Amtrak gets $562 million RRIF Loan for the ACS-64s

[afigg]

Amtrak got their $562.9 million application for a RRIF (Railroad Rehabilitation and Improvement Financing) loan approved today to pay for the 70 ACS-

64 electric locomotives. So at least these will be paid for! Press release on the US DOT website: http://www.dot.gov/affairs/2011/fra1411.html

Start of the DOT press release:

"WASHINGTON – Today, U.S. Department of Transportation Secretary Ray LaHood announced a $562.9 million loan to Amtrak under the Federal Railroad Administration’s Railroad Rehabilitation and Improvement Financing (RRIF) program that will create hundreds of manufacturing jobs across several states. This is the largest loan issued through the RRIF program to date, and the dollars will finance the purchase of 70 high-performance, electric locomotives from Siemens Industry USA. These locomotives are more energy-efficient and will enable Amtrak to improve frequency, performance and reliability for regional and intercity routes along the Northeast and Keystone Corridors."

The announced contract with Siemens was for $466 million, so the rest of the loan is for, what?, FRA testing, spares, training, maintenance equipment?

Don't see an Amtrak press release on the RRIF approval, but they will probably post one in a day or two.

 

[afigg]

Amtrak has put out their own press release on the FRA RRIF loan to pay for the ACS-64 locos. The Amtrak release explains that $97 million of the loan is for maintenance facility upgrades and spare parts. The Amtrak press release also notes with regard to the funding that:

"Amtrak projects that improved ticket revenue from more reliable locomotives can fund the debt service payments to repay this loan.

Amtrak has worked strategically to improve its financial performance across a number of measurements, including successfully reducing its debt by half since 2002 to about $2 billion at the end of FY 2010."

So, after working the last 8-9 years to cut their debt by half, Amtrak is now adding $562 million to it, presumably because they did not see any way to get Congress to put up the capital funds. Ok, so more reliable and a larger fleet of electric locos will have to pay for the loan out of NEC revenues. Maybe more NE regionals on the daily schedule in a few years?

Checking the FY12 proposed budget plan, Amtrak is asking for $63 million in the FY12 capital funding for the second year payment for the Viewliner II order. The first year payment of $39 million is being funded from FY10 and FY11 ticket revenues. If Congress does not provide the FY12 funding for capital equipment purchases, will Amtrak's backup plan be to cover the $63 million from ticket revenue and/or the general capital budget?

 

[had8ley]

Amtrak has put out their own press release on the FRA RRIF loan to pay for the ACS-64 locos. The Amtrak release explains that $97 million of the loan is for maintenance facility upgrades and spare parts. The Amtrak press release also notes with regard to the funding that:

"Amtrak projects that improved ticket revenue from more reliable locomotives can fund the debt service payments to repay this loan.

Amtrak has worked strategically to improve its financial performance across a number of measurements, including successfully reducing its debt by half since 2002 to about $2 billion at the end of FY 2010."

So, after working the last 8-9 years to cut their debt by half, Amtrak is now adding $562 million to it, presumably because they did not see any way to get Congress to put up the capital funds. Ok, so more reliable and a larger fleet of electric locos will have to pay for the loan out of NEC revenues. Maybe more NE regionals on the daily schedule in a few years?

Checking the FY12 proposed budget plan, Amtrak is asking for $63 million in the FY12 capital funding for the second year payment for the Viewliner II order. The first year payment of $39 million is being funded from FY10 and FY11 ticket revenues. If Congress does not provide the FY12 funding for capital equipment purchases, will Amtrak's backup plan be to cover the $63 million from ticket revenue and/or the general capital budget?

I think the biggest money question is going to be; "Just how are they going to pay for the Viewliner car order?"

 

[jis]

I have heard that if Congress does not come through then both the rest of the Viewliner order cost and the additional cars for Acelas will be covered by additional RRIF loans. Boardman pretty much said so during his testimony to the Congress.

In the same testimony Boardman said there will be no further equipment orders funded through Amtrak, unless Congress (or someone else) comes up with funding for them, and also no further orders for LD equipment from Amtrak until a general policy regarding long distance trains is articulated by the Congress.

And of course everyone and their uncles proceeded to lambast Boardman for saying that LD trains did not make a profit, in the same hearings.

 

[Anderson]

Amtrak is getting $500 million of loans at 3%, I believe (my understanding is that they basically get the loans at Treasury rates). That is something like $15 million in interest per year. I do not believe that Amtrak could do any better, and frankly I wish they could milk this for a lot more in capital costs (i.e. new equipment).

 

[jis]

Amtrak is getting $500 million of loans at 3%, I believe (my understanding is that they basically get the loans at Treasury rates). That is something like $15 million in interest per year. I do not believe that Amtrak could do any better, and frankly I wish they could milk this for a lot more in capital costs (i.e. new equipment).

That sounds about right. I have seen figures that claim that for a $30 to $40 million a year commitment, Amtrak can pretty much cover the Viewliners, the ACSs and the Acela cars - maybe off by $5 million this way or that.

