Wanted: Would-Be Railroad Barons.
Well, this is interesting: The Federal Railroad Administration has published the ground rules for anyone who wants to submit a bid for operating passenger trains on as many as three existing Amtrak long-distance routes. These rules will become final on September 5th and potential operators will have 180 days from that date to submit their proposals.
There are several stipulations, all of which are obvious and one in particular, it seems to me, will be damn hard to meet.
First, bidders will have to provide service at least as frequent as whatever Amtrak is now offering.
Second, they will have to provide a detailed description of the rolling stock they propose to use on the route—meaning sleeping cars, coaches, dining cars, etc. And, if they don’t currently own ‘em, they’ll have to say how they’re gonna get ‘em.
And third, the FRA wants to see a detailed financial plan and a signed, sealed and delivered agreement from the owners of the right of way … meaning the freight railroads over whose track they’ll be operating.
That will mean getting CSX, for example, to agree that they will allow someone other than Amtrak—almost by definition a newcomer to the passenger business—to run daily trains back and forth across their infrastructure. And lotsa luck with that!
And, yes, Amtrak will be permitted to bid.
Of course this all brings to mind the Hoosier State experiment. When Congress shoved responsibility for subsidizing routes under 750 miles off onto the states, the Indiana DOT put the Hoosier State (Chicago to Cincinnati through Indianapolis) out to bid. Iowa Pacific Holdings out-bid Amtrak and was awarded the service, but gave up the ghost after about 18 months. The Hoosier State service has since reverted to Amtrak.
There’s another very interesting aspect to this whole proposition: Assuming Amtrak enters the bidding to retain any contested routes, they will be required to submit a detailed financial plan. That should be most illuminating because, for years, outside observers have believed that the label of “bottomless money pit” given to the national network was neither accurate nor fair. Those critics have alleged that Amtrak has been allocating a disproportionate share of costs onto the long-distance trains–costs that properly should have been assigned to the Northeast Corridor. If nothing else, this move by the FRA could bring some clarity to that issue.
One final fascinating thought: it wouldn’t come as a surprise to me if the Brightline people bid on the Silver Star and Silver Meteor service.
I don’t see this as a serious show stopper. The big private passenger operators (Herzog, Keolis, Bombardier, etc) already operate on class 1 railroads . . . running commuter trains. They already have a relationship that does seem to be working. I think it’s going to come down to money . . . and I think the class 1’s can be bought.
What is going to make this interesting however, is that negotiating this will take time. And only three routes will be bid. So speed will count in getting a successful bid. For that reason, I’d predict that routes involving only one freight railroad would be the easiest targets. That means auto-train, Eagle, Sunset Limited and Southwest Chief. Plus Silver Service and Crescent if corridor connections don’t gum things up too much.
I also wonder if any of the freight railroads will bid themselves? It wouldn’t surprise me, actually. Although I think nobody is expecting it. UP and BNSF still operate passenger trains (for Metra).
One of the rules is around the amount of subsidy which can be bid having to be less than 90% of the subsidy for that route in the prior fiscal year. I didn’t know that Amtrak or anyone else keeps track of subsidy by route. That would all get back to your point of how the overhead is allocated to the long distance routes – any method of doing so will be flawed at some level. Yes, this is all very interesting.
I didn’t know that either. Way down into the weeds, aren’t they!