Funds Obligated for 120 bi-level coach car buy

[dlagrua]

At last we are using taxpayer stimulus money for a public interest that will serve the American people and not the world bankers, globalists , Wall Street , the corporatists. and the financiers.

 

[jis]

Edit 2:

To expand on the CZ situation, where I have a bit more hard information to work with, you have at least 50,000 people per year who board at CHI and detrain at or before Denver (14.6% of the FY09 ridership was CHI-DEN, CHI-OSC, or CHI-Omaha). You can add another 25,000 or so between Denver and either Glenwood Springs or Grand Junction...and Amtrak has explicitly stated that this section gets capped off in the winter, as does traffic between Reno and the San Francisco/Sacramento area. In both of the latter cases, simply adding a seasonal, short distance coach on would help things (and again, looking at the "Sparks cars" proposal, if the WB Zephyr is falling hopelessly behind, you could probably move an engine up on the EB Zephyr and allow the Sparks cars to run on-time down to CA).

If that happens at all, it is more likely to happen as an Amtrak California train (substituting for Thruway bus off of 524 and 553) than as a car + engine off of the CZ. Just IMHO, and of course if it happens as an Amtrak California train the fares will be more affordable too. Actually California has been looking at ways to get Capitol Service extended at least as far as Truckee anyway.

Rightfully Chicago - Omaha, should be a Midwest Corridor train, partially funded by Illinois and Iowa, offloading mid distance pax from the CZ.

In general neither the host railroad, nor Amtrak in that situation, likes the idea of an unpredictable second train. It is a major operational headache on top of another late running train. Amtrak on its own territory does do such things, but they do have much better control over their own railroad than they do over what a host railroad might or might not do.

 

[Anderson]

Edit 2:

To expand on the CZ situation, where I have a bit more hard information to work with, you have at least 50,000 people per year who board at CHI and detrain at or before Denver (14.6% of the FY09 ridership was CHI-DEN, CHI-OSC, or CHI-Omaha). You can add another 25,000 or so between Denver and either Glenwood Springs or Grand Junction...and Amtrak has explicitly stated that this section gets capped off in the winter, as does traffic between Reno and the San Francisco/Sacramento area. In both of the latter cases, simply adding a seasonal, short distance coach on would help things (and again, looking at the "Sparks cars" proposal, if the WB Zephyr is falling hopelessly behind, you could probably move an engine up on the EB Zephyr and allow the Sparks cars to run on-time down to CA).

If that happens at all, it is more likely to happen as an Amtrak California train (substituting for Thruway bus off of 524 and 553) than as a car + engine off of the CZ. Just IMHO, and of course if it happens as an Amtrak California train the fares will be more affordable too. Actually California has been looking at ways to get Capitol Service extended at least as far as Truckee anyway.

Rightfully Chicago - Omaha, should be a Midwest Corridor train, partially funded by Illinois and Iowa, offloading mid distance pax from the CZ.

In general neither the host railroad, nor Amtrak in that situation, likes the idea of an unpredictable second train. It is a major operational headache on top of another late running train. Amtrak on its own territory does do such things, but they do have much better control over their own railroad than they do over what a host railroad might or might not do.

I would think the super-delayed train would be the one that the host RRs didn't like. In this case, BNSF would know "There will be a train running DEN-CHI in this slot whether the inbound train from EMY is on time or not". I do understand them not liking the unpredictability, but at the same time at least the second operation would be starting on-time.

I agree on Chicago-Omaha (and I like the idea of routing it through Des Moines, which I think would do very well with direct service). My suspicion is that a "Denver Zephyr" operating as a subset of the California Zephyr does have sufficient market potential if developed (and if set up so that it runs on time even if the main train gets screwed up in the Sierras...I think the super-long nature of the CZ, and also the EB, is a major inhibiting factor to effective service in several markets).

And thanks for explaining the crew issues. On a lengthened CZ, I would be assuming at least an extra cafe/lounge (possibly modified with extra food storage space downstairs) to deal with the added traffic...the Zephyr can get tight on food as it stands, so I think they'd need at least the extra storage space.

