Phoebe Vet If you remember the time when railroads were begging to drop passenger service, the railroads themselves were dropping like flies. Remember how many railroads there used to be?
If you remember the time when railroads were begging to drop passenger service, the railroads themselves were dropping like flies.
Remember how many railroads there used to be?
A friend of mine and I are doing an abandoned MOW project cataloguing all the RR's that USED to actually run North and North West of us. The number of passenger routes up there was amazing. With Palmerston at the center as a major division point those lines went out like a giant spiderweb across the country side stopping in places that have never seen or heard even a whistle from a locomotive for over 50 years since.....
One can blame the rise of the car but we had a major bout of "disinvestment" going on up there as well...
Any argument carried far enough will end up in Semantics--Hartz's law of rhetoric Emerald. Leemer and Southern The route of the Sceptre Express Barry
I just started my blog site...more stuff to come...
http://modeltrainswithmusic.blogspot.ca/
henry6 I don't think HSR is as important in the big picture as much as a passenger rail service that is clean, efficient, on time, consistant, and reasonably priced that does what it is supposed to do. That is success and that's the best advertisement and endorsement for rail passenger trains. Henry you seem to be right on point. As RWM has pointed out the European experience of gradually speeding up their systems has really waked up Europeans. The experience of Spain and France with close to an explosion of riders who are commuters trying to stay inside the one hour train ride is revealing. HSR is too likely not to deliver what is most wanted, needed, or usable by a vocal (and maybe majority) group. Yes you are probably right. Advocates are expecting results in 5 - 10 years. Look more for 40 - 50 years, long after we are dead. California's got the right idea: provide service as needed where needed. Yes their incremental approach has been showing great strides. As the trip times have decreased the # passengers increases. Oakland - Sacremento, and Oakland - San Jose. CAL DOT's desire to reduce LAX - San Diego towards 2:00 from now 2:40 best transit times. It is amazing that the number of riders is as much as it is for the 128 miles times. The upper Northwest seems to be doing in quite well, too. ACELA seems to be working ok but is always being bashed as not really high speed, the the Boston-Washington-Richmond-Norfolk Corridor is emerging as an Eastern corridor which will benefit by any well run and consistant service...HSR will eventually come but not imperataive. Correct!!
I don't think HSR is as important in the big picture as much as a passenger rail service that is clean, efficient, on time, consistant, and reasonably priced that does what it is supposed to do. That is success and that's the best advertisement and endorsement for rail passenger trains.
Henry you seem to be right on point. As RWM has pointed out the European experience of gradually speeding up their systems has really waked up Europeans. The experience of Spain and France with close to an explosion of riders who are commuters trying to stay inside the one hour train ride is revealing.
HSR is too likely not to deliver what is most wanted, needed, or usable by a vocal (and maybe majority) group.
Yes you are probably right. Advocates are expecting results in 5 - 10 years. Look more for 40 - 50 years, long after we are dead.
California's got the right idea: provide service as needed where needed.
Yes their incremental approach has been showing great strides. As the trip times have decreased the # passengers increases. Oakland - Sacremento, and Oakland - San Jose. CAL DOT's desire to reduce LAX - San Diego towards 2:00 from now 2:40 best transit times. It is amazing that the number of riders is as much as it is for the 128 miles times.
The upper Northwest seems to be doing in quite well, too. ACELA seems to be working ok but is always being bashed as not really high speed, the the Boston-Washington-Richmond-Norfolk Corridor is emerging as an Eastern corridor which will benefit by any well run and consistant service...HSR will eventually come but not imperataive.
Correct!!
My point wasn't to provoke an examination of the causes of the decline in passenger rail. Rather, how to bring a positive image of the rails into the public consciousness beyond advertising? Perhaps building a real HSR corridor (I don't consider the existing NEC as a very appealing example for the public) where a good number of out-of-area Americans might gain first-hand experience and become supporters for routes in their home states/regions.
Your positive image goes to the heart of the matter. Even though your "NEC not very appealing" has merit the NEC will probably be the first route in the US that is at least MSR. If AMTRAK can get the funds to fix the signals,curves, and CAT (intermediate hangers for the variable tension CAT) between Newark and PHL for 150 MPH then many Americans will want to try it out when it becomes a less than 1 hr trip NYP - PHL on Acela and 1 hr Regionals. That will give the country first hand experience and will boost support for these passenger's home regions.
One final item is the combining of all transportation funds into one pot. For too long cars and airlines have received both direct and indirect funding that has not gone to rail or transit in any meaniful amounts. I will wait until Sam returns before posting my ideas to get her take..
Hate to say it, but based on her most recent statements her "take" is predictable.
C&NW, CA&E, MILW, CGW and IC fan
Wow! I would love to jump into this discussion, but I know that I would be banished to the "sin bin" in a heartbeat! Been dere, done dat! I must agree that the railroads need to hire more psychologists: "And what were you thinking, Engineer Jones, while you were smoking crack, texting, and scratching when you ran the red signal?". Might be enlightening, even if he didn't come from a broken home.
