Amtrak advances high-speed plans, ignores GOP calls for privatization

[FayeforCure]

Yay for Amtrak. If private industry can do better..........let them try to improve the less profitable routes. The profitable routes are doing just fine without private industry interference that only jacks up ticket prices.


Amtrak advances high-speed plans, ignores GOP calls for privatization

By Keith Laing - 08/24/11 12:33 PM ET


Amtrak is rolling forward with its high-speed rail plans, despite House Republican intentions of privatizing parts of the national pasenger rail service.

Amtrak announced Wednesday that it was hiring an accounting firm to plan the financing for its high-speed rail proposals, even while House Republicans are targeting Amtrak's most profitable service area for privatization.

Led by Transportation and Infrastructure Committee Chairman Rep. John Mica (R-Fla.), Republicans are arguing that non-governmental companies could operate the Northeast rail lines at higher speeds than Amtrak's Acela trains.

Despite that objection, the agency (Amtrak) said it was hiring New York-based KPMG LLP to acquire financing for its plan to increase the speed of Acela up to 220 miles per hour in 30 years.

"The selection of KPMG is the result of a highly competitive procurement process that showed us there is real interest and enthusiasm in the financial community for advancing the Amtrak NEC high-speed rail project," Amtrak Vice President of High-Speed Rail Al Engel said in a statement announcing the contract.



"The Amtrak high-speed project is critical for the future of the Northeast megaregion and we are interested in identifying innovative business approaches for attracting private capital and combining it with public financing sources to help us build it," Engel added. 

KPMG will work on the rail financing plan with several other companies, including DWH Strategic Advisors, Sharon Greene & Associates and TranSystems, Amtrak said Tuesday.

Plans call for the first 220 mph trains to run between New York and Philadelphia by 2023. The service would eventually be expanded from Philadelphia to Washington, New York to Hartford, Conn., and Hartford to Boston, in that order, the company said.

After a crop of newly elected Republican governors moved to derail large chunks of President Obama's plan for nationwide network of high-speed railways by rejecting money for projects in Ohio, Wisconsin and Florida, Republicans in Congress have moved to block Amtrak from being involved in projects in the Northeast, where rail systems are already numerous and popular.

However, Democrats have sharply resisted the proposal and Amtrak has stood by its own high-speed rail plans.

About $745 million of the $2.4 billion that was rejected by Florida was recently redirected to the Northeast rail expansion project.

http://thehill.com/blogs/transportation-report/railroads/178045-despite-house-gop-privatization-effort-amtrak-pushes-ahead-with-high-speed-rail-plans

[Ocklawaha]

Yay for Amtrak. If private industry can do better..........let them try to improve the less profitable routes. The profitable routes are doing just fine without private industry interference that only jacks up ticket prices.

There are no profitable routes according to Amtrak's CEO, but an argument can be made that the new 'long distance' Lynchburg train 'made' about $2.5 million in the last FY. Actually another argument argues quite successfully that the long distance trains, often the target of idiotic ideas, offer a better return on their operations then any of the so-called 'high speed'.

Amtrak's Acelas, accounting by themselves for roughly one-fourth of Amtrak’s revenues. At first glance, they are truly lucrative. The Acelas brought in $450 million in fiscal 2010, and after absorbing those fully allocated costs, still earned an astounding $101 million. (The Northeast Regional trains took in $470 million but on a fully allocated basis, ended up losing $49 million.)
 
However, there’s a huge “but” to the Acela numbers. They run on the Northeast Corridor, Amtrak’s own railroad, and the NEC’s capital costs are huge. Let’s put aside the capital cost of replacing an Acela trainsets when they come due for retirement. Amtrak estimated in 2010 that the normalized cost of keeping the Northeast Corridor infrastructure in a state of good repair is roughly $450 million a year. In an honest accounting, the Acela fleet must bear its fair share of such costs, and there go the profits.
SOURCE: TRAINS MAGAZINE   
http://cs.trains.com/TRCCS/blogs/fred-frailey/archive/2011/02/03/amtrak-trains-that-make-money-really.aspx

A recent claim of a 40% profit in the NEC is incorrect, the correct figure of some 27% or so DOES NOT count capital costs, if it did the entire NEC, Acela and all, would only cover 1/6Th of its costs.

So am I against Amtrak or HSR? NOT A CHANCE! And if you are against Amtrak then please inform me how much money I-10 recovered from it's farebox... Nothing you say? Therein you find the injustice of The Grand Old Party and their minions.

OCKLAWAHA