NCI: Leo King Amtrak is adding more Acela Express weekday roundtrips in April, plus more weekend service. The railroad says it will add four weekday trains between New York, Philadelphia and Washington starting April 26. The four trains, with two in each direction, will bring to 30 the number of weekday Acela trains south of New York. The new northbound trains will depart Washington at 11:00 a.m. and 7:00 p.m. while southbound trains will leave at noon and 2:00 p.m. The new schedule calls for 15 trainsets to be in revenue service on a typical weekday. A dozen weekend trains in total will also be running on weekends.

More Acela riders in New England

Amtrak said last week Acela Express ridership north of New York “surged 38 percent between October and February vs. the same period a year ago. The period is the first five months of the railroad’s fiscal year.

The carrier said north-of-New York ridership was 301,211, up from 218,155 in fiscal 2003. Amtrak attributed the ridership gains to “lower Acela fares that took effect in April 2003. Since then, Acela business class fares from Boston to New York have been $99 or less every day. First class service is available for only $50 more.”

Seeking to build on these ridership results, Amtrak last month started a sale. Passengers who take two Acela roundtrips between Boston and New York, Philadelphia or Washington before April 15 would be “eligible to receive a free roundtrip from Amtrak Guest Rewards,” the railroad’s frequent traveler program.

The passenger carrier also said it may wire its high-speed trains with high-speed internet access – up to 1.5 megabits per second – if a plan to wire its Acela Express and other trains out of Boston’s South Station comes to fruition.

The rail web connection, which is currently being tested on a California route, could be a boon for passengers on the heavily traveled Northeast Corridor, Amtrak spokesman Dan Stessel said, though no date has been set for it.

“It’s something we’re actively looking at,” he said. “We’re aware that the customer demand is there.”

That demand is so high that South Station travelers Megan Kennelly and Jennifer Scola booked their New York trip specifically to use the ‘Net after a travel agent erroneously told them the service was already on board.

“I thought they had it,” Kennelly said. “We usually fly but we took the train this time to get some work done.”

While wireless Internet users can already log-on while aboard, service can be spotty in remote areas, a problem also affecting hard-wire hookups for the planned plug-in service, Stessel said.

“It’s more complicated than cell phones. You certainly would not want it cutting in and out,” he said.

Amtrak recently wired the Route 128 and Providence stations with wireless Internet access.

Cars frozen by prolonged below-zero temperatures in January and February resulted in an equipment shortage throughout the Amtrak system, causing Beech Grove mechanics to shift their priorities by working on two less-wrecked cars that could be repaired and returned to service sooner than those more heavily damaged cars.

While 11 wrecked cars at the Beech Grove Car Shop are slated to return to service between now and October 30, the equipment shortage forced mechanics to repair Superliner I sleeping car 32023 and coach 34097. They were selected for repair because mechanics could turn both of them around in 1,800 man-hours, compared to the 4,000 to 5,000 hours required to repair other cars.

Amtrak’s employees publication Amtrak Ink reported in its March edition both cars arrived at the Beech Grove facility in November 2003.

On February 16, sleeper 32023 joined the consist of the Capitol Limited operating between Chicago and Washington. Coach 34097 returned to revenue service in early March.

Mechanics repaired the sleeper’s draft gear, couplers, its left side and roof. Craftsmen installed a new hot-water heating system, carpeting, curtains, and cushions, and replaced the interior water piping. When repairs were completed on the coach, about 10 feet of the car’s exterior was replaced.

Amtrak isn’t planning on building or buying any new Viewliners soon.

The question arose last week after a job posting appeared at Amtrak looking for a “Principal Engineer Viewliners – New Equipment” on March 11.

The engineer would “provide and supervise technical services related to development of vehicle and system specifications and other technical documents and the procurement of new cars and locomotives,” among several other tasks.

Said railroad spokeswoman Marcie Golgoski in Washington, “Amtrak is not going to start building its own Viewliners. It’s possible we may purchase new ones. Amtrak is currently developing technical specifications that would eventually be provided to prospective car builders. There is no timetable for any of this.” She added, “No contracts have been advertised or bid on.”

The engineer would also direct preparing designs, develop and review technical specifications for new and overhauled passenger cars, locomotives and other equipment, “and assure that they are safe, functional and cost effective.”

Golgoski added, “There is no answer for the types of cars built or numbers of them because the specs are still in development; however, it’s conceivable that Amtrak would be looking for replacements for diners, lounges and sleepers.”

The job pays around $57,000, and the engineer would be based in Delaware.

House T&I Committee The Transportation and Infrastructure Committee debates legislation, which it later unanimously approved, to reauthorize federal highway, transit, highway safety and motor carriers programs for the next six years.

WASHINGTON – A $275 billion bill that would provide federal funding for the nation’s highway and transit programs for the next six years was approved last week by the U.S. House Committee on Transportation and Infrastructure. The legislation, The Transportation Equity Act: a Legacy for Users, nicknamed “TEA LU,” (H.R. 3550) was approved by a voice vote. The legislation is tentatively scheduled to be considered by the full House late this week.

The Transportation Committee also unanimously approved on March 24 by voice vote a $375 billion, six-year highway and transit funding bill (H.R. 3994) that was based upon funding projections by the USDOT.

According to DOT, the $375 billion bill would be the minimum level needed simply to maintain America’s existing highway and transit infrastructure and begin to address minimal improvements to address the increasing highway safety and congestion crisis. H.R. 3994 would also create and sustain 1.7 million new jobs throughout all 50 states over the next six years.

Committee chairman Don Young (R-Alaska) introduced scaled-down legislation a fortnight ago that would replace the current transportation funding law, which has already been extended twice, the Transportation Equity Act for the 21^st Century, or TEA-21. Signed into law in 1998, TEA-21 provided $218 billion over six years for surface transportation projects. It currently expires on April 29, after some extensions.

The committee’s leadership from both political parties, Young and Democrat James L. Oberstar of Minnesota, were forced to scale back the funding in the bill by the Administration to the $275 billion level included in H.R. 3550.

House Transportation Committee spokesman Steve Hansen explained “In November 2003, the bipartisan leadership of the Transportation Committee introduced the original $375 billion funding bill citing DOT’s projection regarding the need for $375 billion during the next six years simply to maintain the nation’s existing surface transportation.” He added that the Transportation committee also cited the $70 billion that is “wasted each year due solely to traffic congestion and the waste of more than 5.7 billion gallons of gas each year by commuters sitting idle in traffic jams,” and 42,000 highway fatalities each year. , “One third are directly attributed to substandard road conditions and road size hazards,” he said.

The $375 billion legislation would have provided about $300 billion for highway projects and $75 billion for transit projects over the next years.

“On November 20, 2003, this committee stood together on a bipartisan basis to introduce a bill which embodied our vision for a better transportation legacy for America’s future,” said Young.

“However, I am disappointed that we have had to reduce the funding for many of the very good programs that we have proposed.

“We had originally based the funding level of our $375 billion bill on the Administration’s ‘Conditions and Performance Report’ which set forth the needs of our transportation system. In addition, we received far more requests from members for funding of projects than we can possibly accommodate. That proves to me that the needs are real and that they are growing.”

Young said, “Failure to begin to address those needs will leave our country behind in protecting the integrity of our economic base. It will reduce the quality of life of our citizens.”

Rep. Tom Petri (R-Wis.) said “H.R. 3994 is the right bill and the bill we should be moving this morning and bringing before the House.” Petri chairs the Highways, Transit and Pipelines Subcommittee.

“It reflects a robust and dynamic transportation program that invests in our nation’s infrastructure to save lives, create jobs, ensure economic prosperity and help the U.S. remain competitive in a global environment,” Petri enthused.

He said the bill, in the long run, would save the nation some dollars.

“Not investing in transportation now in order to ‘save money’ is penny wise but pound foolish. As we have seen repeatedly, a nation is only as strong as its basic infrastructure that supports economic activity and improves the daily lives of its citizens. Countries like India and China are investing in infrastructure on a massive scale. We should not rest on our past laurels and be shortsighted about the future challenges before us.”

The Committee concluded the markup by approving the $275 billion funding bill by a voice vote. This bill will provide about $225 billion for highway programs and about $51 billion for transit programs during the next six years. The funding for all of the highway and transit projects was reduced because of a veto threat from President Bush.

