House bill cuts Amtrak funding 40 percent

[Andrew]

Andrew, the bigger reason for optimism is deep down in the linked StreetsBlog article:

... it does propose reforms to the Railroad Rehabilitation and Improvement Financing (RRIF) program, whose $35 billion in lending power goes largely unused because of cumbersome and confusing requirements. NARP applauded these changes, which include the creation of a $14 billion loan fund within RRIF to invest exclusively in the Northeast Corridor. ...

The ability to borrow $14 Billion is a real something. You could do new Portal bridges, Baltimore tunnels, Susquehanna bridge, and many miles of new catenary etc. for that sum. Don't think you could dig a tunnel under the Hudson and do the rest of Gateway, but maybe get a start.

The borrowing could be limited practically by a concern of how Amtrak and the Acelas could pay back that amount of money.

Well, heck, borrow and spend the money now, let President Romney/Rand/Rubio/Santorum/Bush/Walker/Christie/Jindal/Cruz/Perry/et al figure out how to pay it back. I'm sure they'd do the same. LOL.

This proposed bill calls for diverting $470 million in Amtrak's Northeast Corridor....

Is this IN ADDITION to the money that is currently spent in Amtrak's Northeast Corridor?

 

[The Davy Crockett]

An editorial from Politico's Morning Transportation Report:

It's been nearly a year since the current Amtrak authorization expired and T&I members on both sides of the aisle are sure to praise today's bipartisan effort. But, the Senate has done little to advance a passenger rail bill this year and Senate Commerce Committee leaders say that's unlikely to change given the limited number of days left in the legislative calendar, meaning this could be the end of the line for an Amtrak bill until next year. Still, the bipartisan House effort may prove a good starting point for what's sure to be a busy year for transportation committees in 2015, which will have to tackle highways and transit, rail and aviation.

In all likelyhood we will be talking about this, and much more, in the coming year...

 

[Andrew]

Well, it was definitely discussed earlier today; plan is for $7 Billion for Amtrak over four years, which includes $1.8 Billion for NEC...

http://www.delawareonline.com/story/money/business/2014/09/17/house-panel-approves-amtrak-overhaul/15791277/

 

[MikeORD]

I'm no expert in the operations and funding of Amtrak.

However, am I the only one who feels that Senators and Representatives should have their salaries slashed by more than 40% as well?

 

[afigg]

In all likelyhood we will be talking about this, and much more, in the coming year...

Yes, it is quite clear that an PRIIA reauthorization bill is not going to be passed by Congress in the remainder of the legislative session. The proposed House bill may make it to the floor of the House or even get voted on by the entire House, but with the Senate backlogged on a large number of ambassadors, federal judges, presidential appointments in addition to the FY15 appropriations, foreign policy stuff, and so on, it will die at the end of the session. The re-authorization process will restart next year, hopefully with a Senate that will ignore the worse parts in the House version and craft a better bill with a higher funding ceiling for Amtrak and provide better support for HSR and corridor services outside of the NEC.
For now, FY2015 will start off with a continuing resolution at FY14 funding levels for Amtrak.

 

[afigg]

The ability to borrow $14 Billion is a real something. You could do new Portal bridges, Baltimore tunnels, Susquehanna bridge, and many miles of new catenary etc. for that sum. Don't think you could dig a tunnel under the Hudson and do the rest of Gateway, but maybe get a start.

The borrowing could be limited practically by a concern of how Amtrak and the Acelas could pay back that amount of money.

Well, heck, borrow and spend the money now, let President Romney/Rand/Rubio/Santorum/Bush/Walker/Christie/Jindal/Cruz/Perry/et al figure out how to pay it back. I'm sure they'd do the same. LOL.

