GOP Seeks Bidders on Amtrak Rail Lines

amtrakowitz wrote:

MikeEspee wrote:Maybe if Mica and his henchmen's bill passes the NEC will go up on Ebay. Starting at 3 easy payments of $29.95!

John MIca has henchmen?

Yeah, congressman Bill Schuster - Mica's lackie.

I think you are all missing the point.

Can a privatized passenger railroad be profitable in the American context? Who knows? It hasn't been seriously tried in years.

Is that a reason not to try it? Obviously not: "if God had meant for man to fly, he would have given him wings."

Are there examples of botched privatizations elsewhere? Of course there are; I would hope we would at least attempt to learn from them.

But set aside the issue of "overall profit" for a moment. It is a fact that, right now, Amtrak has a large subsidy from the general public purse. It is also true that other transportation modes receive subsidies in various ways, though the totals of subsidy vs user fees paid by users is the subject of intense debate and I won't go there. And obviously, any private entity that has anything to do with Amtrak (or anything else) is going to demand a profit for its operations.

So the real question is, can private contracting of some, all, or several aspects of Amtrak's operations reduce costs - that is, reduce the level of subsidy? It beggars belief to think that the answer would be NO, if for no other reason than because Amtrak is more or less a monopoly provider of passenger rail services, and it is an iron law of economics that competition always leads to increased efficiency.

In fact, it generally does so at the expense of profit: the airlines were far more profitable in the regulated years than they are today, and overall, service is enormously more efficient. That doesn't mean it's "better" - it's awful in every substantive way - but it's also enormously cheaper and thus far more Americans are able to fly than were in 1960. Which is a perfectly legitimate tradeoff in a free society, and nobody would argue that safety has suffered from the change.

If the People's Representatives have decided that it is in the public interest for a train service to operate from Point A to Point B, X times a day, then why shouldn't we try and find out what a private firm would charge to operate it? If Amtrak wants to bid to operate the service itself, fine, go ahead. We've used this model for a while now in commuter rail, and it seems to be working tolerably well - sometimes Amtrak wins, other times it loses, and sometimes the new provider does a lousy job and the commuter authority goes back to Amtrak.

Otto Vondrak wrote:Can you please name these routes?

The list of routes that broke even after world war two is a short list, and probably unverifiable. I have seen this reputation given to the Denver Zephyr, the Seaboard trains, possibly the Santa Fe, and possibly the Auto Train Corporation on its eastern route for a short time. Chicago and Northwestern occasionally made money on commuter trains before they were taken over by Illinois. The interurban lines would not have lasted as long as they did if they never made money, and they were primarily passenger.

Over time the initial equipment costs can be recovered by regularly earning a profit over operating costs. The same with infrastructure costs, only in that case every train is subsidizing each other as one single train will probably not be able to pay for the tracks.

Huh? Are we still talking about some historical operation or some theoretical future operation?

This is how any business operates. You make an initial investment on the equipment you need, and hope that these costs will be recovered in the shortest amount of time possible. So it applies to all passenger rail past and future.

So what you're saying is that as long as there can be a passenger train that doesn't cost more to operate than what revenue is brought in, it will be profitable for the operator. That sounds about right... How do you make that happen with a privatized Amtrak route in America in the 21st century?

Let's not forget that this thread is about the private sector wanting to bid on the operation of select Amtrak routes in hopes of turning a profit. Yet no one in the private sector has ever proposed this, because it is clearly not a profitable venture.

I doubt that anyone would want to bid on taking over any Amtrak service right now. Almost all the long distance routes have absolutely no chance of ever being profitable. If anything is privatized (without subsidies), it would be corridor routes that serve dense population centers along the entire route with a high level of traveling in between, where alternative modes of transportation are expensive or inconvenient enough to create demand that regularly fills the trains. Subsidies for highways and air simply skew the market too much to create that demand at fares that would make money.

Re-privatizing the Auto Train might work, since it started as a private operation after Amtrak was created, is close to covering full operating costs under Amtrak's operation, and is similar in concept to many excursion style routes that currently operate.

IF private enterprise was so successful in running ground transportation and especially intercity rail passenger service then how come the railroads got out of that business 40 years ago and turned it over to a Federal Corporation namely Amtrak at that time?
Noel Weaver

Noel Weaver wrote:IF private enterprise was so successful in running ground transportation and especially intercity rail passenger service then how come the railroads got out of that business 40 years ago and turned it over to a Federal Corporation namely Amtrak at that time?
Noel Weaver

One wonders if a 1960 version of Staggers would have led to continued private passenger rail, with or without government subsidy, and what form that would have taken today. But, it seems like the only way private industry is interested in running passenger rail is with the aid of government money for rights-of-way, equipment and subsidy.