Hays
blue streak 1...Your positive image goes to the heart of the matter. Even though your "NEC not very appealing" has merit the NEC will probably be the first route in the US that is at least MSR. If AMTRAK can get the funds to fix the signals,curves, and CAT (intermediate hangers for the variable tension CAT) between Newark and PHL for 150 MPH then many Americans will want to try it out when it becomes a less than 1 hr trip NYP - PHL on Acela and 1 hr Regionals. That will give the country first hand experience and will boost support for these passenger's home regions.
Since it sounds like at least some Acelas are sold out with the present schedule; so a faster schedule would only serve to fill out off-peak trains. When you sell speed, you can't expect a potential customer to go either an hour earlier or an hour later.
Second, the fleet plan doesn't include a bi-level Acela that would capture some of the business that is turned away now; and certainly not the additional ridership that would be attracted by a two hour schedule. The seventh car is a stop-gap measure at best.
A third option would be to run an express and a non-stop every hour. In the peak, maybe the Acela would arrive and depart New York with combined sections from and to Newark where trains would couple or split.
The fourth is to spend $5 billion for new Hudson River tunnels and running every half hour that would reduce the effective travel time including average wait time by 15 minutes from 3:10 to 2:55. A two hour schedule with one hour headways is effectively 2:30.
BNSFwatcher Wow! I would love to jump into this discussion, but I know that I would be banished to the "sin bin" in a heartbeat! Been dere, done dat! I must agree that the railroads need to hire more psychologists: "And what were you thinking, Engineer Jones, while you were smoking crack, texting, and scratching when you ran the red signal?". Might be enlightening, even if he didn't come from a broken home. Hays
Actually, sir, may you be banished to the Ford Motor Co. Chicago Assembly Plant and become a member of the United Auto Workers! You may find out how the other half earns a living.
blue streak 1For too long cars and airlines have received both direct and indirect funding that has not gone to rail or transit in any meaniful amounts. I will wait until Sam returns before posting my ideas to get her take..
Well I agree with some of Sam1's presentations but on the other hand we would be all using OX Carts if we applied the arguments presented against passenger rail to all forms of transportation. All you need to do is enter the text term "Airline Subsidy" into Google to see my point. It's good to be sober about the true costs of passenger rail but at the same time we shouldn't ignore it's social and economic benefits.
HarveyK400 The fourth is to spend $5 billion for new Hudson River tunnels and running every half hour that would reduce the effective travel time including average wait time by 15 minutes from 3:10 to 2:55. A two hour schedule with one hour headways is effectively 2:30.
Well lets see --- A total cost to improve the NEC is about $15B. there is about 30,000 passengers a day on the NEC. Now lets see Boston's big dig cost the taxpayers over $15B and still is not finished costing as there are many unresolved issues. So who is subsidized?
blue streak 1Well lets see --- A total cost to improve the NEC is about $15B. there is about 30,000 passengers a day on the NEC. Now lets see Boston's big dig cost the taxpayers over $15B and still is not finished costing as there are many unresolved issues. So who is subsidized?
HSR may be coming along a little late in the day to grab a piece of the necessary subsidies by either Washington or the states. More's the pity; HSR could actually buy a useful product, but I'm afraid all the money has been spoken for by entitlements.
The tragedy, to me, is that the cost of HSR is really chump change ... Washington and the states spill more than Obama's $8 billion every couple of days. We can hope for the best, but HSR had better make a favorable impression quickly, methinks.
HarveyK400 Don't shoot yourself in the foot. $15B for the NEC with 30,000 daily passengers against $15B for the Big Dig for I don't know how many vehicles a day, maybe 150,000? OK so I had fuzzied my memory. Further research puts the final (Central artery/traffic report) cost not counting the repairs still going on at a $21.93B including interest for the big dig. The traffic was improved during rush hour (0700 -0800) of 4 - 14 minutes with a traffic count of 11000 cars. Half that on the shoulder rush hours. The non rush hours 2 - 3 minutes saved with a traffic count of 154,000 total per day. Now the AMTRAK costs for getting BOS - NYP times to 3:10 ( 34 min) of $3.75B. NYP - Wash to 2:00 (37 min) costs $6.4B. Totals are 10.2B with time savings 1:10 BOS - Wash. An additional $7B for the Monyninhan (?) station (no time savings posted) total SOGR $17.2B .. This would be for probably many more AMTRAK passengers. Also MBTA providence - BOS passengers benefit; MBTA - NH - NGCT and nyp passengers benefit; NJ Transit Trenton - Newark - NYP passengers, SEPTA's Trenton - Wilmington passengers, and MARC's Perryville - BAL Passengers. I would think that all these commuter line passengers (any guess how many?) will get 5 - 10 minutes time savings all through the day!! Almost forgot replacement rolling stock of $2.3B. So I do not think I really shot my self in the foot. I understand neither represents an annualized cost for the entire route from Boston to Washington; but be careful about the comparisons you bring up.If part of the justification for rail is capacity; Amtrak may need to prioritize maximize capacity rather than profitability with exploitative pricing with higher capacity trains.Higher capacity trains may be needed but until the equipment is at least ordered that is just a paper exercise. I really appreciate your input and keeping me honest.
