles on the NEC were 1,984 million (2 billion rounded) vs. 1,920 million for the state supported services and 2,616 million for the long distance trains.  

I am not sure that I understand your point.  From a business (commercial) perspective, in 2017 the NEC had an operating profit of $471.7 million vs. an operating loss of $97.7 million for the state support services and $500.2 million for the long distance trains.  

So, the long distance trains racked up more passenger miles than the other two service lines, but lost a lot of money doing so. 

 

Operating costs are only part of the total budget.  The capital costs to put the NEC in a state of good working order are in the tens of billion$, and pale in comparison to LD operating losses.

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Posted by CandOforprogress2 on Tuesday, June 12, 2018 4:42 PM

This guy---- with the string tie aka Randall O'Toole of the CATO institute who has a degree in forest managament but would rather see 8-12 lane superhighways instead of 2 track light rail that eat up a lot less forest. He SAYS that he is a expert in urban planning and is often quoted by USA Today and other lazy journalists as a expert despite the fact that he works with a "Think Tank" that has clear anti-goverment pro-laise fair capiltalist agenda in there mission statemen rather then a real university that has peer review and checks and balences

http://t4america.org/wp-content/uploads/2011/06/OToole.jpg

http://t4america.org/2011/06/15/throwing-grandma-off-the-train-and-under-the-bus/

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Posted by CandOforprogress2 on Tuesday, June 12, 2018 4:56 PM

https://www.cato.org/people/randal-otoole

O’Toole travels extensively and has spoken about free-market environmental issues in dozens of cities. An Oregon native, O’Toole was educated in forestry at Oregon State University and in economics at the University of Oregon.

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Posted by PJS1 on Tuesday, June 12, 2018 8:10 PM

MidlandMike
 The capital costs to put the NEC in a state of good working order are in the tens of billion$, and pale in comparison to LD operating losses. 

No one knows how much it will cost to upgrade the NEC.  There are different scenarios of varying intensities.  What is really needed probably differs from what those who want gold plated upgrades believe is necessary.
 
Amtrak will not be on the hook for the total cost of the NEC upgrades.  It shares the NEC with others.  So, it will only pay for its proporational share of the property, plant, and equipment improvements. 
 
Amtrak depreciations it plant, property, and equipment for as long as 105 years.  So, the annual incremental increase in depreciation expense from the NEC capital expenditures could be relatively small.  Moreover, depreciation expense is stated in historical dollars.  It is the same amount each year, but it declines as a percentage of revenues, which are stated in current dollars, year after year.  Revenues for the NEC have increased at an average rate of 2.3 percent over the last five years.  They probably will continue to do so in the future. 
 
Amtrak’s commitment for New York’s Moynihan Station, which is a good example, is $6 million for Phase I, which is estimated to cost of $315 million. Phase II is estimated to cost $1.6 billion.  Amtrak is not on the hook for any of the Phase II construction costs.  Amtrak’s commitment at the end of FY16 for the project was 31 hundredths of one percent of the estimated costs. 
 
Of the 410,000 passengers passing through the Penn Station complex in 2016, 7.3 percent were getting on or off of an Amtrak train.  The others were Long Island Railroad, New Jersey Transit, or subway riders.
 
Amtrak is responsible for 100 percent of the depreciation associated with its exclusive property, plant, and equipment, i.e. ACS-64 locomotives, Acela train sets, etc.,
 
The ACS-64 locomotives cost $466 million.  The increase in annual depreciation expense driven by the ACS-64 locomotive buy – assumes capitalization of interest - would be $18.4 million, which is 2.2 percent of Amtrak’s annual depreciation and interest expense.  It is 1.5 percent of NEC revenues.  Assuming they continue to grow at the annual rate stated above, the incremental depreciation driven by the ACS-64 buy will be down to 1.2 percent of NEC revenues in 2027. 
 
So, capital expenditures for the NEC will increase the depreciation expense associated with it.  So too will the capital expenditures for the long-distance trains, i.e. new locomotives, perhaps cars, etc., although not by as much as the capital expenditures for the NEC.  But, as noted, the incremental increase in the depreciation expense may not be as dramatic as some seem to believe.  Thanks to increasing revenues and inflation, most of the incremental depreciation expense may be recoverable.  And that would not change the increasing viability of the NEC dramatically. 