“I will not give up on my dream to enact a six-year bill that reauthorizes our highway, transit, motor carriers and safety programs at funding levels that are high enough to do the job,” Young told the committee.

“TEA LU as introduced at $375 billion is the right thing to do,” Petri said during the committee markup.

“It was fashioned to start to address the needs as identified by our own USDOT, Petri said, and adding, “Anything less will not maintain and improve our transportation system. Nevertheless, this bill, with the substitute amendment at $275 billion, is a step toward meeting the needs we have as a nation with the reduced amount of resources and is the best we can achieve at the current time given the current situation we find ourselves in.

“Is this the bill that we hoped to approve today? No – but the innovative policy, the improvements as to how this nation builds and maintains its infrastructure, and the course that is set for the future remain in place,” Petri said.

The BondBuyer Reported earlier that the House Transportation committee bill would be funded by an eight-cent gas tax hike.

By approving the two bills at the same time, Young intends to demonstrate the support that exists for his $375 billion TEA-21 reauthorization plan, said Hansen.

Young agreed to the $275 billion, six-year measure in part because it will include a “re-opener” provision that would allow the committee to consider the funding issue again next year and possibly provide more.

The purpose of the re-opener is “to address any of the shortcomings or problems that a $275 billion bill does not address or the problems that it would create,” Hansen said. “I don’t think anyone is happy with the $275 billion bill. The people who have been working on the transportation committee on a bipartisan basis know it’s inadequate.”

Once the whole House passes the measure, House and Senate negotiators will meet to craft a compromise between the expected $275 billion House bill and the $318 billion TEA-21 reauthorization plan approved last month by the Senate – and then send a single piece of legislation to the President.

A related story appears in “Commuter lines.” – Ed.

U.S. senators pressed the Bush administration on March 23 to sharply boost rail security investment, and promised legislation to safeguard trains and subways in the aftermath of the deadly Madrid bombings.

The March 11 attack in Spain on four trains by suspected radical Islamists killed 190 people, a revised figure, and has prompted fresh urgency in Congress to boost security for sprawling freight and passenger rail networks and mass transit systems used by millions of people each day in major U.S. cities, Reuters transportation writer John Crawley reported on March 23.

“We’ve learned from the (2001) aviation attacks that if you’re not ready it can be devastating,” Sen. Barbara Boxer, a California Democrat, told a Senate Commerce Committee hearing.

Lawmakers, including a $515 million bi-partisan Commerce Committee bill, are considering several rail security proposals. That plan would provide money to assess vulnerabilities nationwide, test bag and passenger screening technology, and improve surveillance of rail facilities.

“We will mark up the bill and have it ready and do everything we can to get it passed,” said Sen. John McCain, an Arizona Republican and commerce panel chairman. “I’m somewhat confident the (Bush) administration recognizes the need for this as well. We have some differences and I hope we can work them out.”

McCain said he would consider aspects of another Senate proposal for enhancements like more police patrols and improving tunnel infrastructure.

Amtrak says protecting and upgrading tunnels is a top priority. “Tunnels are where the most people concentrate and where the most damage can be done,” said John O’Connor, Amtrak’s No. 2 police officer.

Two previous Commerce Committee rail security bills were never considered by the full Senate for a variety of reasons including the cost of implementing the requirements. McCain said if that happens again he might attach the measure to a must-pass bill as an amendment.

Senators sparred with Bush administration officials over security priorities, and decried what they called a dramatic under-investment in rail security since the 2001 airline hijack attacks. Lawmakers said the government has spent billions on aviation security but only $115 million on rail security.

Asa Hutchinson, homeland security undersecretary, defended the Administration’s efforts, noting an announcement from the agency that it would begin a pilot program for screening rail passengers and their bags for bombs. He also said more money would be available for rail security in the 2005 budget.

“I believe it is important that we don’t simply react to incidents. We should invest in security based on intelligence and assessments on vulnerability,” Hutchinson said.

Hutchinson said there were no current near-term threats against U.S. rail or transit systems, and intelligence continues to center on aviation as a potential target.

Homeland Security Secretary Tom Ridge said last week his agency will add improvements for U.S. railroad security, but he deferred requests by public transit systems for $6 billion in new federal aid in the wake of the March 11 train bombings in Madrid.

Tom Ridge

After meeting with representatives of Washington and New York transit systems, Amtrak, public transit and railroad associations in Washington on March 22, Ridge said the plans will launch in early May for a pilot program to test baggage-screening technology at a station served by commuter rail and Amtrak, such as Washington’s Union Station or New York’s Penn Station, the Washington Post reported. Homeland Security officials also will use existing funds to create a rapid-response team of explosive-sniffing dogs, which would help transit systems in high-threat situations, and to help systems integrate employee and public awareness security campaigns, Ridge said. The secretary’s remarks followed complaints from members of Congress in both parties and from private industry officials that such efforts are long overdue and that the Bush administration has not done enough to secure the nation’s rails, compared with its efforts in aviation and seaports. Criticism intensified after this month’s synchronized bombings that killed 190 people and wounded more than 1,800 in Spain. Ridge rejected – for the time being – requests for new funding, even as he emphasized changes made since the September 11, 2001, terrorist attacks, and called U.S. transit systems “among the safest in the world.” “The notion that things are the same as they were on September 10th is just – it’s wrong,” Ridge said, noting that transit systems have spent $1.7 billion to upgrade their security. Citing the need to maintain open access and convenience, Ridge said the Administration did not want to “provide enough security to put the mass transit systems out of business.”

“This is clearly just the first step,” said Millar, who said Homeland Security officials would continue to meet with the industry.

Millar said the industry has used money from fares or local taxes to upgrade security since September 11 but now needs federal help.

Ross Capon, executive director of the National Association of Railroad Passengers, which represents railroad riders, said he was concerned that Homeland Security officials were investing in technology that doesn’t address the real threat facing the nation’s railroads.

“When a lay person takes a train, the first thing they say is, ‘Hey, they’re not checking my bags like they do at the airport – this is crazy!’” Capon said, “but checking bags doesn’t necessarily reflect the considered opinions about threats to passenger rail.”

It makes more sense to improve security at rail bridges, tunnels, stations and maintenance yards, Capon said. He added that it is unclear whether screening bags for commuter railroads, like MARC and Virginia Railway Express, would be practical for travelers trying to get to work on time.

Officials from Homeland Security and Amtrak in recent months discussed testing a kind of voluntary luggage screening at the New Carrollton, Md. Amtrak station, but federal officials ultimately decided the program would be too cumbersome and it was dropped, said a source familiar with those discussions who spoke on condition of anonymity because of the sensitivity of the project. The forthcoming pilot program would be more streamlined and create less of a choke point for passengers trying to catch frequent trains, the source said.

“We stand ready to work with the Department of Homeland Security on implementation should they deem that Amtrak is appropriate to try this,” Amtrak spokesman Dan Stessel said, referring to the pilot screening program.

In a press release dated March 22, Homeland Security stated, “The responsibility of securing our nation’s rail and mass transit systems is a shared one. DHS, USDOT and other federal agencies have taken significant steps to enhance rail and transit security in the last two years in partnership with the public and private entities that own and operate the nation’s transit and rail systems.”

The statement stated flatly “Efforts the past two years have focused on greater information sharing between the industry and all levels of government, assessing vulnerabilities in the rail and transit sector to develop new security measures and plans, increasing training and public awareness campaigns and providing greater assistance and funding for rail transit activities.”

In a fact sheet dealing with rail and transit security initiatives, DHS suggested few new specific actions it would take, but outlined vague policies. It noted it would “build on many of the security measures recommended during the past two years for implementation to mass transit and passenger rail authorities by DHS, the Federal Transit Administration and the FRA – including using dogs.

“The department will develop a rapid deployment Mass Transit K-9 program by utilizing existing Homeland Security explosive K-9 resources. These mobile DHS response teams will be prepared to assist local law enforcement teams.”

The text added, “Building upon TSA’s work in the aviation context, DHS will partner with local authorities to provide additional training and assistance for local K-9 teams.”

Federal Protective Services K-9 teams would also be cross-trained for use in the rail and transit environment.

“The mobile program would predominantly be used in special threat environments and provide additional federal resources to augment state and local transit and rail authorities security measures.

