Vol. 6 No. 9
February 28, 2005

Copyright © 2005
NCI Inc., All Rights Reserved

Destination:Freedom
The E-Zine of the National Corridors Initiative, Inc.
President and CEO - Jim RePass
Publisher - Jim RePass      Editor - Leo King
Webmaster - Dennis Kirkpatrick

A weekly North American rail and transit update

For railroad professionals
Political leaders at all levels of government
Journalists from all media

* Now in our Sixth Year *

This page is best viewed at 800 X 600 screen resolution

 

IN THIS EDITION...  In this edition...


Downeaster at Dover, NH

For NCI: Mike Duprey

The brouhaha between the Bush administration, Amtrak and political leaders continued into the second week with nothing resolved. Two senators wrote a letter to Amtrak’s board chairman asking what the board was doing. That’s “cabbage car” 90220 on the rear as Downeaster No. 681 scoots northward from Dover, N.H., enroute to Portland, Me., on January 17 – and the Downeaster folks want to add another train. The stories are below.

 

Moves afoot in DC over Amtrak

By Leo King
Editor

Behind-the-scenes moves are afoot in Washington to resolve the Amtrak crisis. A trusted and reliable source told D:F over the weekend the White House and Congressional members are working to repair the damage created by the Administration’s zero funding number.

Apparently the Administration had not taken into account any damage created in the financial community. A fortnight ago (D:F, February 14) Moody’s Investors Service said it may be required to revisit Amtrak’s ratings. The ratings firm said it “may cut Amtrak’s debt ratings because the railroad operator would likely be forced to file for bankruptcy” under the Bush proposed 2006 budget.

Moody's said it estimates that Amtrak “could likely operate for barely one month without some external supports such as these subsidies,” and rates Amtrak’s debt at A3.

Apparently things had gotten so bad in Washington the various sides weren’t even talking to each other, although now they are.

The source said the zero number will be replaced by a figure within the $1.2 billion-$2.0 billion range, and most likely will be attached to another bill to try make it veto-proof.

The National Assn. of Railroad Passengers said last week that one day after receiving the Amtrak Board of Directors’ financial report, U.S. Sens Patty Murray (D-Wash.) and Daniel Inouye (D-Hawaii) sent a letter to Amtrak board chairman David Laney admonishing the report’s writers of purposely evading the subject of federal subsidies.

David Laney

David Laney

Laney and the board did not ask for funding.

Murray is the ranking member of the Subcommittee on Transportation, Treasury, and General Government Committee on Appropriations, and Inouye is the ranking member on the Committee on Commerce, Science, and Transportation

In a February 17 letter to Vice-President Dick Cheney as President of the Senate, and House Speaker Dennis Hastert, Laney stated, “Because Amtrak is engaged in a strategic planning process which could affect its needs for fiscal year 2006, any such submission at this point would be premature. A grant request will follow as soon as [the] planning process permits.”

The next day, Murray and Inouye wrote, “This year’s report as submitted by a largely new board deliberately evades the question of the railroad’s subsidy needs and instead praises the President’s irresponsible proposal to bankrupt Amtrak as the ‘right message.’ Such an approach undermines Congress’ ability to assess Amtrak’s needs and is a disservice to the Corporation that you are charged with governing.”

The annual report, written by Bush-appointed directors, bucked the intent of laws mandating its submission by avoiding any discussion of federal funding figures.

“The Congress and Amtrak’s 25 million annual riders expect the Amtrak board to responsibly and independently work to improve and sustain a safe and efficient passenger railroad – not to dutifully line up behind the reckless policies of the President that appointed them,” the solons’ letter stated.

The two senators were critical of other statements in Laney’s letter to Cheney and Hastert.

“This year’s report as submitted by a largely new board deliberately evades the question of the railroad’s subsidy needs and instead praises the President’s irresponsible proposal to bankrupt Amtrak as ‘the right message.’ Such an approach undermines Congress’s ability to assess Amtrak’s needs and is a disservice to the corporation that you are charged with governing.”

In angry tones, the pair also pointed out, “The law mandating these reports calls on the Amtrak board to submit recommendations for legislation, including the amount of financial assistance needed for operations and capital improvements’ and every one of your predecessor boards has done so.”

The Congress is expected to begin drafting a budget resolution in about a week for the coming fiscal year.

“By not submitting a grant request prior to our budget considerations, you deliberately leave uncontested the Administration’s request to eliminate all funding for Amtrak and push the railroad into bankruptcy,” they stated, and added, “These actions on the part of the board are irresponsible. In fiscal year 2004, some 37 percent of all of Amtrak’s revenues were derived through federal grants.”

They also viewed the actions as not being good stewards.

“By not specifying Amtrak’s federal funding needs to Congress prior to our budget deliberations, the board is failing to serve as independent stewards of the corporation’s assets, operations, and employees and is ignoring its legal responsibility to Amtrak’s financial condition. We must question whether these actions are consistent with your fiduciary duties as directors as stipulated under Title 29 of the Code of the District of Columbia and other applicable laws.”

