Destination:Freedom Newsletter
Destination:Freedom
The Newsletter of the National Corridors Initiative, Inc.
Vol. 4 No. 42, October 27, 2003
Copyright © 2003, NCI, Inc.
President and CEO - Jim RePass
Publisher - James Furlong
Editor - Leo King

A weekly North American rail and transit update

 


Rail industry message:

‘Reform’ is out the window

By Wes Vernon
Washington Bureau Chief

Intellectual gymnastics (if that is the correct term) aimed at getting around the old-fashioned government funding for passenger trains and avoiding any tough businesslike negotiations with the freight railroads were given short shrift at the annual Passenger Trains on Freight Railroads conference in Washington last week.

Amtrak CEO David Gunn shot down the latest plan to “reinvent” Amtrak so as to take it off the federal budget. The plan was drafted by a coalition consisting of several pillars of business and industry. The Amtrak boss calls the proposal “a fig leaf.”

Hamberger factor

AAR President Ed Hamberger, keynoting last week’s annual Railway Age conference, hailed the growing cooperation between freight railroads and passenger lines in America.

“A rail renaissance is going on inside the Beltway,” said Hamberger, who is one of Washington’s most important players, and is a major figure on the national railroad scene.

Freight and passenger railroads “are working together in pragmatic partnerships” more and more often, citing as one example the massive, ongoing Chicago infrastructure project to streamline freight and commuter access to and through the city.”

Cooperation is essential, said Hamberger, “because congestion is growing as business increases. He noted that in the fiscal year ending September 30, Amtrak served a record 24 million passengers, at the same time that intermodal container freight shipments on freight railroads soared to 10 million units, and next year will surpass coal as their number one revenue generator.

One thing that has helped, said Hamberger: public transit, which has grown “faster than highway use and faster than population growth” in the past decade – but capacity growth is the problem, and finding ways to pay for it is essential, he said.

– Jim RePass

On the freight side, Ed Hamberger, President of the Association of American Railroads, said, paraphrasing now, that while the Class I carriers are open to fair and reasonable negotiations with passenger services desiring to use the freight rights-of-way, the freight railroads are still in business and do not intend to see their operations or their essential contributions to the economy sacrificed in the process.

In an interview with D:F, Gunn took issue with a plan outlined in the October issue of Railway Age – sponsor of the annual conference, and for well over a century, about as close as any publication to being the bible of the industry.

The proposal, explained in the magazine by respected consultant Todd O. Burger of CNI Partners, LLC Boston (and former head of the Transportation Directorate of Arthur D. Little), is currently under study by key Congressional staff on both sides of the aisle, according to Railway Age Editor William C. Vantuono. It was crafted by a group called the 21st Century Coalition, which includes such high profile companies as Jacobs, Bechtel, Oracle, Northrup Grumman, and AON Insurance.

In his D:F interview, Gunn described the plan as “well-intended,” but pointedly declared “Amtrak, as a railroad, can function if you have people running it who know railroads,” a possible reference to the fact that although the coalition consists of respected business leaders, there appears to be a relative dearth of actual rail industry experience in the lineup.

It should be noted, however, that Burger, the article’s author, is a former Burlington Northern rail operations manager. He has also done consulting for FRA, Amtrak, freight railroads, supply companies, and National Corridors Initiative (parent of D:F).

NCI CEO Jim RePass, who also attended the Railway Age conference, is quoted in the magazine as taking a non-committal, wait-and-see attitude.

Here in a nutshell is the 21st Century Passenger Rail Coalition’s proposal:

Amtrak would be “reconfigured” into two separate entities, one of operations (the present Amtrak, but focused solely on running the trains), and the other a National Railroad Infrastructure Corp. (NRIC) which, said Burger, “would manage the 600-plus route miles of Amtrak-owned infrastructure in the NEC as well as 100 miles in Michigan, some main line tracks in the Chicago area, and Chicago Union Station.”

That way, Amtrak would be relieved of ownership costs, paying only a “user fee” similar to what commuter lines currently pay Amtrak for use of NEC properties. For the rest of the Amtrak mileage – about 98 percent – the Class I carriers would continue to host Amtrak trains, as at present, and continue to deal solely and directly with Amtrak.

The new NRIC would solicit a “qualified concessionaire” to fund infrastructure operating costs, tapping into “private-sector sources to address deferred maintenance.”

“Due to long-term needs of the NEC,” Burger wrote, “it would likely take between 12 and 15 years to generate additional rail traffic to realize operating profits after travel times are significantly reduced.”

That prognostication drew Gunn sharpest rebuke.

“I mean, who in the hell is going to invest billions of dollars on the promise that you’re going to make money in 12 years,” he asked rhetorically in a D:F interview.

“The Corridor is not going to make money. There [are] no numbers behind it.”

The coalition is trying to raise capital, he acknowledged, “but ultimately you have to deal with the fact that intercity passenger service is going to be a governmental responsibility, and you’re going to have to fund it, and there’s no way you can do it as a private company. It’s a fig leaf, is what it is, however well-intended,” he added.

The coalition’s plan attempts to overcome objections to the Bush Administration’s Amtrak reorganization proposal – which some key lawmakers pronounced “dead on arrival.”

That outline, with some variations, is modeled on a recommendation by the now defunct Amtrak Reform Council. There are also some “bonding” proposals crafted by consultants for the rail supply industry and at least one bipartisan infrastructure bonding bill introduced in the U.S. Senate.

Gunn has rejected all of these as unworkable, and try as the new industrial coalition does, its plan still does not meet his objections to the others.

“My sense is that all of these plans for sweeping reform are exercises in problem-avoidance,” is the way he puts it.

Gunn, himself a veteran railroader, cited “solid economic reasons” for having rail passenger service “in certain areas and corridors,” and “a good social reason” for the long-distance trains – “and deal with it head-on,” he added.

Furthermore, “separating the [Northeast] Corridor from operations is nuts.” He cited intricate issues involving cooperation with Norfolk Southern, which uses Amtrak’s NEC trackage for some of its freight operations.

“Basically, it took us about three or four months to set that whole deal up, do the track work we had to do, make the arrangements with the schedules and so forth. That would be impossible if we were dealing with an independent infrastructure company,” in Gunn’s view, “Impossible! Because we had to make some changes to do it; little changes, but we had to do it, and that’s just an example.”

On one point, Gunn, the 21st Century Passenger Rail Coalition, and the freight railroads agree: The Class I carriers should maintain their present direct relationship with Amtrak, which would continue to be more than a mere paper company.

In fact, the AAR’s Hamberger cited that as one of six basic principles on which freight cooperation “in the advancement of passenger service, both commuter and inter-city,” should be based.

“Safety requirements and the integrated nature of railroading necessitate that intercity passenger rail be provided by one entity – Amtrak,” the freight rail industry’s Washington voice told the conferees. To transfer or franchise that responsibility, Hamberger warned, “could compromise the efficiency, safety and operations of the passenger network while increasing the complexity of the freight and passenger interaction.”

Other AAR principles include all the environmental, economic, safety, and congestion issues that justify passenger train service apply to the freight side as well.

In general, high-speed passenger trains at 110 mph or more do not mix well with 30 mph coal trains, and in fact could be lethal, the AAR stated. All the more reason for consideration of separate tracks on the rights-of-way through arrangements arrived at in freight-passenger negotiations – and that means “arms length” negotiations.

“Freight rail lines are private property, so there is no automatic right of access,” the AAR argues. Even the issue of “whether access is even possible” is an open question to be dealt with on a case-by-case basis.

The full costs of passenger service, including required changes in freight operations to accommodate it, “must be borne” by the passenger service.

Here Hamberger deals with a perennial point of tension with Amtrak, which, according to studies he cited, cost the freight railroads $240 million in underpayments for use of their property in 2001. Gunn questioned those figures in a lengthy interview with D:F last year, and recalled that Amtrak exists because the private railroads wanted out of the passenger business.

William Howes, a retired CSX executive, said in July that the freight railroads do not have a feeling that their dealings with Amtrak constitute a business relationship in a real sense of the term. He acknowledged that given the political realities, such a relationship might never be possible.

The carriers’ organization argues “Freight railroads must be indemnified and insured against any and all financial liability arising from accidents affecting passenger services.”

Taken together, the Hamberger and Gunn statements at the conference add up to a warning that, after all is said and done and despite all the rivers of ink and forests of paper applied to “reform” proposals, the issues surrounding “passenger trains on freight railroads” will not go away.

