FY 2017 Budget

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Andrew

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Folks, if Amtrak's 2017 budget is allocated by two accounts: LD and NEC, does that automatically mean that Amtrak's NEC operating profits can be reinvested back into the Northeast Corridor?
 
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Yes the purpose of the "separate accounts" clause being inserted into the FY 2017 re-authorization bill was to make sure that the operating surpluses in the NEC would stay in the NEC. While the operating surpluses generated by the Acelas and the Regionals are chump change when stacked next to the capital needs of the NEC, it helps things somewhat in the sense that special capital grants won't *always* have to passed through Congress or through a state house whenever something needs to be built or upgraded in the NEC.
 
The operating surplus will barely cover basic maintenance and state of good repair work, and will not leave much for major capital replacement projects. For those Congress or the States or a combination will have to come up with money. Also the state commuter agencies will have to pay much more for the use of the NEC. of course there is the anomalous situation of MBTA, which technically leases their property to Amtrak to operate and maintain. That one is under some sort of protest/litigation I understand.
 
Folks, if Amtrak's 2017 budget is allocated by two accounts: LD and NEC, does that automatically mean that Amtrak's NEC operating profits can be reinvested back into the Northeast Corridor?
Only if Congress provides the full funding needed to operate and maintain the LD trains. Until Congress does that, Amtrak will have to allocate some portion of the NEC operating "surplus" to over the losses and capital maintenance costs for the LD system. Even if Congress were to fully cover the costs of the LD system, part of the NEC "surplus" will still go towards shared system and overhead costs. The last update I read on the Senate FY17 appropriation process, Amtrak is likely to get the same total funding as in FY2016 with maybe a small increase. So there will likely be little change in the actual allocation by Amtrak of its net NEC "surplus" towards the NEC. The additional funding being contributed by the commuter agencies may be the more significant boost for NEC capital funds, given the weakness in NEC ticket revenue.

That noted, part of the operating "surplus" is going to be used to pay for rolling stock for the next several decades. The FY2016 budget and five year financial plan shows the annual debt service cost for the $562.9 million RRIF loan to pay for the ACS-64 locomotives leveling off to $36.6 million a year. Assuming the contract for the next gen HSR trainsets goes through, the RRIF loan for that is going to be $2.45 billion. That is more than 4 times the debt for the ACS-64 loan, but the interest rate should be lower. Doing some rough ballpark estimates, the debt service for the Acela IIs and related improvements could be in the $130 to $140 million a year range once the new trainsets are all delivered. So roughly maybe $170 million a year of the NEC annual surplus will be allocated towards debt service for rolling stock.

If Amtrak then gets a RRIF loan combined with annual capital contributions from the eastern states to replace the Amfleet 1s with, say, 520 new single level cars at circa $3.5 million a car plus spares and maintenance facility upgrades, that could be another $1.5 to $2 billion RRIF loan to pay off from the NEC annual "surplus". Then how much of the surplus will be left to pay for mundane track and power maintenance and contribute towards the bridge and tunnel replacement projects?
 
Folks, if Amtrak's 2017 budget is allocated by two accounts: LD and NEC, does that automatically mean that Amtrak's NEC operating profits can be reinvested back into the Northeast Corridor?
Only if Congress provides the full funding needed to operate and maintain the LD trains. Until Congress does that, Amtrak will have to allocate some portion of the NEC operating "surplus" to over the losses and capital maintenance costs for the LD system. Even if Congress were to fully cover the costs of the LD system, part of the NEC "surplus" will still go towards shared system and overhead costs. The last update I read on the Senate FY17 appropriation process, Amtrak is likely to get the same total funding as in FY2016 with maybe a small increase. So there will likely be little change in the actual allocation by Amtrak of its net NEC "surplus" towards the NEC. The additional funding being contributed by the commuter agencies may be the more significant boost for NEC capital funds, given the weakness in NEC ticket revenue.

