Ok. But we're not orgaznized enough yet to get into it. So lets set our goals and some perameters: Our company is a private venture with the goal of providing rail passenger services other than commuter services, by owning and operating railroads and equipment, by contracting with railroads, transportation agencies, and others to provide the the equipment and personnel, or provide management and supervisory personnel to exisiting operations. By the way, we have not yet determined whether we are a for profit or non profit corporation yet, either.
With those guidlines we can refute the costs of the Portland servic state above because it is transit or commuter service with a lot of station costs we would not be involved in, Thus the price for a 15 mile segment of our operation would not resemble this example.
Lets also say, we have the opportunity to operate an approximate 400 mile service between two cities, one a major metropolitan urban area and another smaller major city. In between are: almost 70 miles of suburban territory, then another almost 50 semi suburban/rural area before reaching a good sized city, then 70 miles through rural area to a small city, rural to several smaller cities and towns over an 80 mile stretch, then rural the final 130 into the terminal city. Both end points already are connected by passenger service. An underused freight track already exisits over our supposed route but there would be signaling needed as well as maybe a half dozen sidings; being frieght, the blocks are a mile and a half to two miles long. Most of the track is up to 55 freight, 60 passenger speed. We need how much for a market survey along the route including the end points?
Before I go any further, let me ask that those who really know costs to come up with some figures for us to get this far. I should also add that this is not a totally fictional route.
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Marginal tax rates are relatively meaningless except for financial planning purposes, i.e. to determine the hurdle rate for financial modeling.
In 2009, when the marginal federal income tax rate in the U.S. was 35 per cent of adjusted gross income, the average effective tax rate for a median income family was 7.71 per cent. The average effective federal income tax rate for those with adjusted gross incomes of $1 million to $10 million was 24.95 per cent. Those over $10 million had a somewhat lower effective tax rate, all of which proves very little.
The effective tax rate as a per cent of GDP for the U.S. in 2010 was 24.8 per cent, vs. 24.1 per cent in 2009. From 1975 through 2010 the average rate was 27.3 per cent, with a median of 27.4 per cent and a standard deviation of 1.4 per cent. A Z score analysis suggests there were no outlier years. So what?
The other side of the equation is expenditures. At the federal level, in FY11, revenues were 15.4 per cent of GDP and expenditures were 24.1 per cent of GDP. For FY12 the number are 15.8 and 24.3. Again, so what?
Cross boarder comparisons are dicy. Australia has a two tier third party medical payment scheme. Basic medical services are paid for by Medicare, which is funded through general taxes. Since Australian Medicare does not cover all expenses, Aussies are given an incentive to buy supplemental third part coverage. In fact, if they don't buy it, they have to pay a Medicare surtax. In America most people are covered by so-called health insurance; it is really a third party payment system irrespective of the magnitude of the service received, which is a part of their compensation package. If the cost of third party medical coverage in the U.S. was added to the tax base, the tax revenue to GDP ratio would change. Which brings me to a key point.
It does not matter what they do in other countries, other than they may have some best practices worth looking at. At the end of the day the trains issue should be what works for America. Not what works someplace else! What works someplace else may not work very well here.
If Amtrak were run like a business, the key question for investors is whether they (private for profit, private for non-profit, government, etc.) can retrieve the cost of their investment through the fare box or whether it requires on-going operating subsidies. All of the numbers that I have seen suggest that no matter what format the organization takes, passenger rail in the U.S. cannot cover its costs through the users. Thus, one way or the other it becomes a ward of the state.
YoHo1975 Dwight pulled a number out of his nether regions and Paul correctly called him on it, it is worth discussing.
Dwight pulled a number out of his nether regions and Paul correctly called him on it, it is worth discussing.
Figures don't lie, but liars can figure. Okay, this is tedious, but the reason I yawned at his 'calling" me on my back of the envelope numbers is that they were only for discussion and had absolutely no bearing on the argument I was making. But If I were off by as much as a figure of ten it would make little difference for the grand total would still only be around 5% of what the US spent on highways in an entire year. As a matter of fact they are spending $1.2 billion to bring the entire 284 mile Chicago-St. Louis corridor up to Class 6 standards (110 MPH), or about $4 million per mile, infinitely more expensive versus the class four or five standard I was talking about. The BNSF line is already at 79MPH (and could be at 90 if they hadn't shut down the ATS a few years back) so at $5 million per track mile (as he is saying $100 million for 20 miles) it would be $3.5 Billion for the BNSF line between Newton and Gallup. But who is saying FRA Class Six track? Are you nuts, BNSF isn't paying one-tenth that to maintain class 4 track. And Amtrak is getting by for less than that on a line in much worse shape (the old GM&O). Once you subtract the cost of an elevated connection track and a bridge at Wyanet between the old Rock Island and the old CB&Q they are spending about $2 million per track mile on the 75 miles of the Rock Island for Chicago- Davenport service, and having seen that line up close (it is twenty miles from where I grew up) I can tell you it is a wreck, IAIS just set half a train full of ethanol on fire in Tiskilwa last summer because it is so bad..
