FRA Private Rail Operator Pilot - Ed Ellis Comments & Other

I was looking through the various comments filed by various folks in response to FRA's request for comment on rule making for the Competitive Passenger Rail Service Pilot Program.

Here are his comments:

https://www.regulations.gov/contentStreamer?documentId=FRA-2016-0023-0011&attachmentNumber=1&disposition=attachment&contentType=pdf

I learned a lot about how difficult Amtrak makes it for anyone to do anything that it considers to be a threat to itself. In past we had heard rumors of similar behavior when VRE removed Amtrak as its operating contractor and replaced them by a private outfit. Being an exclusively government funded organization I think this is quite inappropriate behavior on the part of Amtrak and needs to be curbed by regulations. I think we rail advocates should make it quite clear that while we support passenger rail service whole heartedly, we do not support obstructionist behavior from an outfit that would not exist without our work to keep it funded.

Anyhow, I learned an enormous amount about the underbelly of the passenger rail business in the US today.

BTW, comments from NARP filed by Malolm Kenton can be found here:

https://www.regulations.gov/document?D=FRA-2016-0023-0003

And comments filed by Amtrak can be found here:

https://www.regulations.gov/contentStreamer?documentId=FRA-2016-0023-0007&attachmentNumber=1&disposition=attachment&contentType=pdf

I just finished reading NCDOT's response which is a very good one too. It can be found here:

https://www.regulations.gov/contentStreamer?documentId=FRA-2016-0023-0008&attachmentNumber=1&disposition=attachment&contentType=pdf

And the response from the Independent passenger Rail Operators brings up some basic issue including the inherent conflict of interest that exists in the FRA and how it needs to be scrupulously neutral in selecting from among the bidders which may include Amtrak, to which the FRA is tied at the hip. There are some examples mentioned where it could already appear that FRA has crafted the rules adding elements that are not in the statutes which sets things up for the pilot to fail. Here is theri response:

https://www.regulations.gov/contentStreamer?documentId=FRA-2016-0023-0005&attachmentNumber=1&disposition=attachment&contentType=pdf

Thank you for the links. Was try to find them myself, but failed.

There's a sense in which this is all completely beside the point. Where a state or government agency owns the tracks, there has been little or no difficulty in contracting out. Where a "freight" railroad owns the tracks, or worse, the route is owned by *multiple* such railroads, only Amtrak has had the clout and influence to actually get trains running on those tracks.

So this is a sideshow. The important question is who owns the tracks. This needs to be *de*-privatized. Vermont is even having trouble with NECR (!) and will probably have to nationalize that track eventually.

neroden said:

There's a sense in which this is all completely beside the point. Where a state or government agency owns the tracks, there has been little or no difficulty in contracting out. Where a "freight" railroad owns the tracks, or worse, the route is owned by *multiple* such railroads, only Amtrak has had the clout and influence to actually get trains running on those tracks.

So this is a sideshow. The important question is who owns the tracks. This needs to be *de*-privatized. Vermont is even having trouble with NECR (!) and will probably have to nationalize that track eventually.

Click to expand...

And when is this supposed to happen? Why in the world would you nationalize an industry that is in the black by multiple billions of dollars?

Ideology makes for a powerful motivator on all sides.

After reading Ed's thoughts I am curious to which three services he is interested in. From how I understood it he was going to put a bid in for three services.

Then here are some points

Equipment

-Amtrak equipment is indeed a bit run down and unreliable.

-IP equipment the rebuilt cars for the HS are supposedly good(I don't know). But other cars I've worked with (SLRG 448, Jackson Square, Sky View, Scenic View, and Prairie View) all have problems. Some more then others which worries me about the equipment he would use. Some is poor material used other is just a lot of car systems being useable but barely.

-I do think they could improve customer service majorly.

neroden said:

So this is a sideshow. The important question is who owns the tracks. This needs to be *de*-privatized. Vermont is even having trouble with NECR (!) and will probably have to nationalize that track eventually.

Click to expand...

We're broke, man. And we're getting broker, 2016 revenues were short of what was budgeted and 2017 has started off also down from projections. We're already one of the highest taxed states in the country. Why in the world should we blow millions on buying a railroad that sees one passenger train a day and isn't at risk of abandonment like the Rutland Railroad was when the state bought it way back in the 60s?

NECR has failed to repair the tracks in Vermont for a year after a derailment. They're just leaving the slow orders in place, because, hell, who cares how fast the trains go? Sure, the government put in millions to make the trains go faster, but NECR will just slow 'em down again, because why not?