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Posted by BLS53 on Wednesday, June 13, 2018 1:00 PM

daveklepper

I think certain markets can be profitable.  I do believe that once all the track impovements are in place and paid for, requiring only normal maintenance, for 125 mph operation over much of the route, that UP could make money and do a terrific public relations job by taking over the Chicago - St. Lous - Kansas City corridor market, with hourly service on the ex-GM&O Chicago - St. Louis, and every other , for every two hours service, St. Louis - KC.   Even though the route is longer, overall Chicago - KC time would be shorter than the Zephyr via Galesberg, but the market would be primarily Chi - StL and StL - KC plus intermediate important stations at Joliette, Bloomington, Sringfield, Independence, and one or two more.  Normal, IL should be a stop before and after college vacation times.   I think the buseinss is there and the opportunity is there.

The operation would be like Brightline but in Armor Yellow and Brown.

 

I recently looked into the St. Louis-Chicago line. Even with the speed improvement, it will still come out only about 15 minutes ahead of an automobile. The problem is the first 50 miles or so at each end, where they operate at reduced speed. The 110 mph, gives the impression of 3 hour trips, but in reality that's not the case. Not many people are going to give up the auto for this.

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Posted by BLS53 on Wednesday, June 13, 2018 1:06 PM

charlie hebdo

 

 
BaltACD

If anyone, anyone at all, THOUGHT they could make money privatizing Amtrak's operation they would have made themselves known long, long ago, or even today.  

The sounds of silence are deafening.

 

 

 

True, very true.   Private concerns could possibly make money on fast, frequent services on logical, under-500-mile routes that contain multiple large population centers.  Maybe.

 

Even if private operation was viable, you still have the issue of the freight railroads owning the ROW. A true modern passenger system, would require new ROW's, and no private entity is going to take on that task.

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Posted by PJS1 on Wednesday, June 13, 2018 3:45 PM

BLS53
 If anyone, anyone at all, THOUGHT they could make money privatizing Amtrak's operation they would have made themselves known long, long ago, or even today.  The sounds of silence are deafening. 
Even if private operation was viable, you still have the issue of the freight railroads owning the ROW. A true modern passenger system, would require new ROW's, and no private entity is going to take on that task.

 
Nobody built merchant power plants – independent operators – in Texas until the regulators changed the market rules.  Today nearly half the electric energy in Texas is produced by these plants.  
 
The Australians did not privatize the State Electricity Commission of Victoria until the government realized that it was being mismanaged. They changed the rules, and a wave a privatization swept the market. 
 
The Brits, Germans, French, Japanese, and Australians did not privatize some or all of their passenger rail operations until the governments changed their stance and opened the markets to privatization.
 
Nobody has proposed privatizing the NEC for a good reason.  The politicians have not invited any bids.  They have not changed the rules.  They have not loosened the political screws that would make privatization workable.  And it won’t be workable until they do. 
 
What may bring about privatization of the NEC, as well as other corridors, is a successful Brightline and Texas Central Railway.  I am cheering them on.  The successful privatization of the State Electric Commission of Victoria caused the other states to sit up and take notice.  In time almost all of them followed SECV’s initiative.

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Posted by MidlandMike on Wednesday, June 13, 2018 9:43 PM

PJS1

 

 
MidlandMike
 The capital costs to put the NEC in a state of good working order are in the tens of billion$, and pale in comparison to LD operating losses. 

 

No one knows how much it will cost to upgrade the NEC.  There are different scenarios of varying intensities.  What is really needed probably differs from what those who want gold plated upgrades believe is necessary.
 
Amtrak will not be on the hook for the total cost of the NEC upgrades.  It shares the NEC with others.  So, it will only pay for its proporational share of the property, plant, and equipment improvements. 
 
Amtrak depreciations it plant, property, and equipment for as long as 105 years.  So, the annual incremental increase in depreciation expense from the NEC capital expenditures could be relatively small.  Moreover, depreciation expense is stated in historical dollars.  It is the same amount each year, but it declines as a percentage of revenues, which are stated in current dollars, year after year.  Revenues for the NEC have increased at an average rate of 2.3 percent over the last five years.  They probably will continue to do so in the future. 
 