Milwaukee_F40C wrote:

Otto Vondrak wrote:Can you please name these routes?

The list of routes that broke even after world war two is a short list, and probably unverifiable.

Jumping geezers on pogo stick! Here you've spent days telling me about information you have on privately-operated passenger trains, and now you tell me that it is UNVERIFIABLE? Or that you just made it up on a feeling?

I have seen this reputation given to the Denver Zephyr, the Seaboard trains, possibly the Santa Fe, and possibly the Auto Train Corporation on its eastern route for a short time.

Well, I'd ask you for proof that any of the above trains ever turned a profit, but you just told me your data is unverifiable. I think I did a pretty good job of explaining how privately operated passenger trains were subsidized by carrying U.S. mail and express parcel shipments. Do you know what that means? That means the cost of operating the train itself was a loser, but when you add in the government mail contract and the REA contract, that additional revenue covered the losses. Do you understand that? Explain to me why the Denver Zephyr, the Seaboard trains, and the entire passenger operation of the Santa Fe were immune to the same market factors as the rest of the industry? Please?

I WILL GRANT YOU A MULLIGAN on the Auto Train, as I do believe its Sanford-Lorton route was indeed a money-maker. Actually, that's a damn good example. Private operator over existing tracks. High costs, plus early expansion, plus several payouts from derailments did in the original service. http://en.wikipedia.org/wiki/Auto-Train_Corporation

Chicago and Northwestern occasionally made money on commuter trains before they were taken over by Illinois.

Please pardon my french, but are you flippin' looney toons? Commuter trains? Making money? On what planet? Oh wait, more unverifiable data, sorry. Who told you that CNW commuter trains ever turned a profit? Because if you can show me proof, I'd like to know what they were doing to turn a perennial money-loser into a profit center. And commuter trains have zilch to do with this conversation.

The interurban lines would not have lasted as long as they did if they never made money, and they were primarily passenger.

Did you hear that? That was the sound of my brain imploding. Comparing interurban lines to common carrier long-distance passenger service is like comparing Coney Island's Cyclone to my rural high school bus route. Short course on interurban finances: If your monthly expenses are $1300, yet you are only paid $975 to cover those expenses, yes, you might be "making money," but you are not turning a profit if more money goes out than comes in.

Over time the initial equipment costs can be recovered by regularly earning a profit over operating costs. The same with infrastructure costs, only in that case every train is subsidizing each other as one single train will probably not be able to pay for the tracks.

Huh? Are we still talking about some historical operation or some theoretical future operation?

This is how any business operates. You make an initial investment on the equipment you need, and hope that these costs will be recovered in the shortest amount of time possible. So it applies to all passenger rail past and future.

Why are you (poorly) trying to explain to me "how business operates" when you have made it quite clear you don't understand it yourself?

Let's not forget that this thread is about the private sector wanting to bid on the operation of select Amtrak routes in hopes of turning a profit. Yet no one in the private sector has ever proposed this, because it is clearly not a profitable venture.

I doubt that anyone would want to bid on taking over any Amtrak service right now.

You might be the worst debator ever... So now you are conceding my point? Or have you lost interest in this conversation and only agree with me because you're bored? Everything. You. Say. Is. Wrong. Everyone here is trying to help you learn, but you keep spouting gibberish!

Is anyone else baffled by this conversation? Or are you all in the Peanut Gallery laughing at me for engaging in some great practical joke this board is playing on me? This is why we can't have nice things.

-otto-

presumably kelios and co are making a profit on the commuter contracts they have . there is a subsidy , of course so overall the service is making a loss , but it is possible for a private company to make a profit running a passenger service .
On the nec amtrak routes , it may require free access and no track fees , or even a direct subsidy , but the private company will make a profit .

I'm curious as to why people keep feeding into these crazed radical right wing whimsies. They want to privatize FEMA too.

frostyorange wrote:I'm curious as to why people keep feeding into these crazed radical right wing whimsies. They want to privatize FEMA too.

Because apparently they have this firm believe that the government they work for is incompetent.

They then seem determined to make that a reality (such as political appointments to run FEMA).

Greg Moore wrote:Because apparently they have this firm believe that the government they work for is incompetent.

And in forty years, there's been absolutely no evidence to the contrary. Who spends your money more wisely and efficiently - you? Or the government?

For that matter, who spends money more wisely and efficiently? Amtrak? Or Norfolk Southern?

krtaylor wrote:
And in forty years, there's been absolutely no evidence to the contrary. Who spends your money more wisely and efficiently - you? Or the government?

With all of the people who bought more expensive houses than they could reasonably afford and got foreclosed on, I'm tempted to say that's a draw.

