Commuter Rail Contracts

[LIRR272]

Amtrak claims VRE's request for the proposal stated that 80 percent of the scoring would be based on an applicant's "performance and experience," and Keolis has no experience operating under U.S. rail safety and security regulations, Amtrak officials said.

VRE spokesman Mark Roeber said 80 percent of the scoring looked at commuter rail operations in totality, addressing everything from an applicant's experience and system safety to maintenance and management plans. The other 20 percent looked at cost effectiveness.

Maybe that's why Amtrak lost the contract, they didn't understand what VRE was looking for and how VRE was evaluating the bids.

After doing business with someone for over 10+ years, its hard to say they didn't know what they were looking for.

[electricron]

After doing business with someone for over 10+ years, its hard to say they didn't know what they were looking for.

I would normally agree with you. But, there has to be a valid reason why VRE selected Kelios over Amtrak.
The reason I can come up with is that maybe Amtrak managers weren't listening well to VRE managers.

[taoyue]

Amtrak is challenging the award based on the new operators experience here in the US along with other things. Amtrak had a long standing operating contract with the VRE and yes they should feel slighted against because if the VRE was unhappy with the service-----then they should have made Amtrak aware of this long before the contract expires.

When a company is bidding for a contract, it is their job to convince you to give them the contract. It is not your job to convince them that they don't deserve the contract.

I've seen it happen in contexts outside railroading. Some company holds a contract for 30 years, and assumes that they've got it locked up. When the next renewal comes around, they just do what they've been doing for 30 years. Prices go up by x percent, service stays the same, no special effort. Now another company swoops in, bids lower, offers more flexible terms, and actually tries to win your business. Now, maybe, they're just doing it to get the contract. But at some amount of savings, it's worth trying them out, if only for a few years. You could always go back. (Bonus: the first company will usually bid lower next time, to try to get you back.)

Amtrak has filed a FOIA request to get ahold of the evaluations. If some enterprising newspaper reporter manages to get ahold of a copy, then we'll have a much better idea of how much Amtrak fell short. VRE has stated that they found Keolis superior to Amtrak in general, not just in the price.

http://railroadnation.com/virginia-railway-express-drops-amtrak-french-company-run-trains/

VRE spokesman Mark Roeber said four companies submitted bids to operate the trains, and that Keolis rated highest, based mainly on its customer service, plus its management and operations plan. It also underbid Amtrak, offering to take over running the service for $18.5 million versus Amtrak’s $19.6 million plus its $2.2 million mobilization fee (versus Keolis’s $1.7 million). He said the agency also wanted a more “hands-on” approach from its operator.

[LIRR272]

After doing business with someone for over 10+ years, its hard to say they didn't know what they were looking for.

I would normally agree with you. But, there has to be a valid reason why VRE selected Kelios over Amtrak.
The reason I can come up with is that maybe Amtrak managers weren't listening well to VRE managers.

Its hard to say that Amtrak managers didn't listen to the VRE. I say this also because Amtrak just inked a deal with the state of Virginia to provide service from Richmond and Lynchburg (I believe). So why would the state deal with Amtrak and the VRE decided to go elsewhere? That something we will never know. If it was true, it would be interesting to know when the relationship started to fall apart.

[electricron]

Another news story with so more background and facts.....
http://www2.insidenova.com/isn/news/local/article/vre_awards_new_contract_with_french_company/45313/

Keolis Railroad Services of America will enter into a five-year service contract with the commuter railroad starting July 1, 2010. During the first year, VRE will be charged 18.4 million, which includes a one-time contract start-up fee of $1.7 million. Over the remaining four years, VRE will be charged $17 million per year.
Total Keolis bill = 18.4 + 17 + 17 +17 + 17 = $86.4 Million.

When Amtrak re-bid for the contract in September, the railroad asked for $19.8 million per year, including a start-up fee of $2.2 million.
Total Amtrak bill = 19.8 x 5 = $98 Million.

Difference over 5 years = 98 - 86.4 = $11.6 Million. That covers the price for three more brand new M36 locomotives. VRE is spending a total of $44 Million for 12 new M36 locomotives, around $3.667 Million each. VRE would really like to own 20 new M36 locomotives.

More from VRE spokesperson Mark Roeber:
(1) Amtrak would not say why they wanted to impose a contract start-up fee on a contract they have owned for 17-years.
(2) VRE has for more than two years been wrangling with Amtrak over poor scheduling and maintenance issues that Roeber said has plagued the system. “It’s not a reflection of people who are on our trains, or fixing our trains or operating those trains; those people put their hearts into it everyday. The problem is when VRE General Manager Dale Zehner goes to Amtrak and asks ‘why did my locomotive break down? You just repaired it the other day,’ and get an answer like ‘oh well, it just happens,” said Roeber.

Looks like VRE had TWO good reasons to drop Amtrak.

[Rtrain]

electricron sounds like he owns a huge business or is some sort of management.

