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This "debate" is mostly in the minds of those who write for URPA. The Northeast Corridor isn't going anywhere; it carries too many commuters (unmentioned by Mr. Seldon), plus about half the capital costs are covered either by the states or by the Federal Transit Administration, not Amtrak.
The long distance trains enjoy low-cost access to freight rights-of-way. By my estimation (and I earn my living doing this kind of stuff) Amtrak payments to the freight railroads are about one-third of what the railroads pay each other for trackage rights.
Plus, of course, the argument in favor of the LDs assumes the NEC will just vanish if Amtrak stops funding it, and all its costs will vanish too. Talk about fairy dust!
Costs of the LD trains are mostly payments to freight railroads, crew and fuel costs, and maintenance of the equipment. These are all variable costs that will disappear instantly when the LD trains do.
Does that all clarify the situation a bit?
Posts: 614 | From: Merchantville, NJ. USA | Registered: Aug 2000
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But if you take the $42 million in revenue from the Empire Builder, and subtract the "payments to freight railroads, crew and fuel costs, and maintenance of the equipment" for that one route you should get a verifiable number. Then if you allocate the administrative cost of running Amtrak and assign a portion of it to the EB based on some reasonable figure such as passenger miles or percentage of total revenue, do you still get a net loss?
Now Amtrak claims it loses up to $400 per passenger on the LD's, and breaks even on the NEC. So the debate, and my big question is: Who is right? Amtrak or URPA. My guess is that the truth is somewhere in between. But I would like to see an apples to apples comparison number from each side.
Not that I assume everything URPA says is correct, but I suspect the EB performs financially as well as the NEC when compared fairly. And it would follow that other LD's, if they ran reliably and had better equipment and service, would not be the money losers Amtrak claims they are.
Since Andrew Seldon is from the same area as me, I know a little bit about him. He is intelligent, conservative, and successful in his profession which involves law and accounting.
Posts: 1572 | From: St. Paul, MN | Registered: Dec 2002
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I still have mixed feelings about Andrew Selden and URPA. I am inclined to agree with the assessment that the long distance trains perform much better than corridor trains, but that doesn't mean there is no need for the latter, any more than I accept that there is no need for long distance services.
I think Selden is stretching a bit when he tries to compare Northwest Airlines payments of landing fees to public airports with Amtrak's capital costs of the NEC. If Northwest Airlines owned the airports, I'd bet they'd also report paving costs as capital costs, and not operations, just as Amtrak does. On the other hand, he makes a valid point when he says that NEC train costs do not include track access fees as LD train costs do, making the former appear to have lower overall costs than the latter. I'm not sure that one method of accounting is necessarily "right" or "wrong" as Selden implies, but since they are different, I agree that they can't be used to make direct comparisons.
While I tend to agree with Selden's conclusions, I've never been particularly fond of Selden's animosity towards NARP or David Gunn. No organization is perfect, and NARP does indeed criticize Amtrak when it is warranted. NARP is hardly an "echo chamber" for Amtrak management. Selden could stand to bring his ego down a notch or two. He provides a much needed perspective to the overall debate, but his holier than thou attitude leaves me cold.
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