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Is Private Rail the Future for Regional Routes?

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#61 Bob Dylan

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Posted 17 February 2017 - 10:25 AM

In theory the private/public partnership for commuter/State rail is ideal since this is the model we currently are using in this country in many places.LD Trains are another kettle of fish however.

In reality when the profit motive enters the picture, the subsidies required by government greatly increase the costs in order for the private entity to show a profit. Cases in point, Class I Railroads throwing in the towel on Passenger rail in the late 60s and early 70s bringing about the creation of Amtrak, and the recent financial fiasco for IP on the Hoosier State contract.

With the current political climate, and considering the costs that would be involved, I can't see this happening with LD Trains.

To paraphrase an old saying: How do you turn a large fortune into a smaller one?

Answer:Invest in Passenger Rail. YMMV
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#62 Ryan



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Posted 17 February 2017 - 12:45 PM

I don't think that many of us are ruling out a public/private partnership. Any way that government can take some tax dollars and slip some of them to lining contributors pockets, they will.

The objection is your impervious stance on the facts that underlie your conclusion.
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#63 A Voice

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Posted 17 February 2017 - 12:56 PM

In keeping with the open exchange of ideas and opinions;  I would like to clarify my point before many of the posters here suffer from high blood pressure. What I really believe will happen is a public/private partnership on some LD Amtrak routes. Amtrak has something like 30 million passengers that travel every year and the government is always looking to save money, especially when the name Amtrak comes up. . Now consider the perpetual lack of sufficient funding for the service, the thinking of current leadership in the house, senate, oval office and the position to rebuild Americas transportation infrastructure. It is reasonable to believe that Amtrak will continue on but why should we rule out a public/private partnership? Its just an opinion and a prediction but is this really so far out of the question? if so explain why this will not happen.


While I disagree with your conclusion regarding a public/private partnership, it was not that your position was wholly  unreasonable - indeed, there have been proposals for a private entity to operate three such routes under contract.   Predictably, such a plan has gone nowhere.  


The main objection was that your conclusions were based upon a false assumption - that Amtrak's roster of long-distance train equipment was shrinking and would soon become inadequate to meet current requirements.  That's not the case, but nor was it ever a prerequisite for private operation of passenger rail.


Among the bigger stumbling blocks to such a plan is just what private entities would want (and be qualified with a workable plan - note Corridor Capital and arguably Iowa Pacific) to bid on such an operation, and how a profit-seeking organization could run the train route for less money than Amtrak and still make a profit doing so (not many for-profit companies looking to invest in a money-losing opportunity).  There really is no free lunch; I am not convinced a private company would see cost significantly lower costs, or much higher revenue, than is possible under Amtrak service.  Further, there are problems with just where these other companies are going to find cars and locomotives (they don't have them now) and the time to acquire them, and the fact the Class 1's really don't want to deal with anyone other than Amtrak (hints too much at 'open access').  


To paraphrase an old saying: How do you turn a large fortune into a smaller one?

Answer:Invest in Passenger Rail. YMMV


I still think the Brightline executives are going to prove that saying correct - the hard way.  But I digress.  

#64 neroden



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Posted 21 February 2017 - 04:43 PM

I still think the Brightline executives are going to prove that saying correct - the hard way.  But I digress.

Nah, they own enough real estate around the Miami Station alone to make a profit. Historically land development is the consistent way to make money off passenger trains. The trains themselves break even at best, but being next to a station increases the value of the property as residential or office property (or even, in the old days, agricultural property).

This was the business model of everything from the Metropolitan Railway in London to the land grant railroads in the US.

Please feel free to moderate my posts.

#65 jis



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Posted 21 February 2017 - 04:57 PM

And the land development leads to increased ridership helping break even or do a bit better. There is a symbiotic relationship between the two. This is incidentally also true of road development, in those situations where the roads are explicitly charged for by being in a tax surcharge zone to get road access.

#66 WoodyinNYC



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Posted 13 March 2017 - 05:27 PM

CEO Michael Reininger is moving to parent company Florida East Coast Industries ...


"Reininger confirmed that he was now focusing on the second phase of the Brightline project. ...


"FECI was already looking at extending the Brightline service north from Cocoa to Jacksonville and west from Orlando to Tampa. But Reininger said ‘we’re going to look beyond’, to find other potential inter-city corridors in which to replicate the rail-plus-property model. ‘Florida is not the only area where there are overcrowded roads and interstates’, he pointed out. ‘We are fulfilling our vision here in Florida, but we are not exclusively bound by the state borders. We have a belief that major cities that are 500 to 600 km apart set themselves up as prime candidates for express passenger rail, and can be made to work. ... "

Railway Gazette has a larger article about new jobs at Brightline.



Edited by WoodyinNYC, 13 March 2017 - 05:28 PM.

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