Also last week, USDOT Secretary Norman Mineta continued his Amtrak-bashing blitz, this time in Charlotte, N.C.

Mineta said the Bush administration wants to “save Amtrak with a reform proposal that will provide more passenger rail funding to states and encourage Amtrak and other rail operators to compete for contracts to service routes.”

Mineta toured North Carolina’s Piedmont train and passenger station in Charlotte.

Mineta said the Administration soon will reintroduce its Passenger Rail Investment Reform Act “to establish a 50-50 federal match for state investments in passenger rail infrastructure, like stations, trains and tracks, create competition for passenger rail service and allow Amtrak to focus on running the trains on time.”

Mineta declared, “We cannot save intercity passenger rail service by burying our heads in the sand and simply shoveling more money into a system that cannot help but fail.”

He said North Carolina is “on the right track” supporting passenger rail. Since the state launched its Piedmont service between Charlotte and Raleigh-Durham 10 years ago, ridership has grown 476 percent, Mineta said. Mineta said the state has “invested more than $150 million over the past decade to upgrade stations, buy trains and even purchase an entire railroad,” but he said under the current system the federal government can’t “really do much of anything and that’s wrong.”


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Downeaster line may get fifth train

A proposal to add a fifth Amtrak Downeaster train from Boston to Maine has prompted a debate on the New Hampshire Seacoast about the future of public transportation in a state where less than 1 percent of the population uses buses or trains to commute.

Supporters of the train service and its increasing ridership, the Boston Globe reported on February 10, are urging New Hampshire to earmark $1.2 million in federal transportation funds for upgrades before putting another train on the already busy tracks. The money would pay for improvements that would allow freight and passenger trains using the tracks to pass each other safely. The Downeaster is New Hampshire’s only commuter rail service, with stops at Dover, Durham, and Exeter.

The main voice opposing the project is Jim Jalbert, owner of C&J Trailways, which provides bus service between the Seacoast and Boston. It’s not the added competition he objects to, Jalbert said, but wasting money that would be better spent elsewhere.

“If the train is already losing 50 cents on the dollar, a fifth train probably makes it more difficult to survive in the marketplace,” Jalbert said.

Both sides of the debate have the same goal: getting more commuters off the roads in New Hampshire – but each wants to take different roads to get there. The state transportation committee is scheduled to vote on the $1.2 million for track improvements in mid-March. If approved, the governor and Executive Council also have to sign off on it.

The Downeaster’s ridership is helping reduce road congestion in the Granite State, supporters say. New Hampshire ridership in 2003 totaled 83,784, accounting for more than one-third of the 250,000 passengers.

Durham is an increasingly popular stop, with 21,241 passengers riding the Durham-Boston route from July 2003 to June 2004, up from 9,144 riders in 2002-2003, according to the Northern New England Passenger Rail Authority, which oversees Downeaster train service with Amtrak. In October, the last audited month available, Durham supplied 4,300 passengers.

NNEPRA executive director John Englert said that a fifth round trip would increase service by 25 percent and allow two trains to leave Boston in the peak evening rush hours. Englert said the Downeaster covers about 50 percent of its own costs, compared with a national average of 38 percent for similar railways.

“There’s not a single transportation mode out there that isn’t subsidized in some form,” Englert said.

Since the Downeaster began in 2001, Maine has provided the most funding, including $3.5 million in 2005. Maine has asked New Hampshire to contribute $1.2 million of its federal congestion mitigation money to make way for the fifth train. While New Hampshire considers that request, Maine officials have proposed a surcharge on New Hampshire riders in what some believe is a not-so-subtle effort to persuade officials to approve the money.

That could be a hard sell in a state where the highway is the only way for many people. According to 2000 US Bureau of Transportation statistics, 83.3 percent of New Hampshire commuters drove solo, well above the national average of 75.7 percent. More New Hampshire commuters walked to work, at 2.3 percent, than rode public transportation, at 0.6 percent.

Nationally, an average 2.6 percent walked to work while 4.7 percent took public transportation.


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Amtrak Ink takes hit with retirees

Amtrak Ink isn’t sending copies of its monthly employee newspaper to retired employees anymore.

Editor Leslie Beers told D:F “The decision was made as a cost-cutting measure and it saves the company about $3,000 a month in postage and printing costs.”

Beers said, “I wasn’t a supporter of the decision – but then, no one asked me, either.”

She said the “plan wasn’t announced, we just did it.”

The decision, ultimately, was Barbara Richardson’s.

“I’m not sure if [David] Gunn was consulted or not. However, I know employees have written to him about it – so he is aware that the decision was made.

Beers added, “Currently they are looking at a couple of alternatives,” including getting it posted on the Amtrak Benefits site, but that “may not be a viable alternative.”

She added, “They’re looking at opening subscriptions for a nominal cost of about $10 a year, maybe less.”

The original proposal was for $10 that would cover the remaining part of 2005 and all of 2006. Details are still being considered.

An employee sent a Freedom of Information Act request to Amtrak’s Law Department, so they sent him the past four issues.


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COMMUTER LINES...  Commuter lines...

