# Bidding opens to outsource up to three Amtrak long distance trains



## TiBike (Jul 7, 2017)

H/T to Train Orders, here's the link to the official notice:

www.federalregister.gov/d/2017-14355


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## AmtrakLKL (Jul 7, 2017)

Well this is certainly going to be exciting. I'm sure there are dozens of private companies busily preparing bids as I type!


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## keelhauled (Jul 7, 2017)

Perhaps one of them will even bother to read the fine print before deciding to sign!


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## me_little_me (Jul 7, 2017)

So much depends on the requirements.

Will winner have to keep present crews and staff? Pay them the same? Keep positions the same way Amtrak does? Will existing union rules apply? Can they change levels of service?

What changes can be made in routing, dealing with host RR, times, etc? Are they restricted by Arrow's limitations on reservations? Must they use Amtrak's reservation people?

What changes can they make in other areas like having an auto-carrying car, adding their own private cars for higher level of sleeper service (ala the Canadian)? Will they be given enough cars to add sleepers and coaches as needed? Can they provide "their own" (i.e. leased) additional cars when they want as long as those cars are roadworthy?


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## stappend (Jul 7, 2017)

I doubt that Amtrak is going to 'give' them equipement. This is another Iowa Pacific in the making.


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## A Voice (Jul 7, 2017)

me_little_me said:


> So much depends on the requirements.
> 
> Will winner have to keep present crews and staff? Pay them the same? Keep positions the same way Amtrak does? Will existing union rules apply? Can they change levels of service?
> 
> ...


The answers to most or all of your questions are to be found in the referenced document.

I've only had a chance to skim thus far, but the real deal killer (among several) is that the host (freight) railroads are under no obligation to grant anyone other than Amtrak access, and any potential bidders must have preliminary agreement with all hosts before submitting a bid. Anything so much as hinting at "open access" sends the major freight roads running for the hills, so that is effectively a non-starter.


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## KmH (Jul 7, 2017)

https://www.federalregister.gov/documents/2017/07/07/2017-14355/competitive-passenger-rail-service-pilot-program


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## west point (Jul 7, 2017)

Absolutely Amtrak will not give up any equipment. If bid went forward then the extra equipment will help other routes meet pent up demand !


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## Just-Thinking-51 (Jul 7, 2017)

A Voice said:


> I've only had a chance to skim thus far, but the real deal killer (among several) is that the host (freight) railroads are under no obligation to grant anyone other than Amtrak access, and any potential bidders must have preliminary agreement with all hosts before submitting a bid. Anything so much as hinting at "open access" sends the major freight roads running for the hills, so that is effectively a non-starter.


Amtrak current trackage does not transfer. Yet you may not run less service or short distances. However even the most basic need for a slot for the train is not included.

The bid is designed to fail.


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## tommylicious (Jul 7, 2017)

Which routes?


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## Just-Thinking-51 (Jul 7, 2017)

tommylicious said:


> Which routes?


Any and all.


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## jis (Jul 7, 2017)

I bet someone will pick up Hoosier State. What? Wait.....


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## Texan Eagle (Jul 7, 2017)

Can we all chip in and purchase one of the routes? I'll pay $20, that should be more than sufficient. Presenting *Amtrak Unlimited Empire Builder*


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## Phil S (Jul 8, 2017)

What an enormous waste of time and money. Business as usual these days.


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## Philly Amtrak Fan (Jul 8, 2017)

Texan Eagle said:


> Can we all chip in and purchase one of the routes? I'll pay $20, that should be more than sufficient. Presenting *Amtrak Unlimited Empire Builder*


If that will save me more than $20 on my taxes having to pay for it, count me in!


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## Green Maned Lion (Jul 8, 2017)

The only bidders that are vaguely plausible are freight operators themselves.

But really this is the classic D.C. Equation:

Noise + Paper = Accomplishment.


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## PVD (Jul 8, 2017)

If the only way to achieve savings is to attack workers, instead of working together to achieve savings, then it is a worthless endeavor.


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## Bob Dylan (Jul 8, 2017)

Green Maned Lion said:


> The only bidders that are vaguely plausible are freight operators themselves.
> 
> But really this is the classic D.C. Equation:
> 
> Noise + Paper = Accomplishment.


This!


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## Thirdrail7 (Jul 8, 2017)

It should be quite clear that freight does not want to touch this. They shy away from state supported services which have their costs covered. Why would they take on long distance service and still have to answer to Congress? They still have to make the stops (or a comparable amount of stops), they still have to run the same distance and now their name is on display is something goes wrong. They won't be the faceless "host" railroad. Amtrak was formed so they wouldn't have to deal with this stuff.

There is a reason the NS (who had a first dibs on the VRE MSS contract) let it pass. There is a reason that CSX let go of MARC service even though their costs were covered and there is a reason they let the VRE FBG contract pass without a bid.


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## railiner (Jul 8, 2017)

What about other railroads in other parts of the country...don't the freight roads still run some of the Chicago RTA routes, and by choice?


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## Thirdrail7 (Jul 8, 2017)

railiner said:


> What about other railroads in other parts of the country...don't the freight roads still run some of the Chicago RTA routes, and by choice?


Sure...and they are regional/commuter services with their costs covered. They aren't running trains through multiple states. If they were interested in running long distance service or additional services, you'd see them submitting bids for the various commuter contracts that have been up in recent years (such as C-DOT, Knowledge Corridor,MBTA/MBCR,VRE,MARC)...that have their costs covered.


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## Eric S (Jul 8, 2017)

railiner said:


> What about other railroads in other parts of the country...don't the freight roads still run some of the Chicago RTA routes, and by choice?


BNSF and UP operate portions of the Metra system. BNSF also operates Seattle-area Sounder.


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## neroden (Jul 8, 2017)

To be absolutely clear here, the provision of federal law which required this idiotic bidding scheme was inserted by the particular faction of "privatize everything" Republicans of whom I spoke. Many, many years ago. (If I remember correctly the legislation was actually passed under the G W Bush administration, but I'm bad with remembering timelines.) (Edit: did some research: this particular provision came out of the Republican Congress of 2015. I was remembering the previous attempt, by the same gang, to insert the same idiotic provision, back in 2008.)

I followed this nonsense down to the committee hearing level. It was left in the legislation as a sop to this crazy Congressional faction, because everyone sane (which included both Congressional Democrats and some Congressional Republicans) knew there would be no bids anyway. So all it does is waste some paper and some people's time.

Sorry I wasn't more specific before.


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## neroden (Jul 8, 2017)

So, for reference, the only cases in the US of "freight" railroads operating passenger trains are:

(1) a small number of class IIIs which are essentially running tourist trains for an extra buck or two

(2) UP operating three lines in Chicago (which are inherited from lines operated by their predecessor) and the occasional tourist train

(3) BNSF operating Sounder in Seattle, Northstar in Minneapolis, and the "BNSF Line" Metra line in Chicago

There's one extra example in Canada: CP operates one GO Transit line in Toronto.

Basically only BNSF has been willing to consider operating new commuter lines. CSX, PanAm, CN, and others have aggressively worked their way out of all their commuter rail contracts. Honestly I expect UP and CP will probably eventually figure out how to end their existing passenger operating contracts too.

Herzog Transit Services has been a willing contract operator of new commuter rail lines, as have Keolis and Bombardier. But they don't take revenue risk. They're we-get-paid-for-our-work contracts, with the commuter rail agency taking on all the risk of dropping ticket sales. (This is the same with the BNSF, UP, and CP contracts.)

This idiotic bidding concept entertains the idea that an operator will take on revenue risk. It's simply not going to happen.

The restriction that the bidder must either own the track or have a contract with the track owner helps further guarantee that there won't be any bids. The track owners (Class Is) don't want to do it themselves and will not contract with anyone. All the long-distance routes actually have multiple track owners, making it even less possible to get a contract. Most of them have multiple Class I track owners; I believe the Southwest Chief and Silver Meteor are the only exceptions, and even they run through multiple commuter rail agencies, and in the case of the Southwest Chief, the Kansas City Terminal.


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## Cho Cho Charlie (Jul 8, 2017)

neroden said:


> This idiotic bidding concept entertains the idea that an operator will take on revenue risk. It's simply not going to happen.