Hamberger’s points, though not new, are summarized in such a way as to update and drive home the issues, most of which have remained on the table for over 30 years. The one matter he did not directly address was the softening in some Class I boardrooms of the freight industry’s resistance to accepting government handouts. He could not say much about that because his bosses in the industry are not all on the same page on the issue, and even most of those who are willing to bend are careful to add some important footnotes. Hamberger did speak of mutually beneficial “private-public” partnerships.

Because of the prestige of the firms lined up in support of the plan to “reinvent” Amtrak, some Amtrak supporters on Capitol Hill may be persuaded to give it more serious attention than was accorded previous “reform” proposals, depending on how far it goes in the Halls of Congress, which could ultimately lead to a crack, however slight, in the excellent relations Amtrak enjoys with the lawmakers. Even the most severe Amtrak skeptics on the Hill have a tremendous amount of respect for David Gunn. Longtime observers of the legislative scene don’t expect that to change, even if there develops a difference on the coalition study.


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Senate okays $1.346 billion for Amtrak

By Leo King
Editor

Amtrak's $1.346 billion appropriation was left intact Thursday when the Senate passed a $90 billion spending bill for transportation, Treasury and other governmental offices.

HR-2989 passed on a roll call vote 91-3.

President Bush, backed by the House, wants to cut Amtrak's funding to $900 million, which is half the amount the railroad says it needs this fiscal year.

The final amount will be up to Congressional negotiators in a conference committee who must consider the House-passed bill.

Sen. Patty Murray (D-Wash), an ardent Amtrak supporter, told her colleagues on the Senate floor, “The increases above last year’s [funding level] is to accommodate the non-discretionary cost increases that will burden the railroad in fiscal 2004, including cost increases associated with mandated pay raises for employees who are under contract, and automatic increases in debt service payment associated with that which the railroad has already taken on.”

Murray added that the funding level would permit the authorizing committee to continue working on Amtrak reform legislation, and, she hoped, “address the long-term financial needs of the railroad, including its five-year backlog of critical capital investment.”

One day earlier, on October 22, Amtrak CEO David L. Gunn sent a letter to all 100 Senators urging them to at least keep the $1.346 billion level written into the Senate’s version of the House bill.

He feared amendments would be offered on the floor or efforts in conference to significantly reduce Amtrak's funding.

Gunn warned again, “The House-passed level of funding for Amtrak ($900 million), also the amount recommended by President Bush, will result in the shutdown of Amtrak's entire national system in 2004.”

He averred, “Even the Senate Appropriations Committee recommendation of $1.346 billion leaves us at great risk in terms of reliability,” and, he added, that was why “We asked for $1.8 billion, so that we could move quickly to address critical plant and equipment needs.”

Gunn explained, “The Senate committee level will allow us to operate the existing system and hopefully not worsen the amount of deferred maintenance. I think I can make that promise to you, but any reduction to the Senate committee level of $1.346 billion will seriously jeopardize the availability of service and continued operation of the national system.”

He included some statistics, including the carrier’s record ridership numbers of “24 million trips, the highest annual ridership in the company's 32-year history – despite the challenges posed by deferred maintenance, aging and late trains, and a weakened economy.”

He said repairs were proceeding.

“Our production lines are up and running to repair both plant and equipment, and much good work has already been done.”

Costs are also under control, he added.

“Headcount has been reduced by approximately 2,500 employees during fiscal 2003. We have also gotten control of our finances, cut our costs, and opened our books to the USDOT, OMB and the appropriate oversight committees in Congress.”

He also reported the railroad had “begun to address and fix organizational problems within Amtrak and have made real progress. We are beginning to arrest the decline in plant and equipment. The inability to move forward on these essential projects will inexorably result in the failure of key parts of our system.”

Sen. Kay Bailey Hutchison (R-Texas), another firm Amtrak supporter, also tried to help out. She and seven other Senators wrote a letter dated October 20 to Senate Majority Leader Bill Frist and Senate Appropriations Committee Chairman Ted Stevens (R-Alaska) to “retain the $1.346 billion.

“If we do not at least maintain this funding level for Amtrak, we will force Amtrak to limp along for another year.”

The Senators stated they were concerned Amtrak’s capital plan did not “adequately address the needs of the national system outside the Northeast Corridor,” and urged money be spent on long-distance routes.

The other signers included John Warner (R-Va.)


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AAR urges Congress to oppose
rail re-regulation; industries join rail view, too

The nation’s railroads today urged Congress to reject S. 919, the so-called Railroad Competition Act of 2003, which would to re-regulate the railroad industry.

In testimony prepared for the Senate Subcommittee on Surface Transportation, Edward R. Hamberger, president and CEO of the Association of American Railroads (AAR), said that while “AAR’s opposition is to be expected… what was not expected was the overwhelming outpouring of opposition to this bill from the railroad customer community.”

He noted that almost 400 rail customers wrote to Congress to oppose the legislation.

“They range from large international companies like Ford, GM and 3M to specialized customers like Wyo Ben Inc. in Billings, Mont.; Superior Graphite in Chicago; and Arizona Wood Preserving in Eloy, Ariz. They span the entire spectrum of economic activity from Schneider Trucking to the Port of Lake Charles, La., to Oregon Steel Mills in Portland, Ore., to Pennington Seed Co. in Madison, Ga.”

Hamberger pointed out that some of the opposition comes from members of Washington-based associations “agitating for this bill. For example, some 20 letters come from NITLeague members; the paper and forest product industry is well-represented in its opposition, from industry leader Georgia Pacific to Bennet Forest Industries in Elk City, Idaho. The utility industry (is) represented by DTE and Mid America Energy – along with one of the largest coal producers, Arch Coal. Even chemical industry customers such as Texas Petrochemical and Solvay Engineered Polymers have written to oppose S. 919,” he said.

Hamberger stated the argument over re-regulation “is not a fight between railroads and their customers, but rather a fundamental difference between some customers who continue to cling to the belief that government should dictate the market place and the rest of America’s shippers who understand and recognize how deregulation has improved service and lowered rates.”

Supporters of re-regulation, Hamberger said, believe government “should intrude by placing a cap on prices, imposing uniform pricing by severely restricting the use of differential pricing, taking away from the railroads the operational efficiencies of routing prerogatives.” These policies, he said, would “drag rates down, thereby making it impossible for railroads to ever earn their cost of capital.”

He said that rail customers opposing reregulation realize that rail rates have gone down an average of 60 percent since the Staggers Rail Act of 1980 partially deregulated railroads and recognize that the reforms from Staggers are necessary for the railroad industry to meet its massive capital needs, in AAR’s view.

Hamberger said the choice boils down to this: “Do the railroads remain a self-sustaining private industry, or do we return to an era of heavy regulation, capital starvation, poor service and eventual bankruptcy or nationalization?”


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JetTrain

For NCI: ©Dennis Zaccardi

Bombardier’s JetTrain visited Miami, Orlando and Tampa earlier this month. Here it is parked near Amelia Street on the Florida Central Railroad in Orlando on October 3.

 

JetTrain may begin Canadian service

Canadian Transport Minister David Collenette said on Friday $529 million (C$692.5 million) will lay the groundwork for Bombardier’s high-speed JetTrain for service between Windsor, Ont., and Quebec City, La Presse Canadienne reported last week. The project would likely rely on JetTrain technology being developed by Montreal-based Bombardier.

By Friday, the plan was beginning to unravel because the chaotic state of Canadian politics means there is no guarantee the money will ever be spent, according to Reuters News Agency, and because Collenette had to spend most of his time defending the idea of committing the man expected to be the next prime minister, Paul Martin, to five years of expenditures apparently without consulting him.

After years of delays and obstacles, Collenette was expected to okay the project, according to sources who asked not to be identified. They spoke with Canadian Press’ French service. Collenette has said an additional $2.3 billion will be needed to complete the network.

The new spending is to begin next April 1, after Martin takes over from Jean Chretien as prime minister, and it was not provided for in a federal budget set out in February – but Collenette said the government was acting within its rights.

“There was a cabinet decision,” he told a news conference Friday.

“It is totally legitimate for a government, which has the right to govern, to make a decision which is in the spirit of a five-year-old policy.”

The subsidies are on top of an annual grant of C$171 million to the state-run Via Rail passenger service and a further C$402 million announced in April 2000 for capital improvements.

Almost half of the new money is slated to make improvements on the most heavily traveled corridor, from Quebec City to Windsor, Ontario, but it fell well short of Via Rail’s C$3 billion dream to bring in what it dubbed “higher-speed rail.”

Funding for the project will be spread over several years, and would include improvements to tracks as ell as new locomotive purchases by Via Rail.