David Benton wrote:
presumably kelios and co are making a profit on the commuter contracts they have . there is a subsidy , of course so overall the service is making a loss , but it is possible for a private company to make a profit running a passenger service .
On the nec amtrak routes , it may require free access and no track fees , or even a direct subsidy , but the private company will make a profit .

How is this any different from what we have with Amtrak? Amtrak is a for-profit company that requires subsidies to make up for losses.

Otto Vondrak wrote:

Milwaukee_F40C wrote:

Otto Vondrak wrote:Can you please name these routes?

Jumping geezers on pogo stick! Here you've spent days telling me about information you have on privately-operated passenger trains, and now you tell me that it is UNVERIFIABLE? Or that you just made it up on a feeling?


Well, I'd ask you for proof that any of the above trains ever turned a profit, but you just told me your data is unverifiable. I think I did a pretty good job of explaining how privately operated passenger trains were subsidized by carrying U.S. mail and express parcel shipments. Do you know what that means? That means the cost of operating the train itself was a loser, but when you add in the government mail contract and the REA contract, that additional revenue covered the losses. Do you understand that? Explain to me why the Denver Zephyr, the Seaboard trains, and the entire passenger operation of the Santa Fe were immune to the same market factors as the rest of the industry? Please?

I WILL GRANT YOU A MULLIGAN on the Auto Train, as I do believe its Sanford-Lorton route was indeed a money-maker. Actually, that's a damn good example. Private operator over existing tracks. High costs, plus early expansion, plus several payouts from derailments did in the original service. http://en.wikipedia.org/wiki/Auto-Train_Corporation

Please pardon my french, but are you flippin' looney toons? Commuter trains? Making money? On what planet? Oh wait, more unverifiable data, sorry. Who told you that CNW commuter trains ever turned a profit? Because if you can show me proof, I'd like to know what they were doing to turn a perennial money-loser into a profit center. And commuter trains have zilch to do with this conversation.


Did you hear that? That was the sound of my brain imploding. Comparing interurban lines to common carrier long-distance passenger service is like comparing Coney Island's Cyclone to my rural high school bus route. Short course on interurban finances: If your monthly expenses are $1300, yet you are only paid $975 to cover those expenses, yes, you might be "making money," but you are not turning a profit if more money goes out than comes in.


Huh? Are we still talking about some historical operation or some theoretical future operation?

This is how any business operates. You make an initial investment on the equipment you need, and hope that these costs will be recovered in the shortest amount of time possible. So it applies to all passenger rail past and future.

Why are you (poorly) trying to explain to me "how business operates" when you have made it quite clear you don't understand it yourself?

You might be the worst debator ever... So now you are conceding my point? Or have you lost interest in this conversation and only agree with me because you're bored? Everything. You. Say. Is. Wrong. Everyone here is trying to help you learn, but you keep spouting gibberish!

Is anyone else baffled by this conversation? Or are you all in the Peanut Gallery laughing at me for engaging in some great practical joke this board is playing on me? This is why we can't have nice things.

-otto-

The only thing that baffles me are the hostility and the personal attacks...

During the 1960's (and perhaps into the early 70's), the C&NW did claim to make a profit on its Chicago commuter operations.

Paying a private company to operate a commuter service certainly doesn't mean the commuter service operates at a profit. The private company makes money but only at the expense of the taxpayers. It's like the current British system. A bunch of companies are making money, but it costs the British taxpayers more than British Rail did. This system profits a few at the expense of the many.

artman wrote:

Otto Vondrak wrote:Why are you (poorly) trying to explain to me "how business operates" when you have made it quite clear you don't understand it yourself? You might be the worst debator ever... So now you are conceding my point? Or have you lost interest in this conversation and only agree with me because you're bored? Everything. You. Say. Is. Wrong. Everyone here is trying to help you learn, but you keep spouting gibberish! Is anyone else baffled by this conversation? Or are you all in the Peanut Gallery laughing at me for engaging in some great practical joke this board is playing on me? This is why we can't have nice things.

-otto-

The only thing that baffles me are the hostility and the personal attacks...

Artman, I apologize if you think I'm out of line, but the original poster is either not very experienced in debate, or is intentionally trying to sabotage this thread. He is responding to my rational inquiries with utter nonsense. Wouldn't that make you a little upset?

The topic at hand is that the GOP is trying to get private operators to bid on Amtrak routes to operate them at a profit where Amtrak cannot. Original poster was claiming at somehow there is a way to operate passenger trains at a profit, but when challenged for details, becomes unresponsive. Its quite okay to have a differing point of view, but come up with some facts to back up your point, or at least come up with reasonable arguments that can be discussed. Don't get evasive when the facts are presented.

I promise to take it down a notch. I get a little excited sometimes!

-otto-

Otto Vondrak wrote:I promise to take it down a notch. I get a little excited sometimes!

-otto-

It's good to be a railfan again, isn't it, Otto?