Destination:Freedom Newsletter
Destination:Freedom
The Newsletter of the National Corridors Initiative, Inc.
Vol. 4 No. 1, January 6, 2003
Copyright © 2002, NCI, Inc.
President and CEO - Jim RePass
Publisher - James Furlong
Editor - Leo King

A weekly North American rail and transit update


Acela Express-Yuppie Train

NCI: Leo King

On the Northeast Corridor “yuppie train,” the attaché case and laptop crowds who occupy the hourly Acela Express and Metroliner service are largely Republican – and need to be targeted for Amtrak support, according to a labor leader. Sources at Amtrak report that a tenth and final Acela frequency will be added with the January 27 timetable change.

 

A view from labor:

Target Republican Amtrak passengers?

By Wes Vernon
Washington Correspondent

For all the rivers of ink and forests of paper that have been expended over the future of rail passenger service in the United States, Amtrak is going to continue pretty much the way it is. That is the consensus among transportation watchers in Washington.

Contemplating a big fight on Capitol Hill (Every year since Amtrak’s founding has witnessed a “big fight” over Amtrak), at least one rail labor leader says the smart strategy to keep Amtrak on track is to seek the support of “the Republicans who ride Amtrak.”

“Republicans ride Amtrak,” declares James “Broken Rail” Brunkenhoefer, U.S. National Legislative Director for the United Transportation Union (UTU).

So, how about Democrats? Don’t they ride Amtrak too?

Well, sure, but the Republicans control the Presidency, the Senate and the House of Representatives. When you’re dealing with a Republican White House and a Republican Congress, you have to make the point that this can affect a part of the GOP’s base.

Brunkenhoefer outlined his proposed Amtrak political strategy this way in a conversation with D:F:

A lot of the folks who ride Amtrak’s long-distance trains are senior citizens with time and a certain amount of disposable income. Judging by the latest election results, many of them voted Republican.

On the Northeast Corridor, the attaché case and laptop crowd that occupies the hourly Acela Express and Metroliner service, on both first and business class, is largely Republican.

Ergo: Amtrak is arguably a Republican issue.

“You’re saying Democrats ride Greyhound,” I asked.

“Sure,” he replied.

There is, of course, another side to the coin. Democrats populate some of the elite precincts of America – government contracting industries, entertainment, academia, etc. Though some senior retirees do ride the long-distance sleepers, others of a more frugal mindset will go coach and sit up all night. They are as likely to be Democrats as Republicans.

Moreover, while the attaché case, laptop coat-and-tie set indeed is found on the NEC’s Acela and Metroliner services, the backpack bluejeans crowd will often show up on the slower lower fare Acela Regional. Republicans or Democrats? Who knows?

However, Brunkenhoefer’s point is not necessarily that Republicans always dominate Amtrak’s ridership, but that there are a lot of Republicans out there on the rails, and that the GOP would do well to bear that in mind.

The lobbying battle on Capitol Hill is shaping up.

Amtrak President David Gunn fired off a letter to key lawmakers December 16, reiterating Amtrak’s rock-bottom need of $1.2 billion for Fiscal Year 2003. Senate appropriators went along with that, while the House Appropriations Committee held the line at $762 million. The Bush administration had approved only $521 million.

Gunn, however, never one to mince words, said, “there are no easy options to any of us if the funding level falls below $1.2 billion.” Tight as that is, he added, it “will allow us to hold the existing system together and operate through this [fiscal] year without the threat of insolvency.”

Gunn reminded the lawmakers that last May he took over a railroad “that had lost focus and engaged in financial games to make it look like the railroad was making progress toward self-sufficiency,” which he said was belied by reports of the DOT Inspector General and others.

Writing in Trains magazine, Potomac Pundit Don Phillips offers “an educated guess” that with Amtrak, “the status quo will prevail,” and yes, that means the name of the game will be “to squeeze Amtrak as tightly as possible on money, and pretend there’s enough to actually run the service.”

Phillips even found some solace in the fact that Sen. John McCain (R-Ariz.), incoming chairman of the Senate Commerce Committee, will hold extensive hearings on Amtrak with an emphasis on “reform,” but that the senator did not say “let’s kill the passenger train.”

The basic conflict in the Bush administration, according to D:F sources, was between Budget Director Mitch Daniels, who wanted no part of Amtrak, and HHS Secretary Tommy Thompson, who wanted expansion of the system as far as the eye could see.

The fact that Thompson did not get his way – and that was one reason he didn’t get the DOT Secretary job he really wanted – caused many to reach the mistaken conclusion that Daniels won the battle.

Not necessarily. The Administration reportedly was wary of all the talk about a vast high-speed rail network, noting that the money for that simply “is not there,” an observation that David Gunn has also made.

It is also a fact, however, that the Bush administration does not want Amtrak to die on its watch.

Perhaps that is where Jim Brunkenhoefer’s “Republican strategy” comes in.


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Amtrak still awaits Turboliner parts

Amtrak is committed to putting seven Turboliner trainsets into service, according to Amtrak’s Dan Stessel in Washington. New York State paid to have the trains refurbished at SuperSteel Corp. of Glenville, N.Y. in its Schenectady plant, but Amtrak has refused to put the first trainset into service, citing training, missing spare parts and documentation (D:F December 9, 16).

He said the trains SuperSteel is refurbishing are 27 years old. That means it will take time to produce an inventory of spare parts, locate the service manuals and retrain locomotive engineers.

The parts needed to maintain these trains are nonstandard, Stessel said. Before Amtrak begins running the trains, the carrier needs to ensure that there are enough spare parts on hand to keep them running, he explained to the Albany Business Review of December 23.