The numbers Neal uses are generally based on assumptions that don't bear scrutiny, like his claim that the reason trains in Germany use one-third the fuel as cars is because Germans drive faster (never mind that they don't SUVs or 4wd pickups).
[quote user="DwightBranch"]
As a matter of fact they are spending $1.2 billion to bring the entire 284 mile Chicago-St. Louis corridor up to Class 6 standards (110 MPH), or about $4 million per mile, infinitely more expensive versus the class four or five standard I was talking about.
The section from Chicago to Joilet will not be a class 6 railroad.
An "expensive model collector"
OK, but that's only 37 miles so the numbers become 247 miles, or 4.86 mil. per mile.
C&NW, CA&E, MILW, CGW and IC fan
schlimm OK, but that's only 37 miles so the numbers become 247 miles, or 4.86 mil. per mile.
The 1.2 billion number is a little questionable.
http://articles.chicagotribune.com/2010-12-23/news/ct-met-high-speed-rail-1224-20101223_1_high-speed-rail-110-mph-service-louis-route
"The entire project is estimated to cost about $4 billion."
http://www.idothsr.org/about/funding.aspx
"Illinois’ signature high-speed rail route received $1.1 billion for corridor improvements between Dwight and St. Louis."
After doing a little more poking around, it appears the Alton to St. Louis section will not be class 6 track as well, subtracting another 26 miles from the total. Getting closer to 5 million a mile.....
I can not figure how you guys are coming in so low. Acording to the Chicago Tribune article the project will cost $4 Billion. On 247 miles that is $16,194,331 per mile. That is high, I think since I am sure there will be work done between Alton and St. Louis. As I read the article the budget includes nothing for equipment, which makes the entire project cost fixed plant investment.
Note that this project involves an existing line maintained for 79 MPH passenger train speeds. The route is generally tangent with gentle curves between Joliet and Alton, except through Springfield. Between Alton and St Louis there are some curves and some existing freight train congestion.
In the grand scheme of things this is a cheap route to upgrade.
Mac
Paul Milenkovic "A hundred million here, and a hundred million there, and pretty soon it adds up to real money." Four projects at 100 million dollars each, and the BNSF line, maybe 200 million. A total budget of 600 million dollars? There is a document known as the Vision Report. It offers cost estimates for the kind of thing being proposed. A 100 million dollars gets you 20 route miles of this kind of upgrade.
"A hundred million here, and a hundred million there, and pretty soon it adds up to real money."
Four projects at 100 million dollars each, and the BNSF line, maybe 200 million. A total budget of 600 million dollars?
There is a document known as the Vision Report. It offers cost estimates for the kind of thing being proposed. A 100 million dollars gets you 20 route miles of this kind of upgrade.
Not to blow my own horn, but I nailed the numbers (from a meeting in Garden City KS yesterday):
"Advocates of passenger rail service said their aim is to stay on track as they look for funding solutions to keep the Southwest Chief alive and running in this part of the country.
Brad Nading/Telegram Amtrak's Marc Magliari, right, talks with Reynaldo Mesa about what eastern states have done to aid in the funding of rail lines Tuesday after a meeting between Amtrak, BNSF Railroad, community and state leaders from Kansas, Colorado and New Mexico. Magliari is an Amtrak media relations manager for government affairs and corporate communications.
A portion of the cross-country route operated by Amtrak runs through western Kansas, southeast Colorado, and northern New Mexico, but is in danger of being re-routed south if outside sources of funding for the track's maintenance don't surface in the next few years.
That was the message from Amtrak authorities who met with a coalition of communities across all three states at a summit held Tuesday in Garden City, to spell out the funding challenges facing the government-owned corporation and to deliberate where the stakeholders move from here.
"We're here talking because it's not a panic. It's not like tomorrow we're going to have to do something different," Paul Vilter, assistant vice president of Amtrak, said during the gathering held at the Finnup Center for Conservation Education. "But within a pretty short time frame, within a couple years, we have to figure out how to move forward."
The uncertain future of the portion of the passenger rail route stems from ongoing struggles over maintenance costs of the rail track that is owned and operated by BNSF Railway, the second-largest freight railroad network in North America.
Vilter said Tuesday as BNSF has shifted its freight traffic in recent years to an alternative track known as the "Transcon" route, BNSF's "utility" of this portion of the track has decreased dramatically, shifting the burden for its upkeep to Amtrak.
The burden of maintaining, repairing and replacing the track line is estimated at about $10 million per year and $100 million in long-term improvement needs, funds that must spent to keep the Southwest Chief running through Garden City and a host of other communities in Colorado and New Mexico in future years, Vilter said."
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