LATE LAST MONTH, news broke that America's federal government plans to loan Amtrak, the country's government-run passenger rail company, $563 million for new equipment and capital improvements. Amtrak will use most of the money to buy new locomotives for the Washington-New York-Boston corridor and Pennsylvania's "Keystone" route. The bulk of the money—$466 million—will be used to buy just 70 locomotives at approximately $6.7 million each. Blogger Alon Levy isn't impressed: "The locomotives are an [Federal Railroad Administration]-compliant version of Siemens’ EuroSprinter product, which has recently been sold in Europe for €3.7-4 million per unit, as has Bombardier’s competing TRAXX locomotive (in fact, the TRAXX even sold for €3.2 million). Amtrak is paying a premium of about 35-50% for these locomotives, depending on exchange rates."
The price premium isn't even the worst part of the deal. As Streetsblog DC notes, there's a reason (a bad one) the trains are more expensive. Federal Railroad Administration rules require American trains to be far heavier than their European and Asian counterparts. In a few years, those rules will no longer apply. Amtrak could wait a bit and save millions (or buy a bunch more equipment):
Europe and Asia have realized the benefits of lighter and more nimble trains – cost, speed, and energy consumption among them – but Amtrak’s planned purchase is further proof that the U.S. is not quite there yet. One easy cost-saving move would be to wait two years for Positive Train Control, an anti-crash safety technology, to be fully installed along the Northeast Corridor. By 2015, Amtrak will no longer have to comply with the Federal Railroad Administration’s requirement that trains be able to withstand crashes with enormous freight trains. Free to buy lighter off-the-shelf foreign designs, Amtrak could then save 35-50 percent off the cost of the locomotives, as Alon notes.
An even more radical modernizing and cost-cutting measure (at least in the long run) would be to transition the Northeast Corridor Regional fleet from locomotive-hauled trains to electrical multiple units, or EMUs, in line with best practices in Europe and Asia. EMUs are, like subways in the US, individually-powered carriages, and standard models can be as cheap as the inflated price that Amtrak pays for its unpowered passenger railcars. The locomotive purchase locks Amtrak into buying more of these unpowered carriages in the future, making Amtrak’s decision to go with locomotives all the more important.
Another good idea would be to invest more money in the transition to Positive Train Control so that Amtrak can move to lighter, cheaper trains and EMUs earlier than expected.
There are other things to worry about in this plan, too. In its press release on the contract [PDF], Amtrak says it projects that "improved ticket revenue from more reliable locomotives can fund the debt service payments to repay this loan." How sure are lawmakers that Amtrak's projections are reasonable? Or do they just not particularly care? Gulliver has long supported increased funding for Amtrak. But that shouldn't come in the form of loans that the company may or may not be able to pay back.
Matt Yglesias says "I don't particularly want Amtrak to do more with less. I’d like it to do much more with more. But either way, it would be better to act cost-effectively." In other words, Democrats and Republicans should both want to change Amtrak's poor purchasing choices. Instead, both parties seem to be largely ignoring the issue. That's too bad.
