Third-party LD operation RFPs

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Third-party LD operation RFPs

Postby mtuandrew » Fri Aug 04, 2017 2:49 pm

http://www.progressiverailroading.com/a ... tes--52346

The FRA opened the bid process today for private operators to take over "up to three" LD routes. The article didn't say which.
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Re: Third-party LD operation RFPs

Postby Gilbert B Norman » Fri Aug 04, 2017 4:50 pm

Of interest is this quotation from the article Mr. Stephens links:

.Under the FAST Act, an entity may be an "eligible petitioner" for the pilot program only if it owns the relevant rail infrastructure on the route or has a "written agreement" with the rail infrastructure owner. Additionally, a winning bidder who doesn't own the infrastructure must obtain from the owner a written agreement that governs access issues


First I am unaware of any subsequent enacted legislation that has repealed provisions of RPSA70 which bars any party to the Agreement under that act to re-enter the intercity passenger business.

So I guess Ed Ellis could have visions of a Warbonneted Super Chief, or maybe that other actor, Jim Coston, looking for a home for his Hi-Levels. However, they will have to reach operating agreements with the roads. While those "actors" could seek relief from the Surfboard for failure "to negotiate in good faith", the facts of life are suggesting an uphill battle.
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Re: Third-party LD operation RFPs

Postby SouthernRailway » Fri Aug 04, 2017 5:47 pm

Aren't the only permissible bidders (1) the relevant track owners and (2) people who have agreements in place to access the relevant track?

I would assume that a Class I wouldn't have signed any agreements with (2), so the only bidders would be Class Is.

I could see some benefits to a Class I by getting involved with this, but, having worked in large corporations, it would be very difficult to get a large corporation's leadership to be interested in re-entering a line of business that it happily left before, so I am guessing that there would be no bidders.
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Re: Third-party LD operation RFPs

Postby BandA » Sat Aug 05, 2017 12:10 am

Most LD trains cross multiple railroads. So one railroad would have to have agreements with their competitors. Private railroads would only try this if they know they can get out of it if it fails, say with a year's notice.
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Re: Third-party LD operation RFPs

Postby mtuandrew » Sat Aug 05, 2017 12:13 am

In theory, a Class I could operate trains for another company's benefit (for example, if Keolis bid on the Southweat Chief they could subcontract T&E to BNSF.) It'd be a way of skirting that proviso, if it is still in force.

Lowest responsible bidder will still be Amtrak, I hope, but one never knows.
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Re: Third-party LD operation RFPs

Postby BandA » Sat Aug 05, 2017 12:30 am

If Amtrak loses some routes to competitors, their overhead costs would increase and operating bases might be impacted. Employees might lose jobs to the freight's employees. Equipment repair could be outsourced. Are pay rates/labor costs/rules pretty similar between freight railroads & Amtrak? Bidders could take advantage of regions with low wages which amtrak probably cannot. The freights might regain some efficiency that they lost in 1971, but with LD frequencies so low it wouldn't make much difference.

Could help short term with Amtrak's equipment shortage. And competitive bidders could take advantage of depreciated "Heritage" equipment that Amtrak cannot or won't use. So to summarize, bidder would somehow have to have lower costs than Amtrak.
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Re: Third-party LD operation RFPs

Postby mmi16 » Sat Aug 05, 2017 12:10 pm

With this RFP, the FRA has become the Don Quixote of railroading.
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Re: Third-party LD operation RFPs

Postby John_Perkowski » Sat Aug 05, 2017 3:32 pm

BandA wrote:Most LD trains cross multiple railroads. So one railroad would have to have agreements with their competitors. Private railroads would only try this if they know they can get out of it if it fails, say with a year's notice.


HUH?

1/2. Mostly UP rails

3/4. Where is it not BNSF?

5/6. Ok, mix, but I can solve that moving it all to UP.

7/8. Almost all BNSF

11/14. All UP except a small amount of historic shared passenger trackage rights between UP and BNSF predecessors.
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Re: Third-party LD operation RFPs

Postby John_Perkowski » Sat Aug 05, 2017 3:37 pm

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Re: Third-party LD operation RFPs

Postby John_Perkowski » Sat Aug 05, 2017 3:38 pm

I hold positions in UNP and BH. IFthe managers even THINK to try a bid, I will start a shareholders class action suit for diluting value so fast it will make your head swim.
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Re: Third-party LD operation RFPs

Postby OrangeGrove » Sat Aug 05, 2017 3:47 pm

BandA wrote:Could help short term with Amtrak's equipment shortage.


Qualified bidders - if there actually were any - potentially have access to Amtrak equipment.
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Re: Third-party LD operation RFPs

Postby John_Perkowski » Sat Aug 05, 2017 4:42 pm

OrangeGrove wrote:Qualified bidders - if there actually were any - potentially have access to Amtrak equipment.


Agreed. One super liner = 40 berths or 80 coach seats. There are 3 sleepers and 4 coaches right now in a consist, plus a diner, a lounge, and a baggage.

3/4, 5/6, and 11/14 mean 14 train sets, plus two-three protects.

No investor owned railroad has 68 coaches, 51 sleepers, plus 17 dorms, diners, lounges, and baggage cars.

OBTW, at single level...double those.
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Re: Third-party LD operation RFPs

Postby SouthernRailway » Sat Aug 05, 2017 5:55 pm

John_Perkowski wrote:I hold positions in UNP and BH. IFthe managers even THINK to try a bid, I will start a shareholders class action suit for diluting value so fast it will make your head swim.


The business judgment rule protects railroad boards when making these types of decisions.
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Re: Third-party LD operation RFPs

Postby mtuandrew » Sat Aug 05, 2017 6:02 pm

58/59: all CN, if for some reason they wanted to bid. Say they did want in - could they bid using their Wisconsin Central subsidiary (not a RPSA signatory) instead of Illinois Central?

(But then again, EEE would underbid anyone for the City of New Orleans franchise.)
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Re: Third-party LD operation RFPs

Postby CHTT1 » Sun Aug 06, 2017 9:35 am

CN is openly hostile to all passenger operations. Why would you think they would be interested in actually operating a passenger train? As far as Iowa Pacific is concerned, they had their chance with the sleepers attached to the CONO. That didn't seem to end up very well. Not to mention the Hoosier State. IP is having troubles running their tourist train operations, I don't think they will be getting back into intercity operations any time soon.
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