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Author Topic: Privatization of Amtrak
yukon11
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http://www.cato.org/pubs/pas/pa-266es.html

I know I must be the "black sheep" of this forum. The above link is to an article by the CATO institute (Libertarian think-tank)from back in the early 1990's.
One of the topics in "Atlas Shrugged " (Ayn Rand) was what happened to a railroad system, in a fictitious country, when the government took over operation. If nothing else, some food for thought.
Yukon-11

[This message has been edited by yukon11 (edited 06-24-2004).]


Posts: 1909 | From: Santa Rosa | Registered: Jan 2004  |  IP: Logged | Report this post to a Moderator
George Harris
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Two comments before you swallow this thing whole:

1. Reality check: I find myself wholy in agreement with the stated objectives of the Cato Institute, "Individual Liberty, Limited Government, Free Markets, Peace" However, some of the things they come up with are the national equivalent of leaving your front door open in a bad neighborhood. Of course we can have peace. It is available immediately. The method is called surrender. Free markets only work if the playing field is level. Do we really want the US working person's income to go down to the point that you can compete with those whose pay scales leave their employees able to afford a two room hut with a dirt floor and no running water or electricity? Limited government, yes, but again, there are certain funcitions that can be handled well by no other, and that is part of why we set up govenments, and providing transportation infrastructure in the current society is one fo those functions. Individual liberty, yes, but remember that a persons right to swing his arms ends before it hits his neighobr's nose.

2. What is the agenda of the institute and its authors nad those providing their funding? I see Wendell Cox mentioned as one of the sorces of this article. Go see in The New Electric Railway Journal the article "Who Funds Wendell Cox" The NNERJ can be found at the bottom of the rail news page on trainweb. His funding is basically the same anti-anything-rail road road gang.

There is no un-subsidized transportation in the United States. If the full cost of hauling a transcontinental airline passenger was paid by the passenger, it would probably cost well over the fare plus legitimate subsidy allocation for the rail passenger. The heavy trucks on the highway pay a minute fraction of their cost to the road system. The basic design parameter in bridges, both load capacity and clearances, and pavements is the heavy truck. A road for automobiles only, even including the those "horrible" SUV's would be much cheaper.


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Mr. Toy
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I wish I had time to do a complete breakdown of their claims. Most of the information they use to debunk what they call "myths" are themselves based on myths.

The first thing that stands out is the common confusion of referring to Amtrak's capacity and equating that capacity with actual demand. I think there is ample evidence that demand significantly exceeds Amtrak's current capacity, at least outside the NEC (i.e. most of the country). Such evidence includes frequently sold out trains, new routes that generate higher than expected ridership, etc. It is also notable that as David Gunn has increased capacity by putting wrecked cars back into service, and opened up Transition Sleepers for revenue space, ridership has increased accordingly.

The report goes to great lengths to depict Amtrak as irrelevant, but fails to address Amtrak's potential if it were properly funded and properly planned.

And as Mr. Harris mentioned, anything with the name Wendell Cox on it is automatically suspect for the reasons already stated.

Mind you, I have nothing against privatization per se, but I have yet to see a proposal put forth in sufficient detail to convince me it will work any better than, or even as well as, what we have now.

[This message has been edited by Mr. Toy (edited 06-25-2004).]


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Ira Slotkin
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At the risk sarcasm - I think the advantage of privatization is that then the "company" could diversify and buy an airline, declare bankruptcy, have the government guarantee loans to get out of bankruptcy, and then use the money to have Halliburton build rail lines and stations across the nation. Then AMTRAK would be on more equal footing (tracking?) with other transportation modes...
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sojourner
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As you point out, Ayn Rand's tale is FICTION; in actual FACT, Britrail was a rather good train service operating throughout Britain in the 1970s, whereas, last I heard, privatization under the Tories had virutally ruined the train system there.


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TwinStarRocket
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Now I know I am being cynical, but doesn't it seem to be the goal of private enterprise these days to achieve a monopoly, control pricing, and obtain as much financial help from the government as possible? Amtrak is already there, without having to make a CEO rich or spend millions on lobbyists.