Don't shoot yourself in the foot. $15B for the NEC with 30,000 daily passengers against $15B for the Big Dig for I don't know how many vehicles a day, maybe 150,000?
OK so I had fuzzied my memory. Further research puts the final (Central artery/traffic report) cost not counting the repairs still going on at a $21.93B including interest for the big dig. The traffic was improved during rush hour (0700 -0800) of 4 - 14 minutes with a traffic count of 11000 cars. Half that on the shoulder rush hours. The non rush hours 2 - 3 minutes saved with a traffic count of 154,000 total per day.
Now the AMTRAK costs for getting BOS - NYP times to 3:10 ( 34 min) of $3.75B. NYP - Wash to 2:00 (37 min) costs $6.4B. Totals are 10.2B with time savings 1:10 BOS - Wash. An additional $7B for the Monyninhan (?) station (no time savings posted) total SOGR $17.2B .. This would be for probably many more AMTRAK passengers.
Also MBTA providence - BOS passengers benefit; MBTA - NH - NGCT and nyp passengers benefit; NJ Transit Trenton - Newark - NYP passengers, SEPTA's Trenton - Wilmington passengers, and MARC's Perryville - BAL Passengers. I would think that all these commuter line passengers (any guess how many?) will get 5 - 10 minutes time savings all through the day!!
Almost forgot replacement rolling stock of $2.3B.
So I do not think I really shot my self in the foot.
I understand neither represents an annualized cost for the entire route from Boston to Washington; but be careful about the comparisons you bring up.If part of the justification for rail is capacity; Amtrak may need to prioritize maximize capacity rather than profitability with exploitative pricing with higher capacity trains.Higher capacity trains may be needed but until the equipment is at least ordered that is just a paper exercise.
I really appreciate your input and keeping me honest.
The point that was put out was the 30,000 Amtrak riders who would benefit by the NEC improvement (didn't mention the commuters from MBTA to MARC) opened a comparison to the Central Artery that may not show the NEC in as favorable a light as one might wish.
Interesting stats nonetheless.
It's late tonight and I'm not going to sit down and compare the minutes saved per dollar spent.
dakotafred HSR may be coming along a little late in the day to grab a piece of the necessary subsidies by either Washington or the states. More's the pity; HSR could actually buy a useful product, but I'm afraid all the money has been spoken for by entitlements. The tragedy, to me, is that the cost of HSR is really chump change ... Washington and the states spill more than Obama's $8 billion every couple of days. We can hope for the best, but HSR had better make a favorable impression quickly, methinks.
So let me get this straight. So much money is being wasted on Grandma's Social Security check, Uncle Fred's heart stent, and cousin Martha's kidney dialysis, so why can't we waste so money on HSR?
If GM "killed the electric car", what am I doing standing next to an EV-1, a half a block from the WSOR tracks?
Paul Milenkovicdakotafred HSR may be coming along a little late in the day to grab a piece of the necessary subsidies by either Washington or the states. More's the pity; HSR could actually buy a useful product, but I'm afraid all the money has been spoken for by entitlements. The tragedy, to me, is that the cost of HSR is really chump change ... Washington and the states spill more than Obama's $8 billion every couple of days. We can hope for the best, but HSR had better make a favorable impression quickly, methinks. So let me get this straight. So much money is being wasted on Grandma's Social Security check, Uncle Fred's heart stent, and cousin Martha's kidney dialysis, so why can't we waste so money on HSR?
Let us hope that in the age of distortion, people can still distinguish between the purposes of useful social services and investments in infrastructure, such as HSR.
HarveyK400The point that was put out was the 30,000 Amtrak riders who would benefit by the NEC improvement (didn't mention the commuters from MBTA to MARC) opened a comparison to the Central Artery that may not show the NEC in as favorable a light as one might wish.Interesting stats nonetheless. It's late tonight and I'm not going to sit down and compare the minutes saved per dollar spent.
Minutes saved per dollar invested is an interesting measure, but I don't think all minutes are created equal. A five minute chunk of time is not the same as five, one minute chunks (as anyone with toddlers would know.). Knocking 30 minutes or an hour off the occasional trip might be more valuable than saving a minute a day on a commute, 220 days a year.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
I have worked in the government. Government programs are usually designed to please the largest number of voters and so are universally spread too thin. Providing poor service for many people instead of good service for fewer people makes the project counter productive and an apparent failure.