RENFE helps with security plans

Spanish rail officials warned last week American railroaders need to stay vigilant because it is not a matter of whether future attacks will happen, it is a matter of when. They emphasized the importance of coming together to share preventive measures and stressed the importance of sharing information.

The Spanish railroaders were in Washington on February 16 for an international rail security conference that focused on lessons learned from the terrorist attacks on Madrid’s RENFE commuter rail system last year.

American Public Transportation Assn., Amtrak, and the Association of American Railroads sponsored the conference. APTA said more than 200 people attended.

Four senior RENFE officials, including Security director Manuel Rodriguez-Simons, made presentations.

Pointing out that rail terrorism occurred in the world before September 11, 2001, APTA president William W. Millar said, “Security has been and still is a top priority for the public transportation industry. Our industry doesn’t need another wake up call. We have already worked hard to prevent terrorist attacks and we will continue to be vigilant.”

Noting that 32 million times a day, Americans use public transportation, Millar said, “Sponsoring this conference so we can learn from and share with our international partners, is another way that the public transportation industry is working to make sure that America’s public transportation riders are safe.”

Amtrak security vice-president Al Broadbent echoed the importance of rail security stating, “The safety and security of our passengers and employees continues to remain a priority at Amtrak.”

Since the attacks on the U.S., the public transportation industry has spent over $2 billion on security, but current transit security needs for American transit agencies total in excess of $6 billion. APTA is asking Congress to fund $2 billion for transit security in fiscal year 2006 that begins October 1.

Attendees included representatives from the Department of Homeland Security and the Federal Transit Administration as well as the Federal Railroad Administration, FBI, Secret Service, National Transportation Safety Board, police departments, and transit agencies.


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Jersey trains to Gloucester may yet run

Nearly a decade after Gloucester County, N.J. officials rejected building a rail line to transport commuters into the fast-growing county, the idea is back.

The Delaware River Port Authority (DRPA) has scheduled five public hearings to pitch the idea of expanding its train system with new lines into Gloucester County and expanding service in Center City in Philadelphia, The AP reported February 21 from Mount Laurel.

Providing more mass transit options in the Philadelphia area is a key for the region, said John J. Matheussen, CEO of the DRPA, which runs four Philadelphia-area bridges connecting Pennsylvania and New Jersey.

It also operates the PATCO Hi-Speed Line and works on economic development, especially on the waterfront of Philadelphia and Camden.

“If we are going to compete in the marketplace with places like Atlanta and Los Angeles, it is extremely important that we look at this as a regional issue,” Matheussen said.

Currently, three lines into Gloucester County are under consideration, and all three would follow Interstate 676 to Route 42. One route would continue on 42 into Washington and Monroe Townships. One option would follow the Route 55 corridor to Glassboro and the third also would go to Glassboro but would use existing track.

Matheussen said a line could eventually be extended into Cumberland County if the population grows enough to justify it.

In Philadelphia, the DRPA is studying a new subway-surface line that would run from the station at 8th and Market streets to Delaware Avenue, and up and down that street along the river.

Also under consideration are changes to the current PATCO stations to make it easier to connect to SEPTA lines.

The Philadelphia and Gloucester County projects each have preliminary price tags between $1 billion and $1.5 billion, Matheussen said, and it would take at least seven or eight years to complete either line.

One project could be built if the other is not, he said.

Southern New Jersey legislators argued in the mid-1990s that the northern part of New Jersey should not get all the state money for big transportation projects.


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Worcester mayor wants more trains

The Worcester, Mass., mayor’s call to boost commuter rail service between his city and Boston is drawing mixed reaction from MetroWest, where some say improvements are critical for the region’s economy while others fear more traffic congestion.

Mayor Tim Murray called for more service on February 24 on the commuter line to meet growing demands in the region, where rush-hour trains are often standing-room only.

In a report released February 23, Metro West Daily News of Worcester, reported, Murray pushed for the state to buy the portion of the line between Worcester and Framingham, which CSX owns –but that arrangement restricts the number of trains that can run between the two communities.

If buying the tracks is not possible, Murray said a third track should be built along the corridor to increase capacity.

The possibility of an added line and more trains came under fire from Framingham officials, who predicted more traffic backups for an already congested downtown business district.

“I don’t care who’s standing on trains. You can’t destroy a community,” said Kathy Bartolini, Framingham’s director of planning and economic development. She called for mitigation projects like a Route 126 underpass to keep traffic moving if the proposal becomes reality.

Commuters, however, welcome the idea. Hopkinton’s Mark Kelley, who takes the train to Boston from the Southborough station, said he would prefer to see outbound trips added to the afternoon schedule over an increase in morning service.

“There are times when it does get crowded (in the morning). It’s full, but I get a seat,” he said.

Dara Delgudic also contends with gaps in service as she commutes between her home in Boston and her job teaching at the Danforth Museum in Framingham. She typically waits an hour and 45 minutes for a train after finishing work in the afternoon.

“If you miss the 3:45, there’s nothing after that until 5:45,” Delgudic said. “It’s terrible.”