IMHO, this "idiotic bidding concept" reeks of Congress. I am sure that this isn't Amtrak's idea. Someone in Congress probably loudly proclaimed that several freight railroads have personally contacted him, begging to take over LD, intercity, passenger train service. And use this to backup their claim that any well-run passenger service can easily turn a major profit.

This bidding might be the only way to show that this Congressional genius is wrong, and move on.


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## MisterUptempo (Jul 8, 2017)

This whole "bidding process" is nothing but a stalking horse for the Amtrak haters to justify killing the system entirely.

In scenario A, no one (or at least no one of any credibility) bids. The proponents of this process will then declare, "If the Class I's and successful private rail operators, those who know railroading better than anyone else, don't see a path to financial success operating Amtrak's routes, why should taxpayers foot the bill for Amtrak any longer?"

In scenario B, an entity attempts to operate a route or routes and fails (see-Iowa Pacific/Hoosier State). The proponents of this process will then declare, "If a Class I or successful private rail operator, those who know railroading better than anyone else, tried and failed to find a path to financial success operating Amtrak's routes, why should taxpayers foot the bill for Amtrak any longer?"

It's a pre-determined conclusion that's just been furnished with a mechanism to prove that conclusion.


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## bretton88 (Jul 8, 2017)

neroden said:


> So, for reference, the only cases in the US of "freight" railroads operating passenger trains are:
> 
> (1) a small number of class IIIs which are essentially running tourist trains for an extra buck or two
> 
> ...


I doubt UP is going to exit the Metra business. UP uses it as a point of pride and seems to have a much deeper respect for their passenger train heritage and has retained a lot of the institutional knowledge. I could see BNSF getting out before UP does. It's a cost covered operation, so there's very little risk in UP running the trains.


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## Skyline (Jul 9, 2017)

It's only a bidding "opportunity." Don't hold your breath that any company will bid. Hasn't worked previously.


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## dogbert617 (Jul 9, 2017)

bretton88 said:


> neroden said:
> 
> 
> > So, for reference, the only cases in the US of "freight" railroads operating passenger trains are:
> ...


Curious, why do you think BNSF would pull out of supporting the Chicago-Aurora BNSF commuter line service? It gets a lot of ridership, and is one of the higher ridden routes in the whole Metra system. I doubt this railroad would end support of the BNSF Metra line, in the future. Wouldn't that mean(if they were to pull support of the Metra BNSF line) their support of other services such as Sounder in Seattle, also be in jeopardy? There is talk also of possible expansion of Metra BNSF service to Kendall County, though it'd require this county to join the 6 county RTA as a new membership county. As of now, they aren't a member of that, and just the main 6 counties(Cook, Lake, DuPage, Kane, Will, and McHenry) on the IL side of the Chicago area are.

The 3 UP lines all have decent ridership, as well. The only thing I sometimes wonder about is if McHenry, IL will continue to have service on that branch off of the UP-Northwest Line to Crystal Lake(and Harvard), since it has only a handful of weekday only trains at most. That branch used to have 1-2 Saturday trains(but no Sunday trains) in each direction, but those were cut from the schedule in the 2000s.


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## railiner (Jul 9, 2017)

If the remaining freight railroads have been willing to continue operating their heritage commuter routes for so long, why would they now try to rid themselves of it? And if they are covered for their costs, and make a modest profit running them, why wouldn't they be willing to operate more, especially over their own routes? Not to mention, they would not have to deal with third party contractor's operating over their railroad....


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## Green Maned Lion (Jul 10, 2017)

Making a modest profit is not always the most intelligent use of resources.


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## Skyline (Jul 10, 2017)

Green Maned Lion said:


> Making a modest profit is not always the most intelligent use of resources.


True, board members and shareholders often expect to maximize short term profits at the expense of long term goals and even good citizenship. It's a major flaw in an otherwise mostly positive capitalist system.


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## Green Maned Lion (Jul 10, 2017)

That's actually not what I meant. All profit is the result of investing. The function is measured not in dollars, but percentages, called Return On Investment. The operators of these commuter trains tie up investment capital in running these trains, in various ways.

Sometimes a modestly profitable operation is not the best place to invest your money, time, or management talent, all of which are limited resources.


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## jis (Jul 10, 2017)

I have indeed wondered how these otherwise more or less marginal operations actually fit into their big strategy, unless the value comes from goodwill or keeping other operators off their property or some such intangible.


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## cirdan (Jul 10, 2017)

jis said:


> I have indeed wondered how these otherwise more or less marginal operations actually fit into their big strategy, unless the value comes from goodwill or keeping other operators off their property or some such intangible.


Maybe as long as they don't bind senior management resources or attention or lose too much money, it's a case of these operations not really being a big enough a problem to require anything being done?

Many big corporstaions, especially of the type that have been around for a long time, have various oddball operations on the side. Strictly speaking they don't fit in the bigger picture or strategy but maybe seeking to spin oir sell them off would me more hassle than just leaving them ticking along.


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## bretton88 (Jul 10, 2017)

dogbert617 said:


> bretton88 said:
> 
> 
> > neroden said:
> ...


This would not be an end of service at all. Just a different operator taking (probably metra in housing it) for what BNSF does currently, just like when CP got out of operations. To note, there's been no indication BNSF does want out of operations anyways.


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## railiner (Jul 10, 2017)

jis said:


> I have indeed wondered how these otherwise more or less marginal operations actually fit into their big strategy, unless the value comes from goodwill or keeping other operators off their property or some such intangible.


That's what I was thinking....going all the way back to the CB&Q days, the BNSF always seemed to take pride in their operation along the 38 mile, triple-track raceway, and their pioneering use of the gallery type of commuter car, etc...

UP inherited C&NW's highly regarded commuter operation, as well...


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## Hotblack Desiato (Jul 11, 2017)

railiner said:


> jis said:
> 
> 
> > I have indeed wondered how these otherwise more or less marginal operations actually fit into their big strategy, unless the value comes from goodwill or keeping other operators off their property or some such intangible.
> ...


When it comes to taking pride in their operation, BNSF actually brands their commuter cars on the Chicago-Aurora corridor.


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## dlagrua (Jul 11, 2017)

Don't know what to make of this "open for bids" announcement to take over long distance passenger routes. The freight railroads could do it but their profit from freight shipments would far outweigh anything that a passenger train could produce. On a freight train you can have 50 or more cars filled with oil,coal,grain, seeds,lumber, steel and general freight. It takes only two employees to staff an entire freight train. In contrast an LD passenger route can have a dozen or more employees aboard, have red cap baggage service, cleaning crews and people that deliver food and essentials to the train at stations along the line, all for a train only 7-10 cars in length. Point is that LD passenger trains have high labor costs. That is a reason why the freight railroads wont touch them. I would venture to say that there might be interest from the private railroads for taking over the operation of some additional commuter lines.


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## neroden (Jul 11, 2017)

dogbert617 said:


> Curious, why do you think BNSF would pull out of supporting the Chicago-Aurora BNSF commuter line service?


Maybe you're confused.
Currently BNSF *operates the trains* on the Chicago-Aurora corridor, in exchange for payment from Metra (Metra cuts them a check). BNSF employs the conductors and engineers. Similar for UP on those lines.

What might happen with BNSF or UP in Chicago is what already happened with all the other Metra lines -- where Metra operates the trains directly and employs the conductors and engineers. On the same routes as before. (Passengers wouldn't notice any difference.)

Basically UP has a tiny division which learns how to be passenger engineers and conductors, which is used only in Chicago. BNSF likewise has a tiny passenger division though they learn how to do it in Chicago, Minneapolis, and Seattle, so they seem a bit more interested.

Metra has a very large number of passenger engineers and conductors and might be able to operate these lines more efficiently.

The lines would certainly not be discontinued. Sorry if I gave the wrong impression.


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## railiner (Jul 11, 2017)

The interesting point is, apparently all of the other freight roads across the country have been eager to get out of the direct running of commuter or passenger trains even over their own rail's, happy to let Amtrak or some other agency relieve them from that responsibility, but these two exception's hold on...


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## cirdan (Jul 12, 2017)

railiner said:


> The interesting point is, apparently all of the other freight roads across the country have been eager to get out of the direct running of commuter or passenger trains even over their own rail's, happy to let Amtrak or some other agency relieve them from that responsibility, but these two exception's hold on...


