Saving the Hoosier State, Again: An Illustration of Federal and State Policy Conflict

[n012944]

V.Payne

Sure, but I know of no instance of a DOT asking a city to pay for a section of rural interstate, or any. Cities and counties pay for a majority of the local road costs but the statewide agency pays for longer distance roads. If anything it speaks to the level of local political support.

What does that have to do with anything?  Rails and roads are different, and should be treated as such. 

[daveklepper]

different, but why?  

[n012944]

daveklepper

different, but why?  

One is made of steel, wood, and rock, the other concrete...

The difference is the State of Indiana is not asking the areas to subsidize the right of way, which is all roads really are.  CSX is already subsidizing the right of way for Amtrak.  The state is asking the cities to subsidize the service, much like South Bend took it apon itself to pay Frontier to fly to Denver.   

[Anonymous]

it is money in the bank to have less rubber on the road in towns and flip both freight and passengers to steel wheels!

[blue streak 1]

n012944

The difference is the State of Indiana is not asking the areas to subsidize the right of way, which is all roads really are.  CSX is already subsidizing the right of way for Amtrak.  The state is asking the cities to subsidize the service, much like South Bend took it apon itself to pay Frontier to fly to Denver.   

I have to challenge some assumptions of this statement.   Roads, transit, and rails are not different systems but just one  "transportation system".  Rails can mitigate those roads that for whatever reason a person who derives cannot use the rails.   Even my red neck buddies down here in middle Georgia want rail so the rail riders can mitigate the road traffic slightly. 

The light rail in Charlotte NC is a very good example of what can happen with a "well" designed system.  Phoebe can probably give us specific figures? 

 So if Indiana does not add a lane to I-65 the funds would probably allow a HrSR or maybe a HSR rail line to be built cheaper ?  The opposition of So Cal rail 20 years ago what vorxcificous but now it is supported by a large majority of the drivers there.  Of course anyone connected to the auto business still hates rail ?

 

[blue streak 1]

r bandr

it is money in the bank to have less rubber on the road in towns and flip both freight and passengers to steel wheels!

This is the reason there has to be a co-operative effort between the RRs and the Governments to rebuilt our rail infrastructure for HSR or at first HrSR for passenger and 70 MPH+ rail everywhere for freight trains ( thinking mainly of intermodal ).  Getting even 10% of truck traffic off the roads will extend the life of the roads. Again how to best do this is a difficult question?  Tax credits and property tax mitigation may be one direction.  What ever the method there has to be incentives for passenger rail to operate on the freight RR lines. 

[V.Payne]

"The difference is the State of Indiana is not asking the areas to subsidize the right of way, which is all roads really are. "

The government pays quite a bit for accidents not covered by road users, think of Medicaid and Social Security Disability along with direct payments to hospitals, police, and fire departments. A common carrier makes the passenger whole, I have never come out whole fiancially in an auto accident even when not at fault. Roads have an operating cost not meet by the users. Those financial costs borne by the users for accidents are about twice those of governments

All told there is a historical deficit of about $0.125 per automobile mile for an interstate type facility for capital and operations (accidents and maintenance) if there is no toll. It is made up by leverage off the local system. New build interstates like I-69 are running about $0.24 automobile mile for the capital deficit alone. If the goal was to design a train service for 200 passengers a train mile it could operate at a $20/train mile deficit and be better off than historical road expenditures.

[krtraveler]

http://www.jconline.com/apps/pbcs.dll/article?AID=2013312200028&gcheck=1&nclick_check=1

[schlimm]

Was this the article?

http://www.jconline.com/article/20131220/NEWS/312200028/hoosier-rail-INDOT-consulting?nclick_check=1

[krtraveler]

Yes, that's the one

[Anonymous]

We the people are on the hook for all the expenses with any and all transportation projects either thru direct cost or the additional cost of goods. the more cost efficient we are the better it is for everyone. Period. stop being greedy and we can all pull the load much easier when we all pull in the same direction>

[V.Payne]

As some of you know the INDOT has received proposals to run the Hoosier state. The Total Cost reported by Amtrak in the monthly reports are as follows.

Total (Fully Allocated) Costs (Millions):

$8.9 Million/Year per Monthly Report for September 2013 (I reproduced a snip of the chart below).

However, as part of the bidding activities INDOT posted an analysis of the various cost elements which is somewhat similar to what Amtrak is charging the states (appears to be short-term cost plus additives which is consistent with the PRIIA rulemaking).

Now, I often stress that the Total Cost numbers are purely assigned by some unknown formula that matches company wide costs with reveneus. So, at the following known values:

70 PM/TM, 416 Yearly Departures, 81,536 TM/Year, 5.74 M-PM/Year

And with estimated industry values for Reservations at $2/Rider and Stations-Shared at $4/Rider perhaps we can calculate the PRIIA required values that Amtrak is supposed to report monthly per statute but has avoided for several years due to accounting problems.

Short-Term Avoidable Operating Costs (Millions):

Third Party Costs            $0.689

Route Costs                    $2.174-($0.276 Excess Reservations and Stations-Shared)

Additives                           $0.000   (Few Additives can be avoided in Short-Term)

                                =         $2.587   (29% of Fully Allocated Costs of $8.9)

Long-Term Avoidable Operating Costs (Millions):

Third Party Costs              $0.689

Route Costs                      $2.174

Additives                             $0.554

Equipment Capital           $0.740   (Using Replacement Value)

Equipment Overhaul        $0.096   (Prorated)

                                =           $4.253   (48% of Fully Allocated Costs of $8.9)

So why has Amtrak chosen to report the Total Costs only at the route level despite the law? Further, in this example the Long-Term Variable Costs were shown to be half the Total Cost, consider the implications for the true cost recovery of the Long Distance trains.

[A McIntosh]

With private operators bidding to run this service, I wonder if any of them have pockets deep enough to buy their own rolling stock? If your in for a penny, might as well be in for a pound. On another facet of this topic, and at the risk of flogging a dead horse, I posted a comment last fall concerning my experience riding a bus. I am sorry if I caused any offense to anyone with it. I only wanted to say that while the purpose of passenger travel is to get from point A to point B, not all modes are the same. Each has its strengths and weakness.

[Anonymous]

A McIntosh

With private operators bidding to run this service, I wonder if any of them have pockets deep enough to buy their own rolling stock? If your in for a penny, might as well be in for a pound. On another facet of this topic, and at the risk of flogging a dead horse, I posted a comment last fall concerning my experience riding a bus. I am sorry if I caused any offense to anyone with it. I only wanted to say that while the purpose of passenger travel is to get from point A to point B, not all modes are the same. Each has its strengths and weakness.

They probably would not buy any rolling stock. They would lease it! In fact, Amtrak leases most of its equipment. A private operator would only enter the business if he had a strong reason to believe that he could recover the costs and enhance shareholder wealth.

[daveklepper]

Doesn't Ed Ellis's (fomer?) operation have enough equipment to cover the service without making any dents in other operations?   May that is what gives them a head start, that they have the equipment on-hand and operational.