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Published Thursday, January 9, 2003, in the Stockton Record
Caltrans to study split with Amtrak
Service suffering financial problems
By Audrey Cooper
Record Staff Writer
In what could be the beginning of the end for the state’s 27-year-old relationship with Amtrak, state officials will consider firing the operator of California’s massive system of passenger-train lines and buses.
On Friday, the California Department of Transportation will announce its intent to hire a consulting company to study the pros and cons of a divorce from Amtrak, the government-subsidized train system that has teetered on the brink of insolvency over the past year.
Amtrak’s passenger trains cross the country, in part with the support of Congress. California pays Amtrak separately to run three in-state rail lines and connecting bus routes. That partnership began in 1976.
The unprecedented study ordered by Caltrans will examine how the state could split from Amtrak whether or not the train operator stays in business. That includes the legality of such a split, what procedures could be used to solicit takeover bids and the general financial implications. The study will cover only the in-state rail system and not Amtrak’s trains that start in California and go into other states.
The handful of private companies interested in taking over the system are certain that the study will show that Amtrak’s national fiscal problems are dragging down California’s system, costing the state millions of dollars.
Rail advocates are also looking forward to the study results, expected late this year.
“If anything, California is hindered by being part of Amtrak,” said Richard Silver, executive director of the Rail Passenger Association of California.
“Amtrak’s finances have slowed the ability to expand service, and there is an argument to be made that the cost to California is greater being a part of Amtrak than if it was more independent,” he said.
Caltrans officials said Wednesday that the train system and its network of feeder buses is the most successful in the country. Studying the issue doesn’t necessarily foreshadow an intent to privatize the train system or bring it under total state control, Caltrans spokesman Robin Witt said.
“It’s like any business faced with a problem and unsure of what the future holds. We’re thinking of reasonable alternatives for the future,” he said.
Keeping the trains running involves several bureaucracies. Various freight railroads, such as Union Pacific, own the tracks. Caltrans owns the stations and locomotives. Amtrak runs the show.
For this fiscal year, the state agreed to pay Amtrak $73 million for doing everything from driving the trains to running ticket booths and operating a toll-free reservation number.
In addition to the dozens of feeder-bus routes that connect train stations to various cities, three passenger rail lines cross the state: The San Joaquin Route that runs between Bakersfield and Sacramento or the Bay Area; the Capitol Route from Auburn to San Jose; and the Pacific Surfliner Route from San Diego to San Luis Obispo.
About 3.5 million people ride the trains, which are among the top five most popular Amtrak lines in the country, Witt said.
Amtrak spokeswoman Vernae Graham said the train operator would work with the state-hired consultant to study the future of the rail lines.
“I think we’re providing adequate service. The state agrees with us. So we’re happy to work with whomever they bring in,” she said.
So is Herzog Transit, a private company that runs trains in other states and the Altamont Commuter Express trains that travel between Stockton and San Jose.
“No. 1, we’re a much leaner organization. We don’t have the overhead and the bureaucracy, if you will, that Amtrak has,” said Ray Lanman, Herzog’s vice president of corporate development.
Lanman was in Sacramento on Wednesday to shore up support among legislators for taking the Amtrak operations out to bid.
“Given the state’s financial problems, I think it’s a good time to think about saving a little money,” said Lanman, who couldn’t say how much his company could save taxpayers.
According to various state officials, the state budget deficit is somewhere between $21 billion and $35 billion.
Herzog wouldn’t save money by drastically cutting employees’ pay but might be willing to eliminate positions. The company would also be able to maintain the system for less money, Lanman said.
Caltrans to study split with Amtrak
Service suffering financial problems
By Audrey Cooper
Record Staff Writer
In what could be the beginning of the end for the state’s 27-year-old relationship with Amtrak, state officials will consider firing the operator of California’s massive system of passenger-train lines and buses.
On Friday, the California Department of Transportation will announce its intent to hire a consulting company to study the pros and cons of a divorce from Amtrak, the government-subsidized train system that has teetered on the brink of insolvency over the past year.
Amtrak’s passenger trains cross the country, in part with the support of Congress. California pays Amtrak separately to run three in-state rail lines and connecting bus routes. That partnership began in 1976.
The unprecedented study ordered by Caltrans will examine how the state could split from Amtrak whether or not the train operator stays in business. That includes the legality of such a split, what procedures could be used to solicit takeover bids and the general financial implications. The study will cover only the in-state rail system and not Amtrak’s trains that start in California and go into other states.
The handful of private companies interested in taking over the system are certain that the study will show that Amtrak’s national fiscal problems are dragging down California’s system, costing the state millions of dollars.
Rail advocates are also looking forward to the study results, expected late this year.
“If anything, California is hindered by being part of Amtrak,” said Richard Silver, executive director of the Rail Passenger Association of California.
“Amtrak’s finances have slowed the ability to expand service, and there is an argument to be made that the cost to California is greater being a part of Amtrak than if it was more independent,” he said.
Caltrans officials said Wednesday that the train system and its network of feeder buses is the most successful in the country. Studying the issue doesn’t necessarily foreshadow an intent to privatize the train system or bring it under total state control, Caltrans spokesman Robin Witt said.
“It’s like any business faced with a problem and unsure of what the future holds. We’re thinking of reasonable alternatives for the future,” he said.
Keeping the trains running involves several bureaucracies. Various freight railroads, such as Union Pacific, own the tracks. Caltrans owns the stations and locomotives. Amtrak runs the show.
For this fiscal year, the state agreed to pay Amtrak $73 million for doing everything from driving the trains to running ticket booths and operating a toll-free reservation number.
In addition to the dozens of feeder-bus routes that connect train stations to various cities, three passenger rail lines cross the state: The San Joaquin Route that runs between Bakersfield and Sacramento or the Bay Area; the Capitol Route from Auburn to San Jose; and the Pacific Surfliner Route from San Diego to San Luis Obispo.
About 3.5 million people ride the trains, which are among the top five most popular Amtrak lines in the country, Witt said.
Amtrak spokeswoman Vernae Graham said the train operator would work with the state-hired consultant to study the future of the rail lines.
“I think we’re providing adequate service. The state agrees with us. So we’re happy to work with whomever they bring in,” she said.
So is Herzog Transit, a private company that runs trains in other states and the Altamont Commuter Express trains that travel between Stockton and San Jose.
“No. 1, we’re a much leaner organization. We don’t have the overhead and the bureaucracy, if you will, that Amtrak has,” said Ray Lanman, Herzog’s vice president of corporate development.
Lanman was in Sacramento on Wednesday to shore up support among legislators for taking the Amtrak operations out to bid.
“Given the state’s financial problems, I think it’s a good time to think about saving a little money,” said Lanman, who couldn’t say how much his company could save taxpayers.
According to various state officials, the state budget deficit is somewhere between $21 billion and $35 billion.
Herzog wouldn’t save money by drastically cutting employees’ pay but might be willing to eliminate positions. The company would also be able to maintain the system for less money, Lanman said.