The improvements would decrease travel time on Canada’s busiest stretch of track, but the new line wouldn't go into service for between five and seven years because of the work involved, La Presse Canadienne reported.

A high-speed line between Canada’s two most populous provinces has been on the drawing board for decades but it gained new life last year when the federal government asked Via Rail to draft a plan for the upgraded rail network.

A detailed outline was submitted to the cabinet last fall that would see the Bombardier trains travel at 125 mph, making the trip between Montreal and Toronto in three hours. The trip currently takes four hours and 30 minutes.

“This is something the current administration can saddle the next one with without any of the responsibility of having to actually come up with that money,” Jim Gouk of the official opposition Canadian Alliance party told reporters.

“That’s why I believe this is the most irresponsible thing I’ve seen this government do in some time.”

Martin is scheduled to take over from Chretien no later than February, and would be expected to have a budget of his own shortly after taking office.

Collenette evaded repeated questions about whether he had talked to Martin before making the announcement. The minister would only say he had gone through the proper procedures of consulting cabinet and government bureaucrats.

There appeared to be nothing legally to prevent Martin from killing the package once he takes power, but Martin aides have voiced concern that government departments were ramping up spending promises to try to tie his hands politically.

Martin ally Stan Keyes, chair of the Liberal caucus in Parliament, questioned why so much money was going to be spent on a rail system that accounted for just 0.1 percent of all Canada’s domestic transportation.

“Via Rail apparently has asked for this money, or the minister is prepared to give Via Rail the money, on a proposal that we have never seen, on a proposal that we’re not sure what the benefits will be,” he told CBC television.

“There can only be one government at a time. The government’s under no obligation to consult Mr. Martin,” said Scott Reid, a spokesman for the incoming prime minister.

“The government of the day has every right to take decisions affecting spending priorities, but so, too, the new government will have a responsibility to review those decisions with an eye to ensuring that the public purse is well-managed.”

Reid said Martin would certainly review this decision, adding, “In the meantime, Via Rail would be well-advised to not plan on spending a dollar of this new money,” Reuters reported.

He added, “The fiscal outlook promises to be somewhat constrained and, as such, we’re going to have to all make important choices about competing priorities.”

The subsidies were not flagged in February’s federal budget, which is where most new spending initiatives are outlined.


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CSX wants Richmond station change

CSX has told Amtrak that it wants Amtrak to abandon its Staples Mill Station because there’s too much freight traffic on the line.

According to Mike Jerew, who’s in charge of Amtrak Station Services for most of Virginia, CSX wants to run Amtrak trains to Main Street Station on the old Piedmont Sub from Doswell, which would also eliminate all service to Ashland.

Meanwhile, a new passenger track connection from Main Street Station to the Florida main would have to be rebuilt. CSX removed a Florida platform track many years ago.

Main Street Station is slated to open in December, but does not include a connection to Florida. Only a couple of Newport News trains will use the station, which will be unstaffed. The Florida connection was supposed to be in “Phase 6” of the renovation because CSX wants something in excess of $6 million to relay the tracks. That figure was cited before the renovation of the Main Street station began about six years ago, when there was money available.


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COMMUTER LINES...  Commuter lines...

Senate questions transit leasing

Cities such as Boston, Chicago and Washington are reaping millions of dollars leasing their mass transit systems to private companies that use them as tax shelters, an anonymous witness told a Senate hearing, testifying October 21 behind a screen with his voice electronically distorted.

The AP reported “Faced with local budget deficits, state and local governments are leasing off infrastructure assets at a record rate,” said the witness, dubbed “Mr. Janet,” who was described as a former leader in the leasing industry.

“The subway systems of Boston, Chicago and Washington, D.C., have been leased and leased back to U.S. corporations,” he said.

Officials in the three cities said they use leasing transactions and described them as a revenue boon for transit agencies often strapped for cash to make upgrades.

“They are common throughout the transit industry,” said Jonathan Davis, the financial officer and deputy general manager at the Massachusetts Bay Transportation Authority.

Michael Fleming, president of the Equipment Leasing Assn., said the transactions can be compared with home equity loans – a way for cities to borrow against their assets to raise much needed capital; but Senate Finance Committee Chairman Charles Grassley (R-Iowa), said the practice crosses a line.

“Roads and bridges built with tax dollars are leased out to shelter promoters so major corporations can get a phony tax deduction,” Grassley said.

“Even the subway system of Washington, D.C., our nation’s capital, has been leased as part of a shelter scheme. We need to shut down this type of tax shelter and all others in the process.”

Transit systems, however, have found a cash cow in the deals.

Davis said his agency, which runs Boston’s transit system, has generated $53 million since 1995 in lease transactions that included, among others, the Bank of New York. A spokeswoman for the bank declined to comment.

The Chicago Transit Authority has gathered $115 million in eight deals since 1995, with transaction fees ranging from $200,000 for buses to more than $40 million for rail cars, said spokeswoman Noelle Gaffney.

Those transactions involved, among others, Wachovia Corp., which declined to comment. Gaffney said her agency is considering another lease deal for more buses next year.

Washington has made $100 million on several transactions, said Lisa Farbstein, spokeswoman for the Washington Metropolitan Area Transit Authority.

“It’s considered a pretty entrepreneurial approach to generating needed funds,” she said.

Officials said they see nothing wrong with the deals, pointing out that the Federal Transportation Authority must approve many. Farbstein said the approach is even outlined in a 1995 FTA brochure for transit systems titled “Innovative Financing Handbook.”

Officials in Boston and Chicago said they adjusted their leases when the IRS ruled certain transactions illegitimate in 2002.

Those transactions were known as “lease-in, lease-out,” or LILOs. A city would lease its asset to a company in exchange for a payment. The company then leased the asset back to the city and took a tax deduction based on the asset’s depreciation.

Tuesday’s anonymous witness, Mr. Janet, said new variations that rely on service contracts treated as leases, called SILOs, are no more legitimate.

Fleming, speaking for the leasing association, disagreed. He said companies no longer use the lease-in, lease-out transaction. “As far as we’re concerned, they’re history,” he said. “They’re done.”

Current leasing practices, he said, have been long used by tax-exempt entities like cities and hospitals to acquire financing for and use of equipment. “The service contract model is based on a privatization arrangement commonly used and not regarded as abusive,” he said.

Members of the Senate panel have proposed legislation that would disallow the newer leases involving service contracts.


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PATH returns to ‘Ground Zero’

A PATH train, carrying only a conductor and an engineer, zipped under the Hudson River and eased into New York City’s bare-bones station at Ground Zero October 22. The commuter train came to a stop at 1:42 p.m., weeks ahead of schedule. There was neither fanfare nor political speeches – but the moment foreshadowed a significant triumph in the long, hard recovery of lower Manhattan. It also marked a painful moment for some who lost loved ones and consider the disaster site sacred ground.

Following $566 million in repairs, wrote the New York Daily News, PATH will resume normal service to the World Trade Center site in November, allowing thousands of commuters to get to and from the city’s southern tip with greater ease. Final checks, including three test runs of the train last week, are being completed to remove any glitches.

“The reopening of the PATH will be a momentous occasion and a true milestone, as we continue to rebuild and revitalize lower Manhattan,” said Mollie Fullington, a spokeswoman for New York Gov. George Pataki (R).

About 67,000 riders took PATH to the Trade Center daily before a pair of hijacked jets destroyed the twin towers on September 11, 2001. No one died in PATH tubes or stations during the attacks, although an empty train at the Trade Center was buried under debris.

The century-old, cast-iron tunnels held strong, but water from broken mains flooded the tubes all the way to Jersey City, short-circuiting electrical systems. Some 3.5 miles of new track had to be laid, some trespassing on the twin towers’ footprints, where the vast majority of dead were recovered.

A coalition of victims’ families opposes a Port Authority plan to expand the PATH station to accommodate more trains by 2006. The $2 billion terminal would encroach on both footprints.

“If they leave the station [configured] the way it is now, we will not be upset,” said Jack Lynch, whose son Michael, a firefighter, died at Ground Zero.

“This is difficult,” he added, staring at the train.


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New Haven-Springfield commuters?

Mayors from New Haven, Conn., and nearby communities along with first selectmen voted unanimously October 22 to urge the state DOT to start regular commuter rail service between New Haven and Springfield, Mass., to reduce congestion and spur economic development.

The action came in the form of a resolution asserting the region’s support for a slightly beefed-up version of the less ambitious and less expensive of two options presented to a New Haven, Hartford, Springfield Commuter Rail Steering Committee, which was set up to study the issue, according to the New Haven Register.