On the crew front: When a train runs with 3-4 engines, does it need just one crew to run all of the engines? Or does each engine need its own crew? (Yes, this is a serious question that I don't know the answer to)

 

[jis]

On the crew front: When a train runs with 3-4 engines, does it need just one crew to run all of the engines? Or does each engine need its own crew? (Yes, this is a serious question that I don't know the answer to)

The number of engineers needed is not determined by the number of engines but by the length of their trip. I forget what the threshold is off the top of my head, but below that threshold it is a single engineer, and above that is two engineers in the cab. That's it.

The number of conductors and assistant conductors is determined by the length of the train.

So if you are going to run an extra section, which is what your proposal is really talking about, it will need a full additional complement of engineers, conductors, and OBS over and above what the original train requires. The fact that this train runs only occasionally complicates the scheduling of this additional staff since you never know when they will be needed. So you will probably need to add to your roster permanently in order to be able to have them available occasionally. Which will actually land up costing you as much in staff as if you were running the train almost every day, or be stuck with a situation of having staff unavailable when you need to run the second train. And if you are going to carry that cost anyway, the trackage charge is almost noise compared to that cost to just run a second train regularly.

Note that this additional cost is minimal if you land up running an occasional extra section on a railroad where you are running 60 trains a day anyway. But the cost is considerable when you are on a railroad where you are running exactly one train in each direction each day.

 

[afigg]

As to the financial situation, what is the current debt load? I know it is far lower than it was a few years ago, but I can't tell what it actually is (i.e. what line items I should tally up to get it off the balance sheet).

According to the Amtrak FY10 annual report, the total debt and capital lease obligations decreased by $854 million from end of FY09 to $1,988 million at the end of FY10. So they have been cutting their debt load pretty significantly. Of course, Amtrak has recently added $592 million in new debt with the RRIF loan to buy the 70 ACS-64 electric locomotives, but the interest rate on the RRIF loan should be pretty low. Will be interesting to see what the costs are for the loan if it shows up in financial reports.

I have been looking through the financial reports and, if I am interpreting the documents correctly, Amtrak will be getting $420 million in grants from the FRA in coordination with the US DOT and Treasury through July, 2013 to pay for the exercise of a number of Early Buyout Options (EBOs) of leases. The funding for this looks to be a done deal and is coming from the Department of Treasury, so my read is that it is not subject to needing additional funding from Congress. The EBOs are from Jan, 2011 to July, 2013 to close leases on a total of 142 Superliners, 98 P-42s, 50 Viewliner Is, and 10 Surfliners. This is being done as part of the 2008 PRIIA act, but it got to help to have a favorable administration to work with to help clear much of the remaining debt from the Warrington years. Yes, let's put everything in hock, so we can start on the glidepath to profitability! Hmm, actually that logic describes all too common thinking for much of the last decade, but I digress.

Some excerpts from the Amtrak reports:

Near the end FY10 financial statement:

"NOTE 13: SUBSEQUENT EVENTS

On October 15, 2010, United States Department of Treasury and DOT, acting through the FRA, in consultation with each other and the Company, entered into a Memorandum of Understanding (the “MOU”) to set forth terms and conditions for the exercise of certain early buyout options on select leases entered into by the Company. The MOU provides funding up to $420.0 million from October 15, 2010 through July 1, 2013."

From the FY12 comprehensive business plan:

"An Early Buyout Option is a contractual right for Amtrak to terminate a long term lease of equipment, in part or in whole, on favorable terms. The EBO gives Amtrak the rights to a) buy the equipment which is owned by a bank and, separately, to b) pay off the rest of Amtrak's lease payment obligations to the bank. The EBO occurs at a specified, fixed price, one time only, late in the term the lease. It is the only right of voluntary pre-payment in the lease.