But I guess that being under the METRA umbrella, that Metra handles everything from marketing to passenger facing roles to ticket machines.

BNSF just handles the actually running of the trains, which is something that is much closer to the rest of their business.

Maybe if Amtrak could similarly devolve the actual operation of LD trains to freight railroads, while Amtrak still managed everything else including ticketing and food and stations etc, and the freight railroad was awarded a lump sump compensation for doing its part, with maybe some bonus malus agremment to encourage on time operation, they might actually be willing to discuss that


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## ehbowen (Jul 12, 2017)

cirdan said:


> railiner said:
> 
> 
> > The interesting point is, apparently all of the other freight roads across the country have been eager to get out of the direct running of commuter or passenger trains even over their own rail's, happy to let Amtrak or some other agency relieve them from that responsibility, but these two exception's hold on...
> ...


To the best of my understanding, that's pretty much the way it was handled up through (about) the mid-1980s....


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## railiner (Jul 12, 2017)

That's correct.... Amtrak at first had nothing to do with running the trains or anything supporting them, other than having their name placed on them...

As the company matured, they started taking over more and more of the jobs involved in running the company.

The big breakthrough came in 1976, when Conrail took over the bankrupt northeast railroads, and conveyed the bulk of the Northeast Corridor to Amtrak. In the eyes of many, that made Amtrak a "real" railroad.

It was several years later that Amtrak completed taking over the train and engine crews, nationally.

I don't see why they would ever want to give those jobs back to the freight railroads...


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## MikefromCrete (Jul 12, 2017)

cirdan said:


> railiner said:
> 
> 
> > The interesting point is, apparently all of the other freight roads across the country have been eager to get out of the direct running of commuter or passenger trains even over their own rail's, happy to let Amtrak or some other agency relieve them from that responsibility, but these two exception's hold on...
> ...


I don't see the freight railroads wanting to actually want to operate the trains. They worked hard to get out of the passenger business and certainly don't want to get back into it. There is no advantage to them, and frankly, I don't see any improvements in the actually running of Amtrak trains.

As far as the Metra operations of BNSF and UP, those are based on historic operations. The main concern of BNSF and UP is to control their entry into Chicago. In fact, UP is probably only really concerned about the West Line operations. The Northwest and North lines have very little freight traffic.


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## Hotblack Desiato (Jul 12, 2017)

cirdan said:


> railiner said:
> 
> 
> > The interesting point is, apparently all of the other freight roads across the country have been eager to get out of the direct running of commuter or passenger trains even over their own rail's, happy to let Amtrak or some other agency relieve them from that responsibility, but these two exception's hold on...
> ...


IIRC, the ticket agents on UP/BN-operated lines are (or at least were) UP/BN employees and not Metra employees. While I've never done so, I'm told that if passengers bought tickets/monthly passes with checks at those stations (probably not to common/if at all anymore, but was very common when Metra was stuck in the 60s and refused to accept credit cards before being forced to do so by state legislation a few years ago), the checks were written to the railroad and not to Metra.


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## Bedford (Jul 12, 2017)

Here's a thought to make outsourcing something other than a joke. The basic problem is that the bidder assumes financial risk for something that never makes a profit. (Hoosier State Experiment). How about this: Tax credit to any Class I that operates a long distance train that is equal to all avoidable costs plus 5%. Advertising costs would be included in avoidable costs so railroad could market the train and create a national positive media image for the railroad as a side benefit. The tax treatment would be a guaranteed subsidy to the Class I- if that's bad so is air traffic control, TSA, general fund highway maintenance, inland waterways and all the other taxpayer subsidies that keep America moving.

Advantage to Class I Public Advantage

1. Costs covered just like commuter operations 1. Privatized operation with permanent funding source (like the highway)

2. Total control of "their flagship"-no open access slippery slope. 2. Since the train is the Class I 's mirror to the world the incentive is huge

3. Effective way to create visibility and positive image to general public on a to make the train look, feel and be equal to or better than all the other long

national level (like UP steam program). long distance operations.

4. Get a lot more corporate benefit out of a train that is and will be running on

your track anyway.


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## cirdan (Jul 12, 2017)

Bedford said:


> Here's a thought to make outsourcing something other than a joke. The basic problem is that the bidder assumes financial risk for something that never makes a profit. (Hoosier State Experiment). How about this: Tax credit to any Class I that operates a long distance train that is equal to all avoidable costs plus 5%. Advertising costs would be included in avoidable costs so railroad could market the train and create a national positive media image for the railroad as a side benefit. The tax treatment would be a guaranteed subsidy to the Class I- if that's bad so is air traffic control, TSA, general fund highway maintenance, inland waterways and all the other taxpayer subsidies that keep America moving.
> 
> Advantage to Class I Public Advantage
> 
> ...


I see what you're getting at.

The naysayer in me fears the reverse may be true.

In their heyday, passenger trains showcased the efficiency, smoothness and speed of a railroad. This had a kickback in the form of positive public perception and confidence.

If you travel by train today, you get to see a rather different picture. As long as people stay away from their actual assets, railroads can sell you glossy images of their fast and efficient engines pulling long intermodals at high speeds. But if you actualy travel on them you see the ugly warts on the beats's underbelly. You feel track is rough and not getting the maintennace it maybe should, You feel the ehhects of slow orders. You see industrial spurs overgrown with weeds and freight cars covered in graffiti rotting away. You see congestion and delays caused by insufficient capacity or maybe just poor despatching. This is the effect of railroads having been in survival mode rather than growth mode for the last 50 years or so. All this is thus not showing the railroad at its best and maybe the railroad is right not to want people to see that.


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## Bedford (Jul 12, 2017)

I ride a lot of long distance trains this year and every year and on most trips the host railroad would have nothing to be ashamed of and several Class I s choose to run TV ads (you've seen them). NS is back in the steam program business. So there is some interest in and perceived advantage in good PR for the railroad or they wouldn't spend a dime on it.


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## railiner (Jul 12, 2017)

Bedford said:


> Here's a thought to make outsourcing something other than a joke. The basic problem is that the bidder assumes financial risk for something that never makes a profit. (Hoosier State Experiment). How about this: Tax credit to any Class I that operates a long distance train that is equal to all avoidable costs plus 5%. Advertising costs would be included in avoidable costs so railroad could market the train and create a national positive media image for the railroad as a side benefit. The tax treatment would be a guaranteed subsidy to the Class I- if that's bad so is air traffic control, TSA, general fund highway maintenance, inland waterways and all the other taxpayer subsidies that keep America moving.
> 
> Advantage to Class I Public Advantage
> 
> ...


Interesting proposal....nice to hear some fresh, positive idea's, here....

Kind of doubt it will ever happen, but still....sounds good....


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## Thirdrail7 (Jul 13, 2017)

I'd like to remind everyone that this kind of thing has been proposed before. I suspect the reason for the host railroads staying out of it revolves around the concept of staying under the radar.

It is one thing for a BNSF or CSX freight train to derail. It is another to have passengers (with twitter) raking their names over the coal. This would open them up to more scrutiny, which could prove harmful to their reputations. Although it was NS that allowed the auto-router to wreak havoc, the name the passengers on the delayed train screamed out was Amtrak. Additionally, there is little control over "their flagship" since most trains will have to deal with multiple hosts. It is likely not worth the price of the contract. When CSX operated the MARC baseball specials, I'm sure they thought it would be good publicity and show they had the spirit of cooperation....until a few high profile incidents put CSX in the spotlight. Even though the train had MARC on the side, everyone looked at CSX. The next time the operating agreement came up for renewal, they refused to sign it and would not allow the train to operate. It is no longer "Amtrak's" disabled train. It is now NS's passengers are out in field without buses. Do you think they or their shareholders want that?

Additionally, there is also the liability factor. If they run the service themselves, even a LLC wouldn't likely be enough to shield them from the fallout of a derailment or injury.

.

This is likely why when CSX and NS were offered the VRE service, they bowed out. Their costs were guaranteed. I can't imagine them dipping their toes into a multi-state, long distance service especially if it is subsidized by the feds. If you take their money, it comes with a price that I'd venture to say, the hosts don't want.


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## Heath Loxton (Jul 13, 2017)

Would contracting amtrak long distance trains out to a private railroad save money? if yes then how?