The MBTA is working on a Worcester line study that will identify ways to increase service and capacity, said spokesman Joe Pesaturo in Boston. He said the agency is not prepared to spend money on expansion projects other than the Silver Line bus service in Boston and the Greenbush commuter rail along the South Shore.

“I don’t think it’s a secret that the MBTA does not have the financial capacity to expand the system outside what’s already in our five-year capital investment program,” he said.

CSX has a contract with the MBTA that dictates the number of trains that can run on the tracks, said spokeswoman Jane Covington at corporate headquarters in Jacksonville, Fla. The freight railroad owns the tracks from Worcester to Framingham, while the company and the MBTA own sections from Framingham to Boston’s South Station.

Covington said CSX would allow more trains on the tracks if the state agency makes improvements to the line such as track extensions and crossovers.

The company would also consider selling the tracks, she said, as long as the company can continue to deliver freight to its customers. Murray complained the MBTA needs to be fairer in doling out funding for transportation projects.

“I think there’s an equity argument. Worcester and MetroWest, we want our fair share,” he said.


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Northstar gets $10 million bond

The Minnesota House on February 22 sent the strongest signal yet that a long-planned commuter rail line connecting Minneapolis and growing communities along Interstate 94 is on the verge of reality.

For the first time, the House voted to set aside $10 million to build the 40-mile, $265 million line. Supporters say the Northstar Commuter Rail will be used by 5,600 riders a day but opponents argue it will do little to ease congestion northwest of the Twin Cities.

“This is a huge milestone,” said state Rep. Kathy Tinglestad (R).

The Northstar project was the most precarious in a state borrowing package the House approved 121-12. It authorizes $816 million in public works, with $781 million of that long-term debt borne by state taxpayers and the rest by the state college system.


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APTA Highlights...  APTA Highlights...

Here are some other transit headlines, from the pages of Passenger Transport, the weekly newspaper of the public transportation industry published by the non-profit American Public Transportation Assn. For more news from Passenger Transport and subscription information, visit the APTA web site at http://www.apta.com/news/pt


Passenger-Only Ferry Opens in Kitsap County, Wash.

Kitsap Transit in Bremerton, Wash., has introduced service on a passenger-only ferry service connecting Kingston, in the northern part of the Kitsap Peninsula, to Seattle across Puget Sound. The service, which takes 40 minutes, operated free to passengers for the first two days.

Kitsap Transit has entered into a public-private partnership with Aqua Express – a conglomeration of Clipper Navigation, Nicholas Brothers Boat Builders, Argosy Cruises, and TMT Corp. – to provide the ferry service. The transit system also provides bus service to the Kingston ferry landing as part of the agreement with Aqua Express.

The service, using a single boat, provides five morning and evening runs in Kingston. The ferry dock in Seattle is located in the business district, convenient to King County Metro Transit buses and trolleybuses, Sounder commuter rail, the Seattle Monorail, and Amtrak.


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AARP’s Novelli Cites Importance of Livable Communities to Seniors

William D. Novelli, CEO of AARP, highlighted the creation of livable communities as a major priority of his organization, along with an overhaul of health care and strengthening the U.S. retirement system, in his remarks February 9 at the National Press Club in Washington.

Novelli noted that cities with public transportation systems offer “obvious possibilities” as far as accessibility for older Americans who no longer drive, “but in the suburbs – where nearly half the population lives – mass transit is not always available. And in rural communities, it is simply not there.”

He continued, “Most older people want to stay where they are – at home, in familiar surroundings. This may seem obvious, but there are many barriers to living in our own homes and communities for as long as possible. To remain independent in this automobile society, people need to be able to drive safely as long as possible. And when they can no longer drive, they must have ways to avoid social isolation.”

APTA President William W. Millar applauded Novelli for his emphasis on the importance of transit to older Americans.

“Unfortunately, the lack of public transportation is becoming an increasingly critical problem across the U.S. as more and more older Americans choose to drive less or simply stop driving,” he said.


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Zumwalt Is New Chairman of PBS&J; Kenner Becomes President

John B. Zumwalt III, P.E., president of PBS&J since 2000, has been named the firm’s new chairman of the board. Zumwalt also continue to serve as CEO. He succeeds outgoing Chairman Richard A. Wickett, CPA, who announced his retirement after 31 years with PBS&J.

Todd J. Kenner, P.E., will assume the president’s role. Kenner, a PBS&J employee since 1989, has served as regional director of the firm’s west region, and is the director of PBS&J’s National Business Development Service.


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Transit Takes a Stand at Pennsylvania Rally

More than 2,000 supporters of public transportation from throughout Pennsylvania gathered at the State Capitol in Harrisburg on February 14 to show support for transit agencies in the state that are facing budget shortfalls, potentially leading to layoffs, increased fees, and reductions in service.

Transit supporters went to Harrisburg by the busload to participate in the event from Pittsburgh and other areas of the state including York, Wilkes-Barre, and Reading. Additional supporters boarded a chartered train in Philadelphia to join the statewide rally.