If needed parts aren’t on hand, a train would have to be taken out of service while waiting for a part to be made, he said.

“It is in everyone’s interest to give them a couple more weeks for SuperSteel to give us the parts to build an inventory,” Stessel said.

Amtrak also wants to make certain that crews will have the technical manuals they need to operate and repair the trains and that the train crew have time to train on the equipment, he said, adding, “It’s like the difference between flying a 727 and a 757.”

Amtrak officials are “working through the issues” that caused New York state Transportation Commissioner Joseph Boardman to go public in November with complaints about Amtrak’s commitment to high-speed rail traffic upstate, Stessel said.

Boardman sent a letter to Amtrak Chairman John Robert Smith (who is also NCI’s chairman) complaining that the passenger rail service was reneging on a deal with the state which would put the seven high-speed Turboliners in service on the Empire Corridor between Niagara Falls to New York City via Albany, the state capital. Boardman went public with the letter, which accused Amtrak of seeking more state dollars while not doing enough to improve rail service.

State officials said they were “pleased” with Amtrak’s response and are working with them, said NYDOT spokeswoman Melissa Carlson.


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Saratoga to get $2.7 million Amtrak station

New York’s Capital District Transportation Authority (CDTA) has awarded a $2.7 million contract to build a new Amtrak station in Saratoga, N.Y., about 35 miles north of Albany.

Bast Hatfield of Clifton Park, N.Y. received the contract on a conditional basis.

Amtrak requires companies to purchase a special insurance policy when work is done around the railroad. There is some concern among CDTA board members that Bast Hatfield may have paid too much for the coverage and that they could acquire insurance more cheaply, said CDTA spokesman Carm Basile.

If the company does find cheaper insurance, it may require the entire contract to be rebid, Basile said. Therefore the board decided to make the award contingent on the insurance issue being resolved.

Work will include major renovation work, site finishing, utility and demolition work. The construction firm will do the majority of the work needed to upgrade the new station.


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UP nixes night train plan

The latest effort to restore Amtrak passenger trains to the Tehachapis has stalled in frustration after Union Pacific Railroad refused to even consider the idea, according to a January 2 report in the Bakersfield Californian.

Caltrans recently asked Union Pacific to study the possibility of running a single Amtrak train nightly between Bakersfield and Los Angeles over the 150-mile route over the Tehachapi Mountains. Union Pacific owns the tracks, and Caltrans operates Amtrak train routes in California.

The trip would have been an extension of Amtrak’s current San Joaquin route, which runs between Oakland and Bakersfield. Caltrans requested a capacity study to determine if a single passenger train could squeeze among the freight traffic on the route, and to determine what track improvements would be needed, such as new sidings that would let trains pass each other.

“We told them that it was basically a nonstarter as far as we’re concerned,” said Union Pacific spokesman John Bromley. “It just doesn’t make sense when you compare how quickly you can make the drive.”

Passenger trains have not operated between Bakersfield and Los Angeles since 1971, when Amtrak took over passenger rail service nationwide. Passenger rail travel heading south dead-ends in Bakersfield, and Amtrak passengers seeking to go farther must now board buses to reach the next active rail route.

A Caltrans study last year identified the Bakersfield-Los Angeles route as one of the two most significant rail “connectivity gaps” in Southern California.

“It’s surprising that they (Caltrans) asked,” said Alan Miller, executive director of Train Riders Association of California, or TRAC, a 1,500-member passenger advocacy group based in Sacramento.

“It has been a while since they’ve moved forward with action like this. I think they recognize the need. It’s just disappointing that they haven’t followed up yet.”

Amtrak has the authority under federal law to demand access to private freight tracks for passenger trains, but because Amtrak and Caltrans share control of passenger trains in California, it’s unclear if either agency has authority to demand that UP complete the capacity study, and neither has stepped forward to do that.

“That route is actually subsidized by the state of California, so it’s really a California issue as to whether they want to see that route expanded on to L.A.,” said Dennis Kuklis, director of planning for Amtrak West.

Caltrans spokesman John Robin Witt said neither agency has the right to demand the study.

“Rail is expanding in California, and it makes sense to look at every possible route. So we’re simply asking, is it possible now?” said Witt, a former Bakersfield resident.

The proposal called for a single nightly passenger train leaving Bakersfield at around midnight and arriving at Union Station in Los Angeles around 7:00 a.m. Barring freight traffic, the trip would take five hours, but the proposal included two hours of extra time in case of delays.

Miller said the route, though long, would appeal to casual and business travelers who want to avoid Southern California’s always-crowded highways. They could sleep aboard the train and arrive in L.A. just as the city awakens, he said.

The Tehachapi route carries 38 long freight trains a day operated by both Union Pacific and Burlington Northern & Santa Fe, said Bromley. It’s a slow, tortuous, single-track route that simply can’t handle any more traffic, especially passenger trains, he said.

“It’s just a bad mix and it’s worse on a mountain grade where there’s so much congestion,” Bromley said.

Others aren’t buying that complaint, including Rick Norris, a Palmdale city councilman and vice chairman of the San Joaquin Valley Rail Committee, a Caltrans advisory panel made up of city and county officials. A capacity study would reveal, in fact, whether present traffic loads could accommodate one short passenger train. It also would identify new sidings or other improvements needed to relieve strain on the main track, which the state would fund.

“Union Pacific has not been cooperative at this point,” Norris said.

Norris’ committee will take up the issue again when it meets January 10 in Los Angeles.


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Mallery sees cost sharing as best financial plan model

As part of its bid to survive, Amtrak is asking California and other states to sell Congress on a new state-federal cost-sharing plan.

