Great article, worthy of posting the entire text:
December 23, 2006
Surprising Forecast for Amtrak: Growth
By MATTHEW L. WALD and DON PHILLIPS
WASHINGTON, Dec. 22 — Amtrak could see a ridership growth spurt of 50 percent in the next five to 10 years, but it would require billions of state and federal dollars invested in the tracks of other railroads, and millions more of private investment in passenger rail cars, the new president of the railroad said Thursday in an interview.
“The stars may be aligning” for a renaissance of rail, both passenger and freight, said Alexander K. Kummant, who was named president of Amtrak in September, after the board fired his predecessor, David L. Gunn.
Mr. Kummant indicated that Amtrak was backing away from some ideas that had upset Amtrak supporters, including putting the Washington-to-Boston corridor under separate ownership. He also said he did not intend to slash the long-distance network because it was a national asset that, once lost, would probably never be recovered.
Mr. Kummant appeared to rule out much-discussed plans to privatize major parts of Amtrak’s unionized work force, instead saying it would make better sense to expand passenger service, and with it union jobs, while outsourcing only peripheral functions, like tree trimming.
The railroad may be poised for a rebound. Congressional Democrats, soon to be in control, are hopeful that they can enact a law setting goals for Amtrak, replacing the one that lapsed in 2002. Those goals include some of what Mr. Kummant listed as his own strategy, like financing rail projects the way that the federal government finances highways — by offering matching money to the states — and helping Amtrak and local rail transit agencies consolidate their purchases of new equipment at reduced cost.
The proposals passed the Senate overwhelmingly last year, but House Republican leaders would not bring them up for a vote
Senator Frank R. Lautenberg, the New Jersey Democrat who co-sponsored a bill with those provisions, will be in charge of the Senate’s rail subcommittee next year. Mr. Lautenberg said he would offer a similar measure when Congress reconvened.
Amtrak reported record revenue of $131.2 million in November, the highest of any month. For the fiscal year ended Sept. 30, ticket revenue was $1.37 billion, up 11 percent over the 2005 fiscal year. Its flagship Acela train, which runs between Washington and Boston, was sidelined for months with brake problems in 2005, but now is running well, and national ridership is up.
But Amtrak, which has $3.6 billion in long-term debt, will remain heavily dependent on federal subsidies of about $1 billion a year for the foreseeable future. And it has enduring labor problems; most of its employees have been without a contract for seven years.
Mr. Kummant, a former freight rail executive, said that the rail network nationally was overloaded, but that strong growth in freight traffic, and the interest in rail as a solution to congestion and energy problems, opened the possibility for government investment in private freight railroad lines that Amtrak used.
He said the additional money needed — perhaps $1 billion a year for 10 years — was modest compared with what Washington spent on other modes of transportation. He said that track improvements for “the cost of four or five highway interchanges” would allow corridors of several hundred miles with passenger service at more than 100 miles an hour.
But both Amtrak and the freight railroads would need outside capital. Matthew Rose, chairman of the Burlington Northern Santa Fe Railway, said Mr. Kummant’s idea of government investment “makes a lot of sense” as long as it is carefully devised to avoid government interference in private-sector decisions. Mr. Rose said that railroading was in a “rising tide” era, and that without government help, Amtrak would inevitably be squeezed and unable to provide reliable service.
Amtrak’s chairman, David M. Laney, chosen by the Bush administration, and Mr. Kummant are viewed with suspicion by some of Amtrak’s allies in Congress, who fear they share the view of the Transportation Department that the railroad, a perennial money-loser, should drop its long-distance routes. But in a one-hour interview in his office, which was punctuated by the vibrations from trains passing in a tunnel four stories below, Mr. Kummant said, “We’re not going to do anything radical there.”
The cost of cross-country trains comes to about a dollar and a half per American per year, he said, and they are irreplaceable. He compared trains like the Empire Builder and the City of New Orleans to assets like national parks. “I haven’t had the opportunity to go to Glacier National Park since 1976, but I pay taxes every year in the hope that I have the option to go back,” Mr. Kummant said.
The Government Accountability Office said in a report in November that 80 percent of Amtrak’s losses were on long-distance trains, which were not helping with congestion, urban mobility or energy use, and suggested they be dropped.
Mr. Kummant spoke six days after he fired several top executives of Amtrak; he would not comment on why. Mr. Laney said Mr. Kummant was simply making room for his own management team.
Mr. Kummant said Amtrak was looking into a new way to buy rail cars for its aging fleet: allying with commuter lines and ordering cars by the hundreds, instead of the dozens, cutting the cost to manufacture new models.
Joint purchase efforts are already under way in a partnership between Metrolink in Southern California and Tri-Rail in South Florida, while New Jersey is buying locomotives identical to those being bought in Montreal, said Anthony M. Kouneski, vice president for member services at the American Public Transit Association.
Mr. Kummant also raised the possibility of using “equipment trusts” to provide passenger cars and locomotives, much the way freight cars and airplanes are often purchased, with banks or other investors buying the cars and leasing them to Amtrak long-term.
The Amtrak president seemed conciliatory toward the railroad’s unions, suggesting that they could share in the railroad’s growth and observing, as a former manufacturing executive, that “outsourcing is no panacea.”
But he said that the railroad would need flexibility from its unions. For example, he said, the highly skilled workers who maintain the overhead power lines should not spend their time trimming trees, and their union should allow the railroad to bring in outside contractors to do that job at lower cost.
Tony Iannone, vice president of the United Transportation Union and an Amtrak conductor, said that Mr. Kummant was “saying the right things, and we are patiently waiting” to hear more.