Amtrak, in most markets, provides one train a day. In some markets it's not even every day.
What should be done is to pick one interstate heavily traveled route and do it right. They could then point to the success along that route when they seek funding to pick another route and do it again. Eventually an entire system would evolve. Amtrak should only provide high speed interstate service among large cities with one stop in each city.
Intrastate service serving the smaller communities and connecting those smaller communities to the high speed arteries should be the responsibility of the state and local governments. Providing station facilities should be the responsibility of the local government.
Dave
Lackawanna Route of the Phoebe Snow
Phoebe VetWhat should be done is to pick one interstate heavily traveled route and do it right....
The Congressional Budget Office (CBO) and Government Accountability Office (GAO) have different missions.
The CBO provides the Congress with (1) objective, nonpartisan, and timely analyses to aid in economic and budgetary decisions on programs covered by the federal budget and (2) the information and estimates required for the Congressional budget process. Its major activity is to prepare cost estimates of proposed legislation. Its reports contain no policy recommendations. It is staffed by 250 economists and public policy analysts. Douglas W. Elmendorf is the Director. He is a Ph d economist.
The GAO investigates (audits) how the federal government spends taxpayer dollars. It is an independent, nonpartisan audit agency that is staffed by 3,300 accountants, attorneys, computer experts, economists, and public policy experts, as well as support personnel, in 11 U.S. field offices. Gene L. Dodare is the Acting Comptroller General of the United States and head of the GAO. Like his predecessor, David M. Walker, he is a professional accountant.
Successful entrepreneurs have a unique a vision, but they know that their visions will go nowhere unless they have a viable financial plan. And viable financial plans mean financial planners, venture capitalists, and accountants.
The idea for Southwest Airlines germinated in the minds of a pilot businessman and attorney. The first president was a CPA. His business acumen, which reflected a wide variety of tools and techniques used by accountants, laid the operating and financial strategy that ensured Southwest's success. Amongst other things the founders knew that their vision would not fly (no pun intended) unless they had a solid business and financial plan. Needless to say, they got it right. Unlike government projects, success in business requires a viable business plan. And that means accountants, financial planners, etc.
Speaking of the GAO, here are some key findings from its audit of a representative sample of the HSR plans afoot in the U.S., as per its March 2009 report:
Sam1While all U.S. sponsors of HSR cited a variety of public benefits that would flow from their projects, the extent to which benefits have been quantified and valued varied across projects. Ridership and revenue projects are often significantly (overly) optimistic.
Being something of a dumb newbie in these things I'd like to know one thing----has there ever been a type of marketing survey to ascertain just how AMTRAK--or any other passenger service for that matter--performed in terms of number of passengers/pass. miles/ that type of thing?
I've been wondering about the claims myself regarding ridership. I know that Alberta did a study of a sort that did find a desire/need(?) for passenger rail service between Edmonton AB and Calgary AB but the HSR portion was rather minimal. Would anything like that be useful?
New services are always market researched and continuing services are always reviewed. That's why and how changes in schedules, equipment, and connections are usually determined. There is nothing that happens in America today that isn't put under microscopic inspection, researched, reviewed, anaylyzed, debated and debated again, before it happens. And when politicians money is involved it is doubled lest some Congressman from the other side of the world gets more than another. My sarcarstic way of saying that yes, things like this are researched and studied before billions of dollars are put up an in. American business money will be put up only when there is a 99.9999999% chance it will either be a total success or big time tax write off.
RIDEWITHMEHENRY is the name for our almost monthly day of riding trains and transit in either the NYCity or Philadelphia areas including all commuter lines, Amtrak, subways, light rail and trolleys, bus and ferries when warranted. No fees, just let us know you want to join the ride and pay your fares. Ask to be on our email list or find us on FB as RIDEWITHMEHENRY (all caps) to get descriptions of each outing.
Sam1The idea for Southwest Airlines germinated in the minds of a pilot businessman and attorney. The first president was a CPA. His business acumen, which reflected a wide variety of tools and techniques used by accountants, laid the operating and financial strategy that ensured Southwest's success. Amongst other things the founders knew that their vision would not fly (no pun intended) unless they had a solid business and financial plan. Needless to say, they got it right. Unlike government projects, success in business requires a viable business plan. And that means accountants, financial planners, etc.
Heh-heh, better do some research on how Southwest Airlines used the Wright Amendment to reduce competition for a number of years. I believe that America West was trying to compete head to head against Southwest but Southwest effectively used the Wright Amendment along with political lobbying to prevent the competition. I really do not see Airlines as a model of unsubsidized travel.
Sam1Some proposed U.S. HSR corridors may be economically viable, although they are unlikely to cover their cost through ticket revenues. Decision makers have had difficulty ascertaining their viability due to the uncertainties of ridership forecasts, cost estimates, and public benefits.
That maybe true, however, I think you'll find the GAO tends to look at just one specific line vs a entire system or network. Kind of like looking at a single airline spoke without the hub.