“I think it is important… if we are in favor of the service, that we let them know that,” said Judy Gott, executive director of the South Central Regional Council of Governments. Gott is a member of the steering committee set up by the state Transportation Strategy Board.

The line is served by four Amtrak trains in the morning and four in the afternoon and evening, “but the service that they’re providing does not meet the needs” that would be met by full-blown commuter service similar to what the Shore Line East railroad provides to and from Shoreline communities east of New Haven, Gott said.

The council resolution calls for a modified version of an $80 million “minimum build” alternative. It calls for stops at nine existing stations – New Haven’s Union and State Street stations, Wallingford, Meriden, Berlin, Union Station in Hartford, Windsor, Windsor Locks and Union Station in Springfield, according to a study by Wilbur Smith & Associates.

It would offer trains every 30 to 35 minutes from 7:00 to 9:00 a.m. and 4:00 to 6:00 p.m. weekdays. It would require no additional track and minimal additional parking, serve an estimated 1,800 daily commuter riders plus about 600 weekday Amtrak riders and have a similar fare structure to Shore Line East’s fares.

An option the council recommended would add a North Haven-Hamden station at Devine Street and the Route 40 connector, expanded parking in Wallingford and Meriden, include weekend and reverse-commute service and employ shuttle bus service rather than a rail spur to Bradley International Airport.

Bradley’s governing board already is on record in favor of shuttle bus service, Gott said.

Devine Street already has a platform that once was an Amtrak stop, said North Haven First Selectman Kevin Kopetz.

The $481 million maximum-build option would add seven stations, including the North Haven-Hamden station and one near Wharton Brook State Park near the North Haven-Wallingford border. It would offer trains at 15-minute intervals during peak hours, include two Bradley rail spurs and attract an estimated 5,000 daily riders and an estimated 2,000 riders on weekends.

The maximum-build option would cost an estimated $48.3 million annually, versus $7.1 million for the minimum-build option.

Madison First Selectman Thomas Scarpati initially questioned the extent to which ConnDOT would support New Haven-to-Springfield rail service, but later voted in favor of the resolution after prodding from New Haven Mayor John DeStefano Jr.


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NJT line shows steady growth

Ridership on the Hudson-Bergen light rail line, which now operates between Bayonne and Hoboken, N.J., has been steadily rising since it opened in 2000, according to New Jersey Transit.

Ridership increased markedly after the major disruption to the PATH system beginning on September 11, 2001 and when the line was extended from its initial northern terminus in Jersey City to Hoboken.

Current peak daily ridership shows 16,000 daily commuters aboard the trains. When the service began in April 2000, 3,000 people rode the Hudson-Bergen Light Rail system.

Mobilizing the Region, published by the Tri-State Transportation Campaign, reported last week during the immediate post September 11 period, ridership spiked to a record daily level of 18,000. Fare collection was even suspended for a time.

NJT expects daily ridership to increase to 28,000 after the 6-mile link between Weehawken and North Bergen is completed in five years. The Journal News reported that 31 percent of the light rail’s riders had previously driven – perhaps to ferry terminals or PATH stations – indicating the line has been successful is getting traffic off of northern New Jersey’s congested roadways. It has also been a boon to development and housing on Jersey City’s waterfront.

New Jersey officials said last week they would soon name a starting date for the state’s second light rail line, between Camden and Trenton. The project has been roundly criticized as an overly intensive investment for a low-density corridor. The $1 billion system will run 34 miles and serve 20 stations. It is expected to carry about 6,000 daily riders.

If it lives up to its most positive billing, it will encourage investment and growth in towns along the Delaware River, eventually building an even larger customer base.


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Houston plan awaits vote

Houston’s Metro Rail released a budget last week showing it could complete its proposed 73-mile rail expansion by 2024 if voters endorse a larger second bond issue later in the decade.

For almost two months, debate has focused on funding for a more modest rail initiative, a $640 million bond issue that will be on the November 4 ballot, according to the Houston Chronicle of October 22.

Critics have attacked that proposal because it will pay for only 22 miles inside Loop 610.

With less than two weeks before the election, Metropolitan Transit Authority officials now are promising that their entire rail system, including many miles outside the Loop, can be built in the next 21 years.

“We’re doing everything we can to tell voters it’s a 73-mile plan,” said Metro Chief Financial Officer Francis Britton, armed with a proposal dated August 25 showing construction costs for the complete transit-expansion plan would top $7.5 billion, including $5.8 billion for all 73 miles of rail – 65 miles of light rail and an 8-mile commuter spur to Fort Bend County. Also included are $979 million for new bus routes and $774 million for additional roadwork.

Metro had previously floated a projection of $2.8 billion to construct 40 miles of rail by 2019. That projection included asking voters for $340 million in bonds around 2009. The August 25 document would almost triple that future bond proposal to complete the rail system by the plan’s 2025 expiration.

Rail opponents, who have criticized Metro numerous times for what they believe are faulty financial projections, said this development only proves their point.

Chris Begala, a spokesman for Texans for True Mobility, said he suspects this week’s clarification was issued because of criticism that the 40 miles of rail in the construction phase now before voters barely extend beyond the Loop. TTM, formed to oppose Metro’s plan, contends the Inner Loop rail lines won’t reduce traffic congestion.

Begala said the transit authority is making promises it can’t afford.

“Metro has been like daddy at Christmas time, trying to give everybody everything they want,” Begala said, “but in reality, you can’t.”

Metro said its numbers aren’t wishful thinking: If the November 4 referendum is passed and voters endorse $910 million in additional bonds toward the end of this decade, the transit authority contends it could complete the system blueprint laid out in its 2025 “Metro Solutions” plan.


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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.


Mexican President Fox Launches Country’s First BRT Line

President Vincente Fox and state governor Juan Carlos Romero launched Mexico’s first Bus Rapid Transit system, operated by the Department of Transportation of the central Mexico state of Guanajuato, last month in Leon.

Other dignitaries at the opening ceremony included Leon Mayor Luis Torres and Federal Secretary of Transport Pedro Cerisola.

The network, known as the “Integrated Transport System,” is expected to serve approximately 400,000 daily riders when the system is fully operational, which would make it the largest BRT system in North America.


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Reno’s Citifare Celebrates 25th Anniversary

The Regional Transportation Commission/Citifare in Reno, Nev., launched 25 days of celebrations Oct. 3 to mark the twenty-fifth anniversary of the transit system.

Citifare has provided more than 154 million passenger trips in its 25 years of service to the Truckee Meadows.

Citifare began service with six used buses from the Chicago Transit Authority on the morning of Sept.18, 1978, serving four bus routes. During its first year of service, ridership was 360,000 passenger trips.

Today, the system operates 70 buses on 27 routes across Washoe County, and ridership averages more than 7.5 million annual riders. The RTC has received honors from APTA, including the Outstanding Public Transportation System Award and four awards for its safety record.


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GRTA Board Appoints Stancil Executive Director

The Georgia Regional Transportation Authority Board of Directors unanimously appointed Steven L. Stancil to serve as GRTA executive director at a meeting October 8. Georgia Gov. Sonny Perdue recommended Stancil, a real estate appraiser and former state representative, for the position.

Jim Ritchey, who had served in the post on an acting basis since January, will remain with the authority in his previous role as deputy director. Ritchey took over the post after Dr. Catherine L. Ross stepped down at the request of the governor.

Stancil served in the Georgia State House from 1988 to 2001, representing the communities of Woodstock, Canton, Holly Springs, Waleska, and Ball Ground. He was elected House Republican Leader by his colleagues in 1992, and has received the “Legislative Service Award” on three different occasions from the Georgia Municipal Association and the Association of County Commissioners of Georgia.


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St. Louis Metro Operators, Maintenance Employees Approve Contract

Members of Local 788 of the Amalgamated Transit Union, representing Metro employees in St. Louis, voted Oct. 9 to ratify the terms of a three-year contract previously approved by the Metro Board of Commissioners. The union represents MetroBus and MetroLink operators and mechanics.

The contract, which runs from Oct. 1, 2002, to Sept. 30, 2005, calls for a 7 percent wage increase over the term of the agreement: 2.5 percent each in the first and second years, and 2 percent in the third year. It also provides for pension improvements and increases in pensions for employees who retired more than 10 years ago.


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FREIGHT LINES...  Freight lines...

CN buys U.S. regional lines

CN said on August 20 it has agreed to acquire the railroad and related holdings of Great Lakes Transportation LLC for $380 million in a transaction that “will improve CN’s NAFTA rail link between Western Canada and Chicago and expand its role in the transportation of bulk commodities for the U.S. steel industry.”

