Transcript One Case Study Public Passenger Rail Provider

Port of Oakland
Northern California’s ‘Capitol Corridor’ on
Union Pacific Railroad
The busiest intercity passenger route in the country outside the NEC – 32
trains on weekdays, 22 trains on weekend days
• Nearly 1,700,000 annual passengers (average trip: +/- 70 mi
• Railway Age called it a 10-year case-study of ‘How the
CCJPA won the Heart of the Union Pacific Railroad’
• What works and why
• What components may be
applicable elsewhere
Happy customers are advocates!
The Capitol Corridor – Part of the National
Intercity Passenger Rail Network
Union Pacific Railroad’s
Central Corridor
Capitol Corridor
Roseville Yard
Port of Oakland
Union Pacific Central Corridor
Capitol Corridor Intercity Rail
Components of the Business Partnership with
a Freight Railroad
• Involvement in planning
• Capital funding
• Access fees
• Maintenance
The Railroad is not in the business of running trains…
They are in the business of making money.
Running trains is HOW they do it
How Did the Capitol Corridor Do It?
• Defined and shared their ‘Vision Plan’
• Addressed what is important to the
Railroad
• Negotiated ‘Master Agreements’ (C&M)
• Funded a dedicated MOW gang
• Funded a capitalized maintenance
program (partnership with Caltrans $)
• Renegotiated Amtrak-calculated
incentive payment earnings for standalone performance
Discern What is Important to the Railroad
• Compensation is adequate to keep them interested
• You have a capital program and at least initial
funding to start work
• Reliability and existing freight capacity is protected
• They retain their ability to expand freight business
• You are prepared to build adequate ‘fixed plant’ to
operate your service, and these facilities are
adequate for them to run it reliably
Let’s Talk Real Dollars into Railroad…
Capitol Corridor operates 1,200,000 train miles annually
on 170 UPRR route-miles and about 280 track miles, so.
Track Use (Amtrak fees paid to UPRR)
$ 2,225,000/year (CC Cost)
Plus Direct CCJPA-UPRR payments
Dedicated MOW gang (CC direct):
Capitalized maintenance (CC direct):
$ 600,000/year (FRA Class V)
$ 1,000,000/year
Approximate annual paid to UPRR for MOW:
$13,660 per track mile
Plus Direct Capital Funding for Capacity Expansion
Approximately $100M over 10 years
$ 10,000,000/year
Approximate annual capital
$35,714 per track mile
or an average of $49,374 per track mile per year
…and that’s not all, folks.
PLUS
The Capitol Corridor pays UPRR a ‘stand alone’ incentive
for superior on-time performance:
UPRR potential annual incentive earnings:
approx. $2,400,000 or $8,570 per track mile
(100% was earned in 2008-09, 100% was earned in 2009-10, and 100% so far in 2010-2011)
$22,230/ track mile (w/o capital) to
$57,900/ track mile (w/ capital)
AND the Capitol Corridor enjoys the best On-Time
Performance of ANY Amtrak Route
Summary of some ‘hot buttons’ for the freight railroads?
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•
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•
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Protection of the freight franchise & stockholders
Protect existing freight capacity/reliability
Allow freight capacity expansion
Build/buy more capacity than just what you need for passenger service
Joint capacity modeling for expanded services to determine additional
needed facilities
No liability for passenger service
Publicly recognizing the freight railroad when they do a good job in
service delivery
•
•
•
•
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Adequate compensation for public use of private facilities
Full compensation for capital improvements required for reliable
operation of passenger operations
Funding assistance for annual maintenance costs of added facilities
Annual capitalized maintenance contribution
No added tax liability from provision of additional fixed plant to support
passenger services
Ability to earn stand-alone incentives for good on-time performance
You want the Business Deal to be good for the freight railroad!
10-Year Snapshot
September 30
October 1
State Allocation
1,700,000
On 9/30/08
Start of Annual CCJPA-Amtrak Fixed Price Contracts
1800000
$50
9/11
1600000
$45
EFFICIENT MANAGEMENT
1400000
12-Month Ridership Sum
2008
CurrentYTD
$40
$35
1200000
$30
Riders have paid for service frequency increases
1000000
$25
463,000
800000
$20
600000
Annual Farebox Recovery Ratio
40000031.3%
35.7%
40.7%
38.3%
38.6%
43.1%
45.8%
48.0%
55.0%
50.1%
$10
Annual State Operating Cost
200000
$11.74
$15.91
FY 1998-99
Train Frequency
35.3%
$15
$18.80
FY 1999-00
$21.35
FY 2000-01
$20.77
FY 2001-02
$20.86
FY 2002-03
$21.87
FY 2003-04
4RT
4 RT 6RT
6 RT7RT7 RT 9RT 10RT
9 RT 11RT 12RT
$5
$18.07
FY 2004-05
FY 2005-06
16RT
12 RT
Train Frequency Increases – Travel Time Reductions (20 minutes)
$20.15
$22.38
FY 2006-07
$25.70
FY 2007-08
16 RT
FY 2008-09
$0
State Allocation ($ in millions) & Service Level (Daily Trains)
1998
Wrap Up
• It will take understanding what is important to
the host railroad - work in partnership with them
• It will take political will – understand funding
sources and the leadership to secure it
• It will take trust between the parties
Bottom Line:
It can be done, because it already is being done
and you have heard the reports from Maine,
North Carolina and California on HOW it is
being done. Go ye and do likewise….!