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## zephyr17 (Jul 13, 2017)

Thirdrail7 said:


> I'd like to remind everyone that this kind of thing has been proposed before. I suspect the reason for the host railroads staying out of it revolves around the concept of staying under the radar.
> 
> It is one thing for a BNSF or CSX freight train to derail. It is another to have passengers (with twitter) raking their names over the coal. This would open them up to more scrutiny, which could prove harmful to their reputations. Although it was NS that allowed the auto-router to wreak havoc, the name the passengers on the delayed train screamed out was Amtrak. Additionally, there is little control over "their flagship" since most trains will have to deal with multiple hosts. It is likely not worth the price of the contract. When CSX operated the MARC baseball specials, I'm sure they thought it would be good publicity and show they had the spirit of cooperation....until a few high profile incidents put CSX in the spotlight. Even though the train had MARC on the side, everyone looked at CSX. The next time the operating agreement came up for renewal, they refused to sign it and would not allow the train to operate. It is no longer "Amtrak's" disabled train. It is now NS's passengers are out in field without buses. Do you think they or their shareholders want that?
> 
> ...


Heck, I'd even venture to say that if the railroads actually thought Amtrak would last more than 5 years or so (which nobody did at the time), they would have not joined Amtrak, kept their trains, and then petitioned the ICC to discontinue them after the 5 year discontinuation embargo that was part of the "stick" in the NRPC legislation. Then they would have been rid of the pesky things entirely instead of still having to host them because of the feds 46 years later. Freight railroads want to run freight, that is all they want to do. Even in the heyday of passenger trains, freight was where the money was. Heck, even when passenger trains were the dominant form of passenger transportation James J. Hill (founder of the Great Northern) said: "A passenger train is like a male teat--neither useful nor ornamental."

And that is the man the Empire Builder is named for.


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## KmH (Jul 13, 2017)

zephyr17 said:


> Heck, I'd even venture to say that if the railroads actually thought Amtrak would last more than 5 years or so (which nobody did at the time),


Actually it was intended from the beginning that Amtrak would only exist a short time.

That lasted until Fortune magazine published an exposé that showed the people running Amtrak were purposely trying to make it fail.

https://en.wikipedia.org/wiki/Amtrak#Formation



> After Fortune magazine exposed the manufactured mismanagement in 1974, Louis W. Menk, chairman of the Burlington Northern Railroad, remarked that the story was undermining the scheme to dismantle Amtrak.


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## cirdan (Jul 14, 2017)

Heath Loxton said:


> Would contracting amtrak long distance trains out to a private railroad save money? if yes then how?


Save money for who?

A lot of this restructuring stuff is window dressing, it's about stealing from Peter to pay Paul.

So if somebody can make their own budget look good by offloading costs onto somebody else's budget, and if people are getting praise and bonuses for making their budget look good, then these things wil happen.


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## Anderson (Jul 14, 2017)

zephyr17 said:


> Thirdrail7 said:
> 
> 
> > I'd like to remind everyone that this kind of thing has been proposed before. I suspect the reason for the host railroads staying out of it revolves around the concept of staying under the radar.
> ...


IIRC part of the reason that some of the Class Is joined was that they had some real "stinkers" on their rosters which more than offset those which were pulling their weight. For example, the ATSF had been trying to ditch the ex-Grand Canyon for a long time but was (at least for the time) more than happy to keep carrying the Super Chief. Seaboard was, per my understanding, happy to keep the Florida Service running but there were some trains that were third/fourth string and simply didn't make sense to keep. And of course, Southern and the Rio Grande stayed out.

Anyhow, I will say that I suspect we might see a bid for the Auto Train (which effectively operates over one company's tracks), and I could see bids for the Silver Meteor, Palmetto, and/or Crescent (all of which come close...the Meteor has Tri-Rail and Sunrail to contend with and the Crescent has the odd situation with access into WAS, and all but the Auto Train have Amtrak north of DC). The other option would be the Southwest Chief (BNSF). IIRC the bids are _supposed_ to come with a subsidy in the ballpark of most of the subsidy the trains get with Amtrak (I believe via the "fully allocated losses" line). Of those, I'd probably be shooting for the Auto Train (simple operation, two stations, and a re-equipping could probably deal with the losses in ridership in the last few years due to those amenity cuts...also, the train _did_ survive as a private concern into the 80s and might well have made it to the present day if it wasn't for those derailments and the Louisville fiasco) or the Palmetto (daytime operation, no full dining car involved but you could probably make an Acela-ish meal service work in the premium service car).

Edit: Actualy, thinking it over, the Palmetto probably really is a workable proposition for a bidder with at a batch of cars sitting around. Depending on the language of the contract, I would _not_ be surprised to see Ed Ellis shoot for it.


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## A Voice (Jul 14, 2017)

Anderson said:


> zephyr17 said:
> 
> 
> > Thirdrail7 said:
> ...


But how is any potential bidder - Iowa Pacific or anyone - going to get the Class 1's to play ball? There has to be some manner of preliminary agreement (for track access) in place to submit a qualified bid. As suggested earlier, even if you actually do get them to talk to you, those negotiations aren't going to go very far. It's an exercise in futility.


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## jebr (Jul 14, 2017)

cirdan said:


> Heath Loxton said:
> 
> 
> > Would contracting amtrak long distance trains out to a private railroad save money? if yes then how?
> ...


I could actually see the case for contracting out the operating crews, at least for large portions of the routes. Having to staff a bunch of crew change points with conductors and engineers, making sure to have an extra board deep enough to cover those who are sick/on vacation/etc., any overhead needed for having the specific locations up to the standards needed for an office, etc. all for a single train each way each day is pretty inefficient. Having the freights handle the staffing and location concerns could let their economies of scale in that area work to make that staffing less expensive while still ensuring proper staffing (it's a lot easier to account for sick/vacation leave and overhead expenses when it's spread across a hundred or more employees running numerous trains a day than it is to account for that for a dozen or so employees running one to two trains a day.)

I don't see the proposal up currently as having any bidders, though. From the sounds of it, they need both the trackage rights and the cars to make it happen. The Class I's don't have the cars to make it happen (nor do they want to deal with that) and any private railcar operator will likely have a difficult-to-impossible time working with the Class I's for trackage rights.


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## Green Maned Lion (Jul 14, 2017)

The freights might be willing to allow access to accompany who can't handle it. Amtrak's long term survival is actually quite probable. But take them off one of their lines, and replace it with a naive fool like Ellis running it with his own equipment. Then Amtrak reassigns the equipment to bulk up other routes.

By the time The fool fails, Amtrak is going to be reluctant to restart the line and take away from whatever it shored up. Thus the world ends not with a bang, but with a whimper.


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## A Voice (Jul 14, 2017)

Green Maned Lion said:


> But take them off one of their lines, and replace it with a naive fool like Ellis running it with his own equipment.


The FRA document referenced in this thread includes granting potential bidders access to Amtrak equipment.


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## railiner (Jul 14, 2017)

jebr said:


> cirdan said:
> 
> 
> > Heath Loxton said:
> ...


I could see contracting out the engineer position's back to the host railroad, but not the conductor's, who must be knowledgeable of all passenger related matters, besides the passenger cars.

One of the benefits of Amtrak taking over the conductor's years ago, was the elimination of the Chief of On Board Services position's, since now all conductor's were "passenger qualified", with the necessary knowledge to supervise OBS employees...

There is not much difference operating a passenger diesel from a freight, other than the Head End Power system, and somewhat higher speeds...


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## west point (Jul 14, 2017)

T&E crews for the freight RRs are going to be paid more than Amtrak employees. Freight crews their runs are not as long and also the agreements have 2 operating persons in loco. Amtrak only requires 2 in loco for over 6 hours scheduled. You would get back to having an OBS running the train ?

About a bidder using Amtrak equipment. There is the lease issue of equipment. Can FRA even require that to happen ?


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## railiner (Jul 14, 2017)

west point said:


> You would get back to having an OBS running the train ?


OBS Chief never 'ran' the train....just directly supervised OBS employees, and handled certain passenger issues.. The conductor employed by the freight railroads in Amtrak service were still in charge of all...but sometimes, you might get an extra-board conductor, not that familiar with Amtrak rules, regulations, ticketing, etc....hence the Chief's placed on board, for several years, until Amtrak took over the T&E crews for their trains...