Adding $14 billion of debt to the NEC is burying capital projects under a mountain of debt once the $14 billion is spent. If the federal treasury rates are, say, 4.5% for 30 year bonds by the time the $14 billion in a modified RIFF program is in place, who is going to pay the nominal first year interest of approx $630 million? And in the years afterward?
Amtrak could put several billion dollars to work right now on the north Portal bridge & sawtooth bridge in NJ and all the mundane track, signal, catenary and power system replacement & maintenance that needs to be done. A state can float a bond because they have tax and other revenue sources to draw on and can increase taxes if necessary to cover bond payments if they have to. Amtrak or a NEC Authority won't have that capability.

 

[Barton Keyes]

Another politically inspired move dressed up to appear rational. Big business wants to close down Amtrak and finances politicians, think-tanks, etc to do its dirty work. So far people have seen through their games but it seems they never give up. No rail service in the world can operate at a profit simply based on ticket revenue and some things (e.g. pollution, congestion, sustainability, choice) are left out of the reckoning. The US needs to decide whether it wants trains or not. If it does, they have to be paid for - as well run efficiently, obviously.

 

[Andrew]

The ability to borrow $14 Billion is a real something. You could do new Portal bridges, Baltimore tunnels, Susquehanna bridge, and many miles of new catenary etc. for that sum. Don't think you could dig a tunnel under the Hudson and do the rest of Gateway, but maybe get a start.

The borrowing could be limited practically by a concern of how Amtrak and the Acelas could pay back that amount of money.

Well, heck, borrow and spend the money now, let President Romney/Rand/Rubio/Santorum/Bush/Walker/Christie/Jindal/Cruz/Perry/et al figure out how to pay it back. I'm sure they'd do the same. LOL.

Adding $14 billion of debt to the NEC is burying capital projects under a mountain of debt once the $14 billion is spent. If the federal treasury rates are, say, 4.5% for 30 year bonds by the time the $14 billion in a modified RIFF program is in place, who is going to pay the nominal first year interest of approx $630 million? And in the years afterward?
Amtrak could put several billion dollars to work right now on the north Portal bridge & sawtooth bridge in NJ and all the mundane track, signal, catenary and power system replacement & maintenance that needs to be done. A state can float a bond because they have tax and other revenue sources to draw on and can increase taxes if necessary to cover bond payments if they have to. Amtrak or a NEC Authority won't have that capability.

Not necessarily.

If they borrow money and put it into good use--such as for Gateway Infrastructure--a large return on investment can get met.

Remember, the plan is for Amtrak to ADD money into the NEC once the reauthorization gets set. Also, if a ticket surcharge gets approved for travel to/from Newark, NJ or New York City, then, over a 35--40 year period, certainly a lot of money can get paid back into the RRIF loan that was used to pay for Gateway anyway.

 

[jis]

How much per ticket surcharge are we thinking of? What is the expected intake per year? What proportion of $635 million is it? A few concrete numbers instead of feel good proclamations would be more useful information. We already have plenty of politicians to give us the feel good rah rahs while digging us deeper.

Sent from my iPhone using Amtrak Forum

 

[afigg]

How much per ticket surcharge are we thinking of? What is the expected intake per year? What proportion of $635 million is it? A few concrete numbers instead of feel good proclamations would be more useful information. We already have plenty of politicians to give us the feel good rah rags while digging us deeper.

Quite a substantial ticket surcharge if Amtrak were to end up carrying the bulk of the debt load. Would be rather difficult sell to add ticket surcharges to NJT, LIRR, SEPTA, MARC tickets for upgrades to the WAS to New Rochelle portion of the NEC.
If Amtrak or an NEC Authority were to get $10 billion from a 30 year RIFF or TIFIA loan at, for example, 4% interest and if it were to be structured similar to a mortgage with monthly payments, the total interest paid over the 30 year period would be $7.2 billion. (using a mortgage calculator just to ballpark the total debt cost). That is in addition to the $10 billion principle which would have to be paid back. That is a lot of debt to pay off from increased NEC ticket revenues and commuter agency access payments. I don't see it as a remotely viable way to fund NEC improvements. The public sector in the form of the federal governmrent and the NEC states has to step up.