[BuddSilverliner269]

Poor scheduling and maintanence. Sounds like bs to me electricon. The schedules set forth in the public timetable is set forth by VRE, not Amtrak. They only operate what they are told to operate and dont create the schedule other then getting them into and out of Union Station and since there isnt a whole load of trains using the 1st street tunnel, I dont see handling VRE properly or improperly being an issue. Amtrak doesnt own the tracks south of CP Virginia so how do you expect a better service when they are running on CSX tracks and must run the services so not to interfere with the freight trains. Maintanence is another BS line because VRE owns the equipment. If there old broken down diesels arent working properly, Its due to the fact that they arent putting money in them, and not Amtrak. Its funny they are putting less money into the operation by going with this French company when apparently the money that was being paid wasnt enough to maintain the junk plus pay wages etc etc. I will agree that the $2 million that they asked for a start up fee was nonsense but the other money isnt. Again if this new company is going to pay any Amtrak employee who decides to take employment with them instead of staying with amtrak the same kind of money, heathcare and benefits, plus supposedly maintain the trains at a facility that hasnt been disclosed for the amount that VRE is going to pay, I can tell you that soon enough VRE will break off ties in the future because of poor service, broken down equipment, and cost overruns and then all of a sudden Amtrak looks pretty damn good. Do we need to state that Amtrak once rebuilt the MBTA commuter rail system from the ground up and ran it for years and then MBTA thought they could get better service elsewhere. Ask the thousands of commuters what they think of the trains and service since amtrak left and Im sure you wont get to many compliments.MBTA is talking about going back to Amtrak. Metrolink is the same story. Eletricron, it seems you have a hard on against Amtrak and thats perfectly fine, but how about you understand the operations and logistics of a railroad before you start spouting your mouth about how Amtrak over price themselves and blah blah blah.To be perfectly honest, I have a serious problem having our tax dollars pay for a French operation on American soil. If Amtrak couldnt maintain the VRE junk properly, its due to it being junk and not Amtrak employees.If Amtrak didnt know what they were doing, I dont understand why Virginia is gung ho about expanded Amtrak service. Seems to make you think, but hey enjoy your lil french man sucking in our dollars but Im sure you would be the 1st person to cry that America is always outsourcing and paying foreign countries to do what Americans already know how to do

[Jersey_Mike]

Amtrak has made clear time and time again that running commuter lines is something that it doesn't need to do and will only do if the pot is properly sweetened. By that I mean Amtrak isn't going to risk taking a loss by aggressively bidding a contract. Amtrak's core mission is not to subsidize local commuter operations by losing money on them. Same deal if a local authority loads up a contract with performance penalties and the like. Amtrak will just walk away.

Amtrak is the low variance option. They might not have the best service, but they are going to be very consistent and not subject to wild swings as the management rolls out new cost cutting / efficiency initiatives. Amtrak has their passenger rail playbook and they know how to run it. These European franchise Train Operating Companies come from a completely different competitive environment that more resembles a bus company or airline than a North American railroad. For example they might not know which maintenance needs to be done and which can be deferred under American operating conditions. They can have unrealistic expectations about what physical plant and rolling stock defects will get repaired and on what timeline it happens. This all leads to wild swings in service as the management hunts around for the process to make things click while not killing their razor thin margin.

Finally, one last Advantage that one gets with Amtrak is that it has some degree of leverage over freight railroads. Amtrak has mechanisms to lobby/complain to congress, it also owns some of its own lines where the freight railroads are tenants and can also co-ordinate funding to upgrade parts of freight lines for passenger service.

[BuddSilverliner269]

Jersey mike, very well put!!!! Thank you

[electricron]

We can argue forever if Amtrak played fair with VRE. What is apparent from the news stories I provided links to, is that VRE didn't feel Amtrak overall gave them a good deal nor great service. Hence, why VRE is willing to partner with Keolis.
As for maintenance on old equipment, VRE was paying Amtrak what Amtrak asked to provide that service to keep their equipment in good working order, and apparently Amtrak failed at it. Amtrak blaming VRE for running old broken down equipment is very unfair, after all it was Amtrak that was operating and maintaining that old broken down equipment. If Amtrak had been maintaining the old equipment properly, it wouldn't be broken down as much........

[LIRR272]

The problem is when VRE General Manager Dale Zehner goes to Amtrak and asks ‘why did my locomotive break down? You just repaired it the other day,’ and get an answer like ‘oh well, it just happens,” said Roeber.

Come on--do you really think Amtrak's management said that!!!!

First off, if they knew anything about the equipment they would know if the eqipment came in for flat spots and the wheels were replaced or cut and was released and shopped again for a compressor failure, your not going to know about the compressor failure when the original problem was flat spots.

I bet if they were to look at the maintenace history of the equipment, it would tell a different story. You can see how long the unit was shopped, for what reason, and how many days in service (or the number of days out of service or between shops).

Lets just say VRE may not have liked the answers they were given.

[David Benton]

if amtrak is not to bothered if it gets commuter contracts , why is it objecting to losing it ???

[electricron]

if amtrak is not to bothered if it gets commuter contracts , why is it objecting to losing it ???

If Amtrak had really wanted the contract with VRE, it might be a good idea to actually show up at the VRE committee meeting making the decision. Not even showing up can only mean one thing....

[krtaylor]

Competition is how we keep everybody honest. What's bad about forcing Amtrak to up its game? And is not France one of those places that we always hear US passenger railroading should be More Like Them? Let's give them a try - and if they flop, VRE can always go back to Amtrak.

Now what I'd like to see is competition between not operators, but governing authorities. Given the choice to operate under FRA regs or whatever the French rules are, well...

[Jishnu]

From various sources it appears that Keolis - a French transport provider, and the largest such in France, is partly owned by SNCF. So far it has been involved in operations mostly of tramways, airport people movers, buses, trolleybuses and funiculars. They are partners in a few franchises for operating trains in the UK. This is its first exclusive heavy/commuter rail operation contract. It should be interesting to see how it pans out.

They are a minority partner in outfits like Govia in the UK which operate main line rail service. It also operates the Transpennine Service in partnership with the First Group. In Australia they bid for operating a tramway and a suburban railway. They got the tramway contract but did not get the suburban railway one. No harm in giving them a try.