The U.S STB will have the final say. If the STB treats the transaction as a minor one, as CN expects it will, CN expects to close the transaction by mid-year 2004, and would exercise control of the GLT carriers soon after receipt of requisite approvals.

Under the transaction, CN will acquire two railroads, a switching company, and a fleet of Great Lakes vessels from Monroeville, Pa.-based GLT, a company controlled by The Blackstone Group.

The railroads include the Class II 212-mile Duluth, Missabe and Iron Range Ry. It is a common carrier hauling pelletized iron ore in the U.S. CN will also get Bessemer and Lake Erie Railroad Co. another Class II railroad carrying primarily coal, iron ore and limestone between the Lake Erie port of Conneaut, Ohio, and steel mills in the Pittsburgh area.

The Canadian giant will also pick up The Pittsburgh & Conneaut Dock Co., a Class III switching railroad that performs ship-to-rail and rail-to-ship bulk transfer operations for the B&LE at three docks at Conneaut.

E. Hunter Harrison, CN’s president and CEO, told the Canadian Press his company will be able to move its freight trains efficiently across Minnesota and through existing CN-owned lines in Chicago and New Orleans.

“It gives us greater efficiencies in terms of north-south traffic flows, which are growing faster than east-west traffic flows,” said CN spokesman Mark Hallman.

Southbound exports from Western Canada include forest products, grain, potash, various fertilizers and petrochemicals.

Harrison said “CN’s acquisition of the GLT carriers will drive new efficiencies in our network, improve customer service, preserve competition and expand our participation in the steel industry’s bulk materials supply chain.”

He expected the transaction also to be “good news for the Mesabi Range iron ore-producing region of Northern Minnesota. It will strengthen its transportation ties to the U.S. steel industry in the Midwest and Pennsylvania.”

He explained “The transaction will give us ownership of a 17-mile segment of DM&IR track in the Duluth, Minn.-Superior, Wis., area that is an essential part of CN’s Chicago-Western Canada main line. CN currently operates over this short segment of track under a trackage rights agreement with DM&IR.”

In short, the purchases are more efficient for CN.

“By owning parallel CN and DM&IR lines in the 64-mile rail corridor north of Duluth-Superior, we will be able to move our freight trains through the region more efficiently and avoid capital expenses we would otherwise incur for improvements to our existing line.”

Gordon T. Trafton, CN’s senior vice-president, U.S. Region, said, “We believe GLT customers will benefit from being served by CN, whose only business is rail service and which has the financial wherewithal to invest in freight cars, locomotives, dock facilities and capital works that underpin a crucial supply chain for the steel industry. Second, the transaction will preserve shipper choice, as demonstrated by our commitment to keep open all active gateways.”

A CN spokesman said the GLT carriers would increase CN’s annual revenues by about $285 million, in Canadian dollars. CN plans to finance the transaction with debt and expects the acquisition to be accretive to earnings per share and free cash flow in the first year of control of the GLT carriers.


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KCS gets temporary injunction

A Delaware court judge has issued an injunction on behalf of Kansas City Southern Ry. against Mexican operator Grupo TMM, according to KCS.

KCS said on October 22 that Chancellor William B. Chandler III of the Court of Chancery of the State of Delaware indicated he would issue the temporary injunction in a ruling from the bench, stated his intention to grant KCS’ motion seeking a preliminary injunction “to preserve the status quo pending resolution of KCS’ dispute with Grupo TMM.”

Chandler stated that he would issue a written order enjoining TMM from taking any action in violation of the terms of the April 20 acquisition agreement with KCS pending resolution of the dispute between KCS and TMM, “in accordance with the terms of the dispute resolution procedures set forth in the Acquisition Agreement.”

KCS stated it expects the written ruling to be issued “within the next few days.”

In accordance with the terms of the acquisition agreement, KCS said it would “initiate arbitration to resolve the dispute as soon as possible following the expiration of the 60-day informal negotiation period called for under the acquisition agreement.”

That period began on August 29.

Marco Provencio, a TMM spokesman said, “Chancellor Chandler expressed his interest of concluding the arbitration process as soon as possible. We believe it is the right of TMM’s shareholders to have the free will to decide on their interests; however, we also understand that the Chancellor preferred not to expand on this issue. The company will provide additional information once the arbitration process has begun.”

TMM is headquartered in Mexico City.


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BC Rail writes union pact

BC Rail reached a tentative agreement with its unions, the railroad reported on October 23.

The railroad, owned by the B.C. provincial government, is now awaiting word on a pending privatization deal.

Terms of the labor agreement were not released, pending a vote by some 1,500 employees. That is expected to take about six weeks to complete, Reuters reported. The previous contract expired at the end of last year.

British Columbia is seeking a private company to take over operations of the 1,450-mile railway, which reported an operating profit in its last fiscal year but has struggled under a debt of more than $590 million in Canadian dollars.

Canada's two largest railways, Canadian National and Canadian Pacific, have submitted bids, as has private shortline operator OmniTRAX in coordination with U.S.-based Burlington Northern Santa Fe Corp.

BC Rail's unions, who bargain in a joint council, have strongly opposed the plan to lease the publicly owned tracks to a private operator because it is expected to eliminate hundreds of jobs.

The provincial government had been scheduled to select a final bidder by the end of September, but officials are reviewing the proposals.


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Kuhn named NYRR chairman

Gordon Kuhn is New York Regional Rail Corp. new chairman. The railroad’s directors approved the nomination on October 23.

Kuhn retired from Conrail after serving as senior vice-president in charge of its Core Business Group. He was a key figure in Conrail’s monumental restructuring – a $1 million daily loss was transformed into a $2 million daily profit.

CSX and Norfolk Southern purchased CR in 1999 for $10.2 Billion.

NYRR also extended a contract with Unified until July 2006. The new agreement contains railcar transportation and storage charges, as well as a “Facility Use Payment” totaling $30,000 annually. Also, in connection with the agreement, Unified has made non-refundable payments to the Company totaling $180,000.


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Intermodal sets another weekly record

Intermodal traffic on the nation’s railroads set another record during the week ended October 18, breaking the previous mark which was set just three weeks earlier, the Association of American Railroads (AAR) reported Thursday.

The total of 211,237 trailers or containers was 1,138 more than were moved during the week ended September 27 when the previous record was set. The five highest weekly intermodal totals for U.S. railroads have all occurred over the past six weeks. In the most recent week, intermodal volume was up 5.2 percent from the comparable week last year, with trailer volume registering an 11.8 percent gain and container traffic increasing by 2.9 percent.

Carload freight, which does not include the intermodal data, totaled 347,466 cars, up 1.5 percent from last year with volume up 1.8 percent in the East and 1.2 percent in the West. Total volume was estimated at 31.4 billion ton-miles, up 3.0 percent from last year.

Among the 10 carload commodity groups registering gains from last year were coke, up 3.1 percent; farm products other than grain, up 16.0 percent; and chemicals, up 5.9 percent. Nine commodity groups were down from last year with metallic ores down 10.5 percent and motor vehicles and equipment off 4.3 percent.

The AAR also reported the following cumulative totals for U.S. railroads during the first 42 weeks of 2003:

13,666,270 carloads, down 0.2 percent from last year; intermodal volume of 7,984,106 trailers or containers, up 6.6 percent; and total volume of an estimated 1.21 trillion ton-miles, up 1.0 percent from last year’s first 42 weeks.

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. Railroads provide more than 40 percent of the nation’s intercity freight transportation, more than any other mode, and rail traffic figures are regarded as an important economic indicator.

On Canada’s railroads, carload freight was up during the week ended October 18, but intermodal traffic was off slightly in comparison with last year. Carload volume totaled 66,172 cars, up 3.9 percent, while intermodal traffic totaled 40,524 trailers or containers, down 2.0 percent from last year. The week included the Canada’s Thanksgiving Day holiday.

Cumulative originations for the first 42 weeks of 2003 on the Canadian railroads totaled 2,597,390 carloads, down 0.7 percent from last year, and 1,745,997 trailers and containers, up 6.9 percent from last year.

Combined cumulative volume for the first 42 weeks of 2003 on 15 reporting U.S. and Canadian railroads totaled 16,263,660 carloads, down 0.3 percent from last year and 9,730,103 trailers and containers, up 6.7 percent from last year.

The AAR also reported that originated carload freight on the Mexican railroad Transportacion Ferroviaria Mexicana (TFM) during the week ended October 18 totaled 8,315 cars, down 7.0 percent from last year.