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## dlagrua (Jul 15, 2017)

IMO, the private railroads will avoid bidding on passenger rail. Back in the 1900-1950's era trains were the only efficient way to travel long distances. The bus could not compete as the national highway system was not complete. Then air travel came about and the traveling public deserted the trains and took to the air. The interstate highways were finished and car travel became more practical. The demand for train travel drastically declined.

Today train travel represents only 10% of total passenger travel. The number could be higher but the Amtrak skeletal network only serves but a fraction of what passenger rail once was. Point is that there are not enough train travelers today to make LD passenger rail profitable. Even in the Golden age of passenger rail (when the trains were always full) , the railroads only turned a 2% profit on the service.


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## sldispatcher (Jul 15, 2017)

From my own perspective, some degree of privatization is probably the only way Amtrak can ever move to the next level of where we all want it to go.

1. Amtrak gets kicked in the teeth repeatedly but doesn't always deserve it. There are many hard working employees who want to see improvement just as much as the rest of us.

2. Amtrak gets some things right and often. But that is as much due to the folks in middle management and frontline taking care of business.

3. There needs to be some liability reform (not just in passenger rail), to help keep costs in line.

4. Employees need protections and fair wage security in any privatizing effort. Period.

5. Current Amtrak service on LD trains is subpar...and that is being kind. But that is all they can do with the deck of cards that has been dealt to them.

6. I've had enough of freight railroads whining. They have too many wins/protections/help from the American people both historically and even in present day. Either play along or face higher tax consequences (don't give them a tax break for offering passenger access.....tax them higher for denying it)...but protect them with some degree of liability reform

7. Let companies who specialize in service provide it. Amtrak does reasonably well, and if given the opportunity can excel, at doing the rolling stock and ground service portion of the trip.

8. I think Amtrak can still handle appropriately 95% plus of the short distance trains..and transition at least dining and sleeping car soft and hard product service to a vendor who knows how to work that end.

9. All large companies have waste. Picking on Amtrak as thought it is meant to be run with perfect efficiency is not even realistic. A 40 person company has waste and inefficiency. It happens. Congress can get over it.

My wish is for passenger rail to succeed regardless of political affiliation. Some on here like to take frequent swipes without trying to understand where the underpinnings of those opinions come from. If we really want to get mad, look back at the beginning of the interstate highway system. That was the real lack of foresight when dedicated HSR could have been done in tandem. Alas, it did not happen.

Oh well..rant over.


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## neroden (Jul 15, 2017)

sldispatcher said:


> From my own perspective, some degree of privatization is probably the only way Amtrak can ever move to the next level of where we all want it to go.


This makes no sense whatsoever. The only way Amtrak can ever make it is a higher degree of NATIONALIZATION of the track
Let me quote you:



> 6. I've had enough of freight railroads whining. They have too many wins/protections/help from the American people both historically and even in present day.


Take their tracks away. That will force them to play nice. For the last 50 years it has been the ONLY thing which has forced them to play nice.
The freight railroads are very, very polite on lines where they are tenants. (This now includes the NEC, the Surfliner route, the Piedmont route, Empire Corridor as far as Albany, Michigan Corridor from Porter to Dearborn, and some other short segments.) They are mostly complete jackasses, often to the point of criminality, on the lines where they are landlords (though BNSF finally started playing nice when Matt Rose took over and it has stuck under Carl Ice).

Curiously they're usually quite happy to sell their tracks to governments (state, local, or national). Take advantage of that.


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## sldispatcher (Jul 15, 2017)

_"This makes no sense whatsoever._ The only way Amtrak can ever make it is a higher degree of NATIONALIZATION of the track"

Don't think anyone on here would ever accuse you of being subtle. The point, which was lost on my wording, was that the OBS part of Amtrak would likely benefit from some privatization. I did not specify that so that is my fault. I am not a proponent of nationalizing the rail system as that would simply wind up in the hands of bureaucrats who would systematically treat the freight system in the same political atmosphere that Amtrak currently has to play in. No thank you. Bits and pieces I'm okay with.

So privatizing some of the OBS aspects may not make sense to YOU, but it does make sense to others.


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## Ryan (Jul 15, 2017)

Yes, because private corporations are so well know for taking such great care of their people.


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## dlagrua (Jul 15, 2017)

Ryan said:


> Yes, because private corporations are so well known for taking such great care of their people.


Its always been like that with the richest people and the biggest corporations. Look at robber barons like Carnegie, JP Morgan, Vanderbilt, Pullman & Rockefeller, They used the cheapest labor possible to provide the greatest profits for the Wall Street investors. Today corporations don't even keep the lower paying blue collar jobs here. They just outsource to China which leads me to my next point. Passenger rail cannot use cheap Asian slave labor It needs American workers. That's why private corporations will never bid on LD routes. They are waiting for the USA to legalize the importation of North Korean prison slave labor.


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## Ryan (Jul 15, 2017)




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## neroden (Jul 15, 2017)

sldispatcher said:


> Don't think anyone on here would ever accuse you of being subtle. The point, which was lost on my wording, was that the OBS part of Amtrak would likely benefit from some privatization.


Oh, OK. That makes more sense. Thank you for explaining.

I'll make the usual distinction between privatization which carries *revenue risk* -- where I think nobody will do it -- and contracting out, which is already done for the cafe on the Downeaster and is just fine. I don't think the OBS on Amtrak are really a problem center however so I think trying to contract it out would be a wasteful distraction at this time, but I'm not philosophically hostile to it on principle.

Nationalization of the tracks is really the only long-term option: literally every country in the world outside North America has done it. It's exactly equivalent to nationalization of the roads. It has its problems, but privatized roads just don't work, and privatized railroad tracks don't work either, which is why we have a frankly derelict freight system dominated by trucking. (Why did private track ownership work in the 19th century? It works financially during an industry boom/mania/startup period, only. There was also a turnpike boom and a canal mania, private roads and private canals, and both ended up nationalized afterwards. Airplanes seem to be financially even worse because they had public-funded airports from day one.)

Of course some of the freight operators understand this. They'd love to have the government maintaining the tracks the way it maintains the roads for the truckers. And I'm OK with that.


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## Triley (Jul 15, 2017)

railiner said:


> jebr said:
> 
> 
> > cirdan said:
> ...


Not really... As far as being an LSA goes, the T&E crew knows maybe 10% of what goes in to working behind that counter. It is my own domain, and that means that they are not allowed behind that counter unless I ask them to be. Unless I have a serious issue with a passenger (harassment, drunk, etc.), they are not going to get involved with any of my issues, as they have no say in it, really.

I still follow the direction of the Conductor as it is their train, but that really only applies in emergency situations, or things just as being ordered to open a door/drop the stairs at a low platform as needed.

If for example I cut someone off from liquor sales, they can not force me to serve them (in that case it's me who would be responsible if something happens when that passenger gets off the train and gets in to a car accident). Or even if I come up with a stupid rule of not selling breakfast items past 11am (even though I may have them and won't need them for another trip) a conductor can not force me to serve them, though they could in theory go above my own head and go to my crew base or OBS manager.


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## sldispatcher (Jul 16, 2017)

Yes, contracting out is a much better term for what I'm referring.

Here is my real skinny on it. I want national passenger rail to succeed beyond our wildest expectations. But it takes political will to do it. The average rider who buys the coach seat from Marshall, TX to Chicago...is going to have an extremely difficult time bringing political pressure to make SIGNIFICANT changes. But you have the routes/onboard service that start getting the attention of the surburban moms OUTSIDE of the NEC and California, you are going to see a big difference in attention paid.

Something has got to give first in this 40 year stand off on passenger rail. We've lost routes. We've gained a few new cars. We've lost service touches. We've preserved some routes.

It is only my limited opinion, but if Amtrak wants to grow, Amtrak has to change first. Writing a potential OBS contractual agreement that is guaranteed to fail is just asking to limit future growth. Limit growth = limited political clout. The current and future political landscape is not going to shift in any great numbers. Heck, when democrats had the control to do _almost anything they wanted with passenger rail_, they did almost nothing compared to the rest of the so called "investments". So for Amtrak supporters like us that lean different directions on both sides of the aisle, waiting on a political party to rescue, salvage, or improve passenger rail....I don't see it happening soon. If Amtrak wants to truly grow and flourish, it is going to have to start within with a major willingness to look at doing things differently. But that is strictly just my opinion from being both a business owner, and employee, and a customer of different sized companies.