 

[WoodyinNYC]

Of course, there are few-to-none shovel-ready projects on the NEC. So no way Amtrak could borrow the full $14 Billion in the first year. At least the option for Amtrak to borrow should make it easier to commit to multi-year projects without being so much at risk that Congress could completely eliminate funding for a couple of years. If Amtrak overall had an option to borrow in a pinch, we'd be a lot closer to ordering replacements for the 600 or so single-level cars.

But surely a handful projects would be viable right away. Buying the new Acela IIs will be from RIFF borrowing. Certain infrastructure investments could also have a good payoff, especially if states pony up, as for the Baltimore tunnels, or if the incumbent governor, uh, moves on, for new Portal bridges and adding another track between Newark and the tunnels under the Hudson.

Borrowing a Billion a year to rebuild the NEC seems plausible, when that money is added to other funding, from Acelas' operating surpluses, state contributions, other Amtrak capital, etc. And at any point if the wind shifts, Congress could pay off some of the borrowing, to jump start the next round of projects.

 

[jis]

In order to get an RRIF loan there has to be clearly identified plan on how it is going to be repaid. There is a good business case for funding Acela II purchase since you can tie the revenue from those to the loan payment. OTOH trying to fund something like the Portal Bridge using RRIF loan seems kind of dicey since there is no clearly identifiable income source associated with that infrastructure to pay off the loan. Unless there is some way of recovering that cost via some tying of the income that accrues to those who benefit from the infrastructure, this will be a difficult sell. Not saying that it cannot happen but seems financially dicey.

 

[afigg]

Of course, there are few-to-none shovel-ready projects on the NEC.

Simply not correct if you read the various NEC documents and news. For the high profile, bigger ticket projects, the (north) Portal bridge replacement has completed final design and could be put out for bid if funding was available. But $800 million to $1 billion total is not easy to come by with austerity budgets for infrastructure.

CT just got $161 million in Sandy Mitigation funds to replace the Walk bridge in Norwalk, but needs to locate another $188 million. CT DOT wants to start construction in 2016.

The Environmental Assessment (EA) for the CT River bridge replacement east of Old Saybrooke was posted to the FRA website in late May. Assuming the FRA approves it, in the EA, Amtrak wants to start construction in 2018, although that obviously depends on having the funds available. The EA is not a design document, it just establishes the 2 preferred alternatives as either a bascule or vertical lift bridge south of the existing bridge with the same closed height clearance (it is a rather unambitious plan). So the replacement bridge would still have to be designed in detail, but it could be done by awarding a design-build contract.

Those are just the near term potential big ticket construction projects. There are lower profile needed projects or capital needs to undercut the trackbed for the southern half of the NEC; do track and switch replacement; signal, power and catenary replacement and modernization to get caught up on the backlog of NEC maintenance. if Amtrak was given another $1.3 billion in stimulus funding, I expect the managers would have little difficulty in drawing up a list of capital projects to spend the money on over the next 3-4 years, even if it was restricted to just the NEC and rolling stock.

 

[Green Maned Lion]

17 billion over 30 years is $566 million. I haven't done heavy calculations but I suspect that between MARC, SEPTA, NJT, LIRR, and MNR there are over 500 million trips a year. God forbid a one dollar a ticket increase. It'll be lost in the noise of the cost reassignment fare increases.

 

[jis]

I am sure LIRR will not be happy paying anything for NEC south or NEC north beyond Harold. But it is an interesting idea at least to try to rope them in to do all sorts of stuff none of which will be of any use to them. The stuff between New York and Philly will primarily have to be the responsibility of SEPTA, NJT and Amtrak.

Also since MNRR has to apaprently come up with its own sources for almost everything, unless they can get significant money for their projects from this pot of money, they will probably decline too.

So it is not as easy as it may sound.

If the cost of the Gateway tunnels have to be covered by those that actually use it, the surcharge will be quite a bit more than $1 per ticket. Also remember that a lot of the users are monthly ticket holders who will not be paying $1 per ride that they take through the tunnels.