TFM reported intermodal volume of 3,491 originated trailers or containers, down 15.2 percent from the 42nd week of 2002. For the first 42 weeks of 2003, TFM reported cumulative originated volume of 353,709 cars, down 1.5 percent from last year, and 145,879 trailers or containers, up 16.0 percent.

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


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STOCKS...  Selected Friday closing quotes...

Source: Bloomberg.com

  Friday One Week
Earlier
Burlington Northern & Santa Fe(BNI)28.18029.720
Canadian National(CNI)59.35054.900
Canadian Pacific(CP)27.22026.120
CSX(CSX)29.78030.550
Florida East Coast(FLA)27.97029.460
Genessee & Wyoming(GWR)24.82026.330
Kansas City Southern(KSU)12.77012.750
Norfolk Southern(NSC)18.85019.300
Union Pacific(UNP)60.06059.370


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QUARTERLY REPORTS...  Quarterly reports...

BNSF

Burlington Northern Santa Fe Corp. (BNI) (BNSF) today reported third-quarter 2003 earnings of $0.55 per share compared with third-quarter 2002 earnings of $0.51 per share.

“Strong volumes in international and truckload intermodal coupled with an increasing export demand for wheat and growing demand for paper, construction products and building products contributed to record third-quarter revenues,” said Matthew K. Rose, BNSF Chairman, President and CEO.

“We saw improvements in pricing and volume despite the continued softness of the U.S. manufacturing sector,” Rose said.

Freight revenues for the third quarter increased $83 million, or 4 percent, to a record $2.37 billion compared with 2002 third-quarter revenues of $2.28 billion.

The carrier stated in a press release, “Third-quarter freight revenues included increased fuel surcharges of $22 million compared with the prior year,” and “Consumer products revenues increased $48 million, or 5 percent, to a record $929 million reflecting continued growth in the international, truckload and perishables sectors as well as growth in existing business.”

Industrial Products revenues rose $30 million, or 6 percent, to a record $554 million reflecting strong demand for paper, lumber, aggregates and clay. Agricultural Products revenues were up $29 million, or 9 percent, to $371 million, as a result of increased export demand for wheat and greater ethanol shipments from Midwest plants to California. Coal revenues decreased $24 million, or 5 percent, to $511 million as a result of less demand due to milder summer weather and flooding at mines in the Powder River Basin, which limited loadings.

Operating expenses of $1.97 billion were $76 million, or 4 percent, higher than the same period in 2002. Increases in operating expense were primarily driven by a $45 million, or 21 percent, increase in fuel expense compared with the third quarter of 2002.

Operating income rose $11 million, or 3 percent, to $430 million for the third quarter of 2003 from $419 million for the third quarter of 2002. BNSF’s operating ratio was 81.8 percent compared to 81.6 percent for the same period in the prior year.


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CN

Third-quarter profit at Canadian National Ry. Co. (CA:CNR) rose 10 percent despite the negative effects of a surging Canadian dollar, the company reported on October 21.

CN said earnings were $223 million (U.S.) or $1.53 a share (Canadian), in the latest third quarter. That compared with a profit of $268 million or C$1.32 in the year earlier period.

Revenues slipped to C$1.41 billion from C$1.5 billion, it said in a statement.

Montreal-based CN said its improved results reflect increased intermodal revenue, recovery in Canadian grain shipments, solid cost control, and favorable tax adjustments of C$30 million, or 16 Canadian cents a share.

“The significant year-over-year appreciation of the Canadian dollar relative to its U.S. counterpart during the quarter reduced revenues by C$100 million, although the stronger Canadian dollar helped our expense performance by C$70 million,” CEO E. Hunter Harrison said in a statement.

“CN also contended with the unprecedented electrical power blackout in Ontario and the Midwest in August, and major summer forest fires in British Columbia.”

Harrison said the strong Canadian dollar will remain a challenge in the month ahead but the railway expects continued strength in Canadian grain shipments and a gradual improvement in North American economic output.


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FEC

Florida East Coast Industries, Inc. (FLA) (FECI) stated last week profits showed small gains for the third quarter ended September 30.

Robert W. Anestis, Chairman, President and CEO stated: “In the third quarter of 2003, our railway and realty businesses continued to show gradual improvement. Railway freight revenues increased over the prior year quarter for the eighth consecutive quarter, and operating profit before depreciation increased, compared to the prior year quarter.”

FECI reported consolidated revenues of $87.1 million for the third quarter 2003, compared to $58.2 million for the third quarter 2002. Revenues included realty sales of $25.3 million for the third quarter 2003, compared to $2.6 million for the third quarter 2002.

Losses from continuing operations was $200,000, or $0.00 per diluted share, for the third quarter 2003 (which includes $5.6 million of after-tax profit from land sales and $10.1 million of after-tax expense for the estimated cost of ending a long-term ground lease), compared to income of $4.1 million, or $0.11 per diluted share, for the third quarter 2002 (which includes $1.0 million of after-tax profit from land sales).

FECI reported consolidated net income of $1.0 million, or $0.03 per diluted share, compared to net loss of $147.4 million, or $4.02 per diluted share, for the prior year quarter. Included in net income is income or loss from discontinued operations related to a building and partnership interests sold, a building held for sale, and the Company’s former telecommunications and trucking businesses.

For 2003, the company has raised its expectations for railway segment revenues slightly to a range of $177 to $180 million, and continues to expect the segment’s operating profit to be comparable to 2002. Capital expenditures for the railway are expected to range between $26 and $28 million.

FEC revenues increased 11.9 percent to $44.7 million for the third quarter 2003 over the prior year period. Included in the revenue increase is $2.7 million of revenue from trucking operations managed by the railway as a result of discontinuing the trucking division in late 2002 and $300,000 in fuel surcharges.

Carload revenues grew 6.8 percent primarily due to a 17.6 percent increase in aggregate revenues, reflecting a combination of strong construction demand and new business from existing customers partially offset by a 19.8 percent decrease in revenues from transporting vehicles.

Intermodal revenues increased 3.2 percent, compared to the prior year period. Increased revenues from the Hurricane Train service from Atlanta to South Florida and business from new and existing retail intermodal customers more than offset a decline in revenues from a connecting carrier for intermodal haulage and from LTL carriers.

The railway segment’s operating profit increased to $10.8 million versus $9.7 million due to higher revenues, which was partly offset by higher depreciation expense. The railway’s operating ratio was 75.9 percent, compared to 75.6 percent in the prior year quarter. The operating ratio was impacted by the addition of lower margin drayage operations that are currently managed by the railway as a result of discontinuing the trucking division in late 2002.


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NS

Norfolk Southern Corp. (NYSE: NSC) reported on October 21 its regular quarterly dividend of 8 cents per share on its common stock, payable on December 10 to stockholders of record on November 7.


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UP

Union Pacific Corp. (UNP) on Thursday posted lower quarterly profits as costlier fuel ate into earnings, but the results beat Wall Street estimates.

Meanwhile, Moody’s rating service increased its ratings for the railroad.

The Omaha-based company said third-quarter profit was $317 million, or $1.21 a share. A year earlier, profit was $437 million or $1.63 a share, and included gains from a property sale and tax settlements equal to 44 cents a share, Reuters reported on October 23.

Wall Street had expected profit between $1.12 a share and $1.18 a share, according to Reuters Research. The average forecast among analysts was $1.15 a share.

“As in the first half of the year, fuel prices continued to be a drain on earnings, adding nearly $50 million to third quarter expenses,” Chairman Dick Davidson said.

Revenue in the quarter rose 4 percent from a year earlier to nearly $3 billion and reflected strong gains in revenues for carrying agricultural, industrial and energy loads, the company said.

UP said its operating income from continuing operations was $592 million, down from the $619 million in 2002’s third quarter.

Moody’s state on October 20, “UP also has a strong record of operating cost management. Each business unit is expected to post productivity gains to at least offset inflationary pressures – increasingly a challenge, but achievable, in Moody’s view.”

The investment advisory service noted, “Continued outsourcing of locomotive maintenance, full implementation of remote control devices in yard and switching operations, automated crew calling, and the lower railroad retirement tax are all expected to benefit costs going forward. UP has good labor relations with manageable contracts in place for substantially all of the crafts.”

In Moody’s view, “UP’s unfunded pension obligation is comparatively modest, considering the size of the company and the number of retirees. Most of UPs retirees are covered by the Railroad Retirement Act, which UP has been funding currently. UP also has a strong record of corporate governance; the board is independent and the directors have broad and balanced experience and are active in the oversight of UP’s business.”


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OFF THE MAIN LINE...  Off the main line...