See, *this* is why it works out better when the state owns the tracks. They occasionally *bother* to keep them in tolerable condition. The same reason you haven't privatized all your roads (which are really expensive, by the way -- if you really wanna save money from the state budget, why not sell 'em off?). I actually looked up the history of road nationalization in England -- in the early Victorian era, it was private toll roads everywhere! They didn't maintain 'em and eventually the government took nearly all of them over, a few at a time.

I particularly like the arrangements in North Carolina. The state owns a huge loop of track (through the North Carolina Railroad). They collect rent from freights which run on the track, and they plow that rent back into maintaining and improving the track -- a job which they contract back to the very same freight company, NS. What the NCRR provides is that they make sure the track actually gets maintained rather than getting downgraded, with its revenues extracted to use somwhere else.

Having the tracks owned by a not-for-profit trust whose duty was to keep the tracks suitable for traffic would do just about as well, or possibly significantly better. The private corporate for-profit owners typically do not have that duty and even when they do legally have that duty, they do not feel that they have that duty and they act as if they don't.

This is the same reason we had to take over private water systems in the late 19th century (something which was a big fight in Ithaca, where I live.)

I guess the model I'm advocating is one where the underlying ownership of the tracks is held by an entity with a trustee obligation to maintain the route for desired railway traffic, which accordingly charges enough for traffic to do that. As far as I am concerned, they can contract everything else out.

If the tracks were *owned* by Vermont and *leased* to NECR under a long-term lease *with maintenance conditions in the lease*, this sort of problem wouldn't be happening.

That is a very good point.

NCRR is an interesting case where the property is owned by the state and maintenance and dispatching is contracted out to Norfolk Southern together with freight trackage rights with lease payments due to the state. The state uses that money to pay for maintenance and capital improvements which are then carried out by Norfolk Southern. A small part of NCRR is also dispatched by CSX by agreement between Norfolk Southern and CSX. This agreement appears to be working fairly well.

The situation in the Capitol Corridor in California is an interesting parallel where the property is owned by UP, also dispatched and maintained by them. The state has negotiated trackage rights and quality of service for an agreed upon payment in exchange. In addition the state has funded a number of capital improvements to enable running of more passenger trains. This agreement seems to be working fairly well too.

On the NEC the State of Massachusetts through its subsidiary owns the portion of the NEC in Massachusetts. It has an agreement with Amtrak allowing it to upgrade, maintain and dispatch that portion of the NEC. Amtrak armed with some dubious piece of rule making by the NEC Commission is trying to strong arm the state into paying an enormous fee for operating property that they own, breaking an existing lease agreement. There are threats and counter threats going on at present between two government outfits. This is an example where government ownership of everyone involved is not working that well at present.

In New York State the Poughkeepsie - Hoffmans segment of CSX property has been leased by the state and the state has appointed Amtrak to improve, maintain and dispatch the segment. So far this arrangement is working well.

In Florida CSX has sold its property retaining trackage rights to TriRail between Mangonia and Miami, and to Central Florida Commuter Rail (SunRail) between Deland and Poinciana. Both Tri-Rail and CFCR are FDOT funded agencies. They are responsible for upgrading, maintaining and dispatching their respective segments for passenger and freight operations. The arrangements appear to be working well.

This is not an exhaustive list. There are many others.

Realistically speaking in the present climate wholesale nationalization/imposition of government ownership on railroad trackage property appears unlikely because (a) the market price for such is high and (b) the SCOTUS probably will not stand for simply taking those properties. But what can be realistically achieved is better accommodation among all concerned to get more realistic operating agreements. For this to occur the inherent adversarial relationship situation needs to be changed CalDOT and UP somehow managed that. There is a benchmark from that on what realistic costs are to achieve that. Whether that sort of thing can be repeated elsewhere is an open question.But it is quite clear that on a case by case basis better operating conditions for passenger trains can be achieved.

neroden said:

NECR has failed to repair the tracks in Vermont for a year after a derailment. They're just leaving the slow orders in place, because, hell, who cares how fast the trains go? Sure, the government put in millions to make the trains go faster, but NECR will just slow 'em down again, because why not?

Click to expand...

Because they got along perfectly fine for years without higher speed tracks? I'm not sure how the NECR is supposed to be the bad guy in this situation. Why should they pay out of pocket to maintain the tracks at a higher standard than they need? IMO the blame is better assigned to the state AoT, who apparently didn't realize that all things decay and that the stimulus money was not all the investment the line would ever need.