Sam1Project sponsors must typically trade-off some level of ridership to reduce costs. For example, most domestic projects being considered are incremental projects on track shared with freight operators-a choice that limits the travel time competitiveness and reliability valued by riders that would be possible on more expensive, dedicated track.
Not mentioned here is that rail frieght in most cases can be cheaply routed to other lines off the shared lines or on new lines which avoid the increasing frequency passenger service. I think this is a flaw in this logic.
Very true. Politicians and HSR do not mix.
Sam1In each of three countries the auditors visited, the central government paid the up-front construction costs of their country's high speed rail lines, with no expectation that its investment would be recouped through ticket revenues.
Same with the Interstate Highway system and our current alleged "private" airline system. So ho-hum here.
Sam1 Federal funding for rail in general, and high speed rail in particular has largely been obtained from general revenues, as opposed to trust funds or other dedicated federal funding sources, such as those that fund other transportation modes. Federal, state, and private funding constraints raise questions about how HSR is to be funded for the long haul. For example, private funding is difficult to obtain without significant federal and state government support.
Thats fine so all we need to do to fix that is establish a trust fund I believe thats been partly taken care of by the Federal DOT has it not? Can't Interstate Highway funds or parts of the gas tax be diverted to rail or mass transit projects. I don't see this as particularly bad thing, just says we have to get our funding in order so as to not add to the deficit. I agree with this.
Sam1The Federal Railroad Administration, which has a key role to play in evaluating proposals for HSR projects, has not yet determined how performance and accountability will be incorporated into the review and evaluation of grant applications.
Well the FAA hasn't replaced our Air Traffic Control system, so my guess is if we wait on the FRA it could be a Century longer of waiting.
Sam1The auditors did not find a national strategy for HSR, i.e. objectives, benefits, accountabilities, etc., and, therefore, recommended to the Secretary of Transportation that a HSR strategy be developed. The Secretary agreed.
The Strategy for the Interstate Highway initially was National Defense. Why can't the strategy for HSR be increased mobility and increased productivity. Interesting throughout all these bullet points with a PhD in Economics mentioned......it is never mentioned how increased mobility and intermodalism adds to productivity..............which contributes to our GDP. Wonder why that is?
CMStPnP Sam1The idea for Southwest Airlines germinated in the minds of a pilot businessman and attorney. The first president was a CPA. His business acumen, which reflected a wide variety of tools and techniques used by accountants, laid the operating and financial strategy that ensured Southwest's success. Amongst other things the founders knew that their vision would not fly (no pun intended) unless they had a solid business and financial plan. Needless to say, they got it right. Unlike government projects, success in business requires a viable business plan. And that means accountants, financial planners, etc. Heh-heh, better do some research on how Southwest Airlines used the Wright Amendment to reduce competition for a number of years. I believe that America West was trying to compete head to head against Southwest but Southwest effectively used the Wright Amendment along with political lobbying to prevent the competition. I really do not see Airlines as a model of unsubsidized travel. Southwest Airlines was founded in 1971 and became operational that year. It morphed from a small charter operation out of San Antonio. It launched its Dallas operations from Love Field. Immediately, American, Braniff, etc. sued in federal court to stop its operations, claiming that it could not operate from Love because the Love based carriers had agreed to fly from the new DFW Airport. Southwest countered that it was not part of the agreement to operate from DFW and could not be prohibited from operating an intrastate carrier from Love. Ultimately, it prevailed in the courts. American, Braniff, etc. convinced Speaker of the House Jim Wright to have the Congress pass an amendment prohibiting common carriers from serving cities beyond Texas' contiguous states. Southwest Airlines had nothing to do with the amendment; in fact, it was bitter opposed to it. Several airlines, including American and Continental, have attempted to compete with Southwest out of Love. All of them failed, with the exception of Continental Air Express, which has a commuter run to Houston Intercontinental Airport. America West was formed in 1981 and became operational in 1983, which was long after Southwest had established itself at Love. I don't believe America West ever seriously considered taking on Southwest at Love. It flew out of DFW prior to the merger with U.S. Airways. The key point of my posting, however, was to show that accountants, contrary to a previous posting, wear many hats, including on occasion CEO, and tend to facilitate rather than squash business visions. Bean counting is something accountants do early in their career; the ones with ambition and brains become an integral part of the management team. As my experience showed, their advice is sought from the get go. Sam1Some proposed U.S. HSR corridors may be economically viable, although they are unlikely to cover their cost through ticket revenues. Decision makers have had difficulty ascertaining their viability due to the uncertainties of ridership forecasts, cost estimates, and public benefits. That maybe true, however, I think you'll find the GAO tends to look at just one specific line vs a entire system or network. Kind of like looking at a single airline spoke without the hub. The GAO, which is arguably the most objective U.S. Government Agency, looked at 16 domestic high and moderate speed passenger rail projects. That strikes me as more than a single