I'm tired of building more and more roads to satisfy developers who won't stop buying land and building houses for which the infrastructure is not in place.

I'm tired of being in a third tier city and being captive to very high base fares for governmental airline travel. (I often pay $500-$600 RT for what would easily be a less expensive overnight sleeper train ride --- but we don't have that service).

As a person that lives and breathes on the "other side of the aisle" from most on this forum, I can tell you that many, many conservatives are very pro-rail travel...but not with the effort that has been put forth now. Reform is needed.

As long as we fight amongst ourselves as rail supporters (and this forum proves it regularly with the snarky comments and put downs), you can forget getting anywhere nationally.


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## Philly Amtrak Fan (Jul 16, 2017)

Amtrak needs its own tracks outside of the NEC. They can't run the times, frequencies or speeds they do on the NEC "renting" from the host railroads. Either buy from the railroads or build new tracks.


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## railiner (Jul 16, 2017)

Triley said:


> railiner said:
> 
> 
> > jebr said:
> ...


Or.....they could take you out of service, for cause, and shut down your counter....


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## cirdan (Jul 17, 2017)

jebr said:


> I don't see the proposal up currently as having any bidders, though. From the sounds of it, they need both the trackage rights and the cars to make it happen. The Class I's don't have the cars to make it happen (nor do they want to deal with that) and any private railcar operator will likely have a difficult-to-impossible time working with the Class I's for trackage rights.


Maybe they don't need to bring in their own cars or equipment. Amtrak could lease them the cars already on those services, at least initially, with maybe a clause in the contrcat that the contractor must bring in their own equipment within a reasonable horizon.

I can't see anybody accepting such terms by the way, at least not in the present climate. I'm just trying tpo come up with hypothetical schemes.


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## Green Maned Lion (Jul 17, 2017)

For Amtrak to change it needs money. Have you ever seen how much money it costs to save a private business that screwed up? Bankruptcy financing is a huge deal.

Amtrak can change a little here or a little there, but the changes people talk about are almost always outside Amtrak's financial reality.


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## DSS&A (Jul 17, 2017)

For a short time in the 1990s, the Federal Government allocated transit agencies to do a lease-lease back financial arrangement to lease their long term new equipment (passenger cars) to there organizations who paid BIG money to utilize the depreciation tax write-off. The Feds stopped it because they started loosing too much tax revenue.

A new version of this lease-lease back law could be enacted to help finance around 50-65 percent of new passenger cars and still not have the Feds "loose too much tax revenue". Amtrak could then use other financing to pay for the remaining costs. Bridges also have a long enough lifespan and a large enough cost for a lease-lease back depreciation write-off.

This type of financial arrangement would probably be received well by the current administration because it would get private capital funds to pay for new infrastructure.


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## sldispatcher (Jul 17, 2017)

1 or 2 percent of this could have transformed Amtrak's Long Distance service for the next 30 or 40 years.

http://money.cnn.com/2012/10/03/news/economy/green-stimulus/index.html

Trust me, I'd love to see AMTRAK get a dedicated 1/4 of 1 % of the gas tax for infrastructure and capital improvement projects.

DSS&A: Great idea that would still work, but again, that would be thinking too far outside of the box.


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## neroden (Jul 18, 2017)

A dedicated funding source, and a concerted program to purchase the tracks or build new tracks... well, that's all Amtrak really needs. Everything else is minor.

This formula is, after all, what saved, expanded, and/or created every single urban rail system in the country. This is the story of every successful subway, light rail, streetcar, or commuter rail line in the US and Canada. Same formula should work for Amtrak.


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## cirdan (Jul 18, 2017)

neroden said:


> Curiously they're usually quite happy to sell their tracks to governments (state, local, or national). Take advantage of that.


They are also happy to sell tracks to shortlines.

But the tracks they like to sell are typicall branches with relatively insignificant traffic, marginal stuff, on which operations break even at best.

In the case of lines being sold to commuter rail authorities, it's actually quite attractive for them because somebody else assumes the maintenance and scheduling costs but the RR still gets to run trains.

One measure of a company's performance is how well capital i invested. If you put your money into a main line, you have a high return on that investment. However, a barnch may break even and may even make a loss. One way out of that would be to close the line, but if somebody else is stepping up to do the maintenence for you, that's an even better alternative. If somebody even steps and offers you cash for it, that's cash you can invest elsewhere where you can generate higher returns.

I don't think any RR, except maybe when in bankrupcy, would contamplate selling something like a transcon.


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## cirdan (Jul 18, 2017)

neroden said:


> Of course some of the freight operators understand this. They'd love to have the government maintaining the tracks the way it maintains the roads for the truckers. And I'm OK with that.


I don't thin the governemnt taking over all ROW would necessarily be good for the railroads.

In many cases, railroads enjoy relative monopolies. If the competion needs to take a longer and more circuitous route, then you are at a natural advnatage.

If the government were to own all the track, railroads would no longer compete on the basis of geographic advantages or speed but it would just be about price. A race to the bottom would ensue which would damage the industry as a whole.


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## neroden (Jul 18, 2017)

The government owns all the track in practically every country in the world. The result is... they don't do the stupid stuff. It's possible for freight and passengers to take the most direct route rather than taking circuitous routes to "stay on the same company".


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## Green Maned Lion (Jul 18, 2017)

Not that I think you are nuts or wrong, Nate, but two points:

Most government owned infrastructure in the US is poorly maintained, be it tracks or roads. I understand the idea you are proposing, but while badly maintained roads mostly mean an uncomfortable ride and more frequent trips to the alignment rack, tracks maintained to the level of my local streets would mean half the trains falling off the tracks, or crawling like a newborn baby.

Secondly, defining a successful public rail system is tricky. Most people around where I live consider the RiverLine successful- it has consistently beat ridership estimates. It also has a fair box recovery somewhere south of 25%. Is that success? (Open ended question with open ended answer.)

I refuse to consider it successful until I can eat dinner in Manhattan any day of the week at a reasonable hour and get home before the line shuts down.


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## bretton88 (Jul 18, 2017)

Green Maned Lion said:


> Not that I think you are nuts or wrong, Nate, but two points:
> 
> Most government owned infrastructure in the US is poorly maintained, be it tracks or roads. I understand the idea you are proposing, but while badly maintained roads mostly mean an uncomfortable ride and more frequent trips to the alignment rack, tracks maintained to the level of my local streets would mean half the trains falling off the tracks, or crawling like a newborn baby.
> 
> ...


To tack onto that, France is seen as one of the great train systems in the world, completely owned by the government. The unseen underside of that is while the tgv is great, the regional train lines outside of Paris have been left to rot, leaving a lot of those lines having to be bustituted or super slow.
Sent from my SM-N920P using Tapatalk


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## Anderson (Jul 18, 2017)

bretton88 said:


> Green Maned Lion said:
> 
> 
> > Not that I think you are nuts or wrong, Nate, but two points:
> ...


This is always a concern of mine with HSR systems: You end up serving a subset of the market very, very well and a good chunk of it rather poorly unless you're willing to cross-subsidize.


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## ehbowen (Jul 18, 2017)

neroden said:


> The government owns all the track in practically every country in the world. The result is... they don't do the stupid stuff. It's possible for freight and passengers to take the most direct route rather than taking circuitous routes to "stay on the same company".


If you're comparing Jimmy Stewart's _Mr. Smith Goes to Washington_ against DiCaprio's _Wolf of Wall Street_, I would have to agree with you. Unfortunately, honest and diligent men with a servant's heart are hard to find in either the business or political spheres these days. If we're talking the societal norm, I would have to say that there is no reason to believe that an indifferent, self-absorbed bureaucrat would be a better steward than an indifferent, self-absorbed plutocrat. And the plutocrat would be easier to oversee and motivate; all it takes is a little pelf.

Personal anecdote, yes, but it's an absolutely true story. I worked for a few years maintaining a major physical facility owned by the City of Houston. The facility manager told me, to my face, that his goal was to spend as little as possible for the next eight years so that he would get good evaluations until he retired. After that, and this is a direct quote, "I don't care if this whole place falls apart and they have to rebuild it from the ground up." Do you think rail passenger service would be doing better under the management of someone like him?