Hence my post several months back suggesting that Amtrak was in a position to cover the stuff they have already ordered or wish to order, for NEC purely from surplus revenue, and for Viewliners, $15 million a year for many years is much easier to come across the $600 million in a single year.

 

[cirdan]

Is this really necessary?

The AEM-7s are only a bit more than 30 years old some have recently been refitetd with state-of-the-art AC equipment

The HHP8 are barely ten years old.

Electric locos are generally expected to last 40 years, so neither type is genuinely life expired..

If the present equipment is so useless that it must be replaced early, then Amtrak should be asking itself what it did wrong when buying and specifying the erquipment to make sure it doesn't make the same mistake again.

 

[GlobalistPotato]

Is this really necessary?

The AEM-7s are only a bit more than 30 years old some have recently been refitetd with state-of-the-art AC equipment

The HHP8 are barely ten years old.

Electric locos are generally expected to last 40 years, so neither type is genuinely life expired..

If the present equipment is so useless that it must be replaced early, then Amtrak should be asking itself what it did wrong when buying and specifying the erquipment to make sure it doesn't make the same mistake again.

By the time the new locos are complete, the AEM-7s would be 35+ years old. HHP-8 isn't liked by Amtrak because it's been unreliable for them.

 

[Dutchrailnut]

the faith of HHP-8 is still up in air, internal rumor is the units will be converted as powercars for 7 new Acela's with one spare powerhead.

this would up the order for Acela cars to 7 times 10 cars plus 2 cars for each existing Acela.

 

[jis]

the faith of HHP-8 is still up in air, internal rumor is the units will be converted as powercars for 7 new Acela's with one spare powerhead.

this would up the order for Acela cars to 7 times 10 cars plus 2 cars for each existing Acela.

That's very interesting Dutch. Thanks for the heads up. I will dig around a bit and see what, if anything I can dig up on this.

 

[RCrierie]

So, after working the last 8-9 years to cut their debt by half, Amtrak is now adding $562 million to it, presumably because they did not see any way to get Congress to put up the capital funds.

Better than waiting for Kongress to give them free money. Amtrak needs more of this thinking.

Ok, so more reliable and a larger fleet of electric locos will have to pay for the loan out of NEC revenues. Maybe more NE regionals on the daily schedule in a few years?

AEM-7s are due for retirement soon; as another poster pointed out, by the time the last AEM-7 is replaced, their age will be 35 years; almost as old as the GG-1s when they retired from corridor service, and the HHP-8s have pretty much packed it in during actual service.

 

[eagle628]

the faith of HHP-8 is still up in air, internal rumor is the units will be converted as powercars for 7 new Acela's with one spare powerhead.

this would up the order for Acela cars to 7 times 10 cars plus 2 cars for each existing Acela.

Oh dear god, no. Regionals breaking down is bad enough, but can you imagine the uproar if Amtrak's flagship train died because the engine had a computer glitch?

 

[jis]

Oh dear god, no. Regionals breaking down is bad enough, but can you imagine the uproar if Amtrak's flagship train died because the engine had a computer glitch?

That happens more often than is reported here. I have been through three of those failures myself. Requires the same bleeping maintenance laptop to get it going again too. Low voltage in the catenary increases the chances of that happening considerably.

 

[AlanB]

the faith of HHP-8 is still up in air, internal rumor is the units will be converted as powercars for 7 new Acela's with one spare powerhead.

this would up the order for Acela cars to 7 times 10 cars plus 2 cars for each existing Acela.

That's very interesting Dutch. Thanks for the heads up. I will dig around a bit and see what, if anything I can dig up on this.

I'm not sure how they can do that, since the HHP's are only rated for 125 MPH, not 150 MPH. And I don't think that the HHP's have the required Tier II bracing that the Acela power cars have. Yes, they technically have more horsepower than the Acela power cars do, so in theory getting up to speed would be even easier.

But again, I'm not sure that they'll pass FRA Tier II HSR standards, at least not without some major body work.

 

[The Journalist]

Won't having two of them make it a lot less likely a train gets stranded? How does an Acela do with only one power car? With all the talk about how overpowered they are for their size it seems like a power car going out wouldn't be horribly problematic. Or does one failing usually mean the other one will too? On a similar note, adding cars to them isn't going to help this...

 

[Dutchrailnut]

I am not sure how they can do that, since the HHP's are only rated for 125 MPH, not 150 MPH. And I don't think that the HHP's have the required Tier II bracing that the Acela power cars have. Yes, they technically have more horsepower than the Acela power cars do, so in theory getting up to speed would be even easier.

But again, I'm not sure that they'll pass FRA Tier II HSR standards, at least not without some major body work.

Easy Alan the train is what determines the speed, not the engine, technicaly the HHP-8 is same as powerhead plus one cab.

they have same propulsion system with same traction motors and gearing.

only mofification would be remove rear cab and install crash pads for cars and different coupler system.

Even the tilt control can be programmed in existing computers

 

[afigg]

Amtrak is getting $500 million of loans at 3%, I believe (my understanding is that they basically get the loans at Treasury rates). That is something like $15 million in interest per year. I do not believe that Amtrak could do any better, and frankly I wish they could milk this for a lot more in capital costs (i.e. new equipment).