Organizers of the rally included the Pennsylvania Transit Coalition, a statewide coalition of individuals and groups that seeks to improve public transit in Pennsylvania, and “Save Our Transit,” a Pittsburgh-based coalition. PTC defines its immediate goal as securing the dedicated, predictable funding from the state of Pennsylvania that transit needs to resolve the current fiscal crisis. Component organizations of the coalition include labor unions; transit advocacy groups; other advocacy groups; business and professional groups and businesses; community groups and community development corporations; local governments; religious groups; social services groups; and others.


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U.S. DOT Forms New Research and Hazmat Safety Agencies

Two new agencies began operating February 20 at USDOT – one to focus on innovation and research, the other on pipeline and hazardous materials safety.

The Research and Innovative Technology Administration (RITA) and the Pipeline and Hazardous Materials Safety Administration were authorized on November 30, 2004, when President Bush signed the Norman Y. Mineta Research and Special Programs Improvement Act.

According to USDOT, RITA will be dedicated to the advancement of the department’s priorities for innovation and research in transportation technologies and concepts. PHMSA will oversee the safety of the more than 800,000 daily shipments of hazardous materials in the U.S. and the 64 percent of the nation’s energy that is transported by pipelines.


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Norman Lea Dies: A Founder of Lea+Elliott

Norman Dale Lea, 81, a founder of Lea+Elliott, Inc. transportation consulting firm, died Dec. 28, 2004, after a long illness at Grove Park Nursing Home in Barrie, Ont.

Lea and Charles P. (Chuck) Elms were the founders of N.D. Lea & Associates, Inc., a predecessor company that merged with Dennis Elliott & Associates, Inc. to form Lea+Elliott, Inc.

He was also the founder and senior principal of N.D. Lea and Associates Ltd., the Canadian consulting engineering firm incorporated in Vancouver in 1962 (now the LEA Group, comprising Lea Consulting Ltd. in Toronto, Lea International in Vancouver, ND Lea in western Canada, and Lea Associates South Asia Ltd.).

Lea was also the visionary behind the Lea Transit Compendium (subsequently published as the International Transit Compendium) that launched N.D. Lea & Associates, Inc.


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FREIGHT LINES...  Freight lines...

CSX fights DC routing ban

CSX Corp. is challenging the District of Columbia’s 90-day ban on railroad shipments of hazardous materials that pass through Washington, arguing that it is an unconstitutional restriction of interstate commerce.

The railroad has asked the federal STB to suspend the ban. The board, a quasi-independent regulatory board charged with resolving rate and service disputes, is the successor to the Interstate Commerce Commission.

The action could be the precursor to lengthy and expensive legal wrangling, The Washington Post reported on February 9. Robert J. Spagnoletti, attorney general for the District, told the D.C. Council he was already planning an “aggressive battle” to defend the ban against administrative and legal challenges. It will take more money, he said, because his department has allocated its $4 million litigation budget.

Proponents of the ban, including Mayor Anthony A. Williams (D) and a majority of the D.C. Council, say it is necessary to protect the nation’s capital from terrorism.

“I think that it should play out through the system,” Williams said, referring to the legal challenge.

“I believe we need to protect our people, and I believe this gets an important issue on the agenda nationally,” he said.

Opponents say the legal challenge is precisely what they predicted.

“It took exactly a week for the real issue of the cost to come up,” said council member Carol Schwartz (R). She voted against the ban and had argued that railroad and federal officials had voluntarily rerouted hazardous rail cargo. She said the cost of the legal fight should have been considered when the council considered the ban.

A CSX route in the District moves 8,500 chemical cars a year through the city, though only a fraction of those chemicals are toxic when inhaled.

The legislation bans the most dangerous materials, including certain classes of explosives, flammable gases and poisonous gases and materials.

It also requires all rail and truck firms carrying other hazardous materials to obtain permits from the city.

In its filing, CSX acknowledged that since last spring, it has voluntarily rerouted shipments of hazardous materials that usually travel through the city on its Interstate 95 line and continues to confer with federal homeland security officials on that and other security measures.

At the same time, the CSX filing argues that carrying out the District’s ban would cause great inefficiencies and hardship on its rail network while creating little additional security. The railroad said rerouting would require sending the materials west of the Appalachian Mountains through Tennessee, Kentucky and Ohio.

“I guess two different people were writing it: one who said they are already doing [the ban] and another who said it was impossible to do,” said council member Kathy Patterson (D).

The Transportation Security Administration last year conducted a security study and hazardous material response plan for 42 miles of rail in the Washington area. It is implementing a $7 million long-term plan for low-tech measures such as fencing and added patrols and other safeguards, including intrusion-detection systems and video surveillance.


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Forestry, grain decline

Rail freight traffic registers strong gain

Freight traffic on U.S. railroads during the week ended February 19 registered a strong gain in comparison with the corresponding week a year ago, the Association of American Railroads (AAR) reported on Thursday.

Intermodal volume for the week totaled 222,937 trailers and containers, up 22.8 percent from a year ago, with containers up 29.5 percent and trailers gaining 6.1 percent.