Edit To Add: We did experiment with nationalizing the railroads, during World War I. There was enough "stupid stuff" done during those years to fill several books. Your retraction will be accepted at any time.


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## Ryan (Jul 18, 2017)

ehbowen said:


> If we're talking the societal norm, I would have to say that there is no reason to believe that an indifferent, self-absorbed bureaucrat would be a better steward than an indifferent, self-absorbed plutocrat. And the plutocrat would be easier to oversee and motivate; all it takes is a little pelf.


You've got that backwards. The plutocrat answers to nobody. The bureaucrat answers to the people. That whole "government by the people, for the people bit", you know?


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## ehbowen (Jul 18, 2017)

Ryan said:


> ehbowen said:
> 
> 
> > If we're talking the societal norm, I would have to say that there is no reason to believe that an indifferent, self-absorbed bureaucrat would be a better steward than an indifferent, self-absorbed plutocrat. And the plutocrat would be easier to oversee and motivate; all it takes is a little pelf.
> ...


Oh? Customers, stockholders, regulators, financiers...lots of leverage to make him pay attention to the basics of customer service. Just make sure that he is able to make a profit if he gets it right.



Ryan said:


> The bureaucrat answers to the people. That whole "government by the people, for the people bit", you know?


The problems we're having today can be directly traced to the fact that the bureaucrats do NOT answer to "the people". What, exactly, could I do about the personal example which I cited? Tell the local newspapers, and have him call me a liar and fire me while he pointed to his pristine record? Think again.


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## cirdan (Jul 19, 2017)

bretton88 said:


> Green Maned Lion said:
> 
> 
> > Not that I think you are nuts or wrong, Nate, but two points:
> ...


One of the problems in France is that the country is hyper centralized. Virtually everything is decided in Paris and by people with a very Paris-centric view.

So the rail system, as indeed much else, is built to make it easy to get to paris quickly. Cross country and regional routes get much less money, and in many cases they only survived because some local people or groups put up huge protests - in Paris, otherwise they wouldn't ahve been noticed.

Germany is a much more decentralized country. Berlin may be a nice city but it's rather peripheral. There are tattempts to artificially make it important, but if you've been there you can see this is mostly fake.. Government is much more federalistic and regional governemnts have much more power. This is why most high speed lines in Germany don't come anywhere near Berlin but connect the other major cities. And because governemnt is more local, cross country and regional lines are also much more visible and are thus in far better shape (on average) than those in France.

Move to Switzerland, a country that is even more decentralized. Berne doesn't feel one bit like a capital city. It's quaint and slow and special and most Swiss don't take anything that comes from there very seriously. The cantons are all powerful, and many of the cantons are small, with several having only about 20,000 inhabitants. And if you get decisons taken on that level, you get a lot of money being puit into local connections.


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## dlagrua (Jul 19, 2017)

As I've said before I do not believe that private industry would bid to take over LD routes where they could not follow today's formula of employing cheap labor. Unfortunately, corporate America has evolved to the point where its only purpose is to make a profit at any cost.

IMO the best operation of the railroads, can be done by private industry but only with government oversight.


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## ehbowen (Jul 19, 2017)

dlagrua said:


> As I've said before I do not believe that private industry would bid to take over LD routes where they could not follow today's formula of employing cheap labor. Unfortunately, corporate America has evolved to the point where its only purpose is to make a profit at any cost.
> 
> IMO the best operation of the railroads, can be done by private industry but only with government oversight.


I wouldn't argue that one bit. I just think that we need to restructure the incentives so that it is _possible_ (not guaranteed) for private business to make a worthwhile profit if they do everything right. That includes setting standards which need to be met to qualify for those incentives (quality, frequency, capacity, OTP) and enforcing restrictions (hours, wage rates, maintenance standards) which ensure that those who are inclined to "race for the bottom" can't undercut those who really do want to provide a decent service.


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## jebr (Jul 19, 2017)

I guess I just don't see the appeal for any private company wanting to wholesale take over the train service from Amtrak. There's too many disparate elements and specialties needed to make it work that without a massive scale there's high risk and relatively low reward.

If we're truly serious about using privatization for aspects of intercity passenger rail, it needs to be broken up into specific elements, likely with a fee-for-service contract. I could see the potential for efficiencies in having companies that already specialize in certain elements of the experience, and if they were interested in it creating a better experience and/or saving some money without degrading the experience. Setting aside labor contract issues, etc. I could see the benefit of having a restaurant chain operating the dining car, contracting out the cafe car operations to a fast food or convenience store chain, contracting out the sleeper cars to a hotel chain, and contracting out the operational crew to freight railroads. There's a lot of synergies in operating the elements as simply moving extensions of landlocked chains, perhaps moreso than trying to operate it all under the "Amtrak" banner.

Now, we'd have to make sure the contracts were written in such a way to ensure that the differences between the two are accounted for, and there may not be chains interested in operating them even under a fee-for-service model. But I think that particular question is still open and one that hasn't been fully considered by Amtrak as a cost-savings and/or service-enhancement measure.


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## cirdan (Jul 19, 2017)

jebr said:


> I guess I just don't see the appeal for any private company wanting to wholesale take over the train service from Amtrak. There's too many disparate elements and specialties needed to make it work that without a massive scale there's high risk and relatively low reward.
> 
> If we're truly serious about using privatization for aspects of intercity passenger rail, it needs to be broken up into specific elements, likely with a fee-for-service contract. I could see the potential for efficiencies in having companies that already specialize in certain elements of the experience, and if they were interested in it creating a better experience and/or saving some money without degrading the experience. Setting aside labor contract issues, etc. I could see the benefit of having a restaurant chain operating the dining car, contracting out the cafe car operations to a fast food or convenience store chain, contracting out the sleeper cars to a hotel chain, and contracting out the operational crew to freight railroads. There's a lot of synergies in operating the elements as simply moving extensions of landlocked chains, perhaps moreso than trying to operate it all under the "Amtrak" banner.
> 
> Now, we'd have to make sure the contracts were written in such a way to ensure that the differences between the two are accounted for, and there may not be chains interested in operating them even under a fee-for-service model. But I think that particular question is still open and one that hasn't been fully considered by Amtrak as a cost-savings and/or service-enhancement measure.



MacDonald's once operated a small number of dining/cafeteria cars in Switzerland. It wasn't a success and the contract wasn't renewed. Some years later Starbucks tried the same and also failed.

Maybe the synergies aren't as big as they may at first appear.

On the other hand there are dedicated train service companies such as Wagons-Lits who have been running train catering and sleeping car services in different European countries for decades.


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## railiner (Jul 19, 2017)

Wagon-Lits was the European version of The Pullman Company...


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## Green Maned Lion (Jul 19, 2017)

dlagrua said:


> As I've said before I do not believe that private industry would bid to take over LD routes where they could not follow today's formula of employing cheap labor. Unfortunately, corporate America has evolved to the point where its only purpose is to make a profit at any cost.
> 
> IMO the best operation of the railroads, can be done by private industry but only with government oversight.


Actually, that's the way business is always done. It's just that today's corporations are getting bad at it. They have started to neglect long term profitability in a search for quarterly returns.

I was in business. All I cared about was making a lot of money. In order to accomplish this, I was generous with refunds, friendly and helpful to my customers, and a finikin about my products quality. Because a good, we'll run, quality and customer focused business is the one that will, in time start generating a lot of money from loyal customers... and if you don't screw up, it will never stop.


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## cirdan (Jul 19, 2017)

railiner said:


> Wagon-Lits was the European version of The Pullman Company...


In later years they developed to a service company.


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## ABQFloridian (Jul 19, 2017)

cirdan said:


> I don't thin the governemnt taking over all ROW would necessarily be good for the railroads.
> 
> In many cases, railroads enjoy relative monopolies. If the competion needs to take a longer and more circuitous route, then you are at a natural advantage.
> 
> If the government were to own all the track, railroads would no longer compete on the basis of geographic advantages or speed but it would just be about price. A race to the bottom would ensue which would damage the industry as a whole.