But I still wonder if LD onboard sales could be run with more of an entrepreneurial spirit. My recent experiences have been they are always out of things, provide little choice, and seem to be closed a lot. With a captive customer base who is willing to pay higher than average prices, it seems to me there is an opportunity for significantly more revenue. Maybe we need a new Fred Harvey. I would like to hear some pros and cons of contracting this out.

When millions of coffee shops, restaurants, and convenience stores can come up with the right products and customer service to be successful, why not Amtrak?

[This message has been edited by TwinStarRocket (edited 06-26-2004).]


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Mr. Toy
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quote:
Originally posted by TwinStarRocket:
Maybe we need a new Fred Harvey. I would like to hear some pros and cons of contracting this out.

I wouldn't rule that out at all. I've often thought that anything behind the locomotives could theoretically be subcontracted to the most efficient operator without making significant changes to Amtrak's management structure. These contractors would be required to meet certain performance requirements, and if they fail to measure up, out they go. Its a good incentive to keep standards high.

I work for a company in a similar situation. We provide audio visual services to hotels. We function as a department of the hotels we serve, but the hotel can cancel our contract if we fail to perform. Believe me, it is a major incentive to do the job right every time!


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MPALMER
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My guess is the existing unions would protest mightily if some onboard services were to be outsourced. But who knows?

Some limited-route private enterprise trains have worked (Denver ski train) but others have not (Florida fun train). Even then I'm not sure if the Denver train is true private enterprise.

I don't think the profit is there for day-in/day-out regular passenger service for a private enterprise firm.


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cassrr
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quote:
Originally posted by Mr. Toy:
These contractors would be required to meet certain performance requirements, and if they fail to measure up, out they go. Its a good incentive to keep standards high.

Isn't it about time Amtrak employees were held to the same performance requirements? And if they fail to measure up, out THEY should go. Return the On-board supervisors!


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Capltd29
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Ok, If you wanna make the Highways profitable why don't they charge a $3 per state toll?!

The reason that Amtrtak can't expand and serve more cites and towns more effectively is because in all 34(?) years of existance it has been short changed and critisized.

They aren't able to be cut costs and made more efficient because the don't have to money needed to start projects toward new things to help the time keeping and efficiency.

Now they finally have a good President at the helm and they are working toward improvement.

Include and exclamation point(!) after almost every sentence!