spoke. I spent more than 40 years working for corporate America, including 33 years in Dallas. I was an accounting and audit manager. The only government agency that we looked to for best practice ideas was the GAO, primarily because of its objectivity and the excellent quality of its work. Sam1Project sponsors must typically trade-off some level of ridership to reduce costs. For example, most domestic projects being considered are incremental projects on track shared with freight operators-a choice that limits the travel time competitiveness and reliability valued by riders that would be possible on more expensive, dedicated track. Not mentioned here is that rail frieght in most cases can be cheaply routed to other lines off the shared lines or on new lines which avoid the increasing frequency passenger service. I think this is a flaw in this logic. These is scant evidence to support this point. For example, the Union Pacific said that it would cost more than $1.86 billion to route freight traffic off of its line from Taylor to San Antonio to enable the Austin to San Antonio commuter rail project. That is just the cost of the relocation work. It does not include the financing. Depending on the length and terms of the financing, it could easily double the total cost over the life of the debt financing, which usually runs in the neighborhood of 30 years. Sam1While all U.S. sponsors of HSR cited a variety of public benefits that would flow from their projects, the extent to which benefits have been quantified and valued varied across projects. Ridership and revenue projects are often significantly (overly) optimistic. Very true. Politicians and HSR do not mix. Sam1In each of three countries the auditors visited, the central government paid the up-front construction costs of their country's high speed rail lines, with no expectation that its investment would be recouped through ticket revenues. Same with the Interstate Highway system and our current alleged "private" airline system. So ho-hum here. The U.S. Highway Trust Fund, which was established to fund the Interstate Highway System, as well as other federal road projects, received a start-up infusion from the general fund of $25 billion. It was quickly recovered from user fees. In fact, until 2000, when the fund balance reached $31.1 billion, it ran a surplus, but because the Congress refused to raise the federal fuel taxes, the fund mangers were required to draw down the surplus. In addition, during the Reagan and first Bust administrations, monies were transferred to the Mass Transit Fund and for deficit reduction. In FY08 the fund required a transfer of $8 billion from the general fund to remain viable. The cost of the airways system has been paid for by the commercial airlines, general aviation, and the military operatiing in civilian airspace. All modes of transport, however, recieve some subsidy from the federal, state, and local governments. But nothing comes close to the amount of subsidy required by passenger rail. In FY2008 Amtrak, as an example, received an average federal subsidy of 22.61 cents per passenger mile compared to .42 cents for the airlines and .026 cents for vehicle miles travelled. Closer to home, Trinity Railway Express (TRE) received an average subsidy of 20.5 cents per passenger mile. Sam1 Federal funding for rail in general, and high speed rail in particular has largely been obtained from general revenues, as opposed to trust funds or other dedicated federal funding sources, such as those that fund other transportation modes. Federal, state, and private funding constraints raise questions about how HSR is to be funded for the long haul. For example, private funding is difficult to obtain without significant federal and state government support. Thats fine so all we need to do to fix that is establish a trust fund I believe thats been partly taken care of by the Federal DOT has it not? Can't Interstate Highway funds or parts of the gas tax be diverted to rail or mass transit projects. I don't see this as particularly bad thing, just says we have to get our funding in order so as to not add to the deficit. I agree with this. Sam1The Federal Railroad Administration, which has a key role to play in evaluating proposals for HSR projects, has not yet determined how performance and accountability will be incorporated into the review and evaluation of grant applications. Well the FAA hasn't replaced our Air Traffic Control system, so my guess is if we wait on the FRA it could be a Century longer of waiting. The FAA is replacing the air traffic control system. Although the current system is outmoded, it is not dysfunctional. Monies for Next Gen, which will cost approximately $20 billion, is in the FY10 and FY11 budgets. Sam1The auditors did not find a national strategy for HSR, i.e. objectives, benefits, accountabilities, etc., and, therefore, recommended to the Secretary of Transportation that a HSR strategy be developed. The Secretary agreed. The Strategy for the Interstate Highway initially was National Defense. Why can't the strategy for HSR be increased mobility and increased productivity. Interesting throughout all these bullet points with a PhD in Economics mentioned......it is never mentioned how increased mobility and intermodalism adds to productivity..............which contributes to our GDP. Wonder why that is?
Southwest Airlines was founded in 1971 and became operational that year. It morphed from a small charter operation out of San Antonio. It launched its Dallas operations from Love Field. Immediately, American, Braniff, etc. sued in federal court to stop its operations, claiming that it could not operate from Love because the Love based carriers had agreed to fly from the new DFW Airport. Southwest countered that it was not part of the agreement to operate from DFW and could not be prohibited from operating an intrastate carrier from Love. Ultimately, it prevailed in the courts.
American, Braniff, etc. convinced Speaker of the House Jim Wright to have the Congress pass an amendment prohibiting common carriers from serving cities beyond Texas' contiguous states. Southwest Airlines had nothing to do with the amendment; in fact, it was bitter opposed to it.
