Is a daily "Sunset Limited" worth $750 million?

Posted by Fred Frailey
on Friday, September 3, 2010

Union Pacific has told Amtrak that changing the Sunset Limited’s frequency from triweekly to daily will cost the government-supported company about $750 million in capital improvements. It’s fair to say the vice presidents at Amtrak headquarters in Washington, D.C., are reeling from sticker shock.
Here’s the back story: Earlier this year, Amtrak’s board of directors approved daily operation of the Sunset, with an eye toward an October inauguration. The stars seemed lined up in the heavens because the existing equipment pool could cover the trips, and revenue gains were estimated to cover the higher costs. The idea was to reorient the train into a Los Angeles-Chicago service via San Antonio, Texas, with a section also running daily between San Antonio and New Orleans. The Texas Eagle already provides connecting service daily between Chicago and San Antonio.
Hold it right there, said Union Pacific. We’ve got plans to run a lot more Z (or express) freight trains across the Sunset Route in times to come. Plus, every time you switch the Chicago-LA cars from the Texas Eagle onto the New Orleans-LA Sunset at San Antonio, or vice versa, our freight trains grind to a halt for a considerable period.
To test the impact of a daily Sunset on UP operations, the railroad did a re-dispatching study, using Rail Traffic Controller software. It assumed train volumes from pre-recession 2007. And it stipulated one significant requirement: There could be no delay to the Sunset or to any UP freight train.
Union Pacific came up with an estimate of $400 million in capital improvements necessary to achieve seamless operation of a daily Sunset west of San Antonio. Between San Antonio and New Orleans, more study is necessary, but Amtrak people are of a mind that the bill for infrastructure improvements, particularly in the Houston area, will come to about $350 million.
So there you have it. Some UP people I’ve communicated with feel very strongly that this will be (or should be) Union Pacific’s take-it-or-leave-it position. Others are more open to a dialogue. But right now the take-it-or-leave-it faction appears in control.
Here’s how I suspect this story will play out: His past behavior suggests that Amtrak President Joe Boardman has no stomach whatsoever for confrontion. So don’t count on his negotiating with UP’s chief executive, Jim Young. Odds are that Amtrak will take this to the Surface Transportation Board for adjudication. The STB will take a sword and cut the baby in half, ruling that Amtrak must make some capital improvements but nowhere near the $750 million. And about the time the Obama girls graduate from college, you and I will be able to enjoy daily service on the historic Sunset Limited.

Enjoy the photos from my recent trip, smoke stop at Del Rio, Texas (top), and from the westbound Sunset west of San Antonio. Fred W. Frailey

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