Looking at the RRIF pages at the FRA website, there are 2 fees associated with the loan: the Credit Risk Premium fee upon award of the loan and an Investigation Fee submitted with the application to cover the FRA costs in evaluating the loan, not to exceed 0.5% of the requested loan amount. So there are costs in getting the RRIF loans, although probably far less than on the commercial market.

The interest rate on the RRIF loans appear to be equal to the current Treasury note rate equivalent to the length of the loan. The current US Treasury rate is 4.09% for a 20 year note and 4.38% for 30 years (the rates look to be sliding upward with the end of QE II). So if Amtrak got a 20 year loan, the interest will run $23 million a year to start. Add principle payments to that.

Amtrak may well fund the Viewliner 2 and additional Acela cars using RRIF loans, but it does add to their debt and monthly payments. Amtrak may have to use the RRIF loans to pay for the cost of replacing and expanding the LD fleet, single level corridor cars and diesel locomotives. But my guess is other than movements to order the Acela cars and working with the states on the order for the 120 (or more) bilevel corridor cars, Amtrak is not going to be placing any large equipment orders until after the 2012 elections when they can get a read on the political landscape (and the world's oil production situation by then). Meanwhile they will work on the specifications and bid packages.

 

[afigg]

I'm not sure how they can do that, since the HHP's are only rated for 125 MPH, not 150 MPH. And I don't think that the HHP's have the required Tier II bracing that the Acela power cars have. Yes, they technically have more horsepower than the Acela power cars do, so in theory getting up to speed would be even easier.

But again, I'm not sure that they'll pass FRA Tier II HSR standards, at least not without some major body work.

That is what I was wondering. What are the differences between the Hippos and the Acela power cars, besides couplings? Just because the Hippo is based on the Acela power car, that does not mean that it was designed to be able to run at 150 mph - or 160 mph - with some minor mods and FRA recertification.

I can see why Amtrak would like to get another 7 Acela trainsets because, holy toledo, they are actually making a profit above the rails on them. But 7 new Acela trainsets which are limited to 125 or 135 mph will be awkward when the current Acelas can run at 160 mph in central NJ. At a estimated $4 million per car - figuring the order will also include new café and first class cars for each consist - with 8 cars times 7 trainsets, that works out to $224 million total. Amtrak also ends up with brand new passenger cars coupled to 15 year old engines. May be smarter to order the 40 coach cars to extend the current consists, but save the money for the Acela IIs.

 

[AlanB]

Won't having two of them make it a lot less likely a train gets stranded? How does an Acela do with only one power car? With all the talk about how overpowered they are for their size it seems like a power car going out wouldn't be horribly problematic. Or does one failing usually mean the other one will too? On a similar note, adding cars to them isn't going to help this...

It all depends on just what goes wrong. Yes, the odds are better with two, that you can keep going with just one while losing some time on the schedule. But there are situations where having one power car shut down will prevent the train from being moved.

As for adding cars, the HHP's currently haul more cars than the Acela power cars do. It's not uncommon to see an HHP hauling 9 to 10 cars. Acela trainsets are currently only 6 cars, expanding to 8. So with two HHP's, you'd actually have an over-powered Acela train, since the Acela power cars are 6,000 HP and the HHP's are 8,000 HP.

 

[jis]

the faith of HHP-8 is still up in air, internal rumor is the units will be converted as powercars for 7 new Acela's with one spare powerhead.

this would up the order for Acela cars to 7 times 10 cars plus 2 cars for each existing Acela.

That's very interesting Dutch. Thanks for the heads up. I will dig around a bit and see what, if anything I can dig up on this.

I'm not sure how they can do that, since the HHP's are only rated for 125 MPH, not 150 MPH. And I don't think that the HHP's have the required Tier II bracing that the Acela power cars have. Yes, they technically have more horsepower than the Acela power cars do, so in theory getting up to speed would be even easier.

My assumption is that the carbody will need significant work. Which it will anyway to get rid of one cab and put in the "bracings" as you say. Changing the top speed is not that difficult I should imagine. It may be at most an issue of changing gearing and redoing the control computer software a bit. This could fly if Bombardier manages to get the Canadian taxpayers to chip in again

But again, I'm not sure that they'll pass FRA Tier II HSR standards, at least not without some major body work.

 

[Dutchrailnut]

The HHP-8 and Acela power heads have same trucks, gearing, motors and electrical gear, no changes needed.

Only difference in tier II is no break in side sills for lower doors, crash pads/structures at coupled ends.

 

[jis]

The HHP-8 and Acela power heads have same trucks, gearing, motors and electrical gear, no changes needed.

Only difference in tier II is no break in side sills for lower doors, crash pads/structures at coupled ends.

Ah. That makes it even simpler then. AFAIR HHP-8s already do not have any break in side sill, right?

 

[Dutchrailnut]

locomotives never have low doors (other than RDC's) so do not have breaks in side sills.

as for horsepower even if you MU two HHP-8's the horsepower drops back to 6000 max (from 8000) to avoid overloading the catenary.