Several airlines, including American and Continental, have attempted to compete with Southwest out of Love. All of them failed, with the exception of Continental Air Express, which has a commuter run to Houston Intercontinental Airport. America West was formed in 1981 and became operational in 1983, which was long after Southwest had established itself at Love. I don't believe America West ever seriously considered taking on Southwest at Love. It flew out of DFW prior to the merger with U.S. Airways.
The key point of my posting, however, was to show that accountants, contrary to a previous posting, wear many hats, including on occasion CEO, and tend to facilitate rather than squash business visions. Bean counting is something accountants do early in their career; the ones with ambition and brains become an integral part of the management team. As my experience showed, their advice is sought from the get go.
The GAO, which is arguably the most objective U.S. Government Agency, looked at 16 domestic high and moderate speed passenger rail projects. That strikes me as more than a single spoke. I spent more than 40 years working for corporate America, including 33 years in Dallas. I was an accounting and audit manager. The only government agency that we looked to for best practice ideas was the GAO, primarily because of its objectivity and the excellent quality of its work.
These is scant evidence to support this point. For example, the Union Pacific said that it would cost more than $1.86 billion to route freight traffic off of its line from Taylor to San Antonio to enable the Austin to San Antonio commuter rail project. That is just the cost of the relocation work. It does not include the financing. Depending on the length and terms of the financing, it could easily double the total cost over the life of the debt financing, which usually runs in the neighborhood of 30 years.
The U.S. Highway Trust Fund, which was established to fund the Interstate Highway System, as well as other federal road projects, received a start-up infusion from the general fund of $25 billion. It was quickly recovered from user fees. In fact, until 2000, when the fund balance reached $31.1 billion, it ran a surplus, but because the Congress refused to raise the federal fuel taxes, the fund mangers were required to draw down the surplus. In addition, during the Reagan and first Bust administrations, monies were transferred to the Mass Transit Fund and for deficit reduction. In FY08 the fund required a transfer of $8 billion from the general fund to remain viable.
The cost of the airways system has been paid for by the commercial airlines, general aviation, and the military operatiing in civilian airspace. All modes of transport, however, recieve some subsidy from the federal, state, and local governments. But nothing comes close to the amount of subsidy required by passenger rail. In FY2008 Amtrak, as an example, received an average federal subsidy of 22.61 cents per passenger mile compared to .42 cents for the airlines and .026 cents for vehicle miles travelled. Closer to home, Trinity Railway Express (TRE) received an average subsidy of 20.5 cents per passenger mile.
The FAA is replacing the air traffic control system. Although the current system is outmoded, it is not dysfunctional. Monies for Next Gen, which will cost approximately $20 billion, is in the FY10 and FY11 budgets.
henry6 New services are always market researched and continuing services are always reviewed. That's why and how changes in schedules, equipment, and connections are usually determined. There is nothing that happens in America today that isn't put under microscopic inspection, researched, reviewed, anaylyzed, debated and debated again, before it happens. And when politicians money is involved it is doubled lest some Congressman from the other side of the world gets more than another. My sarcarstic way of saying that yes, things like this are researched and studied before billions of dollars are put up an in. American business money will be put up only when there is a 99.9999999% chance it will either be a total success or big time tax write off.
I spent more than 40 years working for corporate America. Not once did we look for a 99 per cent probability of success. If we had nothing would have been done. Instead, we looked for reasonable probabilities, using Net Present Value and Internal Rate of Return math models, amongst others, to guide our decision making. To be sure, we factored in the tax consequences of our investment decisions, but no business remains viable by writing off its loses.
Rail projects don't cost out. That is why no business has attempted to enter the rail passenger business. Even if the government owned the rails, which in the case of Amtrak it does in certain corridors, there is scant evidence that rail passenger services could cover its operating costs and provide a return to the investors. Only government, with it relatively unlimited ability to tap out the taxpayers, is in the intercity rail passenger business.
Speaking of revenue projects, the California High Speed Rail proponents claimed that they would be able to offer a $55 fare from Los Angeles to San Francisco. Last week, I saw where they have revised their estimate. It is now $115.
oltmanndSam1While all U.S. sponsors of HSR cited a variety of public benefits that would flow from their projects, the extent to which benefits have been quantified and valued varied across projects. Ridership and revenue projects are often significantly (overly) optimistic.I've see this criticism expressed often, but never other than an opinion. Since virtually no new intercity work has been done, how can the ridership estimate methods be vetted? I would like to see the details about this. Is the report on line somewhere? Would you have a link handy?
The GAO Report can be found on its website. I don't remember how I found it; I think I was running a search one day when I came across it.
When I was overseeing work similar to that performed by the GAO, we looked at the customer and revenue estimates, amongst the other key financial elements, for new projects. Every project (new power station, transmission line, long term contract) had to demonstrate its business viability. To be sure, it is a difficult task.