PRIIA Section 205 provides that the Secretary of the Treasury may make agreements to restructure Amtrak’s indebtedness, including leases, outstanding as of the date of enactment of PRIIA upon of the United States Government. Amtrak, Treasury and the Department of Transportation, acting through the Federal Railroad Administration (FRA) entered into a Memorandum of Understanding (MOU) to fund the exercise of certain EBOs on select leases entered into by Amtrak, up to the amounts and on the dates shown in Table 16. Because these funds will be transmitted to Amtrak via grant from FRA, EBO funds are not a part of this year’s request."

Thought this stuff might be of some interest.

 

[Anderson]

jls:

Good point. Alright, serious conceptual question then: Would running a no-dining-car section CHI-MSP as part of the Builder (or running a separate section CHI-DEN on the Zephyr) as part of the service make sense at some demand/CR level? And if so, at what level would we be looking (and yes, I know we're not there at the moment, but I am wondering about what could be done if we get CR on some of these routes closer to 70%...which I do hold as a good long-term goal for the LD network)? I'd note that, if nothing else, if you had the short-distance section leave slightly ahead of the long distance one, you'd likely assure that passengers could, if need be, do a transfer at MSP/DEN if Arrow made a mess of the bookings (or someone decided to book some sort of wacky through ticket and the computer wasn't set up to refuse it).

 

[jis]

Any CR less than 100% implies that someone has to subsidize the balance.

If there was a vibrant CHI - MKE service then extending one of those trains to MSP would make it more like the LYH service as an extended NEC Regional, and then one would just have to worry about the incremental cost of running one train to MSP rather than dicking around with trying to figure out how to split the cost in an LD train. As we know this method of accounting has effectively made the LYH train be able to cover its entire incremental cost and then some. I bet if they had tried to structure the LYH train as a section of the Crescent they would have had greater difficulty in getting the CR that they are getting now. Afterall cost allocation is almost a branch of witchcraft to start with.

 

[Anderson]

Any CR less than 100% implies that someone has to subsidize the balance.

If there was a virant CHI - KKE service then extending one of those trains to MSP would make it more like the LYH service as an extended NEC Regional, and then one would just have to worry about the incremental cost of running one train to MSP rather than dicking around with trying to figure out how to split the cost in an LD train. As we know this method of accounting has effectively made the LYH train be able to cover its entire incremental cost and then some. I bet if they had tried to structure the LYH train as a section of the Crescent they would have had greater difficulty in getting the CR that they are getting now. Afterall cost allocation is almost a branch of witchcraft to start with.

Oh, don't I know it...when you can generate two separate CR figures in the same report, something is clearly off. Of course, while the LYH service wouldn't be showing a profit, the Crescent would be over 50% CR (if I merge the two, I get revenue to date of $38.4 million against non-OPEB costs of $76.6 million, for a CR of 50.13% (vs. 42.98% for just the Crescent). Standard caveats apply about mid-year corridor CR figures.

 

[jis]

You are assuming it is a linear system that you are analyzing, which may not always be the case in financial matters since multiplier effects are notoriously non-linear and they are inadequately accounted for in most systems. What may be effectively happening is that in computing LYH as an extension of NEC one is getting the advantage of the multipliers of a very frequent service corridor which commands premium revenue per seat, while counting it with the Crescent drags things down by an infrequent route that does not command the sort of premium that NEC does. So more of the costs of the Crescent subsystem loads down the LYH service instead of the performance of the NEC subsystem dragging it up. All this is very roughly speaking of course.

There are entire treatise that have been written on the behavior of complex non-linear systems (e.g. by Stuart Kaufman among others) based on work done at the Santa Fe Institute and other places, ironically funded to quite an extent by the then CEO of Citibank who was trying to get a handle on the behavior of the financial market.

 

[Anderson]

The worst part is that I might actually want to read a summary of one of those studies just to get a handle on some of this stuff. That said, I don't know how the Lynchburger's costs are handled w.r.t. the NEC segments (the train runs BOS-NYP-WAS-LYH). Of course, another possibility is that the allocated administrative expenses might simply not be assigned to the new train like they are with a separate service, resulting in a slight improvement to the overall operation, too.