Next Generation High-Speed Trainsets for the Northeast Corridor The introduction of Amtraks first generation high-speed trainsets and the start of Acela Express service in late calendar year 2000 represented a watershed event for Amtraks service on the NEC. In FY 2000, the last year before Acela Express began operation, Amtraks NEC operations generated a net operating loss. In FY15, the NEC operations generated an operating surplus of nearly $479 million, down from approximately $500 million in FY14.5 The large majority of this operating surplus, and hence the success of the NEC, is attributable to Acela Express.
Acela Express service is provided by 20 trainsets, each with approximately 300 seats that are based upon early to mid-1990s technology. These trainsets, which are of a design unique to Amtrak, are becoming progressively more difficult and expensive to maintain due to their aging technology. More important, however, are their capacity constraints and inability to meet growing demand. A majority of the departures between Washington and New York City on most days of the week see load factors in excess of 90%. Trains that are completely sold out are becoming an increasingly common occurrence. This reflects potential income Amtrak cannot realize because of the limited capacity.
Amtraks Next Generation High-Speed Trainset Project will address the short-term capacity constraints and position Acela Express service for the long-term. The project will acquire up to 28 contemporary, state-of-the-art, high-speed trainsets to first supplement and eventually replace the legacy Acela Express trainsets. Each will have substantially more seats than the current equipment, and the added number of trainsets will permit Amtrak to operate half-hourly service between Washington and New York City during peak hours and hourly service between New York City and Boston while maintaining the remaining existing schedules. Minimum requirements of the trainsets included that they meet or reduce the existing Acela Express trip times, and preserve or enhance on the existing customer experience.
This project will be the first application of a new tier of passenger equipment safety standards by FRA and the first large Amtrak equipment procurement using performance standards rather than a set of design specifications. Together, they will permit Amtrak to acquire equipment that will be the next generation of high-speed trainsets proven in service overseas. Amtrak published the request for proposals on July 1, 2014. Proposals were received on October 1, 2014 and evaluated, and Amtrak is presently in negotiations with an intended awardee. Amtrak anticipates the delivery of the first prototype trainset 36 months following the notice to proceed (NTP); the first revenue in-service trainset is anticipated 48 months after the NTP and the final revenue service trainset 60 months after the NTP.
A critical element of the project involves financing. In part because of the anticipated strong financial performance of the Acela Express service using the new equipment, in FY14 Congress directed that Amtrak seek to finance this equipment using the USDOTs RRIF Loan Program, whose advantageous terms will maximize the ability of Amtrak to use Acela Express passenger revenues to meet NEC investment needs. The RRIF application for these new trainsets and other investments necessary to position the Acela service for the future was filed with the FRA in July 2014. Amtraks business case supporting the release of the request for proposals shows that incremental growth in NEC revenues resulting from the high-speed trainsets will fund Amtraks debt service obligations associated with the financing. Amtrak anticipates a decision by USDOT on the RRIF application in the second quarter of FY16. A favorable decision on the RRIF application and successful conclusion with the intended awardee on the purchase of the equipment should permit a final decision by the Amtrak Board of Directors to proceed with this project and a NTP to builder late in the second quarter of FY16.