Effective project managers don't come up with just one scenario. Rather, they develop three or four that are plausible and can be defended. Model consistency, control, and comparability were amongs the elements that we evaluated. We also tested the projections against similar activities. If these characteristics were absent, we raised a red flag.
If a project proponent went to a venture capitalist with a business plan that did not contain reasonable projects for customers and revenues, as well as the other key elements of a financial plany, she would get nowhere.
Sam1The GAO Report can be found on its website. I don't remember how I found it; I think I was running a search one day when I came across it.
The airline industry is in fact heavily subsidized by all levels of governent. The obvious is nationwide air traffic control followed by municipally owned and operated airports. But also the US military's investment in air and space research and development and purchase these products takes the financial burden off private airline companies by them being able to buy an already researched and proven product without financial risk. Then there are the safety guidlines for operation and employee responsiblity, all spelled out and enforced by the government. There's probably a lot more. But you cannot say the airline industry is not subsidized.
henry6 The airline industry is in fact heavily subsidized by all levels of governent. The obvious is nationwide air traffic control followed by municipally owned and operated airports. But also the US military's investment in air and space research and development and purchase these products takes the financial burden off private airline companies by them being able to buy an already researched and proven product without financial risk. Then there are the safety guidlines for operation and employee responsiblity, all spelled out and enforced by the government. There's probably a lot more. But you cannot say the airline industry is not subsidized.
Yes, airlines are not only subsidized, they are "heavily subsidized."
Heavy subsidy is subsidy on the level of 20 cents/passenger mile. Like Amtrak. For the "above the rails" part of the operation.
Airline passenger miles to Amtrak passenger miles are in the ratio of 100 to 1. By that accounting, some 140 billion dollars is being spent out of general revenue on airlines in some direct or indirect form.
OK, find 140 billion dollars in public money being spent in one form or another in airlines. Then we can can support the assertion of "heavy subsidies."
oltmanndSam1The GAO Report can be found on its website. I don't remember how I found it; I think I was running a search one day when I came across it. Thanks. I did search and find it. It was disappointed at the depth of their analysis of ridership models and estimates. It was really just a discussion of the factors that influence them and how they might be less than objective. I was hoping for some analysis to see which of these factors played out where, when and with whom. That is, why do some projects tend to underestimate (Amtrak's Lynchburg train) and some overestimate (Amtrak's Atlantic City service). It doesn't seem to be relevant to me if ridership projections in China or Spain are bad if one does not take the country's culture and politics into account as a variable. There was no "there" there.
Auditors don't develop customer and revenue projections. They comment on the robustness or lack thereof of the projections that have been developed by the project's proponents.
As I read the report, that is exactly the conclusion that they came to, i.e. the ridership and revenue projections are shakey, although they vary from project to project.
Your claim is long on generalizations and short on facts. The airline industry is not heavily subsidized, whatever heavy means, NARP's claims to the contrary not with standing. In fact, although it would take an enormous amount of time to demonstrate it, the Net Present Value (NPV) of the subsidies received by the airlines could pale compared to the NPV of the local, state, and federal subsidies (low cost bonds, land grants, etc.) given to the railroads.
Most airports in the United States were built by the military (turned over to civilian operators) or local government authorities. They are paid for by landing fees, hangar fees, vendor fees, parking fees, etc. Most of them are self-supporting.
Nation wide the airlines use about 30 to 35 per cent of the U.S. aviation infrastructure. The remainder is used by general aviation and the military operating in civilian airspace. Not all of the monies transferred from the general fund (approximately $2.2 billion in FY08), which is a federal subsidy, go to the airlines. They only benefit from a proportional share of it.
Most airports in the U.S. were built with tax free municipal bonds. The difference between the interest paid on these bonds and the interest that would have been paid on fully taxable bonds could be seen as a federal subsidy. Moreover, they may or may not qualify for a state subsidy, depending on whether the state has an income tax and treats the interest on the tax free bonds the same way that it is treated by the federal government. Historically, the rate spread between a AAA municipal bond and AAA corporate bond has been less than one per cent. For example, the spread between a AAA corporate (there are very few corporates with this high of a rating) and U.S. Treasury long bonds, which are a good emulator for municiple rates, was 90 basis points between 2000 and 2008. By using tax free financing, airports are able to charge slightly lower fees than would be the case if they had to resort to taxable financing. However, because the airlines, as well as other commercial users, pay slightly lower fees than would otherwise be the case, they have high income, assuming that they have any income at all, which results in higher taxes, which in turn means that a portion of the so-called subsidy is actually paid back to the federal government in higher income taxes.
But this is irrelevant. The key question is how to fund passenger rail, if funding it at all is appropriate, and what transport problem is it addressing. It does not matter how or why the government funds other activities.
Our community is FREE to join. To participate you must either login or register for an account.