Amtrak’s staff has outlined a possible plan calling for states to pay operating costs for the first time of in-state lines like the San Joaquin and for the federal government to pay most of the capital costs for new or upgraded service. In California, the state pays most of the operating cost and well over half the capital costs of those lines.

That varies nationally, with some states paying nothing to run their in-state lines and varying amounts of capital costs, reported the Desert Sun on December 30.

As outlined by Amtrak, the federal government would continue to pay the cost of long-distance trains like the Sunset Limited, which runs through the Coachella Valley, and the Coast Starlight, which operates through Monterey County.

Gil Mallery, Amtrak’s vice president of planning and business development, said the plan recognizes that the current way of financing Amtrak can’t continue. Last year, the nation’s passenger rail line suffered what he called a “near-death experience” when it almost ran out of money.

“Amtrak’s current business model is not sustainable,” Mallery said.

Mallery said Amtrak isn’t lobbying states to sign on to any particular plan, even though he has outlined the new state-federal proposal for officials from 27 states in a series of meetings.

He said that as part of the upcoming debate on Amtrak’s future, states need to present Congress with a plan to keep their in-state trains running.

“The issue is not about Amtrak but about what the states, such as California, want in terms of their transportation system and what is their relationship with the federal government,” Mallery said.

California paid about $73 million in 2002 to help cover most of the cost of operating three Amtrak trains beyond what is collected in fares, said Dennis Trujillo, spokesman for CalDOT.

The federal government still pays about 5 percent each of the operating cost of the San Joaquin, which runs between Bakersfield and the San Francisco Bay area, and the Capitol Corridor, which operates between the Bay Area and the Sacramento region, he said.

He added federal funds cover about a third of the cost of the Pacific Surfliner, operating in coastal Southern California.

When it comes to the cost of new track, better signs and stations, California has been paying the bulk of the costs – $1.7 billion out of the total $2.7 billion spent since service began in 1976.

While the new plan outlined by Mallery would cost the state some additional operating funds, it could be a big gain in capital costs. The plan calls for an 80 percent federal and 20 percent state split of these costs, which, he said, is similar to the way they share highway and other transportation related costs.

Eventually, this would mean about a $3.5 billion federal pot of money for in-state capital construction projects nationwide.

“If that (cost-sharing plan) is the result, it would be silly for us not to support it,” Trujillo said of the Amtrak proposal.

He said Caltrans officials are studying the plan and Amtrak’s future, but stressed that it’s far too early for the state to take a position on any plan. He said the state needs more information on various options, other states’ views and the federal outlook.

Mallery acknowledged that states are far from settled on his proposal, which he stressed isn’t a formal Amtrak board plan, or any proposal.

“There are almost as many proposals from states as there are states,” Mallery said. What’s important, he stressed, is that states, as well as the federal government, seriously address this issue if they want to keep Amtrak running in their states.

He said the issue is particularly important for states like California, which already heavily subsidizes very popular in-state trains.

That compares with a state like New York, where the federal government covers the entire $50 million annual operating cost beyond farebox collections for the Empire line. The reason: the New York line was part of the original Amtrak system.

Generally, he told a recent California train conference, Western states pay more for their in-state service because they got into the system later.

“The enthusiasm for this increase dramatically increases as you move from the East toward the West,” Mallery said of his proposal for states to pay operating costs for in-state lines.

With its popular in-state trains and existing subsidy program, he said, California is Amtrak’s most important state partner and it hopefully will help lead the effort to develop a viable new financing system for Amtrak.


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Jackson named Illinois communications chief

Illinois Gov. Rod Blagojevich on December 19 named Cheryle Jackson as his communications director. Jackson was Amtrak’s Intercity regional vice-president for communications and government affairs from January 2000.


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COMMUTER LINES...

Richmond studies light rail, commuter operations

Richmond, Va., planners want to find out whether the railroads that run to Ashland, Petersburg and Midlothian could help address some of the region’s future transportation needs. Virginia’s DOT has hired consultants Parsons Brinckerhoff to study the potential costs, funding sources, corridors and riders of a commuter and light rail system for the Richmond area.

The $150,404 study, which is being paid for with federal money for the Richmond Area Metropolitan Planning Organization (MPO), will provide the region’s most extensive look at the service, officials said, according to the Richmond Times-Dispatch of December 31.

“It’s a study we’ve been trying to get going for years,” said Daniel N. Lysy, director of transportation for the Richmond Regional Planning District Commission, which provides staff for the Richmond Area MPO.

Viktoria Badger, a transportation planner for Richmond who is helping to guide the study, called it “futuristic” and said local officials will be the ones who decide whether anything comes of it.

“It will depend on the priorities of the jurisdictions and the development densities that occur,” she said.

The MPO’s study committee is expected to meet in late January to review the proposed corridors. The study is expected to be finished by year’s end.

As recommended, commuter rail service would be studied along existing rail lines from Main Street Station to several outlying areas. They are the White Oak Technology Park and Richmond International Airport in eastern Henrico County, as well as Hanover Courthouse, the Village of Midlothian, Ashland and Petersburg.

Light rail, which would use a separate right-of-way, would be studied along several broad corridors – White Oak to Short Pump by way of Broad Street; Main Street Station to Chesterfield Towne Center; and Maymont to Lewis Ginter Botanical Garden.

Having a corridor included in the study “doesn’t rule any out in the future or rule any of those in,” Lysy said. He also noted that the study will assume that development will occur as it is recommended by each locality’s comprehensive plan.

CSX and Norfolk Southern, which own the rail lines in question, are willing to discuss starting a commuter service in the Richmond area.

“It’s not out of the question,” said Susan Bland, spokeswoman for Norfolk Southern, however, “it needs to be transparent to our freight operations.”