Carload freight totaled 350,225 units during the week, up 4.9 percent from a year ago with loadings up 5.8 percent in the West and 3.7 percent in the East. Total volume was estimated at 32.6 billion ton-miles, up 5.8 percent from 2004.

Fourteen of 19 carload commodities were up from the comparable 2004 week, with coke up 24.1 percent; metallic ores gaining 15.2 percent; crushed stone, sand and gravel rising 13.1 percent; and coal increasing 5.3 percent. On the downside, loadings of primary forest products declined 3.6 percent while grain mill products were off 2.4 percent.

Cumulative volume for the first seven weeks of 2005 totaled 2,321,298 carloads, up 2.4 percent from 2004; 1,503,222 trailers or containers, up 10.4 percent; and total volume of an estimated 215.2 billion ton-miles, up 3.2 percent from last year.

On Canadian railroads, during the week ended February 19 carload traffic totaled 69,734 cars, up 6.4 percent from last year while intermodal volume totaled 42,123 trailers or containers, up 7.8 percent from last year.

Cumulative originations for the first seven weeks of 2005 on the Canadian railroads totaled 453,677 carloads, up 3.2 percent from last year, and 284,834 trailers and containers, up 3.3 percent from last year.

Combined cumulative volume for the first seven weeks of 2005 on 15 reporting U.S. and Canadian railroads totaled 2,774,975 carloads, up 2.5 percent from last year and 1,788,056 trailers and containers, up 9.2 percent from last year.

The AAR also reported that originated carload freight on the Mexican railroad Transportacion Ferroviaria Mexicana (TFM) during the week ended February 19 totaled 8,671 cars, up 7.2 percent from last year. TFM reported intermodal volume of 3,983 originated trailers or containers, down 1.1 percent from the seventh week of 2004. For the first seven weeks of 2005, TFM reported cumulative originated volume of 59,415 cars, up 7.1 percent from last year, and 26,714 trailers or containers, up 18.6 percent.

Railroads reporting to AAR account for 88 percent of U.S. carload freight and 95 percent of rail intermodal volume. When the U.S. operations of Canadian railroads are included, the figures increase to 95 percent and 100 percent. The Canadian railroads reporting to the AAR account for 90 percent of Canadian rail traffic. Railroads provide more than 40 percent of U.S. intercity freight transportation, more than any other mode, and rail traffic figures are regarded as an important economic indicator.

The AAR is online at www.aar.org.


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WALL STREET LINES...  Wall Street lines...

UP gets upgrade from top brokerage

Union Pacific Corp. garnered its second upgrade from Morgan Stanley in less than a month on February 18, as the brokerage argued that the worst is over for the railroad after a difficult year.

Analyst James Valentine, who had carried an “underweight” rating on the Omaha-based company for most of 2004, boosted his recommendation to “equal-weight” on January 25 and has now moved up to an “overweight” with a $70 one-year price target, Dow-Jones’s MarketWatch reports from New York.

“In a perfect world, we’d like to wait at least another month or two to upgrade UNP so that we can get even greater confidence that it’s well on its way to recovery,” Valentine told clients.

However, in light of Valentine’s expectation that the brokerage will raise its first-quarter outlook in the next several weeks, “we’d rather run the risk of being too early than too late,” he said.

Valentine estimated UP’s quarterly upside at “possibly 50 percent above the current consensus.”

He noted, however, that the latest upgrade wasn’t based on Union Pacific shares being inexpensive based on 2005 earnings but rather on the company’s potential to generate the best year-over-year earnings growth among the major railroads over a number of years.

“Based on all of the data we’ve gathered, including conversations with shippers and industry sources, we believe that UNP has finally turned the corner after 18 months of congestion,” Valentine said.

He believes earnings expectations have likely bottomed and may begin an upward move soon so, after a year of declining consensus expectations, the current Wall Street forecast of $3.13 earnings for 2005 is achievable.

Over the longer term, he expects UP to move back to its historical peak margins, which equates to earnings per share that are double his $3.53 forecast for 2005.

According to Valentine, the company is benefiting not only from industry-wide railroad price increases but also appears to be shifting its long-standing strategy of winning market share through price discounting to one of improving margins and returns.

“Among the major railroads, UNP arguably has the most long-term contracts that are currently below market rates, leaving it with more untapped upside from the recent upward pricing trends,” he said.

Meanwhile, Valentine also thinks the relative attractiveness of coal prices in western states and the prospects of eventually operating with one-man crews could result in potential upward earnings revisions in the outer years.

“If everything should break UNP’s way, we could see the stock near $100 three years from now,” he concluded.

Within the past 12 months, Morgan Stanley has received compensation for investment banking services from and has co-managed a public offering of securities for UNP.


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CP

Canadian Pacific Ry. declared a quarterly dividend of 13-1/4 cents ($0.1325) Canadian per share on the outstanding common shares. The dividend is payable on April 25 to holders of record at the close of business on March 25.


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UP

Union Pacific Corp. has declared a quarterly dividend of 30 cents per share on its common stock, payable April 1 to stockholders of record March 9.