Regarding the luggage screening and carry-on bags pilot program, the agency said it would test for explosives at railroad stations and aboard trains. The initial program will begin at an unnamed station “with commuter rail service in conjunction with Amtrak and the FRA. The pilot program would not resemble an aviation-type solution to transit and rail, but rather provide the department with a venue to test new technologies and screening concepts.”

The lessons learned from the pilot could allow transit operators to deploy targeted screening in high threat areas or in response to specific intelligence.

The Administration’s fiscal 2005 budget request includes $407 million for DHS for continued development of biological countermeasures (including an integrated threat agent warning and characterization system) and $63 million in DHS for chemical and high explosives countermeasures. These investments will enhance our ability to detect and counter threats, including threats to transit systems.

DHS’s Information Analysis and Infrastructure Protection division, FRA and the FTA “have conducted comprehensive vulnerability assessments of rail and transit networks that operate in high-density urban areas,” according to the press release, which added, “The risk-based assessments have provided information on where current and future security resources must be directed to reduce vulnerabilities to terrorism. As a result of these assessments, transit systems are producing robust security and emergency preparedness plans.”

DHS said it had granted just $115 million since May 2003 to improve rail and transit security in urban areas.

The agency said it coordinates information and threat sharing through the Surface Transportation ISAC (Information Sharing and Analysis Center) managed by the Association of American Railroads (AAR), including deploying TSA people.

USDOT is coordinating rail security-related projects including responding to bomb threats, monitoring incident databases for acts of sabotage and vandalism, and serving as a liaison to railroads regarding terrorist activity.

In 2002, Amtrak received $100 million for life safety and security improvements to the rail tunnels connecting Manhattan to New Jersey and Long Island. Amtrak has spent $76 million to date, and the New Jersey Transit and the Long Island Rail Road are also contributing to construction costs. The funding will support improvements for fire and emergency service access and communications.

Shortly after the September 11 attacks, the AAR prepared a classified security plan that identifies risks and security measures. FRA has also contracted with the Rand Corp. to conduct a systematic review and assessment of Amtrak’s security posture and current programs, focusing on the adequacy of preparedness for combating terrorist threats. The FRA has reviewed the documents.

Transit systems have participated in exercises, protocols, and training for identifying the effects of a chemical or biological attack, and have developed system-wide employee awareness campaigns as well as deployed chemical and biological detection equipment. DHS also noted “All major state and local mass transit and rail commuter operators have completed vulnerability assessments since September 11 with federal technical assistance to best determine where current and future security resources must be directed to reduce vulnerabilities to terrorism.”

Some protective measures taken in major metropolitan transit systems – such as New York City, Washington, DC and Chicago – include perimeter barriers, high-tech fencing and lighting, intrusion detection equipment, alternative external communications capability for continuity of operations, increased number of uniformed and undercover patrols on light rail and subway systems, and hazmat training.

A simple thing to do, but sometimes quite effective, is searching trashcans and other storage areas, and increasing video surveillance and reviewing materials.

“Securing the passenger and freight rail systems are fraught with challenges,” a GAO report stated bluntly in its lead sentence in a document issued last Thursday. The lengthy title is RAIL SECURITY: Some Actions Taken to Enhance Passenger and Freight Rail Security, but Significant Challenges Remain.

“Some of these challenges are common to passenger and freight rail systems,” the report stated, “such as the funding of security improvements, the interconnectivity of the rail system, and the number of stakeholders involved in rail security.”

The document was written by Peter F. Guerrero, director of GAO’s Physical Infrastructure Issues, and Norman J. Rabkin, Managing Director for Homeland Security and Justice issues. It was prepared for the March 22 Homeland Security meeting in Washington dealing with transportation matters.

In a single-page summary of the entire 25-page document, the paper explained, “other challenges are unique to the type of rail system. For example, the open access and high ridership of mass transit systems make them both vulnerable to attack and difficult to secure. Similarly, freight railroads transport millions of tons of hazardous materials each year across the U.S., raising concerns about the vulnerability of these shipments to terrorist attack.”

The writers said passenger and freight railroaders had taken several steps to improve the security of the nation’s rail system since September 11, 2001, and added, “Although security received attention before September 11, the terrorist attacks elevated the importance and urgency of transportation security for passenger and rail providers. Consequently, passenger and freight rail providers have implemented new security measures or increased the frequency or intensity of existing activities, including performing risk assessments, conducting emergency drills, and developing security plans.”

Within the pages of the entire document, the GAO writers stated according to mass transit officials and transit security experts, “certain characteristics of mass transit systems make them inherently vulnerable to terrorist attacks and difficult to secure.”

They explained, “By design, mass transit systems are open (i.e., have multiple access points and, in some cases, no barriers) so that they can move large numbers of people quickly. In contrast, the aviation system is housed in closed and controlled locations with few entry points. The openness of mass transit systems can leave them vulnerable because transit officials cannot monitor or control who enters or leaves the systems.”

They also noted other characteristics of some transit systems – “high ridership, expensive infrastructure, economic importance, and location (e.g., large metropolitan areas or tourist destinations) – also make them attractive targets because of the potential for mass casualties and economic damage. Moreover, some of these same characteristics make mass transit systems difficult to secure.”

For example, they pointed out, the number of riders who pass through a mass transit system, especially during peak hours, “make some security measures, such as metal detectors, impractical. In addition, the multiple access points along extended routes make the costs of securing each location prohibitive.”

It also praised other federal agencies, which “acted to enhance rail security. For example, the Federal Transit Administration has provided grants for emergency drills and conducted security assessments at the largest transit agencies, among other things.”

The writers suggested, “Implementation of risk management principles and improved coordination could help enhance rail security. Using risk management principles can help guide federal programs and responses to better prepare against terrorism and other threats and to better direct finite national resources to areas of highest priority. In addition, improved coordination among federal entities could help enhance security efforts across all modes, including passenger and freight rail systems.”

The GAO reported in June 2003 that the roles and responsibilities of the Transportation Security Administration (TSA) and USDOT in transportation security, including rail security, “have yet to be clearly delineated, which creates the potential for duplicating or conflicting efforts as both entities work to enhance security.”

The agency said it conducted the study because passenger and freight rail services are important links in the nation’s transportation system, so terrorist attacks on passenger or freight rail services have the potential to cause widespread injury, loss of life, and economic disruption. The recent terrorist attack in Spain illustrates that rail systems, like all modes of transportation, are targets for attacks, the GAO document stated.

GAO was asked (The GAO didn’t state who asked) to summarize the results of its recent reports on transportation security that examined challenges in securing passenger and freight rail systems, actions rail stakeholders have taken to enhance passenger and freight rail systems, and future actions that could further enhance rail security.

Earlier, the GAO recommended that the Department of Homeland Security and Transportation use a mechanism, such as a memorandum of agreement to clarify and delineate TSA’s and DOT’s roles and responsibilities in transportation security matters.

DHS and DOT generally agreed with the report’s findings, but “they disagreed with the recommendation. We continue to believe our recommendation has merit and would help address security challenges.”

Two Sacramento-area Amtrak conductors were indicted on Thursday on federal embezzlement charges, while a third has agreed to plead guilty, prosecutors said.

Robert B. Hellam, 42, of Fiddletown, was charged with one felony and 20 misdemeanor theft counts alleging theft of government property. He is alleged to have embezzled more than $24,500 he had collected selling cash fare tickets on trains between September 24, 1999 and May 30, 2001.

Myisha Angela Farr, 31, of Sacramento, faces 14 similar charges for allegedly embezzling more than $5,000 between November 1, 1999 and September 24, 2001 while selling tickets as an assistant conductor.

The AP reported a third conductor, whom prosecutors identified only as Anderson, 41, of Copperopolis, was charged Wednesday and simultaneously entered a plea agreement admitting misdemeanor embezzlement of more than $8,000 he collected between June 22, 1999 and May 14, 2002. He agreed to pay Amtrak $10,273.06 to cover the embezzled funds and additional missing tickets.

The felony charge can bring a maximum 10-year prison term, while misdemeanor theft brings up to one year in prison.

Transit systems try saving deals

Atlanta, Los Angeles, Connecticut and New Jersey are among more than a dozen cities and states seeking to squeeze in deals that would net their transit systems $250 million before Congress shuts down a tax loophole.

The Senate last week debated a bill that would block the deals, which also give tax breaks to banks and other companies that lease subway cars and other equipment from the transit systems. The AP reported on March 23 House tax writers would let transit systems finish the last batch of financing arrangements before shutting them down.