Even if officials can show commuter or light rail would work in the region, competition for funding is expected to be fierce. Virginia is spending about $25 million on mass transit, buying everything from buses to supporting the Virginia Railway Express in Northern Virginia.

“Funding for a rail project, I would say, is in the realm of possibility, but it’s a difficult thing,” said Charles Badger, assistant director for the state Department of Rail and Public Transit and husband of Viktoria Badger of Richmond.

James W. Dunn, president of the Greater Richmond Chamber of Commerce, applauded the region for looking at rail to address its future transportation needs but said the region will need to change how it plans for residential and employment growth if the service is to take hold.

While each locality has a plan to guide its growth, Dunn said the cumulative effect of those plans leaves much to be desired.

“Look what’s going on right now in Chesterfield,” he said. “People are calling for a moratorium for housing developments that are already approved, and we’re about to open another growth corridor” with the final leg of state Route 288, through western Chesterfield, as well as eastern Powhatan and eastern Goochland.

Dunn said businesses that are considering whether to invest in the region are starting to ask about the region’s long-term growth strategy. “Frankly, we don’t have a good answer for that today,” he said.


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Breda cars blocked from service in Boston

State regulators in late December blocked the Massachusetts Bay Transportation Authority from bringing its sidelined fleet of derail-prone Green Line trolley cars back into service, saying they want assurances their Italian manufacturer is actively involved in devising the fix.

The Department of Telecommunications and Energy, which has final say on T safety matters, nixed the transit agency’s plan to reintroduce 27 low-floor Breda trolley cars in December saying it needed additional information and at least another month to review the transit agency’s plan, according to a report in Boston’s Daily Herald for December 21.

“While the department shares the MBTA’s goal of returning these handicap-accessible cars to revenue service as soon as possible, (it) anticipates it will need approximately 30 to 45 days to thoroughly review and assess the completed (repair) proposal,” wrote Brian Cristy, director for the DTE’s transportation division.

The T had hoped to slowly put the 27 Breda cars back into service on the Green Line’s Boston College branch by mid-December.

T officials said they were “disappointed” by the DTE’s decision.

“We believe they can be returned to service…(because) the cars have performed quite well during the testing on Commonwealth Avenue,” said T spokesman Joe Pesaturo.

The $2.18 million cars, introduced in 1998, sustained a rash of derailments and had been repeatedly yanked from service.

The most recent problems arose 16 months ago, when they were mothballed once again.

The T has proposed a $3.8 million fix that involves “cutting” new wheel profiles, upgrading the track and beefing up inspections in an attempt to help the Italian-made vehicles stay on the rails.

Earlier this year, an independent review panel warned the T to prepare itself for a massive redesign of the vehicle that could cost the cash-strapped agency $50 million.

The T froze its order of 100 Breda cars last year after taking delivery of 27 vehicles. The contract remains on hold.


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Fresno leaders ponder monorail

Fresno may see a 50 mph monorail operating overhead in a few years.

The Fresno Area Sky Train committee has raised $15,000 and soon will receive an additional $26,000 in federal funding, routed through Caltrans, for a feasibility study that will gauge the market for such an advanced transit system and estimate its construction and operating costs.

It took a decade to get to this point, but now the committee thinks things are changing, said one member, landscape architect Paul Saito. He said, “It has started to pick up steam now that we’ve gotten Caltrans to agree to participate.”

Saito and committee chairman Deryl Bear, owner of Hungry Bear Cookies, said they expect their idea to gather even more momentum if their study, to be conducted by the civil and environmental engineering department at California Polytechnic State University in San Luis Obispo, concludes that it is feasible.

“If that study shows we’re on the radar screen, then it opens up a lot of doors,” Bear said in a Fresno Bee story of December 28.

The committee envisions a monorail system spanning 34 miles, with a series of east-west feeder routes connecting to the main north-south Blackstone Avenue route, and electric shuttles to ferry passengers from their homes to the nearest station. It estimates the system’s cost at $1.5 billion.

By any measure, that is a lot of money. It’s more than half of what the Measure C extension on November’s election ballot would have raised over 30 years, if it had won the required two-thirds approval, which it did not.

Backers point to savings that would result from building an advanced transit system – everything from the avoided cost of having a second, third or fourth car to the reduced need for new streets and utilities in sprawling suburbs.

“We believe we can show that what we call ‘urban sprawl overhead’ costs every Fresno family $10,000 a year,” Bear said.

The committee chose to focus its efforts on a monorail rather than a traditional light-rail system because it believes a monorail could be wedged into highly developed areas where ground-based trains might not be possible.

Blackstone Avenue, Shaw Avenue and other heavily traveled streets have many of the destinations that transit users will want to reach, including shopping centers and places of employment, but those streets are already congested with cars, trucks and buses. Finding space on the ground for a set of tracks and light-rail stations would be impossible, the committee argued.

A monorail, in contrast, would need only enough ground space for its supporting pillars. Stations could be incorporated into buildings; quiet, electric-powered trains could deposit passengers inside, the committee said.

Downtown, the system would link with the state’s proposed high-speed rail network. To the east, it could have stops at Fresno Yosemite International Airport and California State Univ.

Bear even envisions new mid-rise and high-rise office and housing developments springing up in the monorail corridors, enabling future Fresno residents to go from home to work to shopping without ever entering a street.

“If this thing works,” he said, “what it will do for Fresno is far more than anyone is thinking.”

Caltrans planner Jeffrey Spencer, whose office has committed federal funds to the feasibility study, is not making predictions yet. He describes the funding pledge as providing support for “an exploration” of the monorail committee’s idea, but he said the state is keenly interested in finding new ways to increase transit ridership and thereby cut congestion on surface streets and highways. If there are some people in Fresno who think that a monorail is the answer, he reasons, then why say no?

