In South Dakota, billions for freight, not one cent for passengers

Fortune reports that Sen. John Thune (R-S.D.) added an earmark to last summer's transportation bill that greased the skids for a $2.5 billion loan to the Dakota, Minnesota and Eastern for a new rail line from South Dakota to Wyoming's Powder River Basin, a source of low-sulfur coal.

Hmm . . . South Dakota and Wyoming. What do those two states have in common? Why, they're the only 2 states in the "lower 48" with no Amtrak service.

In an unfortunately unrelated development, folks in Aberdeen--a city DM&E considers a "partner in progress"--are restoring their historic downtown depot. The restored building will serve many different functions. "Train station," however, won't be one of them.

To be sure, better access to relatively clean coal is a public good. The nation's economy depends on coal-fired power plants. But should this be the only public good required of a public-private rail venture? Your conductor doesn't think so.

Next time the FRA loan program gets revisited, what if some senator reconfigured it to require a passenger component for the projects it funds? Call it a kind of Community Reinvestment Act for the railroad industry.

Remember, it's the Federal Railroad Administration, not just the Freight Railroad Administration.

In St. Louis, private train operator throws in the towel

Visitors to St. Louis Union Station may recall seeing the green-painted cars of RailCruise America parked on a siding west of the train shed. The "Green Train" was a popular choice for dinner excursions and charter moves, running "full to sold out" most of the year. At least one politician whistlestopped from its observation car.

Now its owner has sold the train to Kansas City Southern Railway and moved out of Union Station.

Rising costs were cited as one reason for the owner's decision. Another was the stunning realization that passengers hate late trains.

[T]he increasing congestion on the railroads resulted in a certain unpredictability of departure and arrival times. Higher prices with uncertainty do not make for good customer relations.

Moral of the story: Congestion and delays are not isolated to Amtrak. They are a fact of life on the nation's railways for all operators: freight, passenger, public, private, excursion, scheduled. At some point it will become necessary to make the condition of the national rail network a national priority.

The secret subsidy for Japan's railroads

NARP's Feb. 17 hotline makes an excellent point about debt service. Amtrak carries about $4 billion of debt, and servicing it will cost the railroad about $295 million this year.

When Japanese National Railways was broken up and privatized, in 1987, JNR carried 37.1 trillion yen of debt on its books. The government handed about one-third of this debt to the private companies and retained the remaining 22.7 trillion.

The plan was for the government to knock down the debt through asset sales. Not only did that not happen, the old JNR debt actually rose to about 25 trillion yen. How much is that? At 118 yen to the dollar (check here for current exchange rate), that's $210 billion.

Remember, debt you don't have to carry is debt you don't have to service.

So what's the cost of servicing that debt?

Interest rates in Japan are extremely low by U.S. standards. In 2004, yields on 10-year government bonds ranged from 1.3% to 1.9%. If we take the midpoint of this range, we can calculate that the Japanese government still shoulders a burden of more than $3 billion a year.

Remember, interest is an operating expense. Interest forgone is therefore an operating subsidy.

Some privatization fans continue to insist that privatization would end operating subsidy for passenger trains. But that didn't happen in Britain, and it clearly didn't happen in Japan either.

Harris poll: We want more passenger-train travel

Harris Interactive reports that Americans "would like to see an increasing proportion of [passenger and freight] traffic going by rail."

• 44% want a greater share for commuter trains
• 35% want a greater share for long-distance trains
  

Who should pay for transportation improvements? For "the nation as a whole," as opposed to "your community," 68% said that's the federal government's responsibility.

Survey was taken Dec 8-14, 2005, and released Feb. 8. Read the news release here.

Your airport's closed? Ride Amtrak to one that's open!

The Northeast got a little snow over the weekend.

Boston Logan Airport is shut down. La Guardia, JFK and Newark Liberty were shut down Sunday morning.

But Philadelphia International is open, and Washington Reagan National reopened Sunday afternoon.

And though some trains have been cancelled, Amtrak is still running over the Northeast Corridor. Delayed, to be sure, but running.

That's good news for someone like Emily Hughes, the New York-based figure skater who needs to catch a flight to Turin, to take Michelle Kwan's place on the U.S. Olympic team.