“We have a projected $70 million deficit for next fiscal year,” said Jim Whitaker, spokesman for Southeastern Pennsylvania Transportation Authority. “We have a $70 million hole we have to fill.”

A deal involving Philadelphia’s Broad Street subway line, negotiated with Bank of America, could mean $15 million for the transit authority if Congress lets it proceed.

The deals in question typically see passenger cars, buses, or rail lines leased to a private corporation. The corporation gets a tax break for the depreciated value of the transit equipment. The transit system retains control of the equipment and receives a payment, often used to cover an upgrade or buy new equipment.

Critics say the transactions do little more than sell a tax break – which is useless to a tax-exempt city or town – to a corporation.

Transit deals in the pipeline came to a halt in November when the Treasury Dept. started investigating and told USDOT to stop approving them. The cost to the federal treasury outweighs any benefit to cities and towns, Treasury officials said.

Fifteen deals, involving more than $3 billion in transit assets, had been submitted to the Federal Transit Administration for approval when they were ordered to stop. Cities would reap $250 million if the deals are completed, APTA estimates. Transit officials argue that the leases supplement scarce federal and state funding for public transportation.

“At a time when these states and localities are strapped for resources – look at California, that’s a good example – it’s unfortunate that this additional resource area looks like it’s going to be shut down,” said Daniel Duff, APTA’s vice-president of government affairs.

Senate Finance Committee Chairman Charles Grassley (R-Iowa), has said the leases, which also came under questioning during President Clinton’s administration, should end immediately.

“The promoters of these deals had a clear indication that their gig would be up sooner or later,” Grassley said in an interview.

House Ways and Means Committee Chairman Bill Thomas (R-Calif.), said cities should be allowed to finish what they started.

“You can’t tell people... notwithstanding the fact it was legal when you did it, it’s not legal now,” he said. “A government should never do that.”

Atlanta is among the cities with leases stuck in limbo, and it has made lucrative use of them. The Metropolitan Atlanta Rapid Transit Authority has generated more than $100 million since 2001, said Richard Marsh, MARTA manager of financial planning and analysis. The city stands to gain $10 million to $12 million from a pending deal to lease railroad cars.

“We’re definitely interested in completing the deal,” he said.

Meanwhile, transit officials in Sacramento, Calif., have a pending deal that would net as much as $26 million by leasing the city’s rail cars and buses.

“It’s not 100 percent of our fleet, but it’s close,” said Richard Davis, the transit system’s chief financial officer, but “We are in limbo,” he said.

Two deals in Connecticut are on hold that could infuse $20 million into an ongoing project to overhaul rail cars that operate on the New Haven Line in Connecticut and New York, said Bureau of Public Transportation Chief Harry Harris.

The state leased rail cars to raise $29 million already invested in that program. In Los Angeles, officials planned an arrangement involving the computer control system that services its rail lines that would bring in $8.5 million, a small fraction of the city’s transit budget.

“We’re not going to come to a screeching halt, but we would certainly have to scramble,” said Marc Littman, spokesman for the Los Angeles County Metropolitan Transportation Authority.

BART and San Mateo County’s transit agency have agreed to try to settle a dispute over the struggling Peninsula BART extension without going to court. Officials with the Metropolitan Transportation Commission, the regional transportation planning and funding agency, began to mediate the dispute on March 18.

BART threatened on March 10 to sue Samtrans over that agency’s failure to pay $11 million in bills for operations of the BART extension to Millbrae and San Francisco International Airport. The next day, Samtrans agreed to pay $9.8 million, excluding $2 million in rent for the SFO station – but only if BART reduced service. BART balked, but delayed filing suit, reported the San Francisco Chronicle.

Samtrans and BART have a contract that requires the San Mateo agency to pay the operating costs of the extension in return for fares from trips that begin or end at its five stations. Samtrans expected the bill to come to $6 million, but it is estimated at $22 million, an amount Samtrans says it cannot afford.

SEPTA canceled a planned purchase of new regional rail cars last week, ending a controversial lawsuit by a jilted competitor that accused the transit agency rigging the bids for the contract of nearly $250 million.

“It’s a goal of SEPTA to have taxpayers benefit by as wide a field of competition as possible,” said SEPTA lawyer Mark Gottlieb. “SEPTA elected to do this by its own initiative.”

The decision means SEPTA will have to start anew to find a builder for 104 new Silverliner 5 coaches, after a two-year effort during which four competitors each spent millions trying to win the business, the Philadelphia Inquirer Reported.

Kawasaki Rail Car, Inc. sued SEPTA in state court for granting preliminary approval to a Korean firm that had lower technical rankings from the transit agency’s own staff. SEPTA had previously defended the selection of the Korean consortium, known as United Transit Systems, asserting the company’s zeal to enter the U.S. market would compensate for its inexperience here.

Kawasaki marketing director Tomar Jitendra was jubilant at City Hall as both sides asked Common Pleas Court Judges Darnell Jones to approve a settlement agreement. “It’s a matter of principle,” Jitendra said. “SEPTA should have followed the RFP process based on merit. All we ever wanted was a level playing field.”

Kawasaki, long established in the U.S., had received the highest technical rankings during the competition to build the new cars. Its bid was $14 million higher than the $236 million bid from United Transit.

The Korean consortium has admitted spending heavily on an extensive lobbying effort.

Kawasaki attorney Richard Sprague hinted that the settlement came about in part because of the reluctance of many politicians and SEPTA employees to submit to depositions in the case. In the month since the suit had been filed, SEPTA had consistently put off all depositions; they were scheduled to begin today. “Numerous people did not want to be deposed,” Sprague said. “We’ve been trying to depose various people and the depositions have been put off and off.”

Gottlieb reacted angrily to that suggestion. “I don’t want this settlement to be misconstrued. We agreed on the deposition schedule long before this decision was made.” Sprague’s comments he said are an “unfair and unwarranted inference.”

The Charlotte, N.C. City Council recently approved buying 16 S70 light-rail vehicles (LRVs) from Siemens Transportation Systems, Inc. Charlotte Area Transit System (CATS) will use them on the South Corridor Light Rail Project. The contract is valued at $52.5 million.

The South Corridor Light Rail Project is some 10-miles long, and runs from Uptown Charlotte to Interstate 485. The system will include 15 stations and is expected to open in fall of 2006. Delivery of the first S70 LRV is projected for January 2006. Siemens is currently bidding to provide the electrification and signaling infrastructure for the rail line.

Each S70 vehicle will have a 70 percent low-floor section with room for 236 passengers, Siemens stated in a press release.

The vehicles are capable of speeds up to 65 mph. Their shells are constructed of low-alloy, high-tensile steel with a composite fiberglass covering. The construction method, says Siemens, “produces a higher structural efficiency and reduces energy consumption during operation. Siemens’ Sacramento, Calif. manufacturing facility will construct the car shell and complete the final vehicle assembly. The S70 LRV is currently in use in Houston, Texas, and cars are being manufactured for San Diego, Calif.

A commuter train pulling out of a downtown Chicago station on Friday with about 40 passengers aboard collided with a single locomotive that was backing up, injuring at least 18 people.

Authorities said the injuries all appeared to be minor, primarily bumps and bruises, though four people were carried from the train on stretchers, two with neck braces.

The Metra engines collided about 9:00 a.m. when a locomotive running light backed into the path of the commuter train at a switch, said Deputy Fire Chief Thomas Donnellan.

“They bumped very gently. It was just a slight nudge,” Donnellan said.

Rick Tidwell, deputy executive director of Metra, said the locomotive was coming off a siding. He said 40 to 45 people were aboard the commuter train.

The commuter train was leaving the Ogilvie Transportation Center, one of the city’s main train stations, headed for the northwestern suburb of Crystal Lake.

“There was a loud crash, coffee went flying and people were falling over, and it got dark,” said Gerald Karr, an attorney from Mount Prospect, was on the train with his wife and daughter.

He said passengers were kept aboard for about 10 minutes after the accident before being let off.

Passenger Sarah Peasley of Littleton, Colo., who was going to visit her parents in Crystal Lake, said the train had just left and was moving slowly.

“Suddenly we came to a clanging stop,” she said.

All outbound traffic was halted from the station, formerly known as Northwestern Station.

