By M.E. Singer
For those of us who attained adulthood before the dawn of Amtrak, we were initially thrilled with high hopes the passenger train would be saved; acquire governmental investments (i.e., “subsides”) in equipment and infrastructure in common with other modes of transport; and actually expand to meet its potential. However, within a very short time span we were sadly awakened to a certain reality of lost faith. Just as General Westmoreland learned their was no “light at the end of the tunnel,” because their was no “tunnel” in Vietnam, so too have rail advocates and pundits approached any governmental action regarding Amtrak with suspicion.
Frankly, as it was written under the FAST Act, this FRA bid concept reads more like a manifesto embracing a “Gordian Knot” that portends the devolution of Amtrak. Like peeling layers of the onion, this FRA program is aimed directly at the winnowing of long distance routes from the federal treasury. How else can we read into this “new and improved approach” to long distance routes?
FRA’s pilot program is directed towards “eligible petitioners;” yet, we lack such experienced operators, as the private firms here have been focused on commuter services. However, their is always European private operators excelling in their services-but only in daytime corridor runs. Apparently, only the Austrian Federal Railway (OBB) continues to enthusiastically expand its fleet of “Night Jet” overnight trains.
To clarify, FRA’s vision of a corral of eager private operators will not be allowed to piggyback on Amtrak’s track access rights, current user fee lease arrangement, nor Amtrak’s own insurance program. Yet, despite such private operators lacking the requisite skills negotiating with Class 1s for trackage and dispatching rights, they will be required to furnish such agreement in writing denoting such access rights, before the bid is awarded.
For discussion purposes only, let’s say the vast hurdle of access is achieved. However, will the new operator be required to honor all current labor agreements in place with Amtrak for OBS, T&E, reservations, depot services, etc? What about the costs to access depots, yards, RIP tracks, maintenance/repair facilities, etc? What about equipment? Unlike Europe, doubtful any operator will invest in new equipment, or, pay to fully rehabilitate the overused, long neglected Superliners; nor will they fall prey to those peddling a pipe dream of used equipment already rejected by multiple states.
Why this is a smoke-screened to maneuver against the long distance trains is disclosed in the lessons provided within an historical context obviously unlearned, or, disregarded by the FRA, including:
1. Why not contemplate competitive bids to franchise or give open access in competition to Amtrak?
-The caveat here is to prevent a private operator from dictating terms of exclusivity to the detriment of the current schedule serving the many multi-market segments of en route communities, as well as connecting them to the end points. History has evidenced how this concept got of control: The proposal of operating just a tour-type train stopping every evening to overnight at hotels has only been feasible for the “Rocky Mountaineer,” between Vancouver-Jasper/Banff, by overnighting in Kamloops (equivalent to a night in Fort Wayne). Yet, this private organization persists in using its political prowess and lobbyists playing to the naysayers in Ottawa by undermining the transcontinental train operated by VIA Rail Canada, despite these services not being competitive.
Interestingly, this transcontinental train operated by VIA Rail Canada, “The Canadian,” was allowed to have its advantageous route sabotaged by the Tory Prime Minister of Canada, Brian Mulroney, in 1990, in a smoke-filled boardroom at CP’s HQ in Calgary. VIA’s long-term, traditional route over the CP directly serving the large tourist market for Banff/Lake Louise, as well as the most populated towns en route, was extinguished, forcing VIA onto the less populous, less scenic CN line. “Rocky Mountaineer” was awarded exclusive access on CP between Vancouver-Banff-Calgary. Soon after, “The Canadian” was reduced from daily to two days per week for the non-seasonal market (and than, only three times per week operation); causing increased losses; forced to incur additional costs by adding a fourth night to its schedule to no avail to counter CN’s indifference to On-Time Performance (OTP).
2. Whatever happened to the argument of economy of scale? How would any private operator not be allowed to participate in the benefits derived from the rational for creating Amtrak, e.g., centralized reservations, commissaries, maintenance/repair, purchasing, and eventually, standardized power and equipment?
-However, perhaps a valid private operator from Europe could evidence its expertise by educating the FRA in the relationship of schedules, minus a preponderance of padding, to achieve improved asset utilization? Of course, this continues to be dependent upon the Class 1s respecting OTP, which relates to their enmity over track value. As well, perhaps such a private operator could also appropriately define the true incremental cost of increasing frequency vs. the Amtrak definition of full cost by ignoring both incremental, and GAAP (just in its Northeast Corridor).
3. The open-bid process conducted by the State of Indiana in 2014 for the “Hoosier State” (Indianapolis-Chicago 4 days/week) was a harsh lesson in reality.
-The value to vet proposed operators up front before any award of service was demonstrated in respect to experience, availability of equipment, financing, and working relationship with Amtrak and Class 1s. As well, how the vetting process should clearly identify the bidders capacity to specifically evidence their heft for start-up and working capital funds. Appropriate due diligence by the state would have also clearly identified Amtrak’s position not to be a subcontractor to any operator. (IPH eventually stepped in to operate this train under Amtrak until consumed by legal/financial issues.)
4. Unlike Europe where the governments own the rail infrastructure, in North America all such infrastructure beyond the Northeast Corridor is owned and controlled by private Class 1s, who covet the increased value of their track slots. After mergers and track abandonment, the resulting tighter track capacity has the Class 1s firmly believing they are still not being paid the full value for access by Amtrak, despite the inflated bonus they receive for a dubious effort at OTP.
-Logically, a proven, experienced private operator should bid to assume all responsibilities for ensuring improvement of the customer experience at the higher revenue potential of first class (currently downgraded to “Sleeper Class”) on the current long distance routes. This should anticipate beginning on an incremental basis, eventually to include business class. Certainly, all customer experience services would come under the purview and control of the private operator, including food/beverage services; operation and staffing of first class diner, club, and sleeping cars; provisioning; on-board and housekeeping services. For equipment, perhaps the feasibility of utilizing PVs?
-Remember how the Santa Fe managed from 1958-1971 to combine off-season its “El Capitan” and “Super Chief,” with separate dining and lounge cars, as well as single level and hi-level cars? Given Amtrak’s issues and indifference to ‘spending money to make money,’ let Amtrak just continue running the long distance routes and operating within its current, limited realm of a standardized ability for the coach and cafe sections of the train.
In respect to the plethora of economic issues to restrain any viable bid and private operation of a long distance route, this scenario remains unfeasible. Accordingly, what is the actual point to this FRA pilot program to induce private bids on merely three long distance routes, other than being a “straw horse” to kill those routes? Who is fighting the most logical approach to the long distance routes, as identified in section #4–Amtrak, FRA, DOT; who?