See, *this* is why it works out better when the state owns the tracks. They occasionally *bother* to keep them in tolerable condition. The same reason you haven't privatized all your roads (which are really expensive, by the way -- if you really wanna save money from the state budget, why not sell 'em off?). I actually looked up the history of road nationalization in England -- in the early Victorian era, it was private toll roads everywhere! They didn't maintain 'em and eventually the government took nearly all of them over, a few at a time.

I particularly like the arrangements in North Carolina. The state owns a huge loop of track (through the North Carolina Railroad). They collect rent from freights which run on the track, and they plow that rent back into maintaining and improving the track -- a job which they contract back to the very same freight company, NS. What the NCRR provides is that they make sure the track actually gets maintained rather than getting downgraded, with its revenues extracted to use somwhere else.

Having the tracks owned by a not-for-profit trust whose duty was to keep the tracks suitable for traffic would do just about as well, or possibly significantly better. The private corporate for-profit owners typically do not have that duty and even when they do legally have that duty, they do not feel that they have that duty and they act as if they don't.

This is the same reason we had to take over private water systems in the late 19th century (something which was a big fight in Ithaca, where I live.)

Click to expand...

I guess I don't see the benefits of ownership for the state. The NECR is primarily bridge traffic in VT, there are few on-line customers compared to the southern end in MA and CT or the VTR. In any case the entire route parallels I91 and I89, which makes easy access for trucks that are considerably more important for rural industry than trains, given the small amount of traffic. Unlike VTR's western route, which doesn't have a parallel interstate, the NECR is not a critical transportation link for the area, so the state's benefit is limited. Their train operations are a through freight overnight and an occasional local in some areas during the day--hardly overwhelming traffic to conflict with the Vermonter.

I guess the model I'm advocating is one where the underlying ownership of the tracks is held by an entity with a trustee obligation to maintain the route for desired railway traffic, which accordingly charges enough for traffic to do that. As far as I am concerned, they can contract everything else out.

If the tracks were *owned* by Vermont and *leased* to NECR under a long-term lease *with maintenance conditions in the lease*, this sort of problem wouldn't be happening.

Click to expand...

So if you applied this model to VT, who does the entity bill for the costs of maintaining the railroad? NECR, who then is forced to pay more than they do now for track capacity they won't even use? Or Amtrak, who then bills the state for the added cost of operating the service? Personally I am fundamentally opposed to the first scenario, and even if I wasn't would be a political non-starter in a state that already has a reputation as not a terribly easy place to do business, and the second is exactly the same situation we have now, except with an added middleman to spend more money on. For heavily trafficked lines this might more sense, where passenger and freight operators have broadly similar goals of increasing capacity, but on a lightly used route I don't see any benefit.

I don't see de-privatizing large chunks of the freight system as a realistic policy goal. With that being said, it would be nice if we could set circumstances where Amtrak was compelled to provide their umbrella of access.

Jis, thanks so much for these links. I haven't finished reading yet, but so far, the IPH comments are, IMHO, sloppily-written and poorly-organized. Since they're not getting graded, that wouldn't make a difference--except that, as a result, the information they provide and the arguments they make are obfuscated and weakened. There is a lot of good information here, and they make some good points. But the overall effect is unprofessional.

And that's important because the decisions will be made not by technical experts, economic experts, or foamers, but by lawyers, bureaucrats, and politicians. For want of an editor, IPH has missed an opportunity.

I didn't see this posted here, but I thought it might be of interest to everybody.

The "pilot program" to invite private railroads or other entities to take over some long distance routes was discussed here a few months ago, but now there have been public "comments" posted. Most of them concern the program's deadlines and ask for clarification of the bidding process, but Ed Ellis from Iowa Pacific offers what I think is a very thorough and interesting look at just what it would take to operate long distance trains independent of Amtrak. As he describes it, there is NO way to operate intercity long distance rail without some cooperation from Amtrak.

https://www.regulations.gov/docket?D=FRA-2016-0023

The Capital corridor has the state paying for an additional crew that surfaces the track more than UP requires for its operation. That may be why it has the highest OTP of any route. Another city owned route is the Cincinnati Southern from CIN <> Chattanooga. The city does not plow in everything but have paid for eliminating the rat hole district and then charging SOU now NS more.

keelhauled said:

neroden said:

NECR has failed to repair the tracks in Vermont for a year after a derailment. They're just leaving the slow orders in place, because, hell, who cares how fast the trains go? Sure, the government put in millions to make the trains go faster, but NECR will just slow 'em down again, because why not?

Click to expand...