Metra operates 12 routes from downtown Chicago to stations in northeastern Illinois and southern Wisconsin and serves about 150,000 passengers a day. In October, another Metra train carrying 350 people derailed causing mostly minor injuries.

New Orleans terminal moves
to ‘front-burner’ for restoration

In an effort to breathe life into a downtown transit hub, New Orleans urban planners are dusting off a 14-year-old plan to revitalize the New Orleans Union Passenger Terminal.

Officials first scuttled the effort when talks to revitalize the Canal Streetcar Project began. Before being shelved, a team had drawn up a master plan for the Loyola Avenue station that houses Amtrak and Greyhound operations.

That plan fell by the wayside as city officials and regional planners focused on Canal Street, said Darrel Saizan Jr., principal for Saizan and Associates Inc. consultants in New Orleans, reported New Orleans CityBusiness.

“The previous leadership felt (the master plan) was in competition with funding,” Saizan said.

Now, he said, developing the terminal would be an economic engine for the city, revitalizing and bringing the area up to par with cities such as Houston and Atlanta, which have developed similar transit terminals.

The goal outlined in the original master plan is to turn the terminal into a base where all rail systems converge.

The original plan called for light rail between Louis Armstrong New Orleans International Airport and the Central Business District, and a high-speed rail route between New Orleans and Baton Rouge, Saizan said. A high-speed rail link between New Orleans and Slidell is now an option, too, Saizan said.

Plans to revive the decaying terminal started in 1990 when the FRA and the FTA offered the city a $200,000 demonstration grant to do a strategic plan, Saizan said. After a study combining multiple modes of transportation was completed in 1996 as a follow-up to the strategic plan, Mayor Marc Morial’s administration decided to emphasize the Canal Streetcar Project instead, Saizan said.

Projected costs for the terminal project were between $75 million and $80 million, Saizan said. It would cost $1 million now to update the report on track capacity needed to accommodate several rail systems.

Through the years, several parts of the original master plan were completed. A key component now under way is the $7 million extension of Howard Avenue from Loyola Avenue, creating a circular roadway around the sports arena, said Walter Brooks, executive director of the Regional Planning Commission.

“We need the connection. It’s good for special events,” he said.

Sean Cummings, interim executive director of the New Orleans Building Corp., which manages the terminal, said Mayor C. Ray Nagin’s administration is working on a variety of improvements to the terminal and campus although he is not using the original plan. Cummings said the mayor’s plan will provide for a light rail system between the airport and Central Business District – if it comes to fruition.

“In the meantime, we are going to make it a spectacular train (and bus) station that benefits the great city that we have,” Cummings said. “Our priority is the extension of Howard Avenue back toward the sports arena and to really improve (traffic) circulation.”

After years of neglect, needed repairs include bringing in musical entertainment for arriving trains and buses, a homeland security-type surveillance system and new retail, along with maintenance of overgrown landscaping and broken air conditioners.

“The development patterns of the last half century have almost killed transit,” said Robert Dunphy, senior resident fellow for transportation with the Urban Land Institute in Washington, D.C.

The move to malls, tech parks and suburbs led to the expensive retrofitting of our transportation system to accommodate automobiles, Dunphy said. He recommends considering several key factors when building a transit base: Think development when thinking transit; build a community, not a project; make retail development-driven instead of transit-driven; put parking accommodations near transit; and encourage residents of all income levels to live near transit.

Combining rail services can save on capital investments and “can create a hub of activity that feeds retail, commercial and even some office development,” said Alan Artibise, dean of the University of New Orleans’ College of Urban and Public Affairs.

Retail and commercial activity must be able to support maintaining the building.

“The more difficult question is, what will the impact of an improved Union Passenger Terminal be on the ridership? It’s kind of a chicken-and-egg situation,” he said. Without development, it’s more difficult to improve rail service but development won’t necessarily lead to ridership improvements.

“But ridership won’t improve unless service on the lines improves.

Everything needs to be coordinated,” he said. “I would say that I consider it an important investment but it shouldn’t be over exaggerated the kind of impact it could have.”

A proposal to move the rail depot seemed like a whim, but now, many people are asking, “Why not?”

A few months ago, when the idea popped up, some wondered if it was just a whim. A consultant asked, “How about picking up the 7,000-ton Sacramento depot and moving it 400 feet north to be part of a proposed new multi-use transit center?

Last week, that whim became a “Why not?”

Sacramento city officials agreed to explore the costs and logistics of moving the brick and concrete structure from its I Street site into the railyards about where H Street would be.

The move would allow the aging structure to be revived as the centerpiece of a larger transit center that city officials want to create as a junction for Amtrak trains, regional commuter trains, light rail and buses, according to the Sacramento Bee.

The idea won plaudits from people at City Hall and around downtown, including some who had sharply disagreed on the fate of the old building.

“It’s a bold step,” said Hinda Chandler, a city architect on the project.

“Amazing,” said Greg Taylor, a member of the Save Our Rail Depot coalition.

“To me, it is a symbol of moving into a new future.”

Taylor’s group for years had been at odds with a transit operators group headed by Union Pacific and Amtrak.

The transit operators proposed moving the tracks several hundred feet north to straighten out the iron, separate freight trains from passenger trains, and provide longer platforms for future expansion.

Taylor’s group said it feared that if the tracks were moved away from the depot, the stately brick structure would become a glorified T-shirt shop for tourists.

The proposal to move the depot came from San Francisco consulting firm SMWM, a group the city hired last year to help forge a compromise.

“The technology is relatively simple,” said consultant Evan Rose. “We cut it from its foundation, and we roll it. We’re confident it can be moved. No one’s laughed in our face. That’s encouraging.”

Far from laughing, the City Council took the unusual step recently of eliminating three other conceptual layouts for an expanded downtown transit hub – all of which kept the depot in place – and focusing only on the proposal to relocate the building.

“I was taken aback,” Mayor Heather Fargo said of her initial reaction to the idea. “Move the depot? – but once you get over that, it really is an intriguing possibility.” Fargo has been the driving force for building a new transit center and saving the old depot.

Every day, 700,000 people walk through New York City’s Grand Central Terminal with a schedule to keep. Time is of the essence – and it’s running out.

At 15 years of age, Grand Central’s master clock, which controls all other clocks in the terminal, is already considered antiquated and suffers from a lack of replacement parts.

“It was state-of-the-art,” Metro-North Railroad spokes-man Dan Brucker said, “(but) time has gone on and the time machine hasn’t.”

In May, Metro-North plans to replace the master clock with a new synchronization system designed by Brandywine Communications of Santa Ana, Calif. The change will improve the accuracy and synchronization of about 55 analog timepieces – including some 19^th Century timepieces – and digital displays in the terminal, Katherine Didriksen, a special correspondent for the Stamford, Conn., Advocate, reported on March 21.

It had become increasingly difficult to rationalize the current master clock as cost-effective, said Steven Stroh, Metro-North superintendent of electrical maintenance. Stroh heads the master clock synchronization system replacement program.

While the existing system is still dependable, some commuters have remarked that Grand Central’s clocks are not accurate. Officials want to fix the problem before it worsens.

“It’s almost like bailing wire holding it together,” said Stroh, who was an electrician when the current master clock was contracted for in 1988. “Now, it’s one of my bigger headaches.”

The master clock receives a shortwave radio signal from the atomic clock in Colorado at 3:00 a.m. every day. At the time of receiving the signal, it is accurate to one three hundred thousandths of a second; however, after that it – and all the clocks it synchronizes in the station – is free to wander for the next 23 hours and 59 minutes.

In contrast, the new master clock system will receive a signal via satellite from the atomic clock every second, making all timepieces in the terminal accurate to within two microseconds at all times.

Grand Central’s 20 historic clocks, some dating to the late 1800s, 10 digital clocks and 25 nonpublic clocks all will be affected by the change. The flip boards and television monitors that display arrival and departure information also will be attuned to the new system.

Other advantages will include installing two identical master controls, primary and secondary, and an 18-hour battery backup system, something the station could have used during a blackout last summer.

Stroh said the new system will link public clocks in the terminal with those that employees use in administrative offices and behind the scenes.

Brandywine is replacing the clock for $56,000, Brucker said. The original system cost $212,000.

Accurate timekeeping has always been a priority for the railroad, whose trains must depart and leave according to schedule. It was the railroad industry that pushed for the creation of “standard time” in 1883, so that time was no longer measured according to when noon was at any one place in the country but by four different time zones.