Last Baldwin finds a new home

A prize is in hand for the operators of the Iron Horse Central Railroad Museum in Minnesota’s south Chisago Lake Township. Better yet, the prize is on the tracks.

The museum recently bought Baldwin’s last locomotive, a diesel, writes the Forest Lake Times.

Baldwin Locomotive Works built the engine in 1956 at its Eddystone plant near Philadelphia, and carries builder’s plate number 76151. Baldwin operated from 1831 until 1972 when its doors closed for good, and locomotives were built from 1831 until 1956.

It was a major acquisition for the museum group that operates from Richard Thompson’s farm just north of Bone Lake.

“We'll promote it as the last Baldwin locomotive,” Thompson said, stroking a paint brush over a nameplate area where the museum operator plans to apply a numeral “2,” symbolic as the second lead engine for the Ironhorse Central.

The industrial switcher engine weighs 50 tons and was used in the Baldwin factory yards from 1956 until 1972 when it was sold. The engine was used in upstate Michigan for about 30 years before Thompson's son, Erik, learned of its whereabouts earlier this year.

The engine had been used as a switcher in a crane plant for many years before being sold to the Mineral Range Railroad, a short line operator in Marquette, Mich. The short line had planned to use the engine as a switcher along its four miles of tracks, but ruled the diesel too light for its purposes.

After sitting idle and in storage for the past year, the Iron Horse Central struck a deal to purchase the Baldwin product.

The engine was trucked 400 miles from Michigan to the Thompson farm.

Thompson said the new acquisition would be used in the Ironhorse Central yard to move cars and engines. It also may be used for pulling trains for three or four cars over the three-quarter mile oval track on the Thompson farm.

For Thompson, the addition of the Baldwin locomotive makes logical sense.

The Iron Horse Central formed in 1963 when twin brothers Richard and Robert Thompson and Doug Alexander purchased locomotive No. 4 from Dresser Traprock of Dresser, Wis. Two years later, the operating railroad found a permanent home on Thompson's farm.


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ACROSS THE POND...  Across the pond...

Deutsche Bahn InterCity Express train - ICE

For NCI: Dave Beale

A Deutsche Bahn InterCity Express train whizzes across the German landscape near Haste last March. It is ICE-2 equipment.

 

Which wins the prize – Acela or ICE?

By Dave Beale
Special to Destination:Freedom

Editor’s note: The writer is an American living in Germany where he is a civilian jet engine mechanic.

 

During a two-week long vacation to New England and New York, away from our home in the greater Hannover, Germany area, my wife Cathy and I had the chance to ride on Amtrak’s Acela Express from Boston to New York City and back.

I thought it would be fun to do a sort of Road & Track or Consumers Report comparison of America’s and Germany’s respective flagship high-speed trains as well as the stations and routes they operate on. Amtrak began operating its Acela Expresses three years ago, while Deutsche Bahn began operation of the InterCity Express (ICE) in 1989. Both countries adopted high-speed trains after Japan and France lead the way with the Shinkansen “Bullet train” and Tren a Grande Vitesse (TGV) respectively in the mid 1970s.

The Acela Express might be considered America’s second generation of high-speed train with the Metroliner of the 1970s being the first American high-speed train in regular revenue service. DB’s ICE-3, introduced to regular service in 2000, represents likewise Germany’s second generation of high-speed passenger train. DB’s ICE-1 and ICE-2 trains were the country’s first widespread high speed trains introduced in regular service at the end of the 1980s and mid 1990s respectively, and remain in service today.

The first generation ICE-1 and ICE-2 are locomotive-hauled trains with non-motorized passenger cars operated between the locomotives on either end. The ICE-3 and its closely related tilt-body diesel-electric variation are multiple unit trains with propulsion motors on every axle. With Amtrak, the opposite scenario is the case – the old Metroliner trains were EMUs and the new Acela Express is similar in configuration to the locomotive hauled ICE-1 train.

Both the ICE-3 and Acela Express started regular services with many teething problems, some of which continue to this day. ICE-3 trains have been plagued with problems in the air conditioning system, windshields in the drivers’ cabs, and numerous electronic and software bugs in the on-board computers which monitor the train’s major systems for faults or malfunctions. The diesel-electric variation of the ICE-3 has been removed from service at least twice due to cracks found in the wheel axles. Acela Express’s technical problems have been reported in numerous D:F reports.

Both Amtrak and DB offer the ability to buy tickets and reservations via their web sites. DB offers an e-ticket, which can be printed out by the customer on his or her own printer and is valid for travel. Amtrak does not offer the e-ticket option; tickets are sent via mail or can held for pick-up at a major train station ticket office. Of course, tickets on both DB and Amtrak can be bought at travel agents or at major rail stations. One can also purchase tickets on nearly all DB intercity trains from the onboard conductors, however the price will be at full fare plus a service charge, making this the most expensive option. One cannot board Acela Express without ticket in-hand.

Seating on Acela Expresses is not assigned; individual seats cannot be reserved, but seats can be reserved on all DB intercity trains for an extra charge of about $2.50 per reservation.

In my view, flexibility in buying tickets from DB is superior to Amtrak. During peak travel periods such as weekends and holidays, the option to book seats in advance to keep families or groups together is a big plus. Acela Express’ open seating could make this a major challenge, especially at stations in between Acela Express end stations at Boston and Washington.

Pricing is always a consideration when travelers are making plans.

Boston to New York and Hannover to Frankfurt represent a similar geographical distance between two cities also served by airlines and by highways.

On Amtrak, the Boston-New York roundtrip excursion fare for two is approximately $370.00.

On DB, a Hannover-Frankfurt roundtrip standard full fare for second-class seating for two is about $280.00 (in U.S. dollars).

In light of the substantially lower costs of driving an automobile in the USA compared with Germany, this is a major disadvantage for Amtrak. Despite this, the Acela Express trains we traveled on were well patronized, with some three-fourths of all seats occupied.

The interior of the Acela Express at first glance looks like the inside of a modern single aisle jet liner such as an A320 or Boeing 737 with a bright off-white colored ceiling and closed overhead luggage storage bins, but the legroom and seat width are far better in second class of Acela Express (called business class) than any coach seat in just about any airline coach seat as well as the second class of the typical ICE train. Although the interiors of the ICE trains are also bright and modern looking, one will never confuse them with the inside of an airliner.

The open luggage racks, pastel green or light brown colors, chrome accents, art deco lighting and generous use of glass dividers and doors with etched designs or patterns in the typical ICE train have little or nothing in common with any airplane.

In my opinion the clean, modular look of Acela Express’ interior is more appealing and timeless. Wear and tear from heavy use seems to make itself more apparent in the ICE’s glass, chrome and painted aluminum interior, than in Acela’s airliner based interior design which uses more fabrics, composites and high impact wear resistant plastic.

In Acela Express equipment, standard 110-volt AC outlets are installed at every seat for those who want to use their laptop computers, and no special power adapter cords required. Not all ICE trains are yet outfitted with power jacks in the seats for laptops, and those which are equipped, a special power cord similar to what is required for laptop use in airplanes is required to plug-in.

Acela Express cabins appear to be much wider than ICE. The same applies to the commuter trains we rode on in the Boston and New York areas; they are wider than their equivalent passenger coaches in Germany and elsewhere in Europe.

Commuter coaches in Boston and New York have five-across seating, whereby in Germany, France, Great Britain and elsewhere in Western Europe commuter trains have only enough width for four-across seating. Obviously the loading gauge in North America is substantially wider than in Western Europe. In Acela Expresses, the extra width provides for wider seats in four-across seating and a wider aisle than in DB’s InterCity Express trains.

An Acela Express appears to have much more space available for storage of luggage than does ICE. Extra luggage shelves are installed at the ends of the cars in Acela Expresses, which is not a feature in much of DB’s InterCity Express rolling stock. It is not uncommon for one to trip and step over luggage in the aisle of a heavily patronized ICE train.

The noise level in Acela Express seems to be somewhat higher than in ICE, mostly due to the air conditioning system, but quite acceptable. The routine and frequent blasts of the train horn on Acela Express as it passes through grade crossings or stations at speed is something almost never heard on-board an ICE, as train horns are used in Germany only in the case when the train driver is attempting to warn someone in immediate or impending danger of collision with the train.

In short, there is more legroom, aisle room and luggage storage room inside the Acelas than ICE.

Amtrak conductors ask, “May I have you tickets please? How are you folks doing today? How do you like the service today? First time on-board? Looking forward to a good time in the Big Apple? Thanks for traveling with us.”

DB Conductors state, “Tickets please.”