More likely, the fair and open competition would serve to sort the industry out. It is the state of monopoly which you praise that causes the degraded state of rhe tracks we encounter on the Amtrak trains we all ride and love. Think of how many of a railroad's customers are essentially captive. 
Suppose you're a large dairy processor and for the sizes of shipments you get, it wouldn't be price-competitive to haul them by truck, so you have to use rail. Your plant is off BNSF track, so you call for the rate. It's higher than you hoped? Too bad, you can't call anyone else. Shipments start coming late because they're skimping on maintenance on your line? Too bad, you can't call anyone else. They arbitrarily raise their rates on you? You get the idea. In a monopoly, there is no incentive to improve service or reduce cost.

Anyone who's ever lived in a house with only one choice cable/internet/phone provider knows this all too well. I think it also explains some of the atrocious customer service on Amtrak.

The only way opening railroading up to real competition would "damage the industry as a whole" is if you consider industry to be only is current players, because some big names might indeed go under. Some might be so used to not having to fight for customers that they never adjust. If some operators race to the bottom, eventually one will hit it and die, leading the others to change course. The market will stabilize within a couple of years, and the companies that emerge as profitable will be those who can deliver freight and passengers with the best combination of speed, service, and efficiency, which by my measure means the industry will be drastically improved, not damaged.


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## Anderson (Jul 21, 2017)

ABQFloridian said:


> cirdan said:
> 
> 
> > I don't thin the governemnt taking over all ROW would necessarily be good for the railroads.
> ...


I think the best question is whether there's a model to be had which doesn't lead to either direct government management of the tracks (which leads to a Beeching problem) or doing it one step removed (which has the potential to trigger a "Hunter Harrison" problem). Basically, how do you make sure you set the operation up so it doesn't turn into some sort of easily "raidable" piggy bank (coughMetroNorthcough)?

Of course, this has also brought to mind another aspect of this question: Whether states wouldn't just be better off pumping billions of dollars into a straight-out hostile takeover bid of some Class Is the next time the market has a bad run? CAHSR is an outlier, but for the present price of UP stock and what I _think_ is the present value cost of the CAHSR project the state could probably buy out around 1/3 of UP's shares over a few years. On a 20% dip that amount starts getting rather close to 50%, and some action from other states (IL, WA, etc.) could make a dent there as well. VA and NC could probably take around 15% of CSX, maybe closer to 20% if the stock slumps more when Harrison leaves, for the "direct" cost of CAHSR. Those dividend checks would also go a decent way towards paying all of this off.

Ideologically I'm not thrilled at the idea of this, but I think it also has some real merit as an approach...especially since it would all be "willing buyer/willing seller" transactions. Moreover, you could _probably_ leverage the money presently going into share buybacks into paying this back...I'm not familiar with how to set up a corporate raid or whether you'd need to take 100% of shares or just 51% or 60% or some other share...but the point does become that buying out large minority stakes in the railroads and using that to negotiate slot rights and priority handling with the executives might well make more sense than the ongoing direction of policy. Regrettably I see it as a non-starter.


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## neroden (Jul 21, 2017)

ehbowen said:


> Personal anecdote, yes, but it's an absolutely true story. I worked for a few years maintaining a major physical facility owned by the City of Houston. The facility manager told me, to my face, that his goal was to spend as little as possible for the next eight years so that he would get good evaluations until he retired. After that, and this is a direct quote, "I don't care if this whole place falls apart and they have to rebuild it from the ground up." Do you think rail passenger service would be doing better under the management of someone like him?


That -- deferred maintenancne -- was pretty much the official policy of almost all of the private railroads for several decades, from the 1930s through the 1990s. Your point?



> Edit To Add: We did experiment with nationalizing the railroads, during World War I. There was enough "stupid stuff" done during those years to fill several books. Your retraction will be accepted at any time.


USRA established the Joint Line in Colorado, widely considered a great success. The railroads were nationalized because the pre-nationalization railroads were COMPLETELY INCOMPETENT and totally unable to move troops and materiel needed for the war. (The private owners were put on notice and managed to be less incompetent during WWII.)
I have never seen a single citation of even *one single specific case* where the USRA managed things worse than the previous private railroads. As far as I can tell, they were better managed. I have only seen vague, nonspecific, and scurrilous claims, almost uniformly coming from the private owners who were temporarily expropriated.

Feel free to provide citations to the contrary. Otherwise, your retraction will be accepted at any time.

Having researched the history extensively, the railroads were returned to the private owners basically due to political lobbying (and the clear desire of Congress to not actually pay fair value for the existing tracks), and not for technical reasons.

I realize that none of us were alive during World War I. The documentary evidence, however, is NOT on the side of the privatization supporters. Perhaps the only lesson is "remember to pay the private owners a reasonable amount for their assets", as Clement Atlee did and Woodrow Wilson didn't.


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## Thirdrail7 (Jul 22, 2017)

Has anyone heard any rumors about an entity making a bid?


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## A Voice (Jul 22, 2017)

Thirdrail7 said:


> Has anyone heard any rumors about an entity making a bid?


Hmm.....can we assume you wouldn't be asking if you didn't already know? :unsure:


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## Anthony V (Aug 20, 2017)

If there ever is a bid from a private operator to operate a long distance route, that route would likely be the Auto Train. Why? This train is the one that is doing the best financially. In the event of such, and with the private operator providing the equipment, that would free up some much-needed Superliners for other trains out west. With these additional Superliners, Amtrak would have enough rolling stock to make the Sunset Limited daily, and perhaps bring back the Pioneer and/or Desert Wind, pending funding availability. The $750 million UP requested back in 2010 for a daily SL was nothing more than a ransom to exploit Amtrak's desire for making the SL daily, which would've unfairly forced Amtrak to pay for the double-tracking project on the Sunset corridor in exchange their daily SL, even though UP was planning to do these infrastructure improvements anyway, with or without a daily SL. Amtrak was smart and didn't fall for that ransom, so UP was forced to pay for the infrastructure upgrades themselves. While the schedule was improved somewhat in 2012, this came with a catch that Amtrak would not ask for daily service again until 2015. That window has long since passed, so now the only thing standing in the way of daily service is the lack of sufficient spare Superliners. This problem would be solved by privatizing the Auto Train to an operator who can provide their own equipment so the Superliners can be freed up to go towards a daily SL.


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## bmjhagen9426 (Aug 20, 2017)

Anthony V said:


> If there ever is a bid from a private operator to operate a long distance route, that route would likely be the Auto Train. Why? This train is the one that is doing the best financially. In the event of such, and with the private operator providing the equipment, that would free up some much-needed Superliners for other trains out west. With these additional Superliners, Amtrak would have enough rolling stock to make the Sunset Limited daily, and perhaps bring back the Pioneer and/or Desert Wind, pending funding availability. The $750 million UP requested back in 2010 for a daily SL was nothing more than a ransom to exploit Amtrak's desire for making the SL daily, which would've unfairly forced Amtrak to pay for the double-tracking project on the Sunset corridor in exchange their daily SL, even though UP was planning to do these infrastructure improvements anyway, with or without a daily SL. Amtrak was smart and didn't fall for that ransom, so UP was forced to pay for the infrastructure upgrades themselves. While the schedule was improved somewhat in 2012, this came with a catch that Amtrak would not ask for daily service again until 2015. That window has long since passed, so now the only thing standing in the way of daily service is the lack of sufficient spare Superliners. This problem would be solved by privatizing the Auto Train to an operator who can provide their own equipment so the Superliners can be freed up to go towards a daily SL.


What about the other two? And what if there are no bidders to outsource the routes to?


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## Thirdrail7 (Aug 21, 2017)

Anthony V said:


> This problem would be solved by privatizing the Auto Train to an operator who can provide their own equipment so the Superliners can be freed up to go towards a daily SL.


What operator has 35 to 40 cars to provide service? Additionally, what happens if a new operator wants to take over the Auto train and wants to use Amtrak's equipment to do so? How will that help?


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## Bob Dylan (Aug 21, 2017)

This idea is a Non-Starter!


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## Devil's Advocate (Aug 21, 2017)

Personally I think the Auto-Train has a decent chance of an exploratory bid. If someone is willing to test the current administration's desire and willingness to destabilize Amtrak that would be the route to go for. There could also be some quid pro quo bids that are intended to fail but leave Amtrak weaker in the process.


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