Chiseled into the marble archway above the Graybar Passage in Grand Central, a clock pays homage to this pioneering move. Commuters rushing to the main concourse from Lexington Avenue catch view of the lettering engraved beneath it: Eastern Standard Time.

When that clock needs fixing, Metro-North electrician Myron Johnson and his team spends hours removing a 30-pound piece of stone and repairing the mechanism protected behind an inner ring face.

“It’s not difficult at all,” said Johnson, a former Stamford resident who has performed clock maintenance and repair for 20 years. “You learn all the technicalities, and it’s quite easy.”

Johnson cleans and repairs the station’s clocks as needed, sometimes climbing the famous clock tower overlooking Park Avenue or adjusting the renowned ball clock—installed at Grand Central’s opening in 1913 – atop the central information booth.

Commuters will start seeing some new digital clocks in the terminal as well, Stroh said.

Metro-North plans to install the new master clock in the middle of the night on a Saturday in early May, when few patrons will be affected.

“Nobody will be the wiser that we switched from the old to the new,” Stroh hoped.

For eight years, a depot in Fayetteville, N.C. served as a passenger station, and now the structure is getting a major overhaul. The community is spending about $4 million restoring the two-story brick structure. Plans call for a transportation museum. Most of the money is coming from federal transportation grants.

From 1890 to 1898, the depot served the Cape Fear and Yadkin Valley Railroad, but when the railroad went out of business, the depot was altered to suit a new business. Arches were filled in with bricks, and separate waiting rooms for whites and blacks became storage for the Carolina Grocery Co., the first of several commercial tenants.

Over the years, the Fayetteville Observer wrote last week, brick walls were built, connecting the station with other buildings. This week the connecting walls came tumbling down.

The demolition rattled the glassware and stirred up dust at The Market next door. An antique and craft store and Cape Fear Studios remain open for business.

Jeff Crouse moved concrete as work continued at the depot. For the first time in decades, the depot’s porte-cochere – the place where carriages dropped off passengers – is visible.

Workers for M&E Contracting have also removed brick from the arches, torn away rusting metal, and replaced charred wood.

In addition to the sign, workers found bottles, license plates, “but no cannon balls,” quipped M&E superintendent Richard Lee.

“It’s tedious, time-consuming work,” he said, “but we’ve got the time to do it.” M&E’s contract is for one year; it began in February.

Lee said the building is in “really great shape” considering its age, its closeness to rail lines and its history.

Meanwhile, tracks along Russell Street and Ray Avenue are used daily.

“Vibrations destroy buildings,” Lee said.

A 1940 fire damaged some of the building’s interior woodwork.

M&E has already begun the restoration process. New wooden beams replaced rotten second-floor joists. As a historic renovation project, the goal is to make the station as close to what it was like when it opened in spring 1890, but some changes are being made. On March 24, workers began digging an elevator shaft.

The city purchased the building in 1982. Turning the depot into a museum was first proposed in 1999 with an opening date of 2001. The opening was delayed to spring of 2003 and then to this fall, but while the signs around the project still announce a fall 2004 opening, city officials said a spring 2005 opening is more likely.

Planned exhibits will focus on the history of transportation in Fayetteville and Cumberland County, including a mastodon’s tooth the city bought on eBay for a prehistoric travel exhibit. The exhibits are being designed to coincide with the transportation curricula taught in the fourth and eighth grades.

The structure that at one time was the Delaware & Hudson Ry.’s locomotive repair shop burned March 21 in Colonie, N.Y. Now owned by Guilford Transportation of Billerica, Mass., the structure had been for sale for several years. Guilford Rail took ownership of the building from the bankrupt D&H in the early 1980s, and since about 1993, the company has had the 80-acre property on the market for sale.

Last week, while volunteer firefighters continued to chase hot spots through the 90-year-old shop, its owner was preparing to demolish the cavernous building, town officials said.

Guilford met Monday with town building and fire prevention officials, the Albany Times-Union Reported, who told the railroad executives to either secure the facility from future intrusions or tear it down, said chief building inspector Robert Cordell.

He said the company plans to obtain the necessary permits, but a possible holdup is the presence of asbestos in the building’s roof.

The extent of asbestos in the building was studied in 1998, when a firefighter training exercise in an adjacent building got out of hand and set Building 1 ablaze. Neighbors tested some fallout from that fire at the time, and asbestos was found in some ashes.

Cordell said the building’s asbestos is confined mostly to a layer in the roof, but he wasn’t sure of the asbestos’ form. “I’m pretty sure it’s not friable,” he said, referring to the most hazardous type of asbestos.

The inspector said the process to obtain town demolition permits is straightforward. Utilities such as electric, gas and water must be turned off and other precautions, such as securing the scene, need to be followed, he said.

”It shouldn’t be a major problem for them to get the permits,” Cordell said.

Joe Morrissey of the New York Labor Dept., which oversees the state’s asbestos removal regulations, said Guilford is having a survey done of the building to determine the extent of asbestos and what needs to be done to remove it safely.

While large portions of the building burned, even more of the 200,000-square-foot facility remained untouched by the fire. Monday afternoon (March 22), a fire truck was parked on Ninth Avenue with the aerial ladder swung over a chain-link fence to spray water onto the top wooden frames that lined its roof.

Fire officials decided that the building was structurally sound enough to allow a fire truck to move inside so firefighters could use the truck’s ladder to reach the underside of the roof, where most of the hot spots remained.

No cause has been determined for the fire, but given the building’s secluded location and history of being a hangout for teenagers, officials believe the fire was either caused by a smaller fire that was not completely put out or by someone intentionally setting the building ablaze.

NCI: Leo King Gray days are hovering over CSX corp. as more job cuts began last week in management ranks.

A third round of layoffs began last week at CSX Corp. Jacksonville as the railroad continues its management restructuring plan. CSX has not stated how many or what types of jobs will be lost in this round. CSX said the cutbacks will save up to $100 million a year. Management layers are being reduced from 11 to 8.

CSX said in November that it was going to cut 800 to 1,000 non-union jobs, but only about 140 people were let go since last fall. Employees received e-mails last week saying the next round of cuts was beginning. A spokesman said affected employees are having one-on-one meetings with their supervisors.

The restructuring began in December when 20 senior vice-presidents and vice-presidents were laid off. Last month, about 120 positions, mainly vice-presidents and directors, were eliminated.

The Florida Times-Union of Jacksonville reported on March 24 CSX Corp.’s third wave of layoffs began Tuesday and continued at least through Wednesday. The intent is to make CSX, which operates the country’s third largest railroad, a more nimble and efficient competitor.

The Jacksonville-based company would not reveal how many or what type of jobs will be lost this round, but the top-down process is expected to end by April, suggesting this stage of cuts will be sizeable as the reorganization hits the wider swath of employees in middle management.

CSX spokesman Adam Hollingsworth confirmed that while a small number of positions were eliminated Tuesday, the “majority of conversations” with employees regarding their future employment with CSX would happen the following day. He would not give additional details.

“I don’t think it would be appropriate to discuss the issue any further until those conversations have been completed,” Hollingsworth said.

The restructuring began in December when 20 senior vice presidents and vice presidents were let go. Last month, 120 positions—largely assistant vice presidents and directors—were eliminated.

The streamlined workforce is expected to save CSX $80 million to $100 million annually.

Last year, CSX had the worst operating ratio, an industry measure of profitability, of any of the country’s four largest freight railroads, according to financial documents.

Beginning at the top of the 24-year-old company’s management, the transformation requires each management layer to redesign the layer underneath. The process both eliminates and creates positions, the company has said.

The month-long strike at Canadian National Railway Co. will cut its first-quarter profit by 8 to 10 Canadian cents a share, the company said on March 23.

CN, Canada’s biggest railway and North America’s No. 5, said it expects its first quarter profit to at least match the earnings of 69 Canadian cents per share made in the year-before quarter ($1 U.S. equals $1.33 Canadian).

That forecast is below earnings of 74 Canadian cents a share expected on average by analysts, according to Thomson First Call.

For the full year, CN had previously forecast a 10 percent profit growth.

“It focuses us on the challenge for the balance of the year, which is to basically get this railroad to rebound. We got our work cut out. That 8 to 10 (Canadian) cents will not come back,” CN chief financial officer Claude Mongeau told analysts during a conference call.