Amtrak’s commitment for New York’s Moynihan Station, which is a good example, is $6 million for Phase I, which is estimated to cost of $315 million. Phase II is estimated to cost $1.6 billion.  Amtrak is not on the hook for any of the Phase II construction costs.  Amtrak’s commitment at the end of FY16 for the project was 31 hundredths of one percent of the estimated costs. 
 
Of the 410,000 passengers passing through the Penn Station complex in 2016, 7.3 percent were getting on or off of an Amtrak train.  The others were Long Island Railroad, New Jersey Transit, or subway riders.
 
Amtrak is responsible for 100 percent of the depreciation associated with its exclusive property, plant, and equipment, i.e. ACS-64 locomotives, Acela train sets, etc.,
 
The ACS-64 locomotives cost $466 million.  The increase in annual depreciation expense driven by the ACS-64 locomotive buy – assumes capitalization of interest - would be $18.4 million, which is 2.2 percent of Amtrak’s annual depreciation and interest expense.  It is 1.5 percent of NEC revenues.  Assuming they continue to grow at the annual rate stated above, the incremental depreciation driven by the ACS-64 buy will be down to 1.2 percent of NEC revenues in 2027. 
 
So, capital expenditures for the NEC will increase the depreciation expense associated with it.  So too will the capital expenditures for the long-distance trains, i.e. new locomotives, perhaps cars, etc., although not by as much as the capital expenditures for the NEC.  But, as noted, the incremental increase in the depreciation expense may not be as dramatic as some seem to believe.  Thanks to increasing revenues and inflation, most of the incremental depreciation expense may be recoverable.  And that would not change the increasing viability of the NEC dramatically. 
 

The cost to upgrade the NEC will still be in the tens of billion$.  I'm not talking about "gold plated", but enough to keep the trains in Penn Station on the tracks, the tunnels and bridges from collapsing, a modern 60 Hz catenary that does not force them to maintain their own 25 Hz transmission lines, and any other critical infrastructure needs.

You talk as if the costs can be handled as some incremental depreciation thing.  Nevertheless, I remember you lecturing us on the high costs of financing over and above the projected price tags of big projects.  If the costs were insignificant, then ATK would have done them by now.  And while the commuter agencies may seem to contribute some to a share of the bill, those agencies are much dependent on the feds for funding.

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Posted by PJS1 on Wednesday, June 13, 2018 10:18 PM

MidlandMike
.....upgrade the NEC will still be in the tens of billion$...... 

The numbers for Amtrak’s portion of the Moynihan Station Complex were intended to show that Amtrak will not be on the hook for the total cost of upgrading the NEC.  The numbers don’t include debt service because it is not clear how Amtrak will fund its share of the project.
 
The amortization of the depreciation of the ACS-64 locomotives – $18.4 million per year - includes the debt service cost – interest that was capitalized – added to the cost of the locomotives.  The loans were issued by the Railroad Rehabilitation and Improvement Financing Program.  The interest rate for them is known.
 
To pay for its share of the NEC improvements, Amtrak will have to take on long-term debt, as it did in undertaking the RRIF loans, get increased funding from the federal and/or state governments, and/or perhaps issue market debt, which is can do.
 
The cash outlays to make the improvements – expenditures – do not hit the Income Statement all at once.  They show up in the annual income stream as depreciation expense over the life of the asset, which in the case of ACS-64 locomotives presumably is 40 years.  The cost – expenditures - for infrastructure improvements, i.e. bridge replacement, power station replacements and/or upgrades, etc. can be depreciation for as long as 105 years.  
 
Although Amtrak’s cost for its share of the NEC improvements could be significant, paying for the improvements is an upfront cash problem. The incremental impact on the company’s income statements however could be relatively small.  And it is the income statement results that are used to compare the fully allocated outcomes of the NEC vs. the state supported trains vs the long-distance trains.

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Posted by MidlandMike on Thursday, June 14, 2018 9:07 PM

The estimates I heard for the NEC upgrade were in the range $20 to $30 billion, for infrastructure, not including rolling stock.  The Moynihan project was on-again-off-again so I can't imagine that that was counted as part of getting the NEC in good working order.  The interest alone on a median figure of $25 billion would be a billion $ per year.  That would about double Amtraks usual subsidy.  While NY and NJ have pledged support for the Gateway project, that is something new.  Usually ATK gets their payback form commuter lines from the (below-cost) track fees.