 

[Paulus]

17 billion over 30 years is $566 million. I haven't done heavy calculations but I suspect that between MARC, SEPTA, NJT, LIRR, and MNR there are over 500 million trips a year. God forbid a one dollar a ticket increase. It'll be lost in the noise of the cost reassignment fare increases.

$974 million with a 4% interest rate however.

 

[WoodyinNYC]

In order to get an RRIF loan there has to be clearly identified plan on how it is going to be repaid. There is a good business case for funding Acela II purchase since you can tie the revenue from those to the loan payment. OTOH trying to fund something like the Portal Bridge using RRIF loan seems kind of dicey since there is no clearly identifiable income source associated with that infrastructure to pay off the loan. Unless there is some way of recovering that cost via some tying of the income that accrues to those who benefit from the infrastructure, this will be a difficult sell. Not saying that it cannot happen but seems financially dicey.

That's an interesting problem. It's a given that reducing the trip times on the NEC will increase demand and allow still further price increases. So there's a list of projects that taken together will cut the schedules and thereby raise revenue. But no individual project is allowed credit for raising speed thereby raising revenues? There's a lot of stupid in D.C., but a lot of smarts, too. Amtrak, the FRA, and Congress may find a way around this one.

 

[afigg]

17 billion over 30 years is $566 million. I haven't done heavy calculations but I suspect that between MARC, SEPTA, NJT, LIRR, and MNR there are over 500 million trips a year. God forbid a one dollar a ticket increase. It'll be lost in the noise of the cost reassignment fare increases.

Where do you get $17 billion over 30 years?

I see that the NEC Commission posted this week a NEC Five Year Capital Assessment report for FY15 to FY19 which is quite informative with a lot of cost numbers. The NEC Commission. BTW, is including the 3 main connecting corridors - eastern Keystone, Albany to NYP (now that Amtrak is leasing the northern part), and New Haven to Springfield - in their capital needs and cost estimates tables. The estimated shortfall for FY15 between what is preliminary funded at $1.655 billion total and the unfunded needs to catch up over the next 15 years to a state of good repair is $1.142 billion. The Unfunded Needs grow to $3.130 billion (!) in FY17.

The NEC Five Year Capital Assessment report is worthy of its own thread if anyone wants to start one. But it makes quite clear that for the NEC, the annual shortfalls are well into the billion plus range. No way Congress and the states will up the funding by $3 billion a year, but an additional billion plus a year should be achievable and gets a lot done over time.

 

[WoodyinNYC]

BTW. Hope this is the appropriate thread to post the reminder below. (I considered the Viewliner II thread -- Are we there yet? Are we there yet? LOL.)

After the offers are in hand, we'll know how much this top priority project will cost. Maybe then Amtrak can get serious about lining up funding, even perhaps borrowing, for any shovel-ready projects it may have.

+++++++++++++++++++++++
AMTRAK has issued a request for proposals for 28 high-speed trains, which will replace the Acela Express fleet …

... The closing date for expressions of interest is October 1. (My emphasis added. --Woody)

-- Railjournal.com

 

[Green Maned Lion]

17 billion over 30 years is $566 million. I haven't done heavy calculations but I suspect that between MARC, SEPTA, NJT, LIRR, and MNR there are over 500 million trips a year. God forbid a one dollar a ticket increase. It'll be lost in the noise of the cost reassignment fare increases.

$974 million with a 4% interest rate however.

The number 17 was $10 billion plus $7 billion in interest.

 

[Paulus]

17 billion over 30 years is $566 million. I haven't done heavy calculations but I suspect that between MARC, SEPTA, NJT, LIRR, and MNR there are over 500 million trips a year. God forbid a one dollar a ticket increase. It'll be lost in the noise of the cost reassignment fare increases.

$974 million with a 4% interest rate however.

The number 17 was $10 billion plus $7 billion in interest.

Gotcha, must've missed that post.