A CN customer, Vitran Corp. Inc., reported the four-week week strike would halve Vitran’s first-quarter results, the transportation and logistics firm said last Monday. The Toronto-based firm said in a press release that it sees diluted earnings per share for the first quarter to be in the range of 7 cents to 9 cents and diluted earnings per share for the full year to be in the range of 92 cents to $1.00.

The company said if the strike at the Montreal-based company had not occurred, diluted earnings per share for the first quarter would have been in the range of 14 cents to 18 cents, and between 99 cents and $1.09 for 2004.

The Burlington Northern and Santa Fe Ry. Co. said last week it would expand its Tennessee Yard, an intermodal facility in Memphis. BNSF’s expansion project represents a $40 million capital investment and will create about 150 new jobs over the next few years.

“This cooperative agreement with the City of Memphis and Shelby County is a critical step that will enable BNSF to successfully meet our projected growth demands for container traffic,” said Fritz Draper, vice president, Business Development. “As a result, we anticipate doubling our capacity to 400,000 container lifts within the next five years, and we also will have the capacity to meet future expansion needs.”

The Memphis Industrial Development Board of Memphis and Shelby County granted tax freezes to BNSF ranging from 9 to 13 years, dependent on the company’s level of operating performance. For the nine-year tax freeze, the company must achieve 400,000 lifts and create 150 new jobs.

“This decision by BNSF further reinforces our position as a major transportation hub for the nation and enhances our capacity to compete in the worldwide logistics network,” said Memphis Mayor Willie W. Herenton.

A three-member panel in the arbitration proceeding between Kansas City Southern and Mexico’s Grupo TMM concluded, “in an interim award,” according to TMM, “that the rejection of the Acquisition Agreement by Grupo TMM’s shareholders in its vote on August 18, 2003, did not authorize the company to terminate the agreement.”

TMM had agreed to sell itself to KCS, but later backed out. The case has gone to Mexican courts.

An arbitrator in the dispute between U.S. rail company Kansas City Southern (BB-/Negative/--) and Mexican rail company Grupo TMM S.A. (TMM; rated ‘D’) over Kansas City Southern’s proposal to take control of TFM S.A. de C.V. (B/Watch Neg/--) has ruled in Kansas City Southern’s favor. Standard & Poor’s Ratings Services said on March 24 the ruling has no impact on its ratings on Kansas City Southern.

TMM added, in a press release, “The panel indicated the agreement will remain in force and binding on the parties until otherwise terminated according to its terms or by law. In reaching the conclusion, the panel found it unnecessary to determine whether approval by Grupo TMM’s shareholders is a “condition” of the Agreement.”

Grupo stated it “continues to believe that any transaction cannot occur without approval of the company’s shareholders,” but the panel’s decision “did not reach a conclusion on that issue.”

Grupo TMM also has a significant interest in Transportacion Ferroviaria Mexica, which operates Mexico’s Northeast railway and carries more than 40 percent of the country’s freight.

KCS and TMM now move on to the second phase of the arbitration process, which will decide the remaining issues, “including remedies and damages due Kansas City Southern,” S&P reported.

S&P warned, “Kansas City Southern’s relationship with its 46 percent-owned affiliate, Grupo TFM, remains strained at this time, and the outcome of its proposal to take control of TFM is uncertain.… If financial performance at KCS or TFM weakens from expected levels, if the TFM deal goes forward under more onerous terms, or if KCS is required to fund the full amount of an option under which the Mexican government can put its indirect 20 ownership stake in TFM to other owners, ratings could be reviewed for a downgrade.”

James Valentine rode the rails in opposite directions last Tuesday, upgrading two of the four major U.S. railroads and downgrading the two others. The Morgan Stanley analyst said he was not deviating from his long-held opinion that the North American railroad industry remains challenged as an asset intensive, heavily unionized, semi-regulated industry. Rather, he said he was making the changes as prospects for the sector diverge.

“This is a short-term, relative valuation call for nimble investors, driven by our view that first quarter 2004 and second quarter 2004 results will likely show a more clear divergence in each carrier’s growth trajectory,” Valentine wrote in a research note.

Reporter Susan Lerner, at CBS.MarketWatch.com, reported on March 24 that against that backdrop, Valentine upgraded Burlington Northern Santa Fe (BNI) and Norfolk Southern (NSC) to “overweight” from “equal-weight” while downgrading Union Pacific (UNP) and CSX Corp. (CSX) to “underweight” from “equal-weight.”

Shares tracked the recommendations the next day, with BNSF shares up 20 cents, or 0.7 percent, to $30.65; NS shares rose 40 cents, or 1.9 percent, to $21; UP saw shares fall 46 cents, or 0.8 percent, to $60.05; and CSX shares gave up a dime, or 0.3 percent, to $29.22.

For NS, it was the second upgrade in as many days.

Bear Stearns had raised its recommendation on the stock to “outperform” from “peer perform” on Tuesday, saying the company was positioned for greater earnings leverage in 2004.

Morgan Stanley’s Valentine had already became nervous about prospects for UP and CSX in 2003, first downgrading the former in September and the latter in December, and now says multiple conversations with industry sources backed up by recent shipper feedback and weekly service metric data lead him to believe the two aren’t on the verge of a major upturn.

“Both railroads continue to struggle with congested networks that are near capacity, which leaves minimal upside operating leverage, at least in the near-term, whereas BNSF and NS remain relatively fluid and therefore are successfully adding revenue to their networks,” Valentine told clients.

Absent a quick turnaround or more resources, Valentine expects UP and CSX will both struggle with unimpressive earnings.

Valentine noted that shipper feedback suggests CSX’s inability to turn around its operations is starting to affect its revenue as customers look to alternatives, including NS, and balk at rate hikes.

“We believe that there is a risk that CSX shippers with options may shift volumes to NS as long as there remains a significant service gap between the two carriers,” Valentine said.

Beyond operational issues, he noted that CSX also is one of the railroads most exposed to changes in oil prices.

As for UP, the analyst said he’d received feedback suggesting that management was not expecting a return to 2002 operating levels until late 2004 or early 2005.

If that turns out to be the case and operating metrics do not improve meaningfully until later in 2004, Valentine believes earnings estimates for UP will likely be revised downward. He, in fact, cut his 2005 estimate to $4.85 from $5.05 for 2005.

On the other hand, Valentine expects BNSF to enjoy the best revenue growth of any railroad in 2004 with growth “firing on all cylinders” thanks to very strong growth in grain, coal and end-market demand for shipped goods.

As for NS, the analyst said a sell-off in the shares has eased prior valuation concerns while improving operating numbers, and anecdotal feedback from industry insiders suggest management is “getting its hands around” its labor issues.

Both carload and intermodal freight registered strong gain on U.S. railroads during the week ended March 20 in comparison with the corresponding week last year, the Association of American Railroads (AAR) reported Thursday from Washington.

Intermodal traffic totaled 206,976 trailers or containers, up 10.1 percent from last year. Trailer traffic was up 14.2 percent and container volume rose 8.6 percent from last year.

Carload freight, which does not include the intermodal data, totaled 336,024 cars, up 5.7 percent from last year, with volume up 11.5 percent in the West but down 0.4 percent in the East. Total volume was estimated at 30.2 billion ton-miles, up 7.1 percent from last year.

Eleven of 19 carload commodity groups were up from last year, with coke gaining 33.7 percent; farm products other than gain up 22.0 percent; waste and scrap material rising 14.6 percent; and coal increasing 11.0 percent. Among the commodities registering declines were motor vehicles and equipment off 7.5 percent and non-metallic minerals down 7.0 percent.

The AAR also reported the following cumulative totals for U.S. railroads during the first 11 weeks of 2004: 3,610,647 carloads, up 3.0 percent from last year; intermodal volume of 2,165,794 trailers or containers, up 6.9 percent; and total volume of an estimated 323.4 billion ton-miles, up 4.4 percent from last year’s first 11 weeks.

Canadian railroads also reported sharp increases in carload freight but a small decline in intermodal freight during the week ended March 20. Carload volume totaled 69,319 cars, up 7.6 percent, with coal up 67.3 percent and agricultural products up 6.7 percent from last year. Intermodal traffic totaled 39,093 trailers or containers, down 6.9 percent from last year.