Because they got along perfectly fine for years without higher speed tracks? I'm not sure how the NECR is supposed to be the bad guy in this situation. Why should they pay out of pocket to maintain the tracks at a higher standard than they need? IMO the blame is better assigned to the state AoT, who apparently didn't realize that all things decay and that the stimulus money was not all the investment the line would ever need.

See, *this* is why it works out better when the state owns the tracks. They occasionally *bother* to keep them in tolerable condition. The same reason you haven't privatized all your roads (which are really expensive, by the way -- if you really wanna save money from the state budget, why not sell 'em off?). I actually looked up the history of road nationalization in England -- in the early Victorian era, it was private toll roads everywhere! They didn't maintain 'em and eventually the government took nearly all of them over, a few at a time.

I particularly like the arrangements in North Carolina. The state owns a huge loop of track (through the North Carolina Railroad). They collect rent from freights which run on the track, and they plow that rent back into maintaining and improving the track -- a job which they contract back to the very same freight company, NS. What the NCRR provides is that they make sure the track actually gets maintained rather than getting downgraded, with its revenues extracted to use somwhere else.

Having the tracks owned by a not-for-profit trust whose duty was to keep the tracks suitable for traffic would do just about as well, or possibly significantly better. The private corporate for-profit owners typically do not have that duty and even when they do legally have that duty, they do not feel that they have that duty and they act as if they don't.

This is the same reason we had to take over private water systems in the late 19th century (something which was a big fight in Ithaca, where I live.)

Click to expand...

I guess I don't see the benefits of ownership for the state. The NECR is primarily bridge traffic in VT, there are few on-line customers compared to the southern end in MA and CT or the VTR. In any case the entire route parallels I91 and I89, which makes easy access for trucks that are considerably more important for rural industry than trains, given the small amount of traffic. Unlike VTR's western route, which doesn't have a parallel interstate, the NECR is not a critical transportation link for the area, so the state's benefit is limited. Their train operations are a through freight overnight and an occasional local in some areas during the day--hardly overwhelming traffic to conflict with the Vermonter.

I guess the model I'm advocating is one where the underlying ownership of the tracks is held by an entity with a trustee obligation to maintain the route for desired railway traffic, which accordingly charges enough for traffic to do that. As far as I am concerned, they can contract everything else out.

If the tracks were *owned* by Vermont and *leased* to NECR under a long-term lease *with maintenance conditions in the lease*, this sort of problem wouldn't be happening.

Click to expand...

So if you applied this model to VT, who does the entity bill for the costs of maintaining the railroad? NECR, who then is forced to pay more than they do now for track capacity they won't even use? Or Amtrak, who then bills the state for the added cost of operating the service? Personally I am fundamentally opposed to the first scenario, and even if I wasn't would be a political non-starter in a state that already has a reputation as not a terribly easy place to do business, and the second is exactly the same situation we have now, except with an added middleman to spend more money on. For heavily trafficked lines this might more sense, where passenger and freight operators have broadly similar goals of increasing capacity, but on a lightly used route I don't see any benefit.

Click to expand...

Did you miss the fact that right now *the line is not getting maintained*? A change to a functional ownership structure would, in actual fact, cause the line to be maintained. If you don't see the benefit of this, you're blind. Right now NECR has nominal responsibility, but nobody can enforce it against them. This is strictly no good. Amtrak has a history of paying for freight railroads to build capacity which they then use for freight (to the detriment of Amtrak), and again, with a better ownership structure, this wouldn't happen.

Anderson said:

I don't see de-privatizing large chunks of the freight system as a realistic policy goal.

Click to expand...

Why not? Literally every other country in the world has done it. Sometimes repeatedly (in Canada, for example, which has gone through cycles).

It's actually the *trend* in the US right now. How much privately owned trackage is left in New England? Not much.

Wick Moorman has even *advocated* it. For the freight railroads, it makes property taxes go away; their lease payments seem to typically be lower than the property taxes would have been.

Maybe Norfolk Southern will be interesting in selling some of their routes. They almost merged with CP.

Philly Amtrak Fan said:

Maybe Norfolk Southern will be interesting in selling some of their routes. They almost merged with CP.

Click to expand...

Well, the more accurate depiction is that CP almost strong armed NS into it. I don't think NS ever wanted to merge with CP, which is the way you state it reads.

Of course any railroad will be happy to do something that is advantageous for it. Which means come up with a lot of money and give them an operating right where they do not lose much. Which of course makes it unattractive.

Wherever the freights are trying to get out of due to the nature of the traffic, like New England, it would be easier to acquire the property that they want to get out of. But a random property in New England with freight traffic in doldrums is different from the NS trunk across Pennsylvania, which is what we are talking of when it comes to trans-Pennsylvania passenger service. That is just arguing a false equivalence.

neroden said:

Anderson said:

I don't see de-privatizing large chunks of the freight system as a realistic policy goal.