“There’s no sense in shutting down any opportunities,” Spencer said.


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POWER LINES...

GP-49s

NCI: Two photos: Leo King

Florida Tri-Rail’s newly acquired GP-49s should be in running order late in the year.

 

‘New’ Tri-Rail GP-49s to be rebuilt
Those half-dozen GP-49s Florida Tri-Rail picked up from Norfolk Southern for a song last year will be rebuilt and replace existing locomotives (D:F December 9).

Brad Barkman, Tri-Rail’s operations director, told D:F “The GP49s were purchased for a remanufacture program we hope to begin in July 2003.”

He said, “These will be completely remanufactured retaining the 12-cylinder 645F3b engines, adding a head-end power (HEP) unit of about 400KW in the long hood, air conditioning and convert the short hood to low nose,” which will then become the front.

Barkman noted Tri-Rail paid “$150,000 each,” and will pay another $1.5 million for remanufacture.” So, that works out to $900,000 for the tired power and another $9 million to rebuild, bringing the tab to a total of $9.9 million, which is still cheaper than brand-new locomotives by about $2 million.

GP-49
He said the engines “Were all in Chattanooga when I first looked at them,” but he did not know which regions of the country the engines came from.

“These units were new in 1980 from EMD and are anywhere from 12 to 15 years newer than Tri-Rail’s 801-805 currently in the fleet, which were remanufactured in the late 1980s from components from the mid-1960s.”

He explained, “Three of these units will replace the 801-803, and, later, the 804,” their fourth unit.

“The remaining two will be fleet addition, increasing our locomotive fleet from 10 to 12.”


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GE unveils ‘Greener’ 4,400HP engines

GE

4,400HP Evolution locomotive
Railroads will test drive a new generation of diesel-electric locomotives this year that emit 50 percent less smoke and 30 percent less smog-producing nitrogen oxide.

GE Transportation Systems rolled out its “Evolution Series” locomotive December 23 in Erie, Pa. The machines will be the “cleanest diesel-powered locomotive ever made,” said Environmental Protection Agency Administrator Christie Whitman. The introduction of the 4,400-horsepower locomotive comes two years before tougher EPA emission standards are scheduled to take effect.

Each year, locomotives emit about 5 percent of all the nation’s nitrogen oxide, a gas that contributes to ground-level ozone that can lead to respiratory problems, GE stated in a press release. The Erie-based locomotive manufacturer stated it “spent six years on research and development and invested $200 million in the new locomotive.”

Besides meeting air quality standards, the new engines will have about 3 percent better fuel efficiency than current locomotives, the company said.

The firm plans to put 40 locomotives in service this year for comparison use alongside standard locomotives. GE has not taken any orders yet and is still negotiating with railroads on who will get the test engines.

Evolution locomotives are expected to cost 10 percent to 15 percent more than current locomotives, which can cost up to about $2.5 million.

GE Transportation is online at http://www.getransportation.com.


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FREIGHT LINES...

December 20 The Wall Street Journal

After slimming down to mainly a railroad company over the past decade, CSX Corp. now faces a major challenge: Running the railroad more efficiently.

That is its main task as its CEO, John W. Snow, gets ready to depart for Washington as President Bush’s nominee for Treasury secretary. Analysts expect Michael Ward, CSX’s president, to succeed Snow.

A key test for the new chief, analysts say, will be how well he confronts CSX’s status as the least efficient of the big North American railroads, as measured by operating ratio, or operating expenses as a percentage of revenue. The railroad’s operating ratio was 87.4 percent in 2001, higher than the U.S. railroad average of 83.9 percent.

“The primary benchmark of Michael Ward’s success will be if he can significantly improve the profitability of the franchise,” says Tom Wadewitz, an analyst at Bear Stearns & Co.

Adam Hollingsworth, a CSX spokesman, declined to discuss succession plans and noted that Snow, now 63, has indicated that he would retire as CSX chairman and CEO upon his confirmation as Treasury secretary. Under Railroad Retirement Board rules, he could have retired at age 62.

Hollingsworth said Ward, who is 52, has headed CSX’s railroad for two years, and earlier this year was named president of the parent company, where he made substantial progress in service, safety, pricing, identifying new avenues for growth and holding the line on costs. Messrs. Snow and Ward declined to comment.

Some analysts say CSX needs to accelerate cost-cutting efforts. Bear Stearns’s Wadewitz believes that CSX could shed 2,000 to 4,000 of its total railroad work force of 35,000 and not harm its service.

CSX was making progress in reducing costs but stumbled in the third quarter, when it missed analysts’ earnings estimates, citing a greater-than-expected decline in coal shipments and higher-than-expected operating costs. [The AAR reported declines in all coal shipments for the year. See its report at the end of “Freight lines” –Ed.]

Some of the excess costs sprang from a decision to slow down much of the CSX system after two Amtrak derailments that might have been related to track defects. Analysts generally expect the problems to be short-lived.

Still, CSX faces making long-term major investments if it is to clear away bottlenecks. For example, CSX’s main tracks between the South and the Northeast pass through a tunnel in Baltimore that is too low for most modern trains. Meanwhile, Norfolk Southern, based in Norfolk, Va., has invested heavily in hubs in Atlanta and eastern Pennsylvania to handle fast-growing intermodal shipments.

CSX’s Hollingsworth said the freight railroad has made significant investments in new terminals, and that the company has good prospects for revenue growth.

“Over the last two years, CSX has converted over 700,000 truckloads from the highway to our rails,” he said, adding, “We have done that in a challenging economy.”