Cumulative originations for the first 11 weeks of 2004 on the Canadian railroads totaled 718,038 carloads, up 6.2 percent from last year, and 427,484 trailers and containers, down 2.2 percent from last year.

Combined cumulative volume for the first 11 weeks of 2004 on 15 reporting U.S. and Canadian railroads totaled 4,328,685 carloads, up 3.5 percent from last year and 2,593,278 trailers and containers, up 5.3 percent from last year.

The AAR also reported that originated carload freight on the Mexican railroad Transportacion Ferroviaria Mexicana (TFM) during the week ended March 20 totaled 8,516 cars, up 3.3 percent from last year. TFM reported intermodal volume of 3,953 originated trailers or containers, up 16.2 percent from the 11^th week of 2003. For the first 11 weeks of 2004, TFM reported cumulative originated volume of 90,685 cars, down 7.3 percent from last year, and 37,833 trailers or containers, down 6.7 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.

Railroader finds a bomb on French track

A bomb was discovered on a rail line in northeastern France on March 24, the second explosive device found since an obscure terrorist group called A.Z.F. began threatening in December to attack France’s railroads unless it was paid millions of dollars.

The bomb, which was neutralized by a bomb squad, was found by a railroad employee who “noticed something unusual” while making his normal rounds, a spokeswoman with SNCF the national rail company, told Reuters. It was half buried between the rails near the town of Montieramey, on the line linking Paris with the Swiss city of Basel, France’s Interior Ministry said in a statement.

The discovery comes amid growing terrorist threats from various groups, causing France to increase security at home and at outposts abroad. It also comes as anxiety over the safety of rail travel in Europe has been heightened by the train bombings in Madrid this month. President Jacques Chirac was in Madrid on Wednesday to attend a memorial Mass for the victims of the attack.

The Interior Ministry said in its statement that the bomb was found at about noon 120 miles southeast of Paris, between the Troyes and Vendeuvre train stations. The bomb contained nitrate fuel in a plastic container with seven detonators attached to a timing device. The statement said one wire on the device was disconnected.

The ministry called an emergency meeting of police, intelligence, and other security officials late Wednesday.

A.Z.F. began threatening to attack the railways in mid-December, demanding more than $5 million to prevent an attack. To back up its claim, A.Z.F. directed authorities last month to a hidden railway bomb that also contained nitrate fuel in a plastic container that was attached to detonators.

The Interior Ministry’s statement said that the circumstances of the latest bomb’s discovery “did not correspond to what was in the letters signed by A.Z.F.” It did not elaborate and Interior Ministry officials declined to comment.

Eurotunnel SA nominated a former Euro Disney executive as its new chairman on March 24, as the debt-stricken tunnel operator prepared for a looming showdown with disgruntled French shareholders.

Philippe Bourguignon, a former CEO of both Euro Disney and Club Mediterranee, is to take over from outgoing Eurotunnel chairman Charles Mackay in October, the company said in a statement to The AP.

The operator of the rail tunnel linking Britain and France said Bourguignon would “significantly strengthen the company’s ability to implement a durable solution to Eurotunnel’s financial problems” as it struggles to rein in its debt of € 9 billion (euros), or $11 billion U.S.

It also said it hoped the appointment would persuade shareholders not to sack the current management in a court-imposed ouster vote due to take place at the company’s April 7 annual general meeting.

“It should, logically, increase our chance of success,” CEO Richard Shirrefs told a news conference after the nomination was announced.

About 65 percent of Eurotunnel’s capital is in the hands of mostly French small investors, who have sometimes questioned why British executives should hold the company’s two top jobs. Bourguignon is French.

A Paris court ruled in December that French shareholders’ association Adacte and Nicolas Miguet, an entrepreneur and would-be politician, had won enough investor support to force the no-confidence vote.

Adacte and its members have pushed for years for changes at Eurotunnel, accusing management of mishandling company strategy and plunging it further into debt. Joseph Gouranton, the association’s president, said the nomination of a new French chairman would do nothing to curb shareholders’ anger.

“Bourguignon’s just a candidate,” Gouranton said, “and he’ll be beaten by our candidate.”

Jacques Maillot, the founder and former head of French package-holiday company Nouvelles Frontieres, has agreed to take over as chairman if Mackay and Shirrefs are ousted.

“It makes no difference whether it’s an Englishman or a Frenchman,” Gouranton added. “If their current strategy is allowed to continue, it will be bankruptcy tomorrow.”

Dear Editor:

I want to thank you for publishing my correction to your March 15 D:F story on the New York State Turboliners in your March 22 issue.

Unfortunately, an editor added a parenthetical statement to my correction submission that in itself is incorrect.

The Union Pacific gas turbine powered freight locomotives of the 1950s and 1960s were not built by Krauss Maffei of Germany but rather by the General Electric Co. here in the U.S.

Rather, the locomotives that your editor is referring to were diesel powered units with hydraulic transmissions. All current major U.S freight railroads operate diesel locomotives with electric transmissions. However, as an experiment, in the mid-1960s, two railroads – the Denver & Rio Grande Western and the Southern Pacific – opted to import German diesel locomotives equipped with hydraulic transmissions. I remember well seeing the SP units in regular service during this time since I was stationed at McClellan Air Force Base in Sacramento, CA and could view them from my office window and hear their distinctive exhaust note. They were retired from service in the 1970s.

Albert L. Papp, Jr.

New Jersey Association of Railroad Passengers, Director
National Association of Railroad Passengers (NARP),
Director Region 3

Regarding the letter to the editor from Mr. Albert L. Papp, Jr. regarding “diesel-turbine powered trains, ” (D:F March 15, 22), I think what was inferred in the original article was that the gas turbine engines in those trains burned diesel fuel oil. Gas turbine engines can be made to be more or less omnivorous. If the fuel system is designed for it, they can run on diesel fuel-oil, kerosene, gasoline, methanol, heavy fuel-oil, even natural gas or propane gas. Gas turbine engines could even be easily modified to run on peanut oil or vegetable oil as fuel, if someone wanted to. In that case, the exhaust would probably smell like burned french-fries (sorry, freedom fries).

I have heard of diesel (reciprocating) engines which can run on diesel fuel, natural gas or a combination of both. Not sure if such diesels are in use in the rail industry, I think a lot are used for stationary electric power plants, where most of the time they run using natural gas fuel. I suppose they could be easily adopted for use in railroad locomotives, if there is a safe way to store compressed natural gas in the locomotive.

As for Mr. Papp’s statement that gas turbines burn as nearly much fuel when at low power as when they are at full power, true for older gas turbines designed and built in the 1950s and ’60s, not so true with the latest generations, such as the Pratt & Whitney Canada turbine engine in Bombardier’s JetTrain – but at no-load idle, even the latest design gas turbine engines are going to burn a lot more fuel than an equivalent sized diesel at idle.

Incidentally, I read somewhere that France’s SNCF is probably going to withdraw the last sets of its Turbo-Liner (T2000 RTG) gas turbine powered trains from service at the end of 2005. The last 10 remaining RTG Turbo-Liner train sets are in service in central France based out of Lyon.

The French RTGs were first put into service in the 1960s and apparently were the direct forerunner of Amtrak’s Turboliners and share a very similar design and layout. According to the article I read, SNCF began to phase the Turbo-Liners out of service in the mid 1990s as they put newer DMUs into service or in some cases electrified certain routes and subsequently used electrically powered trains instead of Turbo-Liners on the newly electrified routes.

Dave Beale
Haste, Germany

Mr. Beale is an occasional D:F contributor and has specialized knowledge of jet engines.

In your March 22, 2004 “We get letters,” Albert L. Papp, Jr. stated, “The Union Pacific Railroad had several series of gas-turbine powered freight locomotives in the 1950s and 1960s [built by Kraus-Maffei and tried out on former Denver & Rio Grande Western].” That information is incorrect.

The writer is referencing the diesels-hydraulic used by the Southern Pacific and DRGW. These imported Kraus-Maffei, were built to U.S. specs, but with German clearances (for road testing on the Deutsche Bundesbahn ) as an attempt to improve mountain railroad operations. The American Locomotive Co. (ALCO) also supplied three domestic DH locomotives to the SP.

General Electric in Erie Penna assembled Union Pacific’s gas turbine electric. All the components were GE products since GE product line include gas turbines.

Philip Hom
Stafford, VA

D:F inserted the sentence regarding DRGW, indicated by brackets – Ed.