That noted, part of the operating "surplus" is going to be used to pay for rolling stock for the next several decades. The FY2016 budget and five year financial plan shows the annual debt service cost for the $562.9 million RRIF loan to pay for the ACS-64 locomotives leveling off to $36.6 million a year. Assuming the contract for the next gen HSR trainsets goes through, the RRIF loan for that is going to be $2.45 billion. That is more than 4 times the debt for the ACS-64 loan, but the interest rate should be lower. Doing some rough ballpark estimates, the debt service for the Acela IIs and related improvements could be in the $130 to $140 million a year range once the new trainsets are all delivered. So roughly maybe $170 million a year of the NEC annual surplus will be allocated towards debt service for rolling stock.

If Amtrak then gets a RRIF loan combined with annual capital contributions from the eastern states to replace the Amfleet 1s with, say, 520 new single level cars at circa $3.5 million a car plus spares and maintenance facility upgrades, that could be another $1.5 to $2 billion RRIF loan to pay off from the NEC annual "surplus". Then how much of the surplus will be left to pay for mundane track and power maintenance and contribute towards the bridge and tunnel replacement projects?
Just to clarify, Amtrak turned a nearly $500 million operating profit on the NEC last year from: http://www.wsj.com/articles/amtrak-faces-prospect-of-private-competition-1449266250

It is my understanding that debt service for the Acela II's will begin six years after the contract is finalized--with a 23 year repayment period. (Mathematically speaking, this should take us to the year 2045)!

But, with regards to Amfleet replacement, wouldn't it be more like a 700 car replacement instead of 520 cars, if we include the Amfleet 2's, or are you saying that the Amfleet 2's would be included in a different contract?

Although I do not know for 100% certainty, I know that Amtrak has also prioritized paying for the Hudson Tunnel Project (which I attended the scoping meeting today) and new Baltimore Tunnels.

According to this link from Senator Schumer's office, Amtrak will be allowed to reinvest their NEC profits back into the Northeast Corridor: https://www.schumer.senate.gov/newsroom/press-releases/schumer-booker-amtrak-chair-announce_breakthroughs-achieved-in-just-passed-transpo-bill-that-provides-clear-path-to-federal-funding-for-gateway-tunnel-new-law-puts-gateway-on-track-for-billions-of-much-needed-additional-federal-dollars
 
Andrew. Once again amfleet-2s will be replaced first due to them having up to 40% more mileage than -1s. PLS read Amtrak fleet strategy plan.
 
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The Amtrak fleet strategy is pretty clear on A-2s going before A-1s. The only plausible scenario that alters that would be if a state or group of states (like NY and Vermont) decided to buy railcars to replace the A-1s on state supported routes. Not likely, but not impossible. That concept seems to be working out really well in the Midwest and California with the N-S cars, right.
 
The Amtrak fleet strategy is pretty clear on A-2s going before A-1s. The only plausible scenario that alters that would be if a state or group of states (like NY and Vermont) decided to buy railcars to replace the A-1s on state supported routes. Not likely, but not impossible. That concept seems to be working out really well in the Midwest and California with the N-S cars, right.
The issue here is, as far as I can tell, pretty clearly with N-S, not with the concept of the batch order. Frankly the "pool order" concept still seems solid and it seems like N-S almost got unlucky with the crash test they failed more than anything.

That being said, I suspect that an LD Amfleet replacement will come first both for the aforementioned reason and because in the short run the LD Amfleets could still be "cascaded" back to the NEC for a few years (for example, I could easily see the Shoreliner and some of the particularly long-haul day trains get re-equipped with them for a while).

With that being said, I figure we're going to have the Amfleets in general use for at least another 20-25 years (and probably in sporadic state use and/or surge use for a decade or more beyond that).
 
The Amtrak fleet strategy is pretty clear on A-2s going before A-1s. The only plausible scenario that alters that would be if a state or group of states (like NY and Vermont) decided to buy railcars to replace the A-1s on state supported routes. Not likely, but not impossible. That concept seems to be working out really well in the Midwest and California with the N-S cars, right.
It is my understanding that Amtrak proposed that in 2012. Now, we are in 2016. Perhaps Amtrak will rethink this?