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Canadian National realigns U.S. divisions

Canadian National reports it has realigned its U.S. organizational structure “to reflect more closely the geographical and operational balance of the company resulting from the acquisition of the Wisconsin Central Transportation Corp. in 2001.”

As of January 1, CN’s Midwest Division included the former Wisconsin Central, all CN operations in the states of Michigan, Indiana, and Ohio, trackage in northern Minnesota, those parts of CN’s Illinois operations north of Chicago, as well as most operations within Chicago.

CN’s Gulf Division now includes all operations in Illinois west and south of Chicago, and all trackage and operations in Kentucky, Tennessee, Mississippi, Louisiana, Alabama, Iowa and Nebraska.

“Our integration of the Wisconsin Central has progressed smoothly and is nearing completion,” said E. Hunter Harrison, who became president and CEO on January 1.

He added, “Re-organizing our divisions along geographical lines will help us maintain the focus of our operations and marketing on our customers and better enable our top managers to stay in day-to-day contact with all of our employees.”

Harrison also noted some management realignment.

He said Gordon Trafton is the new vice-president for the Midwest Division. He formerly was vice-president of the Wisconsin Central Division (since October 2001). Peter Marshall is the railroad’s new vice-president of the Gulf Division. He formerly was vice-president of the Midwest Division while also overseeing the Gulf Division on an interim basis.

CN is currently constructing a new 55,000 square-foot administrative headquarters for its U.S. operations in Homewood, Ill. With completion of that building, scheduled for mid-2003, Homewood will serve as the headquarters location for both of CN’s U.S. divisions.

“Homewood is just south of the dividing line between the two divisions and centrally located to all of our U.S. operations,” said Harrison. “Having our top management of our divisions together in a centrally located and state-of-the-art facility will facilitate communication and cooperation between the divisions.”


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Rail carloads up in December, AAR reports

U.S. rail traffic rose 2.2 percent (26,906 carloads) in December and 0.2 percent (9,436 carloads) in the fourth quarter of 2002 compared to the same period in 2001, the Association of American Railroads (AAR) reported today.  For the full year 2002, U.S. rail carloadings were down 0.7 percent (114,598 carloads).

U.S. intermodal traffic, which consists of truck trailers and containers on freight cars and is not included in carload figures, rose 9.7 percent (61,289 units) in December, 2.5 percent (57,341 units) in the fourth quarter, and 4.6 percent (414,186 units) for 2002 as a whole. Total U.S. intermodal traffic of 9.35 million trailers and containers marked a record high, the sixth time in seven years that has happened.

Total volume as measured in ton-miles was an estimated 1.481 trillion ton-miles, up 0.5 percent from last year.

“2002 was a very challenging year for industries across the economic spectrum, including freight railroads,” observed AAR vice president Craig F. Rockey.

He noted, “Obviously, we’re pleased to have set another intermodal record – an indication that the intermodal partnerships between railroads, motor carriers, and steamship lines are working extremely well. We also experienced carload gains in the second half of the year, which we hope will continue into 2003. Although there is still a great deal of uncertainty regarding the direction of the general economy, railroads stand ready to help make solid, sustained economic growth a reality through efficient, cost-effective service that meets the freight transportation needs of our nation.”

U.S. rail carloadings in December 2002 were paced by metallic ores (up 57.9 percent, or 25,266 carloads), chemicals (up 6.7 percent, or 6,960 carloads), primary metal products (up 16.0 percent, or 6,637 carloads), and coke (up 41.1 percent, or 5,005 carloads).

Commodities showing carload declines in December 2002 included coal (down 2.1 percent, or 11,193 carloads), crushed stone (down 14.4 percent, or 9,391 carloads), and motor vehicles and equipment (down 3.7 percent, or 3,432 carloads). All told, 13 of the 19 major commodity categories tracked by the AAR saw carload increases in December 2002 compared with December 2001.

In the fourth quarter of 2002, a 3.2 percent decline (57,621 carloads) in coal traffic was almost entirely offset by a 33.1 percent increase (57,334 carloads) in metallic ore traffic. In the quarter, carloads of primary metal products were up 10.7 percent (15,752 carloads) and carloads of chemicals were up 4.0 percent (14,173 carloads), while carloads of crushed stone and grain were down 9.1 percent (23,177 carloads) and 3.8 percent (11,720 carloads), respectively.

For the full year 2002, U.S. coal carloadings were down 3.4 percent (237,966 carloads), as export shipments remained weak and coal-fired power plants drew down inventories, while grain carloadings fell 3.3 percent (36,800 carloads). On the positive side, carloads of metallic ores were up 12.3 percent (87,349 carloads) for the year, and carloads of motor vehicles and equipment were up 3.5 percent (42,703 carloads).

Canadian rail carloads were down 3.0 percent (6,512 carloads) in December 2002, down 2.3 percent (18,257 carloads) in the fourth quarter, and down 2.7 percent (86,173 carloads) for all of 2002 compared with the same period of 2001.  Commodities showing year-over-year carload gains for Canadian railroads in 2002 include chemicals (up 7.7 percent, or 50,065 carloads) and motor vehicles and equipment (up 8.6 percent, or 31,886 carloads).  Commodities showing carload declines for Canadian railroads in 2002 include grain (down 20.4 percent, or 99,230 carloads), coal (down 9.6 percent, or 44,526 carloads), and farm products excluding grain (down 28.2 percent, or 28,697 carloads).

Canadian intermodal traffic was up 25.2 percent (31,729 trailers and containers) in December, up 18.8 percent (86,078 trailers and containers) in the fourth quarter, and up 12.0 percent (217,726 trailers and containers) for the full year 2002 compared with 2001.