Both ICE and Acela Express trains feature café cars, which are remarkably similar to one another in layout. Amtrak’s café is smoke free, but in an ICE café car, non-smokers beware: you may choke to death on the thick cigarette smoke. Prices for drinks and food are approaching rip-off levels on both DB and Amtrak, but DB appears to be substantially more expensive than Amtrak’s already inflated prices. Both DB and Amtrak offer meals served at your seat for the first class passengers. DB charges extra for this, not sure if this is included in the first-class fare on Amtrak or not.

On our round-trip, the Boston-New York Acela Express operated nearly on schedule. The trip to New York was about 15 minutes late into Penn Station due to slow operation between New Haven and New York, apparently for major track renewal and bridge re-construction on one of the four main tracks. The return trip to Boston was within a minute or two of on-time operation.

When it comes to travel time, DB wins the race against Amtrak hands down. Although Acela Express hits a higher peak speed for a few moments in Massachusetts and Rhode Island than does an ICE-1 or ICE-2 on the Hannover – Würzburg high speed line en-route to Frankfurt from northern Germany from 150 mph vs. 136 mph (240 kmh vs. 220 kmh), the ICE is able to maintain 200 kmh (125 mph)-plus speeds between stations on this high-speed corridor for the majority of the trip between Hannover and Fulda, where Frankfurt and Stuttgart bound ICE trains switch to the old main line with 160, 140 and 100 kmh speed limits the rest of the way to Frankfurt.

With the exception of a few dozen miles of track in Massachusetts and Rhode Island, Acela Express rarely exceeds 135 mph, and in many sections, less than 63 mph (100 kmh). The result is that an Acela Express takes slightly over three hours to travel from Boston to New York City whereby ICE takes slightly under two and one-half hours to travel nearly the same distance from Hannover to Frankfurt.

Germany now has four dedicated high-speed rail lines.

The original Hannover-Würzburg north-south route built in the 1980s, plus Frankfurt-Stuttgart, Wolfsburg-Berlin, and most recently, Frankfurt-Köln (Cologne).

Coming soon is a new Nürnburg-Munich high-speed line, and a high-speed upgrade to the existing Hamburg-Berlin route.

Only time will tell if further progress is made in the U.S. with additional high-speed rail lines, but at least America has finally entered the elite group of nations such as Germany, France, Spain, Belgium, Italy, Japan and Korea with high-speed trains.

This month, Great Britain also entered this elite group for the first time with the start of regular Eurostar train service over the newly opened high speed Channel Tunnel Rail Link (CTRL), which permits trains operating between Paris, Brussels and London to operate at 190 mph (300 kmh) some 50 miles from the Chunnel’s mouth on the British coast to London’s outer suburbs.

The newly installed electrification to Boston saves a change of locomotive types in New Haven, but one has to question at what cost? Diesel to electric or vice-versa change of locomotive types in Germany and elsewhere in Western Europe usually take no longer than 10 minutes.

The new overhead electrification on the New Haven-Boston appears to be rather expensive from the looks of the hardware, compared to similar electrification in Germany, France and Great Britain.

Did no one from Amtrak talk to his counterparts at DB, SNCF or British Rail during the preliminary design phase?

The ability to go 150 mph over a few short sections of rail line seems like a waste of effort when much of the trip is operated at speeds in the 50 – 60 mph range.

For travelers who enjoy the scenery from the train’s windows, Acela offers more.

One sees mostly the insides of numerous tunnels or non-descript forest and farmland in the valleys below numerous bridges along the Hannover-Würzburg and Frankfurt-Köln high-speed lines from DB’s ICE trains.

On Acela Expresses, views of numerous picturesque harbors and costal waterways along the Connecticut coastline are plentiful, followed by an unobstructed view of the Manhattan skyline during the final 15 minutes of travel into Penn Station.

Hamburg Altona is the northern terminal for most north-south ICE trains (a few ICE trains bypass Hamburg-Altona to continue north to Kiel) as Boston’s South Station is the northern terminal for the Acelas.

The winner, though, is Boston. The recently renovated South Station – with a large bookstore, spotlessly clean and airy waiting areas, large and diverse food court and historic interior and exterior, beats hands down the starkly modern, noisy and rather dirty Altona terminal with its odd collection of a few press shops, grungy bars, pubs and a couple of snack food outlets.

Actually, Boston’s North Station and Altona are similar, except Altona does not have an indoor sports arena (Boston Fleet Center) built above it – but even the minimal North Station is cleaner than Altona.

Hamburg Hauptbahnhof, a large, through station located a few kilometers southeast of the Altona terminal, retains its pre-war early 20th century architecture but is similarly cluttered, noisy and dirty as Altona.

New York’s Penn Station compared to Frankfurt’s Hauptbahnhof offer nearly identical views.

These two rail stations are most likely the busiest rail stations in the USA and Germany.

Frankfurt’s station sprawls over more than one city block, as the station is a terminal except for four underground through tracks which handle only local S-Bahn commuter trains traveling underground to the city center and beyond to its suburbs.

Frankfurt is in the middle of a major overhaul to clean up and reorganize the station’s interior areas and restore the station’s turn-of-the 20th century architecture. Meanwhile, Hauptbahnhof remains a somewhat dark and dirty station.

Underground Penn station is a confusing series of corridors, passages and jumble of shops, fast food outlets and waiting areas built in a bland non-descript 1970s styling not much different than a typical American airport or shopping mall.

There is no winner – it is a tie. What were New York City leaders and politicians thinking when they allowed the original Penn Station to be demolished to make way for Madison Square Gardens in the early 1960s?

If one were to compare Grand Central Terminal vs. Hannover Hauptbahnhof, the results would be somewhat different.

Acelas do not go to GCT, but perhaps it could in the future for Boston – NYC only services. My wife and I passed through GCT on a local side trip during our New York City visit.

The over one century-old Hannover station is 20 years older than GCT, but both received major renovations in the past few years. The Hannover station received a major face-lift and overhauls as part of the preparations for the Expo 2000 World Fair. During the renovations to the Hannover station a triple-X movie theater was replaced with a large two-story upscale book store, a run-down railroad hotel was replaced by a police station and a new business class lounge for ICE passengers, numerous stores and restaurants were added, an American style fast food court was installed and the entire ticket sales and reservations area was re-built. The result: Hannover Hauptbahnhof resembles a 21st century shopping mall and transportation hub on the inside – a 19th century railroad station on the outside, but well integrated with the surrounding city and highly functional.

Winner: close call – New York Grand Central Terminal. The interior of GCT is beautifully restored to its early 20th century period. The architecture of GCT remains a timeless classic. The food court and shops in the lower level of GCT were carefully constructed so that they do not conflict with original architecture of GCT. The entire station was surprisingly clean and free of clutter, especially considering this is New York City. All this for what is today only a terminal for commuter rail lines to the city’s northern suburbs. It seems almost criminal to have a station this classy in the middle of the western world’s most important city, and no long distance train services available from it. Hard to believe that GCT also nearly met the same fate in the 1970s as the original New York Penn Station did in the 1960s.

Logic prevailed.

In summary, Amtrak’s Acela Express makes a good impression from the standpoint of the appearance of the trains and the stations in New York, Boston and cities in between as well as the quality of service. It certainly is as good as what is available in Germany and France and elsewhere in Europe for high-speed trains. All that is missing is the speed – but one has to question the expense of acquiring equipment capable of 150 mph operation when most of the infrastructure is not capable of more than 80 mph, and sometimes much less than 80 mph. If Amtrak was able to operate conventional trains consistently at 90 or 100 mph between station stops all along the New York Boston route, it would probably make the this trip in the same amount of time as the unconventional, highly sophisticated and high cost Acela Express, which is engineered to travel at 150 mph, but rarely does so do to limitations of the elderly infrastructure on this route. The same applies for many other current and proposed rail corridors in the USA. A consistently moderate speed of 80-100 mph is more practical for long distance trains than a few limited high speed sections separated by long sections of railroad where speeds are the same or less than interstate highway speeds.

Acelas and Metroliners are capable of 125 mph on most track between New York and Washington. – Ed.


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THE WAY WE WERE...  The way we were...

 FP-7A

NCI: Leo King

Thirty years ago, the Alaska Railroad ran four FP-7As painted in this bright blue and yellow scheme. USDOT owned the railroad then (it’s now state-owned) and the engines hauled the railroad’s principal passenger trains, Nos. 5 and 6, The AuRoRa. Those Fs are long gone, along with a slew of F-7As and Bs painted in a simple black and yellow scheme for its freight engines. We wonder if that sander is still there in the Anchorage engine terminal area, not far from Ship Creek…

End Notes...

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