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Posted by blue streak 1 on Saturday, June 16, 2018 6:00 PM

Costs for  the upgrading the NEC are all over the ledger sheets.  What is included is unknown.  New North river tunnels, Sawmill bridge, Portal bridge, Dock bridge, the 3 draw bridges in  Maryland, and the B&P replacement tunnels.  Then we have complete 4 tracking of NYP _ WASH.

Another is upgrading the CAT NYP - WASH.  An upgrade would need constant tension CAT.  That installation would include separating all contact wire hangers so each track's CATT is not connected to other tracks.  That prevents wire snags on one track from pulling contact wires from all tracks.  That is often happening especially in the MARC territory.  Upgrading for a possible 25 kV will be done during the upgrades as it will only require one additional insulator for each location requiring insulators.  However do  not expect 25 kV for at least 40 years.  60 hZ 12.5 kV is more feasible conversion from the present 12 kV 25 hZ ssystem. Note these voltages are nominal with a +/- 10% variation to easily handle high draws and regenerative braking. All the present CAT can take the nominal 500 V increase.

However There is still much PRR and early Amtrak replacement switch gear and transformers that are not dual frequency capable.  One benefit of converting to 60 hZ for Amtrak  is that it would allow for modern auto tansformer power transmission and would allow retirement of the PRR  single phase transmission lines.  The PRR lines are easily identified as the lines are in pairs instead of conventional 3  wire 3 phase transmission lines.  FYI each Amtrak line is 69 Kv line to ground and 138 kV line to line much like your 110 / 220 V house current. 

60 hZ CAT will also require a change of the signal system carrier prequencies from 100 hZ to 92? hZ.  If Amtrak is replacing the signal system as needed to the new frequency is unknown.

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Posted by PJS1 on Saturday, June 16, 2018 8:07 PM

blue streak 1

Costs for  the upgrading the NEC are all over the ledger sheets.  What is included is unknown. 

Until the contracts are let, Amtrak's share is know, and the depreciation schedules are carved in stone, the impact of the NEC capital improvements on Amtrak's financials remains unknown.  

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Posted by PETER MCCUE III on Monday, June 18, 2018 11:42 PM

BLS53
 
daveklepper

I think certain markets can be profitable.  I do believe that once all the track impovements are in place and paid for, requiring only normal maintenance, for 125 mph operation over much of the route, that UP could make money and do a terrific public relations job by taking over the Chicago - St. Lous - Kansas City corridor market, with hourly service on the ex-GM&O Chicago - St. Louis, and every other , for every two hours service, St. Louis - KC.   Even though the route is longer, overall Chicago - KC time would be shorter than the Zephyr via Galesberg, but the market would be primarily Chi - StL and StL - KC plus intermediate important stations at Joliette, Bloomington, Sringfield, Independence, and one or two more.  Normal, IL should be a stop before and after college vacation times.   I think the buseinss is there and the opportunity is there.

The operation would be like Brightline but in Armor Yellow and Brown.

 

 

 

I recently looked into the St. Louis-Chicago line. Even with the speed improvement, it will still come out only about 15 minutes ahead of an automobile. The problem is the first 50 miles or so at each end, where they operate at reduced speed. The 110 mph, gives the impression of 3 hour trips, but in reality that's not the case. Not many people are going to give up the auto for this.

 

 

 

 I agree that the beginning and ending of the journey in the Chicago - St. Louis market is the crux of the bottleneck.  Even after clearing Joliet on the north end and Alton (Godfrey) on the south end there just isn't much distance to make use of a 110 mph or 125 mph running.  Take a look at all the stops on the "Lincoln Service" trains, and it's almost a joke to find a stretch of 50 or 60 miles without a stop.  Perhaps the old concept of "Local" and "Express" trains would work better.  A "Local" could operate on an "alternate" schedule from the "Express" schedule, where the "Express" leaves on the odd hours (7, 9, 11, etc.) and the "Locals" leave on the even hours (6, 8, 10, etc.).  The "Express" could have a stop at St. Louis, Alton, Springfield, Bloomington/Normal, Joliet, and Chicago, while the "Local" would serve some of the other markets--Carlinville, Lincoln, Pontiac, and Dwight, in addition to the major cities.

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