Carloads originated on Transportación Ferroviaria Mexicana (TFM), a major Mexican railroad, were up 26.0 percent (6,919 carloads) in December, while intermodal originations were up 96.1 percent (5,785 trailers and containers). For the full year 2002, TFM carload originations were up 15.7 percent (56,197 carloads), while TFM intermodal traffic was up 36.3 percent (42,390 units).

For just the week ended December 28, 2002, U.S. railroads originated 244,774 carloads, up 7.9 percent from the corresponding week in 2001, with loadings up 12.6 percent in the East and up 5.1 percent in the West; intermodal volume of 120,774 trailers and containers, up 15.8 percent; and total volume of an estimated 20.8 billion ton-miles, up 7.2 percent.

Canadian railroads originated 34,491 carloads, down 5.4 percent, and 25,374 trailers and containers, up 32.5 percent, from the corresponding week in 2001. Both the 2002 week and the comparison week from last year included the Christmas holiday.

Combined cumulative volume for the 52 weeks of 2002 on 16 reporting U.S. and Canadian railroads totaled 20,234,393 carloads, down 1.0 percent (200,771 carloads) from 2001; and 11,383,006 trailers and containers, up 5.9 percent (631,912 trailers and containers) from 2001.

The AAR is online at http://aar.org


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ACROSS THE POND...

Floods raise havoc for European rails

D:F’s European correspondent, Dave Beale, tells us flooding is once again raising havoc for European railways.

He reported on January 4 flooding is occurring “all across Europe,” with “the most severe flooding in parts of the Czech Republic, southern Poland, Romania, west-central Germany, Belgium and southern England. The Rhine River is flooding in Cologne, Germany, and high water could soon threaten the historic old town as well as the main rail station. The Mosel River Valley is also severely flooded currently, with several scenic Mosel Valley towns partially underwater.”

He said the flooding is the result of rainfall and snowfall “well above seasonal averages” in several European regions since November.

“So far, major damage, of the kind which happened in August 2002 to the rail network in southeastern Germany, has not yet been reported.”

In Britain, “The Thames River and many other rivers and streams are severely flooded, a number of rail lines are under watch or operating with restrictions due to the high water. A complicating factor for railways in England during high water or flooding is that a majority of the rail routes and lines in southern and southeastern England are electrified with 650-volt DC third-rail power.”

He added several rail lines in Belgium and southern Holland are also “operating with restrictions or have been temporarily closed due to flood damage.”


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‘Tories’ won’t reprivatize rail

The United Kingdom’s railways would not be reprivatized under an incoming Conservative government.

The ‘Tories,’ as the political party is called in Great Britain, said there could be no revival of Railtrack, which was put into administration last year, ends the ideological debate over railways, according to a December 23 BBC report.

“Administration” is similar to receivership in the U.S.

With such a new consensus, the focus can be put on how to raise standards for passengers, they argued.

Not-for-profit company Network Rail has now taken over the UK’s railways after former Transport Secretary Stephen Byers put Railtrack into administration.

Conservative shadow transport secretary Tim Collins explained why his party did not want to reinvent Railtrack.

“If Conservatives claim credit, as we should, for the fact that privatizing the operating companies has produced the biggest rise in passenger numbers for many decades, we have to accept, I’m afraid, that Railtrack did not produce the benefits we had hoped for.

“We also have to accept that London’s city government has made it clear that following the collapse of Railtrack, there is no prospect of them underwriting a further flotation.”

Collins said the decision offered stability for the rail industry.

“Labor [political party] accepted that the train operations belong in the private sector. We accept today there can be no return for Railtrack.

“That means the sterile ideological battle over who owns what in rail is over and we can concentrate on what frankly matters far more, which is improving the unacceptable level of customer services.”

That ideological debate had produced a “no score draw,” he suggested.

With Conservative leader Iain Duncan Smith signaling his party would aim to cut taxes, Collins rejected claims this moved against attempts to improve public services.

Collins argued, “If you look at the record, Conservative governments in the past have cut taxes but invested more on rail in every one of our 18 years in government than Labor planned to invest in rail in every one of their ten-year transport plan years.”


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Iced catenary strands Tokyo travelers

About 2,000 travelers were stranded for a night inside trains on three different railway lines in eastern Japan, reports The AP, after a deep freeze knocked out power for hours, a Japan Railway East official said January 4.

Three Saitama City lines – Takasaki, Ryomon and Kawagoe – stopped running late Friday night, and some passengers waited for up to 10 hours inside train cars before power was restored or other lines began operating on Saturday, spokesman Masahiko Arai said.

All hobbled trains had made it to nearby stations, and cars were heated using backup generators, Arai said. Conductors handed out sandwiches, rice balls and drinks to passengers, he said. Saitama is just north of Tokyo.


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China finishes first leg of Tibet railway

Laborers working in mountain air so thin they have to breathe bottled oxygen have completed the first leg of a railway linking Tibet to the rest of China, part of multibillion-dollar efforts to develop the country’s poor west, the Chinese railway minister said Friday.

The 75-mile segment stretches south from the western Chinese city of Golmud but hasn’t reached the mountainous Tibetan border yet, Fu Zhihuan said at a news conference and reported by The AP.

The railway is controversial because activists worry it will bring a flood of ethnic Chinese migrants who will dilute Tibet’s Buddhist culture while reaping most of the economic benefits.

Chinese officials say they are trying to ensure Tibetans benefit from the project and that they are taking steps to protect the region’s fragile environment. To stress the point, typically secretive officials have taken the unusual step of inviting foreign reporters to visit the construction site.

“This railway is a route to happiness and prosperity,” said Sun Yongfu, the deputy railway minister.