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STOCKS...  Selected Friday closing quotes...

Source: CBSMarketWatch.com

  Friday One Week
Earlier
Burlington Northern & Santa Fe(BNI)50.7149.22
Canadian National (CNI)62.1562.85
Canadian Pacific (CP) 35.2934.17
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OPINION...  Opinion...

Amtrak:

A dire need: plans, talk and money

Commentary by Paul Weyrich

Larry Kudlow of CNBC asked me if it were true that I did not advocate destroying Amtrak but wanted to reform it. I plead guilty. I am pro-rail.

I believe we demonstrated after September 11, 2001 that it is prudent to have a national passenger rail system. However, Amtrak is spiraling toward death. The Administration has recommended not a dime.

In Ronald Reagan’s budget Amtrak was also zeroed out. Back then, the President knew full well that Congress would restore the money. It was one of those “wink-winks” which take place in Washington. Reagan satisfied a part of his conservative constituency by pretending to be against Amtrak funding while his Office of Management and Budget (OMB) people planned for the restoration of the money.

I probed the Deputy Director of OMB as to how serious the Bush administration is about not funding Amtrak. Specifically, I asked him if the Congress restored the Amtrak money, would he recommend a veto to the President, assuming a separate Transportation Appropriations Bill had been passed by the Congress.

Reagan always excused himself on the Amtrak issue by pointing out that Congress sent him what is known as a “CR,” a Continuing Resolution, wherein several appropriations bills are rolled into one. He felt he could not veto the Continuing Resolution without endangering the nation’s defense.

OMB Deputy Director Joel David Kaplan said he was not in a position to recommend a veto. He finally showed the hand he was dealing the Congress when he said, “We have laid out reforms three years in a row. Congress has ignored these reforms. If they will consider and enact reforms we might look at restoring some money.”

Secretary of Transportation Norm Mineta, who in response to a question from our Free Congress Adjunct Scholar Tom Till, said, “Enact the reforms and then we’ll talk money” confirmed that view.

As usual, the media has set up the choice of continuing the status quo vs. zeroing out all funding for Amtrak. That is not, in fact, the only choice. There is zeroing out funding vs. passing reforms and restoring money.

Among the reforms which we at the Amtrak Reform Council advocated, and which were picked up by the Administration, is to create two separate corporations. One would own the infrastructure now owned by Amtrak in the Northeast Corridor from Washington, D.C. to New York City and also New Haven, Conn. to Boston as well as a 70-mile stretch in Michigan. That corporation would be responsible for the maintenance and upkeep of the property owned by Amtrak. In addition, it would assist the freight railroads for that portion of the system now leased to Amtrak. Under such a system the commuter rail lines, which run many more trains over the Corridor then does Amtrak, would have to pay their fair share of upkeep. A second corporation would only run passenger trains.

Presently, because Amtrak is involved in so many businesses, it is not possible to find out exactly what it costs to operate a given train.

The second corporation would have as its only responsibility ownership and operation of trains. That would allow us to know the cost of running trains, and the corporation could husband cash flow by engaging in lease-back contracts. Former Amtrak Reform Council member Jim Coston has set up a company for that purpose. Such a corporation could also outsource food and beverage and other services, which would benefit the private sector, which almost always runs things more efficiently than the government.

A new set of corporations might be able renegotiate Amtrak’s union agreements, which are hand-me-downs from the freight railroads from which Amtrak originally inherited passenger trains.

It is almost ludicrous to suggest that a $2.5 trillion budget is “austere and tight.”

Only by Washington standards.

The truth is, with Social Security and tax reform in the offing and the prescription drug benefit about to kick in, money is in unusually short supply. Sooner or later if things just keep going as they have been money isn’t going to be there for Amtrak. The Administration’s proposal would leave Amtrak intact in only the Northeast Corridor.

That was former Senator Phil Gramm’s secret plan to kill Amtrak, as he explained it to me several years ago. Decouple the Northeast Corridor from the rest of Amtrak and the national passenger train system dies.

I am not sure in view of the impending bankruptcy of many of the older airlines and the nationwide shutdown of all airlines after 9/11 that we want to be without an alternative to carry passengers throughout the country.

In fact, the real role of rail should be in the 300 to 500-mile corridors, which have been identified by the USDOT. There are 15 such corridors. The airlines find serving these relatively short trips very inefficient. We should encourage the development of these corridors to have frequent, higher speed service.

Currently, the highest speed passenger trains outside the Northeast Corridor go is 79 mph. For a time, it appeared that Chicago-St. Louis would be the first such semi-high-speed corridor. Track and signal systems were being upgraded. The current three trains per day were to be increased. New equipment, capable of operating at up to 110 mph., was to be purchased – but state administrations change and priorities change as well. It appears that the effort to demonstrate this first corridor outside of the Northeast has been sidelined.

Perhaps if Congress does get serious about passing the reforms recommended by the Bush Administration, work on the Chicago-St. Louis corridor will resume. If several of these corridors can one day be connected through-running passenger trains could be considered again. If Western passenger trains are discontinued perhaps a private operator could take up operating some of these trains at least as “land cruises”. One such train operates in Canada.