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yukon11
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Conrail and the Alaskan Railroad, both private railroads, seem to be doing well, financially. There is argument over the British rail system, but TRAINS magazine declared, in a recent issue, that privatization has been successful.
With other modes of transportation, the user fees pay a good per centage of cost. With Amtrak, less than half of cost of doing business is payed by passengers (think of that when you spend 1 grand for a round-trip bedroom between the bay area and Seattle).
Another point, in the 1970's govt. subsidies for Amtrak doubled. However Amtrak's overall costs went up over 60%. In the 1980's the govt. subsidies for Amtrak
actually declined. Amtrak's unit costs (cost per passenger mile) also declined, in the 1980's, by 9%.
I think one good example of what happens when the government subsidizes something can be seen with Medicare. When LBJ signed the Meicare bill, around 1964, we were told how necessary it was to finally have a govt financed health care program for the elderly (I am all for Medicare, and Medicaid, by the way). At that time, around 1964, the average cost per patient day, on a national basis, was about $39 per room, per day! It was estimated that by 1990 the Medicare over cost would be about 9 billion per year. The actual cost turned out to be 66 billion.
Now look at the present situation
with govt subsidized health care...the average cost, per day in the hospital, is roughly $4000 to $5000 per day.
It is suggested that about 1/3 of the $4000 to $5000 per day goes to people sitting behind desks doing paper work.
I don't think this is unusual for a govt-run system. And believe me, heatlh care is govt-run even though we don't have a single payer (govt) system.
I am not suggested eliminating Amtrak. I used to live along Highway 2, near Glacier Park, Montana, and know how important it is to keep Amtrak's rail service (especially in the winter) going.
But is it not possible to have a first rate private railroad service along with Amtrak? The Canadians have VIA, but they also have the Rocky Mountaineer which is a first-class outfit with reservations needed well in advance, because of its popularity.
Could we not do the same thing, such as a first-class private railroad line from Portland or Seattle areas over to Glacier and Yellowstone, as one suggestion?
********* PIPE DREAM ***************
It is the year 2030. You drive up to Oregon to begin your train trip vacation.
*You drive into Cottage Grove, Oregon to board the New Great Northern (private) railroad. You don't need to drive into the big city (Portland, Eugene) because most GN train stations are in small towns. You get security parking for as long as you like).
*As it is in the late afternoon, you stop by the parlor car, for a little wine and cheese. The kids go off to the arcade car for some video games. You notice how smooth the train runs, as the track is only for passenger trains, not freight.
*At dinner time, you have 6 dining cars to choose from. You have small tables for 1-2 people or larger ones for familiies. The menu contains 10 entree items.
* After dinner, you travel back to your car or sleeper unit. You have to decide between on-board XM satellite radio, to listen to, or satellite TV. Both are available by a GPS System satellite dish on top of one of the cars, which automatically locks into the satellite despite the twists and turns of the train.
* In the morning, you shower, then think about a quick dip in the jacuzzi car.
* You decide to take breakfast in one of the breakfast dome dining cars, taking in the sunrise.
*I brief sojourn to the library car, where you sip a Starkbucks coffee and enjoy the morning newspaper.
* You decide you might need a haircut..so you go to the barber shop car, you wife goes to the hair salon car.
* You train arrives at the Sandpoint, Idaho, depot. You notice the New Great Northern is on time. You then board a connecting GN train to either Glacier or Yellowstone park.
Because of the enornous popularity of the New Great Northern, you get many connecting lines between Cottage Grove and Sanpoint. The train soon takes on the appearance of a commuter and long distance travel train, and continues to grow. Because of the unpopularity of airports, the New Great Norther continues to prosper.
Well, I can dream, can't I?. I don't know if the above pipe dream will ever become a reality, but do you think if we even approach this dream it will be an Amtrak run passenger service?
Yukon

[This message has been edited by yukon11 (edited 06-28-2004).]


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George Harris
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Your pipedream is exactly that, a pipedream. It sounds like a reasonable 1940's view of the future of railroad passenger service, but without the intrusion of the financial realities of the 50's and 60's that got us to where we are now.

AS to the medicare cost increase:

1. Try what medical care is like without the completely irrational malpractice situation we have in the US. We have somewhat more people per doctor here in Taiwan than in the US, but you could not tell it by the availability of service. Cost is probably about 1/4 or less of US. The doctors are still doing quite well financially, because malpractice is limited to actual losses and a rational level for pain and suffering. NO PUNITIVE DAMAGES. Also, there is little in the way of defensive medicine.

2. With inflation, $66 billion in 1990 is less than $9 billion in 1964. In 1964 no one anticipated the raging third-world level of inflation we had in the US in the 1970's.

3. A lot of that 1/3 or so of the people doing paperwork is for the government, but there is alos a lot to be sure that you document everything to cover yoursself for when some ambulance chaser hauls you into court.

4. Thanks to all of the above, the death of the GP or family practicitioner that had the sort of relationship with his patients to be able to say, "Humm, this is what I think it is, so here is what to expect or here is the most appropriate medicine, but if things turn out different, come back / call me, and we will try something else."

[This message has been edited by George Harris (edited 06-28-2004).]


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Charles Reuben
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That CATO report has been around for a while and it never impressed me very much. Clearly, it was written by somebody who read way too much Ayn Rand during their formative years.

Personally, I would like to see a report detailing the cost breakdowns for coach versus sleeping accommodations. When you consider how many people you can fit in coach vs. how many people you can fit in a sleeper, many questions begin to surface.