The railway, whose route crosses mountain passes more 16,700 feet high, is meant to bind Tibet to China both politically and economically – helping Beijing to raise living standards and stifle pro-independence sentiment.

Its projected $3.3 billion cost will make it Beijing’s biggest investment in Tibet since Communist troops marched into the region in 1950.

The railway is part of China’s “Develop the West” campaign aimed at raising incomes in regions that have lagged behind eastern cities such as Shanghai.

Due to be completed in 2007, the railway will stretch 693 miles from Golmud to the Tibetan capital of Lhasa.

Railway officials say that to shield passengers from the thin air at the highest points, they are building special coaches that will be pressurized like aircraft.

Chinese officials say the railway will propel Tibet’s economy by slashing the cost of exporting its goods, which currently are moved at high cost by truck over a rough, two-lane highway.

The segment built this year crosses territory so high that some of the ground is frozen year-round. In other areas ground shifts as it freezes and thaws, forcing the railway builders to invent technology to keep bridges and track beds stable.


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COMMENTARY...  Commentary

I beg your pardon, UP?

By Jim RePass
NCI President, CEO

It is hard to fathom the arrogance, and the contempt for the public, that must be the corporate mindset at the Union Pacific Railroad, if last week’s comments attributed to a UP spokesman are even close to being accurate (see related article).

For a UP spokesman to refuse to help provide requested information to California and Amtrak officials seeking to re-start Bakersfield-Los Angeles service, or to even consider doing so, is simply breathtaking in its presumption, and calls for swift action by California and Amtrak.

“We told them that it was basically a nonstarter as far as we’re concerned,” said Union Pacific spokesman John Bromley. “It just doesn’t make sense when you compare how quickly you can make the drive,” as recently quoted in the Bakersfield Californian.

How nice of the Union Pacific Railroad to decide where and when – or even if – California and Amtrak should provide passenger train service, especially since UP is largely incapable of dispatching Amtrak’s Sunset Limited (for example) onto anything other than a siding, often resulting in hours of delays. This is the same outfit that so botched its acquisition of Southern Pacific that it took more than a year to straighten out the mess (almost).

The real kicker is that working with California and Amtrak to reintroduce Bakersfield passenger service would benefit Union Pacific stockholders, not simply from increased revenues from the passenger trains, but because the project would almost certainly entail taxpayer-financed capital improvements that would help both the performance, and the bottom line, of Union Pacific. Other railroads, like Burlington Northern & Santa Fe, seem able to grasp this fact, and take advantage of it.

By the way, BNSF has five times the return on capital investment as UP, the kind of thing that Wall Street, and investors in general, tend to notice.

It’s time for Union Pacific to drop its macho posturing on passenger rail service, and learn that self-inflicted wounds are unnecessary, especially in the tough world of railroading. Bakersfield service is long overdue, as is improved service throughout the Golden State, which has been taking the lead, along with the Pacific Northwest’s Cascadia Project, on intrastate and regional railroading for a decade.


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MEETINGS...

January 11-15

National Railroad Construction & Maintenance Assn.
Annual exhibit, technical meeting

Weston Mission Hills
Rancho Mirage, Calif.

Contact Giovanna Bauguess at gbaugess@nrcma.org


January 25-29

APTA General Manager’s Seminar

Tampa Marriott Inn

Contact Tom Urban, turban@apta.com


February 9-11

APTA Legal Affairs Seminar

Savannah Marriott Riverfront
Savannah, Ga.

Contact: Kristen O’Grady, kogrady@apta.com


Looking Ahead...

June 4-9

APTA International Rail Rodeo

San Jose, Calif.
Hotel to be announced

Contact Anitha Tharapatla, atharapatla@apta.com


June 8-12, 2003

APTA Rail Transit Conference

Fairmont Hotel
San Jose, Calif.

Contact Heather Rachels, hrachels@apta.com.


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1953 EMD-Postcard

NCI: Leo King collection: EMD

The year was 1953, and EMD loved giving out little pocket calendars to railroaders and kids –they were a lot cheaper than 8-by-10-inch prints. Just below the painting of the New York, Ontario & Western Ry., the caption stated, “New 5.400 and 6,000 HP diesel freight locomotives, supplied by the Electro-Motive Division of General Motors, are used on all New York, Ontario & Western Ry. Symbol trains.” Within a decade, the century old “Old and Weary,” as its fans called it, would be abandoned. It didn’t leave from anywhere of any industrial significance, didn’t travel though any great industrial centers in Pennsylvania or New York, and terminated virtually nowhere. In short, whatever traffic it had ever had, disappeared for good as trucks took over the milk runs – literally

End Notes...

We try to be accurate in the stories we write, but even seasoned pros err occasionally. If you read something you know to be amiss, or if you have a question about a topic, we'd like to hear from you. Please e-mail the crew at leoking@nationalcorridors.org. Please include your name, and the community and state from which you write.

Destination: Freedom is partially funded by the Surdna Foundation, and other contributors.

Journalists and others who wish to receive high quality NCI-originated images that appear in Destination: Freedom may do so at a nominal fee of $10.00 per image. "True color" .jpg images average 1.7MB each, and are 300 dots-per-inch for print publishers.

In an effort to expand the on-line experience at the National Corridors Initiative web site, we have added a page featuring links to other rail travel sites. We hope to provide links to those cities or states that are working on rail transportation initiatives - state DOTs, legislators, governor's offices, and transportation professionals - as well as some links for travelers, enthusiasts, and hobbyists.

If you have a favorite rail link, please send the uniform resource locator address (URL) to the webmaster in care of this web site. An e-mail link appears at the bottom of the NCI web site pages to get in touch with D. M. Kirkpatrick, NCI's webmaster in Boston.


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