If President Bush is serious about getting the reforms and Congress fails to act, then Bush will have to veto the Transportation Appropriations Bill and insist that no money be forthcoming for Amtrak until the reforms are enacted.

For an Administration that did not veto a single bill in its entire first term, it is a real stretch to think that its very first veto is going to be over Amtrak. Unless that threat is real there will be no action and we will be back to square one. There will be just enough money to operate but not enough to do what Amtrak President Dave Gunn says needs to be done. Who wants to continue the same old game?

Paul Weyrich is Chairman and CEO of the Free Congress Foundation, Inc. http://www.washingtondispatch.com/printer_10725.shtml.


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The real truth about Amtrak

By Carl H. Fowler

USDOT Secretary Norman Mineta has proposed no funding for Amtrak in the 2006 federal budget. While the Mineta plan suggests the Bush administration might provide some sort of 50/50 matching funds for track maintenance, it explicitly rules out any operating support.

The states would have to fund any actual trains. This means there would be no intercity train service in the U.S., since there is little chance the states can find funding to resume even a skeletal local service.

Amtrak received total operating and capital support of $1.2 billion in 2004. In contrast, total U.S. highway spending in 2001 was $133 billion, of which over 40 percent was not recovered from gas taxes. This highway figure continues to grow each year. No passenger rail service or highway system anywhere in the world runs at a profit. Mineta claims we “subsidize” Amtrak and “invest” in highways.

The truth is we invest in both.

When has anyone of us received a dividend check from our interstate highways?

I am a travel agent, and we have sold Amtrak travel and tours since 1982. We have a unique perspective to evaluate the myths that surround Amtrak. The truth about Amtrak is very different than that presented by Secretary Mineta. The following is our analysis of the realities ignored by the Administration in its effort to bankrupt Amtrak and shift all support for passenger service directly to the states.

Amtrak’s national network carried over 25 million passengers in 2004, an all-time record. The long-distance trains produced the majority of Amtrak’s passenger miles, 2.7 billion, compared to the Northeast Corridor’s 1.7 billion.

A passenger-mile is one passenger traveling one mile.

The national network is vital. Passengers must be able to connect between trains to travel from one point to another, but Mineta’s plan assures that, at best, only a few isolated local commuter services would survive. Sen. Kay Bailey Hutchison (R-Texas) is correct that Amtrak must be national or it will be nothing.

Greyhound has canceled thousands of miles of rural bus lines, and the Mineta budget compounds the problem by proposing to eliminate federal subsidies for air service to many smaller airports. Increasingly, Amtrak is the only option in hundreds of cities.

Mineta speaks of “running trains nobody rides between cities nobody wants to travel between.” This betrays his ignorance of how trains work. For example, Amtrak’s Empire Builder takes passengers not only between Seattle and Chicago, but serves many cities and towns enroute.

This train stops at 38 other stations, including major centers like Spokane and Minneapolis and what Mineta views as “nowhere” communities – like Wolf Point, Mont., Glacier National Park, and Wenatchee, Wash. This train “nobody rides” carried 437,200 passengers in 2004. Most riders traveled between the almost totally Amtrak-dependent small towns along the route. There is no parallel bus service for 932 miles from Spokane to Minot, N.D., a truth cynically ignored by Mineta, but very important to towns whose only reliable link to the outside world is this vital, well-used train.

The real truth about Amtrak is that due to lack of federal capital support, it lacks the equipment to meet the demand which already exists. As a tour operator, we have to reserve long-distance trains a full eleven months before departure to assure space for a group.

Sources in Amtrak’s reservations staff advise us they turn away half the requests they receive for sleeper space because of a lack of equipment.

The Mineta plan is fundamentally flawed because it tries to shift the burden of funding Amtrak to the states. A route like the Empire Builder is the perfect example of the futility of the Mineta plan.

This train serves eight states, all of which would have to agree on a formula to split costs, in addition to appropriating operating money which they do not have. If one state refused, the service would be broken at that state border.

Under the Mineta plan, there will be no interstate rail services anywhere. We have a federal government to address issues that cross state lines, and Amtrak is a classic example. The ultimate truth about Amtrak is that it is remarkably well-used, vital to the real America of small towns and inland cities, and needs national support.

The author is vice-president and general manager of Rail Travel Center in Putney, Vt. He served for over a decade as a NARP director, and was a member of Amtrak’s Travel Agency Computer Advisory Committee.


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WE GET LETTERS...  We get letters...

Dear Editor:

In the last edition (February 21), you write about the links by rail between cities and airports. May I inform you that the oldest in Europe is the train between “Brussels National Airport” and the city of Bruxelles (where President Bush was last week, causing traffic problems). It opened in 1958 by the former Sabena Belgian World Airways. After about 20 years, it’s the SNCB (Société Nationale des Chemins de fer Belges) who took the service. Today, there are four trains per hour in each direction.

Yves Charlier


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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.

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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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