In Minot, selling bricks to renovate the Amtrak station

In nearly 3/4 of its stations, Amtrak is a tenant. It is not in the station-building business. So when Minot, North Dakota, prepares to renovate its Amtrak station, it draws on block grants and local matching funds. Those sources are good for $360,000. But the estimate is for $500,000. To make up some of the difference, Minot plans to sell paving bricks engraved with personal messages.

Minot's Amtrak station, busiest in North Dakota, handled 33,314 passengers in 2005; that's up from the 29,511 passengers handled in 2004. Exactly two trains call there daily, the eastbound and westbound Empire Builder.

The bricks are a great idea, but can you imagine an airport financed that way?

Amtrak en español

It's up: Amtrak's new Spanish-language sister site: http://espanol.amtrak.com

In Festus, Mo., corporate pilots seek federal subsidy

The city of Festus, Missouri, is looking at options for its municipal airport. At 2,200 feet, the runway is too short for most corporate aircraft, and a pilots association has a plan for airport expansion:

Get the feds to pick up the tab.

The group Citizens for Airport Economic Expansion, which currently runs the airport for the city, wants Jefferson County to take over the airport, in which case,

the federal government could conceivably pay for 95 percent of the purchase of the airport and its expansion through a matching grant program, CAEE maintains.

With an estimated $7 to $8 million price tag for the purchase and expansion of the facility, the county would be on the hook for about $350,000, according to CAEE estimates.

Pay $350K and get $7 million of improvements, to benefit owners of corporate aircraft. For a airport that hangars all of 30 planes and saw 20 operations/day in 2005.

It's enough to make one wonder how much it would cost to establish Amtrak service in Festus--a town the Texas Eagle already passes through. Not to mention what other train stations would look like if FRA ran a 95/5 matching program.

Whatever happened to baby JetBlue?

Seems like only yesterday that the rail "fans" were clamoring for Amtrak to be more like JetBlue. Maybe it already is.

• JetBlue just reported a quarterly loss of $42.4 million.
• Its executives don't expect JetBlue to make money again until next year.
• They bungled the opportunity to lock in fuel deliveries at predictable prices, as Southwest's managers have done, through a financial technique known as hedging.
• Investors clearly don't like any of this news. (For latest JBLU quote, check here.)
  
• And according to the government's latest Air Travel Consumer Report, JetBlue ranks dead last among the majors in on-time performance. Dead last. Just 63.1% of its flights arrived within 15 minutes of the time published in the timetable.
  

Be careful what you ask for, because you might get it.

Guardian: Passengers abandon northern flights for Virgin's [trains]

In September 2004, Virgin Trains' West Coast service had a 40% share of the London-Manchester market. Then everything changed.

Virgin rolled out new Pendolino trainsets, in a launch timed to coincide with new timetables that cut 35 minutes off the travel time between the 2 cities.

When those shiny new trains hit smoother, faster rails, guess what happened?

• Share rose to 60%, as reported in The Guardian
  
• Virgin West Coast's operating results improved and subsidy dropped--from 12.1 pence per passenger-km in 2003-04 to 3.3 pence per passenger-km in 2004-05.
  
• And the airlines are on the defensive. The regional carrier BMI saw its London-Manchester trade cut 26%.
  

What brought the speeds up and travel times down? A £7.6 billion public investment in the West Coast Main Line, the corridor that connects London, Birmingham, Manchester, Liverpool, Glasgow and Edinburgh. (PDF map here.)

That's billion with a B, and we're talking about pounds, not dollars. (Look up today's exchange rate here.)

And with these improvements in place, Virgin launched an ad campaign trumpeting "the return of the train." Download the MPG file of Virgin's TV commercial here.

Moral of the story: Where appropriate capital investment occurs, more travelers consider trains and more travelers choose them.

Guardian: "Why does anyone fly to Brussels any more?"

Ros Taylor from the UK's Guardian reports that 2/3 of the passengers traveling between London and Brussels go by train.

The piece of transportation infrastructure that makes this possible is, of course, the Channel Tunnel. The passenger carrier Eurostar carried nearly 7.5 million passengers through the tunnel in 2005.

It is fashionable in this country to deride the passenger train as obsolete. But as this story proves, where appropriate capital investment occurs, a reporter can credibly ask, "Why would anyone fly when he/she could take the train?"