I have (rightfully) been cautioned by some people on this board to be careful about speculating on costs in regards to sleepers. However, if you compare what people who ride the VIA or the American Orient Express pay for sleepers, it is clear that Amtrak riders are getting a very, very good deal.

For me, Amtrak is not some sort of vacation holiday. I can't fly and I log over 15,000 miles a year on the rails. I travel by coach because I can't afford a sleeper but I am somewhat dumbfounded when I am told people, by virtue of luck or the stars manage to get $50 upgrades.

To me, Amtrak is as essential a service as the highways, social security or medicare. At about $1 billion dollars a year, or five bucks per citizen, only the most petty or vindictive, could possibly object to a minute subsidy that pales by comparison to some of the pork our government readily funds.

Wake up people. The CATO report was obviously written by somebody who hates Amtrak and doesn't use the train to commute. We have a pretty good train system now and it can only get better when we elect a new President in November.

In the meantime, I want to see the cost breakdowns in coach versus sleeper cars.

[This message has been edited by Chucky (edited 06-29-2004).]


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boyishcolt
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Mr,Harris
as i read your posts i assume you live and work overseas but are an American
please do not take this the wrong way, but when was the last time you lived in the states?

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George Harris
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Boyishcolt: What's your point?

I have worked in Asia for a little over 13 of the last 14 1/2 years. That is 11 years in Taiwan, 2 years in Hong Kong, and a few months in Singapore. I spent the last half of 1995 in New York City and the first half of 1998 at home in North Mississippi, with considerable travel in the West Tennessee to Florida Panhandle thrown in. All of our children are now living in the US, in Mississippi, Texas, and California. Have other relatives mostly in Tennessee and Florida. We have kept our house and one of our children is living in it now.

This (Taiwan) is a "First World" coutry as far as amenities are concerned. We do have electricity and running water, also telephones, cable TV, unfettered access to the internet, etc., so we do keep up with what goes on in the world.

Asides which, I do spend between three and five weeks a year in the US, usually in one of the afore mentioned places where family members are located. Iternational calling is cheap enough that we talk to the US part of the family whenever we feel like it, and we feel like it fairly often.

So, if your point is that I am unaware of the situation in the US, not true.

By the way, the people who seem to have the most difficulty with the concept that things here are not done the same way as they do it at home are those from Western Europe, not those from the US, with a few exceptions both ways.


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boyishcolt
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as i said "please do not take it the wrong way"
i was affraid to ask the question before because you seem to get defensive at times
(as it seems to be the case with people from your profesion)so just cool your jets

why i ask the question was that other than being defensive at times you post some thought's and knowlege about passenger rail and from civil engineer's point of view that has an updated prospective from ties to tracks to new passenger equipment which can not be found in many rail forums and my question was simple because i wanted to know how long you have worked overseas because i do not ever recall you saying it in any of your posts-that is the point

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George Harris
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Sorry about the defnesiveness. It was related to previous issues.
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boyishcolt
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no problem George, it sometimes can be diffucult to know how some people really feel on a computer
the information you gave me on track ware and ties was very usefull when there was the big debate here in Springfield about the track upgrades between Dwight and Splfd. Illinois. most people includeing myself were not aware of the fact that this was light duty rail being used and would fall back into poor shape very soon (115lbs) most think that rail is just rail

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George Harris
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Bayishcolt:

That discussion on track has been a while.

I could talk a lot more about it but not at this time, however I will say this:

Concerning the Springfield, Illinois Bypass project of which some part on the south side of town recently got built.