Click to expand...

Why not? Literally every other country in the world has done it. Sometimes repeatedly (in Canada, for example, which has gone through cycles).

It's actually the *trend* in the US right now. How much privately owned trackage is left in New England? Not much.

Wick Moorman has even *advocated* it. For the freight railroads, it makes property taxes go away; their lease payments seem to typically be lower than the property taxes would have been.

Click to expand...

Canada went from being being half/half (nationalized CN, private CP) to totally private.

Sure, NS might sell come low freight use lines here or there for commuter trains, but I don't see them selling any heavy haul routes.

One point about North Carolina needs to clarified. It's true that the North Carolina Rail Road collects revenue for the use of its tracks and reinvests it back in the track. However, over the last couple of years, the money grubbing NC legislature realized that and had its sights on collecting that money because the state of NC itself owns the railroad. It's hard to tell right now whether they are being successful in siphoning off that money before NCRR gets to reinvest it, because there are so many stimulus projects on-going. After all of those projects are finished, we'll need to see if the legislature is indeed bleeding the railroad dry.

jb

Seaboard92 said:

After reading Ed's thoughts I am curious to which three services he is interested in. From how I understood it he was going to put a bid in for three services.

Then here are some points

Equipment

-Amtrak equipment is indeed a bit run down and unreliable.

-IP equipment the rebuilt cars for the HS are supposedly good(I don't know). But other cars I've worked with (SLRG 448, Jackson Square, Sky View, Scenic View, and Prairie View) all have problems. Some more then others which worries me about the equipment he would use. Some is poor material used other is just a lot of car systems being useable but barely.

-I do think they could improve customer service majorly.

Click to expand...

1. Cardinal. High per passenger subsidy and natural expansion to daily service. Already has operating the Hoosier so knows the western market well.

2. City of New Orleans. Pullman has experience on that route so Ed likely has a laundry list of possible revenue boosters.

3. Sunset Limited. High per passenger subsidy with natural expansion to daily service.

4. Look for aggressive pursuit of a "state supported" "CONO" extension to Florida.

Since Ed is talking about using his own equipment, I doubt that he will have anything to do with any of the western routes which relatively high cost of maintenance of equipment that runs huge distances. CONO and Cardinal seem more plausible.

My speculation is that there will be no Gulf Coast service unless the federal government comes up with some money. The states do not have the stomach to fund it entirely by themselves. They may come up with some local matching funds. As far as any state level support goes, only Alabama and Mississippi may contribute substantially. There will be no money on the table from Florida at the state level. If individual counties or cities on the route contribute some, that will be it, and Louisiana looks very iffy to say the least. So until something happens in Washington, it is going to remain dormant. And I say this with much sorrow, sitting in Florida. Unfortunately the pitiful little money that rail gets in Florida will all get sucked up in Miami - Palm Beach, Orlando, and possibly Tampa. Even there not much moves along unless the feds provide significant money via FTA to be matched by the state. And AAF will not touch NOL - JAX with a ten foot barge pole, since it does not match their operating business model and they have no real estate holdings along that route beyond JAX.

Seaboard92 said:

After reading Ed's thoughts I am curious to which three services he is interested in. From how I understood it he was going to put a bid in for three services.

Then here are some points

Equipment

-Amtrak equipment is indeed a bit run down and unreliable.

-IP equipment the rebuilt cars for the HS are supposedly good(I don't know). But other cars I've worked with (SLRG 448, Jackson Square, Sky View, Scenic View, and Prairie View) all have problems. Some more then others which worries me about the equipment he would use. Some is poor material used other is just a lot of car systems being useable but barely.

-I do think they could improve customer service majorly.

Click to expand...

The problem with running a service with heritage / vintage equipment is that there is generally a reason people like Amtrak replace their equipment periodically. There is a big difference between running the occasional excursion train and running a regular service.

Second hand / vintage equipment may be an interesting proposition for a start up service where you're testing the waters without wanting to risk too muchj investment. But at some point you'll need to bring in something more modern.

John Bobinyec said:

One point about North Carolina needs to clarified. It's true that the North Carolina Rail Road collects revenue for the use of its tracks and reinvests it back in the track. However, over the last couple of years, the money grubbing NC legislature realized that and had its sights on collecting that money

Click to expand...

Yep. This has been beaten back so far, but it's always a risk. A not-for-profit trust would arguably be better than a government in this regard... though they can try to extract money too.