1 Business Model TRAIN OPERATIONS NEC INFRASTRUCTURE GOVERNMENT PROGRAM ADMINISTRATION AND OVERSIGHT.

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Presentation transcript:

1 Business Model TRAIN OPERATIONS NEC INFRASTRUCTURE GOVERNMENT PROGRAM ADMINISTRATION AND OVERSIGHT

2 Government Program Administration and Oversight Independent oversight group (NRPC) created to: –Oversee the rail passenger program Disburse federal funds Plan corridor development Manage any franchising of train operations –Franchise design –Service provider selection –Contract administration Monitor business plans of Infrastructure and Operating Companies –Intervene if necessary to keep plans on track –Hold the statutory franchise to access freight railroad rights-of-way at incremental cost and with operating priority –Make available insurance to train operators and limit operators’ liability –Implement plan to bring NEC infrastructure to state of good repair –Preserve national reservations system and ensure joint ticketing

3 NEC Infrastructure Company Government-owned infrastructure company created to: –Maintain and manage NEC infrastructure Balance/represent the needs of all users Coordinate maintenance and capital projects with commuter authorities and freight railroads –Authorized to sell or transfer non-NEC physical assets –Establish a system of fees for all users of the NEC Funding sources –Operating shortfalls covered by track use fees –Capital funds: A mix of federal and state funds

4 Operating Company Options: 1. National or Regional Monopolies Train operations performed by a national carrier or regional carriers –Option to create a separate subsidiary for long-haul trains –As under existing law, states could choose a different operator for corridor operations but would have to negotiate access with freight railroads Funding sources –Operating shortfalls on long-haul trains funded by the federal government; after transition, states responsible for funding losses on existing and new corridor trains. –Equipment capital provided on a federal-state matching basis.

5 1. National or Regional Train Operating Companies NRPC Infrastructure Company Train Operations Company* NRPC Infrastructure Company Train Operations- NEC* Train Operations- West* Train Operations- Central* Train Operations- Southeast* * Includes mechanical shops for locomotive and car repair

6 Operating Company Options: 2. Competition for the long-haul market Existing and new corridor trains operated by Amtrak; long distance trains franchised through competitive bidding –NRPC authorizes franchisees to operate under the national franchise at incremental cost pursuant to contract (acting on behalf of NRPC) –As under existing law, states could choose a different operator for corridor operations but would have to negotiate access with freight railroads –Labor protection provided by NRPC; Amtrak employees have preferential hiring status but franchisees may immediately negotiate new labor contracts. Funding sources –Operating shortfalls on long-haul trains funded by the federal government; after transition, states responsible for funding losses on existing and new corridor trains. –Train operators responsible for privately financing new equipment. If necessary, federal funding of long-haul equipment and state financing of corridor equipment.

7 2. Competition for the long-haul market Infrastructure Company Corridor Train Operations NRPC Mechanical Shops Long-haul Train Operations Franchise operations

8 Operating Company Options: 3. Competition for all intercity passenger markets After a transition period (2 - 5 years), all passenger operations franchised through competitive bidding –Immediate franchising of one segment of operations (corridors, long- hauls, perhaps a single train) to demonstrate commitment to change –Transition period to give Amtrak the opportunity to become more efficient and competitive in subsequent franchising –NRPC authorizes franchisees to operate under the national franchise at incremental cost pursuant to contract (acting on behalf of NRPC) –Labor protection provided by NRPC; Amtrak employees have preferential hiring status but franchisees may immediately negotiate new labor contracts. –Mail and Express operations franchised (separately or as part of train operations) –Amtrak shops owned and operated by NRPC during transition; then could be retained, leased or sold. –Amtrak ultimately privatized.

9 Funding sources –Operating shortfalls on long-haul trains funded by the federal government; after transition, states responsible for funding losses on existing and new corridor trains. –Train operators responsible for privately financing new equipment. If necessary, federal funding of long-haul equipment and state financing of corridor equipment. Operating Company Options: 3. Competition for all intercity passenger markets (cont’d)

10 3. Competition for all intercity passenger markets NRPC Infrastructure Company Train Operations Mail and Express Mechanical Shops Franchise operations

11 Operating Company Discussion Issues Are there other options that should be put on the table? Should competition be introduced? How much competition? And how fast? Should Amtrak have the opportunity to “get its house in order” before franchising is introduced? How should labor issues and labor contracts be handled? How should the success of train operations be measured? –Operational self-sufficiency –Meeting a critical transportation need –GAAP accounting or other criteria What are the appropriate roles - policy, oversight and funding - for the various Amtrak stakeholders?