I remember seeing some write up about it with some Planning / Engineering company who's name I do not want to recall taking credit for the design. Here is where the GB Norman intellectual property issues should come into play. This whole project was studied at length beginning I believe from the late 1960's, with a fairly detailed analysis being completed about 1981 having a fairly complete geometric layout, including all connections to all railroads coming into town and replacement yard facilities. A design manual based on the Illinois Highway Design Manual was also developed to a draft form. The project died due to cost. An alternative that involved lowering the tracks through town was discussed and would have been significantly cheaper, but was never carried forward because the attitued of the state / city was we want a bypass. All this work was done by Harland Bartholomew and Associates primarily in their Memphis, Tennessee office. HB&A developed financial problems in the mid 80's shrank significantly, including and was later absorbed by DeLeuw Cather. HB&A's entire participation seems to have been completely forgotten and all credit takebn by others even thought they carried it through to just before buying right of way and preparation of construction drawings. Yes, I did work for them on that project.


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RRRICH
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George - I'm curious. I know you are living in Taiwan and are an engineer. You seem very very knowledgeable about all things railroad-related and thoroughly knowledgeable about AMTRAK!!! Are you employed by, or a contractor to, a railroad company over there? Did you ever work for AMTRAK or a railroad here at home? Again, I am just curious -- no hidden opinions here....
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boyishcolt
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George,
that is very interesting to know, i remember the the railroad reloction authority that was disbanned in the early 1980's that had did the study on relocating the 3rd street and 10 th street coridor tracks they did relocate the east /west Great Northern(exIC)
and N&S tracks along Interstate 72 2 years ago the city of Springfield hired a team called "R/DAT" to come in and tell them what was wrong with the downtown and why its looks so ugly but one of there suggestion's was to move the 3rd street track to combime with the 10th street tracks or move both of them to the east side of town along Interstate 55
i believe that both should be moved but Amtrak corridor should be left as is running thru the downtown. they now want to pay to have futher study on the this and i said to the city planner(Norm Simms) that i think this has all been done before and he looked at me like i was nuts
i have never herd of the study being done to "lower" the tracks and i wonder if these study's are still around. i am sure they are somewhere.anything else you may know about this please share
thanks

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George Harris
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To RRICH: I am currently working on the Taiwan High Speed Railway. Huge project. Very interesting. It is a completly new 339 km (210 mile), 100% grade seperated, 300 km/h railway between the two largest cities on the island, Taipei and Kaohsiung. It has a number of superlatives, including the longest bridge, km 185.787 to km 343.103, 157.316 km = 97.751 miles, about 5000 spans. Will be operated with Shinkansen type equipment, run time to be 90 minutes with one stop, 120 minutes with five stops. I am the alignment engineer, which is not as big as it sounds, since the major routing decisions were basically political and the right of way, which sets the main alignment, was all settled before I got here. What our alignment group did was the station track layouts, yard connections, and developing an alingment to fit the Shinkansen trains through 13 km of an existing railroad box tunnel. The project is now well into construction, so mainly I am dealing with minor tweaks, and track structure interface and clearance issues. Scheduled opening is October 2005. Most of my previous working time has been with PB and before that with other engineering consulting companies, but I do have one year of employment by a "real" railroad, the L&N. Projects have been WMATA, DART, Baltimore Light Rail, Springfield Railroad Relocation, and others in small parts. I am a true railroad nut, but civil engineering in orientation. For fun I will plot out line changes on topo maps.

To boyishcolt: I probably have a copy of the main reports done in the early 80's for the Springfield bypass stashed somewhere in storage. There were multiple reports, alignment, traffic, street improvements, noise barriers, etc. Sicne street improvements were developed after the railroad proposals, that is where I did my first highway engineering. The lowered alignment was never developed into a report because the authority said they were a RELOCATION authority, so use of the existing lines through town was not to be considered. It has been over 20 years, but as best I recall the thought was to put everything on the Wabash alignment. I do not remember which street that followed. Due to the rise out of the Sangamon (sp?) River valley, the whole thing could be drained by gravity. "On the east side parallel to I55" sounds like a ressurection of the HB&A study. These guys probably have a copy from somewhere. No reason to reinvent the wheel. Give me your email and we will discuss it further. Mine is ghharris44@yahoo.com. I will be going to the US Saturday, so may not check it for a few days. I do try to hang on to work I have done and back up information because there is no such thing as a good single one or two reference books in this field.


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