But, if that is the case, I could see Amtrak using capital expenditures to pay for 150 new Amfleet long distance coaches--and then a RRIF Loan for the intercity Amfleets. These two coaches would probably look quite similar, right?
 
Operating surplus is not profit. The expense side only covers the cost of operating the train. It does not cover the cost of maintaining the corridor. There is no "profit" (as defined by actual businesses) generated by the NEC, despite what Amtrak tells the media in a very carefully worded ways.
 
AFAICT no one at Amtrak realistically expects to get any Amfleet I replacement before the latter half of the '20s. What they are planning for is another rebuild of the Amfleet I fleet to carry them through till then.

See we keep admiring VIA for keeping their Budd fleet alive through rebuilds for so long. Well, guess what? Amtrak will be keeping its own Budd fleet alive for quite a while yet.
 
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AFAICT no one at Amtrak realistically expects to get any Amfleet I replacement before the latter half of the '20s. What they are planning for is another rebuild of the Amfleet I fleet to carry them through till then.

See we keep admiring VIA for keeping their Budd fleet alive through rebuilds for so long. Well, guess what? Amtrak will be keeping its own Budd fleet alive for quite a while yet.
The Amfleets are very well maintained. Are you saying that Amtrak would not likely order any new Amfleet I's until the early 2020's then? Also, do you know how many Amtrak expects to order, and when they plan to replace their Amfleet 2's?
 
That's all presuming they even stick to something resembling the Fleet Strategy Plan...which has in many respects proven to be more of an academic exercise than anything to date.

Anything beyond noting this is a wild guess; Amtrak could just as easily order 1:1 replacements as they could significantly boost their mid-to-long distance fleet. That's going to be down to a lot of political considerations as well as practical ones.
 
AFAICT no one at Amtrak realistically expects to get any Amfleet I replacement before the latter half of the '20s. What they are planning for is another rebuild of the Amfleet I fleet to carry them through till then.

See we keep admiring VIA for keeping their Budd fleet alive through rebuilds for so long. Well, guess what? Amtrak will be keeping its own Budd fleet alive for quite a while yet.
The Amfleets are very well maintained. Are you saying that Amtrak would not likely order any new Amfleet I's until the early 2020's then? Also, do you know how many Amtrak expects to order, and when they plan to replace their Amfleet 2's?
Depends on how much money becomes available. No one knows when or how much at present.

That's all presuming they even stick to something resembling the Fleet Strategy Plan...which has in many respects proven to be more of an academic exercise than anything to date.

Anything beyond noting this is a wild guess; Amtrak could just as easily order 1:1 replacements as they could significantly boost their mid-to-long distance fleet. That's going to be down to a lot of political considerations as well as practical ones.
Exactly!
 
Anderson the FY 2017 budget request still follows the fleet strategy plan. Plan states new LD single level cars ( type not specified ) will begin in 2019. That does seem to be rather optimistic.
 
Anderson the FY 2017 budget request still follows the fleet strategy plan. Plan states new LD single level cars ( type not specified ) will begin in 2019. That does seem to be rather optimistic.
I say this with the utmost respect, but I'll have an iota of faith in an order when they formally request acquisition funding, substantially more when they actually get the funding, and yet more when the order is formally placed and locked in. If anything, IIRC there's already a non-trivial amount of schedule slip since version 1.0 (we're on 3.1).
 
Folks, if Amtrak's 2017 budget is allocated by two accounts: LD and NEC, does that automatically mean that Amtrak's NEC operating profits can be reinvested back into the Northeast Corridor?
No. Amtrak's overhead has to be covered. Right now, this overhead is arbitrarily "allocated" between NEC, LD, and "state-supported" accounts, but it has to be paid for *regardless*. Any "profits" in any of the accounts go to cover the overhead deficits in the other accounts first. Period. (And yes, the state-supported account does not cover all of the overhead from state money -- there's some left which requires federal funding.)

If Congress provides enough funding to cover the LD account *including overhead* and enough to cover the overhead on the "state-supported" account, then the NEC operating profits could be used for capital expenditures. Otherwise, it's gotta cover the overhead first. If there's any excess it might be used for capital expenditures.
 
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